This past summer marked a significant change for college athletes as the NCAA voted to allow them the opportunity to benefit from their name, image and likeness. While it's certainly a significant change in the NCAA's approach and rulemaking, what will it mean for most student athletes, especially those outside the big conferences and revenue-generating sports like football and basketball?

 

Featured Guests

Terry Mohajir - Vice President & Director of Athletics at UCF

Brittney Anderson-Duzan - Associate AD for Compliance at UCF

Scott Bukstein - Undergraduate Program Director & Associate Instructor of Sport Business Management at UCF

 

Episode Highlights

01:08 - What is NIL?

04:27 - What's going on nationally?

06:26 - What's the total value of the market?

09:08 - Is it going to impact recruiting?

14:54 - Are there guidelines for sports agents?

18:52 - Is NIL the endgame or are more changes coming?

27:05 - Dean Jarley's final thoughts

 

Episode Transcription

Paul Jarley: This would not have happened a year ago.

Valerie Moses with Addition Financial (00:02): Good morning. It is so great to see you all here today. We are so proud of our partnership with Dillon Gabriel and with UCF Athletics and with the College of Business, we're a proud partner. You can see us at the student gate at any football game, so please come visit us. We are incredibly honored to sponsor this morning's event and to get to hear from Dillon and from [Steven 00:00:24] as well, all about the NIL partnerships. This is such a huge brand new front here, I would say, in the world of sports business and something that we all really need to be paying attention to. So it is very exciting to see these partnerships really come alive, and we are so grateful for our partnerships here today.

Paul Jarley (00:44): Will this newfound right to publicity change college athletics forever?

Paul Jarley (00:48): This year was all about separating hype from fundamental change. I'm Paul Jarley, Dean of the College of Business here at UCF. I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, is this really a thing? On to our show.

Paul Jarley (01:08): Name, image and likeness is a legal concept that allows any person, including student athletes, the right to publicity, the ability to capitalize on anything that identifies them, including the ability to engage in third-party sponsorships and endorsements. Some people think this will change college athletics as we know it, others aren't so sure. They think the marketplace will adjust, and that the benefits will accrue to a very few. To help sort through this, I've assembled three guests. Terry Mohajir is UCF's athletic director, Brittney Duzan is the associate AD for compliance, and Scott Bukstein is an associate instructor in our DeVos Sports Business Management Program. Listen in.

Paul Jarley (01:51): As I understand NIL, this is being dealt with on a state-by-state basis. So what does Florida allow student athletes to do now that they couldn't do before? Brittney, I'm going to throw that to you.

Brittney Anderson-Duzan (02:06): Sure. So, like most states, the state of Florida is one of the few that actually has a legislated piece for name, image and likeness. So essentially what they now have is the right to utilize their name, image and likeness for commercial purposes, so whether that be for money or not for money, that they weren't allowed to do previously by NDA legislation. So basically, they have the right to publicity now.

Paul Jarley (02:32): They can print their faces on t-shirts. Can they get appearance fees? I'm trying to understand exactly what we're-

Brittney Anderson-Duzan (02:39): Yeah. They can get appearance fees. It [inaudible 00:02:43] us now with what students on campus can do. So think outside of just those big endorsement deals, our student athletes can now do philanthropy work and actually use their platform as a student athlete for that.

Paul Jarley (02:53):For their own foundation, you mean.

Brittney Anderson-Duzan (02:55): Yep, they can create a foundation. Previously, they couldn't go out on their own and utilize their name, image and likeness for a business. So if my student athletes want to go to the entrepreneurship office here on campus and want to start a business and use their name, Brittney Duzan's makeup brand, they weren't allowed to do that previously. They can do private lessons and actually use their name, image and likeness for that. Like you said, speaking engagements, autograph sessions, and then the stuff you're seeing in the media, like these endorsement deals, and-

Paul Jarley (03:24): They could provide private lessons to like high school athletes.

Paul Jarley: Terry.

Terry Mohajir (03:28): The only thing that we can't do is we can't create the deal for them. So we cannot be involved in the deal, they have to create it themselves. People can ask us, "Hey, I want to talk to so-and-so." We can put them in contact, but that's it.

Paul Jarley (03:43): Okay. You can do that.

Brittney Anderson-Duzan (03:44):Yep.

Paul Jarley (03:44): Okay.

Brittney Anderson-Duzan (03:46): Yep. And what was odd was before, like with the private lessons, they've been allowed to do that forever with the NCAA, but the NCAA used to say, if I was the star tennis player, I couldn't say me, Brittney Duzan, the number one for our tennis program, is giving private lessons. I would literally have to say, "Would you like to do lessons with me?" And couldn't give my credentials because that would be using your name, image and likeness, which makes no sense because when you're giving lessons, you're going to want to give your credentials.

