Another Saudi Powerslam?

Plus: Bickering billionaires blot out the sun ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

January 12, 2023

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TOGETHER WITH

Good morning.

It was the corporate governance equivalent of a streetwear fashion brand’s exclusive drop.

Nike executive chairman Mark Parker has been appointed board chairman of the Magic Kingdom, marking a clear shift in the entertainment giant’s move to make sure that the second coming of CEO Bob Iger doesn’t produce a third. Parker, who knows iconic brands thanks to being chief executive at the House of Swoosh for 13 years before taking over the board, will be tasked with finding a presumably long-term replacement for Iger at Disney after his most recent replacement, Bob Chapek, was ousted following a cup of coffee at the Trolley Car Cafe in December. The appointment comes as Disney faces down activist investor Nelson “Scar” Peltz, who has taken a position in the company and is looking for a board seat to… air his thoughts.

Morning Brief

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The FAA just caused an air travel catastrophe.

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Here comes the pain.

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Billionaire bickering stalls a big solar project.

Aviation

Thousands of Flights Canceled After FAA Computer Glitch

Unless you are on vacation in a tropical paradise and desperate for any excuse to stay on vacation in a tropical paradise, this week will be an absolute nightmare for airline travelers.

Due to an overnight glitch early Wednesday morning in a critical Federal Aviation Administration computer system, nearly 8,000 flights have been delayed and over 1,000 flights have been canceled outright, according to flight tracker FlightAware. That raises a tricky question: If the FAA is tasked with holding airlines accountable for widespread outages — like, say, the delays and cancellations courtesy of Southwest last week — then who holds the FAA accountable when it’s the culprit?

Mistakes on a Plane

The FAA’s calamitous disaster was caused by a temporary outage to the agency’s Notice to Air Missions system, a critical tool for informing pilots of the status of airports across the country. Without it, flight crews can be left in the dark on runway closures and other on-the-ground hazards and obstacles. By early Wednesday morning — around 7:20 a.m. ET — the agency ordered a nationwide “ground stop” for all commercial flights, marking the first nationwide shutdown of FAA airspace since 9/11, according to FlyersRights, the largest US non-profit airline consumer advocacy group.

The FAA lifted the stoppage within two hours, but airline schedules are like dominoes — widespread cancellations and delays today are likely to cascade into the rest of the week. It’s a massive headache that critics and experts are already claiming could have been avoided. “It really shows the vulnerability and unreliability not just of airline computer systems, but of the FAA,” FlyersRights president Paul Hudson told The Daily Upside. “FlyersRights has been urging that the [agency’s] computer systems be updated because of a whole series of outages over the last several years. We think there needs to be stress tests on all these systems.”

With NOTAM back online, airlines and passengers alike are scrambling to pick up the pieces:

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Delta, United, and American Airlines have all already announced that they would waive price differences for some customers who opted to change their flights on Wednesday — though which customers and which flights are eligible for such waivers appears to vary on a case-by-case basis, The Wall Street Journal reported.

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While most airlines hand out vouchers for meals or lodging accommodations to customers affected by cancellations or extensive delays, they typically only do so when it’s the fault of their own organizational failures. With the FAA to blame this time around, it’s unlikely most stranded passengers will receive similar compensation; additionally, federal agencies are generally immune to lawsuits based on negligence.

Could it be Worse? The only travelers having less fun than those sleeping on the airport terminal floor this week was a group of 563 Amtrak passengers trapped in a stalled train in rural South Carolina with limited food supplies for over 20 hours. The trip, which departed Monday evening from DC for a 17-hour trek to Florida, finally arrived at its destination Wednesday morning. Next time we travel, we’ll opt for a road trip.

– Brian Boyle

Sports

Saudi Arabia is Rumored to Purchase World Wrestling Entertainment

Photo credit: Megan Elice Meadows/WikiMedia

Is this a rib? You’re ribbing us, right?

Twenty-two years after Vince McMahon gleefully boasted “I bought my competition” upon acquiring Ted Turner’s WCW, the now-77-year-old wrestling magnate is rumored to be selling World Wrestling Entertainment to Saudi Arabia.

Saudimania

So far 2023 has been a survivor’s match for WWE. Last year, McMahon stepped away from the company after it was revealed he allegedly paid millions in hush money to multiple women for sexual misconduct claims over decades. He still remained the majority shareholder but his creative director role and his in-ring “evil boss” “persona” were no more.

