TheChek News Flow

Crypto Plan Creates Potential Conflicts for Trump

Digital-currency efforts bring campaign closer to industry that is spending to limit regulations

Republican presidential candidate Donald Trump has been stepping up his efforts to court the money and votes of the crypto industry. His latest attempt: a digital-currency project called World Liberty Financial.

While details about the project are scant, the team behind it said this week that it will focus on “spreading U.S.-pegged stablecoins around the world” and ensuring the dominance of the U.S. dollar.

Stablecoins are a type of cryptocurrency that aims to maintain a 1:1 exchange ratio with government-issued currencies such as the U.S. dollar. The most popular stablecoin is tether, which traders have widely used to stash their cash, invest in other tokens and swap for traditional currencies. It has also been heavily used for illicit activities, including terrorism financing and drug trafficking.

Trump and his children’s potential involvement in a digital currency would create a new swath of conflicts of interest for the former president if he is re-elected in November. It would raise concerns over whether Trump might be inclined to push crypto-friendly regulations that benefit his own business—or whether businesses seeking to influence Washington would be inclined to buy Trump’s financial products.

Running a digital currency pegged to the dollar would create even knottier problems. While the president doesn’t control the value of the dollar, actions such as running budget deficits could affect its value.

During Trump’s first presidency, his business interests caused repeated concerns among government ethics experts. Foreign dignitaries, lobbyists and political groups that have interests in Washington opted to stay at Trump hotels or otherwise spend money at Trump businesses. That created the possibility they were trying to purchase influence with the president.

Presidents are excluded from federal conflict-of-interest rules, and critics during Trump’s first presidency found few lines of recourse when it came to the millions of dollars spent at Trump’s hotels during that time.

It isn’t the first time the former president has promoted products while on the campaign trail: Trump has also sold $399 gold sneakers and $59.99 bibles during his 2024 presidential campaign. Trump also launched crypto’s version of trading cards, called nonfungible tokens.

Trump and his two elder sons have been teasing about the so-called DeFi project on social media for weeks. DeFi stands for decentralized finance, an umbrella term that refers to financial services such as borrowing, lending and trading automated by software and without a human intermediary.

DeFi users borrow and lend to each other without a middleman such as a bank, with terms written directly into the software code. Crypto enthusiasts have long touted it as a way to democratize finance and improve financial inclusion.

“For too long, the average American has been squeezed by the big banks and financial elites. It’s time we take a stand—together,” Trump said in a recent post on his social-media platform Truth Social. The post included a link to the Telegram channel for the project.

The cryptocurrency sector is hoping to make headway in Washington if Trump is re-elected. Cryptocurrency interests have poured nearly $170 million into PACs that have been giving generously to pro-crypto candidates, making cryptocurrency one of the biggest industries spending on the 2024 election cycle.

The promotion of Trump’s crypto effort has attracted scammers who have tried to trick Trump followers by creating fake ads that offer tokens claiming to be associated with the project. Hackers targeted the X accounts of Trump’s daughter and daughter-in-law late Tuesday to promote a fake token claiming to be associated with the official project. The posts were deleted soon after.

The Trump family’s foray into DeFi adds to the crypto agenda he laid out at the annual Bitcoin Conference in July. The former president made a series of promises to the crypto industry, including the creation of a “strategic national bitcoin stockpile” and the establishment of a bitcoin and crypto presidential advisory council. In his Thursday speech at the Economic Club of New York, Trump reaffirmed his desire to make America the “world capital for crypto and bitcoin.”

Trump hasn’t always liked crypto, calling it a “scam against the dollar” just a few years ago. His position shifted by 2022, when he saw an opportunity to make money off NFTs.

Greece cracks down on excessive tourism

Curbs on short-term rentals and cruise ship traffic could damage crucial sector, warns hospitality industry

Greece has said it will crack down on short-term holiday rentals and cruise ship traffic as part of a set of measures to curb excessive tourism in the Mediterranean country.

