Daily Business Briefing
Aug. 19, 2021Updated Aug. 20, 2021, 11:28 a.m. ET
Aug. 20, 2021, 11:28 a.m. ETAlan Jackson at the 56th Academy of Country Music Awards in April. The academy’s leader said teaming up with Amazon would allow “fans to discover and stream music as they watch.”Credit...Jason Kempin/Getty Images

Viewership for almost all of the entertainment industry’s big, televised awards ceremonies has plunged in recent years, threatening hundreds of millions of dollars in ad sales.
Many factors have contributed to the collapse of the genre — the pandemic turned some shows into glorified Zoom meetings — but the biggest problem may be this: The old-line networks that have broadcast these ceremonies are themselves in sharp decline, with young audiences in particular now hanging out mostly online.
For the first time, a major awards show is going where the eyeballs are.
The Academy of Country Music Awards will be streamed live on Amazon Prime Video starting next year, Amazon said on Thursday in an announcement with the company that produces the show, Dick Clark Productions.
The ACMs, as they are known, will become the first significant awards telecast to move entirely online. The ceremony had called CBS home since 1998. (Before that, it aired on NBC, starting in 1979. And before that, it was on ABC, starting in 1972.)
Amazon has been looking for ways to create synergy between its Prime Video service and its Amazon Music song and podcast platform. Damon Whiteside, the chief executive of the Academy of Country Music, said in a statement that moving the ceremony to Amazon “will deliver the broadest possible audience and, simultaneously, deliver massive value to our artists whose music lives inside this ecosystem, enabling fans to discover and stream music as they watch.”
Might the move prompt other hurting awards shows — the Emmys, the Oscars, the Grammys — to decamp to streaming?
Modi Wiczyk, a co-chief executive of the entertainment company MRC, which owns Dick Clark Productions and has a variety of other awards clients, including the Golden Globes, congratulated Amazon in a statement for “blazing a path for the future of live awards shows.”

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Alex Gorsky, the chief executive of Johnson Johnson since 2012, at the White House in March. He will leave the post in January.Credit...Doug Mills/The New York Times

Johnson Johnson’s chief executive, Alex Gorsky, will step down after nearly a decade and be replaced by one of his deputies, Joaquin Duato, at the beginning of next year, the company announced on Thursday.
Mr. Gorsky, 61, will remain at the company as its executive chairman. Mr. Duato, 59, has spent more than three decades at Johnson Johnson and is best known for leading its pharmaceutical division.
Mr. Gorsky, who got his start as a drug sales representative and has been at the company since 1988, said in a statement that the timing was right for a change in leadership. He was also motivated by health issues in his family, he said.
Mr. Gorsky’s tenure coincided with a period of expansion and financial growth for Johnson Johnson, which is based in New Jersey and is the world’s most valuable maker of health care products. Its stock price has nearly tripled since Mr. Gorsky took over as chief executive in 2012.
In recent years, the company has grappled with a series of challenges, including prominent lawsuits and trials, as well as the tumultuous rollout of its Covid-19 vaccine, which has been slowed by production problems and concerns about rare but serious side effects.
The vaccine is a small fraction of the company’s business, which spans medical devices, consumer products and medicines. Johnson Johnson has vowed to sell the vaccine at break-even prices during the emergency period of the pandemic, with global sales expected to total $2.5 billion this year.
Johnson Johnson announced in July that it would pay up to $5 billion to states and local governments to release it from all civil liability in the opioid epidemic, part of a $26 billion deal joined by several leading drug distributors.
The company has also been facing lawsuits claiming that the talc in its baby powder can cause cancer and that the company was aware of that risk even as it marketed the product. It decided last year to wind down North American sales of its talc-based baby powder.
Mr. Gorsky is likely to receive a substantial payout on his eventual departure. He is eligible to receive previously issued grants of nearly $48 million in stock and options in the event of a voluntary termination, according to a regulatory filing from March.

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President Biden still believes it is appropriate that the extra $300 benefit to regular unemployment payments expires on schedule.Credit...Stefani Reynolds for The New York Times

