The Best One Yet - 🏀 "The $500M High School Jock" — Overtime Sports's teenager league. Sweetgreen's missing salad. Inflation's celebrity report.

Episode Date: August 11, 2022

What if we told you that venture capitalists and NBA players and Venture Capitalists just poured $100M into a sports league purely for high school kids? (They did). Sweetgreen just revealed that it’s so focused on making scalable salads that it forgot to do 1 thing: Make something else. And for the first time in years, prices actually went down - Because Inflation is a Self-Fulfilling Prophecy.$SG $XOM $CVXFollow The Best One Yet on Instagram, Twitter, and Tiktok: @tboypodAnd now watch us on YoutubeWant a Shoutout on the pod? Fill out this formGot the Best Fact Yet? We got a form for that tooLearn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. It's Thursday, the new Friday, August 11th. And today's pod, for days, pot for so many reasons, is the best one year. TVOY. TVOY. Grab the paddle boards, Jack, tap the trees. Nick and I are live IRL on the northeast shore of Lake Champlain.

It's an ab workout doing the pod on a paddleboard. The stock market is so happy that we're potting in person. So happy in person. The Dow jumped 802 points yesterday. It actually jumped 500 points. If you know, you know. First story. What do we got, Jack?

Overtime League started out as an Instagram account. Now it's a professional sports league. Overtime. It isn't just any sports league. Overtime is a professional high school sports league. For our second story, you know, prices keep going up. Yeah, they keep going on up. For the first time in a while, inflation paused.

Because inflation is a self-fulfilling prophecy. Our third and final story, Sweet Green, just revealed. They're so focused on tossing salads, they forgot to do one thing. Sweet Green forgot to do something else. But before we hit that wonderful mix. A wonderful mix to whip up together, Jack. The Wall Street Journal just did a takedown on the Yetis. Yeah, before you freak out, not you guys, not you Yetis.

Not our listeners of this. No, the Wall Street Journal has no issue we're aware of the listeners of this pot. We call you the Yeties because you are the best ones yet. What the Wall Street Journal did take issue with was the cooler company named Yeti. Here was the Wall Street Journal headline. Does anyone really need a $500 cooler? You've all seen them. Yeti coolers, they claim to keep your drinks cold for seven days.

Seven days. Even in the harshest, hottest, hottest environment. But here's the thing, besties. You need a drink cold for seven hours, not seven days. Oh, great. If I'm deserted in the desert, my white claws will stay. Here's the problem. You're not in the desert.

You're on a glamping trip for like one night. You're worried about your heated down comforter might run out of fluff. You don't need something keeping your drinks cold for as long as an ice age. Oh, Nick and I were thinking about it. And you know what the seven-day promise from Yeti actually is? Here's what Jack and I are thinking. It's a classic case of more than I need marketing. More than I need marketing.

More than I need marketing. When companies promise something can do so much. So much. But you need it for like practically enough. For example, Jack, that Gillette Razor with like nine blades. I need one blade. Or Jack, that MacBook computer with like 9,000 megahertz. I don't even know how to get that many mega-hirts.

Jack, how about that Canada Goose jacket that's made for the Arctic Tundra? Sarah, you live in Scottsdale. So, Yetis, for today's pod, Jack and I went extra far. We built up, we whipped up nine stories for you. But we're going to hit three stories, let's hit three stories. 15 years before this song, two boys from the Northeast met in the dawn. 50% that's though you know, because we're ready to go. We can't wait no more, so just start the show.

Or our first story, no one is raising. venture money out there right now. But overtime league, they just raised $100 million. Because overtime league figured out how to do professional high school sports. All right, yeties, full disclosure. This is Nick. This is Jack. And we're both 510 inches-ish. We told our coaches, though, we're 511. And then we got listed on our sports rosters as 6 foot. Yeah, we wouldn't have been recruited to play in the overtime league. Pretty sure I told Molly on our first day to shake shack, I was 6.1 and a half. Did she have eyes to verify that?

It was in a public art. Yet he was six years ago, an Instagram handle was born. It was called Overtime Sports. Overtime Sports started on Instagram. They would post highlight videos of high school basketball stars. You could follow on Instagram and watch like the future LeBron dunk on some nine-year-old. Yeah, well, they ended up creating an entirely new thing out of that Instagram account. They went from social media account to professional basketball league.

Here's the key. It's a professional high school basketball league. Yes. overtime told kids to ditch the traditional path to basketball start. Like skip the middle school dance, put that bar mitzvah on a whole. Overtime thought that it was silly. That high school kids, the top prospects, they go to Duke or Kentucky for one year. They have no time to study academics.

No time. They don't get paid. No, they don't. And it's all just a one year layover before they get to the NBA. So instead, overtime said, here's the deal. Come to Atlanta, come to us, attend overtime academy, play professional basketball. And how much are they going to get paid, Jack? 100,000 a year.

