Delta Pricing Tickets with AI & WNBA All-Stars Get Loud Over Pay Disparity

0:28This episode is brought to you by Progressive Insurance. Good morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, WNBA players made a bold statement during the All-Star Game, pay us what you owe us. Then it's grilling season, but beef prices just hit record highs. So I hope you like grilled veggies. It's Monday, July 21st. Let's ride.

0:53Good morning. Hope you all had an awesome weekend. And so we know how much you love puzzles, games, trivia, anything that gives your brain a workout, which is why we are extremely excited to announce a Morning Brew daily riddle game called Password that will run throughout this week. Password is an MBD original created by the Brew's puzzle creator, Jack Murtaugh, who literally has a Ph.D. in theoretical computer science from Harvard. Don't get intimidated. The game is very accessible and fun, and Toby is going to explain how it works and how you can win. Yes, I am. Each week, Jack changes his password because he is a security-focused king.

1:32Your task is to try and crack it. At the end of each podcast this week, we'll give you a hint to help you out. If you guess it right, you'll get a chance to win Morning Brew Daily Swag. But here's the kicker. You only get one guess that you can submit at any time. The earlier you submit a correct answer, the more likely your name will be selected for the prize. So if you're feeling especially clairvoyant on a Monday after the show and you nail it, your entry is worth five submissions. On Tuesday, we will give you another clue, but entries are only worth four submissions. By Friday, you should have enough info to pinpoint the password, but your entry is only worth one submission.

2:09My advice is open up your notes app and record each hint to the password throughout the week so you have them all in one place. Now, where to submit? We have a Google form linked in the show description, and we will also post the hint and the link on our Instagram story each day so you can head there as well. Neil, I think that about covers the logistics. I think it's time to hit them with the first clue. The first clue. Here we go. The password anagrams to a major city. The password anagrams to a major city. Good luck, everyone. Now a word from our sponsor, Amazon Ads. Neil, would you say you work hard?

2:48Do you really think I'm going to say no into recording equipment at our literal job? Then you need to make sure your ads are working just as hard as I do. Do you think I don't work hard? Charming antidote there, Neil. The point is Amazon ads makes it easier for advertisers to plan, activate, and measure their streaming TV campaigns. You don't even need to sell on Amazon to be a part of it. Okay, to prove how hard I work, I learned about Amazon ads too, and it can be better than traditional media alone because trillions of buying, browsing, and streaming signals help you reach your ideal audience.

3:18Smarter reach, sharper insights, better results. Gain the edge with Amazon ads. Head to advertising.amazon.com slash start now. That's advertising.amazon.com slash start now. Delta is taking personalizing the customer experience to a whole new level. No, they're not giving you custom snack options or seat specifications. They are using AI to set prices for individual customers. The concept of personalized pricing has been around for a long time now. Companies from supermarkets to ticket sellers have been hoovering up every piece of data possible to try and set prices on the fly. Airfares too have been subject to wild price swings calculated using a mix of timing, demand, and seat supply making for a chaotic and sometimes annoying flight booking experience.

4:05But now Delta is shifting towards a new pricing approach powered by what it calls a super analyst, a system built alongside AI company Fetcher. The tool uses all the real-time data mentioned above, but also consider things like past purchases and browsing behavior to tailor prices based on what the system believes each individual passenger is likely willing to pay. For Delta, it's an opportunity to milk even more revenue out of its customers, and indeed it hopes to price 20 % of its tickets individually using AI by the end of the year. But the passenger experience is also a concern. If two people booking the same flight at the same time get different prices due to some opaque AI algorithm, it could undermine trust in the whole pricing process and offset any revenue gains you were set to get from the model anyways.

4:53Neil, a bold new approach to pricing. I mean, it kind of feels like you are going into a market in a foreign country and the vendor there is sizing you up, kind of seeing how much you're willing to pay for a particular good. And it's the word is opaque. You have no idea how much this particular souvenir or airfare is going to cost. And that is why there is a huge risk here that Delta is doing. Perhaps they will be maximizing profits and revenues by personalizing the air for an individual. But the risk they're taking is that the passenger feels cheated because why would a company do this if not to make you pay more in the long run?

