DealBook Briefing: The Moonves #MeToo Merger Catalyst
Accusations against CBS’s C.E.O. could spur a Viacom dealThe board of CBS spent most of the weekend discussing what to do about Les Moonves, its chief executive, who is the target of allegations about sexual misconduct from six women. More on the board’s deliberations, from Edmund Lee of the NYT:
At least two of the board’s 14 members have questioned whether Mr. Moonves should continue to run the company during an internal investigation, according to two people familiar with the conversations who asked not to be named because the matter was confidential.The board will meet later today.
But Mr. Moonves already had a fight on his hands — with Shari Redstone, who leads CBS’s parent company National Amusements, about merging CBS and Viacom. Mr. Moonves and his board have sued Ms. Redstone to prevent a merger; a trial is scheduled for October. His #MeToo moment could unsettle things.
Tara Lachapelle of Bloomberg expects the new scandal to unseat Mr. Moonves. “And without him leading the charge,” she argues, “the power would shift back to Redstone, enabling her to finally carry out the Viacom deal.”
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Jamie Condliffe and Amie Tsang in London.
Mark Carney is planning for a crisisThe Bank of England governor is worried about Brexit. In an interview with Bloomberg’s Stephanie Flanders, Mr. Carney discusses his preparations for Britain’s exit from the European Union, and explains that he thinks protectionism could be costly:
We can choose between a low road of protectionism focused on bilateral goods-trade balances and a high road of liberalization of global trade in services. The low road will cost jobs, growth, and stability.He would prefer the high road — one which he says “could help solve the problem of persistent trade imbalances” and “support a more inclusive and resilient globalization.” But that decision is out of his hands.
More Bank of England news: It’s expected to raise its key interest rate at a policy meeting on Thursday, even if that might not do much for the pound.
China is eager to talk tradeChinese stocks are down. China has weakened its currency and is stimulating its domestic economy. Those are just some of the signs that it could be losing the trade war.
Its olive branches to encourage trade negotiations are another indication. Reuters reports that China’s State Councilor, Wang Yi, has reiterated that the nation is still open to dialogue with the U.S. over trade tensions. It has also reportedly offered to open discussions on a post-Brexit deal with Britain, according to the British foreign minister Jeremy Hunt.
The A.I. world may end up bigger than you thoughtThe conventional wisdom on artificial intelligence is that America is the world leader, China is catching up, and no one else is really in the race. But Axios reports that other nations — including Israel, Russia, Singapore and South Korea — may also prove to be powers in the A.I. era.
It all depends on how the technology is harnessed, according to a new report by the Center for a New American Security:
We still do not know whether it will be most important in the age of A.I. to be first in the creation of a technology, or to be first in figuring out how to use a technology. History suggests that the latter will be essential to global power, both military and economic. Thus, strategies for leveraging the technology will become essential.America’s government lacks a coherent A.I. strategy. China has one, and is implementing it aggressively. But other countries may put aside safety and reliability concerns to catch up, with unpredictable results.
Why you shouldn’t be too excited about America’s economic growthThe Trump administration is celebrating Friday’s G.D.P. figures, which showed 4.1 percent growth in the U.S. economy during the second quarter, as a victory for its tax reforms and deregulation. Not so fast, says Paul Krugman of the NYT:
The key point when you look at real G.D.P. is that the economy’s actual output depends both on its capacity — the amount it is capable of producing on a sustained basis — and the rate at which it is using that capacity.One quarter of fast growth suggests that more capacity is being used, he says. But sustained growth at this pace? “That would require evidence of an acceleration in the growth of capacity.”
Revolving doorSurendra Rosha has been appointed C.E.O. of HSBC India. (Reuters)
The speed readDeals
■ ARM Holdings has reportedly agreed to buy Treasure Data, a U.S. analytics company, for about $600 million. (Bloomberg)
■ The British betting group GVC Holdings is in advanced talks about a joint venture with MGM Resorts. (Reuters)
■ Amundi, Europe’s biggest asset manager, faces questions about its Italian operations. (FT)
Politics and policy
■ What business can learn from America’s New Left. (FT)
■ Peter C. Wright, nominated to run the Superfund toxic cleanup program, helped Dow Chemical defend a much-criticized cleanup effort. (NYT)
■ Justice Ruth Bader Ginsburg is aiming for at least another five years on the Supreme Court. (CNN)
■ How Bermuda, Malta, Gibraltar and Liechtenstein are competing for cryptocurrency riches. (NYT)
■ Ant Financial is now enough of a success to draw sharp responses from big banks and the Chinese government. (WSJ)
■ Fooling Amazon’s algorithms is now an industry in itself. (WSJ)
■ Silicon Valley has attracted a new, “softer” kind of international spying. (Politico)
■ The U.S. chip industry is facing up to an uncomfortable truth: its performance gains are weakening. (FT)
Best of the rest
■ Mike Cagney’s ouster from Social Finance after sexual misconduct allegations hasn’t stopped him raising $58 million for a new start-up. (NYT)
■ Financial fraudsters tend to do the same things again and again. (FT)
■ When top hedge funds turn investors away, who picks them up? (WSJ)
You can find live updates throughout the day at nytimes.com/dealbook.
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