TheChek News Flow

Little-known company specialises in buying, turning round and selling struggling telecoms groups

The boss of a little-known UK telecoms group received £131mn in total pay last year, making him the highest paid chief executive of a London-listed business. 

Eamonn O’Hare of Zegona received £129mn from a management share incentive scheme in the year ending December 2024, according to the company’s annual report, in addition to base salary and other benefits totalling slightly less than £1.5mn.

The company’s chief operating officer Robert Samuelson, was paid a total of £66mn in 2024. The figures were first reported by the Sunday Times newspaper.

Zegona, which was founded by O’Hare and Samuelson — both former Virgin Media executives — in 2015, specialises in buying, turning round and selling struggling telecoms groups. 

The most high-profile of its deals was its €5bn acquisition of Vodafone’s Spanish business last year.

Since a 2023 capital raise to help finance the deal, Zegona’s share price has risen from about £1.50 in November that year to more than £8.

In its annual report, Zegona said it had returned Vodafone Spain to growth and cut costs, including a 28 per cent reduction in headcount.

The report noted the “exceptional contribution” of management over a three-year period from October 2021 to October 2024.

Zegona did not immediately respond to a request for comment.

The pay for the Zegona executives is much higher than the UK standard, which has long lagged behind the US.

According to the High Pay Centre, a UK think-tank, median FTSE 100 CEO pay excluding pension, is £4.2mn. The highest paid FTSE 100 boss, AstraZeneca chief Pascal Soriot, took home just under £15mn last year.

Denise Coates, chief executive of family-owned gambling business Bet365, was paid more than £150mn last year.

Top American astronomers hunt for clues about a 48-foot-wide giant that Beijing isn’t talking about

Astronomer Robert Kirshner investigates some of the universe’s biggest questions: What happens when a star explodes? Is the universe still expanding?

He recently added a new mystery to the list: Is China quietly building the world’s biggest telescope? He would like to know, because he leads a rival telescope project in the U.S.

There are clues. In January, state-owned Nanjing Astronomical Instruments said on social media that it won a $22 million bid for a dome to surround a 48-foot telescope. In an April social-media post, students visiting a science institute mentioned researchers showing them mirror arrangements for such a telescope. And a top Chinese astronomer told state media he wanted to finish the telescope before he retires.

Yet Chinese officials haven’t directly acknowledged the observatory, which would threaten American technological leadership and potentially give Beijing a military advantage.

“You would expect, normally, some kind of chest thumping,” said Kirshner, a Harvard emeritus professor.

The leading Chinese astronomer and his institute, a national research organization that appears to be in charge of the telescope, didn’t return requests for comment for this article.

If China is building the big scope, that raises another question.

“Why the hell are they doing that?” said Matt Mountain, head of the nonprofit organization that manages observatories, as well as the Hubble and James Webb space telescopes, for the National Aeronautics and Space Administration.

Mountain has two hypotheses. First, astronomical advances benefit both scientific and military purposes, as astrophysicist Neil deGrasse Tyson highlighted in his book “Accessory to War.” Huge telescopes can look at military satellites, not just stars and planets.

The second hypothesis: Beijing is investing in astronomy to inspire children to enter the sciences—so it can surpass the U.S. in a couple of decades.

“Astronomy is an entry-level drug for science, technology, engineering and math,” said Mountain.

American institutes are the New York Yankees of modern astronomy. By Kirshner’s count, 18 of the 23 astrophysics-focused Nobel Prize winners in the last half-century worked in the U.S.

While space telescopes such as the James Webb get more attention these days, those on the ground still matter. They are easier to service and much bigger, offsetting disadvantages such as light pollution and atmospheric distortions.

Bigger telescopes mean sharper images, making it easier to determine the distance between faraway objects, Kirshner said. Astronomers can then discover more planets orbiting stars in the Goldilocks temperature range that could support life.

The Hubble and Webb space telescopes have mirrors with diameters of about 8 feet and 21 feet, respectively. The four biggest ones currently on Earth—one in Spain and three in the U.S.—are all roughly 33 feet in diameter.

If China completes a 48-foot telescope soon, it would be the world’s biggest, unless a delayed 128-foot European telescope in Chile is finished first.

