CEO Daily: Wednesday, May 27
Is soccer the most corrupt sport in the world?
That’s a high bar, but events unfolding this morning suggest it may get crossed. Swiss police have arrested six officials of FIFA, the governing body of the sport, in a dawn raid on a luxury hotel in Zurich on suspicion of accepting bribes and kickbacks in return for lucrative marketing rights to tournaments in Latin America. The Swiss made the arrests at the request of the U.S. attorney’s office in the Eastern District of New York, which has issued arrest warrants for 14 people on charges ranging from money laundering to fraud and racketeering for offenses that spanned 24 years. You can read the press release from the Department of Justice here.
The Swiss also say they have opened a separate criminal investigation in FIFA’s operations pertaining to the 2018 and 2022 World Cup bids, “won” by Russia and Qatar respectively.
Meanwhile, all the turmoil in the media business doesn’t seem to be dampening CEO pay. Six of the ten highest paid CEOs in the U.S. last year worked in media, according to an Associated Press analysis.
More news below.
• Altice wasn't ready for Time Warner bid
Charter Communications dominated the "Merger Monday" news cycle (in this case, news that officially was released on Tuesday due to the holiday) with the announcement of its $78.7 billion bid for Time Warner Cable. After Comcast's bid for Time Warner exploded last month, another rumored suitor was Altice. Don't expect an offer from the European telecoms group. Altice's billionaire owner said his company wasn't ready, adding he wouldn't carry out reckless acquisitions. Reuters
• Snapchat: We need to IPO
Snapchat CEO Evan Spiegel sent out a short message about the startup's future: He says the company needs to launch an initial public offering and has a plan to do it. "An IPO is really important," Spiegel added. While Spiegel's comments show he is serious about taking the startup, which allows users to send photos and short videos that disappear after the recipient sees them, he remained vague about any of the details. Fortune
• Tobacco deal clears antitrust hurdle
Reynolds American won U.S. antitrust approval to buy smaller rival Lorillard in a deal that will combine the nation's second- and third-largest cigarette companies, making a stronger rival to market leader Altria. The $27.4 billion deal, announced last year, won final approval in a tight 3-2 vote. One dissent opinion expressed concern that a fourth rival that would be getting some of the Reynolds American-Lorillard brands would be too small to provide real competition. Reuters
• Hormel Foods goes organic
Hormel Foods is paying $775 million to buy organic processed meats maker Applegate Farms, the latest deal by a food giant for a smaller rival in the grocery aisle. Hormel CEO Jeffrey Ettinger explained that a "growing number of consumers are choosing natural and organic products." That trend has reportedly driven up valuations of private food companies, as larger rivals hunt for sales growth to boost the slow growth of their legacy brands. Fortune
Around the Water Cooler
• Some firms won't haggle over pay
Tech firms are known for their unusual perks and high pay but here's an unusual trend that has surfaced in that world: some Web-based companies are refusing to haggle on pay. Social-news site Reddit.com, for example, has a take-it-or-leave-it policy for starting salaries. And it isn't alone. Others like Jet.com and Magoosh have similar rules in place. WSJ (subscription required)
• Vox Media buys ReCode
ReCode, a tech news website led by journalists Walt Mossberg and Kara Swisher, has been sold to Vox Media, adding to a growing wave of consolidation in the tech media world. Tech industry websites have struggled to attract a larger following, even though many deliver on scoops. Though exact terms of the all-stock deal weren't disclosed, it appears Recode will mostly remain intact with both Swisher and Mossberg continuing to lead their team under the same brand name. Fortune
• Australia exports its' café culture
Australia has developed a $3.2 billion coffee-drinking market that consumes more fresh beans per person than any other country. It has also develop new brews that are reproduced in other Western markets, like the new flat white that Starbucks recently introduced. “We’ve perfected how to make a good, strong, milky coffee,” said Peter Hall, executive chairman of fund manager Hunter Hall International Ltd. Bloomberg