Tiger Woods and Nike Split & United Finds 'Loose Bolts' on 737 Max Planes

0:00Tonight on NBC, Jimmy Fallon and Bozma St John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best I do win! On Brand with Jimmy Fallon. Series premiere tonight on NBC. Good morning for your daily show. I'm Neil Freiman. And I'm Toby Howell. Today, loose bolts, warning lights, tumbling stocks, the fallout over the open-door Alaska air flight is just beginning.

0:42Then you quite literally will never guess which city Zillow crowned as its hottest housing market of 2024. It's Tuesday, January 9th. Let's ride.

0:58there are going to be a lot of happy people in the office today because the university of michigan where it all began for morning brew took down washington 34 to 13 for the school's first college football championship since 1997 but this is the end of an era for a sport because next season is going to look very different the college football playoff is expanding to 12 teams and conference realignment will further obliterate any concept of geography. Among the changes, Michigan and Washington are going to be Big Ten rivals. The University of California is joining the Atlantic Coast Conference, and the Pac-12 will have just two teams.

1:38All right, Pete, the Pac-12s. Positives about the game started at 7.30, which was nice. You finally got to go to bed on a reasonable hour. Negatives about the game, it was kind of boring, and there was a bunch of holding calls. also i am putting i'm officially putting myself forward for candidacy for a new college football team to support i went to schools that didn't have a college football team so i don't really have any allegiance so if you want to send in an email if you want to post on social media kind of recruiting me wow i'm a free agent wow that's huge listeners definitely definitely write in with toby's a complete free agent whatever if you think you have a compelling argument for your school to get Toby on board.

2:19I mean, he has a podcast. He's going to popularize your school. So definitely write in. I'll be your number one fan. Before we jump into the show today, we have a quick word from our sponsor, Veeam. So we're nine days into the new year and I bet people's resolutions are getting stress tested for the first time. Maybe that gym habit is already slipping or your pledge to reduce sugar intake has been derailed by some post-dinner sweet treats. But try taking a page from Veeam's playbook and work on being radically resilient. Radical resilience for companies who use Veeam means both protecting your data from being compromised in the first place and recovering it safely and reliably if something does go wrong.

2:59Be like Veeam. Be radically resilient. Head to Veeam.com today to discover more. That's V-E-E-A-M.com today. This episode is brought to you by State Farm. Checking off the boxes on your to-do list is a great feeling. And when it comes to checking off coverage, a State Farm agent can help you choose an option that's right for you. Whether you prefer talking in person, on the phone, or using the award-winning app, it's nice knowing you have help finding coverage that best fits your needs. Like a good neighbor, State Farm is there. It's the end of an era. Tiger Woods and his longtime apparel sponsor Nike are calling it quits after 27 years together.

3:44Now, please, people listening at home, if you hear some static, just know it's my tears hitting the microphone. Tiger and Nike are as synonymous with each other and excellence as arguably any athlete outside of Michael Jordan. From the famous red shirt he dons every Sunday of a tournament to the iconic shot at the Masters where his ball perched on the edge of a cup and flashed a Nike sign at a breathless nation before falling in. You just can't separate the two. But separate they have. In his farewell post, Tiger teased that he already has, quote, the next chapter brewing. What that may be has been the subject of speculation.

4:22Some thought maybe he joined Roger Federer at the Swiss running company ON, but its president quickly nixed that rumor. Others have linked him to the apparel brand Grayson, who signed his son, Charlie Woods, and his longtime pal, Justin Thomas, to deals recently. Neil, maybe he goes full Kim K and launches his own brand. The main takeaways here are, we're gonna be getting an announcement soon, and I am sad. I am sad too, but let's go back to the beginning of this. 1996, when Nike and Tiger first made their partnership. Then four years later in 2000, Tiger and Nike signed a$100 million deal. Over this 27 years, this has been extremely lucrative for both Tiger and Nike.