President Biden is encouraging states with stubbornly high jobless rates to use federal aid dollars to extend benefits for unemployed workers after they are set to expire in early September, administration officials said on Thursday, in an effort to cushion a potential shock to some local economies as the Delta variant of the coronavirus rattles the country.
Enhanced benefits for unemployed workers will run through Sept. 6 under the $1.9 trillion economic aid bill enacted in March. Those benefits include a $300 weekly supplement for traditional benefits paid by states, additional weeks of benefits for the long-term unemployed and a special pandemic program meant to help so-called gig-economy workers who do not qualify for normal unemployment benefits. Those benefits are administered by states but paid for by the federal government. The bill also included $350 billion in relief funds for state, local and tribal governments.
Mr. Biden still believes it is appropriate for the $300 benefit to expire on schedule, as it was “always intended to be temporary,” the secretaries of the Treasury and labor said in a letter to Democratic committee chairmen in the House and Senate on Thursday. But they also reiterated that the stimulus bill allows states to use their relief funds to prolong other parts of the expanded benefits, like the additional weeks for the long-term unemployed, and they called on states to do so if their economies still need the help.
That group could include California, New York and Nevada, where unemployment rates remain well above the national average and governors have not moved to pare back benefits in response to concerns that they may be making it more difficult for businesses to hire.
“Even as the economy continues to recover and robust job growth continues, there are some states where it may make sense for unemployed workers to continue receiving additional assistance for a longer period of time, allowing residents of those states more time to find a job in areas where unemployment remains high,” wrote Janet L. Yellen, the Treasury secretary, and Martin J. Walsh, the labor secretary. “The Delta variant may also pose short-term challenges to local economies and labor markets.”
The additional unemployment benefits have helped boost consumer spending in the recovery from recession, even as the labor market remains millions of jobs short of its prepandemic levels. But business owners and Republican lawmakers have blamed the $300 supplement, in particular, for the difficulties that retailers, restaurants and other employers have faced in filling jobs this spring and summer.
Two dozen states, mostly led by Republicans, have moved to end at least some of the benefits before their expiration date.
In their letter to Congress, the administration officials said the Labor Department was announcing $47 million in new grants meant to help displaced workers connect with good jobs. They also reiterated Mr. Biden’s call for Congress to include a long-term fix for problems with the unemployment system in a large spending bill that Democrats are trying to move as part of their multipart economic agenda.

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Unlike some other major carmakers, Toyota had been mostly unaffected by the global chip shortage until now.Credit...Philip Fong/Agence France-Presse — Getty Images

Toyota Motor, the world’s largest automaker, plans to cut production worldwide 40 percent in September because of a shortage of computer chips that the company had avoided being hurt by until now.
The move will affect 14 plants in Japan and reduce output by about 140,000 cars and trucks next month, the company said. In the United States, Toyota expects to produce about 80,000 fewer vehicles next month than it had previously planned. The company is also cutting production in Europe, China and other countries.
“Due to Covid-19 and unexpected events with our supply chain, Toyota is experiencing additional shortages that will affect production at most of our North American plants,” the company said in a statement. “While the situation remains fluid and complex, our manufacturing and supply chain teams have worked diligently to develop countermeasures to minimize the impact on production.”
The company is also expecting North American production in August to be 60,000 to 90,000 vehicles fewer than originally planned. Toyota said the production cuts were not expected to affect North American employment, at least for now.
Several months ago, many major manufacturers, including Volkswagen, General Motors and Ford Motor, began idling plants because the semiconductor industry struggled to restore production of auto chips after last year’s pandemic-related shutdowns. But Toyota was relatively unaffected because it has been keeping large stocks of chips and other components after earlier supply problems after a 2011 earthquake and tsunami devastated parts of Japan.
Many automakers have been expecting chip supplies to improve in the second half of the year, but Toyota’s announcement suggests the problem could persist into next year.
Next week, Ford plans to idle a plant near Kansas City, Mo., that makes its highly profitable F-150 pickup truck because of a shortage of components that include computer chips. Production will continue at a plant in Dearborn, Mich., that also makes the F-150.
G.M. stopped most of its truck production in North America for parts of this month because of the shortage. On Thursday, G.M. said it was adding downtime at several North American plants. A plant in Lansing, Mich., will be idled for two additional weeks. Another in Spring Hill, Tenn., will close after this weekend and remain idle until Sept. 6, the company said.
Two G.M. plants in Mexico and one in Canada will also add two weeks of downtime. And the company next week will close its factory in Orion, Mich., which makes the Chevrolet Bolt electric car.

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Stocks flitted between slight gains and losses on Thursday as investors weighed how the surging Delta variant, which has cast a pall over global economic growth, could impact the Federal Reserve’s decision on when to begin pulling back the monetary stimulus it put in place during the pandemic.
Wall Street recovered from early losses on Thursday, but fears lingered that the Fed would begin to taper its bond-buying programs soon. Meeting minutes published by the central bank on Wednesday showed that policymakers were prepared to slow the Fed’s large purchases of government-backed bonds, though they were divided over when exactly to begin the process.
The SP 500 rose slightly by the end of the trading session, led by gains in consumer goods companies, after falling as much as 0.5 percent in early trading. The index, the U.S. benchmark, fell 1.1 percent on Wednesday, the biggest single-day decline since mid-July.
“Markets are weighing the Fed’s action against what’s happening in the world as well, including earnings and the health of individual companies,” said Michelle Meyer, the chief U.S. economist at Bank of America. “They don’t want to begin tapering when there’s weaker economic data that could create concerns among market participants.”
Commodities, including oil and key industrial metals, also tumbled — although, from the point of view of investors worried about a Fed taper, that could be a good thing. Lower oil prices in particular could relieve inflationary pressure, which in turn would give the central bank more room to continue with its bond-buying programs.
West Texas Intermediate, the U.S. crude benchmark, fell 2.7 percent to $63.69 a barrel, the lowest in three months; it has fallen nearly 15 percent this month. Brent crude fell 2.6 percent to $66.45 a barrel.
Jerome H. Powell, the Fed chair, will deliver a speech at an economic symposium in Jackson Hole in Wyoming next week, and many investors expect he could provide hints or details about the central bank’s coming policy move.
“If markets are panicked and there’s a disorderly process playing out in credit markets, I think the Fed would recognize that and would take a slower process,” said Beth Ann Bovino, the U.S. chief economist at SP Global.
The mood in the stock market was also darkened by concerns about the spread of the coronavirus in the United States and a slowdown in the Chinese economy.
In China, the government is ramping up attempts to cool its property market and restrain steel production to reduce pollution. Shipping disruptions in China have also been underway, with one of the country’s largest ports partially closed because of a coronavirus outbreak, raising concerns over global trade.
In the United States, the number of people hospitalized with the virus is rising, particularly in states with low vaccination rates. On Wednesday, officials in Alabama said there were no more intensive care unit beds.
Initial claims for regular unemployment benefits continued to fall last week, dropping by 29,000 to 348,000, the lowest since March 2020. Even as the data could signal more people returning to work, economists warned that the spread of the Delta variant could slow progress in the labor market recovery.
“The virus could slow the return of workers still on the sidelines,” economists at Oxford Economics wrote in a note. “But assuming the variant doesn’t force renewed containment measures, we maintain our positive labor market outlook.”
Stocks fell earlier this week after data showed retail sales dropped in July, a sign that consumer spending was hampered amid an uneven economic recovery from pandemic-induced restrictions. Economists expect a slowdown in sales in the fall.
Market moves can also be exacerbated over the summer as many traders are away and liquidity is thin.