Terry Mohajir (04:11): You just couldn't have a formal camp with your ... you could [crosstalk 00:04:15] private. You couldn't advertise it.

Paul Jarley (04:17): Okay. But now you could do a formal camp, Terry, is that true?

Terry Mohajir (04:19): Mm-hmm (affirmative).

Paul Jarley (04:20): You could, okay.

Terry Mohajir (04:21): You could have the Dillon Gabriel quarterback camp. In the past, he could do private lessons, but not-

Paul Jarley (04:27): Yeah, yeah. Hey Scott, are there any good sources of data on NIL activities at the national level? Do we know what they're doing?

Scott Bukstein (04:34): The data within the space influencer is one of the primary NIL marketplaces. From July 1st through October 31st, the first four months in which NIL activities have been allowed, social media content has represented 59% of all transactions within the NIL space on that one platform. If we look at another primary marketplace, Paul, Opendorse, posting social digital content represents right around 28% of total NIL compensation on the Opendorse deals marketplace. So right now, social media where college athletes are essentially functioning as brand ambassadors, they're making posts, endorsing a company, right now that's the primary activity area and also the primary revenue area. Now there's a bunch of other NIL activation and monetization areas. For example, some student athletes are making personal appearances at places like restaurants, car dealerships, community events. Some student athletes are signing autographs. This could be on physical, or now on digital, trading cards, digital collectibles, NFTs.

Scott Bukstein (05:41): Some college athletes, they're playing video games with fans through platforms such as YOKE Gaming. Student athletes will get paid to spend 20 to 30 minutes playing in a specific video game with fans. College athletes can generate revenue by providing shout-outs to fans on platforms like Cameo, or they can engage in sending text messages to fans on platforms like Subtext. Some college athletes have been selling apparel, other branded items, through platforms like [inaudible 00:06:09] and The Players Trunk. So here's a neat possibility that we're seeing emerge for group licensing collaborations within the space with university athletic programs, so that college athletes, they're able to sell merchandise and memorabilia that have trademark protective university athletics program logos and colors.

Paul Jarley (06:26): So Scott, do you have any sense of what the total value of this market is? Like, even for just the influencer stuff, do you have a number?

Scott Bukstein (06:33): It's difficult to capture. The main reason is, and we've seen this within the past couple weeks, not all of these deals are being disclosed. It's reporting that's been made voluntarily by some athletic programs and then by these marketplaces. So for example, Opendorse, which is one of the primary marketplaces, for the first four months of [inaudible 00:06:53] activities from July through October, if we look at total compensation for division one, 82.9% of all NIL related compensation through the Opendorse deals marketplace involve college athletes on men's college sports teams, and the average compensation per deal was $686.

Paul Jarley (07:15): Those numbers aren't eye popping to me. Particularly on a per-athlete basis, right, I mean, they're pretty small potatoes.

Scott Bukstein (07:22): Yes.

Paul Jarley (07:23): I would assume that the best opportunities here are probably for superstars in either football or basketball in the revenue sports. Fair enough?

Scott Bukstein (07:34): Okay. For sure.

Paul Jarley (07:36): All right. So you went to kind of what's my next question, I assume the star quarterback is in a pretty good position to maybe take advantage of this, but do you have any sense what percentage of your student athletes are probably involved in something related to this? I mean, are you even allowed to know?

Terry Mohajir (07:51): Well, yeah, she knows.

Brittney Anderson-Duzan (07:53): Yeah....

Find yourself asking "Where's the beef?" when you order a burger these days? You could be a victim of "Shrinkflation." Rising demand post-pandemic and disrupted supply chains are impacting many of the goods and foods we consume. Will we be getting less of a product for the same price as companies try to protect their bottom lines? Hear what a UCF economist and Marketing professors have to say about what to expect and whether you need to watch out for Shrinkflators around every corner.

 

Featured Guests

Uluc Ayson, Ph.D. - Associate Professor in the Department of Economics at UCF

Anand Krishnamoorthy, Ph.D. - Associate Professor of Marketing

Muge Yayla Kullu, Ph.D. - Associate Professor of Marketing at UCF

Axel Stock, Ph.D. - Associate Professor of Marketing

Yael Zemack-Rugar, Ph.D. - Associate Professor of Marketing at UCF

Episode Highlights

00:14 - Introduction

01:26 - Are we experiencing inflation?

03:40 - What prompts companies to become shrinkflators?

05:30 - What are some examples of shrinkflation?

08:40 - Are we more sensitive to price than changes in service or packaging?

13:00 - Are there any consumer benefits to shrinkage?

28:00 - Will shrinkflation be here in a year?

32:04 - Dean Jarley's final thoughts

 

Episode Transcription

Assorted Speakers:“Where's the beef?” “Why is my six-count nugget now a five count nugget? Where's my other nugget?” “You mean shrinkage?” “Significant shrinkage.” “So you feel you were short changed?” “Yes.”