Kirshner’s Thirty Meter Telescope group, an international project with U.S., Canadian, Indian and Japanese institutions, proposes a 98-foot telescope on Hawaii’s Big Island. Instead of making one massive mirror, which would require mountain transport and the construction of an unfeasibly huge furnace, it would use 492 hexagonal segments, each 4.7 feet wide.

These giant telescopes cost roughly $1 billion to $2 billion, Mountain said, and costs rise with size. They also take years to build.

Drawing on political rather than scientific wisdom, Kirshner realized it would help make the case in Washington for big-telescope funding if he could show China was building one too.

Kirshner’s best sources have been Chinese-speaking peers who informally confirmed the development of a telescope site in the Tibetan Plateau, in China’s southwest. Mountain says Chilean astronomers told him China was also exploring a Southern Hemisphere observatory in Chile.

Armed with the information, Kirshner met congressional staffers and National Science Foundation officials.

He ran into a roadblock in May, when President Trump proposed to Congress that the NSF’s annual budget be cut to $4 billion from $9 billion. Trump’s science and technology adviser said then that scientific progress had stalled in some fields and more federal money wouldn’t necessarily mean more scientific impact.

In its budget request, the NSF proposed advancing only the Giant Magellan Telescope, which is backed by a California-headquartered consortium. At 83 feet wide, the Magellan would be bigger than China’s but smaller than Kirshner’s proposed telescope. Like the European telescope, this observatory would be in Chile.

The Magellan’s location would leave China with the Northern Hemisphere’s biggest telescope. Earth’s curvature means each hemisphere offers different views.

Kirshner got a reprieve in mid-July. A Senate spending committee recommended minimal cuts to the NSF, and said it supported both the Magellan project and Kirshner’s Thirty Meter Telescope.

Kirshner called on Congress to endorse what he called a “vigorous response to China’s efforts.”

Americans Aren’t Sold on Trump’s ‘Big, Beautiful’ Tax Law

WSJ poll says 52% of respondents oppose the package, showing Republicans’ challenges in touting its benefits ahead of the midterms

WASHINGTON—Americans view President Trump’s tax-and-spending law as a win for wealthy households and large corporations that will hurt poor people and widen federal budget deficits, according to a new Wall Street Journal poll.

The findings show Republicans’ challenges in selling the law’s benefits as they try to hold their slim control of the House and Senate in next year’s midterm elections, and the poll demonstrates how Democrats might be able to capitalize on voters’ skepticism to stage a comeback.

Overall, the law drew 42% support and 52% opposition, performing slightly worse than Trump himself in the poll. It generated negative marks from 94% of Democrats, 12% of Republicans and 54% of independents.

Nearly 70% of overall poll respondents said the law would help the wealthy, while just 7% said that group would be hurt. At least half of poll respondents said the legislation would harm poor people, the working class, Social Security beneficiaries, the U.S. economy, Medicaid recipients, nutrition-assistance recipients and the federal budget deficit.

“Cutting Medicaid is unpopular. Cutting food assistance is unpopular,” said Sen. Brian Schatz (D., Hawaii). “Cutting those things in order to fund tax cuts for the very wealthy is unpopular, so it’s like it was designed in a lab to be unpopular.”

The law contains more in tax cuts than spending cuts, and it is projected to increase budget deficits by $3.4 trillion through 2034, compared with doing nothing, according to the Congressional Budget Office. In the short run, that means tangible benefits for tens of millions of Americans in bigger paychecks and larger tax refunds, and Republicans say they are confident the law’s standing will improve as Americans learn more about it.

Republicans said they are proud of the law and are confident they can highlight its border security, energy production and tax-cut provisions, and argue that Democrats effectively voted to increase taxes by opposing the tax-cut extensions.

“It’s wildly popular when people hear what’s in the bill. It’s a great bill,” said Rep. Richard Hudson (R., N.C.), who runs House Republicans’ campaign arm. “So we just need to tell the truth.”

Although Americans have a clear view of many provisions, and they favor Trump’s new tax cuts, they are mixed on what the legislation overall means for them, leaving openings for both parties to shape public opinion. Respondents were nearly evenly split on whether people like them would benefit. And 39% said their households would mostly be harmed by the legislation with another 20% saying it would make no difference to them.

