Tuesday Nov.22, 2022

🏰 Disney’s Battle of the Bobs

Old Bob is new Bob with his old job (Michael Loccisano/Getty Images)
Old Bob is new Bob with his old job (Michael Loccisano/Getty Images)

Hey Snackers,

Restaurants are getting creative with Thanksgiving-themed dishes, from cornbread stuffing ice cream to turkey-and-mash pizza. Meanwhile, we’re still Googling “how brine turkey?”

US stocks slipped yesterday to kick off the short holiday week. Chinese consumer and casino stocks also dropped as Covid cases climbed and lockdowns intensified.

Bobs

Bob Iger’s surprise comeback as Disney CEO proves brand makers are hard to replace

“Game of Thrones: Magic Kingdom” edition… Disney icon Bob Iger shocked the entertainment industry by announcing he’d return as chief exec for two more years. Iger had stepped down as CEO in 2020 and was replaced by then head of parks Bob Chapek. In June, Disney's board voted to extend Chapek's CEO contract until 2025. But internal complaints from senior execs reportedly prompted a U-turn. Now, Disney’s ousting Chapek while the board looks for a more permanent replacement.

  • “Succession” IRL: Conflicting loyalties may’ve played a role, because Chapek and his inner circle were said to be caught off guard by the decision.
  • Disney shares jumped 6% yesterday, but are down 38% this year. Disney execs say Iger is "uniquely situated" to direct the company at this time.

Mouse House divided… Though Chapek helped Disney survive the pandemic, his tenure featured some public controversies. Last year Scarlett Johansson launched a lawsuit against Disney claiming breach of contract for “Black Widow.” In April, Chapek narrowly avoided a worker revolt following his delayed response to Florida’s “Don’t Say Gay” bill.

  • On the #s side: Disney stock experienced its biggest plunge in 21 years this month after its park and resorts revenue underwhelmed and profit disappointed.
  • Disney+ added more subs than forecast, but Disney’s streaming biz posted nearly $1.5B in operating losses.

Brand makers are hard to replace… Iger spent 15 years growing Disney into Hollywood's most powerful media conglomerate. That's the kind of household-name leadership that investors and execs like to bank on in a downturn. We’ve seen it before: Steve Jobs returned to Apple's helm in 1997 after 12 years away, and Starbucks founder Howard Schultz returned in April as interim CEO.

B(ad)

As World Cup host Qatar kicks off more controversy, Budweiser and other sponsors stay the course

Kicking themselves… Sponsors are losing the PR game at the FIFA World Cup. In the years leading up to this tournament, host country Qatar has been criticized over corruption, exploitative labor practices, and its anti-LGBTQ+ laws (homosexuality is illegal there). Controversy escalated this week after FIFA threatened teams who were planning on wearing rainbow armbands in support of the LGBTQ+ community, while Qatar banned beer sales at stadiums.

  • Sponsors = hit hard: AB InBev-owned Budweiser, the World Cup’s exclusive beer partner since 1986, paid $75M to sponsor this tourney but now won’t be able to sell alcohol (it’ll sell booze-free Bud Zero instead).
  • FIFA = unfazed. Soccer’s governing body, FIFA, made a record $7.5B from 2022 sponsors (FYI: FIFA officials have been charged with accepting Qatar-related bribes).

Hot-button hosts… are nothing new. The organizers of the 2022 Beijing Winter Olympics and the 2018 World Cup in Russia were also criticized for ignoring local human-rights abuses. Now, 2022 World Cup sponsors like Coke, McDonald’s, Visa, Hyundai, and Adidas are getting heat for participating despite Qatar’s human-rights record. Meanwhile, “anti-sponsors” are on the rise:

  • UK brewery BrewDog launched flashy ad campaigns and special brews condemning Qatar, but has itself been criticized for signing a beer-distribution agreement with the country.

Eyeballs may matter more than mouths… when it comes to corporate profits. Despite vocal opposition to Qatar’s conduct, none of the World Cup’s 70+ major sponsors have backed out. Few are willing to ditch one of the world’s top advertising opportunities: this year’s Cup is expected to attract a record-shattering 5B viewers (aka: more than half of all humans).

DEFI(NE)

Heard on the Block: "white paper"

📜 Like a crypto constitution, but the founders are anonymous…

Crypto and blockchains come from somewhere. At the most basic level, that somewhere is often a white paper. Typically, white papers are foundational documents laying out technical specifications and core principles of a new cryptocurrency or blockchain. The bitcoin white paper was first published 14 years ago by the pseudonymous Satoshi Nakamoto.

What else we’re Snackin’

  • Bahston: “Goodwill Hunting” costars Matt Damon and Ben Affleck said they’ve raised at least $100M to start a film-production company. In a rare move, they said they plan to share profits with actors and off-cam talent.
  • Foot: After un-banning Trump’s account, Elon’s next big Twitter play could be surviving the World Cup: the tourney brings big social foot traffic, but Twitter has shed more than half its staff under Musk.
  • Icy: Despite global gloom, luxe jewelers like Cartier, Bulgari, and Tiffany are in growth mode as bling booms. Branded pieces (think: Cartier love bracelets) are driving demand. Even Prada’s getting into jewels.
  • Swipe: Shares of LGBTQ+-focused dating app Grindr soared after the company went public via a SPAC merger, with a drag show outside the NYSE. It was a bright spot for the struggling SPAC market.
  • Ex: Bankrupt crypto exchange FTX said it owes its 50 largest creditors over $3B. Founder Sam Bankman-Fried is trying to broker a massive bailout from his Bahamas home, though he was booted from the company.

Tuesday

  • Earnings expected from: Medtronic, VMware, Dollar Tree, Baidu, HP, Best Buy, Warner Music Group, Dick’s Sporting Goods, Nordstrom, American Eagle, Abercrombie, and Jack in the Box

Authors of this Snacks own: bitcoin and shares of Apple, Disney, Starbucks, Warner Music Group, AB InBev, and Twitter

ID: 2605636

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French luxury fashion conglomerate Kering has seen its shares fall ~10% in the last 24 hours after reporting that sales at its flagship brand Gucci had dropped 21% in its latest quarter.

Kering’s other brands, which include Yves Saint Laurent, Bottega Veneta, and Balenciaga, fared slightly better — but the only real bright spot was the company’s eyewear division, where sales rose 24% (9% on a comparable basis).

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Kering Warns Profit to Tumble Following Gucci Woes in China

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Where Tapestry and Capri most vigorously compete against one another – mainly between Tapestry’s Coach and Kate Spade brands against Capri’s Michael Kors brand – is in the “accessible luxury” handbag market. Today, Coach, Kate Spade and Michael Kors continuously monitor each other’s handbag brands to determine pricing and performance, and they each use that information to make strategic decisions, including whether to raise or lower handbag prices.

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FTC Moves to Block Tapestry’s Acquisition of Capri

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The deal would eliminate fierce head-to-head competition on many important attributes including on price, discounting, and design. Tens of millions of Americans that purchase Coach, Kade Spade, and Michael Kors products could face higher prices

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