But industry leaders warned the restrictions could harm a crucial economic sector at a time when Greece is on track to report a record number of visitors for the year.

“Tourism supports the economy with resources and jobs, but it must also pay its special share of social returns,” Prime Minister Kyriakos Mitsotakis said in announcing the measures late on Saturday at a trade fair in Thessaloniki, Greece’s second-biggest city.

Concerns have grown in Mediterranean countries such as Spain, Italy and Greece about the damage to local communities and the environment caused by surging visitor numbers and light regulation.

But tourism minister Olga Kefalogianni told the Financial Times: “There is no overtourism in Greece. What we’re seeing is overconcentration in specific areas during peak periods.”

Kefalogianni said the country must now look to balance tourism-fuelled growth while protecting its cultural and natural heritage and ensuring local wellbeing.

Economists estimate that tourism contributes more than 25 per cent to Greek gross domestic product, and Mitsotakis insisted it would continue to play a driving role in the country’s economy.

“It is very dangerous to present Greece as a place that is not welcoming to tourists,” he said on Sunday.

Mitsotakis announced the introduction of a fee of up to €20 for cruise ship passengers to the most popular islands such as Santorini and Mykonos. During the summer months multiple ships, some carrying thousands of visitors, dock every day at the most popular destinations.

George Koubenas, chair of Greece’s Union of Cruise Ship Owners, said the move unfairly targeted cruise ship passengers. “Cruise visitors don’t use local infrastructure like water and electricity to the same extent as other tourists,” Koubenas said, suggesting that a flat fee for all tourists, like that levied in Italian cities such as Venice, would be fairer.

Koubenas suggested that local communities should set clear limits on arrivals, with a well-defined allocation system for cruise ships to manage flows at small island ports.

Following similar limits imposed in Spain, Greece is also taking steps to regulate short-term rentals via online platforms such as Airbnb. Mitsotakis announced a one-year ban on new short-term rentals in three areas of Athens. Tourists often start or finish their holiday in the historic Greek capital before moving on to an island destination.

Andreas Chiou, president of the Greek Property Managers Association, said the ban was driven by pressure from hotel owners who viewed short-term rentals as a competitive threat. “There is no oversaturation of the market due to short-term leases,” he said.

He also criticised another new measure incentivising property owners to switch to long-term rentals that includes a three-year exemption.

“How can property owners, who renovated their homes for short-term rentals, make a profit on long-term leases?” Chiou asked, warning that owners could stop using official platforms to promote their properties, as has happened in cities such as New York.

A report by Grant Thornton for Greece’s Chamber of Hotels showed holiday rentals increased 28 per cent between 2019 and 2023, with available properties doubling in that period. Hotel bed availability, by contrast, increased just 3.5 per cent. Chiou said short-term rentals accounted for only 2 per cent of the overall rental market in Athens, citing his own association’s data.

Mitsotakis also announced that a climate crisis tax would be levied on hotel stays and short-term rentals from April to October, with revenues directed towards improving infrastructure in tourist areas.

“A significant portion of the revenue will go back to local communities, allowing them to better prepare for the burden they face each summer,” Mitsotakis said.

Italy recently proposed increasing tourist taxes to promote responsible travel. Its new proposals could see tourists pay a fee of up to €25 a night for luxury accommodation.

Yiannis Paraschis, president of the Greek Tourism Confederation, said imposing fees could make Greece less competitive as its tourism industry is still recovering from the economic crisis a decade ago and the coronavirus pandemic.

“We must be more cautious than our Mediterranean rivals,” Paraschis warned. “In Greece, tourism is vital to our economy in a way it isn’t for other countries.”

In 2023, the country welcomed a record 36.1mn visitors, and in the first half of 2024, tourist arrivals surged by 16 per cent to 11.6mn, according to the Bank of Greece, putting it on course for a record number of visitors this year.

