Morning Wire XX
[0] Once thought to be a necessary part of corporate America's C -suite, diversity, equity, and inclusion officers now face layoffs and cuts.
[1] It's pretty clear that the DEI brand has completely run its course, and we're going to start forgetting about it very soon.
[2] What's behind the shift away from DEI?
[3] I'm Georgia Howe with Daily Wire Editor -in -Chief John Bickley.
[4] It's August 19th, and this is a Saturday edition of Morning Wire.
[5] Investors flocked to apartment buildings and multifamily units, as values increased, but that sector may be ripe for a correction.
[6] And America's most lucrative collegiate sport is suiting up for an even more high stakes season.
[7] We take a look at how the college football field is shaping up and changing.
[8] Thanks for waking up with Morning Wire.
[9] Stay tuned.
[10] We have the news you need to know.
[11] Once the darlings of the C -suite, diversity, equity, and inclusion executives are now facing widespread cuts.
[12] Major companies like Netflix and Disney have laid off their DEI officers in recent months, and data tracking shows that sector is steeply declining.
[13] Daily Wire culture reporter, Megan Basham, is here to tell us why companies have soured on DEI.
[14] So, Megan, this feels like a little bit of whiplash.
[15] I remember probably a year ago, we were discussing how DEI roles were some of the fastest growing in the executive ranks.
[16] Yeah, you know, and not just some of the fastest growing, but actually, according to LinkedIn, they were the fastest growing position in the C -suite between 2020 and 2021.
[17] And that was by a considerable margin.
[18] But then after 2021, you start to see the significant reversal.
[19] So of the top 10 growing roles, the previous year, it was the only one to reverse growth in 2022.
[20] That LinkedIn report found that despite the fact that DEI chiefs grew 169 % over the last four years, in 2022, they saw a 4 .5%.
[21] percent decline.
[22] And then just so we're not solely relying on LinkedIn here, the hiring resource company Textio found that listings for DEI jobs were down 19 percent last year.
[23] And that was the third highest decline behind only science and software engineering.
[24] So no question this trend is real.
[25] Why is it happening?
[26] Well, I think a big element here is simply market realities.
[27] As the economy has declined.
[28] We've seen massive layoffs in the tech sector and the entertainment sector.
[29] Retail is now also showing signs of weakness.
[30] So DEI is largely being seen as a luxury role that isn't necessary to shore up company bottom lines when resources are tight.
[31] But you've also got political considerations.
[32] So as the wider public became aware of the DEI trend, a lot of people didn't like it.
[33] And it became a potential public relations liability.
[34] The Supreme Court recently bolstered those perceptions by banning affirmative action in college admissions.
[35] This was Florida Governor Ron DeSantis, for example, who has made it a cornerstone of his presidential campaign.
[36] This was what he said during his economic policy announcement in Rochester, New Hampshire.
[37] That ruling should apply across the board through our economy in these so -called DEI programs that many corporations have embraced.
[38] Those are discriminatory programs.
[39] Even if you think some of these programs, are well -intentioned, my response to you would be to this.
[40] The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.
[41] And that's what we're going to do in this country.
[42] And to go along with that political backlash, you're starting to see conservative legal activists filing lawsuits.
[43] So Amazon, Comcast, and Starbucks have been sued recently over claims that they're prioritizing DEI goals over fiscal responsibility to shareholders.
[44] And then there's also been a lot of discussion from DEI executives themselves who say that their efforts have been frustrated by a lack of budgets and institutional support.
[45] Some have said they feel they were just hired to be figureheads and not really changed company practices.
[46] According to Wall Street Journal analysis, a number of them have just been taking themselves out of the game.
[47] So is it looking like this was maybe a fad that is now kind of phasing out?
[48] I think that remains to be seen because certainly progressives are pushing back against the back.
[49] backlash, and they're signaling that they are going to fight for DEI.
[50] This was Vice President Kamala Harris at a recent conference.
[51] You look at what's happening with these so -called leaders who are trying to say that diversity and equity and inclusion is somehow a bad thing.
[52] Let us not let them get away with that.
[53] They're trying to get rid of DEI programs so that corporations will stop paying attention to who they're hiring and promoting.
[54] We'll stop paying attention to who gets accepted to schools.