Zemack-Rugar: So apparently if you reduced one dimension, but you make it longer, then people perceive the same size because we can't assess volume.

Jarley (Host): : As Erin Turner would say, this is how they get ya.

Jarley: : This show is all about separating hype from fundamental change. I'm Paul Jarley, Dean of the College of Business here at UCF. I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, is this really a thing? Onto our show…

Jarley: A couple of weeks ago, I read an article claiming that for a variety of reasons, some companies were cutting back on the size of their offerings rather than increasing their price. I was intrigued. So I sent an email out to the faculty and within an hour, I had 10 people who had volunteered to become part of a podcast on this subject. It made me think that shrinkflation was at the very least, well, an academic thing. Conflicting schedules reduced the size of our panel from 10 to five, but I have one economist and four associate professors of marketing with me today to talk about what's going on. Muge Kullu, Yael Zemack-Rugar, Axel Stock and Anand Krishnamoorthy all hail from our Marketing Department. Listen in.

Before we get to shrinkflation, Uluc, are we experiencing inflation right now?

Ayson: Yes, we are. So if you look at TPI inflation, it's called headline inflation. It has increased in the past three months. We went from below 2 percent to 2.6, 4.1. Now it's just four points, 4.6. And then now it's just at 4.9, uh, which is considered high based on the past three decades. And it's high compared to the Fed implicit inflation target as well, which is 2 percent. So it is increasing.

Jarley: It's a really odd situation here. We've had an economy that's been largely shut down for a year. That's coming back. Give me some sense of how much of this is sort of a supply chain issue and how much of it is due to other factors.

Kullu: Companies had trouble from the supply end, also from the demand end, you know, like people just ran to the store and cleaned off the shelves for toilet paper. So like demand went crazy and suppliers shut down first; China shut down. So, and that was a wave of shutdowns in different parts of the world in different parts. At times through the year and then logistics shut down, now there was a lot of trouble passing through the customs and the border shut down. There was a lot of challenges from both ends of the supply chain from both the supply side and the demand side, right?

Jarley: Uluc agrees.

Ayson: So that's how it started on disruptions of supply chains. We call this in economics, we have this Phillips Curve. That's how we describe inflation. Now as these two components, main components – cost push and demand pull. So on the supply chain, disruptions affect the cost per side of things. And now we have all this stimulus money and then infrastructure spending and also the normalization. So we're kind of finding our feet that it means demand is picking up. So it was kind of pulling inflation. So we have both factors happening at the same time. There's a third component, which is inflation expectations. That seems to be still anchored at low level.

Jarley: The market thinks this is temporary.

Ayson: That is correct.

Jarley: If I’m facing rising costs or shortages in my input, I really have three choices. I can raise my price, but I have two other alternatives. One would be to substitute in a less expensive input and that could be a quality reduction or, in some cases, I can shrink the size of what I'm selling you, which is what we're going to call street place. But tell me a little bit about why companies would choose one or the other. And then talk to me a little bit about quantum pricing, Uluc.

Ayson: So it really depends on if you have competitors or not. So if you have close substitutes, so a lot of competitors, then you can't afford to increase prices. So you have to make cuts other places, or you have to, as you say, decrease either the quality or the quantity. These companies that are doing this are mostly in the food and beverage industry, or they have a lot of competitors where there's a lot of awareness or people pay attention to prices more so than they do to quantity.

Jarley: Cause it's clumpy, right?

Ayson: And if I'm buying a box of cereal, that's uh, 15 ounces and I, the company reduces the 14.5. It's the same box. I'm not going to notice that, right? So I'm just going to pay attention to the price so they can do this, but we do live in this social media age. So if the word gets out, people as consumer awareness, I don't know how, how much you can do this. How long you can keep this up?

Quantum pricing. First of all, is these companies that sell multiple products. I mean, I sell multiple products and I, um, place my products in these price ranges. So I, I have bunch of things that I sell at 5 99. I have other things that I sell at 3 99. So instead of moving it from 3 99, 9, 9 to 5 99, I just adjust the quantity. I saw it reduced the quality, as you're saying,

Jarley: Uluc gave us a lot to unpack here. So I'm going to ask my marketing colleagues to help me break this down. Well, we'll let you know it's food as the most obvious place for shrinkflation, but can you give me a few other examples? Muge…

Kullu: First class and business class and economy class seats in an aircraft. Still, we are talking about the size and the critical resource we are talking about is the aircraft space. You know, there have been airlines who offered all business and they're full of the aircraft, like 50 seats instead of 250, right? So you can put 250 economy versus 50 business class. It is five times. It occupies five times the space. So which one is a better strategy is the company's decision, given the profits per unit resource consumed. So that's a very critical aspect of the product that companies should really focus on. Like for any profit may be high for a business class, but then you look at the amount of space it takes up from your aircraft, maybe economy like selling five economy, class seats, maybe more profitable. You know, the company should be careful about those kinds of decisions when they're making these product blind product mix menus.

