--:-- Georgia Howe: Welcome to Morning Wire, I'm Georgia Howe here with Daily Wire editor-in-chief John Bickley. It's August 19th, and this is a Saturday edition of our show.
--:-- John Bickley: Thanks for waking up with us, Georgia. We've got a lot to cover today.
--:-- Georgia Howe: That's right. Once thought to be a necessary part of corporate America's C-suite, diversity, equity and inclusion officers now face layoffs and cuts. It's pretty clear that the DEI brand has completely run its course, and we're going to start forgetting about it very soon.
--:-- John Bickley: What's behind the shift away from DEI? Let's talk to our culture reporter, Megan Basham, about why companies have soured on DEI.
--:-- Megan Basham: Thanks for having me on the show. 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. And that was by a considerable margin.
--:-- John Bickley: But then after 2021, you start to see the significant reversal.
--:-- Megan Basham: So of the top 10 growing roles the previous year, it was the only one to reverse growth in 2022. 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% decline. 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% last year.
--:-- John Bickley: So no question, this trend is real. Why is it happening?
--:-- Megan Basham: Well, I think a big element here is simply market realities. As the economy has declined, we've seen massive layoffs in the tech sector and the entertainment sector. Retail is now also showing signs of weakness. So DEI is largely being seen as a luxury role that isn't necessary to shore up company bottom lines when resources are tight.
--:-- Georgia Howe: But you've also got political considerations.
--:-- Megan Basham: So as the wider public became aware of the DEI trend, a lot of people didn't like it. And it became a potential public relations liability. The Supreme Court recently bolstered those perceptions by banning affirmative action in college admissions.
--:-- John Bickley: That ruling should apply across the board through our economy and these so-called DEI programs that many corporations have embraced.
--:-- Megan Basham: Those are discriminatory programs. Even if you think some of these programs are well, my response to you would be to this: The way to stop discrimination on the basis of race is to stop discriminating on the basis of race. And that's what we're going to do in this country.
--:-- Georgia Howe: And to go along with that political backlash, you're starting to see conservative legal activists filing lawsuits. So Amazon, Comcast and Starbucks have been sued recently over claims that they're prioritizing DEI goals over fiscal responsibility to shareholders.
--:-- Megan Basham: 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. Some have said they feel they were just hired to be figureheads and not really change company practices.
--:-- Georgia Howe: According to Wall Street Journal analysis, a number of them have just been taking themselves out of the game.
--:-- Megan Basham: So is it looking like this was maybe a fad that is now kind of phasing out?
--:-- John Bickley: I think that remains to be seen because certainly progressives are pushing back against the backlash. And they're signaling that they are going to fight for DEI.
--:-- Georgia Howe: This was Vice President Kamala Harris at a recent conference. 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. Let us not let them get away with that.
--:-- Megan Basham: They're trying to get rid of DEI programs so that corporations will stop paying attention to who they're hiring and promoting. We'll stop paying attention to who gets accepted to schools.
--:-- Georgia Howe: And we've also seen the Biden administration increase spending on DEI initiatives across federal agencies. There's been a big push in the military, for example.
--:-- Megan Basham: So it's clear they plan to take steps to further legitimize it.
--:-- John Bickley: Well, the private sector is usually the place where we see trends first emerge. So it's possible that the government is just lagging here.
--:-- Georgia Howe: Megan, thanks for reporting.
--:-- Megan Basham: Anytime.
--:-- Georgia Howe: After years of explosive growth, apartment buildings, once a safe haven in the volatile housing market, are approaching treacherous waters with mass delinquencies looming. Here with more on what's behind the sudden downturn and what it means for renters is Daily Wire senior editor, Cabot Phillips.
--:-- Cabot Phillips: Hi, Cabot.
--:-- Georgia Howe: So what can you tell us about this looming delinquency crisis here?
--:-- Cabot Phillips: So we've talked on the show about the recent explosion in the rental market. 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. That led apartment building values to spike by 24% last year.
--:-- John Bickley: And it also led investors and builders across the country to start new projects, hoping to capitalize on that hot market.
--:-- Cabot Phillips: 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.
--:-- Georgia Howe: Now, traditionally, apartment buildings are viewed as some of the safest real estate investments because of their exceptionally low vacancy rates. People will always need a place to live.
--:-- Cabot Phillips: 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.
--:-- Georgia Howe: Yeah. And that's a major turnaround year to year.
--:-- Cabot Phillips: What's behind the dip? Well, many investors were enticed by exploding rent prices last year and saw a chance for a quick buck. From 2021 to 2022, apartment rents went up 25%, but they since cooled significantly.
--:-- John Bickley: So good news for tenants but it bad news for investors Exactly
--:-- Cabot Phillips: And the other main factor is rising interest rates. Many investors were willing to take on high rates because they assumed they be able to jack up rent and then refinance to a lower rate once they'd scored a higher valuation with those profits.
--:-- Georgia Howe: 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.
--:-- Cabot Phillips: 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. It's really a perfect storm.
--:-- Georgia Howe: Yeah, it is.
