Something Something Metaverse

Audio Length: 00:56:45

This week, Felix Salmon and Emily Peck are joined by management consultant and sports fan Robin Timothy of to talk about Facebook’s sudden loss of users and revenue, why the Olympics are both problematic and boring, and the Brian Flores NFL lawsuit alleging racial discrimination in coach hiring.

Transcript:

S1: Hello and welcome to the something something Metaverse episode of Sleep Money, your guide to the business and finance news of the week, I’m Felix Salmon Axios. I’m here with Emily Peck, who’s also with Axios.

S2: Hello.

S1: And I’m quite excited about this. My old mucker, Robin Payne. Timothy is here joining from an undisclosed location somewhere in Madrid. Robin, welcome.

S3: Thank you so much. Felix and Emily. I feel honored and privileged to be here.

S1: Who are you? I mean, introduce yourself.

S3: Unlike most of your other of your illustrious guests, I am fairly ordinary. I like the fact that you’re getting the man in the street perspective. It’s not just a bunch of highfalutin types. I am ex-banker management consultant. He’s currently doing a stint in an undisclosed location.

S1: But most importantly, for our purposes, you are also a big sports fan.

S3: I am a big sports fan, but if I am your go to sports person, you are. That’s a bit of an indictment on your sports acumen. I have to admit

S1: I have to go to sports people. There’s you and Mina Kimes. You’re the only people I know who understand sports, and I’m very happy that you’re on because it’s the Olympics this week. So we’re going to talk about the Olympics. We’re going to talk about this massive lawsuit that has been filed against the National Football League by a coach who was or was not, we don’t know, racially discriminated against. We are also, of course, going to talk about Facebook or Metta as they’re known and that terrible earnings report. We have a slate plus segment on a gold cube in Central Park because obviously and yeah, it’s all coming up on slate money. It is the Olympics this week. We are going to talk about sport because Robin is my go to person for everything I ever need to know about sport. But we’re not going to start with sports because we did have the largest one day evaporation of stock market value in the history of the universe. Emily What the hell happened? It matter.

S2: Matter, which can I just say it’s Facebook, I don’t like calling it meta. I feel like that’s what caused its stock to drop, but it’s not, but kind of is. So their shares dropped 26 percent on Thursday because they had bad earnings, meaning they were disappointing. They lost some users

S1: for the first time ever. Like the number of Facebook users went down rather than up for the first time ever in Facebook’s history. So that’s like a major event.

S2: They also said they lost $10 billion in revenue because Apple’s privacy changes, which we’ve talked about on this podcast before. So that was a bummer,

S1: except for like that was the weird thing, right? The the Apple privacy changes didn’t seem to hurt Alphabet, which is the other company that is named something which you don’t realize what the actual company is. And then we just had snap earnings and snap earnings were a complete blowout, and they did amazingly well and the stock went up by like 50 percent in one day. On the one hand, I don’t doubt that Facebook is right that this new iPhone operating system has been bad for Facebook, but if it is bad for Facebook, it seems to have been very, very targeted just at Facebook because it doesn’t seem to affect anyone else.

S2: Yeah, I mean, Snap said that they had figured out how to deal with it when they came out with their earnings, and it doesn’t seem like Facebook has. I’m curious what Robin would say, but it seems like Facebook maybe is more dependent on targeting than any other social media site. It’s fair to say, like Twitter wasn’t as affected because Twitter doesn’t do the kind of targeting Facebook does and is known for an only like 24 percent of Apple iPhone users opted in to be tracked, which is pretty extraordinary.

S3: I mean, I would expect that Facebook depends much more on that than other of its big competitors, but it’s still a little bit opaque to me as to why or how those decreases are spread among the different. And the Facebook sort of family of apps?

S1: Oh, it’s all in Facebook Blue. It’s all in the main headline Facebook app. WhatsApp and Instagram seem to be doing fine,

S3: which is interesting because I guess I’ve been waiting to see some impact on WhatsApp in terms of the privacy considerations, but it doesn’t really seem to be impacting them in terms of people substituting away from WhatsApp to other messaging apps that are considered more private.

S1: So Mark Zuckerberg on the earnings call did say that he was seeing quite a lot of competition from Apple iMessage. He met. He mentioned iMessage. He singled out for mention. He definitely singled Tik Tok out for mention. And Tik Tok, of course, you have no privacy at all. It’s basically a wholly owned subsidiary of the Chinese government, and you just give up all of your most private feelings and thoughts to turn to the Chinese Communist Party, and no one seems to care about that. I think one thing we have definitely learned is that while you know the sort of media chattering classes care a lot about privacy and a lot of there’s a lot of talk about like stop using WhatsApp, start using Signal, you know, you have all of this kind of thing consumer behavior when you’re talking across a base of two billion people like those two billion people don’t care so much about privacy that they’re going to stop using WhatsApp or, you know, move to signal or anything like that. The the thing that affects Facebook and that caused this massive evaporation of market cap, so I think was $250 billion in one day is not like some grassroots movement of people leaving the platform because they care about privacy. It was Facebook not being able to target ads to them. And, you know, so far, there were no ads on WhatsApp, so that’s not even an issue on WhatsApp.

