Comcast’s Sky Bid, Apple Taxes, Powell Speech: CEO Daily for February 27, 2018
Delta Airlines’ decision to end discounts for NRA members has gotten it into hot water with its home state legislature. Georgia’s lieutenant governor said he would block any legislation benefiting the company unless it resumed the NRA discounts. Delta, which is one of the largest employers in Georgia, had hoped the legislature would reinstate a sales tax exemption for jet fuel that ended in 2015.
The tiff underscores the potential downside for businesses that wade into the political fray on the gun issue. Yesterday, I was with a group of CEOs at a meeting of the CECP—a CEO-led coalition of companies that focus on strategies for social engagement. Attendees were clearly torn by the gun issue. They were eager to encourage sensible action—such as restricting assault weapon sales and enhancing background checks—and frustrated by the government stalemate on the issue. But they were unwilling or unable to take some of the more far-reaching actions being pushed on them by the anti-NRA campaigns.
What was most striking to me about the conversation among the CEOs was this: All agreed that saying nothing—which used to be the go-to response of CEOs when confronted with controversial social issues—is no longer a viable option. Their employees expect them to take positions on such issues, and they feel compelled to respond.
Social media is also giving the anti-NRA forces a powerful platform to push their case on companies. Sprout Social’s analytic tools, for instance, found that @Amazon and @FedEx were getting barraged with negative #boycottNRA messages yesterday—more than 20,000 messages each—while @FNBOmaha and @Hertz, which cut ties with the NRA, were receiving a flood of positive messages.
More news below. And thanks to all who called out my turning “gun” to “gin” in yesterday’s post. “Your update has struck fear into the hearts of Tanqueray drinkers everywhere,” writes J.M.
Comcast Sky Bid
21st Century Fox's proposed Sky takeover is now even less of a done deal than it was before. On top of serious regulatory questions in the U.K., Fox now faces a counter offer from Comcast at a 16% premium over the Fox bid. Comcast's offer sent Sky's shares soaring to levels way above either bid. The questions now: Will there be a bidding war for Sky, and how will this affect Disney's proposed takeover of much of Fox? And since Fox already has a 39% share of Sky, might Comcast and Disney end up as co-owners of Sky? Fortune
The European Commission has said it will withdraw its illegal-state-aid complaint against Ireland for giving Apple special treatment, but only if the country fully claws back $16 billion in unpaid taxes from the U.S. tech giant. Ireland had been desperately fighting the Commission's demands, made in 2016, but reportedly has been calculating how much Apple owes it of late. "It's a question of the level playing field," said antitrust commissioner Margrethe Vestager. "Because to recover unpaid taxes is, of course, to restore competition." CNBC
Jerome Powell will make his first speech as Federal Reserve chair today and, in anticipation of his first congressional testimony, treasuries and S&P futures have slipped. The euro has also advanced against the dollar, though European stocks dipped. Powell is a fan of predecessor Janet Yellen's cautious approach to tightening monetary policy, but the markets have been volatile of late. Bloomberg
Long-term GE board members Andrea Jung, Susan Hockfield and Rochelle Lazarus are to retire as part of a major overhaul under new CEO and chairman John Flannery, potentially creating a major gender imbalance on the board. Qualcomm CEO Steven Mollenkopf is also slated to retire from the GE board. New board candidates include former Danaher CEO H. Lawrence Culp, former American Airlines chief Thomas Horton, and former Financial Accounting Standards Board chair Leslie Seidman. Wall Street Journal
Around the Water Cooler
The Supreme Court will today start considering a privacy case with major implications for the international reach of U.S. law enforcement. Microsoft has for years been fending off the demands of the Justice Department to access a suspect's emails, which are stored on Microsoft's Irish servers. Instead of asking the Irish authorities to get the data they were after, which would be possible under international agreements, the American investigators decided to compel Microsoft to hand it over based on the fact that the company can easily do so from the U.S. NBC News
Climate scientists have been stunned to note that temperatures at the North Pole may have reached as high as 35 degrees Fahrenheit (2 degrees Celsius) over the last weekend. There is no sunlight at the North Pole at this time of year, and such temperatures are up to 50 degrees Fahrenheit higher than they should be. Although this seems to be a record-breaking example, these "warm intrusions" are becoming more regular as declining Arctic sea ice exposes open water, releasing its heat to the atmosphere. Washington Post
The Wall Street Journal has an interesting profile of Liu He, President Xi Jinping's long-time ally who will next week take charge of China's economy. Liu is making a visit to Washington this week, apparently in an attempt to get the Trump administration to restart trade talks. His policies generally target the stabilization of the Chinese economy, and he is likely to "push forward with gradual market-oriented changes within the state-led model." Wall Street Journal
Alexandre de Rothschild is set to take over from his father David as the chairman of the eponymous Franco-British investment bank. The handover will bring in the seventh generation of family leadership of Rothschild, which was founded two centuries ago. Alexandre de Rothschild worked at Bank of America and Bear Stearns before joining the family business a decade ago. Financial Times