I spent much of the past couple of days doing two things: standing in line at a DMW office and watching the NBA Playoffs. I prefer the NBA. Here’s today’s newsletter:
MEDIA: Box Office Blues
While most movie theaters haven’t yet reopened in the country, it’s still staggering to see this weekend’s domestic box office numbers.
For this past weekend, which measures receipts from Friday through Sunday, box office revenues totaled just under $2 million, according to data from Box Office Mojo.
Compare that to the same weekend last year when box office revenues totaled more than $120 million, according to Box Office Mojo data.
The year-over-year decline, while expected considering the closures of most cinemas in the United States, is still shocking.
Pink’s Bottom LineAs the movie studios scramble to recover that lost box office revenue, Hollywood does have an opportunity to reassess its overall business model.
For example, Disney will experiment next month when it releases the movie Mulan first (for an additional fee of $30) to its Disney+ streaming customers instead of releasing the film first to movie theaters. (I discussed Mulan, movie windows and releases here in a recent newsletter.)
I think we’ll see other creative ideas emerge soon from the studios to make up for this lost box office revenue. As such, it could be a really exciting time for the industry and, potentially, for consumers.
MONEY: Housing Clues
While much of the US economy is sputtering at the moment, one segment of it is powering ahead – the housing market. In the latest sign of housing’s strength, the National Association of Homebuilders/Wells Fargo Housing Market Index reached its highest level ever in August, tying the level it hit in December 1998.
This index measures confidence of homebuilders so it’s a pretty good indicator of how the housing market is faring now and how these builders expect it to perform in the coming months.
The housing market is also benefiting from mortgage rates that are at or near their all-time lows.
Pink’s Bottom LineAs the US economy attempts to bounce back from its steep decline, it will need the housing sector to remain strong.
Additionally, it will need the American consumer to keep spending as consumer spending accounts for roughly 70% of the US economy. Retail sales did manage to grow 1.2% in July, but that was well below expectations and well below the post-pandemic bounce-backs in both May and June.
Housing’s sustained performance will be key to a healthy economic rebound but housing needs to strengthen in tandem with solid consumer spending in order to achieve the best outcome.
SPORTS: Kawhi’s Shoes
Athletic shoe company New Balance will debut its latest Kawhi Leonard basketball shoe this Thursday. The shoe marks New Balance’s strongest entrant yet into the hyper-competitive basketball sneaker market. That market is currently dominated by Nike, but it’s the secondary market for basketball shoes and other high performance athletic sneakers that I find more interesting.
Consider the staggering growth of two companies — StockX and GOAT — that have created a secondary market for these types of shoes and other streetwear. (Some background: Cleveland Cavaliers owner Dan Gilbert is one of the owners of StockX, and, just last year, Foot Locker plunked down $100 million to invest in GOAT.)
Additionally, according to investment bank Cowen, the size of the secondary sneaker and streetwear market is already approaching $2 billion, and the Cowen predicts solid growth for that resale market in the coming years.
Pink's Bottom LineWhile the Kawhi Leonard sneakers are likely to attract quite a few buyers when New Balances releases them Thursday, I think it’s more instructive to see what happens in the secondary market after consumers have purchased them.
Will they try to resell them on StockX and GOAT? Will they get above retail price for them if they do?
If the shoes prove popular in the secondary marketplaces like GOAT and StockX, that will probably be the best indicator if the Kawhi shoes are indeed a hit for New Balance.
Jeremy Pink is former CEO of Broadcast Sports International and a former CNBC executive in New York, London and Singapore. He currently serves as an advisor to companies in media, sports and financial tech.
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