Business

Cathie Wood says ARK dumped Nvidia shares before 160% surge because its just pivoting to other A.I. plays

Cathie Wood defended her firms decision to bail on Nvidia Corp. before the chipmakers shares surged 160%, saying the computer-chip industrys boom-bust cycle poses risks.

Woods flagship ARK Innovation ETF (ticker ARKK) cut its holding in Nvidia in January and missed out on most of the rally that added more than half a trillion dollars in market value. Nvidia jumped 24% Thursday alone after forecasting $11 billion in sales this quarter, 53% more than analysts expected.

As far as Nvidia goes, there are a few reasons we take some pause, Wood said in an interview on Bloomberg TV. She said when she hears, shortages, shortages, shortages about GPUs or anything, I begin to think about the cyclicality of a group.

Nvidia also faces growing competition in the battle to produce chips to power the computing infrastructure behind artificial intelligence programs, Wood said, citing companies like Tesla Inc., Meta Platforms Inc., and Alphabet Inc. that are developing their own chips.

While Woods flagship fund dropped its holdings to Nvidia, some of the firms more specialized portfolios, including the ARK Next Generation Internet ETF (ARKW) and the ARK Fintech Innovation ETF (ARKF), still retain some exposure to the company.

We have not gotten much pushback, she said regarding the decision to drop Nvidia, which she describes as a check-the-box stock.

ARKK has climbed 25% so far this year, outpacing the S&P 500s 9.4% gain. The Nasdaq 100 Index that houses the megacap tech companies that have powered the markets gains in 2023 is up more than 30%.

Nvidia has been one of the main beneficiaries of the AI boom, seeing its sales surge on demand for chips. Marvell Technologies Inc. rallied 29% Friday after saying its revenue from AI products would double in the current fiscal year. ARKK holds neither.

Were just pivoting to another set of plays that most people have not discovered yet, Wood said. Much like they did not understand that Nvidia was an AI play, really, until very recently.

Wood said Metas strategy of focusing on AI was good, although the company does not appear in the firms flagship portfolio.

Metas LLaMA AI language model is able to deliver better models using less computing power and more data, she said.

Meta is interesting to us, she said, adding that she likes the fact that Mark Zuckerberg is now prioritizing artificial intelligence as opposed to the metaverse, which was really what he was focused on last year.

Janet Yellen says the government will run out of cash by June 5

Treasury Secretary Janet Yellen said her department estimates it will run out of funding by June 5 if lawmakers fail to raise or suspend the US debt ceiling.

Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the governments obligations if Congress has not raised or suspended the debt limit by June 5, Yellen said Friday in her latest letter to lawmakers on the potential timing of a government default.

The Treasury chief said that her department will be able to make more than $130 billion of scheduled payments in the first two days of June, including those to veterans, Social Security and Medicare recipients.

These payments will leave Treasury with an extremely low level of resources, she said.

The new guidance significantly narrows the previous range Treasury had given for a possible default to one day.

Previously, Yellen said on Monday her department might run out of cash as early as June 1 and would be highly likely to exhaust all its resources in early June.

Now Yellen is saying the Treasury can make it through Friday June 2, but is unlikely to meet all its obligations on Monday June 5.

The premium investors demand to hold US paper thats most at risk of default if Congress and the White House fail to strike a deal continued to retreat Friday, with yields sliding below 6%.

The latest letter comes as negotiators from the White House and Republican lawmakers are moving closer to a budget deal. Republicans have vowed not to raise the countrys statutory borrowing limit unless Biden agrees to budget cuts.

The Treasury effectively hit the debt limit in January and has since been using emergency accounting measures to stave off a default, which could prove catastrophic for financial markets and the economy.

The Treasurys cash balance fell to $38.8 billion as of Thursday, according to data published Friday, the lowest since 2017. The department had just $67 billion of extraordinary measures left to help keep the governments bills paid as of May 24, the department said in a statement Friday.

The remaining emergency resources are whats left from a total of $335 billion of authorized measures that were available to keep the US government from running out of borrowing room under the statutory debt limit, and is down from around $92 billion on May 17.

With assistance from Alexandra Harris, Ben Holland, Kate Davidson and Margaret Collins.