Jarley: And in an earlier conversation you and I had, and for our student listeners, right, increasing class sizes can be a form of form of shrink question, right?

Kullu: Exactly, exactly. To teacher student ratios, amount of time, you spend with an, um, representative in a bank, you know, in a service then why I'm at the time you can, you know, the resource, whatever the key resources, what are the expensive resource you're talking about, then how much money is needed for each product becomes your decision makers?

Jarley: Anand, I thought I saw a recent article where Walmart's thinking of eliminating all of its front-end personnel and just go to self checkout. Is that a form of shrinklation?

Krishnamoorthy: What is the biggest expense on the floor? It is people. Walmart, as it is, has a very few people on the floor. If much of it can be automated, then a lot of these cost savings can then result presumably in the lower prices that Walmart likes to tout. Anyway, because Walmart is about low prices. That is not as big a deal for some of these other players where pricing is not their key differentiator, but at Walmart it's always about pricing. What can they do to bring prices down in a world where costs are difficult to strength, shrink, uh, labor, for example, that is the first way you can, uh, if a product shrinkage is not going to work, then you would look at shrinking on other expenses like labor. What a manufacturer is doing with shrinkflation is pretty much what Walmart or other retailers are doing with wages, because when it comes to a retailer, um, nearly all the product you put on the shelf is made by someone else. So then when it comes to your own product, so to speak, it is your employee labor force. And that is what you would like to shrink.

Jarley: So in general, are people more sensitive to price than they are changes in service or changes in packaging?

Krishnamoorthy: Yes. They are, and there are a lot of reasons why. The most obvious is that consumers tend to pay attention to top

If you're wondering what an NFT, aka Non-Fungible Token, is, well, you're not alone. CryptoPunks and CyberCats are selling for six and seven figures and even Christie's is getting in on the digital art action. So we've got questions...what are these digital items, why are people investing a fortune in them (and should you?), and what does that mean for the financial sector and the art world?

 

Featured Guests

Buvaneshwaran "Eshwar" Venugopal, Ph.D. - Assistant Professor of Finance at UCF

Carla Poindexter, M.F.A. - UCF Professor of Art

Lory Kehoe - Director, Digital Assets & Blockchain, BNY Mellon

Episode Highlights

0:26 - Introduction

2:04 - What the heck is an NFT?

04:01 - What do I actually own?

05:58 - What's actually in the blockchain?

11:33 - Why did the bank become interested in an NFT?

15:10 - When the world gets back to normal, will this all go away?

21:40 - What keeps you up the most at night about NFTs?

24:45 - 10 years from now are NFTs going to be around and what are they mainly going to be used for?

28:15 - Dean Jarley's final thoughts

 

Episode Transcription

Paul Jarley: Eshwar, I'm going to start with you. What the heck is an NFT?

Eshwar Venugopal: I think the world is trying to figure it out.

Paul Jarley: This here was all about separating hype from fundamental change. I'm Paul Jarley, dean of the college of business here at UCF. I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, is this really a thing? Onto our show. (singing). On March 11th, CryptoPunk 3,100, a piece of digital art, sold for $7.6 million with an NFT. That broke the record set the day before by CryptoPunk 7804, which had sold for $7.5 million. Then on March 21st, Beeple's the First 5,000 days sold for $69.3 million. Needless to say, people took notice. I took notice. Well, honestly, Josh told me to take notice. I was hesitant. This all seemed pretty esoteric. Techno geeks with stupid money doing techno geeky things, I thought.But then Forbes did an article. I noticed Christie's auction house was involved. And so I started to send some emails and make some phone calls. My resident blockchain guy had an interest in this. The dean of arts and humanities, Jeff Moore, put me in contact with an artist interested in NFTs. The kicker was Jeff Stokes. Jeff is a member of my dean's advisory board, with BNY Mellon, who put me in contact with their digital asset guy. If Alexander Hamilton's bank was interested in NFTs, I figured I should be too. So to shed some light on this new phenomenon, we have with us today, Eshwar Venugopal, who is an assistant professor here in the finance department at UCF, Carla Poindexter, who is the professor of art at UCF, and Lory Kehoe, who is the director of digital assets and blockchain at BYN Mellon. Listen in.

Paul Jarley: Eshwar, I'm going to start with you. What the heck is an NFT?

