fortune--2020-05-05--How to play live pro sports in a pandemic? Taiwan, South Korea offer lessons

The Last Dance, ESPN’s weekly documentary series about Michael Jordan and a Chicago Bulls season that concluded 22 years ago, is the only appointment-viewing entertainment for American sports fans during professional leagues’ indefinite, pandemic-inflicted hiatus. In Asia, however, some teams are playing ball. In fact, on Tuesday, fans in South Korea can tune into five games that will mark the national baseball league’s opening day.
In early April, U.S. President Donald Trump told reporters that he wanted “fans back in [U.S. sports] arenas” as soon as possible. And without specifying a date, he said that it would likely be “sooner rather than later.” A month on, no major U.S. professional sports league has released a timetable for a return. League officials like National Basketball Association commissioner Adam Silver have said the NBA would only return if he was confident players and team staffs could do so under safe conditions, which would entail consistent and widespread testing of league personnel on a scale that isn’t yet available in the U.S.
Sports leagues in Europe appear slightly ahead of the curve, with the German Bundesliga soccer league proposing dates for restarting games and its Italian counterpart, the Serie A league, announcing the resumption of team training sessions. The Bundesliga last played a match on March 11, and Serie A was shut down after a game on March 10.
Yet these plans have run into snags.
In Germany, a proposed start date of May 9 will likely be pushed back a week or two after three staff members of a league team tested positive for the virus. In Italy, teams in the Serie A league were cleared to practice as of May 4, but the country’s sports minister is calling for a review of the decision, and there is little certainty the league will resume playing games again this season.
As sports leagues around the world contemplate a return to competition, Asia offers a blueprint for how to play professional sports amid a pandemic.
Basketball in Taiwan
Just as the NBA abruptly canceled games indefinitely on March 11, Taiwan’s Super Basketball League, a national organization, was resuming play after its own coronavirus-related delays.
The five-team league did not play any games between Jan. 18 and March 7, extending its usual one-month holiday for Chinese New Year over concerns related to the pandemic.
To resume play, officials created a “bubble” environment to ensure the health and safety of fans and athletes.
The approach to fans was straightforward enough: They were banned from attending games in-person for the remainder of the 2020 season. They’d have to resort to watching broadcasts of the games; all are televised.
For players, the process of returning to the court required more nuanced adjustments. All of the remaining 50 regular season games, plus playoff contests, were confined to a single arena to limit travel for players. Athletes also had their temperatures checked before entering the venue. Team coaches and trainers distributed squirts of hand sanitizer to players during timeouts and other pauses in play and were expected to urge players to wash their hands thoroughly at halftime.
After squeezing in all the games missed during the delay, the league finished its five-month season on schedule on April 30 after Taiwan Beer defeated the Yulon Luxgen Dinos in the league’s championship.
Baseball in Taiwan
When Taiwan’s Chinese Professional Baseball League began its regular season a month late on April 11, it adhered to public health measures piloted by its basketball counterpart like temperature checks and fan-less stadiums.
Masked Hanwha Eagles players at the Korean Baseball Organization League’s opening game at the empty SK Happy Dream Ballpark on May 5, 2020, in Inchon, South Korea. (Photo by Chung Sung-Jun/Getty Images) Chung Sung-Jun/Getty Images
Baseball, however, is already showing some signs of relaxing the restrictions of its peer league; it’s playing games at five venues—as opposed to one—and is now considering whether to open its stadiums to 250 fans per game.
The baseball league banned common practices like high-fiving and spitting, but players are obeying the directives to varying degrees. For instance, all attempts at social distancing became moot during an April 19 game, when two teams engaged in a bench-clearing brawl.
Neither league has conducted universal coronavirus testing of staff or players, but both said they would postpone games if someone affiliated with the league fell ill and tested positive for the coronavirus.
The return of Taiwan’s professional sports was, in large part, the result of its effective handling of the pandemic. Thus far, the self-governed region has recorded 436 cases of coronavirus with six deaths and hasn’t had to shut down its economy.
Baseball and soccer in South Korea
In recent months, South Korea too has tamed its coronavirus outbreak; it even held a national election with record turnout on April 15.
Now, it appears, the country is ready for sports. On May 5 and May 8, the South Korean KBO baseball league and K-League soccer, respectively, will resume play after months of delays.
The sporting events will not have any fans in attendance and will require players to undergo daily temperature screenings. South Korean authorities have said that if any players show symptoms of the virus, they will be immediately tested and quarantined, and games will be postponed if a player or staff member tests positive.
If the leagues successfully resume play this week, they may be seen by more viewers than ever before. ESPN on Monday struck a deal with South Korea’s baseball league for English-language rights to games and highlights for the 2020 season. Starting with opening day on Tuesday, ESPN will air six games per week live, with the first pitch between 1 a.m. and 5:30 a.m. ET. The deal seems to leave leeway for ESPN to return to its typical slate of live sports, should U.S. leagues make a comeback. Its announcement noted that the telecast schedule for Korean baseball is subject to change “pending future live event considerations.”
South Korea’s soccer league has already struck a deal with 10 overseas markets for rights to air its games, though the U.S. wasn’t part of the agreement.
Basketball in China
The fate of China’s basketball league, however, has provided a cautionary tale for league officials elsewhere about the tricky nature of adapting to the risks of a virus that’s not well understood.
China, which has reported dwindling numbers of coronavirus patients since early March, still doesn’t have a firm start date for its basketball league, the Chinese Basketball Association (CBA). The league initially planned to return to play on April 15, after it suspended games for months during the country’s outbreak. Like their counterparts in Taiwan, officials had been aiming to create a bubble atmosphere for the games, limiting the 20 teams to playing at two sites without fans. However, owing to government orders, league officials are now instead targeting a July start date.
In its statement on March 31, China’s official sports body said that sports leagues, including the CBA, would be indefinitely suspended as a means to enhance China’s “epidemic prevention and control efforts.” But sources told ESPN that Chinese sports officials who made the decision were concerned about the potential for asymptomatic carriers to spread the virus if the league was allowed to resume play.
The danger of asymptomatic carriers is causing a similar holdup in the NBA’s plan to restart games. The league does not believe monitoring symptoms and temperatures will be enough to ensure the health and safety of its players and personnel, since some carriers show neither, according to ESPN. The NBA forecasts it will need roughly 15,000 coronavirus tests to conduct regular testing before its season can resume. Right now, it’s not purchasing any tests, and it won’t do so until the larger health system has enough capacity to address the needs of the general public.
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—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-05--Australia, New Zealand continue plans for shared travel ‘bubble’ that’s safe from coronavirus

‘ Cash for clunkers ’ : German auto giants ask for government help to stoke demand

Australia and New Zealand are committed to introducing a shared travel zone as soon as it is safe to do so, Prime Ministers Jacinda Ardern and Scott Morrison said.
The two leaders agreed to commence work on a trans-Tasman Covid-safe zone that will ease travel restrictions between Australia and New Zealand, they said in a joint statement Tuesday. Earlier Ardern attended Australia’s National Cabinet meeting via video link to discuss the zone and other aspects of the fight against Covid-19.
New Zealand and Australia have both had success in containing Covid-19 and avoided the exponential growth in cases seen in many other countries. As they look to relax lockdown restrictions, the focus has shifted to reigniting their economies and both would benefit if they could open the borders to each other’s tourists and business travelers.
“Building on our success so far in responding to Covid-19, continuing to protect Australians and New Zealanders remains an absolute priority,” the prime ministers said. “We will remain responsive to the health situation as it develops.”
The travel zone would be put in place once it is safe to do so and necessary health, transport and other protocols had been developed and met, to ensure the protection of public health, they said. Officials will work with business leaders from both nations as the plan develops.
“A trans-Tasman Covid-safe travel zone would be mutually beneficial, assisting our trade and economic recovery, helping kick-start the tourism and transport sectors, enhancing sporting contacts, and reuniting families and friends,” the two leaders said. “We need to be cautious as we progress this initiative. Neither country wants to see the virus rebound so it’s essential any such travel zone is safe.”
More coronavirus coverage from Fortune:
—The Rebuild Program: A project to help small businesses reopen amid a pandemic
—Saving lives vs. saving the economy is a false tradeoff, economists say
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—Inside China’s reopening: 7 personal stories of life after lockdown
—Gilead’s remdesivir won’t be a COVID-19 miracle cure, but it’s an important first step
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—PODCAST: How 2 CEOs outside of health care decided to pivot to fight COVID-19
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
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fortune--2020-05-05--Frontier Airlines will let passengers keep their social distance—for a fee