Mark Zuckerberg wants a 'scrappier' Meta after layoffs

Facebook-parent Meta has been on a roller-coaster ride lately that includes CEO Mark Zuckerberg declaring a year of efficiency, culling thousands of employees, and cutting perks. Some of those measures have been reflected in the companys strong stock performance, boosting Zuckerbergs net worth by $46.6 billion to $92.3 billion this year, according to the Bloomberg Billionaires Index.

Despite the gains, the mandate for Metas employees is to be scrappier.

Going through restructuring and layoffs and changes like this is obviously a very difficult thing, Zuckerberg told employees in a company-wide call on Thursday, according to the Washington Post. So its not like were going to end up in exactly the place that we were before because that wasnt my goal. I wanted to get to a scrappier place.

Since last year, Meta has implemented two rounds of job cuts: 11,000 in November and another 10,000 announced in March. All those firings fall under Zuckerbergs broader restructuring to achieve greater efficiency.

He told employees that one of his goals is to have a stronger technology company that can build better products faster, The Post reported. Another reason was to improve Metas financial performance to fund long-term projects amid a challenging economic environment.

During the pandemic, the company went on a hiring spree, doubling its workforce from 2020. But that backfired as employees found themselves being hoarded like Pokémon cards and lacking any real work to do.

Zuckerbergs announcement of a year of efficiency, plus strong first-quarter earnings raised investor optimism and helped to send the companys shares soaring 23% that day. Meanwhile, Metas investments in artificial intelligence and the virtual world of the metaverse are still in full swing, according to Bloomberg. The company unveiled its computer chips last week that could boost its A.I. and video processing infrastructure.

Metas goal to be scrappier borrows a term often used to describe startups that are strapped for money and resources, and therefore must make the most of whats available. Zuckerberg reportedly said that he wanted Meta to be less bureaucratic so work can be done faster even with fewer workers.

It just forces us to find ways to be scrappier and get things done more efficiently, Zuckerberg said, according to the Post. It means that there are going to be fewer environments or projects where there are too many cooks in the kitchen, which is just a kind of common complaint that I hear over and over again across the whole company.

In an earnings call earlier this year, Zuckerberg hinted at slashing layers of management to make the organization leaner and day-to-day operations more efficient.

Meta did not immediately return Fortunes request for comment.

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Chase Sapphire Reserve review: Luxury perks for the frequent traveler

Why we like this card: The Chase Sapphire Reserve card offers ultra-generous travel points, a huge sign-up bonus, plus hundreds of dollars in statement credits and complimentary memberships.

Pros

High rewards rate
Several ways to boost point value on redemption
Points transfer to travel partners 1:1
Multiple luxury travel perks

Cons

High annual fee
No introductory APR

Chase Sapphire Reserve: Overview

APR

Intro: N/A
Purchase: 21.74%28.74% variable
Balance transfer: 21.74% to 28.74% variable, plus a fee of either $5 or 5% of the amount of each transfer, whichever is greater
Cash advance: 29.74% variable, plus a fee of either $10 or 5% of the amount of each transaction, whichever is greater
Penalty: Up to 29.99%

Annual fee: $550 ($75 for each authorized user)

Foreign transaction fee: 0%

Late payment fee: up to $40

Return payment fee: up to $40

My Chase Plan^SM Fee: 1.72% monthly

The Chase Sapphire Reserve card is one of the most lucrative travel cards on the market. For one, its possible to earn up to 10 points per dollar on purchases through the Chase Ultimate Rewards portal. The card also provides an annual travel credit of $300, which applies to a wide range of travel expenses. Cardholders can also take advantage of a 50% bonus when redeeming points for travel through the Chase Ultimate Rewards portal, meaning each point is worth 1.5 cents. The Sapphire Reserve also offers the option to transfer points to a variety of airline and hotel partners at a 1:1 ratio, providing potential for even greater value.

Complementing these perks, the Sapphire Reserve also provides exceptional travel protections and luxury travel benefits. Cardholders receive complimentary access to more than 1,300 airport lounges worldwide through Priority Pass Select, robust travel insurance benefits, a statement credit for Global Entry or TSA PreCheck application fees, free access to DashPass, and more. Given these features, the Chase Sapphire Reserve is considered a premier travel card.