The Wall Street Journal poll of 1,500 registered voters was conducted July 16 to July 20 by two firms—one run by Democrat John Anzalone and the other by Republican Tony Fabrizio. The margin of error for the full sample is plus or minus 2.5 percentage points.

Respondents were reached by landline or cellphone, with some respondents contacted by text messages and invited to take the survey online.

The poll shows paths for Republicans to promote the law. New tax cuts—breaks for tipped workers, senior citizens and overtime pay—all generate strong support, winning not just a supermajority of respondents but also a majority of Democrats. In particular, Trump’s “no tax on tips” policy has broken through to voters as a positive—and is still being overwhelmed by the rest of the legislation and opposition to tax cuts for high-income people.

“People know about the fact that it includes no tax on tips and they really like that,” said Molly Murphy, president of Anzalone’s firm, Impact Research. “It’s not outweighing their concerns about cuts to healthcare, cuts to food services, kind of the other pieces in the bill.”

Trump signed the legislation—the “one big, beautiful bill”—on July 4, and it is the biggest policy accomplishment of his second term so far. The law extends tax cuts that were scheduled to expire Dec. 31, lowers projected spending on Medicaid and nutrition assistance, boosts funding for immigration enforcement and national defense and adds new tax breaks for businesses and middle-income households.

Support for changes to Medicaid and nutrition assistance vary greatly depending on how they are described. A majority of poll respondents oppose cutting Medicaid, the health insurance program for lower-income households. But when cuts are described as work requirements and more frequent eligibility checks—a significant part of the plan—a majority is in favor.

They support making able-bodied recipients work 20 hours a week by a 62% to 34% margin, but that backing vanishes when they are asked if they favor removing benefits from people who don’t comply with a work requirement.

Democrats have described work requirements and other Medicaid changes as cuts to the program and they have warned that changes to state funding formulas will cause benefit reductions and hospital closures. Republicans say the law targets waste, fraud and abuse in the health insurance program.

“Any of the negative polling is because of Democrats’ lies,” said Rep. Jason Smith (R., Mo.), chairman of the House Ways and Means Committee.

Republicans may benefit from the implementation schedule they wrote. Some new tax cuts started this year and will show up in larger tax refunds in early 2026—before the midterms. That was an intentional choice in contrast to the 2017 tax law. Then, GOP tax cuts largely arrived through smaller paycheck withholding in 2018 and not refunds that were more visible to voters.

The largest spending cuts, meanwhile, won’t take effect until after the midterm elections.

“Next year, they’re not going to have people kicked off Medicaid,” Smith said. “Next year, they’re going to have no tax on tips, no tax on overtime, tax relief for seniors. All of that’s going to be there when they file their taxes.”

Still, Americans on health-insurance exchanges might pay higher prices because of Republicans’ decision—so far—not to extend expanded premium subsidies that expire after this year. And hospitals and states are already discussing ways to cope with the future cuts in ways that voters might notice.

In a recent interview with The Wall Street Journal, House Minority Leader Hakeem Jeffries (D., N.Y.) said Democrats will continue holding rallies and giving speeches, noting it will be “incredibly important” for them to explain the legislation’s negative consequences.

“We believe that if we reach enough people over the next 15 months, this Republican majority will be rejected,” Jeffries said.

Democrats say they see the law as the defining midterm election issue and are planning events at hospitals and in GOP-held districts to highlight its downsides.

German carmakers set for €10bn cash flow hit as Trump tariffs bite

Higher levies mean rising costs for importing into the US, parts procurement and supply chain adjustments

Germany’s top three carmakers are set to have more than €10bn wiped off from their cash flows this year as US tariff costs add pressure to an industry already battling sluggish volumes and an influx of Chinese electric vehicles.

The car industry has been one of the hardest hit by Donald Trump’s trade war after the US president imposed 25 per cent tariffs on imports of foreign-made vehicles.

Analysts expect carmakers’ cash flows generated from their automotive business to be squeezed. They are likely to fall from €9.4bn last year to €3bn at Mercedes-Benz; from €7.1bn to €3.5bn at Volkswagen; and €4.8bn to €4.4bn for BMW, according to data from Visible Alpha.