5:02The deal in total has been worth over$500 million. And there is a question. It's like, how much value does a celebrity athlete drive for a particular brand? Well, that one shot that you mentioned where the Nike ball perched on the edge of the cup of the 2005 Masters, that reportedly earned Nike$1 million in free publicity just from the replays of that clip. And then you had these scientists, these economists who also wanted to examine this question. So they published this paper in the journal Marketing Science in 2010. They looked from 2000 and 2010 how much money Tiger brought into Nike's golf ball division from the endorsement, and they found that Nike's golf ball division scored an additional profit of$103 million from the just Tiger Woods' endorsement effect.

5:52And so as a result, about 57 % of Nike's investment in Woods was recovered just in U.S. golf ball sales alone during those 10 years. Nike has always stood by Tiger, too. Obviously, he's been a major source of revenue for them. But even when kind of those extramarital affairs in 2009 derailed his career, a lot of companies ended their relationship with Tiger. Nike stood by him. woods tiger woods also stood by nike though because it's been anything but smooth sailing for nike's golf division they got out of the golf equipment business back in 2016 but he still kept them on as an apparel sponsor and he no longer plays their balls he no longer even walks in their shoes anymore because he's had some leg surgeries and he said he wanted more stability so it has been a relationship that you could see the the cracks developing there's no real tension it It just seems like it's time for both parties to move on.

6:46Still, though, it's going to be very hard to picture him in anything other than that iconic red and that iconic swoosh on Sundays. The question of what comes next is very interesting because there is perhaps a template that Tiger could follow. And that guy is Roger Federer. He broke up with Nike in 2018 after 24 years. He moved to Uniqlo. But the more interesting part is he took a 3 % equity stake in this shoe company called On Holding. and that went public recently. That netted Federer$180 million just from that public offering. And that brand is going bonkers. Its stock is up more than 50 % this year.

7:25It's clawing away market share from Nike and Adidas. So Tiger might want to do this, find a smaller brand like you were talking about, take an equity stake just like Federer did. Even though I feel like Federer is more of a fashion icon than Tiger if we want to be real about it. Whatever the next move is, you can bet that there is going to be equity involved, whether it's his own company or, like you said, joining another brand. OK, next, let's circle back. I know. I'm so sorry. On some stories we've discussed recently to give you the latest updates, the fallout from the Alaska Airlines 737 MAX 9, whose door panel blew off mid-flight over Oregon on Friday, has continued to spread with hundreds of more flights canceled and the FAA directing the U.S.

8:06airlines with MAX 9s to inspect their fleets. And those inspections turned out to be fruitful because both United and Alaska found loose bolts for this door plug that were in need of additional tightening. And a phrase like additional tightening is not what you want to hear with a plane you're about to fly in. The investigation into what went wrong also got a boost when an Oregon school teacher named Bob found the door plug that had broken off in his backyard and called it into authorities in a press conference. U.S. National Transportation Safety Board Chair Jennifer Homendy explained this piece of evidence would be key to the probe and said, thank you, Bob.

8:43But even with heroes like Bob, this story is still playing out and Boeing, its top supplier, Spirit Aerosystems, and the entire aviation industry remains on edge. Yeah, we were really curious to see what the follow-up would be. It turns out that Boeing finished the day with$12 billion wiped off its market cap. Spirit saw some of that fallout that we expected there's also just so many the more you dive into this the more the questions are that arise there's the the issue of the cockpit recording where the cockpit recording was left on a loop and after two hours it resets so we'll never know what was being said by the pilots during that time so that's a new thing that people are looking at there's a potential that the bolts were never even installed at all there's been speculation about that there's also So the cockpit door blew open when the air pressurized, and that's apparently by design.

9:38So that's under review as well to see if that's really the most effective way for a cockpit door to function in this situation. So, again, the more you investigate this, the more question marks appear around Boeing in their policies. One big revelation that also came out yesterday was that the 737 MAX 9 for Alaska Air was not being used for flights to Hawaii, which is flights over long distances of ocean, because they found a warning light that could have indicated a pressurization problem had lit up on three different flights. Now, authorities said that we're not sure whether this warning light has anything to do with the door plug coming off in this flight, but it's just another clue.

