SPORTS

The Bubble That Never Popped

Last night, the Los Angeles Lakers closed out the Miami Heat to win the NBA championship, ending the weirdest—but most impactful—season in league history.

The legacy: The NBA's coronavirus "bubble" will be remembered as one of the most impressive business achievements of the pandemic.

The backstory: The league paused its season on March 11, that wild day the WHO declared Covid-19 a global pandemic, the Dow crashed 1,465 points, and Tom Hanks announced he tested positive. 

As states started to ease business restrictions, sports leagues that had paused their seasons were figuring out how to restart safely. NBA Commissioner Adam Silver, partnering with the players association, went for a moonshot with a self-contained “bubble” at Florida’s ESPN Wide World of Sports Complex.

• To keep basketball players in and the virus out, the league implemented super-strict health protocols. Family and friends couldn’t even arrive until the second round of the playoffs.

Major storylines

Following the social unrest in the spring, the NBA had made Black Lives Matter messaging a focal point of the restart—but no one was prepared when players refused to play following the police shooting of a Black man in Kenosha, WI. The strike was “historic, front-page news that connected sports, politics, racial protests, and labor relations,” writes the Washington Post’s Ben Golliver.

• Players returned to the court a few days later after securing commitments from the league. 

New entrepreneurs emerged. Heat star Jimmy Butler started a coffee shop, Big Face Coffee, out of his hotel room. He appeared to file three trademarks for the brand in September.  

It wasn’t a complete success story. The NBA, like many other sports leagues, is suffering from awful TV ratings. Experts think there are a number of contributing factors, but they point to the crowded fall sports calendar as the most likely cause of the viewership dip. 

Looking ahead...the bubble worked this season, but there’s another one right around the corner—and the pandemic isn’t going away. Adam Silver’s follow-up act may be more difficult than the first.

MARKETS

Markets Try on Their Pundit Bow Ties

The U.S. presidential election is 22 canvassing-call-filled days out. Market watchers are playing Nate Silver to game out the polls...which are currently leaning toward a Biden victory. 

• Biden won in 86 out of the 100 outcomes simulated by Silver’s FiveThirtyEight website. 

In equities: Wall Street is down with aviators in the Oval, despite initial worries about higher capital gains taxes under a President Joe. JPMorgan strategists are pricing in a temporary drag on stocks in Q4 in the event of a Biden win, followed by a recovery next year. 

• Why the optimism? With bonds and cash offering only razor-thin or even negative yields, stocks remain the only viable option for investors to make real cheddar. 
• Under a Biden administration, Raymond James forecasts an exodus out of tech stocks and into sectors favored by additional coronavirus stimulus packages. 

In currencies: Chinese investors are also bullish on Biden. The onshore yuan rallied the most in 13+ years last week in hopes of a “blue wave” of Democrat victories diminishing trade tensions.

SPACE

Virgin Orbit Needs Help to Make Its Rockets Go Woosh

Richard Branson’s Virgin Orbit is looking to raise between $150 million and $200 million at a roughly $1 billion valuation, the WSJ reported yesterday. LionTree Advisors and Perella Weinberg will help it gin up the cash. 

Nope, not Virgin Galactic—this is the other one. Virgin Galactic does space tourism for people, and Virgin Orbit does space tourism for satellites; it launches smaller satellites into orbit for government and commercial customers. 

• Or...it hopes to eventually. It hasn’t yet put a payload into orbit, and an initial demonstration flight in May failed. Analysts estimate that the company has spent at least $400 million in development, much more than rivals. 
• Virgin Orbit also takes a different approach to launches. It’s more nimble, launching satellites from moving aircraft rather than the ground. 

Big picture: Pre-Covid, the space space was already a tricky one for startups. Then, when the pandemic hit, investors got even stingier. But interest in Virgin Orbit’s flexible launch system is creeping back. 

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RETAIL

Curbside Enthusiasm

This week, retailers including Target and Walmart are launching big sales events to compete against Amazon Prime Day, which starts tomorrow.

Their secret weapon, per CNBC? Curbside pickup. 

What that is: When you place an online order, then get in your car and drive to the store’s parking lot to pick it up. 

It’s been a game-changer for retailers during the pandemic, the NYT reports. Target’s curbside sales increased more than 700% last quarter, and of Best Buy’s nearly $5 billion in Q2 online revenue, 41% came from pickup orders.

Why is it so popular?

• For customers: As much as having an item shipped to you is convenient, you can always get something faster if you go to the store.
• For retailers: The “last mile” of delivery is a notoriously difficult (and expensive) logistical nut to crack. With curbside pickup, customers do that for you.

Looking ahead...the big question is whether curbside will remain popular when the pandemic is over and browsing in a store doesn’t require battle gear.

CALENDAR

The Week Ahead

New iPhones! Corporate earnings! Canadian Thanksgiving! We've got a lot to be grateful for this week, especially our friends up north.

Monday: Senate Judiciary Committee begins confirmation hearings for Supreme Court nominee Amy Coney Barrett; Canadian Thanksgiving

Tuesday: Apple’s virtual iPhone event; Amazon Prime Day begins; Consumer Price Index; earnings (JPMorgan, Johnson & Johnson, Delta, Citigroup, BlackRock)

Wednesday: Billboard Music Awards; earnings (Bank of America, Goldman Sachs, Wells Fargo, UnitedHealth, United Airlines)

Thursday: West Wing reunion episode; earnings (Morgan Stanley, Walgreens Boots Alliance)

Friday: Retail sales for September

WHAT ELSE IS BREWING

• Hurricane Delta left more than 400,000 households and businesses (mainly in Louisiana) without power Sunday morning.
• Triller, a growing TikTok competitor, is exploring a deal to go public via a SPAC, per Reuters.
• Saudi Arabia’s National Commercial Bank will buy Samba Financial Group in a $14.8 billion deal. The combined company will control 25% of the Saudi banking sector. 
• Twilio, a $46 billion cloud communications company, is buying customer data infrastructure startup Segment for $3.2 billion, per Forbes.
• Rafael Nadal continued to amaze in Paris. He won his 20th Grand Slam title at the French Open.
• Covid-19 Essentials is likely the first retail chain in the U.S. dedicated to coronavirus products, reports the NYT.

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Hey, Google: Here’s how to optimize Google Drive and simplify nearly every corner of your life (h/t our Essentials newsletter). 

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FROM THE CREW

Start Talking

Every Monday, we curate a handful of balanced resources about a hot-button business issue and encourage you to discuss with friends, family, or coworkers.

This week’s topic: Months into their tug-of-war over a new pandemic relief package, lawmakers and the White House are continuing to butt heads over how much federal aid to give cash-strapped state and local governments. Of the $2.6 trillion the government has spent on economic relief, $291 billion has gone to state, local, and tribal governments. Is that enough? 

• Where states are losing their money (House Committee on the Budget)
• Just how much is Covid-19 impacting state and local revenues? (Brookings)
• What Democrats and Republicans are fighting over (The Hill)
• The National Governors Association has repeatedly asked the federal government for an additional $500 billion (StateScoop)
• State and local governments are fighting over where the money flows (WaPo)

GAMES

Brew Crossword

Today's puzzle, made by Eric Howell, is one of our favorite Brew Crosswords to date. You'll see why when you try completing it.

Remember, you, too, can submit your own Brew Crossword to be featured in this here section. Check out the guidelines.