US Senate on the cusp of approving Biden’s $1tn infrastructure package

This is an audio transcript of the FT News Briefing podcast episode: US Senate on the cusp of approving Biden’s $1tn infrastructure package

Marc Filippino
Good morning from the Financial Times, today is Tuesday, August 10th. And this is your FT News Briefing.

[MUSIC PLAYING]

Oil prices are sliding on fears about the spreading Delta coronavirus variant. And a leading player in online sports gambling is betting on growth with a one and a half billion dollar acquisition. But first, the US Senate is set to approve a one trillion dollar infrastructure package today. We’ll find out how divided lawmakers got to this point. I’m Marc Filippino and here’s the news you need to start your day.

The US Congress is about to put another trillion dollars of fiscal stimulus into the economy. Today, the Senate is expected to pass President Joe Biden’s infrastructure package. They’ll steer billions of dollars towards big projects like roads and bridges, freight rail and public transportation. After months of debate, the bill is getting off the ground because a surprising number of Republicans crossed the aisle. I spoke to the FT’s Lauren Fedor about why so many Republicans joined their Democratic colleagues.

Lauren Fedor
There are a couple of reasons for that. The first, I think, is public opinion. These policies, these investments are very, very popular with the American people. People see crumbling roads and bridges, airports, trains in their communities, and they want to see them fixed. They want to see them improved. So I would say that that’s the number one thing. But we’ve also seen that this is not just a bipartisan vote, but a bipartisan effort. So Republicans have been involved through many stages of this process. Now, originally, the White House came out with a wish list that was many times the size of this package. But the winning formula proved to be this small group which had five Democrats, five Republicans. They came together, they came up with a deal, and then those five Republicans brought along several of their colleagues.

Marc Filippino
I guess it’s still surprising, Lauren, because Republicans for so long when discussing this bill, pointed toward inflation as a reason why they needed to be cautious. And and really one of their biggest talking points against the Biden administration. Does support for this bill cut against that argument?

Lauren Fedor
Hmm. So, you know, it’s definitely still an issue. And I think it’s part of the mood music in Washington at the moment. We’re gonna have the CPI figures on Wednesday where I no doubt will be hearing more about inflation, particularly from the Republican side of the aisle. But, you know, for some of these lawmakers, they saw this as important investments, that we’re going to reap dividends not only in the short term, but the medium and long term. These are investments in communities. It’s important to remember that this is just one package. So it’s a big package, but there’s an even bigger package coming down the road. And that’s a three point five trillion dollar budget proposal that the White House and congressional Democrats are now going to start pushing. In fact, they’re gonna start pushing it probably within hours of the infrastructure bill being passed. That package is gonna be done by Democrats alone. They’re gonna go it alone and they’re not looking for Republican support. And you can, it’s definitely fair to expect that that once that process gets under way, we’re going to be hearing all of these Republicans talking about the importance of fiscal discipline, tightening spending and and trying to rein in those inflation numbers.

Marc Filippino
Lauren Fedor is the FT’s Washington correspondent.

[MUSIC PLAYING]

Oil prices slid again on Monday. Brent crude and West Texas Intermediate both dropped more than two per cent. One reason is the rally in the dollar. A stronger dollar makes oil more expensive for non-dollar holders. Adding to that, the FT’s Neil Hume says there’s the spreading of the Delta variant of the coronavirus, especially in China, where authorities imposed new travel restrictions after the country’s worst outbreak since the start of the pandemic.

Neil Hume
And that’s had people really worried about oil demand in China, which is the world’s biggest importer of crude oil. At the same time, we’re also seeing some concerns among analysts about just slowing economic growth in China. And indeed, over the weekend, we had the latest import data out and that showed that Chinese oil imports fell below 10 million barrels a day for a fourth consecutive month in July. So things really have slowed down in terms of all demand in China since this time a year ago.

Marc Filippino
So really, how big a deal is this recent dip?

Neil Hume
Yeah, I think it’s important not to get too carried away with, you know, the fall that we’ve had, you know, OK, it’s you know, the oil price is down 10 per cent in sort of three sessions or so. But, you know, it’s only just below 70 dollars a barrel. If we think where it was April last year, you know, the US price went negative. So, I mean, it still is up by quite a bit. And if you look at what some of the analysts are saying, I mean, they’re pretty confident that economic growth is, you know, going to continue and they sort of, you know, the reopening after the pandemic is gonna be with us. So, yeah, we probably shouldn’t get too bearish about the oil price at the moment. I mean, it’s had a terrific run and it has pulled back a bit, but probably that’s only to be expected.

Marc Filippino
That’s the FT’s natural resources editor, Neil Hume.

[MUSIC PLAYING]

There was a big deal in the online sports gambling industry yesterday, DraftKings agreed to acquire Golden Nugget Online Gaming for more than one and a half billion dollars. It’s an all stock deal that more than doubles Golden Nugget’s valuation since it listed last year via Spac or special purpose acquisition company. Here’s the FT’s Ortenca Aliaj.

Ortenca Aliaj
The reason why we’re interested in that is because it’s quite a high valuation for this company and it’s, of course, two Spac companies coming together, which is which is always fun.

Marc Filippino
It is fun. Ortenca can you remind us why Spacs have been so popular among online sports betting companies?

Ortenca Aliaj
The Spac is offering, it’s definitely offering a quicker route to public markets, but also some of these companies tend to be early stage. So going public the traditional way might not be best because when you’re going public through a initial public offering, you can’t really talk about the company’s prospects that much, you know, you’re stricter than what you can say. Whereas when you go public with a Spac, you can tell your story. And for these companies, especially ones that are young or, you know, are are in need of cash, it’s easier to go public with a Spac and tell people what you’re gonna do and show projections and sell yourself to investors.

Marc Filippino
OK, so so back to the big acquisition. What does this mean for the two companies involved, DraftKings and Golden Nugget? And and what does it mean for the broader industry?

Ortenca Aliaj
I mean, one of the major things online sports gambling companies have to deal with is customer acquisition costs, right? There’s a lot of competition out there. And if you can cut those costs and sort of draw people in from other platforms, it’s a really good thing. So what’s happening here is that DraftKings is getting five million plus of Golden Nugget customers on its platform and it’s, and then it expects synergies of about three hundred million dollars. That’s essentially the biggest add-on for the business. For Golden Nugget itself, it’s largely operated, I believe, within New Jersey, and it’s had a hard time getting outside of that market. So it’s a good deal to partner up with a company as big as DraftKings.

Marc Filippino
Ortenca Aliaj is the FT’s mergers and acquisitions correspondent.

[MUSIC PLAYING]

In another sign of the times, European soccer club Inter Milan has ditched its longtime sponsor, Pirelli. The Italian tire maker’s logo has graced Inter Milan jerseys for 26 years. Now players will brandish the logo of a cryptocurrency exchange called Socios.com. The company allows clubs and leagues to sell tradable digital tokens to fans. And it’s the latest crypto company to bet on sports sponsorships as a way to become more mainstream. Another company, Crypto.com, is sponsoring Formula One motor racing. And in the US, the Portland Trail Blazers basketball team has a five-year jersey sponsorship with StormX. That’s a company that works with retailers to reward shoppers with crypto tokens. The chief executive of StormX said there was a very strong correlation between National Basketball Association viewers and his target audience of 18 to 45 year old, predominantly male customers. And what better way to get your brand out there than to get it on a sports jersey?

[MUSIC PLAYING]

You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.