Raphael Stevens

The battle in Congress over the federal spending bill last week revealed a deep divide over more funding related to Covid as Main Street faces increased costs on everything from labor to raw goods and energy and transportation.
Covid budget items will now have to proceed on a stand-alone basis, and key small business pandemic relief such as the Restaurant Revitalization Fund and Employee Retention Credit may receive less focus than public health measures.
A recent CNBC survey of small business owners finds two-thirds saying they support more financial support from the federal government.

Elizabeth Frantz | Reuters

A majority of small business owners on Main Street say they support more financial relief from the federal government, but the resolution of the battle in Congress last week over the spending bill for the federal government shows that it may not be coming.
This shouldn’t be a surprise. With fiscal hawks reluctant to provide more funds related to the pandemic even before Russia’s invasion of Ukraine became a key spending issue on Capitol Hill, odds have been long that Congress is going to provide another significant round of financial support for small business owners.

That’s even though the need is clearly there. Two-thirds of small business owners support more financial relief from the federal government, according to the latest CNBC|SurveyMonkey Small Business Survey for Q1 2022, as inflation continues to hit Main Street hard.
“Following action on the spending bill, the legislative docket will be crammed with other things that leave little room for small business priorities. And given Putin’s aggression and what he does next to savage Ukraine and threaten Europe, the attention of Congress and the White House may move increasingly to international matters and away from domestic legislative plans or wish lists,” said Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council.
In addition, there are a lot of complex domestic issues left to tackle in this legislative session, from prescription drug pricing to a version of President Biden’s Build Back Better plan that can receive the support of West Virginia Senator Joe Manchin, as well as a Supreme Court nomination in the Senate, all of which will “eat up legislative days,” Kerrigan said.
The specific measures for small business where hopes have been highest are the Restaurant Revitalization Fund and Employee Retention Credit. Hopes are not dead, but made more difficult by having to proceed on a stand-alone basis in Covid legislation.
The National Federation of Independent Business says while small businesses were left out of the spending bill, NFIB will continue to push for restoration of the Employee Retention Credit in the Covid-19 supplemental bill that is expected to be considered soon. NFIB is concerned about the omission of policy for Main Street given the headwinds small businesses are facing, including rising inflation, increasing energy costs, supply chain disruptions, and workforce shortages.

“Small businesses do not expect these problems to subside any time soon as expectations for future business conditions continue to decline, ” said Kevin Kuhlman, NFIB’s head of federal government relations.
The Employee Retention Credit, which was cancelled earlier that it was supposed to be in Q4 2021, has an estimated $8 billion in tax credits small business owners still might be able to claim. And NFIB thinks it has a better chance of receiving support than the much larger Restaurant Revitalization Fund, which is far larger (nearly $50 billion) and because it is targeted to one industry, makes it potentially harder to gain the broadest support. 
There are some positives to be considered in the just-passed federal budget. For starters, Congress was able to pass the bill after operating on continuing resolutions and the risk that continued into fiscal 2023, and the spending levels are higher than they were under the Trump administration across many agencies.
“From the vantage point of the greater good, we are in a better place. We are increasing the level of spending while still coming out of a pandemic and while we need social investment,” said Didier Trinh, director of policy and political impact at the progressive Main Street Alliance.
And what became a major sticking point in the debate on Capitol Hill — the clawing back of American Rescue Plan funds from states to make the budget work, a battle the states ended up winning when that method of paying for the bill was scrapped — does include an upside for small businesses. That’s because the American Rescue Plan provided a lot of flexibility to states to determine how to allocate financial resources and many did use the funds to support small businesses, Trinh said.
“Extracting that funding back to use as an offset for this bill was a mistake, and the states had every right to be frustrated,” he said. “We want to protect the funding that was promised so that states can still use it to help small businesses,” he added.
The Main Street Alliance favors the state grantmaking approach over programs like the controversial Paycheck Protection Program, which even though it offered loans that were forgivable has yet to grant many loans that status. “Grants are much more efficient and provide relief more quickly. States know how to administer grant programs at the local level,” Trinh said.
There is no guarantee how that plays out at the state level, but he said the state programs are a good place for small businesses to focus if they need more support rather than relying on the federal government moving new legislation.
It was not encouraging that in the White House’s own push for more Covid spending in the broad federal budget bill, the focus was on the public health measures and not more business relief. Even as small business experts continue to worry about the state of health in the restaurant industry, the White House request did not include targeted support.

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This doesn’t mean ideas like the RRF are dead, but Main Street needs to be realistic about the chances. As the Covid measures move to a stand-alone bill to be debated starting this week, Trinh said the Main Street Alliance still feels very strongly that there should be more financial relief for restaurants because the original RRF only met one-third of demand, though he noted it is a much higher price tag than the ERC, which was repealed prematurely, is a relatively simply fix, and less costly.
In the end, any stand-alone Covid bill will have to find its way to be attached to a broader legislative agenda and “there are fewer trains leaving the station and that does make it trickier, and a little dimmer, but there is time,” Kuhlman said.
The spending bill was “must pass” legislation, which meant it was the best chance for any additional Covid relief. And in the Senate it is difficult to assess how a stand-alone Covid measure including small business relief will fare given the fiscal hawks continually objecting to additional spending related on the pandemic.

