Space Business: Buck stops?

Dear readers,

Welcome to Quartz’s newsletter on the economic possibilities of the extraterrestrial sphere. Please forward widely, and let me know what you think. This week: The future of space exploration, Russia tests an ASAT, and DIPs in the satellite biz.

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Will space agencies keep spending?

Around the world, nations have been pouring cash into programs to further space technology development and exploration. According to the market researchers at Euroconsult, space agencies spent nearly $20 billion on exploration in 2019, with more than two-thirds coming from NASA. By 2029, they forecast that number will rise to $30 billion annually.

This prediction is emerging as the economic fallout from the coronavirus pandemic continues to pile up around us. Governments around the world are spending huge sums to avert economic collapse and fight the pandemic, and those costs are only likely to rise in the year ahead. For now, the fiscal gates are wide open. Euroconsult remains sanguine: “While the current health and economic crisis may impact near-term investment and strategies, they are less likely to disrupt long-term space exploration objectives,” the lead author of the study said in a statement.

But past experience suggests that there will be a period of belt-tightening ahead. After the 2008 financial crisis, we saw NASA’s budget grow in 2009, thanks to an infusion of stimulus spending enacted under Barack Obama to battle the effects of the recession. But as battles over debt reduction played out in Washington, the agency’s budget fell for the next five consecutive years, from $19 billion in 2009 to $17 billion in 2014. Those cuts are one reason, though not the only one, that NASA is three years behind and counting in its effort to develop new spacecraft that can carry humans to space.

Before our current crisis, lawmakers were already leery of signing over the $35 billion or so that NASA says it needs over the next five years to again reach the moon’s surface. Now, that may prove an even tougher sell. Similar debates are likely to take place in Europe, China, Russia and India, which all have ambitious space programs.

For the US, it may all come down to the framing, who is in political power after the 2020 elections, and also at what point the world figures out how to effectively treat and eventually vaccinate against coronavirus. Money for NASA, relying more than ever on commercial partners, could be pitched as part of a high-tech stimulus package. Or a return to the moon could be cast as optional or pushed back to the original 2028 target date. Budget pressure could also force hard choices about how NASA will go to the moon, incentivizing more reliance on cheaper commercial partners.

On the other hand, NASA’s $22.6 billion budget this year is less than .5% of current federal spending. Maybe it’ll all just pass under the wire?

Let me know your expectations, and I’ll share the results with everyone next week.

✉️ How will the coronavirus affect government spending?

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Imagery Interlude

US astronaut Chris Cassidy is escorted by two mask-wearing officials to the Soyuz rocket that would carry him and two others to the International Space Station last week.

Image for article titled Space Business: Buck stops?

Like these mask-donning workers helping train astronauts ahead of a hoped-for launch from US soil later this spring, it’s a sign of how space programs adapt to pandemic circumstances.

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🚨 Read this 🚨

Yes, there are medical crowdfunding consultants. Why do some medical crowdfunding campaigns succeed, and others fail? Some of the reasons are beyond people’s control. But there are key elements to money-making campaigns, and optimizing those is the work of a cottage industry of consultants.

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Russia tests an anti-satellite weapon. Earlier in April, we talked about the rise of military counter-space capabilities, from jammers to missiles. A case in point is Russia, which has stepped up its anti-satellite maneuvers in recent years. The country just launched another anti-satellite missile test this week. The last one was in November. The US Space Force spotted the missile with its tracking sensors, but at press time it wasn’t clear if the missile engaged a specific target or what the parameters of the test were. “This test is further proof of Russia’s hypocritical advocacy of outer space arms control proposals designed to restrict the capabilities of the United States while clearly having no intention of halting their counterspace weapons programs,” US Space Force commander General Jay Raymond said in a statement.

Mistaken Identity. Virgin Galactic, the space tourism company trading as SPCE on the New York Stock Exchange, got a boost from its sibling firm, the still-private satellite-launching company Virgin Orbit, spun out in 2017. Perhaps ironically, the venture-backed Virgin Orbit has a much more straightforward business model than its riskier older brother, and it won a $35 million contract from the US Air Force last week to launch three satellites. That’s more money than Virgin Galactic has earned in the last three years—and confusion about which company is which has apparently led Virgin Galactic’s stock to soar to a six-week high. Ah, efficient markets.

Commercial intelligence. The National Reconnaissance Office is charged with operating American spy satellites and purchasing additional data from outside sources. So far, the agency has exclusively contracted Maxar, the titan of satellite Earth imaging businesses, for that external data. But now the NRO says it will allow other companies to also bid for such work. Two obvious competitors are Planet and BlackSky, two venture-backed remote-sensing start-ups that have already won smaller pilot contracts with the agency.

When I DIP, you DIP, we DIP. The crunch in global travel is having a major effect on space telecom firms, who count cruise ships and airlines as major customers. OneWeb has already entered bankruptcy after it became clear it wouldn’t be able to raise sufficient funds to finish building out its satellite network. Its main backer, SoftBank, is now extending a debtor-in-possession (DIP) loan to see through the sale of the firm’s primary asset, the rights to use certain radio spectrum around the world. Intelsat, a more established player, is reportedly looking to take a DIP loan of $750 million as it examines bankruptcy. Intelsat’s situation is different from OneWeb; rather than trying to launch a new constellation, it is a “zombie firm” waiting to receive a payout from the US government, which is reallocating certain wavelengths away from satellite firms later this year. The two firms nearly merged in 2017.

Rocket Lab wins radar launch. The US-New Zealand small launch firm Rocket Lab picked up a contract to launch a pilot satellite for Synspective, the Japanese space radar start-up, later this year. The original plan was to launch the satellite onboard an Arianespace Vega rocket, but after the vehicle suffered a failure last summer, the mission was delayed. Now Arianespace has closed its South American launch site indefinitely.

Does it make sense to launch the commercial crew mission? NASA is pressing ahead to fly two astronauts to the International Space Station onboard a SpaceX rocket in late May or early June. There are good reasons to press ahead, and also to hit pause, but it seems ever more likely that circumstances will decide.

Your pal,


This was issue 43 of our newsletter. Hope your week is out of this world! Please send your space spending forecasts, opinions on the timing of a commercial crew launch, tips, and informed opinions to