But last week, McMahon returned to the company as a board member and suggested he would sell the business. Since then, his daughter Stephanie has resigned as CEO and many insiders believe WWE is set to sell to Saudi Arabia’s Public Investment Fund. Despite denials from sources close to WWE, it’s not far-fetched as the company already has close ties to the Gulf nation:

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In 2018, the WWE entered a 10-year partnership with Saudi Arabia’s Ministry of Sport to host two events per year in the country. WWE received backlash for partnering with a country responsible for numerous human rights violations and the assassination of journalist Jamal Khashoggi, but Vince saw dollar signs. Just one event in Saudi Arabia brings in roughly $50 million in revenue – about three times as much in ticket sales as Wrestlemania, WWE’s show of shows.

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Saudi Arabia has been on a sports spending spree. The nation invested heavily in Formula 1, purchased an 80% stake in Newcastle United football club, and started the absurdly wealthy but highly criticized LIV golf league, which has poached PGA greats like Phil Mickelson and Dustin Johnson.

Fans are disavowing the rumored deal and are worried it could mean bad news for the WWE’s women’s division, which for a long time McMahon treated as an afterthought. After all, women in Saudi Arabia were only recently allowed to drive their own cars, so it’s hard to imagine them being permitted to perform slams from the top rope. Audiences are also showing support for Sami Zayn, who Saudi Arabia has never allowed to perform inside the country because of his Syrian heritage.

“TBH I will follow @SamiZayn wherever he goes. The man is a genuine ACTOR and oozes charisma,” one fan tweeted. “No joke he’s, all by himself, a legitimate reason to not sell to Saudi Arabia.”

Know Your Role, Jabroni: While Vince McMahon revels in defining cad downward, even he can’t just make a deal with the Saudis with the snap of his finger. WWE is publicly traded, so shareholders still need to be made aware of any such deal via SEC filings. Other rumored buyers include Comcast and Disney. One thing’s for sure, there’s No Chance in Hell WWE will retain all of its fans if a Saudi deal materializes.

–Griffin Kelly

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Energy

Australian Solar Pipeline Stalled by Billionaire Spat

Billionaire egos may be contributing to global warming.

Sun Cable, an ambitious Australian solar energy project, has gone into voluntary administration, a first step toward insolvency, because two mega-rich investors — mining magnate Andrew Forrest and software sultan Mike Cannon-Brookes — cannot agree on how to manage a new funding round.

Here Comes The Sun…?

The idea behind Sun Cable is to construct a giant 20-gigawatt solar farm in Australia’s Northern Territory. To put that in perspective, the world’s biggest solar farm in China has a capacity of 2.8 gigawatts, enough to power one million homes. Sun Cable would also feature an undersea cable to Singapore, meaning Australia could export its sunshine to Asia.

Forrest and Cannon-Brookes jointly pumped A$210 million into the project in March last year netting them each a 15% stake, but now it looks like it needs another cash injection and their partnership has become less cooperative. The Financial Times reports that talks about another round of financing started because Sun Cable — which has yet to begin construction — started missing milestones:

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Two sources told The FT that Forrest’s investment vehicle was against a recapitalization plan due to worries over Sun Cable’s spending and future direction. A source told The Guardian Sun Cable was using up its runway fast by, among other things, maintaining offices in five cities simultaneously.

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One of the missed milestones included a failure to secure approval from Indonesia, which was blocking its attempts to seal deals, the same source told The Guardian.

Cannon-Brookes’ Grok Ventures put out a tonally temperate statement saying “all but one shareholder agreed with the company’s funding strategy.” Whoever could they mean?

Biden’s moment in the sun: While Australia’s solar ambitions have been somewhat eclipsed by billionaire infighting, Joe Biden’s tax plan to entice clean energy companies to the US seems to be working. Korean solar manufacturer Hanwha Qcells announced on Wednesday that it plans to spend upwards of US$2.5 billion building factories in Georgia. Maybe in the future, they could pioneer some sort of solar-storage battery to power trains — even ones that run at midnight!

– Isobel Asher Hamilton

Extra Upside

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It’s a start: FTX has $5 billion in cash and other liquidity it can use to repay creditors.

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Going obsolete: CNET is publishing AI generated articles.

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Just For Fun

Hope they got insurance.

Emergency support.

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