fortune--2020-05-01--What it takes to lead the U.S.’s biggest car rental company through a pandemic

Good morning, Broadsheet readers! Sens. Kamala Harris and Elizabeth Warren release new coronavirus proposals, Congress’s response to the crisis caps off Nancy Pelosi’s career, and we talk to the new CEO of the biggest car rental company in the U.S. about how she’s leading through this time. Have a relaxing weekend.
– She’ll pick you up. We’ve been asking female business leaders—including those on our Most Powerful Women in Business list—about the challenges they’re facing right now, how they’re addressing them, and, ultimately, how they hope to be able to get their companies back up and running.
In the inaugural post of what will be an ongoing series, Emma talks to Chrissy Taylor, who took over as CEO of Enterprise, the country’s largest car rental company, in January. Enterprise was started by Taylor’s grandfather, and she became COO in 2016. But even for someone with a deep knowledge of the business, it’s been a tricky time to, well, take the wheel.
Taylor doesn’t shy away from the extent to which the virus has hit her company, saying: “Our airport operation, which is one-third of our business, has been impacted…. Two-thirds of our business happens in the suburban market—where we have stay-at-home orders. The dealership business is closed, where we provide rentals to people getting their cars fixed, so that business has also seen reduction in rentals.” Yet Enterprise, which is considered an essential service, has continued to operate, in large part because of its work serving “healthcare workers, utility companies, and the government to make sure that they can get to the jobs that they need to do.”
She’s also looking ahead, focusing on how to take the lessons and necessary innovations of this moment to make the business more resilient in the months and years ahead. But sometimes facing the future requires a look backwards as well: “It comes back to my grandfather’s philosophy: Take care of your customers and your employees first and everything will fall into line,” says Taylor. “It was so true back then, and it’s so true today.”
Read the full Q+A here.
Kristen Bellstrom
kristen.bellstrom@fortune.com
@kayelbee
Today’s Broadsheet was produced by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Plans, plans, plans. Sen. Kamala Harris plans to introduce the COVID-19 Racial Disparities Task Force Act, which would address the racial disparity in coronavirus infections and deaths. Sen. Elizabeth Warren and Rep. Jan Schakowsky introduced legislation to create a new federal agency that would be responsible for fixing shortages of personal protective equipment and other crucial coronavirus supplies.
- Coronavirus capstone. The coronavirus pandemic has put Nancy Pelosi's "legislative talents on urgent display," as a "capstone" to her three-decade career in politics, writes Molly Ball, the author of a forthcoming book about the house speaker. Read a coronavirus-focused excerpt here: Time
- Troubling choice. Sen. Chris Dodd is now a co-chair of the vice presidential selection committee on Joe Biden's presidential campaign. The problem? Dodd is known for his 1980s partying and has been the subject of other, more serious allegations (Vice reports that he did not respond when asked for comment on its story). Biden is currently facing an allegation of sexual assault, which he denies, and his VP committee has committed to choosing a woman for his ticket. Vice
- Global view. Barbados's Prime Minister Mia Mottley argues that the today's crisis requires international leadership—and, specifically, "moral leadership"—reminiscent of the collaboration that formed global institutions in the aftermath of World War II. CNN
MOVERS AND SHAKERS: The Hollywood Reporter hired Associated Press global entertainment and lifestyles editor Nekesa Mumbi Moody as editorial director. Joy Harjo was named to a second term as U.S. poet laureate. The Recording Academy hired Google global head of inclusion Valeisha Butterfield Jones as its first chief diversity and inclusion officer.
IN CASE YOU MISSED IT
- Last stand. The Marines have long resisted putting male and female recruits in the same platoons at boot camp. This piece goes inside the last stand of the gender-segregated military: New York Times
- Golden ticket. Does the viral-for-the-wrong-reasons show The Golden Arm foretell the future of Quibi and what some say are its bloated budgets? The shortform video platform led by CEO Meg Whitman produced a series in which Marvelous Mrs. Maisel actress Rachel Brosnahan suffers from a disease involving, yes, a golden arm. Financial Times
- YouTube yoga. If you've done any YouTube yoga during quarantine, you've probably come across Yoga With Adriene. The woman behind the channel with 7 million subscribers, Adriene Mishler, reflects on her new level of fame and the sudden crop of home workout competitors in this profile: Guardian
ON MY RADAR
Two women, two career paths and a shared passion: Cars New York Times
Kim Gordon is home again The New Yorker
I had an abortion during the COVID-19 pandemic. And I'm not alone Gen
PARTING WORDS
"Hopefully I can help bring appreciation and value into the game regardless of your gender—trying to use sport to change the way society views us as a whole."
-New York Liberty draft pick and soon-to-be WNBA player Sabrina Ionescu


fortune--2020-05-01--From cargo ships to fairgrounds—as backlog of cars grows, importers search for storage space

ExxonMobil ’ s CEO is banking on a return to normal—but most others in the energy business aren ’ t @ @

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The length of almost two football fields, the cargo ship Jupiter Spirit arrived in Los Angeles’ harbor on April 24 after an almost three-week journey from Japan, ready to unload its cargo of about 2,000 Nissan Armada SUVs, Rogue crossovers and Infiniti sedans in a quick, half-day operation.
But when the ship, operated by Nissan Motor Co.’s freight arm, got about a mile offshore, its captain was ordered to drop anchor. And there the ship remained for almost a week—a floating symbol of an unprecedented logjam as nearby storage lots covering hundreds of acres overflowed with vehicles that Americans suddenly have little desire to purchase.
There are gluts of all shapes and kinds forming in the U.S. nowadays, a testament to the scope of the economic pain the coronavirus is inflicting. Slaughterhouses are killing and tossing out thousands of pigs a day, dairy farmers are pouring away milk, oil sellers were paying buyers to take barrels off their hands last week, and now, brand-new cars are being left adrift at sea for days.
For the auto industry, which saw U.S. sales plunge almost 40% in March, the crisis has left cars gathering dust on dealer lots, dealerships shuttered, auction prices slipping and tens of thousands of workers laid off or furloughed.
“Dealers aren’t really accepting cars and fleet sales are down because rental-car and fleet operators aren’t taking delivery either,” said John Felitto, a senior vice president for the U.S. unit of Norwegian shipping company Wallenius Wilhelmsen. “This is different from anything we’ve seen before. Everyone is full to the brim.”
The Jupiter Spirit’s shipment of vehicles was finally unloaded on April 29. But the auto industry is typically a just-in-time business, which makes the delay at ports like Long Beach so unusual. The majority of the quarter million cars imported from Japan last year came through West Coast ports, mostly via L.A. and Long Beach, according to IHS Markit PIERS data. Some East Coast ports such as in Brunswick, Georgia, are experiencing higher-than-normal inventory, but industry officials say the main logjam is on the West Coast.
“It is very abnormal for a container ship, a car carrier or a cruise ship not to go right to the berth, discharge and be on their way,” said Kipling Louttit, executive director of the Marine Exchange of Southern California, a non-profit that monitors commercial ship traffic.
At the Long Beach terminal south of L.A., cars are discharged at one of two piers—one with a 22-acre lot and another with 168 acres—that are capable of storing several thousand vehicles. They typically spend little time there before being relocated to larger storage lots five to eight miles away, where costs are lower, said Glenn Farren, director of tenant service and operations at the port. Then they’re gradually sent via truck or rail to dealers.
But last month’s sales collapse produced a chain-reaction backlog, causing some ships to divert to other ports, others to wait days to discharge cargo and, ultimately, others to cancel voyages before they even got underway. The Port of Hueneme, a major import facility in Ventura County, California, had to find space in the surrounding area for about 6,000 surplus cars, in addition to the 4,000 on its site. Auto-logistics firms secured lots at a nearby cold-storage facility and an adjacent U.S. Navy base after scouring sites at local colleges emptied by the coronavirus.
“You can’t stack cars,” said Kristin Decas, the port’s director and chief executive officer. “We even looked at using the Ventura County Fairgrounds.”
Toyota Motor Corp. has taken the precaution of leasing additional storage space at a sports venue in California, even though it hasn’t yet experienced major issues accepting deliveries from inbound vessels, a spokesman said. A representative for Hyundai Motor Co. said the South Korean automaker also has experienced elevated West Coast inventories and found additional storage lots to ease pressure on port facilities.
Jupiter Spirit is operated by Nissan Motor Car Carrier Co., an affiliate of the Japanese carmaker and Mitsui O.S.K. Lines Ltd. Nissan said the delays at Long Beach are a result of decreased demand amid the Covid-19 pandemic and that it does not currently have a timetable for clearing its vehicles from the port and secondary-storage lots.
“The company is optimizing the flow of the vehicles and positioning them closer to dealers for quick availability when the market recovers and customers return to showrooms,” said Nissan spokesman Chris Keeffe.
Another car-carrying vessel, operated under lease by Japan’s Kawasaki Kisen Kaisha Ltd., arrived in L.A. on April 21 and discharged its cargo. But the ship, the Morning Crystal, hung around for a week awaiting its next mission to Nagoya, Japan, which is atypical in an business where busy ships normally run routes back-to-back.
Mitsui O.S.K. shares fell 9.1% in Tokyo trading Friday, their biggest drop in more than four years, while Kawasaki Kisen slid 5.6%.
Even as ports struggle to cope with excess auto inventory, they’re preparing for an even worse outcome — deliveries stopping altogether as the recession digs deeper.
Demand for cars and trucks in the U.S. is expected to drop 27% to 12.5 million vehicles this year, IHS Markit estimates, which would be the fewest for the industry since 2010. Used-car prices are expected to plunge somewhere in the range of 8% to 16% through June, according to J.D. Power, then stabilize by year-end as the country reopens and demand picks back up.
Read more: GM, Ford credit arms may lose billions on car-price plunge
Those sour predictions match up with what the Hueneme Port expects: at least a 25% drop in auto shipments in the coming year. Auto-import logistics companies already have laid off about 80% of local staff in anticipation of a long dry spell, Decas said. Her port has only two car-carrying ships scheduled after May 17 compared with at least four or five a week in normal times, she said.
The port is fortunate in having another source of revenue, though. It’s a big importer of tropical fruit, like pineapples, avocados and especially bananas.
“People may not buy cars in a recession,” Decas said, “but they’ll eat a banana.”
–-With assistance from Robert Tuttle and Dave McCombs.
More must-read auto industry coverage from Fortune:
—From V-8s to ventilators: How Ford is pivoting during the coronavirus pandemic
—As German car dealers learn, the great reopening will take time
—Samsung, Nationwide, and GE just invested in A.I. startup Nexar
—Elon Musk calls COVID-19 lockdowns “fascist,” distracting from another Tesla earnings win
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: How tech is disrupting transportation
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-05-01--AMC is at war with Universal Pictures. Is it a fair fight?