There are many Republicans who understand that restaurants are still in need of help, and these measures have bipartisan support on their own merits, but Trinh said the Senate will continue to pose problems for passing stand-alone legislation with more funds for either the Employee Retention Credit or Restaurant Revitalization Fund. “Cutting off the ERC one quarter early was a mistake,” he said. “The belief in that is not partisan, but the question is how do we get political momentum for including it as part of a package.”
“There was never really traction inside the White House for new relief (via RRF or PPP) or ERC extension,” Kerrigan said. “The Administration is touting what they are currently implementing and doing to help small businesses to recover and compete: education and training support through SBA and other agencies, federal procurement initiatives, and other programs, rather than additional Covid relief.”
The underlying message from Main Street back to Capitol Hill is that the costs of owning a small business are going up and so is the challenge of maintaining some level of profitability. “Nothing is getting cheaper,” Trinh said.
More small business owners tell the CNBC|SurveyMonkey Small Business Survey they are passing on cost increases to customers or will soon do so if inflation remains high. The survey found most on Main Street do believe inflation will be persistent, and last Friday, Treasury Secretary Janet Yellen said that is her current view, too.
“It is not getting any easier in terms of the economic outlook, which is why we feel another infusion of support from the federal government could buy small business more time. Especially as Yellen says the level of inflation will remain high through the rest of year,” Trinh said. 
Gaining the attention of the White House and lawmakers, though, amid the Russia-Ukraine conflict, and in the lead-up to midterm elections, won’t be easy. Only a few key small business measures, if they could find bipartisan support, could go a long way in helping Main Street on many core business and economic challenges, but the just-passed spending legislation didn’t indicate that the federal government is inclined to think about the economic issues in this local way.
“The bottom line is that Democrats and Republicans are far apart on addressing issues like inflation and high gas prices, healing the labor market, and how to fix supply chains,” Kerrigan said.
There are many back-at-home issues that lawmakers on Capitol Hill are focusing on, but not the ones that give the small business community much confidence that more support for Main Street is coming.
“Where there does seem to be some inkling of consensus is on the revival of earmarks. There are more than 4,000 in this spending bill devoted to the ‘pet projects’ of members. Just in time for an election year,” Kerrigan said.

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NCAA’s March Madness basketball tournaments are working to get back to a pre-pandemic sense of normalcy.
The 2022 men’s NCAA Tournament starts Thursday on CBS Sports and Turner Sports. Disney properties ABC and ESPN will air the women’s NCAA tournament starting Friday.
This year, the March Madness brand will be used for the women’s tournament, as well.
Ad slots are sold out for both tournaments, according to networks.

A general view of the March Madness logo before game between the Syracuse Orange and the Houston Cougars in the Sweet Sixteen of the 2021 NCAA Tournament at Hinkle Fieldhouse.
Aaron Doster | USA TODAY Sports | Reuters

After two rocky, pandemic-disrupted years, the March Madness we all know so well is coming back.
The 2022 men’s NCAA Tournament starts Thursday on CBS Sports and Turner Sports. Disney properties ABC and ESPN will air the women’s NCAA tournament starting Friday.

Executives from Paramount Global and WarnerMedia spoke on Tuesday to promote March Madness, which promises to pay out nearly $1 billion in advertising revenue on the men’s side.
“The country is ready for the [NCAA] tournament,” said CBS Sports President Sean McManus.
“We’re getting back to being normal,” added Turner Sports President Lenny Daniels. “And we want to take that and go a step further.”
The networks lost the 2020 NCAA tournament due to Covid. The 2021 event was held in a bubble and saw the Baylor Bears win their first NCAA men’s basketball championship.
But this year’s tournament will include the return of storied programs Duke and Kentucky – both missed last year’s tournament – and legendary coach Mike Krzyzewski chasing his final title with the Blue Devils.

Can the men’s tournament lure 20 million viewers?

The production of this year’s NCAA tournament isn’t changing too much. Games will again feature a virtual shot clock on the court. There will be in-game coach’s interviews, and Final Four games will see rail and sky cameras integrated into broadcasts.
But will more viewers watch than they did last year?
The 2021 NCAA championship game between undefeated Gonzaga and Baylor attracted an average of 16.9 million viewers for CBS Sports, a 14% decline from the 2019 game. It was also the least-watched championship aired on CBS since the network started broadcasting the games in 1982.
The 2021 men’s Final Four games drew an average of 14.9 million viewers.
The NCAA men’s tournament returns to Turner Sports this year for the first time since 2018, when Villanova beat the University of Michigan. That title game drew roughly 16.5 million viewers.
CBS and Turner have rotated the Final Four since 2016. The last time the NCAA men’s championship game topped 20 million came in 2017 when the University of North Carolina played Gonzaga. That game attracted approximately 22 million viewers.
On Tuesday’s call, McManus wouldn’t predict viewership around the 2022 tournament but added “good games, good storylines, and as we know when a Cinderella pops up, that’s good for ratings.”
He also noted more prominent programs returning to the tournament should help viewership. In addition, measurement company Nielsen will combine out-of-home viewership with the final metrics. Out-of-home TVs are counted in places like airports, restaurants and sports bars. Nielsen previously provided only at-home metrics for its linear TV reports.
McManus said Nielsen’s decision to combine the metrics is “good for the network and good for our sponsors, and it truly does provide an accurate count of how many people are consuming our content.”
On the women’s front, Disney hopes to top last year’s title game between Arizona and Stanford. The contest attracted an average of 4 million viewers and was the most-watched women’s contest since 2014.
The women’s 2021 semifinal games featuring Stanford and South Carolina drew an average of 1.6 million viewers, while the University of Connecticut’s loss to Arizona had 2.6 million viewers, up 24% from the 2019 second semifinal contest. Sweet 16 games aired on ABC, ESPN and ESPN2 averaged 918,000 viewers, which is up 67% from 2019.