S2: And this is, I think, also about I mean, Zuckerberg said in his comments, this is about people liking. I mean, he didn’t say this, but this is about people liking talk a lot and using it more. And Facebook’s growth slowing down. People have been warning that this would happen for a really long time. And, you know, it just took something cool a new Tic Tacs, not even that new anymore to replace it, like Facebook’s just not going to grow like it used to. Right? I mean, and this is evidence right here.

S1: So, so this is this is the classic thing. I mean, did the media joke is that Facebook announced it was going to pivot to video, which is like the thing that all the media companies used to do just before they died? But yeah, they he he basically said, we really care about this TikTok threat. We’re going to be putting a huge amount of resources into trying to, you know, invest into this thing called Reels, which is basically the Instagram clone of Tik Tok. We’re going to really target the 18 to 25 year olds and we’re going to try and bring those people into the platform, even if it means alienating the old people like you and me. And he clearly wants to do to Tik Tok what he kind of did with Snap, right, which was he created a clone that was called Instagram Stories, and it did really well, and it did hurt Snap for quite a while. Although Snap seems to be doing just fine right now, like there’s there’s room for Snapchat in the social media ecosystem. Definitely. So he is worried and he is moving into Reels, which is the TikTok clone quite aggressively. And that is his attempt to try and get ahead of where the, you know, the kids these days are going. But also apropos his announcement a few months ago, he’s like, Well, what we really have is a long term strategy is something, something Web3, something Metaverse, something which no one really understands. And that’s the other thing which really jumped out at me from this earnings report is they lost 3.3 billion dollars in a single quarter on something something Metaverse something like how is it even possible to spend $3.3 billion on something which no one even knows what it is?

S3: You know, this to me, is it’s the real, a real, the real first shake up of Facebook in terms of understanding where they’re going to go with their business model. Because from what I understand, Reels is more difficult to monetize. And so therefore. So therefore, you are talking about margin erosion anyway. If you start going into that area so you, you, you, you’re suffering. Some loss in your ad revenue, you’re moving into an area where you can’t monetize in that way as well as your historical businesses. And then you’re losing, as you say, $3.3 billion and a quarter on the new new next thing, which is the Metaverse, which no one can really explain or understand. So to me, this is there’s some existential stuff going on right now. Maybe I’m maybe I am over dramatizing it, but it looks a little bit tricky.

S1: I know you’re not overdramatizing until you’re absolutely right. Reals is herdsmen. I can tell you, since I’m in Ireland right now and I have a very low key minor tick tock addiction, it’s not. It’s nothing serious, you know? But I’ve been in Ireland for for a month and I have been dipping in and out of tick tock over that time. And over the course of that month, I have seen exactly zero ads on tick tock. Tick tock is not worth or bite.

S2: Don’t take back all the time.

S1: But you’re not in Ireland.

S3: Oh, OK.

S2: Targeting clarifying question, actually. Just arguing so that they haven’t monetized in Ireland.

S1: So like ByteDance is is worth $500 million or whatever it is these days. Not because it has amazing revenue growth, but because it just has amazing user growth. And people are relatively confident that at some point they’ll be able to monetize all these users. But Facebook, especially Instagram, has like the greatest ad unit in the history of technology. No one has been able to create an ad unit quite as amazing as the Instagram ad unit. And if they’re forced to then put more emphasis on things like stories and reels for user growth or even WhatsApp for that matter, that means that their much vaunted APU is has to come down.

S2: I was going to say it just it feels like Facebook isn’t. The meta bet is not. It wasn’t the right isn’t the right bet for Facebook to make because user growth is slowing down. They’re not like the cool thing anymore. They’re not the social network where everyone wants to be. They need to have something more steady that produces reliable income for them, like I’m thinking about Microsoft by comparison, like Microsoft was used to be like the cool company like Facebook was. And instead of building some new cool thing like the Metaverse, they built a cloud computing business that generates tons and tons and tons of money. Like that seems like the thing you want to do not go off on like some boondoggle in the Metaverse and like, lose billions of dollars a quarter.

S1: Right? And I think I think Google actually does did this very interestingly, right? So Microsoft and Amazon could go into like enterprise software sales and make an absolute fortune. Google didn’t kind of its been dipping its toe into enterprise software sales, and it’s doing OK. You know, as you and I know, Emily, like all of Axios, runs on Google Suite or whatever they’re calling it this week, but they’re whole like, we are going to make big bets on random things like self-driving cars that are going to change the world. They always say, Well, you know that they put it in the in their annual reports or their quarterly reports, and there’s something called other bets. It’s like we have these other bets. They’re off to one side and we really hope they work out. And if they do work out, they could be worth trillions of dollars. But right now, the other bets and the Metaverse thing that’s Facebook is doing really to me feels like an other bet. It feels like Facebook has enough money to be able to throw $3 billion a quarter at this and just see if it works. But it’s way too early for Facebook to say this is the future of our company because they just don’t know that.

S2: Yeah, it’s a wild bet. It’s a pivot, too.

S3: But isn’t that just the point, though, that we think that maybe we are rational beings, but we are also we are not the exalted class like Mark Zuckerberg and Sheryl Sandberg. We don’t have the vision that they do. So what we think of as a wild bet, they think of as a sure thing because they know that they have the technology and they have the resources and they have the capability to create something extraordinary that the world has never seen.