Even so, the Sapphire Reserves high annual fee can be off putting to some cardholders, and may not be worth it for those who dont travel frequently.

Chase Sapphire Reserve: Rewards

Chase Sapphire Reserve rewards points are structured as follows:

10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards immediately after the first $300 is spent on travel purchases annually
5x total points on flights through Chase Ultimate Rewards
3x points on other travel and dining (including eligible food delivery services) not booked through Chase
1 point per $1 spent on all other purchases
10 points per dollar spend on Lyft rides through March 2025

Additionally, Chase is currently offering Sapphire Reserve cardholders 60,000 bonus points after spending $4,000 on purchases within the first three months from account opening. Chase estimates these points are worth $900 toward travel when redeemed through the Chase Ultimate Rewards portal.

How to redeem Chase Sapphire Reserve points

Chase offers several ways to use the points youve earned by spending with your Sapphire Reserve card. Here are the most common options.

Book travel through Chase Ultimate Rewards portal

One of the most lucrative ways to redeem your points is by booking travel directly through the Chase Ultimate Rewards portal. Here, you can book flights, hotels, rental cars, and more using points earned on your Sapphire Reserve card, which are worth 1.5 cents each when redeemed for travel in this way.

Transfer points to travel partners

Chase Sapphire Reserve also allows you to transfer your points to several airline and hotel loyalty programs. These points transfer at a full 1:1 value ratio.

Pay yourself back

Chase introduced its Pay Yourself Back program in 2020 as a way for certain customers with eligible cards to get higher redemption values on points when requesting a statement credit. For Sapphire Reserve cardholders, points are worth 1.5 cents when redeemed this way.

Pay with points

You can use your points to make purchases directly at select merchants through Chases Pay with Points feature. Once enrolled in the program, youll see your total points available displayed at checkout. You can then choose the number of points you want to allocate toward the purchase.

Buy experiences

Chase occasionally offers exclusive experiences and events that can be purchased with points. These can range from concerts and sporting events to unique travel opportunities. The Chase Sapphire Reserve card also has its own set of exclusive experiences, including private VIP dinners and music festivals.

Redeem for gift cards

Chase offers a variety of gift cards from over 175 popular retailers and restaurants that can be purchased with points. The value of your points may vary depending on the gift card, but generally, its one cent per point.

Additional benefits

In addition to earning points on purchases, the Chase Sapphire Reserve card also comes with the following benefits:

$300 annual travel credit: Youll automatically receive up to $300 in statement credits each account anniversary year.
50% more redemption value: Your points are worth 50% more when redeemed for travel through Chase Ultimate Rewards.
Complimentary airport lounge access: After enrolling in Priority Pass Select, you can access 1,300+ VIP lounges in over 500 cities worldwide.
Global Entry or TSA PreCheck or NEXUS fee credit: Get reimbursed for the application fee charged to your card by receiving one statement credit of up to $100 every four years.
Lyft: In addition to earning 10x total points on Lyft rides, you also get a complimentary two-year Lyft Pink All Access membership. You must activate by Dec. 31, 2024.
Gopuff: Get a $10 monthly statement credit. This promotion runs through December 31, 2023.
DoorDash DashPass subscription: Complimentary membership includes both DoorDash and Caviar. You must activate by December 31, 2024.
Instacart benefit: Receive one year of complimentary Instacart+.
Trip cancellation/interruption insurance: Get reimbursed up to $10,000 per person and $20,000 per trip for your pre-paid, non-refundable travel expenses if the trip is canceled or cut short by sickness, severe weather, or other covered situations.
Auto rental collision damage waiver: Receive primary coverage up to $75,000 for theft and collision damage for rental cars in the U.S. and abroad when you decline the rental companys collision insurance and charge the entire rental cost to your card.
Lost luggage reimbursement: Youre covered up to $3,000 per passenger if you or an immediate family member check or carry on luggage that is damaged or lost by the carrier.
Trip delay reimbursement: You and your family are covered for unreimbursed expenses up to $500 per ticket if travel is delayed more than 6 hours or requires an overnight stay
Emergency evacuation and transportation: Get covered for medical services and transportation up to $100,000 if you or a member of your immediate family are injured or become sick during a trip far from home that results in an emergency evacuation.
Purchase protection: New purchases are covered for 120 days against damage or theft, up to $10,000 per claim and $50,000 per year.
Return protection: Get reimbursed up to $500 per item, and $1,000 per year, on eligible items within 90 days of purchase.
Extended warranty protection: The U.S. manufacturers warranty is extended by an additional year on eligible warranties of three years or less.