The position could deteriorate further as analysts adjust their forecasts to reflect VW’s cut in its automotive net cash flow guidance for the year to between €1bn and €3bn, from its previous range of €2bn to €5bn.

The tariff fallout has not been fully reflected in second-quarter results, because some carmakers stocked up and worked their way through their pre-tariff inventory while awaiting the outcome of trade talks.

However, higher tariffs will mean rising costs for exporting to the US, procurement of parts as well as supply chain adjustments, which would put pressure on cash flows.

“The question in my mind is: do we take comfort from the fact that the tariff impact in the second quarter is less than we first feared or is this a false sense of security?” said Michael Tyndall, senior global autos analyst at HSBC.

Volkswagen, Mercedes-Benz and BMW are already paying a 27.5 per cent tariff for many shipments to the US from countries such as Germany and Mexico.

On Friday, VW revealed a €1.3bn tariff hit in the second quarter and predicted the burden would increase to several billion euros if the car tariffs were not lowered. It had negative net automotive cash flow of €523mn in the second quarter.

General Motors surprised investors when it said tariff costs were likely to be bigger in the third quarter than the $1.1bn reported during April to June, as it warned of up to $5bn in annual impact. 

Analysts expect GM’s adjusted free cash flow for its car business for the year to halve to $7.7bn from $14bn.

Stellantis has said it would take a €300mn hit from Trump’s tariffs during the first half, but conceded the impact in the second half would be bigger as it expects up to €1.5bn by the end of the year.

Tesla faced $300mn in additional tariff-related costs in the second quarter and warned this figure would increase through the year.

In May, BMW bullishly predicted that US tariffs would be lowered from this month. While Washington has not yet reduced the levies, people close to the talks have told the Financial Times that the EU and US are closing in on a trade deal that would set the tariff on most European imports at 15 per cent. It remains unclear whether cars will be included.

However, for the carmakers, costs are already rising as suppliers, which have slimmer profit margins, have swiftly managed to pass on higher tariffs not just on foreign-sourced components but also on materials such as aluminium and steel.

Among suppliers, Swedish seatbelt and airbag maker Autoliv raised its annual guidance on sales to reflect the tariff payments following a record second quarter.

“We successfully recovered approximately 80 per cent of the tariff costs during the second quarter, and expect to recover most of the remaining portion later this year,” its chief executive Mikael Bratt said.

Thomas Besson, head of autos research at Kepler Cheuvreux, said European automakers have accumulated rich cash piles following the sales surge and higher vehicle prices the industry enjoyed after the Covid-19 semiconductor crisis. At VW, Mercedes-Benz and BMW alone, their industrial liquidity is over €100bn, meaning the €10bn hit can be absorbed in the short term.

Nevertheless, pressure on their cash positions and profit margins comes at a time when companies such as VW face the need to restructure, in order to bring down their excess capacity at their factories and fix their cost structure to compete against BYD and other Chinese rivals.

“Some companies are still buying back shares when maybe they shouldn’t. They are pretending that everything is fine when everything is not fine,” Besson said. “They are leveraging this silver lining of a strong cash position but they might be consuming it too fast rather than using it more wisely.”

Mark Wakefield, global automotive market lead at AlixPartners, said carmakers were likely to pass on 80 per cent of the tariff costs, which he estimated would total $30bn on the basis that trade deals for lower levies would be reached with Europe, Mexico and other countries.

As making cars more expensive for American consumers would be politically sensitive, he said companies may choose to raise prices more discreetly by reducing sales discounts and changing the financing terms for leasing.

While the tariff costs may be mitigated by raising car prices, Wakefield explained carmakers would still suffer “cash erosion in a different way from lower volumes” if consumer demand fell away with the rise in vehicles prices for potential buyers.

Software group Auterion to ship 33,000 AI drone ‘strike kits’ to Ukraine

Pentagon-backed deal aims to help combat mass attacks by Russia

US-German software company Auterion will send tens of thousands of its artificial intelligence drone “strike kits” to Ukraine to help it combat mass attacks by Russian drones. 

Lorenz Meier, Auterion chief executive, said the company would ship 33,000 of its AI strike systems to Ukraine before the end of the year under a new contract with the US Pentagon. 

The company’s software is already being used in Ukrainian drones operating combat missions against Russia, but the new commitment, Meier told the Financial Times, was “10 times in scale”. 

“So we’ve shipped thousands and we’re now shipping tens of thousands,” he said, adding that the scale was “unprecedented”. 

Russia’s air campaign has escalated in recent weeks, with hundreds of Iranian-designed Shahed attack drones used in each attack. A single bombardment now frequently surpasses the number of drones previously launched over the course of a month. Major cities are being targeted with increased frequency and scale. 

The swarm tactics are also breaching Ukraine’s air defences more often, with strikes hitting targets at roughly three times the usual rate in recent months, according to official data. 

Auterion’s “strike kits” — miniature computers known as Skynode that run the company’s software and include a camera and radio — can transform manually controlled drones into “AI-powered weapons systems” that cannot be jammed and can track a moving target from as far away as 1km, said Meier. 

The commitment comes after Auterion, which is headquartered in Virginia in the US, secured a contract worth close to $50mn from the Pentagon to deliver the systems. The contract is part of the US government’s security assistance to Ukraine, said Meier. It was not part of a drone “mega-deal” that Ukrainian President Volodymyr Zelenskyy last week said he was discussing with his US counterpart Donald Trump, with the aim of boosting industrial co-operation between the two countries.

But Meier said that his company had “pioneered” US-Ukrainian co-production.

“It’s basically acknowledging that the battle-hardening that has happened in Ukraine of drone products is relevant. That it’s a way to support Ukraine, but it’s also technology that . . . Nato countries want to get their hands on.”

The company, he added, was “not trying to compete with what’s already in Ukraine”.

“They have a fantastic drone industry. What we want to contribute are things that they do not have already and that are more software-defined warfare-centric.”

Zelenskyy told reporters on Thursday that Ukrainian production of interceptor drones was already under way but that more financing was needed to scale up operations.

“On the plus side, four companies are solid, and 10 will have the capacity. I say ‘will have’ because, so far, they have only manufactured individual units, and they lack the money for this,” said the president. “The production costs vary — some are more expensive, some are cheaper, with slightly different capabilities accordingly.”

At present, the overall cost of this effort was $6bn, he added.

Meier said he expected further deals for Auterion software with European countries. The company also has offices in Munich.

Germany, which this year committed to unlimited borrowing to fund higher defence spending, is the second-largest supplier of military support to Ukraine after the US.

On Monday, German defence minister Boris Pistorius said that Berlin was financing the production of long-range drones in Ukraine to help improve its defences.

Since Russia’s full-scale invasion began in February 2022, Ukraine has become a test bed for cutting-edge military technology. Kyiv is regarded by many as the drone capital of the world, with a large supply chain for drone parts. 

Auterion’s software, said Meier, would enable the “next evolution in warfare”, allowing swarms of autonomous drones to communicate with each other. 

“What we are providing is leapfrogging what’s on the battlefield right now, which is to go to AI-based targeting and swarming”. Humans would always select the targets, though, he added. 

Germany to avoid EU punishment for breaching budget rules

Exemption for higher defence spending will help Berlin avoid corrective measures, says bloc’s economy commissioner

Germany will escape punishment for breaching strict EU budget rules thanks to an exemption that accounts for its increase in defence spending, Brussels’ top economic official has said.

Europe’s largest economy is forecast to record an excess deficit of 3.3 per cent in 2025, but this is fully accounted for by an increase in defence spending, EU economy commissioner Valdis Dombrovskis told the Financial Times. Therefore Berlin “is likely not to end up in [the] excessive deficit procedure”, he said.

The EU rules — which Germany helped design — dictate member states must keep their budget deficit within 3 per cent of GDP and public debt below 60 per cent of GDP. A country could face fines if it does not take corrective measures to meet the rules.

A final assessment of Germany’s position will take place next spring when full data for 2025 is available, Dombrovskis said, adding: “We have to see the execution, because it’s close [but] if everything holds, then it should not be the case for this year’s budget.”

Berlin’s narrow escape signals a willingness from Brussels to allow the bloc’s largest economy to spend lavishly at a time of higher defence needs and low growth.