S1: But they’ve shown us and it’s not extraordinary. And no one’s

S3: there. Not yet.

S2: It’s not there yet. It just doesn’t seem. You’ve got to make more bets than one. And I mean, I know Mark Zuckerberg is like a billionaire and he was smart and he created Facebook. And that’s great. People love it, obviously. But like, I’m not convinced he’s got another big idea because all of Facebook’s success since Facebook was founded has been updating to make sure it can capture mobile hiring. Sheryl Sandberg, who knows how to do advertising, buying other companies, ripping off products like Snap. None of that. I mean, all of that is very smart business, but it’s not like genius.

S1: They haven’t innovated that. There’s no like innovation you can point to from within Facebook,

S3: basically, since the idea, that’s a really good point, actually. Yeah.

S2: I guess we’re talking about the Olympics now. Is that what’s happening?

S1: Well, talk about it. Yeah, it’s it’s a big deal, right? I mean, there is actually a Metaverse. There is a Metaverse connection to the the whole idea of the Metaverse is that it’s based on cryptocurrency. Somehow, this is something which I don’t entirely understand, but cryptocurrency is deeply embedded in the in the Metaverse and apparently cryptocurrency is deeply embedded in the Olympics. This is the Chinese Communist Party’s grand coming out party for the E CNY, the the the central bank digital currency that they have. And if you want to buy things in and around the Olympics, then you use digital remnant B that is sitting on your phone. And so it looks like maybe Cheyna got there before Facebook in terms of actually being able to buy things that digital currency. I don’t know if that is remotely interesting you to you. I mean, what’s interesting to you about these Olympics?

S3: Well, not a whole lot at the moment. I have to admit, and I’ll tell you why. I’ll tell you why, because I’m in Europe right now, and I’m as Felix would could attest, I’m I’m an aficionado of European football as in soccer. There’s just so much going on in terms of sports. The European Championships for national teams, which occurs every four years. We’re supposed to take place in 2020 because of COVID. They took place in 2021. That was last summer. You have all the European leagues are in full swing. You have the African Cup of Nations going on, which is Africa’s version of the European Championships. You’ve got the World Cup coming up in Qatar at the end of this year and a bunch of, you know, Latin American competitions, World Cup qualifying. And then you throw into the mix the Beijing Olympics.

S1: Oh, not to mention, the Super Bowl and the

S3: Super Bowl is coming up. And all of the all of the fall and winter sports in the U.S. are still going strong in full swing. And it’s kind of like. Yeah. Also now the Winter Olympics. So I’m a little bit underwhelmed at the moment, but I know that once we start in, my feed starts filling up with the drama, the the heart warming stories and the heart wrenching stories. And you’re like, Oh, that guy who is a speed skater from Romania and look at what he’s gone through and oh my god, he won a silver medal. And, you know, so I’m expecting that to come at any moment. But in the meantime, yeah, I haven’t focus on it too much on the digital currency point. I I’m a little bit impressed, I think, with China’s kind of softly, softly approach. It just seems very rational in the way that they are rolling it out and sort of test markets and small, you know, it’s it seems very reasonable and rational. They’re not making a they’re not taking huge risks on it. And I find that impressive. I’m not sure why I do, but I find I’ve been impressive. I would say that. And so the Olympics, it will be interesting to see the numbers. I mean, it’s still a tiny fraction of of of payments, but it’ll be interesting to see and in a few weeks what what results come out of that experiment.

S2: I think the vibe is the Olympics now in Beijing. It’s kind of like a COVID bummer, another COVID bummer for us to not enjoy. But there’s no real audience there because of COVID restrictions. It’s very lockdown. So that’s not going to be great for this digital currency to kind of take off. There’s just going to be less going on and make it sort of harder to get to really get used. So I wonder about that. But also, I wanted to ask Felix, can’t the Chinese just like force everyone to use their digital currency? Like, what are they waiting for?

S1: So I mean, that’s the big question. I mean, like the really big question overhanging these Olympics is though those questions about whether there should be boycotts. There’s we get genocide going on. That’s like, you know, a Chinese tennis players getting disappeared. There’s huge pressure that the Chinese put onto, like the basketball teams and players in the United States about what they can and can’t say about Cheyna. The Cheyna is it’s absolutely seeking to exercise an absolutely enormous amount of control over absolutely everyone and absolutely everything, certainly within its own borders. And it feels like it is just very opposed to what we kind of think of is the Olympic ideals, when the Olympic ideals are anything other than IOC corruption. So, so I don’t know if like and plus like the whole I. That Beijing is a ski town like, no, it’s not the whole thing just feels very odd and very political in a way that doesn’t feel good to me.

S2: Yeah, and the polling, I think I think Axios had an item today, but like Americans are just like me on the Olympics more than ever in Beijing, partly because of the politics. I think there’s been so much coverage.

S1: But there’s also been a long term secular decline in the degree to which Americans care about the Olympics anywhere. Yeah, people are like, Oh, it’s the time zone, and then it happens in Rio and it’s still got like record low ratings and everyone’s I guess it wasn’t the times then that somehow, like Team Sport seemed to have just conquered the world and like individual competition just isn’t as compelling anymore.