Frontier Airlines Holdings Inc. said it’s going to charge extra for passengers who want to guarantee a spot next to an unoccupied middle seat in the age of social distancing.
The carrier aims to generate revenue on the empty seats, charging from $39 to $89 depending on the route. It will have 18 “More Room” assignments available on each flight from Friday through Aug. 31, spokeswoman Jennifer De La Cruz said Monday.
The new product complements a face-covering mandate Frontier is imposing for passengers starting Friday to help guard against the spread of the new coronavirus, along with a “health requirement” customers must accept before they can check in for a flight.
As part of that new system, Frontier travelers must check their temperature, attest that neither they nor anyone in their household has exhibited Covid-19 related symptoms for 14 days and wash their hands or use sanitizer before boarding a flight on Denver-based Frontier, which is owned by private equity firm Indigo Partners LLC.
Large carriers such as American Airlines Group Inc. and Delta Air Lines Inc. say they’ve begun blocking many middle seats to promote greater distance among passengers. The airlines don’t guarantee a middle seat will be unoccupied and they generally may assign them as needed.
Last week, American said it would sell only half the middle seats available in its economy cabin, though it will assign those seats when necessary. Southwest Airlines Co. is also limiting its seat sales to promote greater spacing but did not specify by how much.
“We are well aware that all airlines, Frontier included, are making efforts to allow people to spread out,” De La Cruz said in an email. “But the opportunity for those measures will taper off as more people start flying.”
Ultra low-cost airlines such as Frontier, Spirit Airlines Inc. and Ryanair Holdings Plc generally need to sell more of their seats to break even than do larger airlines that have more frills that generate revenue and generally higher fares.
Last month, Ryanair Chief Executive Michael O’Leary said his airline — which has suspended most of its flights — would not resume operating if government regulators require empty middle seats that can’t be sold.
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—The Rebuild Program: A project to help small businesses reopen amid a pandemic
—Saving lives vs. saving the economy is a false tradeoff, economists say
—When government fails businesses, communities can step up to help them thrive
—Unemployment claims are taking some states weeks to process. What to know
—Inside China’s reopening: 7 personal stories of life after lockdown
—Gilead’s remdesivir won’t be a COVID-19 miracle cure, but it’s an important first step
—Work from home, online grocery shopping, cord cutting: What coronavirus trends will stick
—PODCAST: How 2 CEOs outside of health care decided to pivot to fight COVID-19
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-05--Amazon warehouse worker dies from COVID-19

Most college students won ’ t get stimulus checks—but they should

Amazon.com said an employee who worked in a Staten Island warehouse died from Covid-19, heightening concerns among workers that the online retail giant isn’t doing enough to protect those toiling through the pandemic.
The employee, whose identity wasn’t disclosed, last worked at the New York facility on April 5 and notified Amazon April 11 that he had tested positive for Covid-19, a spokeswoman said on Tuesday. The man’s family told Amazon about his death Monday, and warehouse managers began alerting workers Monday evening. He had no known contact with any other employees since getting sick, according to Amazon.
“We are deeply saddened by the loss of an associate at our site in Staten Island,” Amazon spokeswoman Lisa Levandowski said. “His family and loved ones are in our thoughts, and we are supporting his fellow colleagues.”
At least five Amazon employees have died from coronavirus-related illnesses, according to news reports. The Staten Island worker’s death was reported earlier by the Verge.
People who worked at Amazon warehouses in Hawthorne and Tracy, California, have died of Covid-19. So have at least two employees of Amazon-owned Whole Foods Market. The Seattle-based company and other retailers such as Walmart Inc. have faced calls to do more to protect employees following deaths in their employee ranks.
During the pandemic, Amazon has been overwhelmed by demand from shoppers ordering products online while they remain home to minimize exposure to the virus, and the company is hiring 175,000 workers to help keep up. Amazon staffers have staged demonstrations around the country asking the company to increase efforts to keep them safe from the outbreak, including closing facilities for more thorough cleaning.
Amazon has said it is checking employee temperatures at the beginning of shifts, cleaning facilities, increasing space between workers and taking other safety measures. Chief Executive Officer Jeff Bezos last week said the company would spend $4 billion to get products to customers and keep workers safe while operating through the outbreak.
The company hasn’t disclosed how many workers have tested positive for Covid-19, creating anxiety among staffers who sometimes learn about cases informally in online chat rooms. Amazon said it uses contact tracing and video surveillance to identify colleagues who have worked in close proximity to those who have been infected.
More must-read tech coverage from Fortune:
—Remote work, online grocery shopping, cord cutting: What coronavirus trends will stick
—How T-Mobile shifted 12,000 employees to work from home in less than two weeks
—Coronavirus patient data stored in electronic health records found difficult to study at scale
—The startup founder in India striving to improve mass transit through the pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Zoom’s ups and downs since the coronavirus crisis
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-05-05--Most college students won’t get stimulus checks—but they should

Pence says White House is considering disbanding the coronavirus task force

To ease the financial suffering of Americans during the coronavirus pandemic, the U.S. Congress recently passed numerous stimulus bills totaling hundreds of billions of dollars.
Yet college students were all but forgotten by each subsequent relief package.
For instance, through the Economic Impact Payments, most individuals making under $75,000 a year have received (or will soon receive) $1,200 in stimulus funds, while married couples making under $150,000 will get $2,400. Parents with children 16 and under are eligible for an additional $500 per child, meaning that anyone aged 17 to 24 who’s claimed as a dependent on their parents’ taxes is ineligible for stimulus funds.
College students are stuck in a position where they’re not considered adults and they’re not considered children. In other words, the CARES Act gave them no direct financial relief, nor did it give their parents any on their behalf.
Lawmakers must change this. There are an estimated 16.9 million students enrolled in undergraduate programs in the U.S., according to the National Center for Education Statistics. Many have had their lives thrown into chaos by the COVID-19 pandemic. They’ve been asked to leave campus as colleges went into lockdown, and students who have relied on campus jobs to finance their degrees have seen those jobs disappear as campuses closed. Hundreds of thousands of students were already in debt when COVID-19 hit, and in 2018, the average college graduate in the U.S. with student debt owed about $29,000, according to a report by the Institute for College Access & Success.
As someone who went to college on a scholarship, I know the financial struggles that students endure. When I applied for credit cards, car loans, or other forms of lending, creditors rejected me, time and again. When I moved off campus, I got rejected by landlords who wanted larger deposits than I had, time and time again. I made it through those times.
There are many students today in similar—or worse—situations. Not every student has a safe or accessible home they can return to when their campus closes, and not every student has parents that can Venmo them money whenever they ask.
Officials in Congress have used the notion that college students aren’t responsible for their own financial well-being to justify leaving dependents out of the relief package. “Dependents, by definition, aren’t responsible for a majority of their financial support,” a spokesperson for the Senate Finance Committee, which wrote the CARES Act, told the Wall Street Journal. “The goal of the recovery rebates is to provide support for Americans who are responsible for their own financial well-being or that of another during this pandemic.”
But many college students experience financial hardships as acutely as anyone. A survey of over 13,000 students at 28 community and technical colleges in Washington State found that 41% of students reported being food insecure at some point in the last 30 days. And Pew Research Center analysis of National Center for Education Statistics data found that, in 2015 to 2016, 31% of all undergraduate students were living in poverty.
There are some promising efforts to bring relief to students. The CARES Act did set aside $6.28 billion for emergency grants to students whose lives have been upended by the coronavirus to help them cover costs of educational materials, housing, and other expenses. A group of U.S. Senators, led by Sen. Tina Smith (D-Minn.), also introduced the All Dependents Count Act earlier this month, which would allow the parents of college students (along with others who are in charge of adult dependents) to collect a $500 credit.
While well-intentioned and helpful, these efforts aren’t enough. Congress should pass a version of the CARES Act that provides college students with the full $1,200 that other American adults are already receiving now.
College students are the next generation of lawmakers, doctors, journalists, and others who will build the road forward in the coming decades. If we don’t offer them the same support we’re giving others, in the midst of this historic recession, how does that bode for the future of our country?
Hao Liu is cofounder and CEO of Boro, a Chicago-based financial technology startup for college students.
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fortune--2020-05-05--Pence says White House is considering disbanding the coronavirus task force

President Donald Trump said Tuesday he’s looking at “phase two” of the U.S. response to the coronavirus pandemic as the White House discusses disbanding the task force that has helmed the efforts so far.
The group, which includes top public health experts Anthony Fauci and Deborah Birx, could be dissolved by late May, Vice President Mike Pence, who leads the task force, told reporters earlier Tuesday.
“Mike Pence and the task force have done a great job, but we’re now looking at a little bit of a different form,” Trump said during an event in Phoenix.
When asked whether he considered the mission of combating coronavirus to be accomplished, Trump answered: “No.”
The White House has begun to discuss a transition plan with the Federal Emergency Management Agency, Pence said. A possible time frame for the move could be late May or early June, he added.
“We’re having conversations about that,” Pence said in a briefing the task force held for reporters on Tuesday, confirming an earlier report by the New York Times.
But on Tuesday, Pence portrayed the task force as having accomplished its goal as the U.S. outbreak — the largest in the world — plateaus. There have been nearly 1.2 million cases of Covid-19 and more than 70,000 deaths from the disease, but states are beginning to try to reopen businesses and lift social-distancing regulations as the growth of the outbreak slows.
On Sunday, Trump revised upward the number of the deaths he expects from the outbreak, saying the total could reach 100,000. In April he had said he thought between 50,000 and 60,000 Americans would die.
“We have slowed the spread, we have flattened the curve,” Pence said. Not every U.S. community is “out of the woods yet,” but now have the resources they need, he said, adding that officials are watching the Chicago and Des Moines areas closely.
“We are very confident we can meet the moment” with resources now available at hospitals, he said.
“Whatever decision the president makes with regard to the White House coronavirus task force will all be conditions-based,” he said. “But we are beginning — as states are reopening, we’re seeing progress that we’re making, we’re beginning to have those discussions about winding down the work of the task force.”
“The work goes on,” Pence said, adding that the White House intends to retain Birx, the State Department immunologist who’s coordinated the task force’s activities. “She’s the best in the world,” he said.
Beginning in March, the U.S. response to the outbreak began to revolve around the task force’s daily news conferences, which made luminaries of two government doctors — Birx and Fauci, the director of the National Institute of Allergy and Infectious Diseases.
The task force news conferences were less beneficial for Trump. He tried to dominate the daily news cycle with briefings that sometimes ran over two hours, only to see declining public approval for his handling of the outbreak as deaths rapidly mounted.
The news conferences were dialed back after April 24, when Trump was ridiculed after musing about treating coronavirus patients with light and disinfectant.
More coronavirus coverage from Fortune:
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—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
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fortune--2020-05-05--Nikole Hannah-Jones and Ida B. Wells are now Pulitzer Prize winners

This is the web version of raceAhead, Fortune’s daily newsletter on race, culture, and inclusive leadership. To get it delivered daily to your inbox, sign up here.
The 2020 Pulitzer Prizes have been awarded and there are some incredibly deserving winners in the lineup from the race beat’s (or just humanity’s) point of view. But let’s focus on one for now: Nikole Hannah-Jones wins the Pulitzer for Commentary for her introductory essay for the 1619 Project, what raceAhead once described as “a necessary corrective to the fundamental lie of the American origin story.” Clearly, others felt the same.
“For a sweeping, deeply reported and personal essay for the ground-breaking 1619 Project, which seeks to place the enslavement of Africans at the center of America’s story, prompting public conversation about the nation’s founding and evolution,” said a Pulitzer announcement of the project that recognized the 400th anniversary of the origins of human chattel slavery.
In discussing her acceptance of the award to New York Times staff via video (as tweeted by New York Times Magazine deputy editor Jessica Lustig), Hannah-Jones spoke about “making a difference.”
The 1619 Project stirred up plenty of controversy for its reframing of history, including an open letter from five historians raising questions about the project’s premise, and the process the team used for historical fact-checking and vetting.
The New York Times responded swiftly and thoroughly:
“As the five letter writers well know, there are often debates, even among subject-area experts, about how to see the past,” the editor-in-chief wrote. “We can hardly claim to have studied the Revolutionary period as long as some of the signatories, nor do we presume to tell them anything they don’t already know, but I think it would be useful for readers to hear why we believe that Hannah-Jones’s claim that ‘one of the primary reasons the colonists decided to declare their independence from Britain was because they wanted to protect the institution of slavery’ is grounded in the historical record.”
Ida B. Wells, investigative journalism trailblazer, educator, and civil rights icon, was also posthumously honored with a Pulitzer Special Citation for her “outstanding and courageous reporting on the horrific and vicious violence against African Americans during the era of lynching.”
The prize comes with $50,000 to support Wells’ mission, with recipients to be announced at a later date.
As it’s time to celebrate this achievement and the necessary correctives still to come, it’s worth giving Hannah-Jones the last, re-framed word:
“I’ve been trying to come up with sentences worthy of summing up how it felt to be awarded @PulitzerPrizes the same day as Ida B. Wells for a project I led on the legacy of slavery for the @nytimes,” she tweeted, “a newspaper that in 1894 called Wells a ‘slanderous and nasty-minded mulattress.’”
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
Ellen McGirt and Tamara El-Waylly co-wrote today’s essay.
On point
A new report finds alarming racial disparities in philanthropic funding and assets The report, a collaboration between two philanthropic organizations, Echoing Green and Bridgespan, find that nonprofits led by Black and Latinx executives lag behind in fundraising, had 45% less revenue, and had unrestricted assets that were 91% lower than nonprofits run by their white-led peers. “It’s even worse because it’s philanthropy, and we’re supposed to be changing the world,” Cheryl L. Dorsey, president of Echoing Green, told the New York Times.
New York Times
Diversity, equity, and inclusion must remain front and center as we head back to work I’m digging in on this topic for the long haul, and relying on some extraordinary experts to help me. But these nuts-and-bolts suggestions from Vanessa J. Weaver, Ph.D., are a great place to start. “Every aspect of an organization’s culture and operations will be impacted,” she writes. “DI&E issues will have a significant impact on the success of employee reintegration and how organizations reconnect with diverse groups of customers and redefine relationships with the global and local communities in which they operate.”
Diversity Best Practices
JP Morgan Chase has a new global head of diversity and inclusion Brian Lamb started yesterday, bless his heart, in the newly created position that reports to the firm’s co-presidents. He plans to find ways to support a variety of underserved communities and build on their existing initiatives, including Advancing Black Pathways, Advancing Black Leaders, Military & Veterans Affairs, Women on the Move, the Office of Disability Inclusion, and Global Supplier Diversity. He worked his way up the diversity ladder from Fifth Third Bank, click through for more.
Black Enterprise
Coronavirus in the community
On background
People analytics is a powerful tool for culture change in the workplace I’m re-upping this piece from 2018 as a reminder that for the vast majority of people, their workplace will be—and likely, should be—a greatly changed place going forward. So what are some tools anyone can use to foster a more welcoming and inclusive environment that addresses the very real needs of employees affected by pandemic? “A transformation is a whole portfolio of change initiatives that together form an integrated program,” says two researchers from Microsoft. The question is, what is the goal, no?
Harvard Business Review
A thread for what ails you Hugh Weber is a community organizer, a creative convener, a brilliant entrepreneur, and a brother from another mother. He, along with his equally amazing wife Amy, is raising two extraordinary children, one of whom decided to get curious about, then acknowledge, the hard work of their mail carrier, who lives and works in Sioux Falls, South Dakota. And then, this happened. Bring tissues and stamps.
Hugh Weber on Twitter
Somewhere in the dream we had an epiphany, now we right the wrongs in history If you want a memorable musical metaphor for allyship—or just looking for an excuse to listen to a beautiful song—then take a few moments to enjoy this extraordinary performance of the Oscar-winning song “Glory”, from the Ava DuVernay film Selma about the 1965 marches for voting rights. John Legend and Common won Best Original Song at the 2015 Golden Globe Awards and the 87th Academy Awards for the song. But the staged version, which was performed at the Oscar ceremony, offers a subtle lesson in grace in racial partnership that’s easy to miss. As the “marchers” fill the stage to sing during the dramatic finale, the white performers march shoulder to shoulder with the black ones—but stand in silent solidarity. The glory is in the details.
"Glory" at the Oscars
The big number
Cinco
Turns out, Cinco de Mayo doesn’t commemorate Mexican Independence Day. Please enjoy your margarita ironically.
Today's mood board


fortune--2020-05-05--Disney earnings: Coronavirus pandemic batters business, as expected

Disney reported fiscal second-quarter earnings on Tuesday, suffering a significant drop to its bottom line as the novel coronavirus pandemic battered many of its businesses.
Earnings per share came in at $0.60—down $1.01, or 63% from a year earlier. Wall Street analysts had estimated a figure of $0.83, a decline of 48% from the year earlier, according to consensus estimates from Zacks Investment Research. Revenues meanwhile were up to $18.01 billion, up from $14.92 billion a year earlier—an increase of 21%. That number was in line with consensus expectations of $18.03 billion.
Disney’s Parks, Experiences, and Product segment was hit particularly hard by the pandemic. The division, which handles the likes of theme parks, retail stores, and cruise lines, generated $639 million of operating income in the second quarter. That’s down from $1.5 billion a year earlier, a 58% decline. Disney estimated COVID-19 had a $1 billion impact on the segment’s total operating income, mostly due to lost revenues from closures. Across the entire company, Disney estimated the coronavirus had an impact of $1.4 billion to operating income in the second quarter, a 37% decline from a year ago.
“Disney’s bottom-line number has missed the consensus estimate by a big margin, evidence that the company’s parks and media businesses are taking a big hit from the coronavirus-triggered closures,” said Haris Anwar, a senior analyst at Investing.com. “It’s very difficult to see that segment, which accounts for 70% of Disney’s revenues, coming back to normality any time soon. This new reality will continue to hurt Disney franchises, at least in the next 12 months, keeping its share price down.”
The results marked the first time Disney CEO Bob Chapek reported quarterly earnings since taking over from Bob Iger in late February. Iger remains at Disney in the position of executive chairman, handling the company’s creative endeavors. About three weeks into Chapek’s tenure, in mid-March, Disney began closing its theme parks as lockdown measures intensified. Disney’s fiscal second quarter ended on March 31, meaning the earnings results reflect only about two weeks of significant coronavirus disruptions.
“While the COVID-19 pandemic has had an appreciable financial impact on a number of our businesses, we are confident in our ability to withstand this disruption and emerge from it in a strong position,” Chapek said in a statement. “Disney has repeatedly shown that it is exceptionally resilient, bolstered by the quality of our storytelling and the strong affinity consumers have for our brands, which is evident in the extraordinary response to Disney+ since its launch last November.”
Disney’s direct-to-consumer business was a bright spot for the company as consumers increasingly look to streaming entertainment at home. All three of its streaming services saw paid subscriber growth in the second quarter. At the end of the quarter, March 31, Disney+ had 33.5 million subscribers—but on April 8 the company announced the service had surpassed 50 million subscribers, suggesting accelerated growth (though 8 million in India were automatically signed up through the over-the-top streaming service Hotstar).
ESPN+, meanwhile, is up to 7.9 million subscribers, up from 6.6 million at the end of the first quarter, and 2.2 million a year earlier. Hulu increased to 32.1 million total subscribers, up from 30.4 million the previous quarter and 25.2 million last year.
“Disney’s significant investment in streaming is a bright spot for the company that could help it mitigate some of its shortfalls, but it alone can’t propel the company past all of this adversity. Disney+ quickly amassed an impressive number of subscribers, but its impact on the broader company is limited as long as theaters and theme parks stay closed,” said eMarketer analyst Ross Benes. “This is because the streaming service, like so many other Disney products, generates the most revenue when it can be used to cross-market other company properties.”