A detailed view of the March Madness logo at center court as Gonzaga Bulldogs and Norfolk State Spartans players run by during the second half in the first round of the 2021 NCAA Tournament at Bankers Life Fieldhouse.
Kirby Lee | USA TODAY Sports | Reuters

March Madness ads are sold out

Ad inventory around the 2022 men’s tournament is sold out, said John Bogusz, an executive vice president at CBS Network’s sales division. Thirty-second spots for the tournament run from hundreds of thousands of dollars in the earlier rounds to more than $2 million for the NCAA title game.
Bogusz said automotive, insurance and fast-food categories are “very active and very strong this year.” Movie studios are also returning to the ad rotation, while travel and technology companies will also promote around the games.
TV ad measurement company iSpot estimates ad spend around the 2021 men’s basketball tournament was about $1.05 billion, that’s up 21.4% when compared with the 2019 tournament. The firm told CNBC that AT&T was the top spender at $74.7 million for ads around the 2021 tournament. Capital One spent $48.7 million for ads, Geico ($46.7 million), Buick ($39.5 million) and Progressive ($37.7 million).
Told of the estimates and asked if ad spend around the 2022 men’s tournament would top $1 billion, Bogusz didn’t reveal specifics but added the projection is “in the range.”
“It’s quite impressive,” said Jon Diament, Turner Sports’ chief revenue officer, referring to the ad spend. Diament noted the amount of time the networks have to air the games – “three weeks of activity … it’s quite outstanding that we can gobble that money up in just a three-week flight.”
Last September, the NCAA said the 2022 NCAA women’s tournament would be included in the March Madness brand. The decision came after growing pressure and criticism over the organization’s original stance on using the trademark just for the men’s tournament.
EPSN said it also sold out its inventory for the women’s tournament. Twenty-two advertisers including Apple, General Motors, Target and T-Mobile will run ads during games.
The sports programming ad marketplace remains a top buy for advertisers. The National Football League’s Super Bowl remains the most expensive inventory. CNBC parent company NBCUniversal charged roughly $6.5 million for Super Bowl 56 commercials, and some brands paid a record-high $7 million for a 30-second ad.
Still, the high prices around sports programming aren’t deterring companies. Bogusz said “advertisers across all demo groups are allocating additional dollars” to purchase inventory.
“It provides the best drama in all of television, and to many advertisers, it’s still the most attractive programming you can possibly have,” said McManus. “And that includes the NCAA tournament.”
Asked whether the NCAA men’s tournament would increase to $3 million per 30 seconds when CBS returns to the event in 2023, Bogusz responded: “I wouldn’t say it would be that high. But we anticipate increasing pricing as we continue to move forward.”

Demonstrators protest against the war in Ukraine in front of the Brandenburg Gate.
Kay Nietfeld/picture alliance via Getty Images

War contingency plans 

While networks are welcoming a return to normal for March Madness, there are contingency plans in place for updating the top news of the moment – Russia’s invasion of Ukraine.
“There are more important things happening in the world right now than the NCAA tournament,” McManus said. “No one is going to pretend that the action on the court is as important as the life-and-death action that is happening in Ukraine,” he added.
McManus referenced the March 2003 invasion of Iraq to explain how the network would approach coverage. He said the networks would update the war in Ukraine as needed and “handle it the best way that we can.”
“We have two of the best production companies and two of the best news organizations,” added Daniels, referring to CBS News and CNN. “I think we’ll make the right decisions.”

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Nobel Prize winner Jennifer Doudna is the most well-known co-founder of CRISPR start-up Mammoth Biosciences, but Janice Chen, the sister of U.S. figure skating champion Nathan Chen, is also one of its four co-founders and the chief technology officer.
Mammoth has added $100 million in big pharma contracts and government grants since the pandemic began, quadrupled its employee count and is still hiring, and saw its valuation rise to $1 billion in a venture deal featuring Amazon and Apple’s Tim Cook.
Chen has her sights set on reaching a $100 billion valuation as an independent company.

Janice Chen (C) and her Mammoth Biosciences co-founders Trevor Martin (L) and Lucas Harrington (R). CRISPR gene editing pioneer and Nobel Prize winner Jennifer Doudna is also a co-founder.

Along Highway 101 north of the San Francisco Airport, a break-out biotech start-up named Mammoth Biosciences co-founded by Nathan Chen’s sister Janice in 2018 is fast emerging in the revolutionary field of CRISPR technology.
While not high profile like her gold medal-winning, ice skating brother — or Mammoth co-founder Jennifer Doudna, who won a Nobel Prize in chemistry for her work on CRISPR — Chen’s bioscience work in gene editing technology is in the forefront of medical discoveries from identifying bacterial and viral infections to early cancer detection. 