5:34Yeah, a senator from Arizona, Ruben Gallego, has called the practice predatory. He said that an airline using AI to find your pain point in charge of the highest fare thinks you will accept. That's the key here. What do we think we could push it up right to the limit of what you're willing to pay and not any further? And then there's also the idea of maybe some bias could creep into these models, too, because federal law already bars pricing based off stuff like race, gender or other demographic info. What is getting fed into this model? Are those factors being included? We don't necessarily know right now.

6:06So the two concerns are it could be bias and it could be predatory. Now, Delta says this is a complete revolution in how they price. I know it does feel kind of murky about when you log on to Google Flights or Delta and you're booking a flight and you see a price. You're like, how the heck did they calculate that? Well, airlines have priced their flights the same way for actually decades. Every time you look for a flight, airline puts you in one of over 20 pricing buckets, each with its own rules and price. And then throughout the day, things do fluctuate based on how many seats are left or when you're actually booking this flight.

6:43So that is kind of the formula, how it's worked for the past few decades. Delta says that this new AI super agent is completely ripping up that process and going to a super personalized model that will look at things like your browsing history, your purchase history, maybe what zip code you're coming from. really trying to pinpoint, I know critics call it hacking your brain, but maybe that's perhaps the best way to put it, trying to pinpoint exactly the maximum amount you are willing to pay. And it could work in your favor. You could get offered more discounts if you're a new customer, or maybe Delta needs to stimulate demand.

7:18It needs to fill more seats more quickly. So in a more fine-tuned system, hypothetically, you could get a better price that traditional models could not come up with because the goal of any pricing tweak is to grow net revenue. And if they raise prices too high, that just means people will stop flying Delta. They'll go fly somewhere else or maybe they'll browse using a VPN or use incognito mode or something like that. So this is not necessarily to say that it's going to automatically jack up prices. You could actually find yourself on the end of a discount if it does mean that that's what the algorithm said was the best price for you.

7:53If you are more of a classic bargain hunter. But as you alluded to in your introduction, this is not going to stay in the airline industry. If it is successful, we could see algorithmic, hyper-personalized pricing spread to every industry from ticketing to food. And we'll see what the pushback is like. Wendy's tried this last year and it completely failed on its face. They said they were going to algorithmic surge pricing during particular parts of the day. That lasted all of a few weeks. So there has been pushback in certain sectors. We'll see whether it's more successful in the airline sector where prices are more opaque than they are in the food sector.

8:30OK, moving on, the WNBA's All-Star Game was never going to be about the game itself. And it was the players that made sure of it. As all the league's top ballers came out for warmups ahead of Saturday night's game in Indianapolis, they wore black shirts that read, pay us what you owe us. The sold-out crowd took their cue from the players, chanting pay them as WNBA Commissioner Kathy Engelbert awarded Nafisa Collier the MVP trophy after the game. The protest highlights growing labor unrest between the players and the WNBA as the league explodes in popularity and rakes in more revenue than it ever has before.

9:05Nine months ago, players opted out of their existing contract and are negotiating with the league on a new collective bargaining agreement before a deadline in October. Face-to-face talks were held for the first time in months on the Thursday before the All-Star game, but players said it was frustratingly unproductive, so they huddled up at breakfast on Saturday and decided to make the shirts to put more pressure on the league to boost their salaries. Toby, WNBA pay has become a headline issue after Kaitlin Clark's rookie salary was made public. The superstar made just over$78 ,000 in her first season with the Indiana Fever.

9:37And the highest paid player in the league, Jackie Young, makes a little over$250 ,000. The players say that doesn't square with the booming business of the WNBA. Yeah, and it is booming. So the players do have a ton of leverage on their side. I mean, the new WNBA expansion teams from the Rust Belt in Cleveland, Detroit, in Philadelphia, not really the Rust Belt, paid$250 million in expansion fees to join the league. Stadiums are being sold out. Tickets are getting more expensive. Some WNBA games are outdrawing. NBA games, merch sales are up. All this while players are earning less than NBA mascots, which is just insane to think about.

10:14And then also to clear one thing up too, the WNBA players are not lobbying for the same salaries as NBA players. They just want a fairer percentage of the league's shared revenue. Right now, over in the NBA, players get around 50 % of the revenue, basketball-related income. Right now, WNBA players are receiving only 9.3 % of the league's revenue. So they want to boost that up because the league has grown so much. Now, there's a lot of reaction to this statement slash protest online. Certain people noted that the WNBA lost$40 million in 2024. So their protest of pay us more when you belong to an organization that lost$40 million doesn't necessarily square.