New PM Michel Barnier works to put together a government against backdrop of worsening public finances

France has asked for more time to submit its debt and deficit reduction plans to the European Commission as new Prime Minister Michel Barnier works to put together a government against a backdrop of worsening public finances. 

The country’s finance ministry said it had asked Brussels to give it more time putting together the plans, which are due to be submitted on September 20. France would probably send them alongside the draft 2025 budget, due by mid-October, one EU official said.

“Like other member states in this year of transition to the new European budgetary rules, France has asked the commission for such an extension. This aims to ensure consistency between the plan and [France’s] draft finance law for 2025,” the finance ministry said on Sunday. 

Last week, outgoing finance minister Bruno Le Maire warned that the country’s public deficit would be higher than expected this year, rising to at least 5.6 per cent of gross domestic product. 

“The main risk is linked to an extremely rapid rise in spending by local authorities which alone could affect 2024 accounts by €16bn compared to the 2024-27 stability programme,” his letter to MPs said, in reference to spending plans sent earlier this year to Brussels.

Passing the country’s 2025 budget, which must be presented to parliament for debate at the start of October, will be the first big hurdle facing Barnier’s new government, and one that promises to be highly contentious in a hung parliament sharply divided along ideological lines. 

A veteran conservative politician and former Brexit negotiator for the EU, Barnier’s experience as a political dealmaker will be put to the test as he tries to forge a stable government in a highly fractured political landscape.

EU fiscal rules that limit spending to 3 per cent of GDP were suspended during the pandemic but have been reintroduced with new clauses and conditions.

France is one of seven EU member states facing an excessive deficit procedure, launched by the commission in June, a reprimand for breaching bloc rules that limit annual borrowing to 3 per cent of GDP. 

The commission will give instructions in the autumn on how to reduce spending once EU countries have submitted their multiannual plans for review. However, France still does not have a new government in place two months after snap elections returned a divided parliament. 

In his first interview since being named as PM by Macron this week, Barnier on Friday said he did not want to add the country’s debt. However, he is already facing pressure on spending plans from the different political forces he will need to balance in order to avoid having his government toppled. 

“The country can no longer afford to make reckless expenditures in a certain number of areas. I am thinking of immigration, but also of fraud,” said Marine Le Pen, leader of the far-right Rassemblement National, which came second in the July vote, in an interview with La Tribune Dimanche. 

The prime minister has been consulting with political leaders over potential ministers, but he will need support from his Les Républicains party, other conservatives and centrist groups, as well as the tacit agreement of the RN not to vote against him, if his coalition is to survive. 

“The next budget will undoubtedly be the most delicate of the Fifth Republic,” Pierre Moscovici, head of the national auditor, told Le Parisien at the weekend. “We absolutely must control our debt . . . If this continues, it would result in a massive departure from our commitments and our European partners.”

A commission spokesperson said: “A submission of the plan after September 20 is a possibility foreseen in the rules. Member States can agree with the commission to extend that deadline by a reasonable period. We cannot confirm at this stage whether we have received [France’s] request.”

Very few startups have raised enough money to build and support powerful generative AI models. Germany’s Aleph Alpha appeared to be one of them. Late last year, it touted an investment in excess of $500 million from the country’s industrial giants and one of its richest tycoons, cementing it as Europe’s greatest hope in developing advanced AI independent of Silicon Valley.

Now, it’s exiting that race.

Last week, Aleph Alpha announced a new strategy centered around its latest product, PhariaAI, an “operating system for generative AI.” It’s effectively software to help corporate and government clients use AI chatbots and tools, regardless of whether the underlying technology was made by Aleph Alpha or one of its rivals. The startup still plans to develop large-language models, or LLMs — the systems that underpin products like ChatGPT — but they’re no longer the centerpiece of its commercial strategy. Nor is it trying to outperform models from firms such as OpenAI or Meta.