CRISPR, or clustered regularly interspaced short palindromic repeats, effectively cuts genomes and slices DNA to treat genetic diseases.
Outside of a close circle of colleagues, few knew Nathan was her sibling until she excitedly posted on social media about his gold medal victory as her family watched the televised games from her San Francisco home. Chen recalls being with her family in Seoul four years ago and watching him compete in the 2018 Winter Olympics. During breaks, she was busy contacting lawyers to start the process of setting up the company.    
Since the pandemic in 2020, the biotech start-up has fast accelerated. The company nabbed approximately $100 million in contracts with Bayer and Vertex Pharmaceuticals and government grants, grew the employee count from 30 to 130, and is hiring at least 55 more. Its valuation soared to $1 billion, with $150 million in a venture deal last September that included Amazon, famed Silicon Valley VC firm Mayfield and Apple’s Tim Cook.
The exit strategy isn’t an acquisition, as Chen sees it.”Our intention is not to build and sell it but to become a $100 billion company in next-generation CRISPR technology. There are so many creative building opportunities, and new technology that can come out of discovery in gene editing,” said Chen. “Identifying the business strategy has meant that I needed to step out of the lab and scale the company,” added Chen, who worked remotely during Covid, but is now back at the company’s Brisbane, California, headquarters, where its distinct green and white elephant-shaped signage is highly visible.   

Salt Lake City roots, Silicon Valley growth

Growing up in Salt Lake City as one of five siblings (Nathan, 22, is the youngest), her parents, immigrants from China in 1988, encouraged “us to reach our potential and become what is best for us,” Chen, now 30, said. Chen learned to play the violin, competed in chess tournaments, and excelled in dance performance. In chess competitions, where she was often the youngest and the only female, she said she learned “how to lose and how to win strategies.”

She discovered her passion for bioscience while at her father’s small biotech business in Utah.
To relieve the stress of scaling up Mammoth Biosciences, Chen has recently taken up running in San Francisco’s hills, near her home. She got up to speed for on-the-job managerial challenges by reading “The Founder’s Dilemma.” She also sought the advice of an executive coach who has helped in determining “what kind of leader do I want to be,” she said, adding, “I want to help myself and others reach full potential. It’s about understanding each person’s motivations, what they want to try and learn, and making them part of the company ecosystem.”
Mammoth Biosciences is built on core technology Chen worked on at Doudna’s UC Berkeley lab. Chen earned her PhD as a graduate student researcher in this hotbed of innovation.
As a mentor, Doudna encouraged Chen to set up her own business upon graduation rather than to work at a major biotech company. “She told me I wasn’t shooting high enough,” said Chen, who has academic credentials from Harvard Medical School and Johns Hopkins Bloomberg School of Public Health, as well as an internship at a HIV research institute in Durban, South Africa.     

“She’s a leader of the technical team and an overall strategist who has deep scientific knowledge and creativity, and can see where this technology is going,” said Doudna, whose UC Berkeley lab has been immersed in an ongoing patent battle over ownership of the biomedical technology. The U.S. Patent and Trademark Office recently determined in favor of the Broad Institute, a partnership of MIT and Harvard University. This decision impacts licensing for several CRISPR companies, but doesn’t extend to the particular gene editing system that Mammoth Biosciences uses. Doudna is also a co-founder of publicly traded CRISPR company Intellia Therapeutics.
At the age of 26, right after graduation, Chen had ventured out with fellow student and lab researcher Lucas Harrington to co-start a company. They set up shop at a biotech incubator in the up-and-coming Dogpatch neighborhood of San Francisco. “Janice and I split our time working in the lab and doing prototypes, and pitching venture capitalists,” recalled Harrington. Her husband, a scientist in San Francisco that she met at Johns Hopkins, “understands the journey” and devotion to starting this game-changing company. “It’s my life right now,” she said.

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They met Mayfield partner Ursheet Parikh through a connection with Doudna. Parikh was advising Stanford PhD graduate Trevor Martin on launching a diagnostics testing start-up. The venture investor brought Martin, Doudna, Harrington and Chen together, and the team formed Mammoth Biosciences. Martin is CEO, Harrington is chief scientific officer, Doudna is chair of the Scientific Advisory Board while Chen is CTO.  
“She’s a multi-faceted person and clearly a genius,” said Mayfield’s Parikh, a board member and serial investor in her company.      

VC investing in gene editing reaches billions

Since 2014, CRISPR start-ups have attracted $3 billion in venture capital, according to Chris Dokomajilar, founder and CEO of biopharma database company DealForma. An analysis by GlobalData’s Pharma Intelligence Center shows 74 VC deals for CRISPR technology companies since 2012, with Mammoth Biosciences in the lead of most well-funded. The start-up has raised $265 million in four financings from at least 15 VC firms and angel investors.
The company’s work expanded rapidly during the pandemic in 2020. Among seven firms granted $249 million for rapid tests of Covid-19 from the National Institutes of Health, the firm scaled up its patented DetectR test for commercial labs diagnosing the virus. In a collaboration with GSK Consumer Healthcare in Warren, New Jersey, a handheld device that can perform rapid diagnostic tests of the coronavirus is being created. Additionally, Mammoth Biosciences teamed up in early 2021 with Agilent Technologies in Santa Clara to develop CRISPR testing systems for labs to expand and speed up detection of the coronavirus disease.
“She has a rare skill set to conceptualize the future and what this technology can do for humanity,” said another of her investors, Harsh Patel, co-founder and managing director at Wireframe Ventures. “She can turn incredible science in a lab into commercial technology products. It’s a big leap away from the lab.” 
More developments came in rapid-fire sequence later in 2021 and into this year. Vertex Pharmaceuticals in Boston paid $41 million to the start-up to expand cell and genetic therapy tools, which could lead to $650 million in royalties. Bayer AG in Berlin paid $40 million to Mammoth Biosciences to focus on tests and cures for liver diseases, with royalties that could mount to $1 billion. Moreover, this January, the FDA granted the company emergency use authorization for a CRISPR-based molecular diagnostic testing of the coronavirus.   
The accomplishments have tested Chen’s strength as an innovator and business leader, but investors say she is imperturbable.  “I’ve never seen her frazzled in board meetings. She has strong opinions and she backs it up not by arguing, but by data,” said Omri Amirav-Drory, general partner at venture firm NFX, an investor and advisor. “I’m never selling my shares, I will give it to my kids. There’s a huge amount of IP in the company.” 

