Morning Brew Daily - ESPN Gambles On A Sportsbook & You Need to Earn How Much to Buy a House?

Episode Date: November 14, 2023

Episode 191: Neal and Toby break down ESPN's launch into the wagering space with ESPN Bet on Tuesday. Plus, a new study was released revealing who is buying homes and how much the typical buyer is making. Also, why there is a shift in international students flocking the US for college and Exxon goes all in on Lithium. Toby shares his favorite trends and how much would you pay for a pet psychic? Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Checkout Morning Brew Learning Here: https://learning.morningbrew.com/allaccess Disclosure: This is a paid advertisement for Autonomix’s Regulation A+ Offering. Please read the offering circular at invest.autonomix.com Learn more about your ad choices. Visit megaphone.fm/adchoices

Many employees can't afford a hefty medical bill that pops up out of the blue, but it happens. And employees who are financially stressed are, understandably, more likely to be distracted at work, costing their employers greatly in lost productivity. Luckily, AFLAC plans help with out-of-pocket expenses not covered by health insurance and can be offered at no direct cost to businesses. Learn more at aflac.com slash morning brewdaily. That's aflack.com slash morning brewdaily. Good morning Brew Daily Show. I'm Neil Fryman.

And I'm Toby Howell. On today's pod, the same company that brought you Mickey Mouse and Lightning McQueen is now offering sports betting. Then you literally won't believe what a pet psychic charges to communicate with your furry little friends. It's Tuesday, November 14th. Let's ride. Toby, I came across this crazy stat. So a new NCIS spin-off is being released today, NCIS Sydney. and low-key, this franchise is ridiculously popular.

More than 300 million people around the world watch some version of NCIS last year. And almost 1,000 episodes have been produced across the OG NCIS, NCIS Los Angeles, NCIS New Orleans, and NCS Hawaii. This franchise has generated about $8 billion since it was first launched in 2003. What the heck? I would love to be the NCIS of podcast, just an under-the-radar juggernaut that doesn't need the recognition. Doesn't need the awards, but just absolutely pulls in viewers. A thousand episodes, too. Neil, can you imagine we get there?

We'll get there, man. 200 is coming up later this month. I know. I'm excited for that. Before we get into the news, we have a quick word from our sponsor, Brex. Neil, you spilled the beans about my pickleball shoe company yesterday, and I had multiple people reach out to me on LinkedIn, which is great for me and for Brex, because now I definitely need help managing my spend.

Oh, so you're thinking about hiring some employees in your future? Well, Brex has great expense management software and corporate cards so you can hook up your new workers in no time. So do you want to come work for me? Toby, I'm the one who hired you at the brew. I don't think I can come work for you now. But shout out to Brex for helping you do your thing. Visit brex.com or Toby's LinkedIn DMs for more info. Okay, the way that you watch sports may never be the same, because today ESPN is launching its own betting app in a $1.5 billion partnership with Penn Entertainment.

sports gambling has been legal in the U.S. for years now, but ESPN getting into the game feels like a game changer. That's because ESPN, for all its recent struggles, remains the world leader in sports and broadcast games from college football to NBA basketball to Monday night football. Now that ESPN has its own betting app, you can be sure that betting will be front and center on its telecasts from now on. But the question on everyone's mind is whether ESPN bet, as this app is called, can grab a piece of the sports betting pie in the United States. Right now, the industry is dominated by two giants, Fanduel and Draft Kings, which collectively own more than 70% of the market. ESPN and Penn think by leveraging ESPN's massive distribution

through TV, websites, fantasy apps, and on-air talent. They can become a major player in what is an absolutely booming industry. Toby, this thing is coming online in 17 states today. Will people bet through ESPN? I am a little skeptical, Neil, because ESPN bet is acquiring kind of barren. Marshall's 3% share that they had in the market before that partnership fell through. And then Fox Bet is the reason why I'm skeptical on this, because they try to launch a betting service under their kind of TV network.

And that kind of failed. They recently shut that down. And to be fair, ESPN is a much, much stronger brand than Fox Sports is. But it still shows kind of the perils of trying to cross over from pure entertainment, pure sports media company into the sports betting world. Yeah, I want to talk about how far a U-turn this has been for Disney. Disney, of course, owns ESPN. And as recently as 2019, CEO Bob Eiger said that the company would never get into betting. And I kind of teased it at the top because Disney is supposed to be family entertainment. They make Mickey Mouse. They make animated movies.