Is the Chase Sapphire Reserve right for you?

The Chase Sapphire Reserve card is clearly designed for frequent travelers who prefer a premium experience. This card is a solid choice if you believe you can get more than $550 in value out of the card each year, which should be possible if you plan to book travel through the Chase portal and take advantage of perks such as travel protection, airport lounge access, statement credits, and free DashPash and Instacart+ memberships.

Credit cards similar to Chase Sapphire Reserve

When choosing a travel rewards card, its a good idea to compare several options and see which cards best fit into your spending and travel habits. If youre considering the Chase Sapphire Reserve, you may also want to learn more about these similar travel cards.

Chase Sapphire Preferred Card vs. Chase Sapphire Reserve

If youre looking for a Chase card that offers similar travel perks but a lower annual fee, you may want to consider the Chase Sapphire Preferred Card instead. This card comes with an annual fee of just $95 versus $550 for the Sapphire Reserve. Cardholders can still earn an impressive 5 points for every dollar spent on travel purchases, and boost point values by 25% when purchases are made through the travel portal.

Plus, a unique feature of the Sapphire Preferred card is that each account anniversary, youll earn bonus points equal to 10% of your total purchases made the previous year.

The Platinum Card from American Express vs. Chase Sapphire Reserve

If theres another premium travel rewards card that rivals the Chase Sapphire Reserve, its The Platinum Card from American Express. This card has a slightly higher annual fee at $695, but makes up for it with lucrative offerings. For instance, the Platinum Card currently offers a welcome bonus where cardholders can earn 80,000 points when you spend $6,000 within the first six months of card membership, which some experts value at $1,600. You can also unlock over $1,500 in statement credits per year with this card. Terms apply.

To view rates and fees of The Platinum Card from American Express, see this page.

Frequently asked questions

Is the Sapphire Reserve hard to get?

This card may be difficult to get if you dont meet the eligibility requirements. Chase requires excellent credit in order to qualify for the Chase Sapphire Reserve card, which generally translates to a FICO score of 740 and up.

Is it worth getting Chase Sapphire Reserve?

Getting the Chase Sapphire Reserve may be worth it if youre able to extract enough value out of the card to cancel out the annual fee of $550.

Does Chase waive annual fees for Sapphire Reserve?

In some instances, Chase may decide to waive the annual fee on its cards for the first year to encourage new sign-ups. Currently, however, the Chase does not waive the annual fee for the Sapphire Reserve card.

Please note that card details are accurate as of the publish date, but are subject to change at any time at the discretion of the issuer. Please contact the card issuer to verify rates, fees, and benefits before applying.

A worker making $100,000 in this economy really struggles to live the American Dream, SoFi CEO says

This bank CEO is not like the other girls, or at least he doesnt want you to think he is, as he asserts that he knows his customers are struggling. In many ways, someone today thats making $100,000-plus really struggles to live the American Dream for a variety of different reasons, and they need a relationship bank, Anthony Noto, the chief executive of SoFi Technologies, said in a JPMorgan investor conference this week.

Citing the hefty price of going to college, Noto explains that many workers are graduating and going to be in a hole and they cant invest. Hes not wrong. The price of higher education is starting younger generations off on the wrong economic foot, so to speak, making it hard for them to build wealth and reach the same financial milestones as previous cohorts.

If they buy a home thats too big relative to their means, theyre not going to be able to save and theyre going to constantly be running over budget, he adds, explaining thats where his company would like to come in to help these individuals invest. To be fair, the executive of the fintech company was framing SoFi as the solution to many (or all) of these problems.