10:58They did. The WNBA did lose$40 million last year. It is going to be much more profitable next year because this new media deal is about to kick in. We talked about the exploding popularity of the league. The WNBA signed a new$2.2 billion media deal with new broadcasting partners that will pay them$200 million each year. So they are going to be much more profitable beginning next year because of that new media agreement that they reached. And I think that's what the players are trying to get a piece of the pie from because there's going to be so much more money sloshing around. You have these expansion teams with$250 million fees.

11:37There's going to be a flood of money coming in. the players say we have a lot of leverage right now we don't want our existing contract was horrible for us we're being paid nine percent of league revenues this is the time to strike while maybe popular opinion is on our side maybe they're taking their cue from the u.s women's soccer team that uh sued uh the parent organization for more equal pay so this is not going to go away and you might see over the second half of the season these protests pick up as you know the deadline the october deadline for the new cba nears yeah one thing to look out for is some players have mentioned a walkout, which if you don't reach a CBA by October, that is very much on the table.

12:16All you meal preppers out there dutifully assembling your beef burritos to last you a week, I feel sorry for you. Beef prices have hit record highs that don't look like they're going away anytime soon. Ground beef averaged$6.12 a pound last month, up about 12 % from a year ago, and the first time beef has been above the$6 threshold since CPI data started getting collected back in the 80s. For those who enjoy the finer things in life, steak prices are also up about 8 % year over year. There's a multi-headed monster driving up prices. Cattle farmers have been navigating a years-long drought that has reduced the size of their herds.

12:54U.S. cattle inventory is actually at its lowest level in more than 70 years currently. The temporary banning of cattle imports from Mexico due to a parasitic flesh-eating maggot has also hurt supply. And despite the lower supply demand remains higher than ever with the average american expected to eat nearly 69 pounds of beef this year plus we are smack dab in the middle of grilling season neil the stakes have never been higher that was a good one uh tyson food ceo they're the largest u.s meat packer said beef is experiencing the most challenging market conditions we've ever seen there is a huge supply crunch right now you mentioned cattle inventory is lowest in 75 years the number of farms in the u.s including cattle ranches declined by seven percent there are 141 000 fewer of them between 2017 and 2024 2022 the economics of the cattle business is getting a lot tougher the price for particular cattle themselves are soaring you have to pay a thousand over a thousand dollars for a single animal and that is so that is just too much of an outlay for these ranchers to take on there's just a perfect three four five headed storm hitting the cattle business now and it's put prices for ground beef above six dollars for the first time since data collection began in the 1980s there are some nuance to that herd shrinking at number because the industry has gotten better at breeding bigger cows so they actually can satisfy the same amount of meat production with fewer cattle, which is just a pretty cool thing that you can do.

14:28You don't have to slaughter as many cattle as usual because you have bigger cows. And then also that calculus of cattle prices becoming more and more expensive, that has been a very difficult thing for ranchers to navigate because you have more incentive to sell cows now to capture that profit. But if you sell maybe a female cow, basically what you're doing is hedging your future earnings because you just sold that cow, it can no longer produce more offspring for them. So these ranchers are sitting down saying, hey, cattle prices are super high right now. Let's get the money in our pockets now.

15:01But then that might lead to thinning herds down the line. So just a tough time in a business where margins are already very slim. They might need to borrow Delta's algorithm to figure out that math problem. We haven't even talked about one word that we've talked about so many times on the show, but that is the word tariff. You mentioned that prices are probably not going to go down anytime soon. one contributing factor to that is on August 1st, Trump has floated a 50 % tariff on Brazilian imports. Now, what does Brazil import to us? A lot of beef Brazil accounts for around 23 % of all U.S. beef imports.

15:38And much of that is those lean beef trimmings that goes into ground beef. So, you know, if you're thinking about making burgers over the next few months, which we all are, can definitely focus on these tariffs and they might have a big impact if there's a 50 % tariff on a quarter of all beef imports that are coming into the United States. So cattle industry in a lot of flux right now. Up next, we have our winners of the weekend. It's time for our winners of the weekend, the segment where Neil and I picked two stories who had a better weekend than Scotty Scheffler's butter. I won the pre-show dinosaur naming contest, so I'm up first.

