Morning Brew Daily - The $13M College QB Suing Boosters & Fast Casual Dining Rules The Lunch Rush

Episode Date: May 22, 2024

Episode 328: Neal and Toby look into the lawsuit that could shake up the NIL landscape in college athletics. Then, Japan wants to prevent overtourism of its iconic sites by literally blocking its view. Next, fast casual dining has become a lunch favorite while fast-food is falling behind. Plus, destructive hail weather is threatening to cause billions of dollars of damage. Meanwhile, microplastics have been tested to be found in tes…ticles. Yikes. Lastly, an Australian magnate wants a portrait of herself taken down in a gallery…only to cause more attention to it.   Visit https://www.sage.com/morningbrew for more! Get your Morning Brew Daily Mug HERE: https://shop.morningbrew.com/products/morning-brew-daily-mug?utm_medium=youtube&utm_source=mbd&utm_campaign=mug Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning brew daily show. I'm Neil Fryman. And I'm Toby Howell. Today, how the $17 sad desk salad won hearts and minds. Then what happens when a big-time college recruit doesn't get the NIL money, he's promised? It's Wednesday, May 22nd. Let's ride. A tip of the MBD cap to 60 minutes, because for a show built around a stopwatch, it hasn't aged a second.

The CBS program closed out its latest season on Sunday night as the number one TV news program across cable and broadcast, a title it is now held for 50 consecutive seasons. Toby, at a time when traditional TV is collapsing and trust in news is at historic lows. 60 minutes just keeps ticking along. My perception of 60 minutes is that it just comes on after every major sporting event. Is that correct? Well, it does come on Sunday nights after the late game on CBS Sunday football. And I just have distinct memories of Jim Nance in the fourth quarter, some time being like coming up on 60 minutes. We're interviewing the president, except on the West Coast. And then immediately you're like, oh, crap. I haven't done any of my homework. It is such a trigger for the Sunday Scaries,

but it's just an excellent program that's just kept it up for decades and decades and decades. I think it shows the power of a premise. It really took its premise. It's 60 minutes. They have the stopwatch clicking, and they've run with it. And it's clearly been working for the last 50 years. Now let's hear a word from our sponsor, Sage. Not the herb, but a tool that saves finance, a lot of time and money. Running a business can feel a little bit like driving over a cobblestone road with zero shock absorption. Every single issue can throw the whole team out of whack. And what makes the problem worse is that tens of thousands of CFOs are working with too small tech that doesn't afford them the full visibility of the financial health of their business.

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It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting at $179, like the next grill three burner gas grill, or get $50 off a select Weber Spirit grill and bring big flavor to your backyard, then set the scene with Hampton Bay string lights that bring it all together.

Shop spring backyard days for seven days at the Home Depot. Now through May 6th, Exclusion supplies to homebopo.com slash price match for details. When name, image, and likeness deals came to the NCAA, it brought with it a whole new world for student athletes. Money was now part of the college equation, but with more money comes more problems. And now we have our first real legal showdown at the upper. echelons of college football over an NIL deal gone wrong. University of Georgia quarterback Jadian Rashada has filed a lawsuit against Florida football coach Billy Napier as well as a booster in another staff member over an NIL deal that

would have paid him $13.85 million. Rashada is alleging that the group fraudulently convinced him to abandon a $9.5 million offer from Miami in order to sign for the Gators while having no intention of actually paying him. Neil, this is the first of its kind lawsuit and one that exposes the shadowy underbelly of today's college sports landscape where a network of wealthy donors do what they can to get top recruits to their schools with little to no oversight. It feels like this was a case that was bound to happen at some point. Yeah, speaking of wealthy donors, the person at the center of this case is this guy named Hugh Hathcock who runs an auto dealership empire down in Florida. and he is the one who kind of got in, allegedly, got into the recruiting process and talked to this quarterback and was like, hey, I'll literally write you a blank check for you ditching Miami and coming to Florida.