$100,000 for a 16-year-old to play basketball. And you're going to build a huge social media following that you can monetize for the rest of your life. Now, Yeti's what Jack and I find fascinating about this story. What overtime did is build the audience before it built the product. Right. Social media counts first. League second. Well, now, overtime is treating sports like a high school arts and crafts project.

This is really exciting. You're getting creative because overtime elite is the flagship product. It's basketball. Yeah, it's three teams, nine players per team, 16 to 18 year old. They play against each other, those three teams. And they play exhibition games against like the Harlem Globe Trotters and international team. But they didn't stop there. What's their newest sport, Jack?

Seven on seven football. And not just any football. They're doing flag football like you used to play on the playground with your buddy Timmy. No tackling. No helmets. No bulky pads. And no offense. No linemen.

No linemen included. So every play is a high amplitude like wicked fadmy. Deep pass. Insanely fast. You can't keep up. Speed kills. Highlights, highlights. Highlights. And the CEO of overtime just hinted that next they're doing boxing, so they just made some big news. To finance growth, they just raised $100 million from the venture capital industry, and they're now worth half a billion dollars. And the investors are pro league. We're talking Jeff Bezos, Drake, Morgan Stanley. The bank. Not the D3A. But here's the wildest part. Get this. Six percent of all active NBA players. players have invested in this high school professional basketball startup.

That's what overtime said. We found that shocking to believe. Kevin Durant is an investor. 6% of the NBA invested in this startup. So Jack, what's the takeaway for our buddies over and overtime? The sports industry depends on the TV industry. Yes. But overtime broke that rule.

Yeties, we always mention on this pod that the NFL is the most marketable sport in the United States. Why? TV deals. TV deals. Tech and media companies will pay billions per year. to broadcast Sunday and Thursday and Monday night NFL. Jack, how many cable TV deals does overtime high school sports have?

Zero. Zero. It's got none. And they're fine with that. Yeties, your uncle probably has no idea how to watch an overtime elite basketball game. Yeah. And overtime is fine with that. Yeah, because overtime's audience is all under 24.

A demographic that really just doesn't have cable TV anyway. What is cable? These are cable nevers, cord nevers. So overtime produces, 50 shows and they're all on YouTube or TikTok or Instagram. That's it. So far, overtime monetizes through ads, merchandise, and tickets sales. Sports leagues need TV deals.

Overtime is proven the don't. For our second story, hold it. We have shocking celebrity news. Inflation just paused. The reason this news is so huge. Inflation is a self-fulfilling prophecy. Okay, Jack. We're here together.

We went to college. like right down the street basically. We did. Okay. At that time, it was Jersey Shore. Jersey Shore. Whatever Snooki and Mike the situation did this week, that's what got the attention. Then, for years later, it was the Kardashians.

Kim, Chris, Kendall, whatever they were up to, whoever had a beef with them, that's who got the headlines. Well, now the inflation report, that's the new celebrity. Whatever happened to prices last month gets all the headlines. The monthly jobs report is like, so. jealous right now. The monthly jobs report has been replaced by the monthly inflation report as they talked about economic data. And yeties, we know it's been a year of rising prices for you, us, and your credit card. Every month, inflation seems to hit another 40 year. Well, here was the shocking celebrity

news. Yesterday, we got the inflation report for the month of July. We did. And inflation paused. Inflation prices actually didn't rise from June to July. They didn't rise and they didn't fall either. they stayed the same for a month, and that was a big deal. Now, here's the key. Yes, prices are still up 8.5% from last year, but that's down from 9.1% the month before. Here's the funny thing, besties. You probably already knew this, and that's because of one thing, the gas station. Gas prices. Gas prices. You see gas prices every day. It's the only price tag. The only one. We see every day. Literally on a billboard right there. And you know gas prices are down. In fact, gasoline nationwide average in this country has fallen 57 straight days.

We had a 57 day streak of gas prices falling. It ended like yesterday. Isn't that Joe DiMaggio's hitting streak, 57? It literally ended the day I drove like 300 miles to see you. We went from like 520 a gallon at the peak, which was horrible, to a still bad, but much improved $4.1 per gallon. Now, Jack, we should sprinkle on a little context here. Yes. We're still paying too much for Pop-Tarts and everything we Yeah, food prices are up a tad from last month. So are flights and fashion and like all those pop-tarts. But the overall positive inflation and the specific gas price dropped. Yeah, Jack, those are small economic wins to celebrate. Yes, they are. Here they are. This is our economy. What's the takeaway for our buddies who are everyone in the economy?