S3: And remember, we just had the Tokyo Olympics last summer. So that’s another, you know, it’s it’s it’s it’s really quite soon to have, you know, it’s just another huge international sporting event during COVID. Reduced capacity as as Emily said, it’s it’s a bit messy. It really is sad. But but yeah, that’s where we are. But, but actually, but Emily you you did talk about why you did say, why doesn’t Cheyna just kind of force everyone to use this currency? And he dodged that.

S1: Well, the answer was that they absolutely can.

S3: And that’s why I’m impressed by their approach, because I’m wondering why it is that they are taking such a rational, more moderate approach to this, and I’m intrigued by that give given their history.

S1: I think it’s because they have first mover advantage. It is by far the most used and most fully built out digital currency in the world. They’re not in any particular rush. They, you know, they’re not. They’re already first. And if they were, they’re not even trying to necessarily be fair. They want to get this right. And they they aren’t run by Mark Zuckerberg types who are like, I am going to. I have seen the future and I know exactly what it is and I’m going to drive to the future. The the, you know, they have their the largest country in the world and they roll things out slowly and see what the unintended consequences are, and they iterate. And we’ve seen this in in terms of the the big tech giants in China, right? That was a long time when they were like, Yeah, we we want you to create these world beating companies and go out and make billions of dollars. And Cheyna was fantastic. And then at some point they were like, Yeah, no, actually, that’s not so good for China. And we don’t want so many billionaires and we are going to crack down on us listings and we’re going to consolidate more control in in the central government rather than allowing private entrepreneurs to have power in society. And they they’re very good at like balancing things, and I don’t see them as sort of trying to to to to coin a phrase, come up with a great leap forward when it comes to digital currencies.

S2: Yeah, and neither is the United States. We should add. I think two weeks ago, the Federal Reserve put out its like, I guess, long awaited paper on U.S. digital currency and the paper. Basically, I’ve never seen the the phrase pros and cons like in a research paper. I can’t remember ever having seen it before, but the paper starts by saying like, we’re going to lay out the pros and cons and we’re not taking a position. So a signal that they’re moving extremely slowly and like waiting on Congress to do something. But I think it would behoove the United States to step it up and release the digital currency now.

S1: Well, the cons are clear, and the cons for both China and the United States are the same. And in fact, they’re bigger for China. The concern about the banks? Right. China has a bunch of banks with a bunch of loans, and those loans are looking a bit dodgy. We’ve talked about ever grand on this show. The property market in China is cooling down rapidly and possibly even shrinking. And, you know, just like any country, if you know, it is absolutely vital to China that it manages to look after its banking sector and doesn’t have some kind of bank collapse. The Federal Reserve, you know, has this massive macro prudential job to make sure that the banking sector is healthy and is the top regulator of all banks, and it really takes that very seriously. And the way the banks fund their loans is by taking in deposits, right? You put you leave your money at the bank, it takes those deposits. They do this, you know, fractional reserve banking and maturity transformation, and they take that money and the lender out as loans. If people don’t need to. You keep their money on deposit at banks because they can just hold a central bank digital currency instead. Then that is a real potential problem for the banks, and no central bank in the world wants to wants to create a real potential problem for banks. The so there’s talk about maybe banks can issue their own central, you know, digital dollars or something, rather than just getting them directly from the central bank so that you keep that kind of intermediation. No one exactly knows how that works, but the Chinese one is not issued by that banks. It’s issued by the Chinese central bank, by the Chinese government. And so like, if you had all of China just suddenly moving to the digital yuan tomorrow, that would be absolutely terrible for the Chinese banking system, which would lose all of its deposit base. And that, in turn, would like implode the Chinese economy. So there’s lots of good reasons why you want wouldn’t want to go too fast on this.

S2: Yeah, that was my by one question. Under us in the digital coin, US was just like banks. So I didn’t even have to ask it. That was great. Basically, a digital currency could undermine the whole U.S. banking system. Is that what you kind of just said? Felix.

S1: Yeah, yeah. Yeah. Well, any banking system doesn’t even need to be the American one.

S2: And at first you’re like, Oh, that would be great. Big banks bu. But like, we need them to make loans and whatnot, right?

S3: We need them for some things.

S1: Yes, they have a lot of liabilities, right? So, you know, we don’t want them to go bust because we know what a banking crisis looks like and it’s very unpleasant. We kind of went through one of those almost went through one of those in 2008, and we would really, really like to not have to go through one of those again. The Olympics are boring, but there’s something which isn’t boring, something, something American football, something.