Of course, their rivals too, so that played a big part. He ran a collective Hathcock called Gator Guard, and these collectives have popped up at many different big time schools now that NIL is a thing. And they are this opaque, not transparent, part of the recruitment process, part of that. NIL process that we don't really know a lot about, but they've formed at all of these big schools and are offering all of these NIL deals to players. Right. And technically NCA regulations do prohibit boosters from interacting with players or recruits or dangling the allure of NIL money, but that is widely an ignored rule. Clearly, there is a lot of that going on behind the scenes, and this just shows that this is, in fact, going on behind the scenes. It has a real effect on these

kids, though, because just look at Rashada's path. He was a top recruit in 2023. He had that $9.5 million deal in place with Miami. Florida never stopped recruiting him, though, and eventually he was promised more money at Florida, so he decided to decommit from Miami, go to Florida. Florida pulled the rug out from underneath him. He ended up at Arizona State with no money, so he went from life-changing money to no money whatsoever. And now he's a little bit buried at the debt charts at Georgia. Totally changed this kid's the trajectory of his life. And you're right about life changing money. I mean, the amount of, we say $13.85 million, that is pretty staggering. It would have basically amounted to monthly payments of $250,000 during his freshman year that

would have increased his sophomore and junior year to more than $250,000 per month. And in exchange, he would have to play football and also do various social media promotions and marketing for the school and for, I guess, this guy's auto dealerships that he has. So that is just a staggering amount of money. So we went from, you know, college athletes not getting paid to college athletes getting dangled a million dollars over the span of four months. Yeah. And there definitely seems to be a case here for Rashada because at one point, someone involved in the deal texted Rashada's agent, tell Jaden we look forward to setting him up for life. Need is set up his brokerage accounts,

ASAP, dude is rich and we just got started. So clearly there were promises made here, but promises not kept here. Countries all over the globe have been cracking down on a and obnoxious tourists, but I've never seen anything like what Japan did this week. Officials constructed a 65-foot wall to block visitors from taking a picture of the famous Mount Fuji from a popular photo spot. It's an act of desperation. Mount Fuji is the symbol of Japan. It's like putting up a screen in front of the Eiffel Tower, raising a curtain around the Taj Mahal, powering down the sphere. But locals are fed up. They are tired of the tourist hordes coming into their town, jaywalking, taking up all the parking, causing traffic jams, and littering on the

ground, so they resorted to the last resort. But why has this situation hit a breaking point now? It's because Japan has seen a record number of tourists this year, mainly thanks to its currency, the yen plummeting in value, making it cheaper for outsiders to visit. In fact, the yen recently hit a 34-year low against the dollar. So if you ever wanted to reenact loss in translation, get your butt to Tokyo. But not Mount Fuji. You're not going to be a little. able to see anything. There is definitely a Japan tourist boom underway right now. Across a record, 3 million arrivals in March to April. It expects 32 million visitors this year compared with just $25 million in 2023. It does seem to be a combination of that

weaker yen, but also just a post-pandemic travel boom in general. There's also led to a shopping boom in Japan as well. A number of the premium bands didn't really adjust their prices in time to reflect this new change between the dollar and the yen. So people are going over to Japan and loading up on shopping as well. So it's not just photography opportunities. It's just a tourist boom in general in Japan right now. Yeah, I don't even think it's that much of a post-COVID boom. I mean, if you look at the numbers,

$290,000 Americans visited Japan in March, which was, yes, a 42% jump year over year. But that's a 64% increase compared to the same month in 2019. So the plummeting yen, which the Japanese bang, Central Bank has taken drastic moves to shore up because 34-year low against the U.S. dollar has widespread ramifications for raising the cost of imports, for reducing purchasing power. It's really good for Toyota and other companies that are exporting. But that is a historic move.

And I think Americans are taking advantage. I've talked to some people are like, yeah, I'm definitely going to Japan or other East Asian countries this summer. And we're absolutely seeing that in the numbers. I'm wondering how effective. Do you think that this screen that they put up is going to be effective? because already they've seen tourists just move to the road to get a different angle, which is what they were trying to prevent in the first place. Then also, it was almost like, and we're going to talk about this later in the show,

a stricent effect where as the wall is getting put up, more tourists were flocking there, more cameras were on this specific location. And I almost feel like they were working against themselves. So you're bullish on the wall. Well, I don't know. I don't know the geometry of the wall and where the angles go. But this thing is, yes, 65 feet wide, 8 feet tall. It appears like it is somewhat effective at blocking one of the most beautiful views in the world.

And it's just crazy that they've come to this breaking point. But we've seen this happen all over the globe. Barcelona took its bus route off of Google Maps because that was getting too crowded. Venice hit day trippers with a toll to get into the country. Hawaii dismantled a staircase that was getting too popular. Milan outlawed late night gelato. So all of these places around the world that are getting hit with tourists are just saying, enough is enough.