Jeff Shell was trying to celebrate a victory. He ended up starting a new fight.
In Tuesday’s Wall Street Journal, the NBCUniversal CEO touted the success of the digital release of its animated film Trolls World Tour. He had every good reason to: The movie, which Universal made available on digital platforms such as Apple TV for $19.99 per rental, made the studio $95 million in fees from nearly 5 million customers over the course of three weeks—more money than Universal’s first Trolls movie reportedly earned in a five-month theatrical run in the U.S.
“The results for Trolls World Tour have exceeded our expectations and demonstrated the viability of PVOD,” Shell told the paper, using the acronym for the industry term “premium video on demand,” meaning a film release direct to digital platforms. “As soon as theaters reopen, we expect to release movies on both formats.”
Shell’s statement seemed to enrage Adam Aron, the chief executive of AMC Theatres, the world’s largest theater chain. In a letter to Universal sent the same night, Aron said his theater group would no longer screen movies from Universal, which, in addition to Trolls, is home to several billion-dollar franchises including Jurassic Park and Lego. The studio’s statement of intent to engage in more PVOD releases was “categorically unacceptable to AMC Entertainment,” Aron wrote. “Accordingly, we want to be absolutely clear, so that there is no ambiguity of any kind. AMC believes that with this proposed action to go to the home and theaters simultaneously, Universal is breaking the business model and dealings between our two companies.”
Cineworld, the world’s second-largest theater chain, echoed Aron’s explosive comments the following day. “Universal was the only studio that tried to take advantage of the current crisis and provide a ‘day and date’ release of a movie that was not yet released,” CEO Mooky Greidinger said in a statement. He added that his theaters would not show any movies that “fail to respect the windows, as it does not make any economic sense for us.”
The war of words between longtime partners stunned many Hollywood observers and revealed unease about the future of movie-watching and the evolving relationship between studios and theaters. “Like any company, Universal is trying to find new streams for revenue right now,” says Jeff Bock, a box office analyst at Exhibitor Relations. “But they gloated about it. I just don’t think what Jeff Shell said was necessary. Not in front of the media, not when theaters’ backs are against the wall.”
Two days later, Shell retreated slightly. New movies released directly to digital platforms would be “complementary” and “not a replacement” for a traditional theatrical release, he told investors during Comcast’s quarterly earnings call. In the wake of the coronavirus pandemic, “I would expect that consumers will return to theaters, and we will be part of that,” he added. (NBCUniversal did not respond to a Fortune request for comment.)
In truth, tension between movie theaters and film studios has been simmering for some time. Theater attendance has been in gradual decline even as box offices grosses have been on the upswing. Digital streaming services have become ubiquitous. Their parent companies have launched full-fledged production divisions and recruited acclaimed directors and actors who went on to win the industry’s top prizes—including Academy Awards, in the case of Netflix and Amazon Studios. All of these developments are squeezing long-established relationships and revenue streams, says Paul Dergarabedian, a longtime movie industry analyst at Comscore.
“I’ve never seen this in all my years. It’s a stress test on the industry. We are in a pressure cooker right now,” Dergarabedian says. “Who knew it would be this movie that would become the center of a major discussion surrounding the dynamics of the big screen and the small screen? It’s been something people have talked about for years, but the pandemic and this situation put a fine point on it—a spotlight.”
Cinemas have been hit especially hard by the effects of the novel coronavirus pandemic. Theaters remain closed in many parts of the world as social distancing measures continue. AMC is feeling the pain in a number of ways. Its shares plunged from $15.16 a year ago on April 30 to $4.72 today. AMC furloughed 25,000 of its 26,000 employees, including chief executive Aron, as news reports earlier this month evaluated the company’s likelihood to declare bankruptcy. Since then, AMC has announced plans to raise $500 million—enough to last into the fall, with hopes of a July reopening.
There is no guarantee that target can be met. Several health officials have estimated that coronavirus impacts will linger well into 2021. Beyond that, it remains to be seen if audiences are willing to rush back to theaters. In China, where the box office was poised to overtake the U.S. this year as the world’s largest, “attendance was very, very weak” when the country briefly reopened its theaters in March, studio head Steven Xiang of Huanxi Media told Fortune.
That has some people questioning if theater chains like AMC and Cineworld are really in a position to make threats about streaming to major studios like Universal, which is sitting on numerous unreleased titles such as the latest Fast and Furious installment F9 and Minions: Rise of Gru, a sequel to the original that grossed over $1 billion globally in 2015.
“Theaters need studios’ content. They absolutely don’t survive as a business without it,” says Bock, the box office analyst. “The truth is that content wears the crown, and Universal has the content. Billion-dollar content. Three to four franchises that theaters need. Universal has been right that there is this streaming revolution, and certainly some genres of film could translate to PVOD.”
Others view the dispute as more evenly matched. “At the end of the day, the studio-exhibitor relationship is symbiotic, they rely on each other,” says Shawn Robbins, chief analyst at BoxOffice Pro. “The loss of theatrical revenue on a major blockbuster would be devastating for a studio’s bottom line during its initial run. I see this as a balanced argument. Long term, what we’re seeing right now is a very public negotiation.”
Worldwide box-office revenues in 2019 reached a new record of $42.5 billion, according to Comscore, even as new streaming services expanded their footprint with the arrival of Apple TV+ and Disney+. Still, studios like Universal remain tempted by PVOD because of favorable economics: Roughly 80% of digital rental or purchase fees are retained by the studio in a streaming rollout, compared with just 50% of box office sales.
Ultimately studios need theaters to show their content, just as theaters rely on studios for business, Comscore’s Dergarabedian says. “Without the theater component, some of these films may never become profitable. And also the prestige and exclusivity of a theatrical run around the world makes it that much stronger for the home video,” he says. “It’s all about the positioning and the perception.”
Whatever the balance of power, analysts agree that both sides will come to a truce as tactics for battling the COVID-19 virus subside. “We’re kind of in a vacuum right now with PVOD because there’s not a competitive market for theatrical out there,” says Robbins. “It really just feels like a messaging issue.”
And theaters will likely stand together in solidarity—such as perennial rivals AMC and Regal—because an industry move to PVOD would fundamentally threaten the exhibition industry as a whole, analysts say. “At least now theaters have a chance to regroup, talk about it behind closed doors, and hammer out new guidelines,” Bock says. “Both for safety and for a deal with the studios.”
And if they don’t? “I think we all know how close theaters were to shuttering,” Bock adds. “They have to fight. This isn’t boxing—this is MMA. This is for everything.”
More must-read stories from Fortune:
—Ricky Gervais on releasing After Life season two during a global pandemic
—Hollywood artists are creating PPE for the medical community
—China’s movie theaters are closed again, causing anxiety for studios
—How Mrs. America designers revived a 1970s feminist showdown
—How movie theaters can make a comeback after the coronavirus pandemic has been contained