10:22I mean, I feel like we're Sherlock Holmes here following various tracks, various clues. But we have to talk about what survived from this crash. Not only everyone, but two iPhones that fell 16 ,000 feet were recovered in Oregon, and they were found to be not only intact, but working. someone's luggage receipt was still up on the screen from their alaska air flight i can't believe apple gets this lucky they get the best press sometimes in two iphones falling from an airplane they're going to turn that into an ad somehow absolutely okay up next looks like there won't be any human remains placed on the moon after all because astrobotic the company that aimed to be the first private american firm to land on the lunar surface abandoned its attempt to touch down less than 24 hours after launch.

11:09Things went wrong just after we recorded this pod yesterday, a few hours into the flight. The lander suffered a propulsion issue that made it unable to orient its spacecraft toward the sun and recharge its battery. The company eventually did get the lander facing the sun, but a fuel leak was messing too much with the thrusters and it said a soft moon landing was impossible. It's certainly a setback for what would have been the first U.S. spacecraft to touchdown on the moon since 1972. And Astrobotic probably has a long lot of frustrated customers whose cargo it was carrying, including the human remains it was supposed to deposit on the moon.

11:44But if we need another reminder, rocket science is hard. We jinxed it, Neil. We absolutely tagged it. We said it was going to be the first one since the Apollo missions. But yes, these things happened. Soft landing in the economy, I guess, is easier than soft landing on the moon. I had to. Interestingly enough, though, this is probably a success for the Vulcan rocket. that was developed in a joint venture between Lockheed Martin and Boeing called the United Launch Alliance. We spoke about it yesterday on the podcast. This was their first ever flight for the Vulcan Centaur rocket, which is trying to get on par with some of the SpaceX rockets that launch payloads into space.

12:20And that did do well in the early stages. It got the payload to where it's supposed to be. That's when the problem started. So you can always find some nuggets of success, even though that this mission as a whole appears to be a failure. I'm going to focus on the failures because there have been quite a few recently. When it comes to moon landings, you have landers from Russia, a private Japanese company, and an Israeli nonprofit all crashing into the moon when they tried to land. Since 2019, there was that success from India landing on the far side of the moon last year. But overall, there's been more failures than successes in trying to get back to the moon.

12:54It seems like this is our white whale. Rocket science is hard. I guess that's all there is to say. There is another opportunity, I should say. This is not the only U.S. company trying to go to the moon earlier this year. There is a company called Intuitive Machines based out of Houston that's going to launch another lander next month. So that could be the saving grace for the U.S. space industry. Finally, OpenAI has published its big response to The New York Times, which sued the tech company and its major backer, Microsoft, around Christmas for using its copyrighted articles to train ChatGPT and other AI models.

13:29Remember, the New York Times suit was so explosive because not only did it accuse OpenAI of illegally stealing articles to train ChatGPT, but it claimed that ChatGPT was able to memorize and regurgitate articles word for word. Yesterday, OpenAI pushed back on those claims, saying this regurgitation was a rare bug in the software that the company was working to eliminate. OpenAI said that the Times may have intentionally manipulated prompts and cherry-picked examples from many attempts to get the outcome it wanted to present in the lawsuit. So we are now getting a preview of the different arguments the two sides are going to make and what is likely the biggest legal threat to OpenAI since ChatGPT popped on the scene in 2022.

14:12Yeah, even though OpenAI is getting their ducks in a row to fight this New York Times suit, remember, this is not just something contained to the New York Times. A bunch of content creators are suing OpenAI as well because they feel like they've been unfairly profited off their work. John Grisham, George R.R. Martin, and another group of authors sued OpenAI for, quote, systemic theft on a mass scale back in September. Sarah Silverman and other authors and comedians are also suing OpenAI in meta in this dual claims of copyright infringement. So even though OpenAI can paint this picture that maybe the New York Times is cherry picking or messing with the model to get it to do what they want, this is a wider problem they still have to address.