S3: Yes, the NFL, you might have heard. There’s been a lawsuit

S2: earlier this week. On Wednesday, Brian Flores, who was recently fired from his job as head coach of the Miami Dolphins, filed a really explosive lawsuit against the NFL, the Dolphins, the Giants and the Broncos, essentially alleging race discrimination, seeking class action status and making some really like explosive claims about how he was treated by the Dolphins and by the league. There is the great screenshot of a text message, which is always wonderful in a lawsuit. You always want a screenshot of a text message in a lawsuit, but basically Flores was interviewing for a job as head coach of the Giants, and it was three days before his interview was to take place, and he gets a text from Bill Belichick, who Felix probably knows is like a big fancy coach. No, from the Patriots. He’s like a very winning coach, so he texts Brian Flores and he’s like, Mazel tov, he doesn’t say, Mazel tov. Congrats, whatever I heard, you’re getting the job and Brian Flores is like, Do you mean the other guy Brian Daybell? Because there’s a Brian mix up? Clearly, Belichick had texted the wrong Brian and and Belichick’s like, Oh woops, I guess it’s Brian Daboll getting the job. And Flores was like, I haven’t even interviewed yet. This is such a scam. And I think I’ve talked about before the NFL has this Rooney rule meant the basically the rule is you have to interview at least one diverse candidate for a head coaching position. And it was instituted like in 2003 because they’re being threatened with a racial discrimination lawsuit. But everyone has kind of thought, well, it must be a scam because there’s only like right now, for example, is only one black head coach in the NFL. So like, this rule doesn’t seem to work like there’s a scam afoot. And so the Flores lawsuit? Kind of gives this evidence of the scam, right, like he’s being interviewed for a job, but they already know who’s taking the job, so it’s kind of a joke, right? We should say the NFL denies, everyone denies. The Giants say he was in consideration up to the to the 90th hour, eleventh hour, whatever that phrase is. But anyway, it was super explosive. And there’s other yeah, there’s other details, too. Robin, I’m curious what you make of all this.

S3: First of all, it’s interesting to note that all of this was instigated by one gentleman of a certain age and some bad texting. So he I suspect that Bill Belichick, you know, both of these men were one time assistants to Bill Belichick. And of course, he’s the greatest coach in NFL history. If you had a sort of a family tree of his, of his coordinators and coaches who have gone on to to coach other teams, it’s it’s pretty extensive. So I suspect that Bill had in his phone book. Coach Brian and then Brian parentheses coach, you know. And so he thought he was coaching. He thought he was texting Brian Flores. And of course, he was texting if I was texting Brian Daboll and instead he texted Brian Flores, I think what sticks out to me is, first of all, how brave Brian Flores is because this is. Well, if we go by historical standards, this is a career killer for him. He’s still a young man. He’s he’s and by all accounts, an excellent human being. People love him. Players loved working for him, playing for him. He commands a huge amount of respect. He’s worked his way up for the last couple of decades, and he has been a very good coach. I mean, he coached the Miami Dolphins, who have been an awful team for a couple of decades. He, you know, they’ve been to the playoffs twice in 20 years. He coached them for three seasons and he coached them to winning winning records in the last two seasons, which is the first time that’s happened in 20 years. Right. And then he gets fired. Now this speaks to a couple of things. One is that black coaches are it’s generally accepted that they have shorter tenures in the NFL than white coaches. That’s number one. Number two, if and when they do get fired, which is inevitable, it’s much more difficult for them to get a second a second opportunity. And thirdly, the Rooney Rule, as Emily says, instituted in 2003 and upgraded by the way, in 2020 to give it more teeth. Interestingly, when the Rooney Rule Rooney Rule was implemented, there were three black coaches in the NFL and 20 years later, there are there’s one. So there is a sense of frustration among the black coaching fraternity that is palpable and has been growing. And this situation, I think, was the proverbial straw. I can see the sort of the anger and the resentment as in all of these black coaches. It’s a it’s a it’s a merry go round. They get interviewed every year for every job. They never actually won. I thought they’d never get the jobs, but they rarely get the jobs and they know that it’s all for show. And one of the ways that they know this is, well, situations like this are pretty stark, but they go to an interview for a head coaching position, and the owner of the team doesn’t even bother to show up, which happens all the time. And they all know about it. And of course, this is an open secret in the right circles. So I think that people are just very, very fed up, but everybody is really worried about fair. Prospects and Brian has stepped out into this void in a very brave and selfless way, and here we are now. What’s for the NFL? They’re in a very difficult position. The NFL itself as an organization as opposed to the owners of the NFL teams, they are actually trying to make a change in this area. But the NFL is owned by the owners, and they have very little impact on what the owners can actually do. So if you ask them off-line off the record, what they think, they’ll say, the owners are the ones who are doing this. We are actually trying to move them in a certain direction that they just won’t move.

S1: Are there any black owners in the NFL?

S3: There are no black owners in the NFL there. There are two minority owners in the NFL.

S2: I wanted to talk about the ownership to because that is super interesting. First fun fact is that the owner of the Miami Dolphins is Steve Ross, who’s like a big real estate mogul. And the allegations against him in the suit are pretty wild. For example, Brian Flores says that billionaire mogul Steve Ross offered to give him $100000 every time he lost a game because he wanted to get the team in position for the number one draft pick. So he didn’t actually want Brian Flores to win games and would pay him not to win them. And there are some like dodging meeting on a yacht, but it’s just such a if

S1: that allowed or not, if they’re not

S3: allowed the dodgy meeting on the yacht.

S1: You like getting a bonus for losing games?