fortune--2020-05-01--Gift ideas for new graduates and young professionals

Much like the holidays, spring is a prime time for gift giving, from Mother’s Day to Father’s Day—and graduation season in between. But with travel suspended and social distancing in effect in most regions across the country amid the COVID-19 pandemic, it might not be possible to bestow congratulations in person.
Gift delivery, however, is still an option, and with many graduation ceremonies canceled, a token of appreciation and consideration may prove especially meaningful to graduates, now more than ever.
Still, shopping for newly minted young professionals might not be as simple and easy as it was in years past. Forget the fancy pen—it’s as antiquated as a silver spoon.
Instead, look to our gift guide, curated for those setting off on their own and into the workforce, with an emphasis on the practical but also that ever-growing priority among millennials and Generation Z: self-care.
Organization
A 54-bottle iron folding wine rack from the Container Store Courtesy of The Container Store
The Container Store wine rack: Sometimes a wine collection starts with the shelving. This sophisticated model can hold up to 54 wine bottles. It also has to be the simplest ever to set up straight out of the box—no tools required. Each shelf flips out and hooks together like magic. Suggested Retail Price (SRP): $140
The Puebco brass cookbook and tablet stand Courtesy of KonMari
KonMari: Can one truly make a suggestion about organizing without mentioning the queen of tidying up herself? Marie Kondo’s KonMari brand may sound counterintuitive (buying more household items from the home-organizing guru who wants you to toss anything that doesn’t “spark joy”? Really?) But the Netflix star insists that the brand is curating boutique and handcrafted goods intended to stand out while paradoxically blending in. Among them is the brass cookbook and tablet stand, adding a pop of sophistication to the kitchen counter while also propping up all those cookbooks bought while in self-quarantine. SRP: $58
The under-bed storage bin from Open Spaces Courtesy of Open Spaces
Open Spaces: Home organization brand Open Spaces has designed a series of sustainable organizational products with a very Scandinavian vibe that you will actually want to put on display. If Ikea defined your collegiate interior decoration, then this marks the next step in adult living. With the Restful Bedroom set, you can organize clothing, blankets, and more throughout your room, closet, and under the bed. SRP: $399 (Pairs of baskets and bins can be purchased à la carte.)
The X1 office task chair Courtesy of X-Chair
X-Chair: Everyone’s work-from-home setup is different, and most are far from perfect. After a few weeks of working from the kitchen table or the couch, back problems and other soreness are bound to set in. If this is the New Normal (at least for right now), then it’s time to invest in an ergonomic office chair. The X-Chair molds to the shape of the user’s body, with 10 adjustments that make a glove-like fit possible, including an adjustable seat, headrest, armrests, and a tilt lock. The company’s proprietary Dynamic Variable Lumbar support accommodates the user’s shape in order to provide better lower-back support. (And the brand is also donating 5% of profits this spring to charities fighting COVID-19.) SRP: Starts at $690
Wellness
The KUL Glö beauty kit Courtesy of KUL CBD
KUL CBD: There is no shortage of CBD wellness products on the market, and with everyone’s anxiety-ridden minds going a bit haywire these days, a lot of consumers might be turning toward the so-called wonder substance. (Although studies are still inconclusive as to just how powerful CBD is for each and every individual.) KUL offers a luxury line of CBD-infused skin-care products, such as day and night creams with topical probiotics and retinol; a sulfate-free, all-in-one exfoliating cleanser; and a hydrating rose extract and milk thistle serum. SRP: $395 for the all-inclusive beauty kit
The Rich Cream from Augustinus Bader Courtesy of Augustus Bader
Augustinus Bader: If there is one face cream that beauty bloggers would most likely all nominate as the best, it would be the Rich Cream from Augustinus Bader—or just the regular Cream. Both products are said to be on par with each other in terms of results, but each formula has a different texture to serve different skin types. The luxurious skin-care product has a devoted following, thanks to the inclusion of TFC8, a complex of natural amino acids, vitamins, and synthesized molecules naturally found in skin. SRP: $265
The Fleur single steeps sampler pack from Tea Forté Courtesy of Tea Forté
Tea Forté: This tea brand will never fail you as the flavors are always precise and sophisticated—and never weak. Smoothly transitioning into spring and summer flavors, the newest sampler pack—named Fleur and curated in collaboration with the New York Botanical Garden—includes herbal flavors like blueberry merlot, peach blossom, and jasmine green. SRP: $20
Culinary
The NutriBullet Pro 1000 (left) and NutriBullet Pro 900 Courtesy of NutriBullet
NutriBullet: The most recent upgrade to the bestselling 900 series, the NutriBullet Pro 1000 sports a sleek new design and stronger motor at 1,000 watts. The compact blender is a prime Vitamix alternative in both price and strength, with ergonomically redesigned blades producing silky-smooth smoothies. SRP: $80
The Cuisinart nine-inch loaf pan Courtesy of Crate&Barrel
Cuisinart: Soon after the country went into self-quarantine, social media was flooded with recipes—namely a lot of recipes for bread. Baking bread is not as easy as it looks, and for novices, having a structured loaf pan might be a good place to start. This nine-inch version from Cuisinart is an ideal entry-level baking tin, with a nonstick finish and silicone side grips contoured for standard oven mitts. SRP: $15
The Balmuda Kettle is just the right size for daily use. Courtesy of Balmuda
Balmuda: The cult favorite Japanese brand offers some of the sleekest, most elegant home appliances available. Its lightweight kettle was designed for ergonomic balance, resulting in precise pour-overs, ideal for three small coffee cups or two mugfuls from a single pot. SRP: $179; available in black or white
Ultra Coffee by Jot is 20 times more concentrated than common coffee, requiring just one tablespoon per cup of java. Courtesy of Jot
Jot: In a time when coffee shops are closed and keeping a morning routine can be critical to keeping your sanity, Jot’s new coffee experience delivers directly to your door by the bottle or via monthly subscription. Jot’s Ultra Coffee is a fair trade coffee extract that is 20 times stronger than regular coffee. Just add one tablespoon to hot or cold water or milk for the perfect cup of coffee in seconds—no equipment, pods, or time-consuming process required. SRP: $24, makes 14 cups.
Literary
Books are the perfect companions for days spent indoors, allowing us to travel without stepping outside our homes. Courtesy of Book of the Month
Book of the Month: Has there ever been a better time to pick up a good book and escape from it all? And for recent grads, they can rejoice in the fact that with a Book of the Month club subscription, this is all reading for pleasure, with numerous bestsellers and top-reviewed novels, thrillers, romances, memoirs, and more to choose from. Gift recipients can choose from five brand-new hardcover books each month—including advance copies once in a while—handpicked by BOTM’s editorial team. SRP: Rates start at $9.99 a month for one book (with the option to add more to your digital basket, of course).
“Nothing Fancy,” by Alison Roman Courtesy of Clarkson Potter
Nothing Fancy, by Alison Roman: Based on Instagram and food blogs, there is probably no cookbook more popular with Generation Z or millennials right now. And for good reason. Already a New York Times bestseller, from New York Times columnist Alison Roman, Nothing Fancy lives up to its name with recipes that are easy to throw together on a whim but are still satisfying in flavor, from coconut-braised chicken and chickpeas to blackberry and cornmeal cake. Sure, many of the finished products are ’grammable (if done right), but they’re also versatile, equally good for starter dinner parties and even video dates via Zoom. SRP: $33
More must-read stories from Fortune:
—5 things Maria Sharapova always packs when traveling
—Atelier Ace expands with Maison de la Luz
—Inside the most influential fashion show in menswear
—Millennials are passing on wine when dining out
—WATCH: Can San Francisco Be Saved?
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-05-02--How to watch Warren Buffett’s Berkshire Hathaway annual meeting, for free without cable

Warren Buffett will host Berkshire Hathaway’s annual meeting Saturday, May 2, but it won’t resemble the “Woodstock for Capitalists,” as the event is famously known, of prior years. Shareholders—some 40,000 of whom typically attend annually—aren’t welcome in Omaha, Neb. this year due to social distancing requirements necessitated by the coronavirus.
“We won’t ask this of our employees and we won’t expose Omaha to
the possibility of becoming a ‘hot spot’ in the current pandemic,” Buffett wrote in a letter to Berkshire Hathaway shareholders on March 13.
Even Charlie Munger, Berkshire’s vice chairman who typically fields shareholder questions alongside Buffett during the meeting, will not attend this year. Instead, Greg Abel, vice chairman of non-insurance
operations for the conglomerate, will be the only other board member physically in attendance at the meeting besides Buffett himself.
And in lieu of the bonanza of Buffett-themed souvenirs from Berkshire-owned brands sold right outside the meeting hall (for starters, Brooks running shoes with Buffett’s likeness printed on their insoles; “Warren & Charlie” rubber duckies from Oriental Trading; and plenty of See’s Candies), the company has posted promotional offers online.
Here’s what else you need to know.
When is the Berkshire Hathaway meeting?
The meeting kicks off at 4:45pm ET on Saturday, May 2. That’s a later start than usual for the event, which has historically been an all-day affair, with Buffett fielding questions from shareholders in the audience.
With no one in the crowd this year, the meeting will likely be much shorter—though Buffett and Abel will still answer questions selected by journalists from shareholders’ submissions. Instead of three journalists alternately asking questions as in the past, a single journalist, CNBC’s Becky Quick, will pose all of them.
Where can you watch it?
For the fifth year in a row, Yahoo Finance will stream the Berkshire Hathaway annual meeting on its website.
“Charlie and I will miss you, but we will see many thousands of you next year,” Buffett wrote in his letter.


fortune--2020-05-02--What to expect during Berkshire Hathaway’s ‘virtual’ annual meeting this weekend

Warren Buffett calls his annual meeting a high point of the year. It’s a time when Berkshire Hathaway Inc. shareholders converge on Nebraska to eat Dairy Queen ice cream, sample See’s Candies and, most importantly, hear the wit and wisdom of one of the world’s most successful investors.
The booths offering sweet treats will be missing on Saturday, as will the tens of thousands of attendees. Even the location is being kept under wraps. But Buffett and a top deputy, Greg Abel, will be there, doing their best in a virtual meeting to make sense of an economy upended by the coronavirus pandemic.
Even without the event’s usual trappings, interest is, if anything, even more intense than usual. Buffett, Berkshire’s chairman and chief executive officer, has been relatively quiet over the past month as the global response to the pandemic escalated, drawing questions about his view of what might be in store for the markets, Berkshire’s businesses and the global economy.
“The tone will be different,” said Richard Cook, a shareholder who has missed just two meetings since attending his first in 1997. “I’ll certainly miss all these chances to see all those friends.”
Meyer Shields, an analyst at Keefe, Bruyette & Woods, said this year’s event will likely lack “the celebratory feel that it had in the past.”
There’s clearly very little to celebrate with the world in lockdown. In one of Buffett’s only public comments since the outbreak caused companies and communities to shut down across the U.S., the CEO in March called oil volatility and the panic hitting markets a “big one-two punch.”
His Berkshire Hathaway has likewise stayed in the shadows, a contrast to the financial crisis in 2008, when the Omaha-based company dipped into its vast cash reserves to gain lucrative preferred shares and rescue businesses teetering on the edge of collapse.
Buffett, now with roughly $128 billion in cash, hasn’t announced any large public deals even as the S&P 500 tumbled 20% in the first quarter.
Charlie Munger, a Berkshire vice chairman who in normal years fields questions at the meeting with Buffett, offered one explanation in an interview with the Wall Street Journal in early April. The conglomerate wants to come out of the coronavirus “typhoon” with lots of liquidity, Munger said, adding that many corporate executives are frozen in place as they try to figure out how to handle the crisis.
Berkshire’s phone isn’t ringing off the hook, he told the newspaper.
Cathy Seifert, an analyst at CFRA Research, said it’s possible Berkshire will still make a move. “But the other thing is, when you have the government becoming the lender of last resort, you don’t necessarily need Berkshire to be the lender of last resort,” she said.
Berkshire plans to start its event at 3:45 p.m. Omaha time on Saturday, with Buffett and Abel fielding questions shareholders sent to three hand-picked journalists. The company is set to release first-quarter results earlier that day.
What Bloomberg Intelligence says
“The decline in Berkshire’s equity portfolio was about $66 billion at quarter end, and a steep drop in Berkshire’s stock increases the potential for buybacks.”
The company warned that the pair would steer clear of political questions and discussions about specific holdings at the meeting, which has morphed from a small gathering in the lunchroom of one of Buffett’s insurers into a sprawling event the billionaire has called a “Woodstock for Capitalists.”
Here are some of the topics that might come up:
Stocks
The company’s first-quarter earnings report will give investors a better sense of whether Buffett and his investing deputies, Todd Combs and Ted Weschler, found opportunities in the turmoil caused by the virus.
Berkshire’s quarterly filing usually discloses how much in stocks the company purchased during the quarter and the total size of the investment portfolio, including its largest holdings. Berkshire recently disclosed that it pared back stakes in Delta Air Lines Inc. and Southwest Airlines Co.
Occidental
Buffett’s bet on Occidental Petroleum Corp., made just before his annual meeting last year, may draw questions. The oil producer slashed its common stock dividend in March for the first time in three decades as the plunge in oil prices weighed on the company.
As part of Buffett’s investment, Berkshire obtained preferred stock that helped finance Occidental’s $37 billion acquisition of Anadarko Petroleum Corp. That investment pays a hefty 8% annual dividend. But Occidental recently opted to pay Berkshire’s quarterly dividend in shares rather than cash as the company looks for ways to conserve funds. In some ways, the Berkshire dividend that Occidental has to meet has ended up leaving others worse off, according to KBW’s Shields.
“I certainly don’t think that was the intention, but I think it may be a bit of a discouragement from some people looking at Berkshire capital and saying, ‘Hey, this is expensive, but it’s got this great ringing endorsement,’ because that’s not how it’s working out,” Shields said.
Berkshire’s also been building a common stock investment in Occidental, a stake that was valued at about $780 million at the end of 2019.
Insurance claims
Chubb Ltd. CEO Evan Greenberg had a stark warning about the effect of the pandemic and shutdowns: It will likely be the largest event in insurance-industry history because it affects both sides of the balance sheet.
Berkshire owns a collection of companies in the industry, with some that offer commercial-property insurance, workers’ compensation coverage and health-care liability policies. And some of its companies are reinsurers, which essentially write policies for other insurers.
Auto insurers, such as Berkshire’s Geico, have actually returned some funds or offered premium credits to consumers as driving decreases, which could translate into fewer accidents. The industry may also see potential claims from canceled events and workers’ compensation insurance.
“It’s so different based on the insurance product line,” Shields said. “There are some lines that have major questions,” especially with business-interruption coverage.
Succession questions
Buffett, 89, and Munger, 96, routinely field questions about succession at the conglomerate. Berkshire’s decision in early 2018 to appoint Abel and Ajit Jain to the board was part of a movement to address succession, Buffett said at the time.
Still, both Abel and Jain have remained behind the scenes to some extent, tending to Berkshire’s collection of businesses. Buffett told investors in this year’s annual letter that the pair would field more questions at this year’s annual meeting. But now only Abel, who lives closer to Omaha, will join Buffett at the event.
“It’s really, really important,” Shields said. While there’s no indication that any change would happen now, “at some point in time, it’s not just that one of these guys takes over for Warren Buffett, it’s that maybe one of these guys takes over for Warren Buffett in a period of unprecedented change.”
Pandemic fallout
Coronavirus fallout will hit Berkshire in varying ways. See’s Candies began furloughing workers in early April due to the shutdown of its stores. On the other hand, analysts at UBS Group AG expect an improvement in BNSF’s margins in the first quarter.
Munger told the Wall Street Journal that Berkshire will probably have to shut some small businesses, though the story didn’t name any specific units.
Still, Berkshire’s breadth — with businesses in energy and retail and industrial operations — gives the conglomerate a sense of the broader economy, especially through units such as the railroad, BNSF.
“Buffett has access to a set of data about the U.S. economy through all of his subsidiaries,” Cook said.
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fortune--2020-05-02--Warren Buffett says Berkshire is reversing course on airlines—again

Coronavirus is making clear there is no solidarity in the EU

Warren Buffett is reversing course on his airlines bet — again.
The billionaire investor said Berkshire Hathaway Inc. completely exited its stakes in the four major U.S. airlines. The sales of shares of Delta Air Lines Inc., Southwest Airlines Co., American Airlines Group Inc. and United Airlines Holdings Inc. made up most of the company’s $6.5 billion in equity sales in April.
During his live-streamed annual meeting, Buffett said the business has fundamentally changed following the economic fallout from the coronavirus pandemic. He declined to blame the performance of the airline CEOs, adding that he doesn’t envy their jobs, especially in a period like this.
“The world changed for airlines and I wish them well,” Buffett said Saturday in a webcast. He clarified that he made the decision and that he lost money on his investments. “That was my mistake.”
Buffett’s had a complicated relationship with the airline industry over the years. After a troublesome investment in USAir, Buffett joked that he would call an 800 number to declare he was an “air-o-holic” if he ever got the urge to invest in airlines again.
Then in 2016, Berkshire dove into the industry again, amassing stakes in the four largest airlines. His renewed faith in the industry prompted speculation that he might one day own one of the carriers.
But now, he’s cut those investments again. Berkshire disclosed in April that it had at least trimmed its Delta and Southwest stakes, both of which had previously been above a 10% ownership level.
“The airline business — and I may be wrong and I hope I’m wrong — but I think it’s changed in a very major way,” Buffett said. “The future is much less clear to me.”
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fortune--2020-05-02--The comic book industry faces a new fight amid the coronavirus pandemic

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The pandemic has transformed Christina Blanch, owner of Aw Yeah Comics, into a nightly TV host.
Nine times a week, Blanch leads a livestream from the store she lives above in Muncie, Indiana, to sell some comics and interact with regulars. She holds up issues one by one, usually for $5 or $10, and takes down addresses from buyers. It’s a way to get by but helps keep the shop’s community spirit alive. The show has a warm, thank-God-we-have-each-other feel to it. Sometimes Blanch sips a Modelo or vents about a difficult day. She calls it “What We Do in the Comic Shop.”
Long a repository for tales of world-threatening cataclysms and doomsday dystopias, the comic shop in the coronavirus era now finds itself drawn into a fight for its very survival. The crisis, felt across retailers, poses a particular threat to comic book shops, a pop-culture institution that has, through pluck and passion, held out through digital upheaval while remaining stubbornly resistant to corporate ownership.
Even as the pandemic era takes on the appearance of a comic — desolate urban centers, masks everywhere — the ink-and-paper industry is at a standstill that some believe jeopardizes its future, casting doubt on how many shops will make it through and what might befall the gathering places of proud nerds, geeks and readers everywhere.
It won’t go — insert “POW!” bubble — without a fight.
“I’ve put so much into this shop. I’m going to go down swinging if I’m going to go down,” says Blanch, who also writes comic books and graphic novels. “This place is important to people. What are you going to do but keep going?”
Saturday would have been Free Comic Book Day, an annual nationwide event intended to bring die-hards and newbies alike into stores. Instead, stores are closed nationwide and new print issues haven’t been released since late March, when the industry’s primary distributor, Diamond Comic Distributors, shut down.
In this photo taken on April 29, Joe Feld, owner of Flying Color Comics, loads comics into plastic bags for curbside delivery outside his shop in Concord, Calif. The biggest day of the year for comics retailers in America is May 2, Free Comic Book Day, which Feld created. There will be no such day this May, and no comics to populate it after the main distributor stopped shipping product. Ben Margot—Associated Press
Normally, some 6 million extra comics are distributed for the day and around 1.2 million people flock to stores. For some shops, it dwarfs even Comic-Con, the annual San Diego convention (also canceled ). Joe Field, owner of Flying Color Comics in Concord, California, who came up with the holiday, calls it “the single biggest retail day in the comic book industry.”
The stoppage, says Dan Gearino, author of “Comic Shop: The Retail Mavericks Who Gave us a New Geek Culture,” comes as the industry — despite being a pipeline to massive billion-dollar blockbusters — isn’t in great financial health.
“We’re going to come out of this with fewer comic shops, but there will be enough that survive that this industry will continue,” Gearino says. “The question I’m asking is: How big will the culling be?”
Tate Ottati has run Tate’s Comics in Lauderhill, Florida, for 27 years — long enough, he says, to see people who first came in as teenagers return with their own kids. “There’s cool stuff every day where you go, ‘Oh, my God, look at this great comic book,’ or, ‘Look at this amazing statue,’” he says.
But while his faith in the store remains strong, he’s had to constantly improvise. “I was just going to reinvent the store, and then the coronavirus hit,” Ottati says.
At Flying Colors Comics, Field has been offering biweekly curbside pick-ups. He’s used to crowds every Wednesday when new comics come out — a shared experience for fans prowling racks to see latest issues. But even once shops reopen, the bustle of signings and other events will be curtailed by distancing protocols in the typically cramped aisles of comic stores.
Field, though, is certain the comic shop will abide.
“Comic book retailers are the cockroaches of pop culture,” Field says. “We have been through all kinds of things that were meant to put us out of business, whether it’s the new digital world or distribution upheaval or Disney buying Marvel. We have adapted and pivoted and remade our businesses in ways that are unique and survivable.”
Steve Geppi, the founder of Diamond, said shutting down distribution was the hardest decision he’s ever made.
“When I was a 9-year-old boy reading comics, I never dreamed I’d be the guy to pull the plug on the whole industry,” says Geppi.
Diamond is now cautiously preparing to bring the company back on line, hoping to fill orders for the third week of May. But restarting will be gradual, and a two-month shutdown has already been enough to potentially reshape the industry.
This week, DC began a more robust release of digital comics. Until now, digital comics have been a fraction of the $1 billion industry, accounting for about a tenth of sales. While newspapers have gone digital, most comic readers want to hold the colossal worlds of comic books in their hands.
DC also broke its exclusive distribution deal with Diamond to get new issues to shops that are open, adding a pair of new distributors. That move has been debated among shop owners; some say they’d rather wait until Diamond restarts. DC didn’t comment.
“We want everybody to survive,” Geppi says. “The consumer is going to be the one to decide the fate of the industry.”
Writers and artists have rallied to support shops. Kami Garcia, Brian Michael Bendis, Gwenda Bond, Sam Humphries and Phil Jimenez organized a five-day Twitter campaign, #Creators4Comics. They launched with 150 creators auctioning art, comics and experiences. By the time it was over, they had more than 600, including Frank Miller and Neil Gaiman. It raised more than $433,000.
“We’re not just fighting for businesses and storefronts. We’re fighting to support our community,” says Humphries, the Los Angeles-based writer of “Harley Quinn,” “Nightwing” and others. “In many cases, we’re fighting to support our friends.”
“I could tell you my life story through the lens of comic book stores I’ve loved,” Humphries adds. “I don’t think any of us could cope with a world where comic book stores only lived on in our hearts. We need them to live on in the real world, too.”
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fortune--2020-05-02--Georgia beer named after Dr. Fauci sees surprising demand

The thirst for the beer named after Dr. Anthony Fauci continues to grow.
Atlanta-area brewery Wild Heaven Beer has begun to produce a second, larger batch of Fauci Spring, a popular pale ale named after Fauci, the nation’s top expert on infectious diseases.
Nick Purdy, co-founder of Wild Heaven Beer, said the first run of Fauci Spring surpassed his expectations in terms of demand and the company is now brewing enough beer for another 1,300 cases. Purdy added that his brewery’s effort is all in good fun during uncertain times.
Ron Harris—AP Photo
“Our job is to put smiles on people’s faces and so if during this crisis these beers have provided a little bit of levity and a little bit of fun then I think we’ve done our job,” Purdy told The Associated Press on Thursday, as newly labeled cans of Fauci Spring were stacked by the case at the brewery in Avondale Estates, Georgia.
Fauci is the director of the National Institute of Allergy and Infectious Diseases and President Donald Trump’s point person on explaining the COVID-19 pandemic to the American public.
Purdy said Fauci Spring is part of a series of so-called pandemic beers his brewery is producing. The newest batch includes We Will Meet Again, a rye India pale ale with a nod to Queen Elizabeth II’s recent message of hope to the people in the U.K. amid the coronavirus crisis.
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fortune--2020-05-02--From ‘vice spike’ to ‘hitting a brick wall’: How cannabis purveyors are coping during the pandemic

