The UAE pours billions into Egypt, weight-loss drugs move stock markets and why the NFL rakes in the most bucks
March 2024
Hello and welcome!đ
As we bid farewell to Q1, this edition takes on a business flavour and explores a massive new investment deal between the UAE and Egypt, how the pharma companies behind anti-obesity drugs are booming, and why American football teams are among the worldâs most profitable in the sports industry.
Please feel free to share your thoughts and comments. And - Happy Easter to those celebrating!
REAFFIRMING A CLOSE RELATIONSHIP
UAE President Sheikh Mohamed was greeted with open arms when he visited Cairo on 23 March. Egyptâs leader, Abdel Fattah al-Sisi, made sure to roll out the red carpet for the man who is committing US$35 billion to the country.
Egyptâs economy is in the doldrums (a topic I wrote about last October), and desperately needs a cash injection. For a while, it seemed the Gulf states would abstain from assisting this time around. However, Abu Dhabi has suddenly offered a lifeline to Cairo, resulting in the single largest foreign direct investment in Egypt.
The main aspect of the deal is the transformation of a section of Egyptâs Mediterranean coast. The UAE has acquired the land rights to develop holiday resorts, a financial centre and free zone. Construction is scheduled to begin in early 2025.
The agreement âdemonstrates our confidence in pursuing development projects that will deliver long term value across multiple sectors of Egyptâs vibrant economy,â said ADQ, one of the Emiratesâ sovereign wealth funds.
Apparently, the UAEâs support has spurred the IMF to get back to the negotiating table with al-Sisi and his government. Yet analysts are quick to flag that these measures are temporary pain relief to Egyptâs chronic problems. The countryâs position and population size make it hard to ignore, but endless bailouts arenât doing much to fix the underlying issues.
Given Egyptâs financial malaise, why is Sheikh Mohamed writing a âgargantuanâ cheque? According to reporting by Bloomberg, the Gulf power is aiming to generate tourism dollars, enhance political influence and contain further unrest in the Middle East.
SLIMMER WAISTLINES, BIGGER PROFITS
Entertainment mogul Oprah Winfrey did the interview rounds this month to discuss her use of weight-loss medication. âWhatever works for youâŠLet people make their own choices,â she told CNN.
It might seem like frivolous Hollywood fare but there are serious financial implications to consider. Oprahâs media tour follows her departure from the board of WeightWatchers - a move that caused the companyâs shares to plummet 25% on 29 February. Investors were unhappy to lose a celebrity spokesperson, who was also a key stakeholder and had promoted the brandâs points-based approach to eating.
The advent of GLP-1 drugs is shaking up industries as well as stock markets. The wellness sector is slowly embracing medical intervention as part of weight management. Elsewhere, the CEOs of food and drink conglomerates are increasingly fielding questions about how appetite suppressants could impact their future earnings.
All this excitement is bolstering Novo Nordisk and Eli Lilly - the biopharma giants behind Ozempic, Wegovy and Zepbound. Their shares are thriving and the forecasts remain optimistic. In fact, Novo Nordisk is now Europeâs most valuable company, beating French luxury group LVMH.
Due to strong demand for these anti-obesity treatments, both Novo Nordisk and Eli Lilly are racing to expand their production capacities. Another area where spending is booming is research into pill versions of the injectable drugs.
âWeight-loss jabs have turned out to be blockbusters. And for good reason. For one thing, after centuries of false promises and quackery, these drugs actually work,â notes The Economist.
AMERICAN FOOTBALL DOMINATES
2024 is set to be a banner year for sports and sports marketing, not least because of the Summer Olympics in Paris.
But the game that represents the worldâs most lucrative league, and by a huge margin, is still American football. Despite its limited fan base outside of the US, the NFLâs teams are wildly profitable. Consider this stat: In 2022, the Dallas Cowboys clocked an operating profit of $460 million while Manchester City made $59 million.
To understand the unique forces at play, including TV licensing and salary caps, check out Search Partyâs fascinating breakdown of how the NFL created a money-printing machine.
Thanks for reading! Take care and stay curious, Sara x
Dear DeepDive,
I want to say how great I find your efforts to bring news stories of interest and at times news that many people, I imagine, have no idea is or has taken place.
I found, for instance, the story about the NFL being the most profitable sport, and how they did it!
As an American, living in Asia now, my first years here I was proud to say, as presumption, that the NFL Super Bowl was the most watched sports event around the world. I was told I was wrong, and I was incorrect when compared to The World Cup of Football, or âsoccerâ, if I may. To this point I also thought then, incorrectly according to your report, that soccer earned far more money than the NFL. How far wrong was I?
Fascinating report!
Thank you.