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DealBook: Steven Cohen’s Redemption Tour

12-15 minutes - Source: NYT

Credit...Lucy Nicholson/Reuters
Since insider trading charges toppled SAC Capital, the hedge fund firm’s billionaire founder, Steven Cohen, hasn’t necessarily shunned the spotlight. But a $1 billion art collection and a new firm carry cachet only in certain circles.
Mr. Cohen’s redemption tour has now taken him to Citi Field, home of the New York Mets. But since he first expressed interest in buying the professional baseball team, the sports world has been upended by protests for racial justice, with players exercising their power to push for change with strikes and other actions. For team owners — and for those like Mr. Cohen who wish to enter the business — this presents both risks and opportunities.
Mr. Cohen is in exclusive talks to acquire the Mets, DealBook has confirmed, edging out rivals including a consortium led by the former major leaguer Alex Rodriguez and the pop star Jennifer Lopez. The deal, worth perhaps $2.5 billion, comes seven years after SAC Capital pleaded guilty to insider trading (Mr. Cohen himself was never charged with a crime).
• He is “always someone who cared a great deal about his image, and he was determined to show the world he won,” said Sheelah Kolhatkar, who documented the rise and fall of SAC in her book “Black Edge.” Owning the Mets would be a “capstone” in those efforts, she said. Taking charge of a high-profile team at this moment gives the move even greater weight and far more public prominence.
Professional sports have become the touchstone of a new labor movement, with players increasingly empowered to voice views and take action on a range of social issues. