The media’s message
Four years of a Trump presidency, culminating in a hotly contested, divisive election have been a boon to media companies and social networks. But as those businesses look ahead to a potential change in the political landscape, there are risks.
Politics has been a gold mine:
Comcast, which owns NBCUniversal, said it had seen a 70 percent jump in political advertising in this election over 2016. Local TV operators have benefited too, with Gray Television and Nexstar Media both reporting political ad revenue that vastly exceeded their expectations. Fox News, the most-watched news network, helped drive its parent company’s ad revenue up 18 percent in its latest fiscal quarter.
The New York Times Company (ahem) reported a doubling of net profit in the third quarter, while revenue from digital subscribers exceeded that from print subscribers for the first time.
Internet giants like Facebook and Google have also benefited from a surge in political ads. Although these make up a tiny fraction of their businesses, the rise in attention and engagement that comes from users seeking and discussing information about politics has bolstered their enormous profits.
But navigating the election has been fraught:
What comes next is harder to predict. Traditional media companies, including MSNBC and The Times, face the potential end of the so-called Trump bump. In that case, Fox News would face the challenge of becoming an opposition outlet and confronting a possible new rival network tied to Mr. Trump. (“We love competition,” Fox’s chief, Lachlan Murdoch, said this week when asked about a potential Trump-linked network.) And The Times’s Kevin Roose notes that social media giants would have to decide whether measures they imposed to limit the spread of disinformation around the election are worth keeping in place, given the trade-off of slower growth.
HERE’S WHAT’S HAPPENING
The Fed kept rates steady and its head down. In announcing the central bank’s decision to leave interest rates near zero, the Fed chairman, Jay Powell, said that America’s economic outlook remained “extraordinarily uncertain.” He added that the U.S. could benefit from “more fiscal support” — but strenuously avoided weighing in on the election.
Drug companies near a $26 billion opioid settlement. Three distributors — McKesson, Cardinal Health and AmerisourceBergen — along with Johnson & Johnson and state and local governments are close to an agreement that would end thousands of lawsuits over the companies’ role in the opioid crisis, The Times reports.
Bitcoin is soaring. The cryptocurrency’s price jumped above $15,000, approaching the heights it reached in late 2017. Analysts say Bitcoin has become more attractive to those seeking a safe haven amid the pandemic and the uncertainty around the U.S. election.
The tale of the pandemic in corporate earnings. Making hay: At-home exercise (Peloton), pizza (Papa John’s) and video games (Take-Two Interactive). Suffering: Uber, whose ride-hailing revenue fell 52 percent. In other coronavirus news, a record for daily cases in the U.S. was set yesterday, at 121,000, while a study found that a nasal spray may help prevent Covid-19 infections.
The Justice Department sues to block Visa’s takeover of Plaid. The lawsuit argues that the $5.3 billion deal would give Visa too much power over online debit transactions. The Justice Department is also reviewing two other big fintech deals: Intuit’s $7.1 billion acquisition of Credit Karma and Mastercard’s $1 billion takeover of Finicity.
In disputing votes, Trump turns to business playbook
The Trump campaign and its allies have filed so many election challenges that it requires litigation trackers. This litany of lawsuits is typical of the president’s strategy in his business career — make claims and see what sticks — but it’s unlikely to clinch the election, legal experts say. However, it may serve other purposes.
“‘Sue everyone all the time’ is not going to get him anywhere” in stopping vote counts, Garrett Epps, a constitutional law scholar at the University of Baltimore, told DealBook. Mr. Trump was famously litigious in business, but as president he’s been “better at getting into court than performing,” he said. Republican lawyers have noted flaws in the approach. “You need a legal violation to go to court. It depends on state law and on the facts,” the former White House counsel Don McGahn said this week after the president invoked the Supreme Court in a tweet.