As the coronavirus pandemic escalated in March and businesses across the U.S. began shutting down, retailers in the nascent recreational cannabis industry experienced an unprecedented surge in sales activity.
“We saw sales that were four or five times what our normal averages are for a few weeks,” says Terra Tech chairman Derek Peterson, whose company cultivates and sells cannabis products in California and Nevada. Terra Tech was not alone; in California, Colorado, and other states where recreational marijuana is legal, retailers witnessed a sharp increase in sales—close to 100% in some markets—as the coronavirus outbreak worsened and authorities began rolling out stay-at-home orders.
Peterson attributes the March sales spike to “panic buying” by customers uncertain whether marijuana dispensaries would remain open much longer. “Then,” he adds, “we hit a brick wall.”
While dispensaries in most states have been allowed to remain open as “essential businesses,” April has brought more muted sales figures for cannabis retailers. In tourism-heavy markets like Colorado and Nevada—where spring usually sees visitors flocking to the former’s ski resorts and the latter’s Las Vegas hotels and casinos—slumping demand has resulted in lower sales and higher inventories, according to cannabis industry data analytics platform Headset.
In Nevada, Terra Tech and other retailers have had to comply with a delivery-only mandate that has forced them to close their doors; those without existing delivery services have had to either develop them on the fly or effectively cease operations (though the state will allow curbside pickup beginning May 1).
Even in California, where sales have proven more resilient, some dispensaries are dealing with the same issues that other “essential retailers” are—namely, a drop in revenues due to fewer customers coming in.
“While the demand is still there, the logistics are challenging because of social distancing,” Peterson notes. “You just can’t get as many people through your doors.” And many customers, he adds, simply “don’t want to go out as much as they would normally.”
Alternatives like delivery and curbside pickup are complicated by the fact that they’re not permitted in some jurisdictions or simply not yet implemented at certain dispensaries. As a result, publicly traded Terra Tech recently had to shed 25% of its workforce thanks to revenues that have been down more than 50% year-on-year, according to Peterson.
“We’ve been scrambling to deliver curbside [standard operating procedures],” he says. “A lot of people just weren’t set up for that.”
Matters are even worse for cannabis retailers elsewhere. Across the country in Massachusetts—where the industry has faced an array of issues since recreational sales launched in November 2018—the “essential business” designation has evaded recreational dispensaries, which have been forced to shutter (even as medical dispensaries and liquor stores are allowed to remain open).
In what’s already a low-margin business, the loss of nearly $2 million in weekly revenues for the Massachussetts’s recreational retailers could prove “an unmitigated disaster,” according to Emily Paxhia, co-founder and managing partner at cannabis industry investment firm Poseidon Asset Management.
Paxhia says that among Poseidon’s portfolio companies, its “forward-looking” cannabis retailers who have already invested in online services enabling delivery and curbside pickup have outperformed—something she attributed to the lockdown’s influence on consumers’ day-to-day routines.
“People’s lives have shifted in a way that was unimaginable, and they’re trying to find a new normal,” she says. “We’ve been forced to stay at home, and the things we’re now doing pair very well with cannabis—whether that’s watching movies, or having to suffer through your own cooking.”
Likewise, Vice Ventures founder Catharine Dockery—whose venture capital firm invests in traditionally taboo industries like cannabis, alcohol, and sex-tech—notes that cannabis startups backed by the VC firm, like CBD sparkling water brand Recess and vaporizer manufacturer Indose, have seen an increase in sales since the beginning of the lockdown.
“It portrays the state of mind that a lot of Americans are in right now,” Dockery says. “More people are using cannabis and CBD to stay calm.”
In line with what those in the recreational marijuana sector are seeing, Dockery says direct-to-consumer brands that deliver straight to customers’ homes have done exceptionally well as of late. It is a dynamic that large swaths of the economy are currently experiencing as the lockdown has forced businesses and consumers to conduct more business online—and one that could show the way forward for the cannabis industry, as well.
“Brick-and-mortar is important, but at some point, people are going to think, ‘These are my [product] preferences, I’m going to order it online like I do everything else,’” according to Paxhia.
Terra Tech’s Peterson agrees. “We’re altering our strategic thought process on how we conduct business in the future, and are in the process of re-engineering our approach to retailing,” he says. That will likely include more online-enabled, delivery and curbside-pickup capabilities at the company’s brick-and-mortar locations. “I think a lot of businesses are doing that, and we certainly are.”
In the meantime, despite the current challenges, Peterson thinks the cannabis sector will persevere through these unprecedented times—even though the federal aid available to many small businesses via the government’s coronavirus bailout package remains out of reach for the industry.
“I think the demand is still there; theoretically, it should be increasing from an anxiety and stress level, or even a sheer boredom level,” he notes. “Those [retailers] that are adapting, I think, are going to see a ramp-up in sales in Q2, going into Q3.”
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fortune--2020-05-02--Coronavirus is making clear there is no solidarity in the EU

From ‘ vice spike ’ to ‘ hitting a brick wall ’ : How cannabis purveyors are coping during the @

The European Union is in trouble. From the start, its countries haven’t been on equal footing. But COVID-19 has shone a stark light on the dissimilarities between its national economies. The crisis has also laid bare that EU members have significantly different views on what obligations they have to one another.
It is now evident that the EU’s economically stronger members, such as Germany and the Netherlands, are reluctant to come to the assistance of the weaker—and coincidentally more COVID-riddled—nations of Italy and Spain. This could not only spell the end of the EU, but could plunge its southern members ever deeper into debt, meaning certain economic turmoil.
In a recent interview with the Financial Times, French President Emmanuel Macron expressed his concern over the lack of solidarity in the EU during the coronavirus crisis. He implied that if a resolution does not happen soon, the EU and the euro could be in jeopardy. What he left unsaid was that without collective action, the financial burden on the more disadvantaged members of the EU could be far-reaching and potentially devastating.
Unfortunately, this chain of events is already unfolding. The financial markets have delivered their verdict: The EU is likely to become another COVID-19 casualty.
The markets have also chosen sides: While the coronavirus does not favor Germans over Italians or Spaniards, investors clearly do.
This is not the first time investors have bet against southern countries. During the European sovereign debt crisis over the last decade, fortune has favored the more fortunate. Greece, in particular, was let down by its more affluent EU counterparts, an event from which it has yet to recover.
In the current situation, however, one may assume that investors would favor countries with fewer cases of COVID-19. But that would not be empirically valid. Emerging market patterns indicate that investors believe the survival of some EU countries has less to do with the number of coronavirus cases they experience and more with the health of their public finances.
Evidence of this lies in the current cost of country-specific default insurance. When default insurance prices are elevated, it implies investors consider there to be a greater likelihood of sovereign default. Consequently, raising additional debt becomes more onerous and expensive, and may even leave some countries simply unable to raise debt while maintaining an investment-grade credit rating.
Our analysis suggests that investors believe European countries with similar coronavirus infection rates have very different probabilities of default. For example, Portugal, Germany, and the Netherlands show remarkably similar COVID-19 diffusion rates. Yet Portugal, despite its exemplary handling of the epidemic, saw a much larger increase in its default probability compared to Germany and the Netherlands.
The graph below shows this general relationship in a large sample of European countries. Higher COVID-19 infection rates are associated with significant increases in implied probability of default only among the countries with relatively high debt-to-GDP levels. Investors’ assessment is rational to the extent that countries with better finances can support their businesses for longer following a decrease in economic activity.
Authors’ own calculation based on data from the International Monetary Fund, the Depository Trust & Clearing Corporation, IHS Markit, and European Centre for Disease Prevention and Control
This pessimism might subside if EU members come together to share the financial burden. Some degree of collective financing would allow EU states to pool the overall default risk, reassuring investors that the mutualized debt of each state was backed by the economic power of the whole union. And it would only result in a negligible increase in the default risk of each country. Crucially, such an arrangement would allow even the fiscally weaker EU members to finance temporary spending increases at cheaper, more stable rates, and help them provide appropriate support to their affected populations.
Such a program should be undertaken carefully and with a common set of rules, two of which are worth highlighting. First, the mutualization of government debt must be reserved for global economic shocks such as a pandemic, not locally driven ones. Second, each member state should be prohibited from distributing bailouts to its enterprises in a way that unfairly bolsters their competitiveness and distorts the internal EU market.
If the EU cannot agree on solidarity soon, the union will be torn apart, and the poorer of its nations will find themselves abandoned in a rising sea of debt. We hope European leaders see these signs as a signal to come together and agree on a new arrangement of mutual aid.
Patrick Augustin is an assistant professor of finance at the Desautels Faculty of Management at McGill University.
Valeri Sokolovski is an assistant professor of finance at HEC Montreal.
Marti G. Subrahmanyam is the Charles E. Merrill professor of finance and economics at the Stern School of Business at New York University.
Davide Tomio is an assistant professor of business administration at the Darden School of Business at the University of Virginia.
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fortune--2020-05-03--Gil Schwartz, a.k.a. Stanley Bing, 1951-2020

‘ The Last Dance ’ director is racing to finish episodes .
Kobe Bryant and ‘ the price of global @ @ @ @