S2: No, that’s not allowed and that that could wind up. Dan Primack had a good piece like that could wind up being really bad for Steve Ross. I mean, he’s denied it, but he could maybe lose his ownership of the game like depending on how it goes, which could be a way to get more owners of color, maybe into the NFL. The the barrier to entry is it’s really hard to buy an NFL team. You have to be like, you know, really, really rich and most rich people are white. We can say, you

S1: know, let’s say that know you’re watching the World Cup in football and the is the is the opening round and you’ve won your first two games and four reasons to do with the draw. You actually want to lose the third game rather than win the third game because it will get you a a better like prospect of, you know, meeting weaker teams going forwards. Everyone understands that, and the teams play a bunch of like, not very good players, the second tier players. And often they lose and they’re like, Oh, well, I guess we lost. And it’s it’s an understood part of like the the broader strategy of competing on a, you know, in a repeat game where you know, you’re going to have to compete next year and the year after. So like, where do you draw the line? So you have to be able to do things like, I’m not going to play my very best players in the game that I don’t particularly want to win, right?

S3: It’s an interesting point. Felix. But there are two things about that. First of all, that scenario that you described doesn’t really exist in the NFL, in the NFL. You, you have to play every game to win, essentially. OK. Towards the end of the season, if you’ve, as you say, if you’ve already locked in your playoff spot and you want a risk, you don’t want to risk injuries, you may rest players. However, and this is the big issue when it comes to Mr. Ross and his potential liability a huge part of the NFL’s revenue right now. They are encouraging betting on football games and in a six 17 game season and the playoffs. There’s other than the odd game at the end of the season for specific teams, and there weren’t that many of those games, by the way, this this this year, bettors expect that teams are going to be out there trying to win. And if you are, if you like a ton of money is being put on these games and the fix is in. That’s a real problem. That’s number one. Number two, another coach, Hue Jackson, another black coach who was the coach of the Cleveland Cleveland Browns up to a few years ago. A few years ago, he has also talked about being paid to tank games. Now what’s interesting is that certainly no white coaches come out and said this, certainly not openly. And the other aspect is, is it that black coaches are the only ones who are being asked to tank games because you would never ask a white coach to do it. And therefore, you are now hurting the reputation and the four, you know, the future prospects of these black coaches. So there are there are many layers to this that are very interesting. And that, as I said, fueled a lot of resentment in the black coaching community.

S1: So that’s interesting, though the idea that like the offer to pay 100 grand to throw a game. Is that a racially tinged offer right there? It could be.

S3: We don’t know yet. And the lawsuit itself, so it’s against the NFL, it’s against those three specific owners, but it’s also against all of the owners. It is a class action suit, but you know, whether or not this will be, the suit will even go forward. And certainly any chance of long term success is questionable at best. First of all, maybe no one would want to join the class action, and for it to be recognized as a class action, I think is is a fairly high legal burden, a hurdle and they may not get there. However, as Emily alluded earlier, there are some salacious details here, and the NFL has has seen some fairly unpleasant behavior by owners and coaches and people in positions of power within within the NFL. Recently, Jon Gruden, who was the coach of the Las Vegas Raiders. I think it’s hard for me not to call them the Oakland Raiders, but was, you know, some some had an email trail with some really vicious, racist and homophobic and misogynistic material that was circulating among a group of fairly illustrious folks in that in that realm. You know, you’ve got the Washington football team now known as the Washington Commander’s, not the greatest name in the history of sports.

S2: But what is that mean?

S1: No, I love the idea of the Washington Commies. And that’s going to be awesome.

S3: And that’s exactly what they will be called Felix, because every name is every name that’s more than two syllables is

S1: tell me, tell me, tell me the team color is red. Tell me that the red call means

S3: they are, well, it’s maroon. But yes, but you know that that team Dan Snyder, the owner of that team, is, well, he’s let’s just say that whole organization has been sort of under investigation for what feels like a decade. A lot of misogynistic and just generally unpleasant behavior. And also, as Emily also mentioned, you know, these teams are worth a lot of money. You know, the average value of an NFL franchise is $3.5 billion, the lowest that the cheapest one. If you wanted to buy would be over $2 billion. And they make a lot of money. So, you know, the NFL makes $10 billion a year. So 32 teams. So there’s a lot going on there that is at risk. And if this this lawsuit may not come to fruition. But just getting to discovery could be just make for some very unhappy people in high places.

S2: Bring on more text messages.

S3: Oh, there’s a lot of there are a lot of text messages, even in the Jon Gruden situation. They released a bunch of text messages, but the vast majority were never released. If they come out in this, along with 31 other teams, I mean, it’s it’s it can get very, very, very, very ugly.

S1: I want to ask Emily, though, just like broadening out a little bit from the NFL, this is this is your area of expertise, not mine. I half remember this, but like Rooney Rule equivalent things like. Is there any evidence that they work? Because in the back of my head, I have this this statistic that if you have three or four men up for a job and one woman, the chance of the woman getting the job is basically zero. Like, if there’s if you have three people who look one way and then one person who looks another way and they’re all up for the same job, the one person who stands out will never get that job. And you need like more than one other way, as these kind of rules just have no utility.