The shift makes Aleph Alpha the latest high-flying AI startup to change course in a field increasingly controlled by a few well-capitalized giants. In the US, several prominent newcomers ditched ambitious plans after their founders took jobs at Microsoft, Google and Amazon. Startups behind leading AI models — including OpenAI, Anthropic and France’s Mistral — have also formed tight partnerships with these tech giants, who they rely on for cash and computing resources.

“The world changed,” Jonas Andrulis, Aleph Alpha’s chief executive, said in an interview. “Just having an European LLM is not sufficient as a business model. It doesn’t justify the investment.” He pointed to the consolidation of the field, and the expensive computing contest this set off, as factors behind his company’s “evolution.”

The shift means Aleph Alpha can grow its business without having to spend the monumental sums needed to maintain leading AI models. Yet Silicon Valley’s clout may not be the only reason behind Aleph Alpha’s pivot. Others close to the startup say it has been hobbled in the fast-moving AI market because of slow decision-making and difficulty living up to the unique pressures associated with being a national champion.

“As a founder, of course I think we should be moving faster,” Andrulis said, before adding that his company’s strategy was more developed than those of other generative AI rivals. “Nobody knows how to build business models that make any sense. We are certainly a step ahead there.”

Founded in 2019 by veterans of Apple Inc. and Deloitte LLP, Aleph Alpha pitched itself as a cutting-edge AI upstart committed to upholding “European values” like transparency, autonomy and regulatory compliance. In April 2022, the startup released Luminous, an AI model designed to parse and generate images and text in five languages. After ChatGPT launched seven months later — transforming AI from a niche research field into a top priority for investors and governments — everybody wanted in, including Germany.

“That attention needed a target,” Ludwig Ensthaler, a founding partner with 468 Capital, said in July. “And Aleph Alpha was it.”

Suddenly, Andrulis was meeting frequently with German Chancellor Olaf Scholz and appearing with Robert Habeck, Germany’s economy minister, to stress the importance of “AI made in Europe.” Last November, Habeck and Andrulis stood side-by-side to announce that Aleph Alpha’s latest fundraise had exceeded $500 million, and included German industry titans SAP SE and Bosch.

The outsized attention shocked even the small startup’s biggest boosters. After the 2023 round, when the company had around 60 employees, German business newspaper Handelsblatt put Andrulis on its cover with the headline, “All of Europe should hope that this entrepreneur is successful.” Ensthaler, who was Aleph Alpha’s first investor, recalled doing a double-take upon seeing it. “Is this a joke?”

The investor was impressed with the startup’s progress in a daunting field, but didn’t feel as if it had earned such breathless coverage. Behind the scenes, several Aleph Alpha insiders described the period around the fundraise as turbulent, with leadership debating the launch of a chatbot, expanding outside of Germany and bringing on Intel Corp. as a backer. At one point, investors weighed the idea of finding a new CEO before settling on hiring a chief operating officer, according to people familiar with the matter who asked not to be identified discussing private matters. (Andre Retterath, chair of the startup’s board, said directors did not consider replacing Andrulis.) Critical stories about the company in German media would later detail missed sales targets, product delays, customer complaints and senior staff turnover.

Scrutiny also centered on the startup’s unconventional financing, which the company only confirmed well after the fact. The bulk of its fundraise, €300 million, came as a 10-year research grant from the Dieter Schwarz Foundation, an institution formed by the German billionaire behind the retail conglomerate Schwarz Group. Only €110 million of the investment arrived as equity, while the remainder came from revenue guarantees from the startup’s investors. The company has never disclosed its valuation.

Normally, valuations serve as indicators of potential equity to investors, and this omission caused some outsiders to question whether Aleph Alpha was inflating its size with an eye-catching investment sum. Retterath noted that the deal’s unusual structure made a valuation difficult to calculate, but described it as “the most attractive” he had seen within the generative AI sector.