--:-- Cabot Phillips: So what does this mean moving forward? Well, that's where things get especially concerning. 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.
--:-- John Bickley: But as the rent prices have cooled, they're now on the hook for enormous payments.
--:-- Cabot Phillips: For context, the amount of debt in outstanding multifamily mortgages has gone up 25% since the start of 2020 alone. Between now and 2027, about a trillion dollars in debt on multifamily units is due.
--:-- Georgia Howe: 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.
--:-- Cabot Phillips: Yeah, it makes sense. Many of these same issues are also being felt in another area of commercial real estate, and that's office buildings.
--:-- Georgia Howe: What's the latest on that front, office building rentals?
--:-- Cabot Phillips: Yeah, this is another sector that's just taken a beating in recent years, but for slightly different reasons. 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.
--:-- John Bickley: In the first quarter of 2023, the nationwide office vacancy rate hit 18.6%. That's a new record high, and experts predict more than 300 million square feet of unused office space will be out there by the year 2030.
--:-- Georgia Howe: So multiple sectors in the commercial real estate market are facing an uphill battle right now.
--:-- Cabot Phillips: Well, several concerning trends there in the rental markets.
--:-- Georgia Howe: Cabot, thanks for reporting.
--:-- Cabot Phillips: Anytime.
--:-- Georgia Howe: 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. Here to discuss what just happens to be my lifelong favorite sport is Daily Wire sports reporter and Craning Company co-host David Cohn.
--:-- David Cohn: Thanks so much for having me.
--:-- Georgia Howe: So last time we talked, we looked at some of the seismic shifts happening with conference realignment over the past few weeks, and there's been even more now. So let's start there. What's the latest?
--:-- David Cohn: Yes, there is even more buzz that could have some big financial implications, and that could alter even more of the national landscape.
--:-- Georgia Howe: So the PAC-12 conference is effectively dead at this point. It's lost Oregon and Washington to the Big Ten, and Utah, Arizona, Arizona State, and Colorado to the Big 12.
--:-- David Cohn: That's after already losing its two premier LA schools, USC and UCLA to the Big Ten. 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.
--:-- Georgia Howe: But there's a lot of pushback from within the ACC. Currently, four ACC schools oppose this expansion. Those are Florida State, Clemson, North Carolina, and NC State.
--:-- David Cohn: Interestingly, though, Notre Dame gets to vote for expanding the conference, even though they are not a member in football.
--:-- Georgia Howe: 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.
--:-- David Cohn: Exactly.
--:-- Georgia Howe: Another major financial component of the sport now is NIL deals for the players. This is how players get paid. There's been movement on that front as well. You are right, Alabama Senator Tommy Tupperville was recently on our show to explain what he and Senator Joe Manchin from West Virginia are proposing.
--:-- David Cohn: They've presented legislation called the PASS Act, which would address much of the uncertainty surrounding NIL and work to establish a national standard.
--:-- Georgia Howe: That's the key point they wish to address. 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.
--:-- David Cohn: Right, so a lot of chaos right now when it comes to these deals, so we'll watch that bill with interest.
--:-- Georgia Howe: For sure. Now to the fun part, how the season is shaping up. AP released its top 25 poll. How's it looking?
--:-- David Cohn: Yes, well, some of it looks familiar, but there are some big names moving around. 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.
--:-- Georgia Howe: 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.
--:-- David Cohn: Also departing for the NFL was offensive coordinator Todd Munkin. He has been replaced by Mike Bobo, but he's no stranger to Georgia because he played quarterback for the Bulldogs and spent 14 years on their coaching staff.
--:-- Georgia Howe: Now, Michigan, my alma mater, ranks number two after back-to-back college football playoff appearances. Jim Harbaugh returns a very solid roster, and that includes standout running back Blake Corum.
--:-- David Cohn: Michigan's arch rival in Columbus, Ohio, ranks number three. 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.
--:-- Georgia Howe: 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.
--:-- David Cohn: That's Will Anderson Jr. That shows you just how much trust there is in Coach Nick Saban to reload and win every season.
--:-- Georgia Howe: And then rounding out the top five is the LSU Tigers. Now, remember, this team won the SEC West Division a season ago in Brian Kelly's first year in Baton Rouge, and they returned their quarterback, Jaden Daniels, who we sat down with at SEC Media Days.
--:-- David Cohn: So that's your top five. And LSU is playing in the most significant game of the opening weeks. That is very correct. 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.
--:-- Georgia Howe: Yes, they're number eight, correct?
--:-- David Cohn: That is correct. And I knew you would know that.
--:-- Georgia Howe: Needless to say, can't wait for all this to kick off. You're speaking for all of us.
--:-- David Cohn: Dave, thanks for coming on. We'll talk again soon.
--:-- Georgia Howe: Thanks for having me.
--:-- Georgia Howe: That was Crane & Company co-host David Cohn and Go Nulls. Go Blue.
--:-- John Bickley: And don't forget, you can follow us on Twitter and Instagram.
--:-- Georgia Howe: That's all the time we've got this morning. Thanks for waking up with us. We'll be back this afternoon with an extra edition of Morning Wire.
