What we’re looking at in 2024

Andreas here. As we look ahead to the new year, the DealBook team has identified a dozen themes that are likely to become running stories that could shape the business and policy ecosystem for the next twelve months.

Of course, the presidential election, perhaps one of the most polarizing in history, will infect every part of the business world. Pay attention to which CEOs and other financiers support candidates – and, more importantly, which remain silent – and how companies treat outspoken employees. Also: look for some wealthy executives to avoid giving directly to candidates, but instead donate to PACs as a kind of shield against public scrutiny.

Another storyline that will likely continue to be part of the water cooler (er, Slack and X) conversations in the business community is the backlash against environmental, social and corporate governance, or ESG, principles. This struggle has manifested itself into a political battle and has increasingly found its way over the past year into a debate over freedom of expression on campuses (another theme that is not going away).

Here are some more details about what we’re looking forward to this year.

The American presidential election. The race looks set to boil down to a repeat of 2020, with Donald Trump polling as the Republican candidate despite his mounting legal battles. The big question is how business leaders will respond. Will they unite around (and focus their money on) a candidate who is none other than Trump? Nikki Haley, the former governor of South Carolina, is leading that race, but she still has a long way to go to overtake Trump. President Biden, who has made a series of consistent decisions on the economy, is hoping voters will feel an economic upturn to reverse his deteriorating poll numbers.

Private credit could be hit by a wave of defaults. Just as 1980s-style leveraged buyouts have been rebranded as ‘private equity’, so too has ‘shadow banking’ been rebranded as ‘private credit’ and ‘direct lending’, in time for the company to reach its highest level yet reaches. Direct lending by investment firms and hedge funds has become a $1.5 trillion titan, with scores of companies turning to Apollo and Ares for loans instead of, say, JPMorgan Chase.

But the sector could face a test in 2024: Indebted borrowers, faced with looming debt maturities and high interest rates, are already turning to private credit for even more loans, raising concerns that lenders could face a wave of defaulting customers. A series of failures could hit these lenders hard, skeptics fear – leave pension funds, insurers and other financiers of private credit funds in their hands.

Media deal mania? Reports that David Zaslav, the CEO of Warner Bros. Discovery, which last month held talks about a possible merger with Paramount, sparked a wave of speculation that 2024 would be a year of media consolidation. The industry has been transformed in recent years by the growth of streaming, changes in the way people consume media, and the rise of big tech in industries typically dominated by old-school media companies. Now the industry is on the cusp of the next big shift with the rise of artificial intelligence.

One date to mark your calendars: April 8, 2024, the two-year anniversary of the merger of Warner Media and Discovery into Warner Bros. Discovery – and the first day the new company can be sold without risking a large tax bill.

Will unions maintain their momentum? Organized labor had a banner year in 2023, with major victories in battles with Hollywood studios and the auto industry. Whether this represents a permanent change for the labor movement is open to debate. But the elections will most likely be a key factor. Both Biden and Trump tried to woo striking autoworkers this year, so expect more efforts to win over blue-collar voters.

The money from the Middle East will continue to flow. Tensions with China and economic sanctions have made it increasingly difficult for companies to raise money in a place that used to be at the top of the list. Middle Eastern investors have picked up the slack. Saudi Arabia, the United Arab Emirates, Qatar and others are spending in their quest to diversify their fossil fuel-dependent economies. The sectors are broad, including sports, technology companies, luxury, retail and media. Critics say oil states with questionable human rights records are trying to launder their reputations, but that hasn’t stopped Western businesses from seeking their profit.

One trend to watch: the growing ties between China and Middle Eastern money. Beijing is trying to deepen ties with countries outside Washington’s sphere of influence, or at least with countries willing to play both sides.

More antitrust fights. A difficult year for regulators – such as the FTC’s Lina Khan and the Justice Department’s Jonathan Kanter – ended with two victories after both Illumina and Adobe called off multibillion-dollar acquisitions under government pressure. Enforcers could already claim some success in forcing dealmakers to weigh whether a major deal is worth pursuing, given the potential risk of having to spend months in court defending it. Don’t expect Khan to ease the pressure; expect more antitrust fights.

New climate disclosure rules. Public companies have been bracing for new climate-related disclosure rules from the SEC for years. In 2021, the agency indicated that climate change would be one of its priorities. About a year later, SEC Chairman Gary Gensler said, new rules proposed. The most controversial aspect of the draft regulations was the requirement that large companies disclose greenhouse gas emissions along their value chain. The new rules are ready completed in spring. But the likely lawsuits could go all the way to the Supreme Court.

Another election to watch: India’s. India, the world’s largest democracy and a rising superpower, goes to the polls in April and May. Prime Minister Narendra Modi is benefiting from the West’s search for a regional stronghold to counter China. The business community is eyeing opportunities in India as companies work to diversify their supply chains and tap into a fast-growing economy. The elections will also be a crucial early test of how AI can play a role in the spread of (mis)information during elections.

Turmoil in the workplace. In late 2022, the release of ChatGPT brought AI into the public consciousness. In 2023, companies were experimenting with new ways to integrate technology into their operations, but few had yet to overhaul their procedures for dealing with it. It’s still not clear exactly what AI will mean for employment, but in 2024 we may see more companies making decisions about using it in ways that will impact workers.

The other big issue that workplaces are grappling with is the response to the war in Gaza. Some companies are already considering changes to their workplace diversity, equity and inclusion programs, and executives are facing the same pressures as university presidents when it comes to how to handle their statements and responses to war-related incidents .