The arrangement, which tethered the company’s research efforts to the Schwarz Group, suited Andrulis’s unspoken strategy of prioritizing domestic growth above all else. The company walked away from a financing offer from Intel Corp. to instead focus primarily on domestic investors, according to people familiar with the plans who could not discuss financing deliberations publicly. Two other people who worked at the company who did not want to be identified speaking about internal strategies also said that Andrulis concentrated his sales efforts on German businesses and government agencies despite an internal push to expand internationally.

Germany’s tech market is relatively small. IDC, a market research firm, estimated that spending on computing and software in German-speaking countries would reach $330 billion by 2026, accounting for less than a third of Europe’s total projected spending.

Andrulis declined to comment on Intel’s offer, but he said he preferred a deal without any requirements to buy computing resources from investors. He described the financing round as oversubscribed and said that Aleph Alpha opted for backers that did not impose “strategic limitations” on the startup. (A spokesperson for Intel also declined to comment.)

Andrulis also said that while the company’s “road map” includes eventually expanding beyond its home country, “we cannot disappoint our German partners.”

As Aleph Alpha doubled down on Germany, another national rival was rising. A month after Aleph Alpha’s big announcement, Paris-based Mistral sealed a €385 million round to build its own large-language models. In the months that followed, Mistral brought in more money — hitting a $6 billion valuation in June — and released multiple new versions and models. Aleph Alpha’s model, meanwhile, languished without any notable updates.

Ten months after the height of its media attention, Aleph Alpha now has roughly 200 employees and is booking around €20 million in annual recurring revenue, according to two people familiar with the finances who asked not to be identified discussing private information. The company told investors it would net €20 million in total revenue in 2024 and reach €70 million next year, according to documents viewed by Bloomberg News. In 2023, it projected €5.9 million in sales but delivered shy of €1 million.

Andrulis wouldn’t comment on sales figures beyond saying the startup is on track to beat its targets this year. A spokesperson for Aleph Alpha said it will reach a “solid double-digit million figure” in revenue this year. Andrulis noted that Aleph Alpha currently has “30 to 40” customers, with 90 to 95% of its business in Germany. The startup’s joint venture with the German unit of PricewaterhouseCoopers LLP, formed this summer, will be announcing several prominent deals later this fall, Andrulis said.

Thomas Odenwald, a German executive who spent four months as vice president at Aleph Alpha before leaving in April, said many of the nation’s businesses show little aptitude for taking risks and making swift decisions. “This concept of ‘fail fast’ — you need to internalize that as a startup,” said Odenwald, who lives in California. “It goes against the traditional German mindset.”

Still, Ensthaler, the early investor, noted that businesses looking to use AI in Germany must conform to particular data privacy and regulatory requirements. Aleph Alpha, he said, is “best positioned to cater to those needs.” Other observers have also suggested that Europe’s AI startups are better suited to compete outside the costly LLM race. Adrian Locher, a general partner with Merantix, a venture capital firm in Berlin, said offering “highly specialized” AI applications for particular industries could be a model that would flourish in Europe. “That doesn’t necessarily mean Aleph Alpha has to be the ‘OpenAI of Europe’ to be a success,” he said.

For now, Aleph Alpha is settling into its new strategy. In July, it announced that government employees in its home state of Baden-Württemberg would soon start using the system now called PhaidraAI. During an interview, Andrulis briefly showed it off — an interface that lets public employees tap AI tools to do tasks like manage files, sift through documents or write emails.

The government is using Aleph Alpha’s model to run part of that system. For another part, it’s using an LLM built by Mistral.

The job market is flashing a classic pattern that signals a recession is coming, Citi says

The U.S. economy added 142,000 jobs last month, falling short of forecasts, while the unemployment rate dipped to 4.2%.

Private-sector hiring totaled 118,000, but the three-month moving average dropped below 100,000. According to Citi Research analysts led by chief U.S. economist Andrew Hollenhorst, that’s the weakest three months for the private sector since 2012, excluding the pandemic.

Meanwhile, the unemployment rate has climbed by a nearly a full percentage point from its low, he added in a note on Friday, pointing out that layoffs that were once seen as temporary have now been normalized.