[55] And we've also seen the Biden administration increase spending on DEI initiatives across federal agencies.
[56] There's been a big push in the military, for example.
[57] So it's clear they plan to take steps to further legitimize it.
[58] Well, the private sector is usually the place where we see trends first emerge.
[59] So it's possible that the government is just lagging here.
[60] Megan, thanks for reporting.
[61] Anytime.
[62] After years of explosive growth, apartment buildings, once a safe haven in the volatile housing market, are approaching treacherous waters with mass delinquencies looming.
[63] Here with more on what's behind the sudden downturn and what it means for renters, this Daily Wire senior editor, Cabot Phillips.
[64] Hi, Cabot.
[65] So what can you tell us about this looming delinquency crisis here?
[66] So we've talked on the show about the recent explosion in the rental market.
[67] As inflation took hold and interest rates soared, more and more Americans were priced out of buying a home and ended up settling for an apartment.
[68] That led apartment building values to spike by 24 % last year, and it also led investors and builders across the country to start new projects, hoping to capitalize on that hot market.
[69] But this year is totally different, and many of those investors are now struggling to turn a profit, as the value of apartment buildings nationwide has plummeted 14 % this year.
[70] Now, traditionally, apartment buildings are viewed as some of the safest real estate investments because of their exceptionally low vacancy rates.
[71] People will always need a place to live.
[72] But the sector is approaching perilous conditions, which is concerning for the broader market, given the fact that multifamily housing makes up nearly 20 % of the entire real estate market.
[73] Yeah.
[74] And that's a major turnaround year to year.
[75] What's behind the dip?
[76] Well, many investors were enticed by exploding rent prices last year and saw a chance for a quick buck.
[77] From 2021 to 2022, apartment rents went up 25%, but they've since cooled significantly.
[78] So good news for tenants, but it's bad news for investors.
[79] Exactly.
[80] And the other main factor, is rising interest rates.
[81] Many investors were willing to take on high rates because they assumed they'd be able to jack up rent and then refinance to a lower rate once they'd scored a higher valuation with those profits.
[82] But when interest rates rose and rent prices stagnated, the value of their buildings actually dropped, forcing them to refinance at even higher rates than before.
[83] Persistent inflation has also played a role as building costs have gone up, while the overall cost of managing a building has increased as well further cutting into profits.
[84] It's really a perfect storm.
[85] Yeah, it is.
[86] So what does this mean?
[87] mean moving forward?
[88] Well, that's where things get especially concerning.
[89] Many investors and developers were willing to take on massive debt to acquire properties because they assumed rent prices would continue to go up and they'd be able to pay off the mortgage.
[90] But as the rent prices have cooled, they're now on the hook for enormous payments.
[91] For context, the amount of debt in outstanding multifamily mortgages has gone up 25 % since the start of 2020 alone.
[92] Between now and 2027, about a trillion dollars in debt on multifamily units is due.
[93] And a large number of building owners say they won't be able to pay it, meaning mass delinquencies could well be on the horizon.
[94] Yeah, that makes sense.
[95] Many of these same issues are also being felt in another area of commercial real estate, and that's office buildings.
[96] What's the latest on that front, office building rentals?
[97] Yeah, this is another sector that's just taken a beating in recent years, but for slightly different reasons.
[98] Vacancy rates in America's largest cities are at multi -decade highs, and there doesn't seem to be a light at the end of the tunnel.
[99] In the first quarter of 2023, the nationwide office vacancy rate hit 18 .6%.
[100] It's a new record high.
[101] And experts predict more than 300 million square feet of unused office space will be out there by the year 2030.
[102] So multiple sectors in the commercial real estate market are facing an uphill battle right now.
[103] Well, several concerning trends there in the rental markets.
[104] Cabot, thanks for reporting.
[105] Any time.
[106] The college football season begins next Saturday amid a shifting landscape for the sport, including dramatic new sources of revenue for players, and massive conference realignments.
[107] Here to discuss what just happens to be my lifelong favorite sport.
[108] It's Daily Wire Sports Reporter and Craning Company co -host David Cohn.
[109] Dave, thanks for jumping on.
[110] Thanks so much for having me. So last time we talked, we looked at some of the seismic shifts happening with conference realignment over the past few weeks.