Inflation is a self-fulfilling prophecy. Yet he's so many variables go into why we're paying more for all this stuff. The war in Ukraine, too much stimulus, supply chain snafus, and everyone wanting to eat Pop-Tarts while flying on an airplane inexpensive clothing. But the dirty secret about inflation, it's what we've always told you. The more we talk about inflation, the more inflation we get. It's a self-fulfilling prophecy. If we think inflation is coming, then that gives companies more cover to raise prices. And if workers think inflation's coming, then they demand a pay raise to cover for it.

And that raises inflation even more. But this is what Jack and I were excited to tell you. The self-fulfilling prophecy of inflation, it goes, the other direction too. A key to ending inflation is if we start talking about ending inflation. Because the more consumers like us talk about price drops, the more unacceptable it is for companies to like raise prices. That's why this news is so big. It represents a narrative change in the inflation story. It does. And that could change the direction of the prophecy. Because no matter the direction, inflation is a self-fulfilling prophecy. And now a word from our sponsor, Robin Hood.

Nick, you got introduced to the Robin Hood app the old-fashioned way, right? Yeah, I did. My girlfriend now wife's older brother, who was that guy who worked in tech and like knew about the next iPhone before Apple did. He told you about the Robin Hood app. You told me about the Robin Hood app. All right. So you signed up because you wanted to buy a stock. Because like it was hard to figure out how to buy a stock when you're 25 and it's 2014. Yeah, back then you had to find a broker.

Call a broker on the phone. Call them pay a commission to that broker. Instead of calling, suddenly there's his app. You just swipe and you could buy the stock. Robin Hood's interface felt as easy as ordering an Uber or snagging a sandwich on Seamus. And it still is. So if you're not a Robin Hood user yet and you want to get started, you can go to robin hood.com slash T-Boy and you can choose get this a free stock. That's robinode.com slash TBOY. Certain limitations apply and all investments involve risk.

Robin Hood Financial LLC member SIPC. Robin Hood, by the way, no longer affiliated with us or the podcast. For our third and final story, sweet green salads. just announced they're shrinking in their headquarters and they're moving into a smaller building. Sounds like an HR move. It's actually a fundamental issue with their salad business. All right, Jack, talk to me. When you want to stick your face into a bowl of root vegetables, what do you do? Where do you go? Sweet green, Yettys, it is our preferred bowl of plants. Yeah, our old New York City headquarters in meatpacking, they were like right down the street from the sweet green. We ate there daily. Actually, you get back and the curried cauliflower smell was

on the microphone. It doesn't wash off easy. It doesn't. So it was fitting when Sweet Green IPO last year. Nick and I were excited to cover it, but the stock is down 68% since their November IPO. All right, they just announced they opened eight new salad restaurants in the past quarter. Revenue is up 45%. We love reading Sweet Green's earnings reports, but then the CEO said this. Starting on Memorial Day, we began to see some softness. We're lowering our 2022 sales expectations. But here's where things got ironic. Yeah, they did. Sweet Green also announced they're moving out of their headquarters building and moving into a smaller building. Okay, we repeat, Sweet Green doesn't need as big an office anymore.

And that is a signal of a huge problem for Sweet Green. And here's why it's so ironic that Sweet Green is downsizing their core office. Sweet Green depends on big office buildings because they sell lunch to office workers. Check and I jumped into their old IPO paperwork. They said the word office 11 times. That's more than they said the word salad. Sweet Green's core customer is a guy named Office Office Office. Oliver. Office Oliver. He wants a healthy harvest bowl extremely fast so he can give back to his desk

in Midtown and crunch some more numbers. But Yetis, here's the problem. Sweet Green is not the only one with fewer people in the office and needing smaller offices. This is the strange phenomenon right now. While people are back in the cities, fewer people are back at the office in their cities. We know people are back in the cities because of yesterday's story. In New York City, only 1.9% of apartments are vacant. If you want to go to New York and get an apartment, you're not going to get one. Like, good luck. But for offices, you could get one. You could. Office vacancy is 10 times higher than apartment vacancy in New York City. What was that stat we noticed in the Cushman and Wakefield? They reported that New York City

office real estate is 22% vacant as of the second quarter of this year. All right. So Jack, if Office Oliver is enjoying his apartment in New York City but only hits his office three days a wee, then that is a 40% drop in the number of chicken pesto orders he makes at Sweet Green. So Jack, hold the bread. What's the takeaway for our buddies over at Sweet Green? You can't keep serving the same salad, literally. Yeties, honestly, Sweet Green, they've perfected the office lunch business model. They really have.