“The takeaway from the range of labor market data is clear – the job market is cooling in a classic pattern that precedes recession,” he wrote.

In a follow-up note on Friday, Hollenhorst and company zeroed in further on the three-month average of private-sector job gains slipping below 100,000, saying that pace is usually only seen around recessions.

Adding more concern is that revisions to prior jobs reports indicated payroll growth was overstated by as much as 70,000 per month.

“Data released this week left us more certain that the US economy is headed at least into a substantial slowdown (and more likely a recession), but it is still uncertain as to how exactly the Fed will respond to the deteriorating outlook,” he said, adding that Citi’s base case is for 125 basis points of rate cuts this year.

Other signs of an economic downturn include slowing auto sales and lackluster home purchases, which remain subdued despite the recent drop in mortgage rates, according to the note.

Hollenhorst has been a relative contrarian this year by maintaining a dimmer view on the economy, even as the Wall Street consensus shifted to a soft landing.

In July, he predicted the Fed would slash rates by 200 basis points through mid-2025 as the economy heads for a sharper decline. In May, he doubled down on his warning that the U.S. is headed for a hard landing and that Fed rate cuts wouldn’t be enough to prevent it. That followed a similar forecast in February, even amid blowout jobs reports.

To be sure, the consensus hasn’t shifted back to a recession as economists point to low jobless claims, robust corporate earnings, strong GDP readings and estimates, upbeat retail sales, and rising wages.

But elsewhere on Wall Street, analysts have flagged other recession indicators that are sounding the alarm now. On Friday, Interactive Brokers senior economist Jose Torres pointed out that the yield curve has de-inverted, which has preceded every recession since 1976.

An inversion—where short-term yields top long-term yields—has been a reliable recession indicator as it signals that investors see more risk in the near future.

Yields were inverted for about two years until recently, but their de-inversion doesn’t mean the economy is in the clear.

“Indeed, a positive spread across the 2- and 10-year Treasury maturities following a long period of a negative difference has historically preceded economic downturns,” Torres warned.

U.S. debt is so massive, interest costs alone are now $3 billion a day

With U.S. debt now at $35.3 trillion, the cost of paying the interest on all that borrowing has soared recently and now averages out to $3 billion a day, according to Apollo chief economist Torsten Sløk.

And that includes Saturdays and Sundays, he pointed out in a note on Tuesday.

The daily interest expense has doubled since 2020 and is up from $2 trillion about two years ago. That’s when the Federal Reserve began its campaign of aggressive rate hikes to rein in inflation.

In the process, that made servicing U.S. debt more costly as Treasury bonds paid out higher yields. But with the Fed now poised to start cutting rates later this month, the reverse can happen.

“If the Fed cuts interest rates by 1%-point and the entire yield curve declines by 1%-point, then daily interest expenses will decline from $3 billion per day to $2.5 billion per day,” Sløk estimated.

Meanwhile, the federal government closes out its fiscal year at the end of this month, and the year-to-date cost of paying interest on U.S. debt was already at $1 trillion months ago.

But even if Fed rate cuts lighten the burden on interest payments, the next president is expected to worsen budget deficits, adding to the pile of total debt and offsetting some of the benefit of lower rates.

In fact, a recent analysis from the Penn Wharton Budget Model found that the deficit will expand under either Donald Trump or Kamala Harris.

But there’s a big difference between the two.

Under Trump’s tax and spending proposals, primary deficits would increase by $5.8 trillion over the next 10 years on a conventional basis and by $4.1 trillion on a dynamic basis that includes the economic effects of the fiscal policy.

Under a Harris administration, primary deficits would increase by $1.2 trillion over the next 10 years on a conventional basis and by $2 trillion on a dynamic basis.

Still, JPMorgan analysts called the outlook unsustainable, regardless of who wins the presidential election, while acknowledging the prospect of bigger deficits with Trump.

