Try No. 3

MARKETS

  • U.S. economy: The budget deficit has exceeded the full-year figure for last year. The gap grew to $866.8 billion in the first 10 months of this fiscal year, up 27% annually.
  • Argentina's economy: After voters made it clear they could reject President Mauricio Macri in October elections, the country's peso tumbled and its stock market plunged 48%. That's the second-biggest one-day collapse on any stock exchange since 1950.

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MEDIA

It's All in the Redstone Family for CBS and Viacom

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After a summer's worth of "merger imminent" headlines, CBS (-1.80%) and Viacom (-4.91%) may finally reunite. The two media giants are reportedly nearing a deal after the third attempt in as many years. When this Brew went to e-print, an agreement was expected to be announced as soon as this morning.

Why it makes sense

CBS is the most-watched U.S. broadcast network and Viacom owns Paramount, MTV, Nickelodeon, and other assets. But waging war on today's media (and tech-turned-media) competitors takes guts and financial ammo.

  • Casual TV consumers probably knew Netflix's The Crown announced a season three premiere date yesterday (Nov. 17). But we're guessing your best days of watching Viacom channels are behind you.
  • Together, CBS/Viacom can better recruit Queen Elizabeth II-level star power...a prerequisite for winning attention in the rapidly consolidating entertainment space.

The details

CBS and Viacom are preparing for an all-stock transaction. Negotiators were reportedly torn between 0.5960 and 0.5965 in CBS shares for each Viacom share, a sticking point that kept execs working late into the night on Sunday.

And by the way, "reunite" wasn't a typo. CBS and Viacom are both controlled by National Amusements, a company owned by media mogul Sumner Redstone and his daughter, Shari.

  • Back in 2006, Sumner severed a surging Viacom from CBS. In the years since, Viacom's struggled as cord-cutters hamstring its cable ratings.

Fast forward to today: Shari runs National Amusements and has for years attempted to ink this kind of deal. But ex-CBS chief Les Moonves, ousted last year in the wake of sexual misconduct allegations, stood in the way.

Looking ahead...the younger Redstone has grander ambitions. She reportedly wants to scale her Succession-like media empire by acquiring additional businesses (maybe Sony Pictures Entertainment, maybe Discovery Communications) down the road.

INTERNATIONAL

Hong Kong Business Gets Risky

As protests ground flights and disrupt public transit, Hong Kong's political unrest is spilling over into the business world. The turmoil has led to "can't we all just get along"s from...

Biz leaders. Some of the city's billionaires recently called for protesters to back down. Peter Woo, the largest shareholder of developer Wheelock, referred to the since-suspended extradition bill that incited the original protests as a "big tree" that has already fallen.

  • But the protestors have moved past the bill to hit on a larger point--creeping control from Beijing.

Luxury brands. Red carpet mainstays from Versace to Givenchy have publicly apologized to China in recent days for identifying Hong Kong and other Chinese-claimed territories as independent countries following outcry from prominent mainlanders.

Airlines. The CEO of Hong Kong's flag carrier Cathay Pacific sent a note to employees warning that "There will be disciplinary consequences for employees who support or participate in illegal protests." It appears that Cathay Pacific is complying with China's civil aviation authority's crackdown on protest participants.

APPAREL

Nike, Winged Goddess of DTC Subscriptions

Yesterday, Nike (-0.40%) announced plans to go after the "He started it!" market--kids' sneakers.

What that looks like: A subscription service called Nike Adventure Club that sends customers new shoes periodically. How periodically? Parents can choose between spending $20, $30, or $50 a month. Higher monthly fee = higher frequency of new sneakers.

  • The program is aimed at kids ages 2-10, part of a children's sneaker market estimated to be worth roughly $10 billion per year.

Zoom out: Nike's trying to keep its lead while retro rivals like Fila and Reebok find themselves back in vogue and Kendall Jenner keeps Adidas on solid footing.