Eshwar Venugopal: An NFT is basically a certificate of ownership of a digital group. Basically giving artists an ability to offer limited additions of their artwork. I'm going to use artists as an example over here, since we have Carla over here. But I have a problem with that, but I'll come to it later on. But the idea is that you have a certificate of ownership and it is a limited edition product and it is more of a digital collection rather than a physical good. That's how it has been envisioned. But things have been changing rapidly. These days, if you take some of the latest NFTs that are being minted, there is a physical aspect of it. One guy actually sold his house on NFT. So, things are a little bit blurry now, but if you take a look at it from a property perspective, it is just an ownership as a consumption good. That's it.

Paul Jarley: Yeah. Let me be old school for a minute so I can understand this a little better. I can purchase an original Monet. I would go to someone who would be an expert in Monets who would say, "Yes, Monet really painted this." And I would spend a kazillion dollars and I would put that Monet on my wall. But other people could reproduce that Monet. So when I buy the original Monet, I also didn't really buy the intellectual property or the licensing of that Monet. All I bought was the original Monet. Carla, do you agree? That's how this world used to work?

Carla Poindexter: Definitely. But you can also purchase the copyright.

Paul Jarley: But that would be separate though, right? That would be a separate buy.

Carla Poindexter: Definitely. Right. The Monet is probably, it depends on the piece, but sometimes it's an open source image.

Paul Jarley: Okay, yeah.

Carla Poindexter: And sometimes it is not.

Paul Jarley: Okay.

Carla Poindexter: So, that is the difference.

Paul Jarley: I want to stay in the world I think I know, and then we'll move to most of the world that I think we're going to be in. The other analogy for me is, I'm a big baseball card collector.

Eshwar Venugopal: Oh, yeah.

Paul Jarley: And I've seen that a few... Akil Badoo, who's this rookie for the Detroit Tigers, is actually issued a lot and in NFT. So I have a little bit of knowledge in the collectible area, only enough to be dangerous here. But the first thing I want to understand is what I actually own. I own a certificate of authenticity.

Eshwar Venugopal: Right. Let me actually give you an example with the baseball cards. So the other thing about NFT started with something called CryptoKitties. I'm not sure you know CryptoKitties.

Paul Jarley: Okay.

Eshwar Venugopal: So it's basically similar to baseball cards.

Paul Jarley: Yeah.

Eshwar Venugopal: But a digital version with cats' pictures on them. That's how the entire thing started off. And essentially what you're owning over there is the rights of ownership, or you can even think about it from a copyright perspective, through that particular kitty. The same way you have an authenticated baseball card, here you have a digital authenticated certificate of ownership. And it basically says that nobody else can claim ownership of this particular image, right? And the image is basically a set of lines and quotes, that's it. You can claim in the public markets saying that, "I am the one who owns this baseball card or a CryptoKitty card," and it can be easily verified and it can be verified digitally. If you have the baseball card, you have to call in, say, I don't know what they're called, but you probably have to call an authenticator.

Paul Jarley: Yeah.

Eshwar Venugopal: And somebody has to come in and verify the certificate of ownership and all of that. This just makes that process a bit easier and quick.

Paul Jarley: Let's talk about what's actually in the blockchain. If Carla had produced a work of art, for our listeners, Carla is a painter by trade, and she did a digital painting and she put it out for bid for an NFT. If somebody were to purchase that NFT, her artwork isn't actually in the blockchain, correct?

Eshwar Venugopal: That's correct.

Paul Jarley: Okay. Is it a link to the site? Is it a web address? What's in the blockchain?

Eshwar Venugopal: So let me give you an example. I tried making an NFT last week. I took a picture of a monkey in Houston, I just uploaded it to Rarible and linked it to my Ethereum wallet and I tried minting. So when I minted, what happens is that Rarible has a unique code for my artwork or in this case, a picture of a monkey. And this particular picture gets uploaded into Rarible's database, and there's a link to it, and there's a unique identifier. I can upload the full quality image or I can upload a lower quality image. It doesn't matter, right? There's a unique ID in Rarible for that particular thing. And that is the ID that gets embedded into the blockchain. It is not the actual image that is being uploaded into the blockchain rather a reference. And this reference is your identification for that particular image. So essentially no image is being uploaded into the blockchain, it becomes all the elements of the blockchain …

Paul Jarley: I'm placing a couple of bets here, I think. First I'm betting that the company has actually verified that you are the real creator of this, that you just didn't pick something off of web.

Eshwar Venugopal: Right.

Paul Jarley: Right? And decide to throw that in. So what is the verification process like?

Eshwar Venugopal: That is where things get a bit mucky and I'm not clear on how Rarible does this. Rarible basically says that, or at least... All platforms definitely will verify whether this person has the raw art or if it's a 3D art, they ask for the source file. If the source is there – it is this particular person, that's something to verify the ownership. However, that's not a foolproof way of doing things. I'm assuming that these platforms go ahead on the web and do an image comparison with whatever is existing out there and see if those links back to you. That's one way of verifying. I'm not exactly sure how each platform was doing it.

Paul Jarley: Okay. Then secondly, I have to assume that that company and its website and address is going to continue in operation.

