Hard Times for Cyber Crimes

Plus: Goth outfitter Dr. Martens blames nice weather for weak sales. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

January 20, 2023

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Good morning.

Boy Meets Congress?

Former child star Ben Savage has filed papers to launch a run for a seat in Congress. The 42-year-old Stanford grad best known for his roles in the TV series “Boy Meets World” and the film “Little Monsters” (in which he shared the screen with older brother Fred) is running in 2024, meaning that if things continue as they are, he might be starring in a new project called “Boy Meets Debt Ceiling.”

Morning Brief

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Cybercrime doesn’t pay.

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Hey, Jughead, did you hear?

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Dr. Martens quakes in its boots.

Cybercrime

Ransomware is Getting Less Lucrative

Cyber bandits are feeling less and less like the slick Ocean’s 11 crew and more and more like an ill-fated Robert De Niro at the end of Heat.

Why? According to new research from Chainalysis, it’s because an increasing number of would-be victims are refusing to pay up to escape the ransomware traps that have rocked the corporate world in recent years.

Cybercrime and Punishment

Life was good for cybercriminals in 2019, 2020, and 2021. Companies big and small were increasingly online — especially as the pandemic gripped the world and reshaped office practices. That meant they were storing and sharing large amounts of juicy data and highly-sensitive information, essentially leaving their electronic front door wide open. Meanwhile, cybersecurity and cyber insurance firms were just exiting the “niche” stage of their business life cycles, and the burgeoning wild, wild, west of cryptocurrencies provided the perfect mechanism for doing massive amounts of crime.

But the world soon caught up to these uniquely 21st-century villains. Governments the world over discouraged companies from making ransom payments, and US officials levied steep sanctions against cryptocurrency companies that allegedly facilitate illegal activities. Global criminal investigations hunted down alleged members of the REvil and Darkside hacker gangs, two major repeat offenders, while Insurance companies have grown far more stringent over covering payout claims. It’s all put a significant dent in the once-lucrative line of cybercrime:

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Ransom payments, which are almost always completed using bitcoin, fell from around $766 million in 2021 to around $457 million in 2022, a roughly 40% decrease, according to the forensic blockchain investigation results published by Chainalysis on Thursday.

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“We believe that much of the decline is due to victim organizations increasingly refusing to pay ransomware attackers,” the report said. Just 41% of victims in 2022 ponied up the ransom, down from 76% in 2019, according to data from ransomware security firm Coveware seen by Chainalysis.

Bit by Bitcoin: Even still, the number of attacks continues to be on the rise. The number of ransomware strains in circulation boomed to over 10,000 in the first half of 2022, according to Fortinet research quoted by Chainalysis. And hackers are increasingly ditching the big-game hunting targets — such as major corporations, government networks, as well as hospitals and schools — in favor of often much more vulnerable small businesses. Remember: when the IT department’s 2FA mandates fail, there’s always the simple art of negotiation.

–Brian Boyle

Sports

Shake-Ups in Sports Broadcasting

(Photo Credit: Courtney Cook/Unsplash)

Sports media had everything on Thursday; golf, VC fundraising, Saudi Arabia, Shaq… pickleball.

LIV, the Saudi Arabian golf league that’s earned the ire of pretty much everyone besides Phil Mickelson and Dustin Johnson, has finally found a home on American TV after striking a deal with the CW Network. Yes, that CW Network. In less controversial sports news, The Tennis Channel has deepened its partnership with Major League Pickleball and will now air the league’s semifinal and finals.

Happy Gilmore Girls

The CW, which mostly features melodramas surrounding young, attractive people and their absurdly intense high school problems, is finally introducing live sports to the network. LIV, whose current season is expected to cost the Saudi Arabian government $1 billion, hasn’t been able to broker deals with an American broadcaster until now.