16:18And my winner of the weekend is Astronomer because the company enmeshed in the Coldplay Kisscam fiasco has moved on from the CEO at the heart of the scandal. Before that fateful concert near Boston on Wednesday, Astronomer was a little-known data company. But after a camera operator found then-CEO Andy Byron embracing the company's head of HR on their Kisscam before guiltily ducking away, suddenly the whole internet knew its name. It set off a firestorm of debate, both about the perils of crucifying people online after seeing a quick clip of them, but also about the publicity Astronomer was now receiving.

16:54Ryan McCormick, the founder of a PR firm in New York, told Business Insider it could be a blessing in disguise. The real silver lining, he said, is that if this company is doing something truly innovative, the likelihood of someone finding them has increased substantially. Indeed, Google searches for Astronomer have spiked far beyond any level the company has previously seen. Neil, this was the story of the last few days, but the company is doing its best to put it in the rearview mirror and probably keep Coldplay off any break room playlist going forward. It ran a pretty solid PR crisis playbook here faced with something that they probably did not expect.

17:31I thought this was a pretty savvy statement that they put out on Saturday in announcing the resignation of the CEO. Before this week, we were known as a pioneer in the data ops space. While awareness of our company may have changed overnight, our product and our work for our customers have not. Keep the focus on the work. Move on from this fiasco, but perhaps now become more of a household name than they had been because they work in a very nitty gritty B2B space where they're doing data AI stuff. And no one would have ever heard of them if they weren't in this particular industry. But they were founded in 2018, raised$375 million from investors, including Bain Capital Ventures, Insight Partners, Salesforce Ventures, these big VCs.

18:14So it's a pretty well-known company in this particular space. Now it is a household name for most people in ways they could never have expected. This story just got so, so big. In the 24-hour period before the weekend, more than 22 ,000 news articles were written about Astronomer. roughly 9 000 were written about byron per muck rack data more than 15 million people read about the scandal this analytics firm memo found that puts the readership on par with things like the diddy trial musk trump feud and pope francis's death so we're talking about the biggest news stories in the world and this was a coldplay kiss cam concert that kind of erupted into this thing we also saw it in popular culture i mean the phillies did a reenactment with their philly fanatic mascots and it just became like a larger than life a meme so when you are kind of ensnared in a scandal of this magnitude your crisis comes you have to be in order and some people said that astronomer was a little late to the party they probably could have come out a little earlier with a statement but it did look like they threaded the needle now there is a secondary winner here and there's not that many winners from this story but another one is cold play they're on this music of the spheres world tour which they were at at gillette stadium when this whole thing happened.

19:28This tour has made$1.3 billion over the past two and a half years. That is good for the second highest grossing tour of all time compared only second to the heiress tour by Taylor Swift. Coldplay just puts on an epic live show. And I think a lot of fans who were maybe keeping that quiet over the past few years use this opportunity to say, yeah, I love Coldplay. And now I'm going to go to this particular tour. They are vivying that for sure, deal. All right, let's move on. My winner of the weekend is chess because though it's been around for millennia, the sport has never been more popular, exciting, and dynamic as it is right now.

20:07Yesterday on International Chess Day, the Freestyle Chess Grand Slam Tour wrapped up its tournament at the Wynn Las Vegas, doling out$750 ,000 to top grandmasters, including Magnus Carlsen and Hans Nieman. A brainchild of Carlsen and a co-founder entrepreneur, the Grand Slam Tour offers an innovative spin on the ancient game that hopes to bring it more into the mainstream. The games are shown on large screens suspended from the ceiling, complemented by displays tracking each competitor's heart rate. When they're done the match, the players enter a confession booth to spill the tea directly with the audience, and the matches are splashed across the internet where a thriving live stream community lives on Twitch and YouTube.

20:46When the chess drama Queen's Gambit arrived on Netflix in the fall of 2020, chess enjoyed a growth spurt just like so many other COVID activities. But unlike so many of those pandemic fads, the world's love affair with chess hasn't flamed out. In fact, it's only growing. Chess.com, the dominant player in the industry, recently reported its 200 millionth sign up and does more than$100 million in annual revenue. Said it hosted 35 million games per day in 2024, including not a few from your Morning Brew Daily hosts. Toby, this makes you want to go out to Washington Square Park and lose some money to some hustlers which by the way i have done and you do lose every time they just play weird okay they're not better well they are better than me but they just play a little funky but yes chess has done a complete 180 at the time when gary kasparov faced off against ibm's uh deep blue and he lost to this new uh computer people thought like chess was just solved because computers won they are they were smarter than humans and then also as magnus carlson has risen in you know the ranks.

