Spider-Man needs to sign a contract (and drop the hyphen)
Hey Snackers,
Aisle or window? Neither. Qantas Airlines is testing out a 20-hour flight from Sydney to New York — that would make it the longest direct commercial flight ever.
Markets finished Thursday flat as the Fed Chairman hits up Jackson Hole, Wyoming today to chat policy with a view.
Spider-Man is a victim of a Disney/Sony contract war
There's a disturbance in the universe... Spider-Man (we know — he should drop the hyphen) is stuck in the middle of it. And it's a battle between Sony and Marvel Comics, which is now owned by Disney. Back in 2015, the two struck a deal:
- The superheroes: Marvel's creative team includes Spider-Man in its films, but Sony surprisingly owns the film rights.
- The money: In return, Marvel (now Disney) got 5% of the ticket sales from the 1st day of a Spider-Man movie release (+ all the merchandise $$) — Sony got the rest of the box office.
- The switcheroo: Now Disney's proposed a new 50/50 plan — both companies pay the production costs and split the profits evenly. But Sony said 'No.'
So who's got the Infinity Stones?... No one. If this doesn't get resolved, then Spider-Man won't be in any Marvel films in the future. That means Iron Man and Black Panther can't call on Peter to save the world the next time it inevitably faces eternal death. That would be bad for both Disney and Sony, but right now the talks show no signs of life.
We're witnessing the power of franchise ecosystems... That new Spider-Man movie Far from Home is now Sony's top-grossing movie ever. Meanwhile, Disney's Avengers: Endgame became the largest movie of all time, period. Both share characters, which drives engagement and future spin-offs. That's why Disney acquired Fox for $71B — it's adding 15 movie franchises to its Star Wars and Avengers treasure chest. And it just delivered a record film year.
Dick's Sporting Goods decided to A/B test guns
Curling is having a moment... Sporting goods stores aren't. With Amazon competition and a decline in youth team non-virtual sports, Dick's Sporting Goods stock is below where it was 12 years ago (and compadre The Sports Authority is RIP). But it showed it can still suit up and take the field, announcing quarterly sales rose 3.2%. But we're interested in its guns experiment.
The school shooting in Parkland, FL in Feb, 2018 was heartbreaking... Dick's CEO Ed Stack took action by banning assault rifles and raising the age to buy a gun at Dick's to 21. He's also deciding whether to ban firearms altogether at the sporting goods store (they're in the "hunting & shooting" section). Here are the two intense choices he's facing:
- Don't ban guns, and potentially face the negative PR of selling a weapon used in a mass shooting.
- Ban guns, and face the negative PR of being anti-2nd amendment.
This is claaaassic "A/B testing"... That's when you isolate one variable, then measure two groups to see which was best — one with it, one without it. In the fall, Dick's ended gun sales at 10 of its stores. This spring, it did it for 120 more. Now it's watching the performance of two groups:
- Group A: 600 stores still sell guns & ammo.
- Group B: 130 stores don't.
Management hasn't decided yet which group is performing better, but it knows the one variable that would drive the difference: guns. Soon it'll announce which way is better for its profits.
Germany is getting paid to borrow money — We explain "negative interest rates"
Negative interest rates = The bizarro market... And it's happening right now in most of Europe. The federal government of Germany just did something nearly unheard of: It issued a 30-year bond with a negative interest rate. Here's why that's weird:
- How a 30-yr bond normally works: An investor gives $900 today, in return for $1,000 in 30 years. Investors make money by lending.
- How Germany's 30-yr bonds work right now: Investors gave Germany $1,149 today, in return for just $1,000 in 30 years. Investors pay money to lend.
The asparagus is white... and you have to pay to keep money in a bank. These are both truths about Germany right now, and it's thanks to the European Central Bank — Europe's equivalent to the Fed. It's using a negative interest rate to force you to take cash from your savings account and invest it instead. It's like opposite day for European bank accounts:
- In Germany, banks won't pay you interest — they charge you interest.
- Banks have to pay money for holding your money in an account, so they probably pass that charge on to you.
This is punishing you for not investing... European economies didn't recover from the financial crisis as well or fast as America's did. Policymakers there are still desperate to stimulate growth, which requires investment. So negative interest rates hurt people who don't invest. You're more likely to buy things or invest in stocks if the alternative is your money shrinking in a bank account.
What else we’re Snackin’
- Pulse: Fitbit snags Singapore's government as a client and will supply hundreds of thousands of Singaporeans with health trackers
- Noise: Apple's next product launch is in September — but word leaked that "noise-canceling AirPods" are coming in 2020
- eRide: Volkswagen unveils its next generation of electric cars
- Takeoff: Boeing jumped 4% on word it's close to a "key milestone" getting its 737 Max jets back in service
- Play: Hasbro drops $4B to buy family-friendly Peppa Pig
Friday
- Earnings from Foot Locker and Williams-Sonoma.
- Fed Chairman Jerome Powell makes a speech in Jackson Hole, Wyoming.
Disclosure: Authors of this Snacks own shares of Amazon
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