Disney Plus, their streaming network is meant to be a family-safe platform. But now they're getting into sports gambling, which is not legal in most places, in certain places. in the U.S. And it's certainly not legal for kids. And so this is just kind of been a massive pivot for ESPN and Disney. And I think it's because ESPN may not think it can survive or grow in a sports landscape that is now dominated by gambling money. Yeah.

The synergies, though, Neil, you have to talk about the synergies. They're so delectable that I even had to use the word synergies. The fantasy angle to me is really big because ESPN's fantasy sports players are growing 10% year over year. It's just this massive, massive industry. And so there's definitely this world where you open your fantasy football app. You see bets tailored to the players you own on your team. So, again, I can see why this feels like a match made in heaven. Also, ESPN really wants to leverage the personalities they have, like the Pat McAfee's of the world where you tune into a broadcast. And the broadcasters say, here, here's who I'm betting on today. And you can tail

their bets or fade their bets. So again, it makes so much sense on paper. It really will come down to, does this destroy any of kind of that brand equity that we've talked about? Because, yeah, Disney's been so protective of kind of their brand. And it's interesting that ESPN is getting into betting because ESPN, in addition to being a place where people talk, there's a lot of talking heads about sports, is a news gathering organization. They have reporters and insiders. And there are a lot of ethical questions that are being asked about ESPN with its news

gathering organization, how that interfaces and whether there will be conflicts of interest, with gambling. And it's trying to get out ahead of that and it put out restrictions for the Adam Schaefters of the world and the woges of the world for people don't know. These are two people that cover the NBA and the NFL very intensely and they often break news. That can change betting lines. So ESPN wants to put up some guardrails, but as we've seen in the past, there have been instances where journalists that have been employed by gambling companies have moved betting lines and drawn a lot of scrutiny, even if there wasn't any foul play involved, there's going to be a boundary that might be crossed at certain points, and ESPN needs to get ahead of that to maintain integrity.

They need to take a page from our books and say, not financial advisors, not sports betting advisors before every show. There's a lot of money in this industry. All right. Let's move on. If you're looking for a house right now and struggling to find one, blame Mr. and Mrs. Johnson, the nice boomer couple from down the street. Older buyers are dominating the U.S. housing market right now. This year, the median age for a repeat home buyer was, was 58 years old, according to a new report from the National Association of Realtors, up from 36 years old in 1981 when the survey first started. Even though I said blame Mr. and Mrs. Johnson, it might just be Ms. Johnson, you have a bone to pick.

The share of recent homebuyers who are married couples dropped to under 60% this year, the lowest level since 2010, and it's single women that are increasingly picking up the slack. If you were a single woman roughly 40 years ago, you'd be buying a house at the same rate as your single male counterparts, but now the rate for women is almost double that of men. And regardless of gender, you're definitely rich. The average homebuyers income jumped to $107,000 in 2023, up from $88,000 just a year earlier. Neil, I feel like none of this is especially surprising, given the current vibes around the

housing market. No, I want to talk about the effects of high mortgage rates and how that influence payments because down payment surged because as mortgage. rates grew to 6% last year. For first-time buyers, down payments reached 8% of the total price, which is the highest rate since 1997, and 20% of buyers paid cash in 2023, all cash, and that's up from 13% in 2021. So you see the increase in down payments shows how people do not want as little of a mortgage to pay off as possible with rates surging as they were. Yeah, it is so funny to me that now that people, when people weren't spending all this money

on Taylor Swift concerts, they weren't paying cash, and now that people are, they're starting to kind of bump that up a little bit. And then we've also talked a little bit about, one of the big disruptions that the housing market has come to reckon with in the post-COVID years is that a lot of people aren't moving as far from the previous homes as they did back in 2022. Remote work seemed like it was going to be a really big part of a lot of people's lives. So people were moving to far and wide different parts of the country. But now the distance move from the last home decreased from 50 miles to 20 miles, which has got a lot closer to the previous historic norm of 15 miles.

Yeah, that was interesting to me. I know. People really started moving far away, and they're like, wait a second, I want to be kind of closer to where I initially have been. Yeah, no, just to go back, just to tie this all together and go back to your original point about boomers buying up houses, you know, they're really competing with the first-time buyer because they're all both going over the same type of house. The starter house for the first-time buyer is often the same type.

of house that baby boomers want to downsize to after all the kids have moved out of the house. So there really is, you know, a lot of competition over the same type of smaller house. Maybe it's a one-story house. And if you're a seller and there's a lot, been a lot of competition for your house these days, you're probably going to go with the older buyer has a lot more money, a lot more equity. You can probably put a higher down payment down than the first-time buyer. And that's really squeezing these initial home buyers out of the market. Yeah.