fortune--2020-05-05--Airbnb to cut nearly 2,000 employees due to the coronavirus pandemic

Airbnb is laying off nearly 2,000 employees, or about 25% of its workforce, due to the impact of the coronavirus on its business.
Airbnb CEO Brian Chesky sent a memo to all employees today announcing the cuts, which will be across its Americas, European, and Asia-Pacific teams. The company also said its pausing investments that don’t support the “core” business, including in transportation and a studio intended to produce original entertainment related to travel, and reducing funding for a high-end rental service, Luxe.
“We are collectively living through the most harrowing crisis of our lifetime, and as it began to unfold, global travel came to a standstill,” Chesky said in an internal memo. “Airbnb’s business has been hit hard, with revenue this year forecasted to be less than half of what we earned in 2019.”
Airbnb already had raised $2 billion in funding to try to provide additional cash during the current economic slowdown due to the epidemic, but Chesky said that wasn’t enough since Airbnb doesn’t know when travel will return nor what it will look like post-pandemic. Because of this, he said, Airbnb must make “fundamental” changes in its business, including reducing its workforce and narrowing its focus.
The news comes as the coronavirus pandemic brings the travel industry to a near halt, as people across the world shelter in place. Airbnb recently rolled out new cleaning rules for hosts aimed at helping calm travelers fears. But the company, which reportedly lost $322 million in the first nine months of 2019 and had planned an initial public offering later this year, is still struggling to overcome the financial toll caused by the coronavirus.
Employees affected by the cuts will receive two weeks of base pay plus one additional week for every year worked at Airbnb.. The company will also provide 12 months of health insurance through COBRA and will offer international employees health insurance until the end of the year.
Airbnb said it also plans to set up a public-facing website to help laid off employees find new jobs. It is also reassigning “a significant portion” of its recruiting team to help laid-off employees find their next job.
Chesky ended his memo with some parting words to those affected by the layoffs: “To those leaving Airbnb, I am truly sorry. Please know this is not your fault.”
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—Remote work, online grocery shopping, cord cutting: What coronavirus trends will stick
—How T-Mobile shifted 12,000 employees to work from home in less than two weeks
—Coronavirus patient data stored in electronic health records found difficult to study at scale
—The startup founder in India striving to improve mass transit through the pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Zoom’s ups and downs since the coronavirus crisis
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-05-05--California to sue Uber and Lyft for classifying drivers as contractors

Uber Technologies and Lyft face a lawsuit by California and three of its biggest cities for allegedly violating a new state law designed to give ride-share drivers and other gig-economy workers the benefits of employees.
While expected, the lawsuit that officials said is being filed Tuesday marks a serious threat to the business model of an array of companies that save on labor costs classifying workers as independent contractors. If the companies ultimately lose the suit, they could be forced to pay for overtime, health care and other benefits.
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fortune--2020-05-05--Broadway theaters consider the path forward for shows to resume

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When Broadway theaters finally reopen, at least one musical theater fan will show up. But she’ll look a little different.
“I would wear a mask and gloves,” said actress Emily Hampshire, the “Schitt’s Creek” star and huge “Hamilton” fan. “I don’t think we can forget what happened for a long time.”
COVID-19 has shaken theater fans and shuttered all New York City’s venues, including Broadway, which grossed $1.8 billion last season and attracted a record 15 million people. How Broadway — one the city’s jewels — will reopen is still not clear.
Will every other seat be kept empty? Will there be thermometer checks? Mandatory masks? Bar service? Deep cleanings between shows? More ushers? More exits? No shows until a vaccine?
Producers and labor groups are discussing various options, but one thing Actors’ Equity Association stresses is the Broadway community has one chance to get it right.
“We have to be really, really careful about how we start to come back,” said Mary McColl, executive director of the association, which represents more than 51,000 actors and stage managers.
“If we step wrong and we do something too quickly when we haven’t figured out all of the ramifications, and it goes badly and people become sick because of it, that is going to set the whole industry back a long time.”
A view of the Broadway show “Aladdin” in New York City during the coronavirus pandemic on April 27, 2020. (Photo by John Nacion/NurPhoto) John Nacion—NurPhoto via Getty Images
Broadway theaters abruptly closed on March 12, knocking out all shows — including 16 that were still scheduled to open — and postponing indefinitely the Tony Award schedule. Producers, citing health and city authorities, have extended the shutdown through at least June 7.
The financial demands of Broadway shows don’t favor keeping seats purposefully empty. The average operating costs for a play are about $300,000 per week, while weekly costs run $590,000 for musicals.
Conventional wisdom is that many shows can break even while taking in 50% of their potential grosses — as long as they have full-price tickets and some premium customers.
But insiders say tickets will need to be deeply discounted to attract wary customers when Broadway reopens, and that means theaters will need to be full. In that scenario, some theatermakers will be taking home less than before.
“I cannot imagine Broadway theaters functioning at less than capacity unless all costs are reduced,” said veteran producer Robyn Goodman, who this season was to bring a reimagined “ Company ” to Broadway. “That could be a monumental task but the only way to reopen.”
The shows with the best shot of survival will probably have to be both popular and offer attractive sale prices. Broadway will also have to depend more on New Yorkers, since tourism accounted for 65% of sales during the 2018–2019 season and the number of city visitors will likely dip.
Already some creators are adapting and innovating. Playwright Richard Nelson has written a six-person play designed to be livestreamed. Others have turned to putting new works on podcasts, benefit concerts or offering a song cycle online.
The shutdown frustrated composer Andrew Lloyd Webber’s plans to mount a musical remake of “Cinderella” in London’s West End. He and his cast were ready for rehearsals when they were stopped by force majeure, the legal term for unforeseeable circumstances.
Now he’s thinking of returning to a business tactic he used at the start of his career when he couldn’t get backing for a stage version of “Jesus Christ Superstar”: Release a cast album first.
“Not because I really want to go that way round, but because force majeure kind of makes one have to do that,” he said. “It’s not something I’ve done for a very long time, but it may well be that that’s the direction we’d have to go.”
Actors’ Equity Association is rethinking almost every direction: How can more space be added to dressing rooms? Which costume fabrics resist the virus better? How many people need to touch a prop in a 10-minute period and how can that prop be cleaned? They’ve hired David Michaels, who ran the Occupational Safety and Health Administration under President Barack Obama, to advise.
“I think if all of us — the whole theater community, producers, labor unions, artists, public health professionals — put our heads together, we can figure out a way in the mid-term to have live performance happen,” McColl said. “And in the long term, how to figure out how to bring it back to close to what it was before.”
Broadway could learn some tips from the feisty, experimental downtown theater company The Wooster Group. If city authorities demand social distancing at its 110-seat performance space, the nonprofit will comply — just increase the number of daily performances.
“We are small and flexible,” said associate director Kate Valk, who is already at work on an audiovisual work tacking the pandemic. “I feel for the theatrical artists who depend on a commercial production. The bigger the machine, the harder it is to reinvent.”
Barrington Stage Company in Massachusetts offers another model — it’s reducing its 520-seat main theater to one-third, increasing the distance between rows and seats and deep cleaning the theater after every show. Audiences will be required to wear masks. Additional entrances and exits are also being built, and there will be no intermissions for performances.
Some creators see an opportunity for change. One of the most outspoken is Theresa Rebeck, an award-winning playwright and creator of the Broadway TV series “Smash.”
Rebeck hopes the shutdown can correct inequities like some producers taking too big a piece of the box office. “You end up with audiences paying very high ticket prices and actors and artists getting paid very little,” Rebeck said.
“There are many, many people living right at the edge of disaster, and this is really going to destroy a lot of lives and careers and there’s no way to pretend that that’s not happening right now,” Rebeck said.
Right now, perhaps one-man and one-woman shows will be deemed smarter than shows with large casts. Perhaps outdoor shows will be more attractive than cramming people into a conventional theater.
“I think that for a while, theater might look like it did before all of the technology that we’ve accomplished over the last centuries,” said McColl. “I think it’s going to be stripped down to storytelling.”
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fortune--2020-05-05--Apple’s WWDC developers conference will be livestreamed on June 22 due to coronavirus

