I spoke yesterday on BBC’s Business Matters, an hour-long show that gets into all sorts of topics. Despite the show’s name, it’s not only about business matters, and that’s understandable – in a similar vein, I did the Motley Fool’s radio show for perhaps seven years and I’d say that 85% of the listener emails we got were about personal anecdotes.
Anyway, here’s a quick rundown:
Yellow Trucking bankruptcy: First of all, as Bloomberg’s Matt Levine has pointed out, it’s a weird world we live in when being in or near bankruptcy causes your stock to go up. Yellow’s stock is up 173% for the month. (Tupperware is a more extreme case: its stock is up 637% in the past month(!))
Anyway, the other narrative here is the $700 million COVID-era loan from the US government that it looks like will largely be a loss to taxpayers. Apparently, aside from the PPP loans, $735.9 million had been earmarked to support companies doing things that may affect national security. Also apparently, career Department of Defense folks objected to Yellow getting such a loan on national security grounds (let alone getting 95% of the allocated program budget), but Trump administration appointees pushed it through.
This is the kind of thing that nobody notices if it goes well, but if it blows up, people start asking questions, so expect this to get aired out in the weeks ahead.
I don’t know a ton about Yellow’s business, but it seems they’ve lost money pretty consistently since 2007. The Teamsters union says the issue was wasteful acquisition. Yellow says the issue was the Teamsters. Either way, 99 years is a good run, but sad to see a familiar highway name blow up.
McDonald’s and Burger King want franchisees to eat the cost of spiffing up restaurants: This is despite dine-in visits now representing less than 10% of the total. Presumably it’s for brand advertising, but seems to be akin to asking a movie store 20-25 years ago to invest in fancier shelves for its VHS tapes when DVDs were clearly the emergent thing.
I never eat at fast food restaurants so am perhaps not an authority on this topic, but don’t see the dine-in experience as a major part of the value add of the future. Dine-in was never really the target of fast food in the first place: restaurant chairs are literally designed by length of time they’re comfortable – a 10-minute chair, a 30-minute chair, etc. – and fast food chains traditionally always erred on the uncomfortable side to facilitate throughput.
It feels like a mixed message to franchisees, but clearly, the US has scores of now-overly-large fast food joints that, were they built today, would be built smaller, leaner, and geared toward takeout and delivery.
So what to do with them?
Well, at a minimum, these aging, overly large restaurants represent a brand-damaging eyesore if they’re allowed to get too outdated. So the refurbishment may be a form of brand advertising, which is normally what franchisees pay the parent for.
Loose cannon Matt Healy offends Malaysian government: Look, I had never heard of 34-year-old Matt Healy or his band The 1975, so I had to read up on this, but at a music festival in Malaysia, he got drunk and made some vulgar remarks criticizing the country’s anti-LGBTQ laws, then kissed a male bandmate. Not only did The 1975 get removed from the stage, but the remaining two days of the music festival got canceled. And now the festival organizers are suing The 1975.
I’m not sure which governing law the contract used, but after reading more, I think they have a case, at least in principle.
Yes, for surface-level logic, it’s possible to read the headline and assume that this is a just guy standing up for gay rights in a country where being gay is illegal, so he’s being a brave hero. That may indeed be one element, and Healy surely cares about LGBTQ rights, but there are other elements, too. Healy, who was swigging wine or champagne out of a bottle on stage, has a reputation of getting drunk and saying offensive things to the point that his bandmates are known to be worried about his loose cannon-ness – he’s apparently offended women and Jews before, and apologized after kissing a guy in 2019 in Dubai.
The festival organizers got called before the Malaysian government. The show got canceled. Gay rights supporters in Malaysia say Healy’s stunt has given them a royal headache – hurting, rather than helping, their cause. Healy knew – or should have known – the situation in Malaysia before he arrived. To me, his moves come across more like an insensitive stunt that’s likely more successful in drawing attention and conversation to his behavior, rather than to any cause.
Exorcist: We also chatted about the passing of Willian Friedkin, who directed The Exorcist when he was just 32. I’m not much of a TV or movie guy – I didn’t own a TV for much of my life – but for a random factoid, I’ve many times driven past the stairs in The Exorcist, which are nearby in the Georgetown neighborhood of Washington DC. In 2015 they got a historical marker.
Neither James nor BBAE has a position in any security mentioned.
And if you’re in the mood to check out a BBAE account – and who wouldn’t be? – you can do so via this link!