And, I mean, speaking of just a tie-bo on it, first-time buyers are all. also getting older themselves. They clock in at 35 years old for a first house compared with 29 years old in the early 1980s. So everyone's getting older. Everyone's looking for the same houses and no one can see. Will I own a house by 35? Are you shaking the magic eight ball right now? That's three years from now. I think you got it, Neil. Depends where. I do not see it in my future. I like renting. Okay. The number of international students in the U.S. boomed last year, and it might be the financial pick-me-up colleges need following a major COVID slum. Overall, the number of international students grew by 12% last year, the largest single year increase in more than four decades, according to a new report from the State Department and the Institute of International Education.

Driving the surge was one country, in particular, India. The number of Indian students soared 35% becoming the second highest foreign population on U.S. campuses after China. Most of them are coming for grad school and programs like science, technology, and business. So why does this matter? Well, colleges love giving you free t-shirts, but they like international students even more. That's because these students pay mostly full tuition, and the federal government estimates they pump $38 billion a year into the U.S. economy. But perhaps even more impactful over the long term for me is building the talent pipeline. When international students come to the U.S., they sometimes decide to stay here and create companies, play a huge role in our economy and society.

Toby, it kind of flies under the radar, but one of the U.S.'s most legendary exports, up there with Hollywood and Coca-Cola, is our educational system, and it seems like that diploma made in the USA brand is still going really strong. Yeah, still super strong, but I also just want to give a shout out to India. Everything is coming up for India this kind of decade. Remember, India is riding this massive population broom. It's due to surpass China's the most populous country on the planet this year, according to a UN report. And its economy is also growing right alongside with it. It eclipsed the United Kingdom as the world's fifth largest economy, and it's got Germany at number four in its sites, and the IMF expects India's GDP to grow

by almost 6% this year, which is the highest of the 30 largest economy. So all of this boom, all of this economic boom is kind of spilling over into this influx of international students going to America. Yeah, but they're coming to the U.S. They're not staying in India for grad school or school. So I think that shows to the U.S. is staying power as a hub for education. Well, no, and it actually ties back to India's struggles to educate its workforce. According to NPR, the unemployment rate in India for college grads is 20%. So there's also just a lot of people. There's not maybe enough jobs over there to support like this influx.

But also, yeah, it goes to show that maybe India's higher education system isn't preparing the workforce in the same way that maybe America's college workforce or education system is doing. And this is big for U.S. colleges because the number of... of kids from the U.S. going to colleges as remained low from COVID. Well, you know, a lot of people went remote during COVID for classes, and they just haven't come back in a big way. We're still down 3.6% for freshman enrollment in 2023. So looking abroad and, you know, those numbers also fell off a cliff, especially during COVID, because there were all these travel restrictions and no one came to the U.S. or no one really traveled anywhere for school or anything otherwise. So it's really important for the U.S. to get these

numbers back up. So it's very much. a relief to do that. And I was just thinking about when we were talking about India and the education system and people coming here, I just thought about all of the Fortune 500 companies that are run by Indian or Indian Americans now. And I was like, okay, what are their biographies? How did they get here? Turns out a lot of them came here for grad school. Sundar Pichai of Alphabet is one I was thinking of. He came here. Satya Dadella of Microsoft came here. He went to University of Wisconsin, Milwaukee for grad school. And then Arvin Krishna, who's the CEO of IBM, also. went to University of Illinois at Urbana Champagne for a PhD in electrical engineering.

So this is a huge way to build our talent pipeline. I guess shout out to the Midwest higher education system because there seem to be doing well. All right. Now, before we jump in the next half of our show, we're going to take a quick break. We all have that dream trip. We've been wishing we could go on. But too often life or usually price gets in the way. That's why price line is here to help you turn your job. dream trip into reality. With up to 60% off hotels and up to 50% off flights, you can book everything you need for your next adventure. Don't just dream about that next trip. Book it with Priceline. Download the Priceline app or visit Priceline.com and book your next trip today.

Exxon wants to power your vehicle, whether it's through gasoline or an electric battery. Yesterday, the fossil fuel giant said it was going to drill for lithium in southwest Arkansas in the hopes of becoming a major supplier for electric vehicle batteries by 2030. You might be thinking, Exxon, don't they drill for oil and gas? Yes, but they also are aware that the world will eventually ditch gasoline-powered cars

for EVs, and they want to make sure they're involved in some way. And the way to weasel in is through lithium. Lithium is a key component, of course, to lithium ion batteries that are used in EVs. The problem is the U.S. is a tiny player in the global lithium market compared to South America, Australia, and primarily China.