21:49A lot of people said that with the brute force of calculation, solving chess, and then Magnus just dominating everyone, where was the mystery in classical chess? But then in comes kind of this streaming environment where players just play blitz chess a lot, or you have chess 360 freestyle chess where you rearrange the back rank pieces, and suddenly it's just introduced a new wrinkle to the world's oldest game. It shows more of the true skill of players rather than just these long classical chess slogs. I think they're doing a great job of making it more accessible to people who aren't super chess nerds.

22:21This last tournament had multiple broadcasts, one for hardcore chess fans and one for just the casual fans. So they are trying to just open it up to a broader audience here. So they have made a lot of savviness. I'm saying they, but this doesn't happen without the people involved in chess, mainly Magnus Carlsen, pushing the game forward. But it has been remarkable how they've reinvented a game and brought it to a bigger audience. And I mean, I can't wait for this. A movie coming out is going to be directed by Nathan Fielder and produced by Emma Stone. It's called Checkmate, made by A24, the movie studio.

22:56It's going to explore that huge cheating scandal between Magnus Carlsen and his rival, Hans Niemann. It's going to be adapted from a forthcoming book by Ben Mesrich, the author behind The Social Network and Dumb Money. So we have a Nathan Fielder-directed chess movie coming. How exciting is that? And by the way, Hans Niemann outlasted Magnus Carlsen at this latest tournament. So the rivalry has chapters that are continuing to be written. All right. It's Monday. So here are the major events you need to know about for the week ahead. The earnings gauntlet is upon us with more than one fifth of the S &P 500 set to drop Q2 financials this week.

23:38Alphabet and Tesla have volunteered as tribute to be the first Magnificent Seven companies to report. While aerospace and defense majors such as RTX, Lockheed Martin, and General Dynamics are also on deck, this group of companies is on an absolute tear this year of 30 % compared to the S &P's 7 % gain. And finally, everyone will be watching Coke earnings on Tuesday to learn whether they're actually switching from corn syrup to sugar. I'm pumped for Coke. I say we have a watch party, Neil. Bust out some Mexican Cokes in the office. Do a little blind taste test. Maybe that's how Coke CEO should break the news.

24:11Do a blind taste test between high-frictos corn syrup and sugar on the earnings call and say whichever one wins, that's the one they orient their supply chains around. That would be good content. And then on the small screen, everyone's favorite hockey stick putting golfer returns with Happy Gilmore 2, the follow-up to the 1996 classic that remains one of the most quotable movies ever. The cameo-packed movie hits Netflix on Friday. Also, the new season of South Park arrives on Wednesday following a weeks-long delay and lots of drama. Like pretty much everyone else, the South Park creators are bashing the pending merger of Comedy Central parent company Paramount and Skydance Media, calling it a bleep show that's effing up South Park.

24:54Finally, in the entertainment world, there's Comic-Con happening on Thursday in San Diego, Fantastic Four hitting theaters on Friday, and Shark Week on Discovery running all week. Man, I wish Shark Week was still a big deal. Maybe it's because I am just not little anymore. I was terrified of sharks growing up because I saw Jaws, and I was seeded for Shark Week, but now maybe I'm just older. Maybe there's still kids out there who will love it. As for Happy Gilmer, Callaway is actually selling a mini hockey stick putter that I am tempted to buy, Neil. The only problem is it's$500. You need a new putter, that's for sure.

25:30Hey,$500. That could be an issue, but it could be worth it. That is all the time we have. Thanks so much for starting your morning with us and have a wonderful start to the week. If you have any thoughts on today's episode, send an email with questions, comments, or feedback to Morning Brew Daily at MorningBrew.com. And Toby, what is today's hint for password? The hint is the password anagrams to a major city. Good luck. All right, let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair and makeup knows the password already.

26:01Devin Emery is our president and our show is a production of Morning Brew. Great show, Danielle. Let's run it back tomorrow.