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There’s been a wave of state tax cuts spurred by budget surpluses, and more breaks may be on the way, according to policy experts.
Some 29 states and the District of Columbia enacted “significant” reductions in 2021, according to the Tax Policy Center.
While the savings may be welcome amid rising inflation, some policy experts worry about future revenue volatility.

Anchiy | E+ | Getty Images

And this year, at least a dozen states have made cuts or are eyeing reductions, including both temporary and permanent measures, according to the Tax Foundation.  
While there have been some pushes for corporate or property tax relief, income taxes are “the heart of what’s going on,” said Richard Auxier, senior policy associate at the Urban-Brookings Tax Policy Center.
“Overall, most of the tax cut proposals have been relatively modest, and a number have been targeted,” said Brian Sigritz, director of state fiscal studies at the National Association of State Budget Officers.

“Overall, most of the tax cut proposals have been relatively modest, and a number have been targeted.

Brian Sigritz
Director of state fiscal studies at the National Association of State Budget Officers

“The targeted proposals we’re seeing are directed towards helping with the impacts of the pandemic and inflation,” he said.
For example, some of these have included changes to grocery taxes, levies on retirement benefits, earned income credits, small business relief, pausing gas taxes and more.
Annual inflation grew by 7.9% in February, a new 40-year high, according to the U.S. Department of Labor, measuring the costs of food, gas, housing and more.
And “very uncomfortably high” inflation will likely last for another year, Treasury Secretary Janet Yellen told CNBC.

Bipartisan push

While last year’s tax cuts were primarily done by Republican-led statehouses, rising inflation in 2022 has prompted bipartisan pushes for relief.
“There’s a good mix of tax cuts being proposed by members of both parties,” Loughead said.
For example, Democratic New York Gov. Kathy Hochul called to accelerate a tax cut for middle-class residents, including a property tax rebate program, during her January State of the State address. 
And last week, New Jersey Gov. Phil Murphy, also a Democrat, proposed a property tax relief plan in the form of rebates for 1.8 million homeowners and residents.

State budget surpluses

The flurry of state tax cuts has been driven by better-than-expected revenues after states sharply reduced forecasts at the beginning of the pandemic, Sigritz explained.
Many states bumped tax deadlines from April to July 2020, pushing a surge of unexpected income into fiscal year 2021, beginning on July 1 in most places. Plus, the American Rescue Plan, signed in March 2021, allocated $195.3 billion in federal support for states. 
Meanwhile, high-income Americans kept working through most of the pandemic, boosting state income taxes, and federal stimulus money bolstered spending in local economies, Auxier said.
“You had this whiplash of ‘the sky is falling’ to strong growth,” he said.

You had this whiplash of ‘the sky is falling’ to strong growth.

Richard Auxier
Senior policy associate at the Urban-Brookings Tax Policy Center

As a result, state revenues collectively grew by 14.5% in fiscal year 2021 compared to 2020, according to a report from the National Association of State Budget Officers.
It was a very surprising result, given the Covid-19 caseloads, local restrictions and business closures, said Tim Speiss, a CPA and partner of EisnerAmper in New York.
While much of the individual relief has made its way through local economies, there is still growth above pre-pandemic levels.
Indeed, 32 states are projecting fiscal year 2022 revenues will be above original forecasts, the National Association of State Budget Officers report shows. 

‘Competitive environment’

The slew of tax cuts and proposed relief comes as some higher-tax states shed residents. 
The $10,000 cap on the federal deduction for state and local levies for filers who itemize, known as SALT, has been an ongoing concern for places with above-average income and property taxes.
“They are losing a lot of residents, especially in this era of increased remote work flexibility, where a lot of people can permanently work from wherever they want,” Loughead said.
From April 2020 to July 2021, higher tax areas, such as California, Hawaii, Illinois, New York and the District of Columbia, were the top five to lose residents. 
During the same period, Idaho’s population grew by 3.4%, while Arizona, Delaware, Florida, Montana, Nevada, North Carolina, South Carolina, Texas and Utah all saw 1% growth or more. 
That’s according to a Tax Foundation report analyzing data from the U.S. Census Bureau, U-Haul and United Van Lines.  
“We’re seeing a really competitive environment where states are looking for ways to make a name for themselves,” Loughead said. 

We’re seeing a really competitive environment where states are looking for ways to make a name for themselve.

Katherine Loughead
Senior policy analyst at the Tax Foundation

However, some policy experts worry about the long-term effects of permanent tax breaks.
“The troubling thing about rate cuts is they’re very expensive,” said Auxier, explaining how future revenues may not support these moves.
However, some income tax reductions are designed to phase in over a number of years, contingent on future revenue growth to balance budgets, Sigritz said. 
Still, while slashing taxes may be popular in an election year, states still have plenty of time to carefully allocate and spend unused American Rescue Plan funds, Auxier said.

