LeBron James and Drake are taking a big gamble on the PGA Tour

Golf’s new power players

Just over a month ago, a group of financiers and sports team owners, led by Fenway Sports Group, said it would invest up to $3 billion in the PGA Tour, a watershed deal that gave players parity in the league by eliminating competition from the Saudi Arabia-backed LIV Golf.

What wasn’t reported at the time was that several powerful people in sports, music and entertainment had also personally invested. Two names are likely to draw attention: LeBron James, the superstar basketball player, and Drake, the rapper.

The investors bring more than just money. FSG and fellow financiers including billionaires Steve Cohen, Arthur Blank and Marc Lasry believe they can help revive the sport, especially as the value of media rights soars. James and Drake are investing additional capital as “strategic investors” and are expected to use their marketing muscle to help the tour broaden its audience. James and PGA Tour commissioner Jay Monahan were recently at the home of FSG chairman Tom Werner to discuss just that, DealBook hears.

Fans can see the stars around the greens, perhaps in the same way Drake is a regular at Toronto Raptors games. “Golf can be so much more than a sport. “I remember some of my fondest childhood memories being on the golf course with my uncle,” Drake said in a statement to DealBook. “It’s one thing to invest in a team, but helping reinvent one of the greatest leagues in the world is an incredible opportunity and I’m excited to be a part of it.”

James and Drake are not new to sports investing. In 2021, James took a stake in FSG – he actually is mentioned in the small print as an FSG investor in a press release announcing the $3 billion deal – which owns the Boston Red Sox and Liverpool FC. James’ investment is different of the involvement of FSG.

In 2022, James and Drake also invested in AC Milan, the Italian soccer club, alongside RedBird Capital Partners and the owners of the New York Yankees.

Here are other previously unknown PGA Tour investors: The actor Chris Pratt; James’ business partner, Maverick Carter, and the player’s agent, Rich Paul; Jeremy Zimmer, the CEO of United Talent Agency; and Steve Stoute, the founder of UnitedMasters and longtime recording and marketing executive.

The man behind the investments is Paul Wachter. The Los Angeles-based financial advisor turned investor runs Main Street Advisors and has been involved in many celebrity and athlete-driven companies, including Beats by Dre and NTWRK’s purchase of Complex last month.

HERE’S WHAT’S HAPPENING

Apple will be fined €1.8 billion ($2 billion) over music streaming. The EU’s competition authority accused the tech giant of breaking antitrust rules by preventing developers from informing consumers about alternative music services such as Spotify. The decision marks the first time the iPhone maker has been punished for breaching EU law, and comes after Spotify filed a complaint against Apple in 2019.

Oil prices are rising slightly after the latest move by OPEC members. Brent crude, the international benchmark, yo-yoed only slightly this morning after Saudi Arabia and other top producers said they would continue to cut production through June. The announcement was aimed at supporting falling oil prices hit by tepid global demand.

New polls provide more bad news for President Biden about the economy. The latest survey from The Times and Siena College, which shows him trailing Donald Trump by five percentage points, shows that a majority of Americans think the economy is in bad shape. A poll by The Wall Street Journal shows that almost a third of respondents are so economic conditions had improved over the past two years – but a large majority believed that inflation was still too high.

An investor group increases its takeover bid for Macy’s. Arkhouse Management and Brigade Capital Management increased their offer to $24 per share, an increase of 14 percent and valued the retailer at $6.6 billion. It’s unclear whether that’s enough to get Macy’s to the negotiating table; the department store chain recently introduced its own turnaround strategy.

ICYMI: The Billionaire Debate on AI

Elon Musk tore a rift in the tech world last week when he sued OpenAI and its CEO, Sam Altman.

That fight is about more than accusations of breach of contract. It’s about the future of technology — and other Silicon Valley insiders have voiced their philosophical disagreements.

A reminder of Musk’s argument: OpenAI, which he helped fund for several years, was founded as a nonprofit organization that would release its innovations to the public. He now accuses the organization of violating that principle when it built a profit-oriented branch. The final straw was Microsoft’s billion-dollar investment in that division, which gave it an exclusive license for innovations such as GPT-4.

Not everyone agrees with Musk. OpenAI executives disputed his claims, telling employees they “do not reflect the reality of our work or mission.” And venture capitalist Vinod Khosla, an investor in OpenAI, criticism of Musk:

You jumped in early but didn’t stay committed. And real progress required real funding. Many nonprofits focus on profit efforts.