The big picture: Lawsuits matter only if the vote margins are very thin and there’s fraud or procedural problems; so far, these haven’t been issues, said Josh Blackman of the South Texas College of Law. Yesterday, judges in Pennsylvania, Michigan and Georgia resisted requests to stop counts, saying they found no threats to election integrity. But Mr. Trump has regularly used legal complaints to buy time, so Mr. Blackman posits that he is “hoping something breaks,” which would allow for more cases. This isn’t likely, given “the number of eyeballs” on the process, he added.
What about the Supreme Court? The president asked to intervene in a case about a ballot count extension in Pennsylvania that state Republicans twice requested the justices review, unsuccessfully. Mr. Blackman believes that the top court probably won’t agree to hear the case now, either, unless the vote count is so close that a decision is critical to certifying Pennsylvania’s winner. “They don’t unnecessarily decide difficult constitutional questions,” he said. Mr. Epps said the justices “have to think about their legacy and reputation,” especially the newest member of the court, confirmed quickly ahead of the election. “If I were Amy Coney Barrett, I would not want my 40 years to start with this case,” he said.
What happens next? The lawsuits can be effective for Mr. Trump without succeeding or being valid, Mr. Epps added, simply by showing that he’s fighting, providing fund-raising motivation and cultivating a narrative of unfair treatment. This could serve him well should the votes ultimately go against him and he moves on to lead a media empire or act as a Republican kingmaker (or candidate) in 2024.
“That’s a very hard decision to defend in a democracy.”
— James Baker, the former secretary of state who led George W. Bush’s legal team in the 2000 Florida recount, on President Trump’s demand to stop counting votes in some states.
In the papers
Some of the academic research that caught our eye this week, summarized in one sentence:
Why venture funds generate higher returns than buyout funds. (Boyan Jovanovic, Sai Ma and Peter Rousseau)
A revenue-replacement program would have helped small businesses more than the loan-based Paycheck Protection Program. (Glenn Hubbard and Michael Strain)
It’s more effective to start by doing the hardest task first, not the easiest. (Rachel Habbert and Juliana Schroeder)
Seen and heard
As all eyes were on the counting (and litigating) of votes, it was not lost on executives reporting their latest quarterly earnings that analysts’ attention might be elsewhere this week:
“I know everyone on the call is closely watching and waiting for the final vote count in the U.S. presidential election. From our perspective, General Motors is ready to work with whichever candidate is certified as the winner.” — Mary Barra, the C.E.O. of G.M.
“I want to thank you for taking the time to dial in and join us today. I’m quite pleased that we are able to offer some counterprogramming to the election news drip torture.” — Rich Barton, the C.E.O. of Zillow
“I feel like the last thing the world needs is more election speculation at the moment. But I think that the tax equity market …” — Ed Fenster, the executive chairman of Sunrun
THE SPEED READ
Airbnb plans to file its I.P.O. prospectus publicly, as it aims to begin trading on the Nasdaq next month. (Reuters)
The pet supplies retailer Petco said it has filed confidentially to go public, four years after being acquired in a $4.6 billion buyout. (Bloomberg)
The British insurer RSA is in talks to break itself up in a sale to two peers, Intact Financial of Canada and Tryg of Denmark, in a $9.4 billion deal. (Reuters)
Politics and policy
Uber’s C.E.O., Dara Khosrowshahi, said that gig-economy companies’ victory in California on classifying drivers as contractors could be a model for other states. (Politico)
The Justice Department seized $1 billion worth of Bitcoin linked to the founder of Silk Road, the online marketplace for illegal drugs. (WSJ)
Best of the rest
A real estate management company owned in part by Jared Kushner, the White House adviser and President Trump’s son-in-law, has filed eviction notices for hundreds of tenants as moratoriums expire. (WaPo)
Seven weeks after the end of pandemic-disrupted playoffs, the N.B.A. plans to start its new season next month. (NYT)
We’d like your feedback! Please email thoughts and suggestions to firstname.lastname@example.org.