Instead of holding its annual Worldwide Developers Conference (WWDC) as an in-person event, like in past years, Apple will livestream it on June 22 because of continuing fears about the coronavirus.
The iPhone maker announced the new date of its annual WWDC event on Tuesday. Apple had said in March that its popular conference would be moved online, but it did not announce a date at that time.
Apple’s annual event is one of the most popular conferences in the technology industry, with thousands of attendees being told about software updates to the company’s lineup of products, like the iPhone, iPad, and Mac computers. But the spread of COVID-19 has resulted in shelter-in-place orders nationwide in addition to several companies postponing in-person conferences or converting them to online events.
Other companies that have canceled their annual in-person developer conferences include Facebook and Google.
“WWDC20 will be our biggest yet, bringing together our global developer community of more than 23 million in an unprecedented way for a week in June to learn about the future of Apple platforms,” Apple senior vice president of Worldwide Marketing Phil Schiller said in a statement.
More must-read tech coverage from Fortune:
—Remote work, online grocery shopping, cord cutting: What coronavirus trends will stick
—How T-Mobile shifted 12,000 employees to work from home in less than two weeks
—Coronavirus patient data stored in electronic health records found difficult to study at scale
—The startup founder in India striving to improve mass transit through the pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Zoom’s ups and downs since the coronavirus crisis
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-05-05--Photo essay: What life looks like in Europe as the continent starts to reopen

In Italy, it’s now possible to pick up an espresso and a pastry. In Austria, it’s suddenly an option to get a haircut. In Germany, you can go to a car dealership, maybe even stop by a museum.
Within a week or two, other pleasures that were once considered routine—like going to a restaurant—will return across much of Europe, as countries gradually lift lockdown measures and nudge economic and social activity back to life. It doesn’t quite represent a return to “normal,” but for millions of Europeans, it does represent a reminder of what normal used to look like, now in a deeply altered state.
In Italy, which was hit the earliest and arguably the hardest by the outbreak in Europe, this progress is particularly bittersweet—and highlights vast disparities within the country. While the severity of the pandemic has drawn out inequalities across social and economic lines, cruelly translated into death rates, the divide has largely been geographic.
The wealthy north, the industrial hub of the country, suffered brutal months of war-like conditions in hospitals as people died in the tens of thousands—producing stiff resistance to reopening too early. The south, which is far poorer, by contrast has been largely spared the worst.
There are other disparities too. While reopening has already begun in Switzerland and Portugal, for example, the gradual easing of lockdown conditions won’t begin in France until next week. In the U.K., which went into lockdown later than most of continental Europe and now has more deaths than Italy, the government is under pressure to reveal even the initial details of how the country will emerge. Prime minister Boris Johnson is expected to announce the details of a reopening next weekend.
Europe’s reopening, and China’s before that, hold plenty of lessons for the U.S. In Fortune’s series on the reopening across seven Chinese cities, residents describe a daily reality that is inextricably changed—even as the darkest days of the lockdown, according to a college student in Wuhan, already seem like distant memories. The main narrative seems to be an extension of a message that has gained momentum since the beginning of the pandemic: Daily life will be altered for some time, maybe forever—but people will find a way to adapt.
The reopening is not purely hopeful, either—it comes with serious risks. Scientists have warned since the start of the year that a reopening can bring a second spike in infections. Some Chinese cities have already seen this happen, particularly as travelers from harder-hit regions return.
The economic case for reopening is not as clear cut as it might seem, either. Economists warn that a poorly timed and planned reopening, without sufficient testing and tracing systems, can not only not help the economy—it can hurt it.
Barbershops and cafés may reopen—but people need to feel safe enough, and have enough trust in their governments, to actually use them.
Italy
At Naples Central Station on May 4, travelers file the self-certification form with which they state the origin and the reasons for the trip. Fabio Burrelli—NurPhoto/Getty Images)
A man serves takeaway coffee at a Rome cafe. Yara Nardi—Reuters
AC Milan’s Gianluigi Donnarumma wearing a protective face mask as he arrives at Hospital Clinica La Madonnina for general medical tests after Italy allowed Serie A teams to start training individually. Daniele Mascolo—Reuters
Germany
On May 3, churches and other houses of worship were allowed to hold service. Here, at St. Remigius Catholic Church, Sunday mass communion. Andreas Rentz—Getty Images
Hairdressing salons are allowed to open after a weeklong compulsory closure. In Stuttgart, a customer sits with a face mask. Sebastian Gollnow—picture alliance/Getty Images
United Kingdom
A sign informs customers of social distancing measures at a shop in Croydon on May 4. With the economy reeling, U.K. Prime Minister Boris Johnson is now under pressure from businesses and members of parliament to explain how and when he will loosen coronavirus lockdown restrictions. Jason Alden—Bloomberg/Getty IMages
A shopkeeper, wearing a protective face mask and disposable gloves, adjusts a display of fruit and vegetables at a grocery store in London on May 4. Jason Alden—Bloomberg/Getty Images
Spain
On May 5, workers paint lines on the street, expanding a sidewalk for pedestrians to maintain social distance between them, as the spread of the coronavirus continues in Barcelona. Nacho Doce—Reuters
Greece
In Athens, a municipal employee in protective equipment disinfects a school on the first day of the relaxation of the nationwide restrictions, May 4. Angelos Tzortzinis—picture alliance/Getty Images
Migrants with face masks from the Moria camp, who arrived by ship from the island of Lesbos, stand in the port of Piraeus near Athens after their arrival on May 4. Greek authorities transferred some 400 migrants, mostly families, to the mainland to ease the situation in the overcrowded camp. Angelos Tzortzinis—dpa/picture alliance/Getty Images
A bus driver wears a mask in Athens. In Greece, citizens have been able to leave their homes without restrictions since May 4 but are not allowed to travel to another prefecture. Socrates Baltagiannis—picture alliance/Getty Images
France
In Paris, a delivery man on a bike wearing a protective mask carries packages on May 4. Stephane Cardinale—Corbis/Getty Images
In the Paris suburb of Saint-Mande on May 4, apartment dwellers wearing protective masks applaud to show their support to caregivers as the lockdown continues. Stephane Cardinale—Corbis/Getty Images
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—Saving lives vs. saving the economy is a false tradeoff, economists say
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—Unemployment claims are taking some states weeks to process. What to know
—Inside China’s reopening: 7 personal stories of life after lockdown
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—Work from home, online grocery shopping, cord cutting: What coronavirus trends will stick
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—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-05--Barack Obama will headline televised prime-time commencement for high school class of 2020

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Former President Barack Obama will deliver a televised prime-time commencement address for the high school Class of 2020 during an hour-long event that will also feature LeBron James, Malala Yousafzai and Ben Platt, among others.
ABC, CBS, Fox and NBC will simultaneously air the special May 16 at 8 p.m. Eastern along with more than 20 other broadcast and digital streaming partners, according to the announcement Tuesday from organizers.
Several high school students from Chicago public schools and the Obama Youth Jobs Corps will join, as will the Jonas Brothers, Yara Shahidi, Bad Bunny, Lena Waithe, Pharrell Williams, Megan Rapinoe and H.E.R.
The event is titled “Graduate Together: America Honors the High School Class of 2020.” It’s hosted by the education advocacy group XQ Institute, The LeBron James Family Foundation and The Entertainment Industry Foundation.
Obama will reflect on the COVID-19 pandemic’s disruption of school life, especially for seniors who have missed out on their milestone rites of passage.
“This high school graduation season will be anything but ordinary — but that’s all the more reason why the Class of 2020 deserves extraordinary advice, heartfelt encouragement, and hard-won wisdom about facing new challenges in an uncertain world,” Russlynn Ali, CEO and co-founder of XQ Institute, said in a statement.
“We are grateful to President Obama for giving this gift to our nation’s three million high school seniors as they #GraduateTogether,” she added.
Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
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fortune--2020-05-05--Cord cutting is speeding up as the coronavirus pandemic squeezes consumers