14:54In two different claims yesterday, one for UK regulators and one in this lawsuit, OpenAI was saying, look, we can't make ChatGPT or these AI models without using copyrighted works. Like, we have to. They would just suck without them. But we have to use them and we can use them under what's known as fair use law, which makes content on the Internet, you know, available for some purposes. So it's pushing for the argument that, you know, look, we really can't make these things without copyright. We should be allowed to under fair use. You have to let us. But we'll see what happens because eventually it seems like OpenAI and the New York Times might come to some agreement on some sort of licensing deal like OpenAI has done with other publishers like Axel Springer and the Associated Press.

15:40But it's not even just in the text world. I mean, you have Getty Images suing these image generators and you have Universal Music, which owns music, suing a bunch of AI companies as well. So it spans the entire media spectrum where you have the media rights owners saying you can't steal our work. And so these legal fights are going to play out because there really is no precedent for this. So judges can't just go back and say like, oh, yeah, on case law back from the 60s and 70s, AI companies took these. And so we know exactly what to do. I think I'd rather be in the rocket science business. All right.

16:11Before we jump to the next half of our show, we're going to take a quick break.

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17:19Remote work may not have killed the office, but it seriously injured it. And that's what I want to talk about for today's Toby Trends, where I, a youth with his finger on the pulse, educate my millennial co-host Neil about a trend I've had my eye on. And that trend is that America's offices are emptier than at any point in at least the last 40 years. I know this feels like an extension of the work from home debate that we've been having ad nauseum for the last three years, but there's more to this than just worker preferences. The U.S. has massively overbuilt office space in the last decades. A whopping 19.6 % of office space in major U.S.

17:58cities wasn't leased as of the fourth quarter, according to Moody's Analytics, which is the highest number since at least 1979, which is as far back as the data goes. Huge gluts in supply arose in the office building boom in the 80s and 90s, and we're still suffering from that extra space today. It explains why the U.S. lags so far behind other countries in coming back to the office. Return to office rates in Paris and Tokyo, for instance, have both climbed to over 75%, while the U.S. sits below 50 % still. So this is why I'm saying it's not just a pandemic thing. Other countries are back in the office, but we're sitting here with lower than expected rates and way too much office space.

18:37Right. And it's because the office space that you're talking about is old. And companies that are going back to the office do not want what's known as like class B or class C space. They want the Hudson Yards of the world, the super flashy modern buildings, because they also have a smaller footprint because of changes in the way offices are designed. We've moved away from the Mad Men style. Everyone gets their big corner office. I mean, I'm just sitting there with you plebs here in the office because we have an open we have an open space. So you need less footprint. You want a more modern design, a more modern building to attract employees.

19:13Because if you're going to ask employees to come back to the office, you better have some good stuff for them. So this whole thing is conspiring to this massive glut. And it is really, really shocking to see how different the American experience is than Europe and Asia, where more people are going back to the office now than they were during the pandemic. Yeah. If you look at the graphs of office vacancy rates over that four-decade stretch that I talked about them, you see them plunge office vacancy rates when they go down when times are good. So during boom times, it typically means that offices are full and people are going in.

19:50But right now, even though we are in this soft landing period, like we've kind of I don't want to call it a full boom time, but the economy is doing very well and you still see elevated rates of office vacancies. So that to me shows that this is a trend and we're bucking kind of historical norms right now that even though the economy is doing well, offices are still empty. OK, moving on. During COVID, more than 23 million American households, nearly one in five people nationwide adopted a pet. Now, as they head back to the office, maybe, and face higher expenses, they're returning those pets overwhelming shelters.

20:26A recent article by Bloomberg explained that animal shelters are in crisis mode right now, with stray dogs taken in rising 6 % from January to November of last year and jumping 22 % since 2021. Some have started to turn animals away, and last year, New York City shelters temporarily stopped taking in new dogs and cats for space considerations. There are a lot of factors that explain why people are returning their pandemic puppies, but here are two that I think are most powerful. One, after years of COVID rules cramping their influence, landlords are reasserting themselves and have reinstated new rules on pet ownership that had gotten lax during the pandemic years.