S2: Yeah, actually, I was curious about that because the Rooney Rule, I mean, it started in the NFL, but it spread like wildfire among big companies back in, like the 2015’s and 16, when tech companies were getting criticized all the time for a lack of diversity. Pinterest, Facebook. Everyone was like, What we’re going to do the Rooney Rule, everything’s going to be great. And then around that time, this researcher, Stephanie Johnson and co. did this survey that or study that you’re talking about Felix, where she found like if you have one diverse candidate on an all white. Slate, it doesn’t matter, they never get hired. So then a lot of companies, you know, they’ve sort of like evolved beyond the Rooney Rule. So I called up Stephanie this week and she was like, What’s happening now is a lot of boards really want to actually hire women and men of color so that their slates aren’t just like one candidate like ala the Rooney Rule. They bring in a fully diverse slate of candidates. So they actually are hiring, you know, non-white men for board seats. And if you look at the data, it’s looking, it’s looking better. So companies have evolved beyond this rule, but the NFL clearly has not.

S1: Well, one of this is another thing is that you, U.S. companies have evolved on what you mean is public companies have evolve in public. Companies do tend to be much, much better on diversity metrics than private companies and all and all NFL teams, private companies, you know, Green Bay Packers notwithstanding. They you know, they they. And what’s more, their family owned private companies, you know, and family owned companies. Private companies are famous for being like the last place where you find, you know, the all male boards and all of the rest of it because they don’t answer to anyone else. They don’t have that, that public accountability, that public companies do.

S2: And lest people think I’m like letting public companies, I’m giving them too much credit. I shouldn’t give them too much credit because if you look at the Fortune 500, they’re sort of almost no black CEOs. There’s only been 19 in the 67 year history of the Fortune 500. I mean, they have a lot. There’s still a lot of evolution that needs to take place. So I just want to make that

S3: clear, including including Silicon Valley, by the way. Yeah. Where there’s been a lot of Sturm und drang about it, but in reality, not much has changed. So and by the way, just just one last thing, in contrast to the NBA, both both leagues have about 70 percent. 70 percent of their players are black coaching coaches in the in the NBA added. At their peak, black coaches represented 48 percent of the coaches in the in the NBA. And that’s, you know, like even today, it’s I think it’s 13 out of 30 coaches in the NBA are black, and it’s just the contrast is just it’s remarkable and it speaks volumes as to the way those two leagues are so different.

S1: OK. I think it’s time for a numbers round Emily. Do you have a number?

S2: Yeah, yeah. No. Yeah, my number is 300. That is the number of snow resorts built in Cheyna since 2015, up from 11. Prior to that, because the country was like, we’re going to do this right, we’re going to have the Winter Olympics and you’re all going to learn how to ski. And so, you know, it builds a bunch of snow resorts and a bunch of ice skating rinks. And I hope the Chinese like skiing now.

S1: My number is 23 percent, which is earnings season, and it’s people and it’s a very clever like double number. I’ve never done a double number, which is the same number before 23 percent is the amount that people’s payments volume rose in the fourth quarter just came out with its fourth quarter earnings and its fourth quarter payments. Volume transaction volume was up 23 percent. And as a result of this 23 percent rise in transaction volume, the PayPal stock price fell by 23 percent.

S2: Why? I don’t understand

S1: because because if you grow your transactions by 23 percent, that’s just really disappointing. And so we’re going to punish you by lopping 23 percent off your stock price.

S2: OK. It must have just been contagion from all the other tech stocks that did bad

S1: this week, except for the ones that did well at Amazon went really well,

S3: except for the ones that did

S2: well

S1: and snap Robin.

S3: Mike, I thought that my number would be the lowest number. So Emily. Well done. My number is $50000. And I call it a gateway number because it’s the amount of money that 19 year old Jack Sweeney, who is a college student and at the University of Central Florida, I believe, demanded from Elon Musk to stop. Making publicly available the real time tracking of his private jet. So he was making. He was tracking Elon Musk’s private jet and headed online for anyone to see in real time at all time, 24 hours a day. Based on publicly available information, Elon Musk reached out to him to say, You’ve got to stop this. It puts me at risk, he said. Well, how much will you give me, Elon Musk? So I’ll give you $5000. He considered it and said, How about 50000? And maybe your job as an intern? I just think that this is remarkable. This is a guy who was worth well, depending on the day, about a couple hundred billion dollars. He flies in a Gulfstream 650 that’s worth about 65 or $70 million. And this college kid is trying to hold him for ransom for 50000. And if you tried to tell this story 20 years ago to yourself to just think about how ridiculous it would sound that some guy? So what was it? So Elon Musk decided that he didn’t really think it was appropriate that he should have been forced to pay for someone to do the right thing and cut off negotiations and blocked him on Twitter.

S1: So but the website is still the website

S3: is still up. He also says that he’s also tracking Jeff Bezos and Drake and Bill Gates.

S1: So if Jeff Bezos, if those four people’s private jets all wind up in the same place at the same time, you know that that’s life. That’s the, you know, the Zionist conspiracy right there.

S3: And he has been offered. He’s been offered jobs by private jet charter services, you know, so as as a programmer. So I just think it’s it’s just it’s such a story of our times that, yeah, that’s my number.

S1: Brilliant. Thank you, Robin. It’s been awesome having you on the show. Thank you for calling in from Madrid, Spain.

S3: No one was supposed to know where I was. Felix.