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Ford will attempt to soothe dealers’ concerns over the company’s recent decision to split its EV and legacy gas-vehicle business.
“I was freaking out before I had even shaven that day,” one dealer told CNBC.
Ford executives will speak Saturday during a meeting of the company’s franchised dealers at the National Auto Dealers Association Show in Las Vegas.

Ford CEO Jim Farley poses with the Ford F-150 Lightning pickup truck in Dearborn, Michigan, May 19, 2021.
Rebecca Cook | Reuters

Ford Motor dealer Marc McEver was taken back when he heard about the automaker’s plans to separate its electric vehicle and legacy businesses as part of a restructuring under CEO Jim Farley.
The owner of Olathe Ford Lincoln near Kansas City, Kansas, heard the news around 6:30 a.m. CST last Wednesday and “was calling Detroit” within 15 minutes to try to understand what was happening.

“When it was first announced, I was pretty set back,” McEver said. “I was freaking out before I had even shaven that day.”
But after speaking with Ford officials since then, McEver, whose dealership specializes in commercial and fleet vehicles, is now excited about the plans.
“After talking to some of the people at Ford, I feel a lot better,” he said. “All this is pretty ingenious.”

Soothing concerns of dealers such as McEver is expected to be crucial for Ford executives Saturday during a meeting of the company’s franchised dealers at the National Auto Dealers Association Show in Las Vegas. The event annually attracts thousands of franchise dealers, including many of Ford’s roughly 3,100 retailers.
Farley caused waves across Wall Street and the automotive industry last week when he announced the separation plans. He called them “one of the biggest changes” in the history of the more than century-old company, including dealers “specializing” in certain vehicles.

Farley said some dealers such as McEver may specialize in fleet vehicles, while others only do electric vehicles or sales to retail customers.
“We’re going to bet on the dealer franchise system,” Farley said. “That’s a different bet than I hear from others. But we’re going to do it by asking them to specialize.”

‘Better than Tesla’?

Farley’s plans add to significant pressures and changes for franchise dealers, which many Wall Street analysts view as a negative for legacy automakers such as Ford when it comes to EVs. They argue the system eats into vehicle profits and can provide more inconsistent experiences compared to EV start-ups and Tesla, which own their stores and sell directly to consumers.
Those who want to sell EVs may have to operate in completely new ways, including online ordering, commitment to not carrying any inventory and selling at transparent non-negotiable prices, as some dealers have taken advantage or high demand and low vehicle inventories to mark up prices.

“In the next 60 days, we’re going to be out talking to all of our dealers around the world, and developing a pithy list of standards for a new experience that’s going to be better than Tesla,” Farley said.
Ford and other legacy automakers are contractually obligated to sell through franchised dealers. Many states also have laws that block direct sales of vehicles by automakers to consumers.
Franchise dealers for decades have fought to keep the traditional selling system in place. Traditional automakers view dealers as partners that are particularly important when it comes to servicing vehicles and community involvement.

Big meeting

Ford will attempt to address any and all concerns about the announced plans at Saturday’s NADA meeting, said spokesperson Debra Hotaling.
“That’s why we do this. We work really hard to talk to our dealers and listen to them,” she said, reiterating Farley’s comments about working with its dealers on these plans.
The changes could cost dealers millions of dollars in upgrades depending on their size. They also could force some individual dealers to sell to larger, sometimes publicly traded companies such as AutoNation and Lithia Motors.

Consolidation of dealer networks has been a major trend in recent years amid trying times during the coronavirus pandemic and automakers pushing dealers to invest more in EVs.
Ryan LaFontaine, CEO and co-owner of LaFontaine Automotive Group in Michigan, says he’s excited about EVs, but would like to know some additional details about Ford’s plans and requirements.
“It’s a big change, but it’s going to be something that we embrace and we’re excited about,” he said. “It makes sense, but we’re still waiting as dealers to understand the full impact.”
LaFontaine said his company, which has three Ford dealerships and 26 other stores in Michigan, is “all-in” when it comes to EVs.
The company, which sold nearly 44,000 vehicles last year, has already invested close to $1 million in its transition to EVs. His franchises range from the Detroit automakers and Toyota to Volvo-backed EV start-up Polestar.
“It’s an all-in play. All manufacturers are pretty much taking their entire portfolio, whether it be today or in the near future, to be EVs,” he said. “If you’re not adapting, really what you’re doing is saying you’re not going to proceed forward with Ford or believing in the vision they have. Not just Ford, all manufacturers.”

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Basketball Hall of Famer Grant Hill spoke with CNBC to discuss his brand deal with Philips, real estate and sports ownership.
After all these years, even though his net worth is estimated to be $250 million, Hill says he’s still “paranoid” about losing his money.
He also prefers to invest in real estate. “I believe in hard assets, real assets,” Hill told CNBC.

Grant Hill, the former NBA superstar and Duke Blue Devils icon, amassed over $100 million in career earnings. He has invested in several huge real estate projects, including a $5 billion development in Atlanta. He has an ownership stake in an NBA team, and has a new partnership with multinational conglomerate Philips.
Now, he’s estimated to have a net worth of $250 million.

But the 1994 Detroit Pistons first round pick is still paranoid about money – a mindset that persists from his days on the NBA court.
“I was always thinking about when the game was over,” Hill said about how he would budget during his playing days, with an eye on life after retirement. “And I think that served me well.”
Hill, 49, spoke to CNBC on Tuesday to discuss his new promotion arrangement with Philips’ razor products around the 2022 NCAA men’s basketball tournament, which starts March 17. He also works as a basketball analyst for Turner Sports’ NBA and NCAA games.
The interview was supposed to last only 15 minutes, but ended up stretching beyond 45 minutes as Hill discussed his investments, his continued involvement in the NBA and his unending curiosity about business in general.
Here’s how Hill navigated his finances and built a promising business portfolio off the court.

