Guess who?

MARKETS

• Davos: On the first day of the conference, a 73-year-old and a 17-year-old took their Twitter beef offline. In his speech, President Trump told activists “This is not a time for pessimism,” while climate activist Greta Thunberg told elites, “Our house is still on fire. Your inaction is fueling the flames by the hour.”
• U.S. markets: Travel-related stocks got hit by growing fears of the China-based coronavirus spreading around the globe. Yesterday, the CDC announced the first confirmed case of the virus in the U.S.

MEDIA

Morning Brew Media Day

We’ve still got a week and a half until the Super Bowl...what to talk about...what to talk about...

How about the folks that cover the Super Bowl: digital sports media companies. Some emerging brands are on the fundraising circuit, while others are looking to cash out.

When the paywall works

The Athletic raised $50 million at a valuation of roughly $500 million, Axios reported yesterday. Bedrock Capital led the round, but let’s be honest—it’s much cooler that Matthew McConaughey also participated.

How The Athletic is different: It’s a digital media company that relies on subscription revenue rather than advertising revenue.

• Industry analysts were skeptical that model would work when there’s so much free sports content floating around the web. Heck, even we make playoff predictions. But…
• An impressive 80% of Athletic subscribers stay past one year, Bedrock Founder Eric Stromberg told Axios.

Why they’re sticking around: to read some of the best sports reporting $10/month can buy. The Athletic invested in a roster of top-notch beat writers and newspaper reporters, which has led to a string of successes including breaking the Astros sign-stealing scandal.

Other companies are looking to sell

Last week, the WSJ reported that Spotify was in early talks to buy The Ringer, Bill Simmons’s pop culture and sports outlet.

This appears to be about podcasts:

• After spending 2019 acquiring three podcasting companies for $400 million, Spotify’s in binge mode.
• The Ringer reportedly brought in more than $15 million in podcast revenue in 2018, and it currently has more than 30 shows.

Then there’s Barstool Sports. Barstool's owner The Chernin Group is in “advanced talks” to sell a majority stake to casino operator Penn National Gaming, Recode reported. Barstool was last valued at more than $100 million.

Bottom line: The sports media companies flourishing are either experimenting with new business models or aligning themselves with adjacent industries.

MEDIA

Netflix Is Bored in the USA

Yesterday, Netflix reported its first earnings since Baby Yoda and Reese Witherspoon started tangoing on its turf.

The results? The company added almost 8.8 million paying subscribers in Q4, beating the 7.6 million it predicted in October. Revenue of $5.5 billion also topped expectations.

The Disney+ damage

Everyone was wondering how the November launch of Disney’s streaming competitor might impact Netflix.

In the U.S., Netflix reported “slightly elevated churn levels” and 180,000 fewer new subscribers than expected. In December, analysts estimated Disney+ (which got nearly 10 million signups on Day 1) stole over 1 million subscribers from Netflix.

But does it even matter?

Netflix is drooling over the growth potential overseas. Incredibly, international markets accounted for roughly 95% of net new subscribers in Q4. And according to entertainment expert Matt Ball, Netflix should have better content, lower prices, and less competition outside the U.S. “for many years to come.”

INDUSTRIALS

Hammer Drops on Vale Employees

Yesterday, prosecutors for the Brazilian state of Minas Gerais charged the former CEO of mining company Vale with homicide.

• On Jan. 25, 2019, a Vale dam collapsed, triggering a mudslide that killed 270 people. It was the worst environmental disaster in Brazil’s history.

The former CEO, Fabio Schvartsman, is the highest-level exec to be charged. Prosecutors also slapped homicide charges on 10 other former Vale workers, plus five employees of TUV SUD, a German auditor that inspected the dam.

• Prosecutors said both TUV SUD and Vale were "fully aware" of the dam's safety risks.
• TUV SUD said it was cooperating with authorities.

Big picture: With the tragedy's one-year anniversary coming up, the Brazilian public is looking for accountability, especially since this wasn’t the first disaster involving the company. In 2015, a mining dam owned by a Vale joint venture collapsed, resulting in 19 deaths.

WORKFORCE

Uber’s California Independence Movement

Yesterday, Uber began testing a new feature that grants drivers more independence.

The change: Drivers ferrying people from certain California airports (Santa Barbara, Palm Springs, and Sacramento) can set the price of their rides.

• They can increase the price in 10% increments to up to five times the original fare.
• Uber matches riders with the lowest-cost driver available.

In this “bidding” system, drivers can charge more per ride...but may lose riders if they do. Next week, Uber also plans to test a feature that lets drivers reduce fares down to a tenth of the set price.

Other driver perks: Uber’s now providing more trip info on the front end like travel time, distance, destination, and estimated fare. Plus, riders will be able to pick “favorite” drivers.

The point of the experiment: Uber is trying to get around California’s new gig economy law, AB 5. The law, which was passed last year and went into effect on New Year’s Day, all but requires Uber to classify its drivers as employees. With these changes, Uber hopes it can keep them as independent contractors.

EVENTS

Guess Who? Davos Edition

We know you can recognize Davos headliners like President Trump, Greta Thunberg, and Klaus Schwab. Wait—you mean you don’t know Klaus? He’s the founder and executive chairman of the World Economic Forum, the organization that’s been putting on this event for 50 years.

That settles it: Let’s use the opportunity to put faces to the other important leaders meeting in Switzerland this week. We’ll give you a photo and a brief description, you have to figure out the name (answers at the bottom of the story).

Mystery person #1

I’m the first female president of the European Commission. Since taking over in December, I’ve set a goal for the EU to be carbon neutral by 2050.

Mystery person #2

I’ve been the governor of the Bank of England since 2013, though I’m stepping down on March 16 and handing the reins to Andrew Bailey. I’m big into digital currencies. HODL.

Mystery person #3

I’ve been the chief economist of the International Monetary Fund since 2018. I got my PhD at Princeton, where former Fed Chair Ben Bernanke was one of my thesis advisors.

Mystery person #4

We won't make you guess. That's Klaus Schwab.

Answers: 1. Ursula von der Leyen 2. Mark Carney 3. Gita Gopinath

WHAT ELSE IS BREWING

• Boeing doesn’t expect the 737 Max to fly again until the middle of this year. Shares fell more than 5% on the surprising news.
• IBM's Q4:
• Jeff Bezos's phone was allegedly hacked in 2018 after the personal WhatsApp account of Saudi Crown Prince Mohammed bin Salman sent him a message with a malicious file, the Guardian reports. White guy blinking meme.
• Krystal, a burger chain in the southeastern U.S., filed for bankruptcy.
• Goldman Sachs CEO David Solomon said WeWork’s failed IPO showed that the listing process “worked.”

TAKE ME TO CHURCH

The Pew Research Center analyzed nearly 50,000 sermons shared online by U.S. churches. How long was the median sermon?

TAKE ME TO CHURCH ANSWERS

37 minutes. Catholic sermons are the shortest at a median of 14 minutes, while historically black Protestant congregations have the longest: 54 minutes.