They really have. It's such a fine product. It is a fun product. They're so focused on office lunches that they do bulk delivery of salads to lobbies of huge office buildings where they know that Sweet Greeners work. But the data shows that their weekday lunch business may not come back. 100%. Sweet green doesn't seem prepared for the end of five-day weekday warriors. Sweet green needs to pivot. That's the way Jack and I see this. For example, sweet green, you should be delivering pre-made salads to

grocery stores. That would be sweet green for suburb salad. Or sweet green could start bottling their secret salad dress. Then you could have sweet green for dinner. Or sweet green could launch an entirely new bar concept out of the same locations. Sweet green for happy hour. It's time for sweet green to think outside the bowl, expand beyond office all of her. You can't keep serving the same salad. Literally. Jack, can you whip up the takeaways for us for the new Friday? Overtime League expanded to seven on seven flag football and boxing's next.

It's breaking the rule that pro sports need TV deals. For our second story, inflation. The most talked about number in the economy paused last month. Inflation. It's a self-fulfilling prophecy in both directions. And our third and final story, Sweet Green, just said they don't need such a big office. No.

And they're not the only ones. Yeah, I can't keep serving the same salad. Literally. But you make great salads. Green goddess. You are, sweet green, you are a green goddess. Now, time for the best fact yet. This one sent in by Prabad Mawgi from lovely Vernon Hills, Illinois.

We already told you that more people die from mosquito deaths than deaths from any other animal on earth. We also told you the box jellyfish is even scarier. But Yetis keep kicking this fact up a notch. Yeah, here's the deal. Besties. Are you one of those people who like, you think you get bitten? I'm not. Like, I get bitten all the time.

Others are getting bitten and I'm that guy. I'm like, what am I? Well, if you're wondering if it's personal, it is personal. Turns out the main reason why mosquitoes bite some people more than others is your genes. Your genetics affect your natural body odors. And those certain body odors attract mosquitoes more than others. If you get bit a lot, it's because you're sweet. It's not personal.

except it's personal. But it's personal that you taste good, which I would take as a compliment. Honestly, I'm strutting it. Yetis, you look fantastic today. Jack, what's the plan tonight? What do we got going on? Philo Ridge Farm.

Ooh, I like this. Wonderful, beautiful restaurant with farm-to-table dining. You're just living up the cliches while we're here. We're going to a farm. Of course. Here we go. I didn't bring any overalls.

I got nothing with me. I got a button down. It's not an overall kind of place. This is a fancy fire. One of those nude barns. Great. Yeah, it is. We gotta get out of here. We'll see you tomorrow. Can't wait. And before we go, happy birthday to Joanna, co-founder of Beach Babes, who has her annual 21st birthday in Marina Del Rey.

Annual 21st birthday. Got to have it every year. And happy birthday to Cynthia Karim in Laverne, California. And Jason Raymond Werner, the Vintner, just turned 34 in Portland, Oregon. Happy birthday to Garrett Purdue in Tampa, Florida. And Fall Walker, Greensboro, North Carolina. He's got a birthday. Congrats to Ben Tarragon, who doubled his... Ernst & Young annual bonus by going to Atlantic City.

You want to hang out with Ben. And congrats to Kindle Alley for passing their final CPA exam. And to the entire Boston University Business School class, kicking off their MBA program, enjoy like eight straight days of networking events. Terriers, no business. And just a thank you to Yeti, Amber Benson, who designed sit down, stand up, and sit back down again,

cartoons for Jack and me. Amber, you're the best one, Yeti. Thank you. And to anyone else celebrating something today, Make it a T-Buy. Celebrate the wins. This is Jack, Nick and I both own stock of Robin Hood. And now a word from our sponsor, Robin Hood.

The first time I tried to buy a stock, I got burned badly. Is this when you wanted to buy a share of Ford? Because you liked the chassis over in Detroit? Yes, I had $200, so I bought $200 of Ford stock. I didn't get $200 of Ford stock, though. I got $192. Oh, the commission fees. By the time the stock climbed back to $200, I sold it.

But again, I didn't get $200. I got $192 again. Another commission fee. The stock grows 8%, but I was down on my investment. Because commission fees made small money investing impossible. So Robin Hood came in and killed commission fees. And commissions are still dead in stock and crypto trading thanks to our sponsor. If you're not investing on Robin Hood yet to get started, go to robin hood.com slash t-boy and choose a free stock. That's robin hood.com slash T-B-O-Y. Certain limitations apply for a list of other fees. view their fee schedule at RBNHD.co slash fees. All investments involve risk. Robin to Financial LLC, member SIPC.

Oh, and by the way, Robinette is no longer affiliated with us or the podcast. And the stocks Jack just said are for illustrated purposes only and are not recommendations. We have another mosquito one, which is kind of related, but interesting, from the Smithsonian magazine that what makes you more attracted to a mosquito is actually above anything else, your genes. What? Yeah. They like the smell of jeans? G. G. N.

Yes. But Adam, can we capture that for the five?