Thinking like a CEO

After he was drafted, one of Hill’s most notable decisions was electing not to hire a sports agent to negotiate deals. Hill said he doesn’t believe in paying an agent a percentage of his contracts to talk on his behalf. Basketball agents can charge up to 4% to players to settle contracts and earn more if they lure brand deals to clients. 
Hill, who played for four teams over the course of 19 NBA seasons, recalled his first contract was an eight-year $45 million deal in 1994. That was negotiated by attorney Lon Babby, who had experience as the Baltimore Orioles general counsel and became Phoenix Suns president of basketball operations.
“Essentially, we’re CEOs of our own companies,” Hill said, referring to professional athletes. “And CEOs don’t typically hire agents and pay them a percentage. They work with lawyers, and they have attorneys that help them negotiate and vet deals for you. And to protect your interest in contracts. So, I went that route with representation.”
Babby, who charged Hill an hourly rate, helped negotiate a $93 million deal with the Orlando Magic in 2000 and set up a marketing division that secured deals from brands such as McDonald’s and Coca-Cola’s Sprite. Sports apparel company FILA signed Hill to a lifetime deal in 2018.

Grant Hill #33 of the Detroit Pistons stands at the line to shoot a foul shot against the Washington Bullets during an NBA basketball game circa 1994 at the US Airways Arena in Landover, Maryland. Hill played for the Pistons from 1994-2000.
Focus On Sport | Getty Images Sport | Getty Images

By taking control of his business early in his career, Hill said he learned by “sitting with the executive leadership team, going over marketing campaigns – visiting ad agencies to develop a strategy.” He also studied the business section in newspapers to learn about money and “kept things simple” when it came to spending.
“I didn’t change my lifestyle,” Hill said. “I didn’t go out on a shopping spree. I didn’t buy a car. I had a relationship with General Motors, and they gave me a couple of cars.”
Hill, who played until age 40, was elected to the Pro Basketball Hall of Fame in 2018 and sits on the organization’s board. He is also a member of the NBA Retired Players Association board of directors. In January 2021, Hill was named the new managing director of the U.S. men’s national basketball team.

Inside Hill’s portfolio

Hill said he first became “paranoid about money and about losing money” after watching athletes struggle with money after their careers ended. Hill’s father – former Dallas Cowboys running back Calvin Hill – played in the NFL from 1969 through 1981, so he saw some players deal with financial woes up-close.
Asked if he remains paranoid about similar financial outcomes, Hill said: “There’s constant paranoia. I think that’s a little bit how I’m hardwired.”

I didn’t change my lifestyle. I didn’t go out on a shopping spree.

Grant Hill
businessman and retired NBA star

That thinking is reflected in his involvement in real estate investment.
“I believe in hard assets, real assets,” Hill said.
Hill praised his parents for developing an interest in the sector. He recalled entering the space in 2000, during his time with the Magic. Hill invested in multi-family units and office space buildings in central Florida, a region he described as “prime for growth, and has been growing tremendously since that time.”
Through his marketing and management company Hill Ventures, the former NBA All-Star invested and developed over $200 million in projects throughout Florida in North Carolina.
In his latest venture, Hill joined commercial real estate investment firm CIM Group to invest in Centennial Yards, a $5 billion mixed-use development in Atlanta. Hill said the downtown project would take seven to 10 years to complete. he compared it to L.A. Live, an entertainment and residential development outside Crypto.com Arena in Los Angeles.

Tetra Images | Brand X Pictures | Getty Images

Hill is one of the many athletes to profit from real estate investing post-career.
Basketball Hall of Famer and fellow Pistons legend Isiah Thomas has a real estate firm within his ISIAH International company. Former National Football League running back LeSean McCoy is building his portfolio through Vice Capital.
Several top-tier athletes are getting into cryptocurrency investment, but Hill is skeptical of whether the asset class is sustainable. Again, for Hill, it comes back to hard assets.
“There’s been great fortunes that have developed through real estate, and it’s a part of allocating assets,” he added. “I think it’s a safe bet, but I also think a profitable bet, compared to some of these sorts of new digital currencies that exist.”

Ballboys wear gloves while handling warmup basketballs as a precautionary measure prior to an NBA game between the Charlotte Hornets and Atlanta Hawks at State Farm Arena on March 9, 2020 in Atlanta, Georgia.
Todd Kirkland | Getty Images

Investment in sports teams and Black art

Hill also has sports properties in his portfolio. He’s an investor in the NBA’s Africa business, which is valued at $1 billion, and a minority stakeholder in the NBA’s Atlanta Hawks.
Hill took an equity stake and vice chairman role in 2015 when he joined businessman Tony Ressler to buy the team for more than $800 million. The Hawks are now worth $1.6 billion, according to Forbes.
Hill didn’t reveal his total stake in the NBA franchise. “It’s an investment, and Tony Ressler can treat me like an investor, but he treats me like a partner,” he said. “That’s something that I truly value and appreciate.”
Previously, Hill and fellow investors $1.2 billion bid for the Los Angeles Clippers in 2014 didn’t stack up to the offer from former Microsoft CEO Steve Ballmer, who paid $2 billion for the team.
Another asset in Hill’s portfolio: Black art.
Hill began collecting the Black art pieces in the 1990s. Hill told CNBC he owns art pieces by Romare Bearden, Elizabeth Catlett; painter Norman Lewis, and Hank Willis Thomas. And with more acceptance by the mainstream art community, Black art pieces have increased in value.
“I think if you buy good art, and you have a good eye, and you know what you’re doing, there can be a lot of money that is made,” Hill said.