As a giant in the fintech space, straddling the line between financial services and an app, SoFi is active in student and personal loans, originating billions every quarter, but as the Motley Fool notes, the market seems skeptical. Its stock is up about 10% this year, but thats less than half the increase of the Nasdaq Composite, a benchmark index for tech stocks.

And about that unattainable American Dream because of student loans thing, Notos company has sued the government in order to try to stop the pause on student loans, because thats a huge plank of its business. SoFis attempt to end the student loan payment pause and force millions of Americans into repayment while raking in massive revenues and handing out huge executive paychecks represents corporate greed at its worst, Congresswoman Ayanna Pressley (MA-07) and Senator Elizabeth Warren (D-MA) said in a statement in April.

Still, theres an underlying truth to Notos words. During a time of high inflation, many, especially younger individuals who are more impacted by market volatility and graduated with greater debt, have realized that the American Dream is no longer accessible or affordable. Wages arent keeping pace with inflation, which impacts those with entry-level jobs at a greater level. Its all led to many millennials sounding a bit like a SoFi Technologies guy, stating that a low six figure salary isnt the goal anymore. Its easier to see savings be chipped away at even with a $100,000 annual pay, as a poll from Morning Consult showed that households that made more than $100,000 yearly experience the greatest drop in financial well-being compared to a year ago.

It doesnt help that the hallmarks of the storied American Dream were buying a home and eventually retiring, things that have always been quite difficult but have started to feel trying for the youth of today thats grappling with a bit more financial insecurity. Aging into a difficult housing market, some Gen Z and millennials are depending on their parents in order to get by and afford their bills. The bench post for retirement has also moved, as experts now project that even $1 million is too low for a comfortable retirement.

Even more than $100,00 feels paltry to Americanns and Noto alike. Compared to past generations, $125,000 doesnt feel like enough anymore, Kelly, age 29 who works in tech, tells Fortunes Alicia Adamczyk, My parents, they raised four children on that. I had this expectation that when you make all this money, you can live a comfortable life.

And a majority of (61%) of millennials and Gen Zers told banking app Dave and Harris Poll in 2022 that they lack confidence they can afford their goals. Its gotten to the point where many dont think they can afford their dream future, Americas dream or not.

Main Street is in crisis mode, but A.I. could help small businesses' labor woes

Almost two years after the term Great Resignation was coined, many companies are still struggling to hire enough workers amid a historically tight labor market. Thats especially true for small business owners, who are increasingly taking a page from Silicon Valley by enlisting artificial intelligence to get the job done.

Main Street businesses are considering A.I. as an alternative to the rising labor costs that have been threatening many of them with closures for months. Their adoption of the technology would be a huge shift from how A.I. is currently usedmostly by large companies that have greater resources and are more on the cutting edge.

While only 11% of small business owners have tried A.I. to support their operations, 57% said they are eager to learn how generative A.I. products like ChatGPT could improve their business, according to a survey released Thursday by GoDaddy, an internet services company. GoDaddy interviewed 1,003 small business owners in April for the survey.

Owners interested in implementing A.I. will likely be encouraged by the results at other small businesses that have already tried the technology. Three quarters of the businesses that have used A.I. tools say they have performed at least very well, with only 4% saying their business has suffered as a result.

Small business entrepreneurs are quickly finding that generative A.I. is already really well-equipped to assist them with the tasks they find most difficult to tackle, either because they dont have the time or require skills outside their wheelhouse, Gourav Pani, president of U.S. Independents covering U.S. entrepreneurship at GoDaddy, said in a statement.

Most owners said A.I. helped them delegate specific tasks like marketing, content writing, and customer service responses, freeing them up for other important responsibilities like growing customers and revenue. It speaks to a larger trend in which businesses are exploring how A.I. tools like ChatGPT and equivalents developed by tech giants Microsoft and Google can automate more repetitive and generic tasks.

A February report by job advice platform ResumeBuilder found that around half of business leaders were implementing ChatGPT, and half of those had already used it to replace some employees, whose tasks included coding, content creation, and customer support. Nearly all the companies surveyed said the strategy was saving them money, with 48% saying theyve saved more than $50,000 and 11% saying theyve saved more than $100,000.

