🏠 Rest in peace legendary real estate investor and entrepreneur Sam Zell, who died Thursday at 81.

Our Trey Lockerbie recently interviewed Zell on We Study Billionaires in a fascinating discussion about real estate, investing, interest rates, and what drove him.

One of Zell’s most notable achievements was creating the modern-day real estate investment trust (REIT) industry.

“Not only was he a legend but an amazing human being,” Lockerbie tweeted. “Study up on him and learn from what he has now left behind.”

-Matthew

Here’s the rundown:

Today, we'll discuss two items in the news:

• Disney makes a U-turn on $900 million Florida plan

• Turkey’s unorthodox economic gamble

• Plus, our main story on the electrifying business of Taylor Swift

All this, and more, in just 5 minutes to read.

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IN THE NEWS

🏰 Disney Cancels Plan for $1 Billion Campus in Florida (Reuters)

Walt Disney Co. (DIS) has made a U-turn, canceling its plans to set up a corporate campus in central Florida worth nearly $1 billion, which was expected to accommodate 2,000 staff from California.

This pivot occurs amid its current legal feud with Florida Governor Ron DeSantis. The campus was envisioned as a hub for Walt Disney Imagineering and the Disney Parks, Experiences, and Products division. Originally, the project was set to be financed, in part, through a $578 million tax break from the state.

• Josh D'Amaro, head of Disney parks, noted that “new leadership and changing business conditions” led Disney to rethink its 2021 strategy of shifting employees, specifically its Imagineers — the brains behind theme park attractions, to a new Florida-based campus.
  

• "I remain optimistic about the direction of our Walt Disney World business," D'Amaro wrote. “We have plans to invest $17 billion and create 13,000 jobs over the next ten years. I hope we’re able to do so."

The company will also shut down a luxury hotel that took customers on a two-day imaginary cruise in a “spaceship” for $4,800 per couple.

Why it matters:

Last week, on an investor call, Disney's CEO Bob Iger publicly questioned Florida's dedication to their continuing investments within the state.

Disney and DeSantis have been in an escalating dispute since March 2022, when then-CEO of Disney, Bob Chapek, scolded Florida's law restricting gender identity and sexuality discussions in elementary schools.

• In response, DeSantis sought to revoke Disney's unique autonomous control over Walt Disney World in Orlando, claiming that "woke Disney" shouldn’t be privileged in the state.

• Viewing this as political retribution for exercising its free speech rights, retaliated by suing the state last month to overturn DeSantis's actions.

🎲 Turkey Continues its Unorthodox Economic Gamble (CNN)

Turkey’s President Recep Tayyip Erdogan has an unconventional view on fighting inflation, and despite tremendous economic and political pressure, he’s held firm on his view.

In a recent interview, Erdogan doubled down on cutting interest rates instead of raising them like the Federal Reserve has in the U.S. in response to inflation.

• He said simply: “I have a thesis that interest rates and inflation, they are directly correlated. The lower the interest rates, the lower inflation will be.”
  

• Higher interest rates increase borrowing costs, disincentivizing debt-based spending, from credit cards to buying cars and homes. That reduced spending is meant to slow the economy, balance supply and demand, and as a result, hopefully, slow the pace of price increases.

JPMorgan’s analysts, unsurprisingly, disagree with Erdogan, saying, “If policies are shifted to greater orthodoxy (i.e., raising rates), the disinflation process will be faster.”

Why it matters:

In last Sunday’s presidential election, Erdogan failed to garner 50% of the votes cast, meaning the election will go into a runoff vote at the end of the month. But he performed better than many expected.

For investors, the prospect that Erdogan will extend his 20-year rule has been unnerving: The country’s currency, the Turkish Lira, hit a record low this week against the U.S. dollar.

• A weaker currency makes imports more expensive, worsening inflationary costs.

Despite inflation rising to 85% last October, Erdogan has pushed the country to continue slashing interest rates.