Remember the viral $18 big mac meal that a reporter snapped the picture of at a Connecticut rest stop. It sparked a conversation around fast food. If these chains aren't even saving you money anymore,

why go there at all? Enter Fast Casual. Bloomberg published an article yesterday called How the $17 desk salad won. It calls out the fact that the average check at fast food chains has jumped 47%

since 2019, which makes the greasy Big Mac you're about to eat a little less appealing when you compare it to, say, a kale salad from Sweet Green for only a few more dollars. The gap between premium fast casual lunch and fast food was only $2.64 in the first quarter of this year, according to the market research firm, Sircana. It's led foot traffic at fast casual chains to grow faster than any other dining sector from November to February. And a quick look at the share prices of chains like Kava, Sweet Green, and Chipotle,

show how customers are embracing the healthier, pricier sector. Neil, Sweet Green is one of the fastest rising restaurant stocks this year. They are crushing right now. They're crushing it. I have these numbers. Sweet Green is of 185% year to date. It's the seventh best performer of the 3,000 stocks in the Russell. 3,000.

Kava is up 93%. Both of those are up more than Invidia, by the way. Shake Shacks up 41%. Chipotle is up 44%. Wingstop is up 55%. And last Friday, Kava Chipotle and Wink Stop, they all hit an all-time high. And what's shocking is when COVID hit, we were like, oh, they're done, right? Like, this is where people go to the, these places are perfect for office workers who go in to work and then stop by for lunch.

And for some reason, and we can get into why they've completely flipped the narrative. And what was expected to be, doom has turned into bloom. You know what? And I just made up that phrase. I immediately thought about the bloom and onion from Outback, but I don't think this falls into the fast casual restaurant chain. I think an underrated part of the fact of when it comes to the share prices is that a lot of the people who might invest in a chain like Sweet Green or Kava is also their customer.

Like it's, you think about the typical finance bro who goes and gets their fast casual meals at these places. That means it's like this nice marketing flywheel. They invest in those companies too. So I think it is this interesting flywheel between if your customer, is your investor as well, you might see your share price do outperform kind of the broader restaurant market. Wouldn't we see Albirds then, Spike?

Well, Albers is cool. I don't know. I don't buy. I don't totally buy that. I think I buy the argument that the price parity has completely come down between fast food and fast casual. Also, these companies have set up a ton of shops in the suburbs, which is where people are spending a lot more time nowadays with work from home.

And so they're capitalizing on that market. Chipotle, Sweet Green, Kava, they've all established outposts out in the suburbs. And then another thing is they're getting into dinner. And I think these places, you associate them with lunch, but a lot more people are going there for dinner. And Sweekeye is trying to capitalize on dinner by introducing its first ever steak salad recently. And that was two weeks ago. And there were questions about you're supposed to be a very sustainable brand.

And now you're introducing steak, which emits a lot of emissions. But by taking that step, which they've not done for years, I think shows how important. that dinner time slot is really important for them. McDonald's is fighting back, though. They are planning to offer a $5 value meal, getting back to its roots as providing the best bang for your buck, because you do have to, if you're competing on price and quality, you're going to lose this week,

and you're going to lose to Kava every time. So they're trying to get back to what makes them McDonald's. It definitely is, though. The biggest change in the last four years is the consumer habits of office workers and lunch habits go as office workers go, and it looks like they're going to fast casual. Up next, much like New at the gym, hail is getting bigger and more powerful. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars.

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Book on Hilton.com or the Hilton app and save up to 20% to get the stay you expected. When you want savings, not surprises. It matters where you stay. Hilton, for this day. There's a new weather menace stalking the globe. It's not tornadoes, hurricanes, wildfire smoke from Canada, or clouds with a chance of meatballs. It's hail.

A number of devastating hailstorms in the American Midwest and Europe over the past year have led to record financial losses and could lead to an overhaul of the insurance industry, which is on the hook for much of the damage. Consider this. 1980s, there were eight severe thunderstorms in the U.S. that caused at least $1 billion or more in losses, adjusted for inflation. Last year alone, there were 19 of those devastating storms, more than double the figure of the entire decade. And the main culprit is hail, those icy balls that can wreak havoc on property, like when baseball-sized stones took out power lines in San Marcos, Texas a few weeks ago, of the $64 billion in global damages from storms last year,

the largest single component is hail, which accounts for between half to 80% of the total each year. In the insurance industry, thunderstorms and their side effects like hail are considered secondary perils, while hurricanes, tornadoes, and the other super scary stuff is given a primary label, but given the surging losses caused by T storms, it could lead to big changes in how they're treated, because if not, they'll be hail to pay. Oh my gosh. Yeah, this secondary versus primary perils thing is causing the insurance. industry to look at how they kind of distinction, how they draw the distinction between thunderstorms and other perils like that. And it is something that is interesting, too, is that one of the reasons