Eshwar Venugopal: Yes. That's the hope actually. But if Dot Com and even the recent ICO woman busted any evidence, it may not be true in the long run. It may be true for the next five years, but who knows what's going to happen in the next 10 years?

Paul Jarley: I'm on the fees issue….

Carla Poindexter: Yeah. The fee is supposed to be very high.

Eshwar Venugopal: Yeah. So the fees really depend on how much pressure is there on the blockchain at this point of time. Given that the last couple of weeks has been crazy and everybody's buying a lot of Bitcoins and Ethereum, the pressure was high and therefore the fees are normally higher. On average, the fees have been in the range of $30,...

GameStop and AMC made national headlines for unexpected reasons as retail investors from social media website Reddit began feverishly scooping up shares in each company. While the resulting drama caused wild swings in stock prices and scrutiny against some online trading platforms, the long term impacts remain to be seen. Did "Redditors" usher in a new era of retail stock trading? Or are these so-called meme stocks just another example of financial history repeating itself?

 

Featured Guests

Garrett Cummings - President, UCF Young Investors Club

Kevin Mullally, Ph.D. - Assistant Professor of Finance, Barry S. Miller College of Business at UCF

Episode Highlights

1:04 - Introduction

2:48 - Why would anyone invest in GameStop?

7:22 - What led to the media spotlight on $GME?

12:37 - Who is the group driving the run on GameStop stock?

14:27 - Is this a legitimate area of finance research?

16:37 - Historical similarities

20:12 - How is this run on $GME going to end?

22:08 - What's the future for meme stocks as a whole?

28:27 - Will this still be a story a year from now?

31:33 - Dean Jarley's final thoughts

 

Episode Transcription

Paul Jarley:                         Remember the E-Trade Baby?

E-Trade Baby:                    A lot of people are like, "Isn't it difficult to invest in the markets?" And I'm like, "Not if you're using E-trade. Making a big investment is as easy as a single click." Boom. I just bought some stocks.

Paul Jarley:                         I think he was the first meme investor. He didn't last long.

E-Trade Baby:                    Wait, why is this line going down? Oh God, it just dropped 400 points. This is not happening. Dear Lord, I made a horrible, horrible mistake. ****

Paul Jarley:                         Or maybe he just moved onto the social media site, Reddit [crosstalk 00:00:31] and lost hundreds of thousands of dollars trading stock in GameStop. Turns out he's just one of many.

E-Trade Baby:                    Take it back. Sell, sell, sell, sell, sell. Too late. It's all gone.

Paul Jarley:                         This show is all about separating hype from fundamental change. I'm Paul Jarley, Dean of the College of Business here at UCF. I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, "Is this really a thing?" Onto our show.

Paul Jarley:                         So GameStop has obviously been in the news a lot over the last week, and to help me understand what's going on here, I've convened a panel of experts. Kevin Mullally is an assistant professor in our finance department. Garrett Cummings is the president of our student investment club and a finance major. And I pulled in our own Josh Miranda, who knows a little bit about viral marketing and maybe viral finance to have a conversation about GameStop and its short-term and long-term implications. But I want to start out with a story. When I first came to UCF, one of the first groups I met with were some executives at EA sports.

Paul Jarley:                         And they said to me, "We know right now we're a company that puts the $60 box in a GameStop for people to purchase, but we know that's about to go away. We know that a few years from now, we will have developed into something like iTunes, where people electronically download whatever the game is into their console. And we think after that, we will become a company that offers various components of games that people can download and create their own game. And we want to understand that consumer more and what aspects of the games they like and dislike, so that we can meet that market demand when it comes." Now, I raise that story because that was 10 years ago, and EA sports knew GameStop was dead then. So when I first heard the stories about GameStop, I have to admit my first reaction was, "Wow, they're still around? Why would anybody invest in GameStop?" Is there a legitimate reason to believe that GameStop has a future? Kevin, do you want to kick us off? I'll pick on you first.

Kevin Mullally:                 Yeah, absolutely. So I did a bit of researching that question myself, actually, kind of thinking the same thing, because as you guys probably know, at certain points during this whole incident, GameStop was actually more valuable as a company, as a going entity than was Best Buy. And again, my reaction is the same as yours.

Paul Jarley:                         Or Delta Airlines, I think I read somewhere.

Kevin Mullally:                 Correct, correct. So all kinds of crazy mis-valuations, very clearly. And so I looked back into the history of it, and kind of the thing that has come out is that there are actually quite a few people that were long in GameStop, even sort of middle of 2019.

Paul Jarley:                         Explain long, Kevin, for our listeners.