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The coronavirus outbreak is accelerating the trend of people dropping their cable and satellite TV subscriptions. More than 1.6 million subscribers to five of the largest pay TV companies cut service in the first quarter, a 70% jump from a year earlier.
Comcast, the largest cable provider, lost 409,000 customers by itself, more than it lost in all of 2018 and over half its total cord cutting loss last year. Charter Communications, Verizon, and Altice USA, also among the largest cable TV providers, lost another 200,000 subscribers in the quarter. And AT&T, which is predominantly a satellite TV provider, lost over 1 million customers. Dish Network, another major satellite provider, reports its first quarter results on Thursday.
Cord cutting is nothing new, with the audience of people paying to subscribe to cable and satellite shrinking by 7% last year and 4% in 2018, according to Convergence Research. But with the pandemic putting a squeeze on many consumers’ finances, more people than ever are dropping off. The total loss of sports programming, without any commensurate reduction in sports programming fees, may also be feeding the trend. Convergence forecasts a 9% drop for 2020.
The loss of audience could hurt companies that make programming, like Disney and CBS, while further boosting the prospects of online video services that provide much cheaper fare, like Netflix and Amazon’s Prime Video. While all of the pay TV providers were hemorrhaging subscribers in the first quarter, for example, Netflix reported a record 16 million new subscribers in the quarter.
For shareholders of the pay TV companies, the news isn’t nearly as bad as the subscriber losses might suggest. While the companies lose revenue every time a subscriber cuts the cord, the companies also can reduce the amount they for programming, which is typically charged on a per-viewer basis. Providing traditional pay TV service hasn’t been that profitable for the companies since the cost of programming is rising at a rapid clip.
And, at the same time, most of the pay TV providers also provide high-speed home Internet service. That’s a much more profitable business, with no programming costs. And it’s been growing due to the cord cutting trend, as more customers seek faster Internet service to watch Netflix and other online video.
More coronavirus coverage from Fortune:
—The Rebuild Program: A project to help small businesses reopen amid a pandemic
—Saving lives vs. saving the economy is a false tradeoff, economists say
—States can’t access emergency COVID-19 election funding because of steep match rates
—Unemployment claims are taking some states weeks to process. What to know
—Inside China’s reopening: 7 personal stories of life after lockdown
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—Work from home, online grocery shopping, cord cutting: What coronavirus trends will stick
—PODCAST: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-05--Goldman Sachs doubts there will be a Round 3 of PPP loans for small businesses

Barely a month into the Small Business Administration’s Paycheck Protection Program, nearly two rounds of funding have been depleted. But Goldman Sachs economists don’t think there will be a Round 3.
Money for the program has been spoken for at a rapid pace—As of May 1, over half of the $310 billion Round 2 funds were approved ($175 billion), per the SBA, for over 2.2 million applications. Funds from Round 1’s $349 billion pool ran out in just 13 days.
But Goldman Sachs is doubtful another round is in store. Economists wrote in a May 4 report that, while “additional aid for businesses is possible,” they don’t expect additional rounds of funding for the PPP.
The firm estimates that eligible businesses have expenses eligible for loan forgiveness of around $750 billion—And with nearly $700 billion in funding for the first two rounds combined, the firm believes most eligible businesses would be covered. Now, Goldman believes there are “other options to assist small businesses without increasing PPP funding.”
Instead of new PPP funding rounds, Goldman economists see three other avenues to aid small businesses: First, the 8-week term for forgivable expenses could be extended (for many businesses, 75% of loans must be used for payroll by June for the loan to be forgiven); Second, businesses will soon be able to get loans from the Fed’s Main Street Lending Program (MSLP), which is opening up for businesses with up to 15,000 employees or up to $5 billion in annual revenue (it is not, however, a grant); And third, the firm anticipates there is potential for an expansion of the “employee retention credit” in the CARES Act, which provides a 50% tax credit for employee wages for certain companies hit by shutdowns. The firm notes that “providing a partial subsidy for all wages of affected firms might not cost any more than a full subsidy for wages of virtually all small businesses, as PPP does.”
Yet another aspect Goldman highlights is the “recent political scrutiny” engulfing the program. From carveouts that allowed large chains to receive funds to public companies receiving millions, the program has been plagued with issues from the get-go.
After news broke that over 300 publicly-traded companies received over $1 billion in loans, according to some data trackers, many small businesses and lenders alike voiced frustrations with the program: “The reality is this program has not met the needs of the grand majority of true small businesses, Main Street small business,” Eyal Lifshitz, CEO of BlueVine, recently told Fortune.
Meanwhile, many small businesses have dealt with massive delays in getting funds, and demand is still strong for the PPP, according to banks and fintech lenders.
For the banks doling out the loans, concerns for the need of another round are already top of mind. John Asbury, CEO of the regional Atlantic Union Bank, based in Virginia, recently told Fortune: “The real question in my mind is, if after the second round of funding there is still great demand from the program from the traditional businesses that qualified, the smaller ones, will Congress support a round three of funding? I hope they will.”
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fortune--2020-05-05--Europe’s coronavirus stimulus in doubt as Germany’s top court rules ECB quantitative easing program

Europe’s coronavirus stimulus in doubt as Germany’s top court rules ECB quantitative easing program could be illegal

“Whatever it takes.”
With those three words, former European Central Bank President Mario Draghi burnished his legacy during the tumult of the euro crisis in 2012 and opened an unreconcilable wedge between the euro zone’s fiscal hawks in the prosperous North and the debt-laden South.
Fast-forward to this year’s coronavirus crisis, and Draghi’s successor Christine Lagarde tried to avoid following suit—until her refusal to have the ECB buy more Italian bonds battered the markets. Days later, the Eurozone’s central bank relented. With Europe scrambling to keep its economies afloat, “whatever it takes” was back.
But is it really?
On Tuesday, the ECB’s ability to keep credit flowing (and, indirectly, the markets happy) was dealt a potentially devastating blow by Germany’s highest court. In a 7-1 decision, the federal constitutional court ruled that the ECB had overstepped its mandate back in 2015 when it began a bond-buying purchase program that’s pumped the equivalent of €2.7 trillion into Europe’s struggling economy. Since the start of the coronavirus pandemic the ECB has doubled down on its quantitative easing-styled asset-buying; for now, those more recent moves are safe, and can continue.
But longer terms, there are fresh doubts.
In essence, today’s German court ruling calls the ECB out on the scope of a favored piece of ammunition that it loads into its bazooka whenever a fresh crisis threatens to pull the union apart.
The result could be a further weakening of the European Union, which is already struggling to demonstrate economic solidarity in the face of the COVID-19 onslaught—broadly speaking, the bloc’s richer north is likely to weather the storm more easily than its poorer, harder-hit south.
What’s on the line
The court was not directly dealing with the ECB’s new coronavirus response package—a 750 billion euro ($813 billion) asset-purchase scheme called the Pandemic Emergency Purchase Programme (PEPP). Instead, it’s asking the ECB to justify the five-year-old Public Sector Purchase Programme (PSPP) scheme which was being challenged by German critics who are unhappy with how the QE-style stimulus in essence shifts the balance of power from national capitals to the European stage. It’s a particularly hot political issue in fiscally conservative Germany, which runs a tight ship; in debt-strapped Italy, Spain and Greece, the bond-purchasing program has been a godsend for its weak banks.
But although pandemic bailouts were not the subject at hand on Tuesday, the central questions are the same: is a big ECB bond-buying program compatible with Germany’s constitution, and is quantitative easing even part of the ECB’s mandate to begin with?
Pure QE, which involves the purchase of all kinds of sovereign and corporate assets from mortgage-backed securities to country-issued debt, has become monetary policy de rigueur around much of the world. Its scope, though, in Europe has always been under question, particularly during the Draghi years. The Italian central banker right up to the end of his term said the central bank had the power to open up its check book and buy, buy, buy to stimulate growth, and therefore meet that part of its mandate by… yes, “whatever it takes.”
In recent years “whatever it takes” took the form of PSPP.
“What a big bang!”
On Tuesday, The German court ruled that the PSPP program was possibly illegal in Germany because the German government and parliament had not tried to ensure that it was proportionate. The upshot is that, unless the ECB explains how PSPP is proportionate within the next three months, Germany’s central bank—the Bundesbank—will have to opt out of the coordinated scheme, and stop buying government bonds.
Here’s where the potential impact on the newer PEPP scheme—this one to bailout Europe’s coronavirus stricken economies and businesses— becomes clear. When the ECB launched PEPP in mid-March, it did so while saying: “We are fully prepared to increase the size of our asset purchase programs and adjust their composition, by as much as necessary and for as long as needed. We will explore all options and all contingencies to support the economy through this shock.”
To the markets, that sounded a lot like “whatever it takes,” the sequel. Europe’s bourses have since soared as the borrowing costs of the bloc’s shakiest economies came down.
But the question remains: can the central bank’s move to open up its balance sheet in such a generous fashion be squared with the proportionality demands of German judges who argue for clearly defined limits to the “the amount of purchases” from the start.
Good news, bad news
Economists stepped in on Tuesday, trying to predict how this will play out.
“The good news is that the ruling does not seem to apply to the PEPP, but there is a bigger concern that it limits the ability of the ECB to ‘do whatever it takes’,” Standard Chartered chief Europe economist Sarah Hewin told Reuters.
“What a big bang!” wrote ING’s chief economist for the Eurozone, Carsten Brzeski, in an emailed note. “An optimistic interpretation could be this is lots of barking without biting and that everything is fine as long as the ECB demonstrates that it has thought through the economic consequences of its decisions, but a pessimistic interpretation could be no amount of additional ECB analysis will convince German judges and could, therefore spell the end of QE.
“Today’s decision could become a real problem for the ECB in the next phase of the crisis when the recovery starts.”
Some argued that, should the ECB’s spending powers ultimately be clipped, it would be time to rethink the central bank’s role and function.
“How is Europe supposed to deliver an appropriate economic response to the COVID-19 crisis when the ECB cannot act like a normal central bank, but must engage in legal tightrope walks all the time?” tweeted Jens Suedekum, an adviser to Germany’s economy ministry. “Maybe it’s time to reconsider the rules of the game themselves.”
Clash of the courts
Tuesday’s ruling was also notable for another reason: it set up a major conflict between Germany’s highest court and Europe’s highest court, the Court of Justice of the European Union or CJEU.
Again, this could have major implications for the European Union.
During the five-year case that led to this week, Germany’s constitutional court asked the CJEU for its view. The European court delivered its preliminary ruling at the end of 2018, saying the PSPP scheme was entirely kosher—and on Tuesday, the German court partially tossed that ruling aside. In the world of European law, this was a seismic event, because the CJEU is a higher authority even than Germany’s top court.
The German court’s reasoning was that the CJEU had not examined the actual economic-policy effects of PSPP, making it impossible to judge whether the ECB was sticking to its monetary-policy mandate or not. This decision, the German court said Tuesday, “contradicts the methodological approach taken by the CJEU in virtually all other areas of EU law.” The result, it warned, was that the ECB could gradually expand its own mandate.
So, the court argued, it was “not bound by the CJEU’s decision.”
“That the German court rejects a key plank of a decision by the European court is a legal bombshell which will make significant legal waves across Europe,” said Berenberg chief economist Holger Schmieding in a note. And, Axiom Alternative Investments research chief Jerome Legras told Reuters he had “never seen such a legal slap in the face in my entire life.”
If Europe’s member states get to decide when they do or don’t listen to the CJEU, that could have implications that extend far beyond the quantitative-easing debate. But for now, the key question is what the implications will be for the stability of the euro—and perhaps for its ultimate survival as an economic and political project.
More must-read international coverage from Fortune :
—Inside China’s reopening: 7 personal stories of life after lockdown
—Saving lives vs. saving the economy is a false tradeoff, economists say
—Photo essay: How the world has overcome pandemics over the last century
—Coronavirus could spread in prisons where censored journalists are detained
—PODCAST: How 2 CEOs outside of health care decided to pivot to fight COVID-19
—WATCH: The global crisis in recycling
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fortune--2020-05-05--U.S. service sector falls into contraction for first time in 10 years

