| | Good morning and happy Friday. Here's some food for thought on Wall Street's first trading day of 2026: The US has had a change of heart-shaped Barilla regarding 92% tariffs on 13 Italian pasta-makers. The levies, announced in October and scheduled to start this month, would have been on top of a 15% tariff on EU imports. Instead, two firms accused of selling pasta at non-competitive prices, Garofalo and La Molisana, will have their additional tariffs reduced to 13.98% and 2.26%, respectively, Italy's foreign ministry announced yesterday. The 11 other producers will face a 9.09% tariff. The reduction is worth at least a grazie mille, since Italian producers value the US market at about $800 million. Losing that would cost a pretty penne. | | | | | Forget the three-game NBA parlays and slamming the over for Jahmyr Gibbs' total yards. The biggest wagers in the world of sports haven't been placed on game performance via FanDuel or DraftKings, but broadcast rights, in the form of massive deals by media companies. But has the massive bet on live sports, thought to be one of the few reliable routes to attracting mass amounts of eyeballs in our fractured media space, paid off? In the media, as in sports, there have been winners and there have been losers. According to a report published in November by media research group Ampere Analysis, global sports-media spending is on track to reach $78 billion by 2030, a 20% increase from 2025's levels. Nearly half of the increase comes from the MLB's new rights deal in November, which expanded coverage to NBC/Peacock and Netflix, and the NBA's 11-year megadeal. Renewing a partnership with ESPN/ABC while placing longtime partner Warner Bros. Discovery's TNT on the bench in favor of NBC/Peacock and Amazon Prime, the NBA deal officially kicked off this season. For WBD and the NBA, all's well that ends well: - NBA ratings climbed roughly 30% in the first month of the season this year, with national games drawing the most views in 15 years. The deal massively expanded the amount of games on broadcast networks, while tapping an Amazon Prime user base that now vastly outnumbers cable subscribers in the US.
- WBD, meanwhile, responded to the loss of the NBA by scooping up a decade of The French Open, which proved a ratings bonanza in its first year in May, as well as a slate of major college football games, the second-most watched sport in the US by far. Earlier this month, the company said it struck a deal to sublicense a group of College Football Playoff games previously scheduled for ESPN.
  Football Night in America: Still, not every deal has been a clear winner. David Ellison's new-look Paramount-SkyDance paid $7.7 billion to poach the UFC from ESPN this year. But in a recent filing urging shareholders to reject Paramount's takeover bid, WBD flagged the price as "above-market" and added that the company could face further pressure if and when the NFL exercises its right to renegotiate a broadcast deal early. Such a maneuver by the top sports league is expected to break the bank for media companies. Just look at Disney: To secure a suite of tertiary NFL media properties this year, the company ceded a full 10% stake in ESPN to the league. Written by Brian Boyle | | | | | | | | | | | | | | It's easy to see how investors in vice stocks could develop a severe case of the spins from 2025. Some rose, some fell, and seldom at the same time. Nicotine pouch-maker Zyn's parent company, Philip Morris International, soared nearly 34%, and Budweiser-maker AB InBev ended the year up about 29%. Drink-maker Molson Coors, however, tumbled 18%. A Dizzying Year From cannabis to tobacco and betting to liquor, vices faced major roadblocks last year as consumers saved their beer money for essentials and regulators tried to adapt to rapidly changing markets. Let's break it down sector by sector, starting with the one that had the most recent shakeup: - Cannabis: President Trump signed an executive order last month knocking marijuana's federal status down from Schedule 1, which covers highly addictive drugs with no accepted medical usage (such as heroin), to Schedule 3, which includes drugs like ketamine and Tylenol. The rescheduling was the biggest regulatory moment for cannabis since 1970, but companies are still waiting on federal legislation. And while they wait, investors are feeling wary of the sector as it faces challenges accessing financial services (dispensaries are cash and debit only) and capital.
- Nicotine: The shift to smokeless is in full swing, with 41% of Philip Morris's revenue coming from smoke-free products like Zyn. The company in September convinced a federal judge to quash a class-action lawsuit that alleged Philip Morris overcharged customers for Zyn, the only FDA-approved nicotine pouch, because its $16 billion purchase of Zyn-maker Swedish Match hurt competition in the sector.
- Alcohol: Sales of beer, wine and spirits continue to fall flat with some exceptions. Molson Coors lost $2.9 billion in the fall quarter and expects sales to fall about 4% this year. It, along with Heineken, laid off hundreds of employees this year. AB InBev, meanwhile, reported its slowest profit growth since 2021 in October. Alcohol sellers continue to grapple with a sober-curious trend that analysts don't think is going away.
Happy Hour: Still, the mood isn't all gloom and doom. Vice stocks are "almost the opposite of the AI trade," Bloomberg Intelligence analyst Kenneth Shea said. "They're recession-proof." So while some sectors face unique challenges, they're not going anywhere. Written by Jamie Wilde | | | | | | Sports betting via online platforms such as FanDuel and DraftKings is legal in some form in more than three dozen states, but an even more lucrative payoff for the gaming industry may come from America's love affair with wagers on random events. Prediction market platforms such as Polymarket and Kalshi allow millions of Americans to buy contracts on the outcome of everything from sports plays to presidential elections, a business that may benefit from scrutiny of sports betting after a headline-making scandal in the US. 'Face Card' In October, the Justice Department announced indictments of more than 30 people, including NBA legend Chauncy Billups and Miami Heat guard Terry Rozier, in connection with gambling schemes. Billups was accused of serving as a "face card" to give credence to poker games rigged to steal millions from participants, the BBC reported, while Rozier was accused of sharing private information that might influence a game's outcome (such as player injuries) with sports bettors. Both Billups and Rozier have pleaded not guilty to the charges. In an effort to cut the inside trading of NBA player information, the NBA issued a league-wide memo last week outlining steps to increase the frequency of public injury reports, reducing their value, ESPN reported. But not all bets are off: - While the effect of the cases on demand for sports-betting platforms is not yet clear, DraftKings announced plans in November to join PolyMarket, Kalshi and FanDuel in the trending event contract market.
- Since DraftKings' attempt to merge with FanDuel was blocked by the Federal Trade Commission in the late 2010s, Morgan Stanley has projected that a push into prediction markets could be what the company needs to buoy its longer-term growth profile.
Robinhood and Coinbase have also recently incorporated event contracts into their platforms, with the latter announcing plans to snap up prediction market startup The Clearing Co. to accelerate its entry. The business case is obvious: Polymarket and Kalshi handle more than $2 billion in bets each week, according to Dune Analytics data from November reported by Bloomberg. The amount has more than doubled from the end of last year. The challenge is that offering event contracts will embroil the companies in a growing fight over how they should be classified by the Commodity Futures Trading Commission (CFTC) and how, if at all, they should be regulated. The Best Defense: Coinbase, meanwhile, has gone on the offensive against regulation of prediction markets by individual states, filing federal lawsuits in December against Michigan, Illinois and Connecticut for what the cryptocurrency company says are attempts to "gain jurisdiction over something they have no legal right to regulate." Written by Emell Derra Adolphus | | | | | | | | | |
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