Kevin Mullally:                 Oh, I'm sorry. So they had established a position where they had held a good number of shares in that company. So they were investors in that firm mid 2019, early 2020, well in advance of any of this taking place. In the argument, one of the most famous guys that had established a pretty sizeable position in GameStop was Michael Burry, who listeners may be familiar with from the movie The Big Short. He was kind of one of the guys that very famously predicted that the housing market was going to collapse. And his argument for investing in GameStop was basically that it had been mismanaged, that they had a whole bunch of cash on their books, that they had been making a bunch of bad acquisitions, and just generally had poor management and a lot of managerial turnover at that time as well.

Kevin Mullally:                 And his argument was that, "Look, hey, if we can get these guys to buy back their shares, we can take cash off the books and deploy that more efficiently in the market. It's going to make the firm more valuable and the shares more valuable." And so that was the argument for it, is that they had a lot of cash on the books. We can basically just kind of skim this thing down and take that cash and make it more valuable elsewhere. And so that was the argument for him and then several other hedge fund investors who came in later on as well to try to establish, to take some control over that firm. So the argument was potential, basically.

Paul Jarley:                         Okay. So that cash had built up over a number of years?

Kevin Mullally:                 That's my understanding.

Paul Jarley:                         Okay, because I doubt they even own the real estate they're in, right? I mean, I think there's probably little asset there.

Kevin Mullally:                 Yeah, that's probably true. What I definitely know is that the number that I saw as far as their cash holdings was like $500 million.

Paul Jarley:                         Wow.

Kevin Mullally:                 So a very sizeable amount of cash that they were just basically sitting on, or misusing in many cases.

Paul Jarley:                         Well, because here's one of the first questions I would have for our two younger colleagues who are here on this podcast. Josh, when's the last time you set foot in a GameStop? I know you're a gamer.

Josh Miranda:                   I mean ... so the difference in setting foot in a GameStop, maybe a little bit more recently, but actually buying something from a GameStop? It has been quite some time. It's just most game consoles nowadays, the new ones don't even have disc drives, so you can just download the games directly from the vendors, from the publishers. So why leave your house to check out what's out there when you can just download it?

Paul Jarley:                         Garrett. How about you? Have you ever set foot in a GameStop?

Garrett Cummings:         Yeah, it's been a very long time, I must say. And being a brick and mortar company, you got to sell the best. With everything moving online, GameStop is definitely not the first place I think of when I want to download a new video game.

Paul Jarley:                         Right, they're in a space where you can download things directly located in shopping malls. Could there be a company in a worse position than GameStop? It's kind of hard to imagine, really. So it's not surprising, I think, that some hedge funds started shorting it. Kevin, would you mind explaining shorting for our listeners?

Kevin Mullally:                 Absolutely. Yeah. So this is a pretty common thing that hedge funds do. So when you short a stock, what you are doing is you are borrowing those shares from somebody else in the market. You are taking them and you are selling them, in a sense, and then hoping that the stock will fall so that you can later go back and buy them to replace what you've borrowed, and thus you win, you make money if those shares fall. The risk, of course, is that they could also go up, and if they go up, your risk is unlimited. They could go up to infinity, theoretically, and you would lose a whole bunch of money or all of your money.

Paul Jarley:                         Now, just so I understand the scope of the potential loss here for the market, you can't short more shares than are in circulation though, can you? Is it the number in circulation or is it the number authorized?

Kevin Mullally:                 So one of the impetuses for these, for the sort of Redditors to buying GameStop and begin squeezing these guys is the fact that the short interest was actually above the shares outstanding. In aggregate ... not a single trader of course, but in aggregate, I want to say the number was 138%. So they had shorted 138% of all shares outstanding. And so the issue there becomes that clearly everybody can't buy back the shares they've shorted at one time....

After one of the deepest recessions in history, the U.S. economy still has roughly 10 million fewer jobs than before the COVID-19 pandemic began. While some say the economy is improving faster than expected and has seen significant growth in recent months, it could be some time before the U.S. returns to pre-pandemic highs. What will drive the economy back into recovery? And can it happen before 2022? Sean Snaith, Director of UCF's Institute for Economic Forecasting, explains his timeline and predictions for complete economic recovery.

Featured Guests

Sean Snaith - Director, UCF Institute for Economic Forecasting

Episode Highlights

0:45 - Sean Snaith introduction

1:31 - Just how bad did it get in 2020?

4:54 - How Sean Snaith describes the economy today

7:01 - The U.S. government's response

9:46 - Will new stimulus packages be effective?

11:41 - How did Florida fare compared to the U.S. economy?

16:06 - The future of the U.S. and Florida economies

18:18 - Economic recommendations for the Biden Administration

22:48 - New taxes?

25:21 - Are the "Roaring '20s" going to be a thing?