Musk pushed back. But so did Marc Andreessen, another OpenAI investor who backed Musk and responded that Khosla is “lobbying for ban open source.” That led to an interesting debate between Andreessen And Khosla on the dangers of rapidly advancing AI and whether it should be nationalized

Speaking of AI and the common good: Forty-five companies and tech executives have signed an open letter pledging to ensure their work benefits humanity, DealBook is the first to report. (The letter was planned before Musk’s lawsuit.)

From the letter, written by veteran investor Ron Conway:

While AI is unique in directly augmenting human thinking, we expect its impact will be more like that of the printing press, the internal combustion engine, electricity, and the internet. The balance between its good and bad effects on people will be shaped by the actions and thoughtfulness that we as humans demonstrate. It is our collective responsibility to make choices that maximize the benefits of AI and limit its risks, for today and for generations to come.

Others who have signed include OpenAI, Meta, Google and Microsoft; the AI ​​start-up Mistral; and investors Coatue, Tim Draper and Khosla.

Music is entering the ‘post-streaming’ era

The fight between Universal Music Group and TikTok looks like a repeat of the file-sharing era’s streaming wars, pitting the music giants against a formidable digital force.

But some in the sector believe in a world move largest music company to remove its artists’ work from the platform could have even more profound consequences. And the specter of artificial intelligence looms everywhere.

This is what the fight is about: Universal says TikTok should pay more to license his songs because the platform has grown so big that it actually underpays compared to its peers. The music company also wants TikTok to do more to protect its artists, such as Taylor Swift and Drake, from the AI ​​threat.

says TikTok Universal is endangering the future of its artists by taking them off a massive marketing and music discovery platform, especially for emerging singers.

The conversations have hit a wall. Shou Chew, TikTok’s CEO, and other executives attempts Resuming negotiations has reportedly failed. Universal boss Lucian Grainge doubled down on his warnings during an earnings call last week, saying there were none “free rides” for TikTok.

What happens is important for the entire sector. According to MIDiA Research, TikTok is the top platform where young consumers, especially teenagers, find new music. TikTok is also transforming the music industry and building what MIDiA de “post-streaming era,” defined by the rise of AI and the ‘consumer creator’.

AI is a potential existential threat to music labels. Universal says TikTok is “inundated” with AI-generated music. As the platform embraces user-generated content, this issue has become a sticking point in conversations.

TikTok wants royalties to be shared with fans, and Universal rejects that idea outright, according to The Financial Times. “AI will also allow social users – and even the platforms themselves – to simply use their own AI-generated music for messages, instead of using music created by human artists,” said Tatiana Cirisano, analyst at MIDiA . told DealBook. “I understand why these developments fuel the fears of labels.”

The pre-wedding party of the year

Tech billionaires, including Mark Zuckerberg and Bill Gates. Wall Street heavyweights like Larry Fink. Rihanna and Bollywood stars galore.

Those were among the VIPs — a list that also included prime ministers, royalty and figures like Jared and Ivanka Kushner — who flew to Gujarat, India. They were there during last weekend’s pre-wedding celebration to toast Rhadika Merchant and Anant Ambani, the son of Mukesh Ambani, the head of Reliance Industries and Asia’s richest man.

Rihanna played a long set. (She millions were reportedly paid.) But the three-day extravaganza was just a taste of what’s to come: The actual wedding is scheduled for July.

The coming week

It’s a busy week with payrolls, primaries, the State of the Union address and crucial policy meetings in China. Here’s what you need to check out.

Tuesday: It’s Super Tuesday. Voters go to the polls in fifteen states, including California, Texas and North Carolina. The big question: Could this be Nikki Haley’s last stand?

Elsewhere, China’s “Two Sessions” conference begins in Beijing. Investors will look for an official GDP target for 2024 and any signs of policy moves to restart the economy.

Wednesday: Fed Chairman Jay Powell is expected to give two days of testimony on Capitol Hill. He is expected to emphasize that this is so There is no urgent need to reduce interest rates.

Thursday: President Biden will deliver his State of the Union address. In addition to talking about his economic performance, he does that too expected to advocate for lower health care costs and higher taxes for corporations and the wealthy.

Friday: It’s job day. Economists predict employers will add 190,000 jobs last month, a big drop from last month. As a reminder, the January report was a stunner, with payroll numbers well above Wall Street estimates.

READING THE SPEED

Offers

Policy

• A federal judge in Alabama blocked an effort by the Treasury Department to collect more information from small businesses to help combat money laundering. (NYT)

• Bayer would lobby state governments to this end limit its legal liability for its Roundup weedkiller, the subject of a wave of lawsuits. (FT)

The best of the rest

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