So as the race to scoop up lithium for EVs heats up, Exxon is making a bet that it's made in America lithium will eventually be the kind that goes into the Ford F150 Lightning or Electric Mustang. Toby, if Exxon is getting into lithium production, it can only lead to one question. Is lithium the new oil? What you call oil black gold is lithium silver gold, I guess? I don't know what lithium looks like. It's definitely sparkly.

I mean, this is just smart business from Exxon. This to me is what the future of decarbonization looks like. It's not these big splashy announcements that by 2050 will be carbon neutral. It's investing in infrastructure that actually leads towards a future where the combustion engine isn't the main form of power for cars anymore. So when I hear that Exxon plans to supply lithium for well over a million EVs per year and become the leading supplier of the metal by 2030, I think they actually will because it's in their best business interests you ramp up their lithium mining capabilities.

Right, but all our listeners probably remember, only a few weeks ago, was Exxon made a $60 billion purchase of Pioneer Natural Resources to grab a share of the oil fields in West Texas. And I think this deal is only worth $100 million. So the scale of how much it's drilling for fossil fuels and the scale of how much it is making a play in the lithium market are exponentially different. and the lithium play is much smaller. It's much smaller. It's a hedge of their bets. It's not like they're not betting the future of the company.

But again, I still think it is, it represents meaningful progress. I was also digging into how the heck you actually mine lithium because it's kind of fun. You actually use conventional oil and gas drilling methods, but instead of oil, you're trying to reach this saltwater, lithium-rich salt water, that's 10,000 feet underground. And then you use something called direct lithium extraction technology to separate the lithium from the saltwater. You used to have to do this thing where you would have these large evaporation pools where you just wait for the saltwater to evaporate and then mine lithium from there. Now it's a lot more complicated and a lot more efficient in how you can extract the lithium.

So I just thought it was funny that Exxon can use their existing oil and gas techniques to get to saltwater. It is a liquid that's underground. So I thought that was interesting. Yeah. And then just to wrap this up, there is going to be a global race for lithium. And right now, prices have fallen as more supplies come on the market, but as more EVs get produced in the coming decades, you need lithium. So there is an arms race right now to get your hands on lithium. Tesla, like it's done, everything else, is bringing lithium production in-house, and it opened a huge facility in, or it started to build a huge facility in Texas in May because it just knows that lithium will be so important. Elon Musk has called it one of the major chokker. points in building electric vehicles. So the race is on to secure lithium supplies. And maybe it'll

happen in the U.S. but it seems like most of it is happening abroad right now. And that's not what U.S. companies like to see. Yeah, but the U.S. did just find what may be the largest lithium deposit on Earth back in September on the border of Oregon and Nevada. So it may hold 20 to 40 million metric tons of extractable lithium. So again, if there's an arms race and we just found maybe the biggest supply, like it. Bullish on Southwest Arkansas, by the way. Yeah, I know. Shadda. Northwest Arkansas is booming.

It's one of the boomingest regions. That's a word, in the country. Now, Southwest Arkansas likely will have a lot of thousands of jobs created because of these. They're really abandoned oil drills, wells that are being taken over by lithium production. So it seems like a somewhat productive use of what is now a industrial wasteland. Yeah, shout out Southwest Arkansas. I never thought I'd say those words. It's Tuesday, which means we are so back with another edition of everyone's favorite

segment, Toby's Trends. Neil, this one is for anyone out there who just wants to get away but doesn't want to mortgage the house that they may or may not be able to afford to do it. It's called travel doping, where dupe is a reference to a cheaper, more generic alternative that still resembles the real thing. In the context of travel, that means opting for a more under-the-radar doppelganger of a more popular vacation spot. Expedia actually put together a list of recommended dupes, so pay attention at homeless

listeners, this could save you a buck or two. Instead of going to Nashville, try out Memphis and trade in country music for some soul. Instead of going transatlantic to find a striking body of water in a historic old town in Geneva, keep it in North America and try out Quebec city for the same dose of both. And finally, if London is screaming your name, try Liverpool instead. If it was good enough for the Beatles, it's good enough for you. Neil, when you're not sitting at this desk with me, you're a pretty astute traveler yourself. Are you on board with this dup trend? I think it's great. I think people have been doing this for years, but, you know, it's been dubbed dupe now because of whatever, TikTok. Yeah. But no, I think going to a cheaper

destination rather than these major cities that are super expensive and only becoming even more expensive is a great thing to do, go off the beaten path a little bit. Often these more regional centers have more interesting culture and more of a local flare than the major metron polls that are going on around the world. So I put together a few of my dudes. I knew you would, yes. I just, you know, I just had to. So please tell me listeners if this is a good idea or not, or if you like these or not.