26:54 - Paul Jarley's final thoughts

It's hard to imagine a virtual Tupperware party. Sales presentations are trickier with the move to increased online communication. Gone (for now) are the days of making small talk with prospective clients in the hallway and capturing their undivided attention face-to-face. Now that life has gone virtual, is it really possible for sales professionals to channel their charisma and build rapport through video calls? Do customers respond the same way to virtual selling tactics? Or should salespeople be expecting lower commissions until they can meet in person?

Featured Guests

Kathleen Lima - Sales Manager, Gartner

Keith Lubner - Chief Business Strategist, Sales Gravy

Episode Highlights

1:47 - What is virtual selling and how does it work?

6:35 - B2B vs. B2C - Who virtual selling is really for

12:34 - The biggest barriers to overcome

16:50 - Is virtual selling just a "young people's" game?

23:09 - What students can learn from virtual selling

26:16 - Final thoughts from Keith and Kathleen

28:12 - Paul Jarley's final thoughts

As employees continue to work from home, leases are running out and corporate office space is in jeopardy. Managers around the world have to decide if it's more efficient to keep their offices open, downsize, or go entirely remote. Seven months into this pandemic, the question remains... is working from home really going to stick? How is the commercial real estate industry handling the move to remote work spaces? Can professionals truly replicate the "sense of space" that comes with collaborating in person... from home? And five years from now, what will the typical workday look like?

Featured Guests

Steve Garrity - Vice President, Highwoods Properties

Nick Poole - Managing Director, JLL

Yvonne Baker - Regional Managing Partner, Franklin Street

Bill Moss - Director, Dr. P. Phillips Institute for Research and Education in Real Estate at UCF

Episode Highlights

2:34 - The state of commercial real estate pre-COVID

4:25 - The rise of the open offices

9:19 - How the pandemic is changing office space

12:07 - The importance of "a sense of space" in collaborative work

13:44 - How working from home affects company culture

18:30 - Will companies downsize their offices? Eliminate them entirely?

23:04 - Permanent fixes for temporary problems

25:27 - Will everyone be back in the office in two years?

28:01 - Dean Jarley's final thoughts

As cardboard cutouts occupy the stands at stadiums across the country, sports leagues and teams are dealing with a massive blow to their bottom line. If fans are stuck watching the game from home, it begs the question... how long can sports really be financially viable? Can exclusive, virtual experiences fill the budgetary void left by the absence of ticket sales? Or can the leagues just shoulder the economic consequences until stadiums and arenas are back at full capacity?

Featured Guests

Brian Wright - General Manager, San Antonio Spurs

Shelly Wilkes - Senior Vice President, Orlando Magic

Jon Alba - Sports Reporter/Anchor, Spectrum Sports - News 13

Episode Highlights

2:00 - What's missing from sports in the pandemic

4:27 - The media landscape for sports in 2020

5:56 - How the NBA is doing during COVID-19

7:16 - What the future could hold for sports

9:54 - A new model for sports monetization

13:01 - Media owned sports leagues?

19:50 - Will there be fans in the building next season?

26:23 - Final thoughts from the panel

30:06 - Dean Jarley's final thoughts

Two researchers at UCF are developing a cough drop that can reduce the spread of COVID-19 by making saliva heavier and stickier - it makes sneeze and cough particles fall rather than float. But is there really a market for such a product? Paul Jarley talks with researchers Michael Kinzel and Kareem Ahmed to find out the science behind the lozenge, how soon it could hit store shelves and the similarities to products you already have around the house.

Featured Guests

Kareem Ahmed - Assistant Professor, College of Engineering & Computer Science, Department of Mechanical and Aerospace Engineering

Michael Kinzel - Assistant Professor, College of Engineering & Computer Science, Department of Mechanical and Aerospace Engineering

Cameron Ford - Director, UCF Center for Entrepreneurial Leadership

Michael Pape - Dr. Phillips Entrepreneur in Residence; Lecturer, Management

Episode Highlights

0:49 - The origin of the COVID-19 cough drop idea

2:58 - How mechanical engineers got into cough drops

5:18 - How can the COVID cough drop make it to stores?

7:58 - Legal hurdles for the COVID cough drop

11:53 - Who is the target audience for this?

16:27 - How long will it take to get to market?

25:42 - ...Ketchup?

28:48 - What are the learning lessons for students?

33:07 - Final thoughts from Paul Jarley, Cameron Ford and Michael Pape

As the name explains, The Invitational is the Barry S. Miller College of Business' invite-only career fair, designed to connect top business students with employers and college partners seeking to fill internships within their organization. In this episode, Paul Jarley speaks with employers and recruiters to learn the best tactics to help you find your dream job.

 

Featured Guests

Amanda Valiente - Eli Lilly

Mateo Perez - Enterprise Rent-A-Car

Brittney Brown - City Furniture

Dylan D'Orazio - Gartner

 

Episode Transcription

Episode transcription coming soon!

Listen to all episodes of "Is This Really a Thing?" at business.ucf.edu/podcast.