A.I. could be a game-changer for small businesses too. Almost half of small businesses had at least one unfilled job opening in April, according to a report earlier this month by the National Federation of Independent Businesses, a small business association. But consumer spending is still strong, the report found, meaning small businesses are still in dire need of workers to keep up with demand.

Among the top labor problems facing small business owners are the lack of quality labor and the high cost of hiring. Inflation for raw materials and wages has been one of small business owners primary concerns since last year, according to the Chamber of Commerce, and the recent banking crisis has also led to fears that lending by small and regional banks, which represent a lifeblood for small business, could dry up in a credit crunch.

The labor market continues to be a big challenge for small business owners, Bill Dunkelberg, the NFIBs chief economist, said in a statement accompanying this months report. More owners are raising compensation to compete, but labor quality remains a serious problem for owners.

A.I. could help alleviate some of those pressures, although educational tools to help small businesses integrate A.I. into their operations would likely be helpful, as the majority of owners remain unfamiliar with the technology. Only 33% of respondents to the GoDaddy survey said they could explain generative A.I. to a friend, while owners over the age of 55, who in 2021 owned half of small businesses in the U.S., were by far the group least likely to have experimented with A.I.

A.I. companies and experts have tried to bridge the gap locking small business owners out of the technologys benefits. Even back in 2021, the Chamber of Commerce worked with small and medium-sized businesses to communicate how A.I. could help entrepreneurs improve customer service, hiring, and marketing strategies. Earlier this month, Microsoft released a guide for how small businesses in particular could use A.I. and educational tools to implement it.

Small businesses are notoriously slow to adopt new technologies, but their smaller size also makes them more flexible, so that when they do decide to adopt a new technology, it does not take long to make an impact. If familiarity with A.I. improves, GoDaddys survey suggested, it might be the bridge that helps small businesses finally find their footing in todays labor market.

The horrific racial abuse that Real Madrid's Vinicius Junior keeps suffering suggests Spain's soccer problem is bigger than bad fans

On May 21, 2023, the Real Madrid forward commonly seen as one of the best soccer players in the world brought a halt to a game at Valencias Mestalla Stadium, pointing to fans who were making blatantly racist remarks and gestures.

He later made it clear that this was not an isolated event: It was not the first time, nor the second, nor the third. Racism is normal in La Liga, he tweeted in reference to the Spanish top division. The competition considers it normal, the federation considers it normal and the rivals encourage it.

As a soccer scholar whose latest book includes analysis of how players, fans and the games governing bodies have responded to the Black Lives Matter movement, I believe the latest incident points to how difficult it is to change fan behavior when racism remains institutionalized in the sport itself. While it is true that teams and leagues have made progress in signaling their lack of tolerance for racist behavior, there remain systemic problems working against real progress not least the lack of Black representation in management positions.

Deep roots of soccer racism

Soccer has a long-established racism problem. Black players throughout the decades attest to both abuse by fans monkey chants are still common during games in parts of Europe as well as more subtle forms of discrimination, such as being left out of national squads or overlooked for coaching positions.

Black Brazilians such as Vinícius and stretching back to Pelé have been subjected to racism both overseas and at home. Indeed, as soccer writer Franklin Foer has pointed out, in the early days of Brazilian soccer Black people were not allowed to play for professional clubs or the national team. Even when finally accepted, some of the star Black players like Arthur Freidenreich and Joaquim Prado would straighten their hair and attempt to lighten their skin in the hope of gaining popularity.

While there has been great change since such times, the roots of subtle and overt racism facing Black soccer players run deep be it in their home countries or playing for prestigious European clubs.

Soccers Black Lives Matter moment

While one can argue that there have always been minor attempts to address racism in soccer, it has only really been in the last decade that such efforts have gained steam. And it has been geared very much toward changing attitudes among fans.

For example, in England, the Football Association has long partnered with anti-racist group Kick It Out to create programs and punishments for racist fan behavior. Meanwhile, the Royal Spanish Football Association has codes for applying financial penalties against clubs with racist fans.

