This is a recording of FT News Summary podcast episodes: ‘Missing shot for women’s football’

Sonja Hutson
Good morning from the Financial Times. Today is Monday, July 24th and this is your FT News Briefing.

American companies are struggling to pay off junk loans, and European retail banks are still seeing strong profits. Additionally, FT’s Josh Noble explains why the commercial rollout of the FIFA Women’s World Cup is a bit lackluster.

Noble Josh
A former pundit named Karen Carney, she frequently uses the phrase that women’s soccer is a start-up business.

Sonja Hutson
I’m Sonja Hutson, for Marc Filipino, and here’s the news you need to start your day.

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The US junk lending market has been hit by the biggest credit downgrade since 2020. That’s according to an analysis by JPMorgan. These loans typically have a floating rate that moves with the interest rate. Companies and private equity advocates have taken on this type of debt during the pandemic because of super-low interest rates. Now, borrowing costs have skyrocketed, and this downgrade is a sign that companies are having a hard time repaying their lenders. The downgrade means companies will have to pay more to issue new debt. They also mean that the biggest buyers in the market can steer clear of some of the riskiest loans.

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European banks are reporting their second-quarter earnings this week. Expect this to be another good news for banks with big retail weapons and bad news for investment banks. This is Owen Walker of the FT.

Owen Walker
What we are expecting in this week’s results is that you will see a lot of European banks with large retail banking branches continuing to see their profits grow on the back of net interest income, which is the difference between what they charge borrowers versus what they pay depositors. So that’s really a strong point for banks, certainly in the case of interest rate hikes over the past year, 18 months or so, and European banks in particular will continue to see the advantage of those hikes.

Sonja Hutson
But Owen says it could be one of the final quarters before those banks hit a tipping point when that equation doesn’t make them much money.

Owen Walker
So with interest rates rising, that has increased the amount of money available to banks, which, in theory, should pass on to customers with high deposit rates. Now, the amount of money they move is not keeping up with the pace of central bank rate increases. That delay has kept the banks profitable. Now what we are starting to see is that in some countries, such as the UK, for example, pressure from politicians is forcing them to adopt that rate in order to increase the deposits they offer so that their customers can also benefit and earn more from the rate hike. And we’re going to start to see, I think, within the next 6 to 12 months, that money is going to move into higher interest rates on deposits.

Sonja Hutson
Owen says he expects more pain for investment banks in these earnings reports.

Owen Walker
If we think about what we’ve seen from US banks, that’s going to continue to be a pretty bleak story on Wall Street, certainly in terms of investment banking, in terms of trading activity, in terms of market activity and revenue, and that will almost certainly be the case in European banks with large investment banking branches. So the banks like BNP Paribas, Société Générale in France, perhaps UniCredit in Italy, and these are the banks that will find it difficult, if you will, due to the prolonged drought in trading activity. And so that will affect some of their profits this quarter.

Sonja Hutson
It was the FT’s European banking correspondent, Owen Walker.

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The FIFA Women’s World Cup came to an end on its first weekend.

[AUDIO CLIP OF THE WOMEN’S WORLD CUP]

England beat Haiti 1-0, and the US led Vietnam, winning 3-0. Expectations for the commercial launch of this year’s FIFA Women’s World Cup were high, but many of these expectations fell through. Here to talk more about this is FT sports editor Josh Noble. Hi Josh.

Noble Josh
Hello. How are you these days?

Sonja Hutson
I’m doing good. So what exactly have commercial deployments been?

Noble Josh
I think the commercial rollout we actually saw was quite different from those high hopes. Instead of getting a lot of interest and people scrambling to get their names associated with the tournament, we’ve seen really hard to agree broadcast deals, streaming and TV rights bids, they’re far below what Fifa, the organizers, um, governing body, expected. Sponsorship deals have also come in at the last minute, with major sporting events like this often a sign that there’s a big gap between what people are willing to pay and what rights sellers think they’re worth.

Sonja Hutson
OK, so what happened?

Noble Josh
I think what happened, I mean, this sounds very simple, but I think one of the big problems is simply the time zone. I think the breakthrough with women’s football last summer was pretty special in Europe, but with this World Cup’s time zone, in Australia and New Zealand, it’s hard to do that from a broadcast perspective. All Olympics end at lunchtime in Europe, which means you won’t have many spectators because people are at work, people are at school or they are just going to bed. Therefore, it is difficult to attract audiences, to attract interest, which means that broadcasters do not want to put money into it. And when broadcasters are reluctant sponsors, funding doesn’t really flow so quickly.

Sonja Hutson
Just take a step back. How has the business surrounding women’s sports and women’s soccer in particular changed over the past few years?

Noble Josh
I think the business of women’s football is changing rapidly, especially in Europe. There is a recent review of women’s football in the UK by a former professional named Karen Carney, and she uses the phrase frequently that women’s football is a budding business. It’s basically a new sport on a professional level. For example, the Spanish Super League has just finished its first year as a professional league. That then leads to going on, you know, pay TV, rising wages, rising costs and all that while you’re trying to develop the commercial side of it. You’re trying to get people to the game, you’re trying to get people to follow. I think it’s still pretty early in that process, and that’s why we’re going to see some mismatch between revenue and expenses. We will see some kind of bump in the road. But the trajectory is so much that this is a growing and engaging game. . . usually a very new and attached object.

Sonja Hutson
Josh Noble is the FT sports editor. Thanks, Josh.

Noble Josh
Thank.

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Sonja Hutson
Before we left, Germany had been the target of ATM robberies. Dutch gangs blew up these cash machines. And last year, nearly 500 of them were hit by bullets. The Netherlands and France have moved more towards electronic payments. But the Germans are much more reluctant to stop using cash. So there’s a lot of money in ATMs across the country. In fact, the average amount seized in a bombing attack last year was €100,000.

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You can read more about all of these stories for free at FT.com when you click the link in our program notes. This is your daily FT news summary. Make sure you check back tomorrow for the latest business news.