[111] And there's been even more now.
[112] So let's start there.
[113] What's the latest?
[114] Yes, there is even more buzz that could have some big financial implications and that could alter even more of the national landscape.
[115] Yeah.
[116] So the PAC -12 conference is effectively dead at this point.
[117] It's lost Oregon and Washington to the Big Ten, and Utah, Arizona, Arizona State, and Colorado to the Big 12.
[118] That's after already losing its two premier LA schools, USC and UCLA, to the Big Ten.
[119] The ACC has gathered university presidents in an effort to possibly add two of those remaining Pac -12 teams, Stanford and Cal, to the conference.
[120] But there's a lot of pushback from within the ACC.
[121] Currently, four ACC schools oppose this expansion.
[122] Those are Florida State, Clemson, North Carolina, and NC State.
[123] Interestingly, though, Notre Dame gets to vote for expanding the conference, even though they are not a member in football.
[124] And all that, as we've noted, will have huge financial impacts on these schools with tens of millions of dollars on the line with TV deals alone.
[125] Exactly.
[126] Another major financial component of the sport now is NIL deals for the players.
[127] This is how players get paid.
[128] There's been movement on that front as well as your crane and company team has reported, correct?
[129] You are right.
[130] Alabama Senator Tommy Tupperville was recently on our show to explain what he and Senator Joe Manchin from West Virginia are proposing.
[131] They've presented legislation called the Pass Act, which would address much of the uncertainty surrounding NIL and work to establish a national standard.
[132] That's the key point they wish to address.
[133] Many people have reservations about the federal government getting involved in collegiate sports for good reason, but the NCAA has lost much of its authority following the antitrust case of O 'Bannon versus the NCAA, which ruled that the organization cannot bar athletes from being compensated.
[134] Right, so a lot of chaos right now when it comes to these deals, so we'll watch that bill with interest.
[135] For sure.
[136] Now to the fun part, how the season is shaping up, AP released its top 25 points.
[137] How's it looking?
[138] Yes, well, some of it looks familiar, but there are some big names moving around.
[139] So the University of Georgia ranks number one in nearly every preseason poll, which is not surprising, given that they are the two -time defending national champions.
[140] The Bulldogs will be starting a new quarterback this season after the departure of Stetson Bennett to the NFL, who he looked quite sharp in his first NFL preseason game.
[141] Also departing for the NFL was offensive coordinator Todd Monkin.
[142] He has been replaced by Mike Bobo, but he's no stranger to Georgia because he played quarterback.
[143] for the Bulldogs and spent 14 years on their coaching staff.
[144] Now, Michigan, my alma mater, ranks number two after back -to -back college football playoff appearances.
[145] Jim Harbaugh returns a very solid roster, and that includes standout running back Blake Corum.
[146] Michigan's arch rival in Columbus, Ohio ranks number three.
[147] The Buckeyes will be starting a new quarterback, but they return a loaded roster that features one of the best receiving prospects, John, that we've seen in a long time in Marvin Harrison, Jr. Now, Alabama comes in at number four, despite its star quarterback, Bryce Young, being drafted number one overall to the NFL, and their star defensive end going number three overall.
[148] That's Will Anderson, Jr. That shows you just how much trust there is in Coach Nick Saban to reload and win every season.
[149] And then rounding out the top five is the LSU Tigers.
[150] Now, remember, this team won the SEC West Division a season ago in Brian Kelly's first year in Baton Rouge, and they returned.
[151] their quarterback, Jaden Daniels, who we sat down with at SEC Media Days.
[152] So that's your top five.
[153] And LSU is playing in the most significant game of the opening weeks.
[154] That is very correct.
[155] They are playing your Florida State Seminoles who had their first winning season last year since 2017, and there is a lot of buzz around the Seminoles.
[156] Yes, they're number eight, correct?
[157] That is correct, and I knew you would know that.
[158] Needless to say, can't wait for all this to kick off.
[159] You're speaking for all of us.
[160] Dave, thanks for coming on.
[161] We'll talk again soon.
[162] Thank you for having me. That was Crane and Company co -host, David Cohn, and Go Nulls.
[163] Go Blue.
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[169] Thanks for waking up with us.
[170] We'll be back this afternoon.
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