Hill is still leveraging his NBA brand

Celebrity Net Worth, a website that tracks athletes and celebrates, estimates Hill made roughly $120 million from endorsements. Hill is also gaining experience in the consumer packaged goods sector as a board member of New Jersey-based Campbell Soup.
Hill is also helping Philips lure first-time shavers with its Norelco OneBlade line. Terms of Hill’s endorsement with Philips weren’t made available. Philips is traded on the New York Stock Exchange and has a market cap of $28 billion.
“You look for companies that are credible,” Hill said of how he approaches endorsement deals with brands. “Companies that have a history of success; ultimately embody the quality and characteristics that you stand for.
“They (Philips) have a product that I think identifies and serves young college basketball fans,” Hill added. “I’m mindful of that because I was a young college basketball fan.”
Hill played for legendary Duke coach Mike Krzyzewski. The iconic coach is retiring from the program after 42 seasons and five NCAA Division I championships. Two of those title teams, 1991 and 1992, featured Hill.
The retired superstar attended Krzyzewski’s final home game at the school last weekend and called the moment “bittersweet.”
“To celebrate him, to celebrate his legacy – to see players from multiple decades come back, it was special,” Hill said.
And he thinks the Blue Devils are going to go all the way this year. Duke won its last NCAA championship in 2015.
“We’ve been due,” Hill said. “Hopefully, we can send Coach K off with another championship.”

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Disney CEO Bob Chapek is doubling down on comments he made supporting the LGBTQ+ community during the company’s annual shareholder meeting.
The executive apologized for not being a “stronger ally” and for the company’s silence over Florida’s “Don’t Say Gay” bill.
Chapek said Friday that the company is pausing all political donations in Florida as it reviews its approach to advocacy.

Bob Chapek, CEO of Walt Disney
Patrick T. Fallon | Bloomberg | Getty Images

Disney’s CEO said Friday the company is ceasing its political donations in Florida due to the state’s so-called “Don’t Say Gay” bill, and he apologized for the company’s previous silence on the issue.
“You needed me to be a stronger ally in the fight for equal rights and I let you down,” CEO Bob Chapek wrote in a statement to colleagues and the LGBTQ+ community published Friday. “I am sorry.”

The statement doubled down on comments he made supporting the LGBTQ+ community during the company’s annual shareholder meeting Wednesday.

Chapek and the Walt Disney Company faced pressure this week for not publicly opposing the Parental Rights in Education bill in Florida. The legislation, which was passed earlier this week, forbids instruction on sexual orientation and gender identity in public schools for kindergarten through third grade.
It has been dubbed the “Don’t Say Gay” bill and criticized by some who believe the bill could do harm to already marginalized populations.
Disney, which operates four theme parks and dozens of hotels in Orlando, Florida, was targeted by activists after it was discovered that the company provided financial support for some of the bill’s backers in the state legislature.
The company reportedly donated around $300,000 to these backers over the last two years, according to a report from Popular Information, an online news site that tracks and reports corporate political contributions.

Chapek said the company is reviewing its approach to advocacy and will donate $5 million to organizations, including the Human Rights Campaign, that work to protect LGTBQ+ rights.
“I missed the mark in this case but am an ally you can count on — and I will be an outspoken champion for the protections, visibility, and opportunity you deserve,” Chapek said.
The entertainment giant has made diversity and inclusion a major part of its corporate policies and storytelling across theme parks, movies and TV shows. Many felt its silence on the bill was a statement of its own.
“Our employees see the power of this great company as an opportunity to do good,” Chapek said. “I agree. Yes, we need to use our influence to promote that good by telling inclusive stories, but also by standing up for the rights of all.”
Chapek told shareholders Wednesday that he contacted Florida Gov. Ron DeSantis and sought to meet with him to discuss the bill. DeSantis’ office confirmed that Chapek had called but said no meeting had been scheduled yet, according to a statement provided to CNBC.
DeSantis, a Republican, also doubled down. Speaking to supporters in Boca Raton on Thursday, DeSantis said there was a “zero” chance he was going to reverse his position on the bill, according to a video obtained by Fox News.
“You have companies, like at Disney, that are going to say and criticize parents’ rights, they’re going to criticize the fact that we don’t want transgenderism in kindergarten in first-grade classrooms,” he said.
“If that’s the hill they’re going to die on, then how do they possibly explain lining their pockets with their relationship from the Communist Party of China? Because that’s what they do, and they make a fortune, and they don’t say a word about the really brutal practices that you see over there at the hands of the CCP.”
“And so in Florida, our policies got to be based on the best interest of Florida citizens, not on the musing of woke corporations,” he added.
DeSantis’ comments about Disney’s relationship with the Communist Party of China has been a common criticism of the entertainment company in the last week. Disney was one of several studios to suspend theatrical releases in Russia over the country’s invasion of Ukraine, but has not make similar overtures in China for the treatment of Uyghurs in the Xinjiang province, who are facing human rights abuses.
In 2020, Disney thanked government entities in Xinjiang in the credits for its live action adaption of “Mulan,” which was partially filmed in the province.

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