The U.S. service sector plunged into contraction territory for the first time in a decade last month as the pandemic forced shutdowns and layoffs nationwide.
The Institute for Supply Management said Tuesday that its service-sector index fell to 41.8 in April, compared with a March reading of 52.5.
Any reading below 50 signals that the service sector, where the majority of Americans work, is in a contraction. It was the first time the services index has been in contraction since December 2009 and it was the lowest reading since March of that year with the nation mired in the Great Recession.
In April, all major categories fell sharply with the business activity index dropping to 26, the lowest reading on record, while the new orders index fell to 32.9 and the employment index dropped to 30.
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More must-read finance coverage from Fortune:
—Saving lives vs. saving the economy is a false tradeoff, economists say
—ExxonMobil’s CEO is banking on a return to normal, but most others aren’t so sure
—Cybercriminals adapt to coronavirus faster than the A.I. cops hunting them
—How cannabis purveyors are coping during the pandemic
—Inside the chaotic rollout of the SBA’s PPP loan plan
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Why the banks were ready for the financial impact of coronavirus
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fortune--2020-05-05--A.I. engineers should spend time training not just algorithms, but also the humans who use them

This is the web version of Eye on A.I., Fortune’s weekly newsletter covering artificial intelligence and business. To get it delivered weekly to your in-box, sign up here.
Last month in this newsletter, I interviewed Ahmer Inam, the chief A.I. officer at technology services firm Pactera Edge, who offered some advice for how companies can build machine learning systems that can cope with the changes the pandemic has caused to normal business and consumption patterns.
Inam argued that the coronavirus pandemic is pushing many businesses to accelerate the adoption of more sophisticated artificial intelligence.
Abhishek Gupta, a machine learning engineer at Microsoft and founder of the Montreal AI Ethics Institute, got in touch over Twitter to say that I should have highlighted some important safety issues to bear in mind when considering Inam’s suggestions.
Last week, I caught up with Gupta by video call and asked him to elaborate on his very valid concerns.
One of the suggestions Inam made was for the A.I. systems to always be designed with a “human in the loop,” who is able to intervene when necessary.
Gupta says that in principle, this sounds good, but in practice, there’s too often a tendency towards what he calls “the token human.”
At worst, this is especially dangerous because it provides the illusion of safety. It can just be a check-the-box exercise where a human is given some nominal oversight over the algorithm, but actually has no real understanding of how the A.I. works, whether the data analyzed looks anything like the data used to train the system, and whether its output is valid.
If an A.I. system performs well in 99% of cases, humans tend to become complacent, even in systems where the human is more empowered. They stop scrutinizing the A.I. systems they are supposed to be supervising. And when things go wrong, these humans-in-the-loop can become especially confused and struggle to regain control: a phenomenon known as “automation surprise.”
This is arguably part of what went wrong when an Uber self-driving car struck and killed pedestrian Elaine Herzberg in 2018; the car’s safety driver was looking at her phone at the moment of the collision. It was also a factor in the two fatal crashes of Boeing 737 Max airliners, in which the pilots struggled to figure out what was happening and how to disengage the automatic pilot.
Gupta thinks there’s a fundamental problem with the way most A.I. engineers work: They spend a lot of time worrying about how to train their algorithms and little time thinking about how to train the humans who will use them.
Most machine learning systems are probabilistic—there is a degree of uncertainty to every prediction they make. But a lot of A.I. software has user interfaces that mask this uncertainty.
It doesn’t help, Gupta says, that most humans aren’t very good at probabilities. “It is hard for most people to distinguish between 65% confidence and 75% confidence,” he says.
More A.I. software, he says, should be designed to show a user its confidence in its own predictions. Better yet, if that confidence drops below a certain pre-defined threshold, the software should alert the user that it simply can’t make a prediction. Users should also be told exactly what data was used to train the software and what its strengths and weaknesses are.
Pactera Edge’s Inam said that the pandemic was also leading more companies to experiment with reinforcement learning—the kind of A.I. that learns from experience—usually in a simulator—rather than historical data. Gupta said that while reinforcement learning can indeed be very powerful, it can also be particularly dangerous.
The biggest challenge with reinforcement learning is specifying the A.I.’s goal in such a way that it will learn to do what you want it to do—without doing something dangerous or harmful in the process.
A.I. software is remarkably adept at “specification gaming”—finding shortcuts through data that allow it to achieve its objective, but not in the way or spirit that its creators intended. Programmers have to be extremely careful about how they state the algorithm’s objective and how they design positive reinforcement during its training.
DeepMind, one of the world’s foremost practitioners of reinforcement learning, recently published an excellent compilation of about 60 examples of A.I. systems running amok due to inaptly specified objectives and rules. (They come from lots of different researchers—not just DeepMind—and span about 30 years of experiments.)
Even an A.I. that performs fantastically in a simulator may not be safe when it is transferred to the real world, since simulations are never perfect. Even with thousands of human years of training in a simulator, it’s impossible to know if the A.I. will actually be able to cope with everything the real world might throw at it.
“Reinforcement learning is opening up new avenues for us, there’s no doubt,” Gupta says. “And in Go and chess, it’s fine. But we don’t have disposable humans to use to test autonomous vehicles.”
Good points all. Now here’s the rest of this week’s news in A.I.
Jeremy Kahn
jeremy.kahn@fortune.com
@jeremyakahn
A.I. IN THE NEWS
Utah suspends work with A.I. startup Banjo over CEO's white supremacist past. The State of Utah has suspended its contract with computer vision startup Banjo, which sold software to help law enforcement agencies track people through traffic and CCTV cameras, following revelations that its co-founder and chief executive officer had once been a member of a Klu Klux Klan splinter group and participated in a gun attack against a synagogue, The Salt Lake Tribune reported. Patton was 17 at the time of the synagogue attack, which damaged the building in Nashville, Tennessee. He was convicted of juvenile delinquency and testified against fellow gang members. OneZero, which first uncovered his past, found evidence that Patton's affiliation with white supremacists continued after the incident, and, in court documents, Patton admitted he associated with skinheads after joining the U.S. Navy at age 18. The 47-year old CEO Damien Patton told OneZero that his actions were "indefensibly wrong" and that he felt "extreme remorse" for "this shameful period in my life." Banjo has raised more than $220 million in venture capital to date, from investors that include SoftBank.
Your A.I. may be a genius but it can't legally be an inventor, U.S. government says. The U.S. Patent and Trademark Office has ruled that only "natural persons" can be listed as the legal inventor on a valid patent filing. The decision followed two patent applications—one for a flashing light and another for a food container—that were conceived by an A.I. system called DABUS which was created by something called the Artificial Inventor Project, The Verge reported. The Financial Times had earlier reported that the project was a deliberate attempt by an international group of A.I. and legal scholars to test the limits of U.S., British and European patent systems.
Senator Tom Cotton promises "hard look" at Chinese science students in the U.S., but there's little evidence of the brain drain he alleges. Senator Tom Cotton, the Arkansas Republican who sits on a number of intelligence and defense-related committees, stirred controversy with his remarks on Fox News last week suggesting it was scandalous that U.S. universities trained a large number of Chinese students in technical subjects, including artificial intelligence and quantum computing, only to have these students return to China. Cotton threatened to introduced legislation to prevent any Chinese students from coming to the U.S. to study STEM subjects. A number of leading U.S. technologists, from both industry and academia, took to social media to condemn Cotton's remarks as xenophobic. And a Washington Post story looking at the available data found that most PhD students from China wanted to remain in the U.S. after their training and that there was no evidence of a sustained brain drain—in fact, quite the opposite. The story noted that no good data was available for those receiving bachelor's and master's degrees.
BenevolentAI helps find a possible coronavirus treatment. The London-based A.I. startup BenevolentAI used its software, which is designed to find novel drug research avenues lurking unnoticed in the medical literature, to pinpoint "a possible treatment with speed that surprised both the company that makes the drug and many doctors who had spent years exploring its effect on other viruses," according to a story in The New York Times. After just two days, the A.I. alighted on baricitinib, a drug that was originally designed to treat rheumatoid arthritis. It will soon be tested on coronavirus patients in an accelerated clinical trial overseen by the U.S. National Institutes of Health.