why that damage number is getting so much higher is that we keep on building in places that experience like these hailstorms because a lot of it is happening in the Midwest in Texas, and that's where the biggest growth areas for real estate are in residential areas. So it is a causation, but also a correlation that the storms are hailing on places where people are building. Right. So there may be more hail storms in existence now because of climate change

or whatever, but the fact is that now that when the hail is falling, it's falling on houses instead of great plains. Texas, the Texas population grew by close to 40% in the last 20 years. They're building in the suburbs of Houston. They're building in the suburbs of Dallas-Fort Worth. That is the largest, that is the fastest growing county in the country now. They're building in the,

in the, the, the Fort Collins to Denver corridor. So this area of the Great Plains, which is considered a hail factory because there are ripe conditions for what leads to hail. And we can talk about the science of hail because I would love to do that. They're building more. And that is leading to higher losses, higher damage and a lot of concern in the insurance industry and for people who are building there. Let's talk about the science of hail a little bit. Those balls of ice that form when updrafts in thunderstorms carry raindrops into the colder parts of the atmosphere and it causes them to freeze. And then if you think about why does the middle of the United States cause this perfect geographical conditions for creating hail, there's this big pool of warm moisture that comes off the Gulf of Mexico. Then there's cool air descending from Canada.

And then there's all this instability in the atmosphere as well because winds come in off the Pacific and over the rocky mountains. And all of this turns the Great Plains into this very viable. hail factory, as you described. And I do want to just call out one other risk that it poses to property. It's not just people's houses. It's also the energy infrastructure. You mentioned the power lines, but also a solar farm in West Texas had this brief hailstorm in 2019. It destroyed more than half of the photovoltaic panels caused at least $70 million in damage. So it's not just residential areas, but it's also the very power grid itself that is at risk from these hailstorm.

Yeah, before you have to deploy a solar panel panels in these areas now, they pelt it with artificial hail to see how resistant it is. But these things are powerful. They can be huge. The biggest recorded hailstone

that ever fell in the United States in South Dakota was a diameter of eight inches, which is twice the size of a softball. I cannot. That's scary. That is very scary.

Yeah, hailstorms. There will be hail to pay. If you're dialed into your personal health, then you are no doubt aware of microplastics, those pesty particles that scientists have found in our food, our water, in the very air we breathe. But researchers have found the microscopic flex in a different place recently. Human testicles. Now, if you're listening to this in the morning, I do apologize for the testicle jump scare so early, but a new research paper just dropped where scientists tested 23 humans as well as 47 dogs and found micropastic pollution

in every single sample. And the results may provide an insight into why sperm counts have been falling for years. The human samples had been preserved, so their sperm count could not be measured. But for the dogs, sperm count was lower in samples with higher concentrations of plastic.

Neil, it's still a small study and it only provides a correlation, not a causation at this point, but still, on a list of places you don't want to see plastic popping up, I think testes are pretty high. I think they are high. I mean, there are only two organizations.

in the human body that are protected spaces, that are safe spaces. Those are the brain and the testicles and the fact that microplastics are showing up in there and getting into the reproductive system and are perhaps causing havoc for the male fertility. It's definitely causing researchers concern. We found microplastics in other parts of the body and blood vessels, arteries, things like that. But the fact that they're getting into the reproductive system could be a huge problem. And yes, a reason why we've seen sperm counts drop precipitously over the past few decades. Uptown now, the going theory said it has to do with air pollution or exposure to pesticides.

But microplastics, which are these little tiny plastic particles that fall off, discarded plastic that are in landfills, and get into our air, get into our water, and we ingest them and inhale them, could be a huge problem. Right. And what's unknown right now is why they could be bad for us? Because is it the actual hormone-disrupting chemicals, contain in these plastics, or is it just the fact that the plastics are there, like physical pieces of microplastic are there that is causing these throwing things off? Scientists don't quite knows yet. We have seen microplastics cause damage to human cells in a laboratory setting, but again, we don't exactly know how they are causing that damage. Exactly. That's the main problem.

So what can we do about the microplastic problem experts say, we just need to do better job of disposing of our plastics and figuring out what to do with the waste? I mean, humans produce 350 million metric tons of plastic each year, and that gets shoveled into these landfills. They break down, become these nano and microplastics that end up in our water, end up in our food, end up in our testicles. And so figuring out how to convert that plastic, how to manage that plastic in a way that converts it maybe to energy. Some have suggested burning it, and they're like, yeah, it's not even that bad compared

to coal. And then one thing you definitely shouldn't do, though, just if you're wondering, how can I reduce my exposure is don't microwave your food in. plastics, which is something I am so guilty of. I do that. You know, those takeout containers, I just toss in the microwave, but it makes it just a lot easier. It causes the chemicals to become more prone to leaching into your food, which means they're more prone to getting in your body. So if you want to guard yourself a little bit from this, put a ceramic bowl, put your stuff in a ceramic bowl. Yeah, end note on microplastics, there's just more, there's so much we don't know.