Too much wiggle room? For parents, the service offers the welcome convenience of avoiding trips to the store, but that also makes it risky. After all, kids don't always grow predictably. Nike hopes to make sure the sneakers fit the first time around by sending parents a sizing chart fridge magnet they can consult.

Bottom line: Nike's hoping the "adventure" in this club is the thrilling journey of lifelong customer-hood.

P.S. Is it acceptable to still do bunny ears in your mid-20s?

SPACE

The Bezos Doth Protest Too Much

Blue Origin, the rocket ship and space venture company from world's richest person Jeff Bezos, is protesting the Air Force's approach to finding two companies to launch upcoming national security missions.

Blue Origin's gripe: It told the Government Accountability Office that the Air Force's current "flawed acquisition strategy" will result in a competition-stifling "duopoly."

  • For years the Defense Department contracted with just one company, a joint venture from Boeing and Lockheed Martin called United Launch Alliance.
  • In 2014, Elon Musk's SpaceX filed a lawsuit to be considered. When it eventually settled with the Air Force, SpaceX's entry drove down prices for mission competitions.

But now Blue Origin wants in, and we can't blame it. The Air Force's chosen companies will secure billions of dollars in revenue thanks to a 60/40 split of lucrative national security launches from 2022-2026.

But timing is everything. The Pentagon plans to choose its two providers next year. Blue Origin's rocket, New Glenn, won't be ready for flight until 2021.

STARTUP

Venture This: Mixhalo

In this section, we tell you about a startup making waves. Then, you must make a decision: would you invest?

You may have heard Paul Simon brought Bob Weir onstage to close his Outside Lands set...but one startup ensured this weekend's festival was still more 2019 than 1969.

Mixhalo, which closed an $11 million Series A last month, was testing its tech under the radar, reports Axios.

How Mixhalo's trying to make the world a better place: By ending the frustration of shelling out to see your favorite band...only to get stuck swaying to what sound like whale vocalizations.

  • Mixhalo's wi-fi networks connect live event attendees directly to the show's soundboards, so they can hear through headphones the same quality of music that's piped in to musicians' ears.
  • Its network can accommodate unlimited users, as long as they're located within a certain range.

It's got serious music industry bona fides. Mixhalo was co-founded by Incubus guitarist Mike Einziger and its investors and advisors include Pharrell Williams, Hans Zimmer, Rick Rubin, Metallica, and Baba O'Riley himself.

So, once again we turn to you, wise Andreessen Brewowitz investors. Would you participate in Mixhalo's next fundraising round? Let us know here.

WHAT ELSE IS BREWING

  • The Trump administration announced it's advancing a proposed rule that could prevent legal immigrants from getting green cards if they use public assistance programs.
  • Verizon (-0.16%) has agreed to sell Tumblr to WordPress owner Automattic Inc. for "well below" $20 million, per Axios. Yahoo bought Tumblr for $1.1 billion in 2013.
  • Deliveroo, the Amazon-backed U.K. food delivery startup, is leaving the German market.
  • Saudi Aramco announced plans to buy a 20% stake in India's Reliance Industries. And Aramco is still the world's most profitable company.
  • Rite Aid (-2.36%) has named Heyward Donigan as its new CEO. Donigan volunteered as tribute to execute the company's turnaround plan.

BREAKROOM

Family Jewels

Bloomberg has compiled a list of the 25 wealthiest families on the planet. Can you figure out the top five? Don't worry, we'll give you clues.

  1. Family that's synonymous with the largest retailer in the world by revenue
  2. Out-of-this-world candy manufacturers
  3. Politically active oil barons
  4. An entire country is named after this family
  5. Their family fortune goes back to 1920s Paris

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Breakroom Answers


Family Jewels
1. The Waltons (Walmart)
2. The Mars family
3. The Kochs
4. Al Saud (Saudi Arabia)
5. Wertheimer (Chanel)