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What we are looking forward to in 2024
Andrew, I’m here. Looking ahead to the new year, the DealBook team has identified approximately 12 themes that could become ongoing narratives that could define the business and policy ecosystem over the next 12 months.
Of course, perhaps the most polarizing presidential election in history will impact every part of the business world. Which CEOs and other financiers are endorsing candidates, and importantly, which candidates are silent, and how companies deal with outspoken employees. Please pay attention to what is happening. Also, look for wealthy executives who avoid donating directly to candidates and instead donate to his PAC as a kind of shield from public scrutiny.
Another storyline that will probably remain part of the water cooler — er, Slack and The past year has sparked a debate about free speech on campus (another persistent theme).
Let me explain a little more about what we’re focusing on this year.
American presidential election. The race is expected to come down to re-election in 2020, with opinion polls showing Donald Trump in the lead as the Republican candidate, despite an intensifying legal battle. The big question is how business leaders will react. Will they unite around (and direct money to) candidates other than Trump? Former South Carolina Governor Nikki Haley is leading the race, but she has a long way to go to catch up with Trump. President Biden, who has made a series of major decisions on the economy, is hoping voters will begin to see an improvement in the economy in order to reverse his sluggish poll numbers.
Private credit could be hit by a wave of defaults. Just as 1980s-style leveraged buyouts were rebranded as “private equity,” “shadow banking” was rebranded as “private credit” and “private equity” as business reached record levels. The brand name was changed to “Direct Loan”. Direct lending by investment companies and hedge funds has reached a staggering $1.5 trillion, with many companies turning to companies like Apollo and Ares rather than JPMorgan Chase & Co.
However, the industry may face challenges in 2024. Debtors facing looming debt maturities and high interest rates are already turning to private credit for more loans, raising concerns that lenders could face a wave of customer defaults. Skeptics fear a series of failures could hit these institutions hard, leaving pension funds, insurance companies and other backers of private credit funds in the lurch.
Media trading enthusiast? Reports last month that Warner Bros. Discovery CEO David Zaslav had discussed a possible merger with Paramount sparked a wave of speculation that 2024 could be the year of media consolidation. . The industry has been transformed in recent years by the growth of streaming, changes in the way people consume media, and the encroachment of Big Tech into fields typically dominated by legacy media companies. The industry is currently in the midst of its next big change with the rise of artificial intelligence.
One date to mark in your diary: April 8, 2024 is the two-year anniversary of Warner Media and Discovery merging to form Warner Bros. Discovery without risking a hefty tax bill. This is the first day you can sell your new company. .
Can unions maintain their momentum? 2023 has been a banner year for organized labor, with major victories in the fight against Hollywood studios and the auto industry. Whether that signals a permanent turnaround for the labor movement is debatable. But elections will likely be a key factor. Biden and Trump are expected to make further efforts to appeal to blue-collar voters this year as they tried to woo striking autoworkers.
Middle Eastern money will continue to flow. Tensions with China and economic sanctions are making it increasingly difficult for companies to raise money from the places that used to be at the top. Middle Eastern investors have regained that slack. Saudi Arabia, the United Arab Emirates, Qatar and others are spending money to diversify their fossil fuel-dependent economies. Sectors include sports, technology companies, luxury goods, retail, and media. Critics say the oil state with a questionable human rights record is trying to launder its reputation, but that hasn’t stopped Western companies from seeking profits.
One notable trend is China’s growing relationship with Middle Eastern money. Beijing is seeking to deepen its ties with countries outside of Washington’s orbit, or at least those willing to play both sides.
There will be more antitrust battles. A tough year for regulators, including the FTC’s Lina Khan and the Justice Department’s Jonathan Cantor, saw both Illumina and Adobe halt multibillion-dollar acquisitions in the face of government pressure, resulting in two wins. finished. Enforcement authorities are already doing some good work by forcing traders to consider whether it is worth pursuing a large deal, given the potential risk of having to spend months defending it in court. It could be argued that this has been a success. Don’t expect Mr. Khan to ease the pressure. Further antitrust battles are expected.
New climate disclosure rules. Publicly traded companies have been preparing for new SEC climate-related disclosure rules for years, but in 2021 the SEC signaled that climate change would be one of its priorities. About a year later, SEC Chairman Gary Gensler proposed new rules. The most controversial aspect of the draft regulations was the requirement for large companies to disclose greenhouse gas emissions along their value chains. The new rules are expected to be finalized in the spring. But the case could go all the way to the Supreme Court.
Another notable election is in India. India, the world’s largest democracy and emerging superpower, will vote in April and May. Prime Minister Narendra Modi is benefiting from Western countries seeking a regional bulwark against China. Companies are eyeing business opportunities in India as they seek to diversify their supply chains and tap into a fast-growing economy. This election is also an important early test of how AI can influence the spread of (mis)information during elections.
Major reforms in the workplace. In late 2022, AI entered the public consciousness with the release of ChatGPT. In 2023, companies experimented with new ways to incorporate technology into their operations, but few had yet overhauled their procedures to cope. Although it is not yet clear exactly how AI will impact work, by 2024 more companies will be making decisions about the use of AI in ways that impact workers. It may become.
Another big topic the workplace is grappling with is the response to the war in Gaza. Some companies are already considering changes to their workplace diversity, equity, and inclusion programs, and executives are working with university presidents on how to handle statements and responses to war-related incidents. facing similar pressures.
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