Facebook creates the most human-like chatbot yet. Facebook has created an open domain chat bot—one that can hold a conversation on virtually any subject—that comes tantalizingly close to passing the Turing Test. In blind tests, 49% of human evaluators said they would prefer to keep chatting with Facebook's A.I. software, which it calls Blender, instead of an actual person. The system also scored far better than the previous champion chatbot, a system called Meena, created earlier this year by Google. Facebook's chatbot is designed to blend—hence the name—essential conversational skills such as knowledge, personality and empathy. It was created using one of the largest language models to date, taking in some 9 billion variables across a pre-training set that included 1.5 billion Reddit comment thread posts and four separate fine-tuning training sets that helped it hone each of the conversational skills sets and then learn how to mix them together in a human-like manner. Here's my story in Fortune on the chatbot breakthrough.
Google uses an A.I. to successfully predict gene expression in yeast. A team of Google A.I. researchers working with a group from their sister company Calico Life Sciences have built a machine learning model that looks at an entire genome and tries to accurately predict which genes will be expressed at any given point in time, Google says in a blog post. The researchers were only looking at yeast, a single cell organism, but the researchers said their work might have important implications for the study of aging, since yeast cells tend to self-destruct after they bud, or self-replicate, about 30 times. In one experiment, the researchers tried to see if their machine learning model could accurately predict which genes would serve as intermediate regulators of the expression of other genes. The researchers were only able to experimentally verify three out of 10 predictions the machine learning system made. But, interestingly, one of those predictions involved a protein scientists had not previously identified as a regulator, and another, for a protein that turned out to be a very active regulator, had been known to scientists previously but its significance had never been proven experimentally.
How Eric Schmidt became the liaison between Silicon Valley and the Pentagon. The New York Times has an interesting look at how ex-Google chairman Eric Schmidt has reinvented himself as the guy evangelizing state-of-the-art software, particularly A.I., to the U.S. military. Schmidt serves on several civilian boards that advise the military on innovation and A.I. Following one tour, he told a four-star general in charge of special operations that "you absolutely suck at machine learning," according to the story, and then made it his mission to help the military improve. Outside observers tell the newspaper that Schmidt may wind up like many other proponents of a revolution in military technology—frustrated by the slow pace of progress, bureaucratic inertia and the internal and external politics that stymies change within the defense establishment. The story also details potential conflicts-of-interest Schmidt has due to his past role at Google and his current investment in a tech startup, Rebellion Defense, that wants to sell its software to the Pentagon.
EYE ON A.I. TALENT
Uber Chief Technology Officer Thuan Pham has resigned from the company amid widespread layoffs, The Information reported. Thuan, who joined Uber in 2013, was the company's longest-serving senior executive.
AiCure, a New York-based company that uses A.I. to improve clinical trials, has appointed Ed Ikeguchi as its new chief executive officer. Ikeguchi, who had been serving as AiCure's president and chief medical officer, had previously co-founded and served in senior executive roles at Medidata Solutions.
Braid Health, a San Francisco startup that uses computer vision software to create A.I.-powered diagnostic tools for radiology, has hired Rajni Natesan as its chief medical officer. Natesan had been a professor of diagnostic radiology at MD Anderson Cancer Center.
Clari, the Sunnyvale, California, technology company that uses A.I. to companies to better forecast and improve their revenue collection, has appointed Laura MacKinnon as its chief people officer. MacKinnon was most recently in the same role at SignalEx.
EYE ON A.I. RESEARCH
Baidu's researchers top "city of the future" challenge. The AI City Challenge is a contest created by an international group of A.I. researchers "to accelerate intelligent video analysis that helps make cities smarter and safer." It challenges teams to create A.I. systems that can perform a variety of tasks on monitoring vehicle traffic in a large city based on camera data.
This year's competition attracted 315 teams from 37 countries who had to design systems that could handle four separate tasks: automatic vehicle counting, vehicle identification, vehicle tracking, and detecting traffic anomalies. Teams from Baidu, the Chinese technology giant, took the top positions in all of these tasks except vehicle tracking, which was won by a team from Carnegie Mellon University.
Some of the tasks were clearly harder for A.I. systems to handle than others: Less than one hundredth of a point separated Baidu from the second- and third-place teams on the vehicle counting task. But on the vehicle re-identification task, Baidu's win was a more convincing 84% accuracy, compared to 78% for the runner-up. On traffic anomaly detection, Baidu achieved a remarkable 96% accurate compared to just 57% for the second-place algorithm. Vehicle tracking across multiple cameras remains a tough challenge: The winning CMU team achieved just .4589 (or about 46% correct identifications).
The contest shows that A.I.-empowered traffic management systems for large cities may not be too far away. You can read more about the contest and the various contenders here.
FORTUNE ON A.I.
Samsung, Nationwide, and GE just invested in A.I. startup Nexar—by Jonathan Vanian
Cybercriminals adapt to coronavirus faster than the A.I. cops hunting them—by Jeremy Kahn
The Coronavirus Economy: The startup founder in India striving to improve mass transit—by Maithreyi Seetharaman
Facebook creates the most ‘human’ chatbot yet—by Jeremy Kahn
Coronavirus patient data stored in electronic health records found difficult to study at scale—by Fred Schulte and Kaiser Health News
Some of these stories require a subscription to access. Thank you for supporting our journalism.
BRAIN FOOD
What do A.I., Jay Z and Fat Elvis all have in common? Now there's a question. The answer: They all present a thicket of intellectual property rights issues. Several stories this week touched on the challenges for artists and entertainers, A.I. developers, and the legal system.
First came the news that Jay Z was using copyright challenges to combat audio deepfakes. Apparently, the hip hop mogul's signature raspy voice and distinctive rap cadence have become popular material for those creating humorous audio impersonations using deepfake technology. The impersonations, which include what sounds like Jay Z rapping the Billy Joel song "We Didn't Start the Fire," Hamlet's soliloquy, and the Navy Seal copypasta, have drawn the ire of the star's entertainment company Roc Nation LLC, which has asked YouTube to remove the material for copyright violation, according to The Verge.
But, after initially taking down the recordings, YouTube subsequently reinstated them, saying Roc Nation's requests were incomplete. Technologist Andy Baio, co-founder of the XOXO and former Kickstarter CTO, argues in a lengthy blog post that using deepfakes in this way may not actually violate U.S. copyright laws—that they may be covered by fair use, especially as VocalSynthesis, the creator of the deepfake audio, does not seem to be profiting from them nor attempting to defame Jay Z.
Baio raises a number of interesting points. While copyright law has previously dealt with the issue of sampling, deepfakes are different: They don't use existing audio recording except as training data. Instead, the audio output the system generates is completely novel. As the technologists writes, deepfakes like this are clearly "derivative works" under copyright law, but they may not constitute a copyright violations. It may even be the case that the deepfakes themselves can be copyrighted by VocalSynthesis as new pieces. (Although courts may well find that deepfakes are not copyrightable because they are not created by a "natural person." This has huge implications for anyone using A.I. to create art. The artist may be able to claim that the A.I. code is copyrightable—but not the output of that code, which is interesting.)
OpenAI may be wading into the same copyright issues with the debut last week of its new music-making A.I. called Jukebox. The San Francisco-based A.I. research company has created software that can invent novel music, including sung lyrics, in the style of almost any artist in any genre. The system was trained on 1.2 million songs. A separate engine is used to generate lyrics, which are then fed into the music maker that uses a combination of state-of-the-art machine learning techniques to create the new songs. You can read more about it on OpenAI's blog, including a full research paper, and also listen to samples of Jukebox's output.
Part of the issue, as Baio also points out, has less to do with copyright than with artists' publicity rights—the right to use their own likeness, image, voice and style to promote their work. Deepfakes and other synthetic "in the style of" compositions (such as those produced by OpenAI's Jukebox) might infringe on these. Well, it turns out there's a fascinating set of case law on the issue of publicity rights and the fine line between fair impersonation and illegal rip-off artist, and much of it revolves around the battle that Elvis Presley's estate has fought over the years to police all those Fat Elvis impersonators. For a great overview of that case law, I highly recommend this entertainment law review article by David Wall, a professor at the University of Leeds.