Germany plans to exceed a 3 per cent annual deficit threshold this year to the end of 2027, according to its own fiscal plan.

But the “national escape clause”, invoked by Germany and 15 other EU countries, allows member states to spend up to 1.5 per cent of their output on defence over four years without breaking rules.

The clause was added at Germany’s behest this year to accommodate higher defence spending, given US demands on EU countries to boost their own security and a new Nato target to spend 5 per cent of GDP on defence by 2035.

The request was a stark about-face from Germany, which during a recent reform of fiscal rules asked for strict safeguards for countries that breached EU debt and deficit thresholds.

In negotiations over the past few months with Berlin over its fiscal plan, Brussels granted Germany a right to “back load” measures to reduce its budget deficit towards the later years of its plan.

Brussels has also accepted Germany’s estimate for the potential growth impact of German Chancellor Friedrich Merz’s €500bn infrastructure investment fund and increased defence spending at 0.9 per cent on average until 2041 — up from 0.3 per cent in 2025 — something which German officials stress is allowed.

“We are not overstretching the rules,” said Armin Steinbach, chief economist at the German finance ministry.

Brussels’ leniency towards Berlin is due to its relatively low debt levels, projected to come in only slightly above the EU’s 60 per cent threshold at 63.8 per cent of GDP this year. Berlin’s investment is also expected to boost growth and generate positive spillovers for the bloc.

“The European Commission has been asking Germany to increase its infrastructure investment for years, and so now we see this actually happening,” Dombrovskis said. “Our recommendation is . . . to actually increase defence spending in coming years.”

But critics said the commission was prone to bending rules for Germany and other large EU economies.

“The commission has been quite lax in its interpretation of the fiscal rules towards Germany,” said Guntram Wolff, a senior fellow at think-tank Bruegel and a professor of economics at the Free University of Brussels.

“At some level, that is understandable given that debt levels are low and also the deficit levels are small compared to France. At another level, it is weakening the just reformed fiscal rules.”

Brussels has a patchy history of enforcing the rules, designed in the late 1990s, with both Paris and Berlin falling foul of them in the early 2000s without incurring sanctions.

The commission has until September 11 to formally assess Germany’s fiscal plan, but officials are confident it will be approved.

Why a $200bn US rail megamerger could still hit the buffers

Deal between Union Pacific and Norfolk Southern would create first transcontinental operator in 200-year history of US rail

When Jim Vena, chief executive of Union Pacific, announced on Thursday that the US’s biggest railroad had made significant progress in talks on merging with another network, he used deceptively humdrum language.

The company was “in advanced talks” with Norfolk Southern, the US’s fourth-biggest railroad, about a “potential business combination”, he told participants in the company’s second-quarter results conference call.

Yet to observers and analysts of freight railways in the US and Canada, Union Pacific’s plans are far more than just another “business combination”. A successful deal would destroy the widespread assumption that big Canadian and US railroads — which handle around 40 per cent of inter-city freight movements — had become so consolidated that regulators would block any new attempted merger.

A combination of UP — which operates west of the Mississippi — and NS, on the east, would be the first operator in the US railways’ 200-year history capable of carrying goods all the way from the Pacific coast to the Atlantic on its own tracks.

The deal could prompt BNSF, the other big western railroad, owned by Warren Buffett’s Berkshire Hathaway, to consider a tie-up with CSX, the other big railroad in the east, according to many analysts.

Tony Hatch, an independent railroad analyst, said the talks had surprised an industry that stopped expecting new deals after Canadian Pacific bought Kansas City Southern in 2023.

“The thinking was that this would be the last merger,” Hatch said. “All of a sudden, there’s been a revival of interest.”

Henry Posner, a veteran railroad investor and chair of the Iowa Interstate Railroad, said there could still be considerable opposition from customers to the creation of a behemoth with the power that a transcontinental railroad would wield.

“At the industry level, it’s hard to imagine a constituency that’s anxious to see a transcontinental railroad merger,” Posner said.

The question is whether industry regulator the Surface Transportation Board has changed sufficiently under US President Donald Trump to brush aside precedent and clear a deal.