21:04Second is the cost of keeping a pet has just become too great for many people during a period of high inflation. Dog owners paid an average of$344 annually for veterinary visits,$354 for food, and$315 for boarding in 2022, according to the American Pet Products Association. Toby, it looks like the great COVID pet boom is behind us with disastrous effects for animals and shelters. Right. The disastrous effects are so many people still want dogs. Like the U.S. pet population jumped 6 % in 2020, 4 % in 2021. Historically, it's grown around 1 % annually. So we definitely saw these outsized jumps. And now people are coming to terms with the fact that, yes, it is expensive.

21:45You might not be working from home anymore. You can't take care of the dog all day. So you have to go back in the office. And we're seeing shelters bear the brunt of it. And you just have all these really awful ripple effects on how are you supposed to deal with the amount of kind of unwanted dogs in the system right now. Meanwhile, pet companies have not been a smart investment at all. PetSmart, Petco, Chewy are all down bad. Petco shares have crashed to their lowest level on record. They're saying that it's a very challenging consumer environment. So while people are still spending so much on their pets, 78 % jump in the past couple of years, that high level of spending has not kept up.

22:28And these companies are just absolutely crashing and burning right now. Yeah. And I think, especially in Chewy's case, it was meant to be this e-commerce revolution. It was modernizing this older way of doing business. And some cracks have developed in that kind of facade, if you will. Here's a sentence you probably didn't think you'd hear this morning. Buffalo, New York is projected to be the hottest housing market of 2024, according to an analysis from Zillow. Sure, maybe the hottest QB, but hottest housing market? According to Zillow, it's true. Naming affordability as, quote, the most powerful force driving real estate right now, that's propelled the Great Lakes, Midwest, and South regions to the top of the company's 2024 rankings.

23:11Zillow used metrics like typical home value, average mortgage payment, and the average number of days a house is on the market for each city. And here's the rest of the top five. Coming in at two is Cincinnati, Ohio, Columbus, Ohio, Indianapolis, Indiana, and then Providence, Rhode Island rounds out the top five. Some of the big movers this year were Charlotte, who was number one last year but fell to seven um number one last year but fell to seven this year while san antonio which was four in 2022 and 13 last year fell all the way to 49th for 2024 i still can't get over that first sentence though buffalo new york is going to be the hottest housing market well they're they're calculating it based on demand for jobs based on supply in the market right because that's what's going to create upward pressure on housing prices and there's just apparently a lot of jobs coming to Buffalo now.

24:03And one of them, which is most interesting to me, is probably semiconductors. So the Syracuse, Rochester, Buffalo region was just named one of the tech hubs that is eligible for up to$10 billion in funding under the Chips in Science Act. And so policymakers at the federal and the New York level are trying to make this region into this chip highway, they're calling it. Meanwhile, Micron Technologies is building a$100 billion factory just north of Syracuse, also kind of in that general region. And that's going to be the largest memory chip factory in the country. So there's a lot of money, especially in chips, going into this area.

24:44So, you know, Buffalo, the houses are affordable now. Maybe if you are living in New York City or another place when we haven't seen an inch of snow in two years, you want some snow, will go to Buffalo, which gets 133 inches of snow every winter. I'm sure they still play pond hockey there. So I can understand why this is happening, because there are other hot housing markets. This is not saying this is the best housing market in the world. It says this is the one that's not maybe, this is very affordable now, but it's the one that's going to pop over the next year. Yeah, when you start piecing the puzzle together, you do see why Buffalo made it on top.

25:21I don't know if that 100 plus inches of snow stat is going to do anything for their tourism board. We've talked all about how the people are going to Southern States, to the South, and now here we are saying, hey, 100 inches of sail and some pond hockey. Still a good way of life. Okay, we have to wrap it up there. But before I shout out our team behind the scenes, we want to try something new and close out our show with one thought you may want to focus on over the course of the day so you can be your best self. In golf, this is known as a swing thought, where you clear your mind of all the noise that's buzzing around in it and just zero in on a single mindset.