America's hottest club

QUOTE OF THE DAY

“Well, I'm a free agent.”—ESPN.com writer Mark Saxon after being laid off from the network on Wednesday along with dozens of other staff. We’ve got full coverage below.

Ticker

MARKET CORNER

Market Snapshot

Stocks closed slightly lower on Wednesday, breaking a two-day winning streak after the President’s heavily-anticipated tax plan initially fueled an intra-day bump.
European stocks reached their highest level since August 2015, with the euro hitting a 5.5 month high.

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SportsCenter Might Be Next

Layoffs have hit ESPN again, and this time it’s affecting 100 on-air personalities as the Disney-owned (+0.35%) network struggles to keep up with changing TV habits.

When it laid off 300 employees in 2015, on-camera staff (i.e. the people you’d recognize) were safe. This time not so much, which is not a good sign for the Worldwide Leader in Sports.

It's cord-cutters' fault

Loyal Brew readers will know that all cable networks are hurting, but ESPN is feeling it the worst because of its hefty subscriber fee.

When you pay your cable bill each month (but who are we kidding, you probably don’t have a cable box), each channel gets a chunk of that change. ESPN takes a whopping $7.21. Compare that to CNN’s 71 cents, and it’s pricey to say the least.

You know the saying, with great power comes great responsibility, well, when you make 10 times what another channel does per viewer, 11 million subscribers walking away over the past seven years hits you where it hurts. The problem worsens when you’re locked into expensive contracts: NFL broadcasting rights alone will cost ESPN $1.9 billion a year until 2022.

On deck

Now that you can watch Thursday Night Football on Amazon and Major League Soccer on Facebook, watching on ESPN feels as outdated as listening to a radio broadcast, or remembering to floss.

CEO John Skipper acknowledged "changing consumption habits" in his letter to all employees announcing the layoffs, but it might be too little too late.

Twitter’s Turning Tide

President Trump’s social network of choice desperately needed good news for investors this time around...and somehow managed to find it. Twitter (+7.91%) added nine million users last quarter—its biggest increase since early 2015.

This traction could help CEO Jack Dorsey save the faltering company and please investors. Still, there’s a long way to go. Twitter also reported its first revenue drop since going public in 2013. Between neo-nazi trolls and lost streaming deals, we’ll take any good news we can get, Jack.

Chipotle Can’t Catch a Break

After an E. coli outbreak devastated burrito sales last year, Chipotle (+2.62%) seems back on track to recover. At least, as long as a new crisis doesn’t overshadow the good news.

First things first: the fast-casual chain solidly beat earnings expectations and grew same-store sales by 17.8%, initially causing the stock to jump, but the gains were short-lived. Chipotle also admitted some 'unauthorized activity’ had been detected and warned customers to double check their bank accounts.

Hopefully its newest idea—dessert—can help out.

America’s Hottest Club Is…Costco?

Last month, we told you about the insane popularity of Kirkland Signature golf balls, but apparently that’s not all Costco (+2.39%) is doing right. As retailers nationwide feel the crunch, Costco is setting itself apart: it announced Wednesday a special dividend of $7 per share next month.

It’s good news, but Costco will need to keep the (golf) ball rolling to stay ahead. Its Washington neighbor, Amazon, is on track to take the cake in membership grocery shopping. Amazon Prime now has about 80 million members, a 40% increase over the year before, putting it just 8.1 million behind Costco. Shoppers, start your engines...

What Else Is Happening…

Shark Tank host Kevin O’Leary dropped out of contention to lead Canada’s Conservative Party
FCC Chairman Ajit Pai has begun dismantling net neutrality, angering tech companies
Amazon’s new voice-controlled camera wants to be your personal stylist
Instagram added 100 million new users in just four months to reach 700 million accounts

Economic Calendar

Monday: Halliburton (+), T-Mobile (+) Earnings
Tuesday: 3M (+), AT&T (+/-), Chipotle (+), Coca-Cola (-), JetBlue (+), Lockheed Martin (+/-), McDonalds (+), Texas Instruments (+), Xerox (-) Earnings; Consumer Confidence (-), New Home Sales (+)
Wednesday: Alaska Air (+), Boeing (+), Boston Beer (+), Hershey’s (+), Norfolk Southern (+), PayPal (+), PepsiCo (+), Procter & Gamble (-), Twitter (+) Earnings
Thursday: Alphabet, Amazon, American Airlines, Comcast, Dow Chemical, Expedia, GoPro, Microsoft, Southwest Airlines, Starbucks, Under Armour, Union Pacific Earnings; Weekly Jobless Claims
Friday: Morningstar, Steve Madden Earnings; GDP

WATER COOLER

Chris Sacca Hangs Up His Investor Cleats

Yesterday, one superstar came out of retirement while another entered it. (You knew we meant Marshawn Lynch and Chris Sacca...right?)

Sacca, the veteran venture capitalist, announced yesterday that he is retiring from investing. Here’s his highlight reel:

Sacca’s company, Lowercase Capital, made a $300,000 investment in Uber way back in 2010, and it now owns 4% of the $50 billion ride-hailing firm. ROI looking solid there.
Other investments include Docker, StyleSeat, Instagram, Optimizely and Twitter. Based on a study in 2015, Lowercase Capital’s overall return was an astounding 216 times its investment. Are you kidding me with those companies!?!
Shark Tank’s singing cowboy is known for his embroidered cowboy shirts. What started as an airport gift shop purchase is now a wardrobe icon, and Sacca owns nearly 70 of them.
So why is he retiring now? His plan was originally to retire when he hit 40. Now he’s only two years late, but he’s still young. We can’t really blame him...especially with a net worth of $1.2 billion.

THE BREAKROOM

Interview Question of the Day

Which is the cheaper kind of capital: debt or equity? (Answer)

Business Tip of the Day

How to write a kick-ass cold email, according to the CEO of Birchbox:

Subject lines are everything (We can vouch for that at the Brew)
Don't be boring (duh)
Don't make their life harder than it has to be! No massive attachments, please.

Stat of the Day

$400,000—Barack Obama’s post-presidential speaking fee. The same figure he was pulling annually as commander-in-chief, but this time from Wall Street.