There are also questions about whether it would approve a “voting trust”, a key mechanism that in past US rail mergers has allowed shareholders in a target company to sell up and avoid the risks of the STB’s laborious approval process, which typically takes at least 18 months.

At a conference in May, Keith Creel, chief executive of the merged Canadian Pacific Kansas City, pointed out that any new deal would take place under tough rules introduced in 2001 that required any transaction to “enhance competition”. Those rules did not apply to the 2023 deal because Kansas City Southern had an exemption.

“There is . . . not a hill of regulatory risk to climb,” Creel said. “There’s mountains of regulatory risk.”

Nevertheless, UP’s advisers appear confident a deal is possible. Vena has used language apparently calculated to appeal to Trump’s economic nationalism.

In an interview with industry magazine Trains, published in May before the NS talks became public, Vena said: “I think it’s a win for our customers and a win for competition, and it’s a win for how the country should move ahead.”

Advocates for a merger have argued that creation of a single transcontinental railroad would improve the industry’s structure. There are two big western networks, two big networks in the east, and CPKC and Canadian National competing in Canada and parts of the US.

Long-distance freight often has to be handed over between operators, frequently in Chicago, which becomes congested at busy times.

David O’Hara, managing director of MKP Advisors, a specialist advisory firm, wrote in a note to clients this week that the end of such interlining would be a key advantage for shippers — railroads’ customers.

“A merged entity would offer true end-to-end service across the continent, reducing complexity and delivering better performance to shippers with time-sensitive or intermodal cargo,” O’Hara wrote.

Hatch said there was also potential for a merged rail network to make a better job of handling “watershed” traffic from the areas near the Mississippi that need to go relatively short distances.

Yet even if it approves a merger, the STB could still demand in return that a network sells some of its routes to a rival or allows another operator to use parts of its track.

Hatch pointed out in a note to clients this week that any merger might face opposition from large customers worried that a merged railroad would enjoy far more power to raise prices. Rail is critical to key US sectors including agriculture, energy, the automotive industry, aerospace and for supplying retailers.

“Both antagonists are big, and sophisticated,” Hatch wrote of the potential regulator tussle.

Posner, who sits on a committee advising the STB on passenger rail issues, insisted there was no certainty the STB would bend with the political wind. The board has a Republican chair but only one other Republican member, alongside two Democrats and a vacant seat.

“I think the STB is somewhat removed from political pressure,” Posner said.

On top of the approval concerns, there is a strong chance the STB might bar the use of a “voting trust”. In past rail mergers, shareholders in the selling company have sold their shares to an independent entity which has overseen the railroad’s operations during the 18 months to two years that the STB takes to consider a deal.

Canadian National failed in a counterbid to Canadian Pacific’s offer for Kansas City Southern, partly because the STB barred it from using a voting trust. Hatch said that, without the trust structure, shareholders would face an unattractive period of uncertainty.

“That means that shareholders in the target company take that two-year risk of awaiting approval,” he said.

It remains possible, according to analysts, that UP will navigate the many challenges and succeed in its bid to reshape US freight rail’s competitive landscape.

MKP’s O’Hara wrote in a note to clients after UP’s announcement that a merger offered a “compelling east-west match”.

Yet Hatch stressed that there remained considerable uncertainties.

“We’ve long thought that the risk and the cost would overwhelm the benefits,” Hatch said of a potential deal. “It appears that Union Pacific now think they have a handle on that and they can pull off enough benefit to make the risks worth it.”

AI chatbots join the Premier League squad

This season the Premier League is teaming up with Silicon Valley giants Microsoft and Adobe in a bid to revolutionise how its global fan base — all 1.8bn of them, give or take — connects with the game.

It’s big on ambition, heavy on buzzwords, and powered by the same AI tech that writes emails, generates images and now, apparently, helps you choose your Fantasy Football captain.

Microsoft becomes the League’s official cloud and AI partner, bringing with it Azure, Copilot — Microsoft’s AI assistant that answers natural language questions and generates content — and a few decades of tech knowhow.

Adobe, which provides fan engagement tools to the NFL, Real Madrid and Bayern Munich, is deploying its Firefly AI system so that fans can design their own team badges and kits.

