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| Hello, Insiders, and thanks for joining us for this edition of "Inside Business After Dark." Tonight, we dive into August's jobs data and the hope that it means the Fed's rate hikes will stop, a group of private equity and hedge funds suing the SEC over its newest rules, and Disney yanking its channels off the Spectrum pay-TV service, including ESPN right before a highly anticipated college football game kicked off. If you find this newsletter helpful, please share it with someone you like. Thanks! Aaron
p/AaronC | |
| 1 | | The U.S. economy added 187,000 non-farm jobs in August, the third consecutive month under 200,000, and unemployment climbed to 3.8%, leading to hope that the Federal Reserve will give its repeated interest rate hikes a rest. It's a possible sign that the Fed could bring inflation under control without causing a recession. More: - Economists had predicted that unemployment would hold steady at 3.5%, a multi-decade low.
- A cooling labor market would slow down jobs and wage growth, which are key drivers of inflation.
- The reason that unemployment went up even though the economy added 187,000 jobs is that the labor force participation rate rose to 62.8%, the highest since February 2020.
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| 2 | | A group of private equity and hedge funds has sued the Securities and Exchange Commission over new rules that are intended to improve transparency for investors. The lawsuit, filed on Friday, claims that the SEC overstepped its boundaries. More: - The new rules, adopted last week, require PE and hedge funds to disclose quarterly performance, fees, and expenses. They also ban side letters — when a fund and a particular investor carve out special, preferential terms — unless the terms are offered to everyone.
- Opponents of the new rules claim they'll discourage competition, harm investors, reduce returns, and slow innovation.
- The rules passed in a 3-2 party-line vote.
- PE firms manage $27T for institutional investors and wealthy individuals.
Zoom out: - The suit was filed in the Fifth District Court of Appeals, which has 19 Republican judges to just six Democrat judges.
- The same district ruled earlier this year that the FDA improperly expanded access to the abortion pill mifepristone.
- It also ruled last year that the SEC can't bring enforcement actions through its own courts.
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| 3 | | Disney pulled its TV channels, including ESPN, from Charter's Spectrum cable service on Thursday amid a carriage dispute. Charter claims that Disney wants a huge price increase, while Disney said it has deals in place with the other TV providers and is seeking market rate. More: - The channels went dark right at kickoff of the college football game between Florida and Utah, angering Gators fans who are served by Spectrum in central Florida.
- Tennis fans hoping to watch Spanish sensation Carlos Alcaraz at the U.S. Open on ESPN2 were also out of luck.
- The fight shows the strife between the traditional pay-TV model and the growing streaming market. Charter said it's willing to wait Disney out until it can offer customers packages without ESPN and its associated costs.
- On average, providers pay $9 per subscriber per month to carry ESPN, which is passed on to all subscribers.
- Increasing prices will lead to more people cutting the cord in favor of streaming services. But ESPN is considered a "must-have" channel, particularly during the NFL season, meaning not having it will also lead to more people cutting the cord.
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| 4 | | Meta is thinking of offering paid, ad-free access to Facebook and Instagram in the European Union. Such a move would be in response to EU regulators' privacy concerns. More: - Meta serves ads to its users based on analyzing their data, sparking privacy concerns.
- Those paying for the service wouldn't see any ads, while there would still be the ad-supported free tier.
- This could be the beginning of a divergence in the online experiences for Europeans and Americans because of the differing regulatory environments in the U.S. and EU.
- Facebook has been fined nearly €2B in the EU over various violations of data privacy laws since the General Data Protection Regulation went into effect in 2018.
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| 5 | | Robinhood will buy nearly $606M of its stock that used to belong to Sam Bankman-Fried back from the U.S. government. The government came into possession of it as part of the former FTX CEO's bankruptcy and criminal fraud case. More: - U.S. District Judge Lewis Kaplan, who is overseeing the criminal case, OK'd Robinhood buying the 55.3 million shares for $10.96 each, saying the deal was appropriate and in the best interest of shareholders.
- Robinhood shares climbed 3% in premarket trading on Friday in response to the news.
- After the Justice Department seized the shares, four entities contested the claim: FTX, Bankman-Friend individually, an individual FTX creditor, and bankrupt crypto exchange BlockFi, which said the shares were supposed to be collateral for its loan to Bankman-Fried's Emergent Fidelity Technologies.
- Bankman-Fried is set to go on trial in October on charges of lying to investors and using their FTX deposits for other things without telling them. He has pleaded not guilty.
NOTE: Inside.com founder and CEO Jason Calacanis is an investor in Robinhood. | | | |
| 6 | | Amgen's $27.8B purchase of Horizon Therapeutics can move forward, the Federal Trade Commission said on Friday. The deal should close in the fourth quarter. More: - The FTC's agreement with Amgen restricts the drug giant from offering rebates or discounts on two of Horizon's most significant drugs — thyroid eye disease drug Tepezza and gout medicine Krystexxa — in an attempt to corner the market.
- Amgen would also have to get FTC approval if it wants to buy up any competitors to the two drugs.
- A lawsuit the FTC filed in May to block the acquisition over concerns Amgen will leverage its new products to stymie competition will be dropped.
- Attorneys general for California, Illinois, Minnesota, New York, Washington, and Wisconsin will also drop their lawsuits.
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INSIDE BUSINESS LEADERBOARD (30 DAYS) |
 | Copy Editor | | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | | This newsletter was edited by Aaron Crutchfield | |
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