“Irrespective of the election outcome, the trend since the pandemic has been profligate fiscal policy that is absorbing substantial amounts of capital and is incentivizing additional private investment,” the bank said. “At the same time, the en masse retirement of baby boomers is shifting a substantial share of the population from a high-savings period in life to a low-savings period, depressing the supply of capital.”

In an interview with DealBook, the U.S.T.A. chief Lew Sherr discussed the U.S. Open’s record attendance, the prospect of a new tennis league, and fighting with pickleball for court space.

This weekend, Jessica Pegula and Aryna Sabalenka, and then Jannik Sinner and Taylor Fritz, will face off in championship matches as the U.S. Open concludes what has been a booming 144th run. The tournament is expected to draw more than a million in fans for the first time, sell $10 million worth of Honey Deuce cocktails and offer up its biggest prize pool ever.

But the event’s success highlights the sport’s perennial struggle to get tournaments right the rest of the year. Professional tennis has been troubled by complicated scheduling and late start times that tire players and confuse fans. With private equity firms and sovereign wealth funds hungry to invest in tennis as they plow into sports globally, the big question is whether tennis can fix itself on its own.

DealBook’s Lauren Hirsch spoke with Lew Sherr, the chief executive of the United States Tennis Association, about how the sport plans to approach those challenges. The interview has been edited and condensed.

What explains the surge in attendance at the U.S. Open, beyond the growth of tennis as a sport?

We’re seeing the results of investing in fan week, a period before the main draw when the top players are here practicing. This year we had 216,000 people come through the gates that week free of charge. Last year, we were under 160,000 fans.

Years ago, we worried that investing in that programming might cannibalize first-week sales. It’s been the opposite. When our long-term partnerships come up for renewal, the fact that when the deal was signed, we might have been hosting 700,000 fans and now we’re up more than a million — there’s clearly more value in that partnership.

Alicia Keys, Tony Goldwyn and Simone Biles were among the many celebrities spotted in Arthur Ashe Stadium. We are coming off a huge Olympics, where it felt like celebrities were everywhere. Has there been any extra effort to recruit celebrities to attend the U.S. Open recently?

We’ve made an effort for years and years to lean into that aspect of our sport and our event. Many of our sponsors now are active in facilitating that. We have quite a sophisticated machine that supports it. But so much of that celebrity attendance really is inbound inquiries from some of the biggest celebrities in the world that are just keen to be here.

U.S.T.A. has invested big in building new tennis courts across the country. To what extent has this driven the great tennis and pickleball rivalry?

Where pickleball and tennis come into conflict is when someone makes a decision to convert a tennis court into pickleball courts, even though they didn’t have enough tennis courts to begin with, solely because it’s so much cheaper to just paint over a tennis court. We’re trying to address that.

We provide enormous support in terms of funds, grants for court refurbishments and court construction. And we’re also now starting to take advantage of those pickleball courts for beginning tennis play.

Tennis has a huge fan base, but investors have argued its business is broken. The major parties in tennis have discussed creating a premier league that includes the sport’s best-known tournaments, beyond the majors, like a tennis version of Formula 1. Is that the solution?

About 70 percent of tennis fans really are only paying attention to the Grand Slams. What we would love to see is more attention to tennis on a week-to-week basis. We’re working very closely with the tours, the Association of Tennis Professionals and the Women’s Tennis Association.

How much of the potential financial upside from a premier league would be from TV rights?

We are the third-most popular sport on the planet, but probably come in eighth or ninth against other sports in our commercial efforts, which are primarily driven by TV rights. The solve for that is to create more focus on premier events where the best players are playing the best players.

What is the risk that lower-tier tournaments are dwarfed by that arrangement?

Proceeds generated at the top would need to be redistributed to subsidize prize money and events at lower levels. I’m not sure private equity coming into the sport, or others coming into the sport, would necessarily be focused on reinvesting.

Is there any concern that a premier league would diminish the prestige of the four Grand Slams?

We feel very secure in where our event sits, the history of our event, the investments we’ve made into infrastructure.