By day, he was a cog in the corporate machine. By night, he was its chief critic.
Gil Schwartz, the longtime media executive who for two decades wrote insightful, biting, and witty columns for Fortune under the pen name Stanley Bing, died in his Santa Monica home on Saturday. He was 68.
Representatives of CBS, where he once served as chief communications officer, confirmed the news Sunday, adding that his death was unexpected but due to natural causes. Schwartz led his department “with creative flair, craftsman-like expertise, and an abundance of personality,” the company said in a statement.
A graduate of Brandeis University, Schwartz built his career working first as a public affairs associate for the Teleprompter Corp.; then Westinghouse Broadcasting, which acquired Teleprompter in 1981; then CBS, which was acquired by Westinghouse in 1995. He was also a musician, photographer, playwright, and actor, and co-founded The Next Move, an improv troupe in Boston. Schwartz retired from CBS in November 2018 in the wake of the forced resignation of his longtime boss, chief executive Leslie Moonves.
For 13 years, the New York City native secretly and successfully skewered office life in the pages of Esquire magazine under the byline “Stanley Bing.” (The name of his column? “Executive Summary.”) The cigar-chomping, silhouetted Bing took his wry talents to Fortune in 1995, where he took over the magazine’s final page for a new column called “While You Were Out.”
Less than a year into his Fortune assignment, a New York Times exposé rocked corporate corridors nationwide: Schwartz was Bing. As Schwartz’s former editor David Blum told the newspaper at that time: “It’s pretty much unheard of for the top P.R. guy at a major American corporation to write a humor column.”
“Nobody but my editors had a clue who I was,” Schwartz recalled in a Times essay published in 2018. “I was Zorro, Clark Kent, putting one over on Perry White. But with this cool little secret came the fear—debilitating, crushing, sleep-destroying. Because, you know, I simply could not be fired. I had a mortgage, a little girl about to go to a preschool that cost more than my car each year … So, while Stanley sneered at authority and sauntered about town going to magazine parties, Gil lived in dread. Our most precious secret was Bing’s anonymity, which assured the continued well-being of both of us.”
Contrary to his expectation, Schwartz’s (and Bing’s) well-being continued. Schwartz rose in the CBS ranks even as Bing’s profile grew larger. He wrote 13 books—among them Crazy Bosses: Spotting Them, Serving Them, Surviving Them and 100 Bullshit Jobs . . . And How to Get Them—that satirized the corporate world he inhabited. And he continued to fill the last page of Fortune magazine, and later, the “Bing Blog” on Fortune.com, with gimlet-eyed columns about the idiosyncrasies of business: “The perils of spending more time with your family,” “Exclusive: Interview with a lemming,” and “Why crazy works in the office,” among so many others. His final column, “How business has changed over two decades,” was published in 2016.
Schwartz is survived by his wife of 14 years, Laura Svienty, two children, two step children, and two grandchildren. A memorial service is expected to take place in the fall. In lieu of flowers, the family requests anyone seeking to honor Schwartz donate to the Los Angeles Regional Food Bank, Food Bank for New York City, or San Francisco-Marin Food Bank.
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fortune--2020-05-03--‘The Last Dance’ director is racing to finish episodes. Kobe Bryant and ‘the price of global fame’ i

‘The Last Dance’ director is racing to finish episodes. Kobe Bryant and ‘the price of global fame’ is next

Warren Buffett says Berkshire is reversing course on airlines—again

Four episodes in, ESPN’s blockbuster docuseries The Last Dance has cemented itself as appointment Sunday night viewing. The 10-part examination of Michael Jordan and the Chicago Bulls dynasty has already claimed the title of the network’s most-watched documentary ever. Director Jason Hehir is watching it all unfold in real-time as he and his team race to finish editing the last few episodes of the series. “We’re running on fumes and trying to finish this thing strong,” he told Fortune by phone from his New York City apartment.
Last Sunday’s third and fourth episodes took a step back from Jordan and shifted its attention to the eccentric rebounding talisman Dennis Rodman and the offense-minded head coach Phil Jackson (including his youthful exploits taking acid and thinking he was a lion). Naturally, a lot of memes showed up on Twitter during and after the broadcast, which Hehir says he loves.
Ahead of the next pair of episodes airing tonight, Hehir spoke about the highlights of what he’s seen from viewers so far, as well as what to expect going forward as the series crosses its halfway point.
Fortune: You’re through four episodes so far. How do you feel?
Jason Hehir: I feel good. We’re still working. It’s great to see people’s positive responses and that we’re getting good viewership numbers, but we also are trying to finish this thing strong and not get complacent with the final couple episodes. We’re running on fumes, but it gives us a great energy boost for the final few weeks of this.
What’s still left to do?
We just finished the actual editing of the final picture lock of Episode 10. So now Episodes 8, 9, and 10 we’re in different phases of sound design, color correction and closed captioning, and subtitling and translation. This is going to 185 countries via Netflix, so that process is pretty painstaking. The creative process is pretty much done as far as putting the story together and all the parts where they belong.
You’re editing all of this while seeing the real-time response of viewers, who are starved of sports content right now. What has been the most interesting observations that you’ve seen from the audience so far?
Some of the more subtle stuff. I knew to expect some of the obvious things, like Michael looking at the iPad [and watching rival player Isaiah Thomas, who played for the Detroit Pistons] and Michael’s responses to some of the more controversial moments in the doc—everyone’s depiction of the Pistons rivalry on both sides from the Pistons perspective and the Bulls perspective. We knew that was going to resonate.
But some of the smaller, more subtle production decisions like the “former Chicago resident” description of President Obama. Those were little inside jokes in the edit room that I’m surprised took on a life of its own. And the memes I’ve seen, the way that people have been absorbing this in the Twittersphere rather than just as television viewers has been fun. Also the response to the music, which is arguably the most important aspect of any film that I do. To see people responding to the music so positively and saying that they’re really enjoying how we’re matching music to picture is really gratifying, because we put an enormous amount of thought into that.
Some casual NBA fans or non-watchers might be surprised to learn about coach Phil Jackson being into a hallucinogenic drug like LSD. Were there any moments in the series along those lines that took you by surprise?
There’s very few stories that I didn’t know because I’ve done years of research on this thing going into it. But we heard some stories that are coming up in later episodes about the way Michael used to motivate himself. Sometimes he would take slights that people had directed at him and he would just magnify them and embellish them in his own head to the point where he needed to exact revenge. And then there were times when he would take slights that didn’t even exist, that he had conjured in his own head. He would exact revenge on people who didn’t even deserve it. He just needed something to motivate himself. So those were fun to uncover.
And then just the background to get both perspectives on some of these indelible moments in the NBA. To hear Charles Barkley talking about that great ’93 Finals series [between Barkley’s Phoenix Suns and Jordan’s Bulls], and Charles tells us in Episode 6 that one of Michael’s performances in a game of that series—Charles says that was the first time he realized there was someone on Earth better at basketball than he was. It just gives you an idea of the elite level of competition that these guys are undertaking, and the opinions they had of themselves and the opinion you had to have of yourself to go out there and perform at that kind of level. We’ll hear from Reggie Miller about the heartbreaking loss that the [Indiana] Pacers had in the ’98 Eastern Conference Finals. And then of course the Bulls and the [Utah] Jazz had some tremendous battles in ’97 and ’98.
We also had no idea what to expect with the behind the scenes footage. So to see some of the candor and the rawness that these guys exhibited, especially as the season goes on and they get more used to the cameras being around—I think you’ll see in some future episodes some stuff that I’m still shocked that Michael allowed us to include. But I’m glad that he did, because it was a gutsy thing of him to do. He certainly could have pulled the plug on some of the shots that we included in there, but to his credit he never did that once.
So Michael has watched the series in full, then? Have you had any sort of review or reaction from him so far?
Not so far. I mean, he’s seen all these episodes, so any reaction that he would have had he gave to us when he watched the rough cuts. And to his credit he watched these rough cuts just like all the other executives, and he had his own notes on him. But Michael’s notes, I’m happy to say, were always in the interest of improving the show. He would recommend shots to put in or a moment from a game that meant a lot to him. Or he told us that one of the things that really created the schism between he and [former Bulls general manager] Jerry Krause was that he traded away Charles Oakley, who was his enforcer on the court and his best friend off of it. So he asked us to put things like that in, and it just enhanced the detail-oriented telling of the story. But he never once said, “Take that answer out, don’t put this in, that’s unflattering.” He had the power to do that but he never once did.
Even just through text message or email, he never said anything like, “You did a good job with the show,” or, “I didn’t like this,” kind of things?
No. There were group notes that came from the [Nike-owned] Jordan brand, and there were group notes that came from the NBA, group notes that came from Netflix and ESPN. So we had a lot of executive cooks in the kitchen up to the head of Disney who were watching this thing. Especially under quarantine. It’s kind of the great equalizer—no one has anything to do, everybody’s stuck at home, and the size of those homes vary greatly between my apartment here in New York City and where Michael lives [in Jupiter, Fla.] and where [Disney chairman] Bob Iger lives [in Brentwood, Calif.]. People are stuck inside their homes and they’re eager to see the content that the rest of the world’s going to see as soon as they can get their hands on it. So it’s not that level of personal interaction that we’re having, but the message is being sent nonetheless.
How about any of the other main figures in the show? So far you’ve spent a lot of time in dealing with the likes of Scottie Pippen, Dennis Rodman, and Phil Jackson? Have you asked them for their thoughts?
I haven’t. I got a really nice text from [former Bulls player] B.J. Armstrong, because I did his podcast the other day and we’ve been in touch since I interviewed him a couple of years ago. But, you know, Scottie, Phil, and a guy like Rodman… Phil is difficult to get to regardless, and Scottie’s not a guy that I want to be bothering all the time, asking how he likes the series. Dennis Rodman—who knows how to contact that guy?
A lot of people on social media naturally mentioned Obama’s presence in the series. Out of the 100-plus people you interviewed, who were you the most surprised to see actually agree to speak with you? Someone like Rodman, perhaps?
Yeah, Rodman definitely was one of the white whales. He’s the guy, if I had to guess who was never going to sit down with us, it would be Dennis. We also got Michael to do an extra interview. He was contracted to do two, and he agreed to sit down for three, so that was a tremendous surprise. It helps the series enormously. And then there was guys like [former Bulls player and current Golden State Warriors head coach] Steve Kerr, who I’d always wanted to sit down with and pick their brain, and were so present and thoughtful and incisive.
I like the technique in the series where you show interview subjects previous interviews with other people on an iPad to get their reaction. Is that something you planned to do all along?
I did plan to do that all along, especially with Michael, because Michael doesn’t know me well enough for me to read off a piece of paper what someone like Gary Payton or Reggie Miller or Isaiah Thomas said about him or those teams or the series they played in. It made more sense for me to just hand him an iPad, have him hit play, and record his visceral, immediate response to what these people were saying. It was really valuable because it was almost like a time machine. You give him that thing, and as soon as he hits play it’s a portal back to prime M.J. in the nineties. And he gets that look on his face, and you can see that fire start to burn again when he hears people talking about these series that were such battles. When he hears people talking about these things in real time you can see that his soul goes right back to the days when those gams are being played.
Episodes 5 and 6 premiere this Sunday. What can we expect? And, in general, what remaining episode are you most excited to see how the audience reacts to?
Episodes 5 and 6 I think people are going to really respond to the Kobe Bryant material that’s in there. The NBA had cameras behind the scenes for that ’98 All-Star Game in Madison Square Garden. And that’s a collection of some NBA legends who are playing in that game. Kobe was the youngest All-Star ever and, in that game, he’s only 19, but you can see the seeds of this relationship that blossomed with Michael over the years. Planted in that game. And Episodes 5 and 6 are really kind of tandem episodes about Michael’s rise to global fame, and the perks of that global fame with endorsements and everything that comes with being such an icon. The price of that global fame in Episode 6 is that inevitably, people are going to want to poke holes and take you down when there’s nothing left to talk about how perfect you are. They want to poke holes and show how human you are. So it’s the upside and the downside of international acclaim that we examine there.
As far as what episode I’m most looking forward to people see, it’s almost like choosing a favorite kid. But as the series goes on, I think we start to show more and more of the humanity of all these guys. I’m proud of all the episodes, but as the series goes on I get more and more proud because we’re telling stories deeper into the series that are not just about superstars, but about human beings.
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fortune--2020-05-03--NCAA moves toward athlete compensation, but how?