They're just at the beginning stages of learning about it. Research is like, we don't want to cause alarm or anything like that. We're just beginning to study how it gets into our body. And what effects it does have on our health. Finally, a new episode of the Streisand effect just dropped. Yep, another prominent person tried to hide embarrassing information about themselves, but by doing so inadvertently told everyone about it. This week's episode is about an extremely unflattering portrait of Australia's richest woman, Gina Reinhardt.

Reinhardt was painted as part of a satirical series by Aboriginal artist Vincent Namajira that Lampoon's 21 influential people who shaped Australia like Ryanhaw. Queen Elizabeth II and an Olympic swimming champion, Kathy Freeman. But once she saw what was hung up in the National Gallery of Australia, she did not like what she saw. And frankly, I wouldn't either. She looks like a villain in a role doll story. It's not great.

So she demanded that the gallery removed two paintings of her, but the gallery said, no, this is a free country after all. And that sparked a global discussion and plenty of jokes about the portrait and art censorship. That probably wouldn't have happened had she not asked it to be. taken down. Toby, this is not a good look in more ways than one. Yeah, I was going to be fully on her side. I didn't know it was going to be a satirical

portrait because, yeah, he definitely did her dirty, but I think what you need to take an account here is always like the power imbalance when it comes to stric and effects. It's usually a more powerful person trying to exert their power and authority over someone who is less powerful. And there is

definitely a stric and effect at play here. Let's be clear because the National Gallery of Art told the guardian in the statement that there have been a noticeable increase in visitors to the National Gallery. Also, Google searches for Reinhart have been just going up. They were basically at zero before this because who's Googling Gina Reinhart. But then once she pulled this stunt, tried to get the portrait removed, they definitely surged. And also it went global as well. It's not just Australia, not just New Zealand. It's everywhere across the world. There are now keyed in on this Gina Reinhardt portrait.

Yeah. And I mean, we all are just learning about Gina Reinhart, but she is a big deal. Let's go into her bio a bit. She is. has a net worth that is estimated to be $31 billion, so that's good for the 53rd richest person in the world. She is a billionaire mining magnet and heiress, which she inherited from her father. She is a bit of a controversial figure because her father made some disparaging statements about aboriginal people, and she herself has been outspoken on issues like climate change. On the other hand, very few people have come to her defense, but the few people that have come to her defense are Australian

swimmers because she is a huge financial backer and booster of Australian swimming and competitive swimming around the Olympics. So she gives them direct payment. She set up this massive funding program to allow them to compete and get paid. So all the swimmers are like

they're defending her. Like she is the reason that we exist and that Australia is really good at swimming on the global stage. So that has been one pocket of her defense because she's been a huge booster of sports and swimming in particular. Ian Thoris. swimming legend. I do just want to call it the final thing here.

Australian comedian Dan Illick, he wants to raise money to display the portrait on a Times Square billboard. He's raised about $17,000 for $30,000 to make it happen. So this is just the logical conclusion of the Barberer Streisand effect, where you're going to not want your portrait seen in the gallery.

Now it's going to be seen on a billboard in Times Square. Let's wrap it up there. Thanks so much for listening. Have a wonderful Wednesday. and remember if someone hangs up an ugly portrait of you, probably bite your tongue and people will forget about it. For any thoughts on the show, send a note to our email Morning Brew Daily at MorningBrew.com.

We really do care about your feedback and try to incorporate it. Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Olivia Graham is our associate producer. Yucheno Ogu is our technical director. Billy Menino is on audio. Hair and makeup is in Japan living like a king.

Devin Emery is our chief content officer and our show is a about your note morning brew. Great Saturday, Neil. Let's run it back tomorrow. Not loving your AT&T or T Mobile Bill. Yeah, we've been hearing that a lot. Good news. Bring your AT&T or T Mobile Bill to Verizon and we'll give you a better deal. So get away from that unfortunate phone bill and get to Verizon. Run, ride, canoe. Whatever it takes, we'll be here. Bring your AT&T or T Mobile Bill to a Verizon store today and we'll give you a better deal on the best network. A better deal. No surprises. That's Verizon. Best Network based on Route Metrics, Best Overall Mobile Network, Performance, U.S. Second Half 2025,

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