Philadelphia for New York. Nope. Okay. Just going to give that one an X right there. Portland, Maine for Boston. This one is true. I'm a Portland guy through. Okay.

Fort Collins instead of Denver. Okay. I've never been to Fort Collins. Fort Collins is sick. But I do love Denver. Okay. And then Flagstaff, Arizona, for literally any other mountain town out west. Yeah.

Great for training, too. if you want to train for an ultramarathon, go to flyt-staff. Right, it's super elevated. And this one, kind of random. Ocean Springs, Mississippi instead of Charleston, South Carolina. I'm just going to take your word for that one. Ocean Springs is really cool. It's kind of like an hour east of New Orleans, but it's a beautiful downtown, super cool,

much cheaper than Charles. I'm taking notes. Let's do a dupe tour, Neil. We just go to all those places you mentioned. Okay, for our final story, how much would you pay to know what's going on inside your pet's head? If your answer was $550 for 90 minutes, you're in luck because that's what a pet psychic goes for these days. People are increasingly booking session with these animal communicators to figure out certain behavioral issues or even learn about their pets' preferences for end-of-life care. The idea is these pet psychics can communicate with your animal on a level you can't, so you pay these folks to get inside their tiny, furry, adorable little heads.

You know, the craziest part about this to me is that a lot of these times these sessions are being conducted over the phone. Don Allen, a 48-year-old from Western Mass, does 30 phone sessions a week where she apparently connects telepathically with the animal and lets you know what makes them happy or if they are feeling anxious about anything. And she makes bank for it. She charges $85 for those sessions, which comes out to $2,550 a week. you know, regardless of whether you believe in the skills of these analogue communicators or not, it's a heck of a business. Of course, it's a heck of a business to prey on people's anxieties around their pet. I mean, there's so many surveys that come out, just how much people value their pet,

and it's part of their family. About half of U.S. pet owners think of their pets as much a part of their family, as a human member. So you're just praying on these anxieties, so it makes me not happy. I know. And then the other part of another survey that speaks to this trend is that a 2022 UGov survey found that 67% of Americans said that they have had a paranormal experience. So you combine a massive influx of these pet lovers with a growing majority of people who do believe in kind of the psychic realms and the paranormal realms. And of course, you have a recipe for these pet psychics popping off.

This was wild. One of these, I should say, they like to be called animal communicators. And in this article in the Wall Street Journal that we're drawing from, they said, that this is growing mainstream, you know, a few years ago, they were considered fringe lunatics, and now they're growing mainstream. I don't know whether that's true or not. Obviously, they're going to say that. But in one episode, one of these animal communicators found out that the dog didn't like

their nickname of Big Al. It's actually so cute. The dog's name is Albi. And this video went super viral because apparently the animal communicator was told by the dog that I don't like my nickname, and she said that the dog didn't tell her what his nickname was, and then she later came to find out that the nickname was Big Al, and he didn't like it because he thought it made him seem large and overweight. Just adorable, though, to think about Big Al being stressed out about his nickname. The best part about this business, as

Morning Brew Writer, Dave Lozo pointed out yesterday, is that the dogs can't tell you, you're wrong. It's actually the perfect psychic kind of target, because Humans also fall for psychics all the time, because if you get one thing right, you're like, oh my God, they're totally right. The dog can't tell you anything. So I think it's actually a genius move. And if you get something kind of right one time,

then you're locked in for life. So I don't know. I'm all in on the dog. All right. We have to wrap it up there. What a business. Have a wonderful rest of your day, everyone. Before we close up shop,

I do have to apologize to the entire state of Texas. Yesterday, I mistakenly said that Texas A&M was in West Texas, when of course it is in East Texas. Look, sometimes a New England boy mixes up Lubbock and College Station when trying to sound articulate on a podcast. I'm only human. I won't mess that up again, I promise. But if you have any more beef with us or want to share other thoughts on the show, you can write into our email Morning Brew Daily at Morningbrew.com.

Let's roll the credits. Emily Milliron is our editor and producer. Samantha Velas is our associate producer. Yuchena Wa Ogu is our technical director. Billy Minino is on audio. Hair and makeup is very proud of my haircut, which has been called both a sleigh, and tight. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.

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