Have discussions progressed to the point of hiring a banker or other advisers?

No. These are very productive and cordial conversations that we’re having with the ATP and the WTA and the four Grand Slams to try to work through really complicated issues.

There has been a lot of discussion about maximizing the value of men’s and women’s tournaments by selling them in one combined package. Is one barrier to that kind of deal figuring out how to value each business?

At the U.S.T.A., that issue was settled more than 50 years ago. We started offering equal prize money in 1973, We don’t differentiate when we sell our broadcast rights. It is the U.S. Open: When you buy a ticket, you know you’re going to see a men’s match and a women’s match.

When it comes to combining, the reality is what would be best for the sport is getting to that place. There are some challenges, but I think those are conversations that are happening now between the ATP and the WTA.

CVC Capital Partners is now a minority investor in the WTA Has having an institutional investor had any broader impact on the sport?

I’m not within the WTA and I’m certainly not in their board meetings. What I would say is CVC coming into the sport, and what accompanied that, which was a separation of the commercial arm of the WTA from the sporting arm of the WTA, has probably brought more energy, more focus, more resources to pursuing commercial opportunities. My understanding is they’ve had some meaningful revenue growth as a tour in the past year.

And, of course, the elephant in the room is Saudi Arabia. To what extent has the Saudi threat helped spur these conversations around the premier league?

We’re not involved in any direct conversations with the Saudis. I know it’s been reported the Saudis are in discussions with the ATP about becoming part of that tour and bringing an event to Saudi Arabia. I think it’s reflective of the global interest in the sport.

Murmurs of a sale come just as Tapestry prepares to go to court and defend its $8.5 billion acquisition of Capri.

The reshuffling seems to have already begun at Tapestry Inc., which multiple sources have said is close to selling off its Stuart Weitzman brand — just as the company prepares to defend its $8.5 billion buyout of Capri Holdings Ltd. in Manhattan federal court on Monday.

The brand’s chief executive officer Giorgio Sarné is also said to have left the company.

A spokesperson for Tapestry declined to comment.

Tapestry owns Coach, Kate Spade and Stuart Weitzman and is looking to expand with Capri’s portfolio of Michael Kors, Versace and Jimmy Choo.

The Federal Trade Commission sued to stop the deal in April, charging, in part, that the buyout would give the firm undo control over the accessible luxury handbag market.

The sale of Stuart Weitzman wouldn’t change that equation, but it would demonstrate a certain willingness for Tapestry to shake up its portfolio ahead of the trial. A deal for Stuart Weitzman would also help Tapestry raise some extra funds and offload a business that has struggled recently.

Even before the FTC challenged the acquisition of Capri, there was speculation that Tapestry would seek to sell some of its smaller businesses to help fund the deal and focus on the larger brands.

For the fiscal year ended June 29, Stuart Weitzman’s revenues fell 14 percent to $241.5 million with operating losses of $21.2 million, according to Tapestry’s latest financial report. The brand has 34 doors in North America and 60 stores in the rest of the world.

On a call with analysts last month, Joanne Crevoiserat, Tapestry’s chief executive officer, said of Stuart Weitzman: “Our results for the year were challenged, significantly impacted by external pressures in the brand’s two key markets of North America and Greater China. Despite disappointing financial results, we continue to focus on brand building initiatives to drive awareness, growth and profitability long term.”

During the fiscal fourth quarter, Stuart Weitzman expanded its assortment of shoes and extended into new and emerging categories, including men’s and handbags.

“Importantly, new innovation is driving traction at wholesale with the business growing double digits at [points of sales] in North America in the fourth quarter,” Crevoiserat said. “Further, order bookings through spring ’25 season are up over 30 percent to last year. This will support an improvement in revenue and profitability trends in the year ahead.”

Tapestry, then Coach Inc., acquired Stuart Weitzman in 2015 from Sycamore Partners in a $574 million deal.

— With contributions from Miles Socha