Such anti-racist efforts and messaging increased as part of a more general societal reckoning over racism after the killing in the U.S. of George Floyd by a police officer in 2020.

Soccer authorities usually wary of political statements and quick to punish players who display protest slogans on shirts by and large allowed players free expression in regard to Floyds killing and the protests it sparked.

Indeed, after restarting a pandemic-struck season in June 2020, the English Premier League promoted an active Black Lives Matter campaign. This included Black Lives Matter patches on uniforms although patches were later amended to read No Room for Racism and allowing the taking of the knee before games. Three years on, many players and teams still take a knee before games throughout England.

But it hasnt stopped the abuse. In 2020, while players on the pitch were presenting a unified front against anti-Black racism, British Home Office Minister Susan Williams observed that racist incidents had risen for the third year in a row.

Soccer leagues in southern Europe tended to leave it to clubs and individuals to respond to the Black Lives Matter movement, rather than having any blanket policies akin to that of the English Football Association.

But again, it appears to have had little effect on crowd racism.

Italian soccer continues to garner a reputation for racism among its fan base. While examples are numerous, the most recent cases include verbal attacks against Lecce defender Samuel Umtiti and forward Lameck Banda while playing at Lazio, and racists taunts against Inter Milan striker Romelu Lukaku after he scored against Juventus in a Copa Italia semifinal.

In Spain, after the latest Vinícius incident, football federation chief Luis Rubiales acknowledged that racism was a problem in the league. It would be hard not to: The abuse of May 21 was at least the 10th racist incident against the Brazilian star that Real Madrid has reported to the league this season.

The diplomatic fallout of the Vinícius abuse Brazil summoned the Spanish ambassador, and Rios Christ the Redeemer statue was shrouded in darkness in protest has reignited discussion of what action needs to be taken to stamp out racism in the game.

Spanish police have made several arrests over Vinícius abuse. Meanwhile, La Liga has fined Valencia the team Real Madrid was playing 45,000 euros (US$48,000) and closed a portion of the stadium for the next five games.

But given how persistent crowd racism has been in the face of numerous attempts to challenge it, I believe it is fair to ask if such disciplinary actions will have any real impact now.

Counter-cosmopolitanism

Continued racism in European soccer comes despite a rise in soccers cosmopolitanism culture. Prior to the 1990s, Black players in the top European leagues were relatively few and far between especially in countries where nonwhite players would fear being subjected to racist taunts from their own supporters, as well as the oppositions.

But modern-day fans have long become accustomed to supporting a racially diverse team. So why does racism in stadiums persist? Political scientist and sociologists Andrei Markovits and Lars Rensmann point out in Gaming the World that the rise in cosmopolitanism on the field is not reflected in the stands that is, in European leagues, the makeup of fan bases is not as diverse as that of the team they go to cheer on. Markovits and Rensmann argue that what we are witnessing in the stands is a kind of counter-cosmopolitanism in which the other is treated with anger and suspicion because they are deemed to threaten the stable sense of identity of some fans.

If the racial makeup of teams is not reflective of the fan base, it also isnt reflected in management, or among the people who govern the sport.

Analysis conducted in May 2022 found that of the 98 clubs that played in the five most prestigious European leagues the English Premier League, La Liga, and Italys Seria A, along with Germanys Bundesliga and Frances Ligue 1 only two had Black managers. La Liga had none, and still doesnt.

Failing the Sterling standard

As England striker Raheem Sterling noted in a 2020 interview: Theres something like 500 players in the Premier League and a third of them are Black, and we have no representation of us in the hierarchy, no representation of us in the coaching staffs.

While there is certainly some merit in the actions being taken in Spain to address behavior in the stands in the aftermath of the latest Vinícius incident, there is an argument that it is too little, too late. Moreover, it does little to address more institutionalized racism in the game. And to date, anti-racism programs and fines have failed to stamp out racism in soccer.

As Sterling noted, When theres more Black people in positions, when I can have someone from a Black background (to) be able to go to in the [Football Association] with a problem I have within the club these will be the times that I know that change is happening.

John M Sloop is Professor of Communication Studies, Vanderbilt University.

This article is republished from The Conversation under a Creative Commons license. Read the original article.