MORE HEADLINES

📺 Netflix addiction is becoming a problem for the Japanese yen

🌙 Bezos’ Blue Origin wins NASA moon lander contract to compete with SpaceX’s Starship

🤝 The U.S. and Taiwan reach a deal on trade pact

CHART OF THE DAY

SWIFTONOMICS: THE TAYLOR SWIFT ECONOMY

Swiftless

Taylor Swift's 52-night, 20-city “Eras” tour through the U.S. is breaking attendance records — and poised to be one of the highest-grossing tours ever.

It’s expected to rise to the top (or very close) of the highest-grossing tours, which includes Elton John ($850 million), Ed Sheeran ($776 million), and U2 ($736 million).

Swift fans are spending big on tickets, lodging, travel, and merchandise to glimpse one of the world’s most popular talents. Swift, 33, is in such demand that some nosebleed tickets sell well over $1,500.

Swift could net between $500 million and $1.5 billion on the 52-night tour. Tack on potential international dates, and the total could be even higher.

The tour could enable Swift to tap into that moment to the tune of $500 million plus by August when the tour wraps up in Los Angeles. That estimate subtracts expenses from the tour’s ticketing and merchandise revenue.

Special events nationwide

Every Swift concert has been a spectacle. Swift kicked off the tour in Glendale, Arizona, which renamed itself “Swift City” for the occasion.

Hotel rates skyrocketed several times their average as fans flew in from around the world.

Later, in Houston, Swift boosted hotel occupancy rates more than the NCAA men’s Final Four. Her three-night stint in the city was Houston’s highest hotel revenue week of the year.

All told Swift could net close to $100 million on merch alone. Fans are also spending on boots, custom jackets, and hair and makeup. Amazon, Poshmark, and other retailers have sold thousands of Eras Tour outfits.

In Philadelphia last weekend, one woman brought a reading light and 81 pages of printed-out lyrics so she could sing along. The merch truck had arrived hours early to accommodate fans camping out in the parking lots around the stadium.

Swift, the investor

Swift’s father, Scott, is a former stockbroker for Merrill Lynch and ex-financial advisor.

The 12-time Grammy award winner has a real estate portfolio worth about $150 million, including sprawling beachfront mansions, per the Wall Street Journal.

Among her properties, Swift owns several units in a luxury condo building in Nashville, Tennessee. She purchased a penthouse when she was 19 years old for $1.99 million and later bought the unit below for $387,000. Her holdings in Nashville are worth $4 to $6 million, based on estimates by the Wall Street Journal.

Swift owns an estate in Forest Hills, Tennessee, a Nashville suburb, worth nearly $10 million.

Swift also owns a seven-bedroom, nine-bathroom beachfront property in Rhode Island, which she reportedly bought through an LLC for about $17.75 million in 2013. The nearly 12,000-square-foot property is valued at about $30 million.

In 2015, Swift bought the historic Goldwyn Mansion in Beverly Hills, California for $25 million. The estate was built by Samuel Goldwyn, a Hollywood producer who was part of the famous Metro-Goldwyn-Mayer film studio. The home is worth an estimated $30 million.

Swift also owns property in New York City’s Tribeca neighborhood, one of the most expensive zip codes in the country.

Nearly $2 billion?

If the average ticket price was $700, “Eras” ticket sales would pop to $1.9 billion — making “Eras” the top-grossing tour ever with much higher average ticket prices and far fewer concerts.

Her last album, Midnights, sold 6 million album-equivalent units worldwide in the first two months of its release. Per Universal Music Group, Swift is the only artist ever to have five albums with more than 1 million units sold during release week.

And Swift’s 2018 Reputation tour brought in $266.1 million in ticket sales, breaking the record for the highest-grossing U.S. tour since Billboard Boxscore started tracking data in 1990.

Not to mention the endorsement dollars that pour in: Swift has entered into partnerships with major brands such as Coca-Cola, CoverGirl, Keds, AT&T, Target, Capital One, and Sony. To her credit, in 2022, Swift turned down a $100 million sponsorship deal with FTX after doing her due diligence on the securities she was asked to promote.

Thanks to concerts, merch, and endorsements, Swift is well on her way to becoming a billionaire, likely in the next few years.

“No matter what happens in life, be good to people,” Swift has said. “Being good to people is a wonderful legacy to leave behind.”

Dive deeper

Check out Swift’s full library of award-winning music here.