The goal? To overhaul the Premier League’s digital outreach, from fan engagement to broadcast analysis and admin, and deliver a more “intelligent and intuitive” fan experience.

The moves are part of a broader effort to build deeper links with fans overseas, who may avidly follow several clubs or star players, and are increasingly the main source of revenue growth for the competition. The league has also launched an online store selling EPL merch (giving football fans the chance to re-enact Hollywood actor Rob Lowe’s viral NFL cap moment).

The most visible result is the Premier League Companion, an AI-powered feature on the League’s revamped app and website. It draws on 30+ seasons of stats, 300,000 articles and 9,000 videos to serve up personalised content, previews and trivia tailored to your favourite club or player. Fans can ask questions in multiple languages, with voice interaction coming soon — ideal for those who prefer shouting to typing.

It’s a clever bit of tech. But the question is whether fans actually want — or trust — AI to curate their football fix. Many already feel bombarded by content; what they may crave isn’t more data, but better storytelling, sharper analysis, and fewer algorithmic guesses based on last week’s Google search.

Microsoft’s tools will also power live match enhancements, with real-time overlays and AI-generated post-match analysis. And Fantasy Premier League fans will soon get their own AI assistant manager, offering squad tips and (presumably) taking no blame for dropping a centre forward the day before he bags a hat-trick.

Still, this isn’t the first time tech has been tipped to “reimagine” football. Past efforts — from companion apps to virtual tactics boards — have had mixed success, especially when they overestimate how much fans want their phone involved mid-match. For many, the joy of being a football fan is spending time with other (human) football fans.

Premier League CEO Richard Masters is bullish, calling the deal with Microsoft “one of the most significant technology transformations” in the league’s history. It could be. But with AI hype already in extra time, the real test is whether fans see an enriched experience or simply another gimmick cooked up by corporate executives.

Why CVC is plotting a £9bn sports ‘mothership’

CVC’s £9bn sports ‘mothership’

The rumour mill has been in overdrive since news emerged that CVC Capital Partners was exploring a refinancing of its sports assets, which span cricket and rugby to volleyball, tennis and football.

Sports executives and bankers are asking deep questions about the motives behind an entity that’s being referred to as SportsCo.

CVC is known for making a killing through its past ownership of Formula 1, which it sold in an $8bn deal to Liberty Media in 2017.

But struggles in French football, where media rights values have dropped since CVC bought into a new commercial entity controlled by Ligue de Football Professionnel in 2022, show that sports investing isn’t a sure thing.

Premiership Rugby, in which CVC holds a 27 per cent stake, says it has turned a corner since three clubs collapsed in the wake of the coronavirus pandemic. The league recently struck an improved media rights deal, but clubs still play second fiddle to the internationals. To be sure, CVC also has a stake in Six Nations, the annual contest featuring England, France, Ireland, Italy, Scotland and Wales.

To some cynics in sport, CVC’s latest idea, first reported by Sky News, looks like a firm struggling to find buyers for assets such as Premiership Rugby. Or even a tacit acknowledgment that investors would rather not be exposed solely to CVC’s investment in French football, where the league and clubs are experimenting with their own media platform because of weak demand from broadcasters.

But by putting CVC sporting assets into a £9bn group, the private equity firm’s interests can be leveraged to borrow cash. The idea is that a large, diversified group is less risky than any individual asset, enabling CVC to borrow at cheaper interest rates.

This is critical because of booming sports valuations and mounting interest from rivals in the sector. Just consider Apollo Global, whose in-house insurer provides cheap capital to invest in deals. For CVC to remain competitive for sports assets, it must think creatively about its funding sources.

A person close to CVC also dismissed the notion that SportsCo is simply a method by which to raise money to distribute to investors in CVC funds.

Scoreboard’s understanding is that the Amsterdam-listed group thinks SportsCo can be the CVC “mothership” for new deals in sport. Further ahead, the firm could sell a minority stake in the vehicle without changing the ownership of the underlying assets.

As one person with knowledge of CVC’s perspective said, why sell “forever assets” at a time when sports exposure is “red hot”?

Perhaps the truth is that CVC is in fact owning for longer, preparing to add to its collection of sports assets without giving up what it already owns.