The foundation is in place for the NCAA to drastically alter its definition of amateurism.
By this time next year, college athletes may have the official OK to become paid sponsors, able to earn money for their names, images and likenesses without compromising their eligibility.
Remember when Ohio State players got into trouble with the NCAA in 2010 for trading their own memorabilia and gear for tattoos? Or when Heisman Trophy winner Johnny Manziel signed autographs for money in 2013 and everyone wondered what the punishment might be?
Under the new rules being drawn up across the NCAA, all that would most likely be fine. A report from the NCAA’s Federal and State Legislation Working Group laid out how we got here, what has been agreed upon and what is still to be determined.
There is still a lot to figure out, including how, exactly, to draw up “guardrails sufficient to ensure that … the role of third parties in student-athlete NIL activities is regulated.”
Some questions and answers as the NCAA moves to address athlete compensation, a thorny issue for the nation’s biggest college sports governing body for more than 60 years.
Who will be permitted to pay the athletes?
The best way to answer that is by laying out who will not be permitted to pay the athletes: the NCAA, the schools and the conferences.
That doesn’t mean everybody else is good to go: The NCAA working group said member schools should consider prohibiting athletes from promoting things like alcohol, tobacco and sports gambling. There is also a recommendation to limit what athletes can do with shoe and apparel companies — a source of angst for college sports for a long time.
What about boosters?
Boosters likely won’t be disqualified immediately from working with athletes. The NCAA plans to monitor deals athletes make and require them to disclose details, perhaps through a clearinghouse.
Will this be enough to satisfy lawmakers, both state and federal?
No. The NCAA is trying to fend off attempts by states to force the association into opening up the free market for athletes. The NCAA is also hoping to get help from Congress in the form of a federal law to override anything states come up with and to provide uniformity.
Reactions to the NCAA’s announcement from lawmakers ranged from cautiously optimistic (California state Sen. Nancy Skinner, the primary driver of the state’s law on the topic, said it was a step in right direction) to downright dismissive (Florida state Rep. Chip LaMarca said: “If the NCAA’s goal was to limit access, then they have accomplished their goal.”).
When will Congress get around to dealing with the NCAA?
Hard to know.
Sens. Chris Murphy of Connecticut and Mitt Romney of Utah are leading a group of lawmakers examining compensation for college athletes and related issues. There was momentum for senators to take action. Then a global pandemic hit. This is still a big issue for Murphy and others, but whether it can move forward during a public health and economic crisis remains to be seen.
Is the NCAA angling for an antitrust exemption?
Not directly, but when you ask Congress to protect your organization from state laws and future lawsuits challenging your rules, it sounds a lot like you are asking for antitrust exemption.
Will athletes be capped on what they can earn?
No, according to Ohio State athletic director Gene Smith, who led the group that produced the recommendations approved by the NCAA Board of Governors.
That is notable since the NCAA is still fighting the appeal of an antitrust case in which the plaintiffs claimed the association and its member schools and conferences have illegally capped compensation to athletes at the value of a scholarship.
Can we expect to see athletes in their jerseys touting the local sandwich shop?
No. Athletes will not be allowed to use their school logo or brand in their personal deals.
Is the NCAA football video game coming back?
Not under these recommendations. That would require a group licensing deal between the players and the schools, and the NCAA is steering clear of that.
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fortune--2020-05-03--Rep. Rosa DeLauro: We must repeal Trump’s $135 billion hidden tax giveaway for wealthy real estate i

Rep. Rosa DeLauro: We must repeal Trump’s $135 billion hidden tax giveaway for wealthy real estate investors

Senate Republicans snuck in a $135 billion tax giveaway for the wealthiest in the same law that gave working people in my home state of Connecticut and around the country checks of $1,200 or less. The $135 billion tax break is a giveaway for millionaire real estate developers and hedge fund managers. Meanwhile, small businesses across our state still cannot access relief.
It is unconscionable. House Democrats are joining with the public to demand that Congress repeal and rescind this Republican giveaway immediately.
We passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the third congressional package providing relief for the COVID-19 pandemic, to provide $100 billion in much-needed support to hospitals and other health care providers, to give $150 billion of equally-needed funding to state, local, and tribal governments, and to establish the Paycheck Protection Program to get small businesses and their employees through this crisis. I strongly support those provisions.
But, as the New York Times reported in late March, “Senate Republicans inserted an easy-to-overlook provision on page 203 of the 880-page bill that would permit wealthy investors to use losses generated by real estate to minimize their taxes on profits from things like investments in the stock market.”
The nonpartisan Joint Committee on Taxation estimated the cost of the giveaway to be $135 billion over the next 10 years. Over 80% will go to those earning more than $1 million in income.
And there are no strings attached: no requirement that wealthy recipients use the windfall to retain employees, no requirement they use it to respond to or recover from the pandemic, and no requirement they show they lost money because of the pandemic. It can be for losses that investors have not yet settled from years before.
Meanwhile, many small businesses still cannot access the new Paycheck Protection Program, which Congress established to get local business owners and their workers to the dawn of the coronavirus recovery. Nearly 80 have contacted my office—from New Haven, from Milford, from Prospect, from Seymour. The roadblocks they’ve faced go beyond just getting enough funding; some banks are prioritizing bigger businesses with bigger applications—and thus bigger fees. The $135 billion Congress handed to real estate developers who don’t need it would have been much better going to in-need local businesses.
We must repeal and rescind this Republican giveaway. I am cosponsoring legislation from Rep. Lloyd Doggett and Sen. Sheldon Whitehouse that will do just that. And I have sent a letter to congressional leadership, cosigned by more than 60 House Democrats, demanding action.
There is precedent for righting this wrong. In 1997, a $50 billion tax break for tobacco companies was slipped into comprehensive budget legislation right before it passed. Only after President Clinton signed the law did we discover the giveaway. The public demanded action, and we repealed it the next month.
During this pandemic, there are many in Connecticut and the rest of the U.S. who should be getting Congress’s immediate attention. Wealthy real estate developers and hedge fund managers are not among them.
Rosa DeLauro is the U.S. representative from Connecticut’s 3rd District.
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