S1: Oh shit. Thank you for calling in from your undisclosed location. Somewhere in southern Europe.

S3: Somewhere in the world.

S1: Felix somewhere in the world like Elon Musk.

S3: I don’t need people tracking me.

S1: I mean, I only knew that you’re in Madrid because I tracked your private jet. Well, it is, you know, I got

S3: to do something about that.

S1: But yeah, it’s been great having you on the show. We’re going to have a Slate Plus segment on the Gold Cube because of course we are. Thanks for listening. Thanks for emailing us. Sleep Money at Slate.com. And thanks to Jane Arraf for putting the show together. We’ll be back next week with even more sleep money. Robin? Yes. Do you have any cubes? Do you own any cubes?

S3: I do have a very valuable cube. It’s it’s a Rubik’s Cube from the night.

S1: Is it a collector’s item?

S3: I think it might be, although it’s a bit dinged up and it’s missing a couple of phases, but I’m sure that I’m sure that somebody would buy it.

S1: Are you interested to feel like if I’m interested in this cube, which is like the pedestal for the world, I love this thing. There’s this French artist and I can’t even remember his name is, but he built this like one and a half cube of a pure gold and put it on a snowy Curtis

S2: as he German. Yeah, I’m looking at the art in that story. Its German artist Nicolas Castello.

S3: Very German name.

S1: OK, but not very German name, but German artist. In any case, Mr. Castelo created his Castelo Cube. It’s not a solid cube, it’s a hollow cube. It’s a quarter of an inch thick. But it still is got about $12 million worth of gold in it. And I think the idea is that if you look at it the right way, then basically it is the cube on which the entire world is resting. You can just think of the whole world as a sphere on top of this cube of gold or something iron Emily. What do we make of this cube and is there? Do I even need to ask, is there an NFT angle?

S2: There is an NFT angle. The Castello coin is available for purchase. It’s a dollar sign cast, I guess. I’m not going to pretend I understand any of this. I don’t understand. First of all, why people are so interested in cubes lately. We recently had a different slate plus segment on the tungsten cube phenomenon. Everyone wants a tungsten cube.

S1: Well, tungsten cubes weigh the same as gold cubes, tungsten, gold and basically the same way.

S2: So now there’s a gold Cuban Central Park. For some reason, I mean, it’s art. It doesn’t really have to make sense. People are talking about it. And so that’s cool, I guess. Help me understand why

S1: it’s opposite the Guggenheim Museum, where they installed that Mauricio Catalan solid gold toilet, which is a thing for a while.

S2: There’s something very just, I guess, I mean, not a genius comment. There’s something people are. Gold’s items have some kind of like mystical or they symbolize something really extravagant. I mean, when I think gold toilet, I think of our former president, right? I feel like I can make some kind of link there. But gold things signify like excess and we are in a time of excess, right?

S1: And I think I think that’s exactly right that you that the the symbolism of this gold cube, whether it was intended or not, is definitely a kind of like, well, we are in this world where some random German artists and no one’s ever heard of can find eleven point seven million dollars worth of raw materials to put together a dumb artwork that makes no sense because money has no meaning anymore.

S2: Yeah, that’s right. Feels like that’s it.

S3: I mean, I I kind of feel as though this entire event was custom designed for you, Felix it. That’s right. I mean, it’s like I have to show gold, crypto and f ts. It’s sitting in the snow for a man who is probably mourning. He didn’t get to go to Davos this year. Armed guards, it’s just it’s sort of like the Felix wet dream, I have to say. Does this does this not make you happy to be alive that you could be living in this time?

S1: You know what it is, is it’s it’s presenting itself as this piece of conceptual art. And the thing which annoys me about it is that it’s a very bad beat.

S2: What can I, if I might read about?

S1: You can. Yeah, you can definitely quote me on. That is if if it was smarter, if it was funnier, if it was more cutting, if it had any kind of any anything interesting about it, then I can see myself going, Oh my God, that’s kind of interesting. This kind of funny. That’s kind of cool. That’s kind of artistic, but it’s just a dumb cube. And it’s clearly just an attempt for this guy to create a cryptocurrency, which is going to make him very rich. And he’s going to fail and it’s going to be like, really stupid. And and yeah, and yet somehow we are talking about it in a way. We’re talking about it, but he’s succeeded in that.

S2: How does it compare to the banana on the wall that was the other one, I thought the

S1: banana on the wall I loved, the banana on the wall was the same artist as the solid gold toilet.

S2: Oh, OK, there you go. Well, I feel like the solid gold toilet like it goes there. Like, the symbolism is super clear and obvious, but doesn’t bother me. Like, I’m not like, Oh, you really hit me over the head with the gold toilet. I’m like, I get it. Yeah, OK. Makes me think of horrible, rich people and excess nothing more excessive than a solid gold toilet. And the cube does not evolve on that, right?

S1: Exactly like that. Maurizio Cattelan is great. He was the one who did that statue of the Pope like getting hit by a meteorite? You mean flattened by a meteorite coming down? Yeah. So they move into cattle, and we don’t have a problem with this random German guy. Yeah, he is. No Mauricio Catalan.

S2: Wow. You heard it here, folks. This is why you subscribe and pay for sleepless.