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Blank-check companies, known as SPACs, are coming under increased scrutiny from the Securities and Exchange Commission.Credit...Andrew Kelly/Reuters

Regulators have been scrutinizing special purpose acquisition companies, or SPACs, more closely in recent months, as the deals through which private companies have merged with public shell companies have boomed. The Securities and Exchange Commission is focusing on disclosure and accounting practices, while Congress has discussed making banks as liable for their work on SPACs as the stricter rules that apply to traditional initial public offerings.
According to new research by Usha Rodrigues of the University of Georgia School of Law and Mike Stegemoller of Baylor University, highlighted in the DealBook newsletter, there is another urgent issue to worry about: “empty voting.”
SPAC investors can vote in favor of a merger but redeem their shares before the deal is done. The SPAC structure allows investors to get their money back at the initial public offering price, plus interest, if they don’t want to keep the shares after the blank-check firm merges with a target company. But even as redemptions are rising, in some cases with large majorities of shareholders pulling their money out, deals are still almost all being approved.
Why? One reason may be because redeeming shareholders — which tend to be institutional investors like hedge funds — can keep the warrants that come with SPAC listings, which are tradable and give them exposure to the merged company despite having redeemed their shares for cash. And for the target company, redemptions deprive it of the money in the SPAC, but outside investment at the time of a deal (known as a PIPE) is usually larger and makes the merger still worth doing.
The “ability to vote ‘yes’ and nevertheless jump ship” is worrying, the researchers write, because it is a form of “empty voting.” It creates the impression that early investors in the SPAC are in favor of its chosen merger target even as they sell their shares. Later investors — more likely to be retail investors — may misinterpret this signal.
If more than 50 percent of the SPAC shareholders ask to redeem their shares, the S.E.C. should prohibit the deal from going ahead, the researchers write.

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When Kmart opened its first store in 1962, the retailer catered to suburban shoppers.Credit...American Stock/Getty Images

Parishioners at the Elevation Church, inside a former Kmart in Concord, N.C.Credit...Travis Dove for The New York Times


Kmart’s two-decade slide has transformed the commercial real estate market in unexpected ways, bringing churches, truck washes and self-storage facilities to places that once sold Martha Stewart sheets and Joe Boxer pajamas. In cities and towns across the country, former Kmarts are being used by tenants that might not typically get a crack at such a large haul of commercial space at an affordable price. READ THE ARTICLE →

Charles Schwab, one of the country’s biggest brokerage firms, said on Thursday that it was delaying its return to the office until at least January. The company, which has about 20,000 employees, is the latest firm to push back plans to recall employees. Amazon has also delayed its return until January, and Lyft has pushed its return to February. Other companies, including Google, BlackRock and Wells Fargo, have postponed their returns until October.
Schwab also said it would give “the vast majority” of its employees a “special” 5 percent raise, starting in late September. Walt Bettinger, the chief executive, said the raises were a thank-you for “outstanding results for our clients and growth for the company.” Employees that receive incentive-based compensation and senior executives will not be eligible for the raises.

The Federal Trade Commission took new aim at Facebook on Thursday, beefing up its accusations that the company was a monopoly that illegally crushed competition, in an attempt to overcome the skepticism of a federal judge who threw out the agency’s original case two months ago.
The suit submitted Thursday contains the same overall arguments as the original, saying that Facebook’s acquisitions of Instagram and WhatsApp were made to create a “moat” around its monopoly in social networking. But the updated suit is nearly twice as long and includes more facts and analysis that the agency says better support the government’s DemidovaToday in the On Tech newsletter, Shira Ovide writes that an outdoor gear store is a test of what it’s like to start an e-commerce site in 2021.

Source: New York Times

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