A lot of that had to do with the Gulf Nation’s litany of human rights violations. The country’s got plenty of money to burn – $612 billion through its Public Investment Fund to be exact – but it was easier for US networks to just avoid the PR nightmare especially since those same broadcasters already have plenty of sports media rights:

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Details on the multi-year deal between LIV and the CW’s parent company Nexstar Media are scarce. No figures have been disclosed, but the network will broadcast 14 events in 2023, starting as early as next month with the promotion’s invitational in Mexico.

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LIV and its US competitor, the PGA Tour, are bigger rivals than Riverdale and Baxter High. While the PGA is suing LIV for antitrust issues and poaching its players, LIV filed a complaint suggesting the PGA Tour was responsible for funding anti-Saudi protests during its events last year. And they call golf a gentlemen’s game.

That’s a Paddlin’: Over in the world of giant ping pong, The Tennis Channel will begin broadcasting even more pickleball this year. “Fastest growing sport” is often a wonky phrase thrown onto ridiculous activities like chess boxing, but in the case of pickleball, where the global market for the paddles alone is worth more than $150 million, it might be true. According to the Fitness Industry Association participation in pickleball grew by nearly 40 percent between 2019 and 2021.

All In: Venture capital firm Courtside Venture, which includes investors like Dick’s Sporting Goods and Shaquille O’Neal, raised $100 million Thursday for a fund that will support sports-related startups. It’s previously pumped money into The Athletic news site and the Drone Racing League. The focus now is sports betting, especially in countries with lax regulations. You know, the things that are meant to minimize rigging and addiction. So a deal with Saudi Arabia is definitely not on the table this time. Hello, Nigeria.

–Griffin Kelly

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Retail

Dr. Martens Shares Take a Pummeling

What’s more goth than blaming your woes on the sunshine?

Dr. Martens, the maker of the steel-toed boots favored by punks, goths, and impressionable tourists visiting London’s Camden Market, announced it expects to make less money in the 12 months ending March than previously expected, falling short by about £26 million. Dr. Martens said it had been beset by problems including “unseasonably warm weather” in fall. So punk.

Los Angeles Calling

UK-based Dr. Martens ascended to icon status in the 1960s and 70s when they were popularized by musicians like The Who’s Pete Townshend and Sid Vicious of the Sex Pistols. The fashion brand decided to IPO in 2021 at a £3.7 billion valuation, surprising many industry watchers. Unfortunately, the market turned out to be every bit as vicious as the Sex Pistols bassist.

Dr. Martens’ $3.7 billion valuation started to look a little puffed up in November 2022 as investors reacted to some disappointing half-year numbers, and the new forecast casts an even gloomier pall over proceedings. Aside from fair weather taking a bite out of its sales figures, the company looked across the Atlantic for a culprit:

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Dr. Martens said it has experienced bottlenecks at a new warehouse in LA and predicted it may have to fork over another £11 million to work out the kinks in its supply chain, which could in turn cause a further £25 million loss in potential sales.

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The road ahead is not looking smooth, as consumers will have less disposable income to splash out on fashion statements in the months to come. However, Dr. Martens made a move last May to get into the resale market, which may give it a scooch more accessibility to cash-strapped shoppers.

Boots vs Choc: What would you rather go without, high-end footwear or classy chocolate? While Dr. Martens girds itself for 2023, the CEO of British luxury chocolate retailer Hotel Chocolat declared on Thursday that chocolate is “recession-resistant” following strong Christmas sales, and he announced the company plans to open 50 more stores. Here’s hoping that particular sugar rush doesn’t end in a crash.

–Isobel Asher Hamilton

Extra Upside

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Roll the Credits: Netflix founder Reed Hastings resigns from co-CEO role.

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Macron Misery: Retirement age protests are rocking an angry France.

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If achieving financial freedom was simple, we’d be dispatching today’s Daily Upside from our own private island. The good news for both us and our readers is that Finmasters is clarifying the intricacies of mastering financial goals 一 like this breakdown of the “Boots Theory”, which reveals the actual cost imposed by financial stress. Or how to break these 8 bad habits to expedite your financial goals and build wealth faster. Check out these articles and we’ll meet you in the Bahamas.

Just For Fun

Dam it.

Babysitting.

Disclaimer

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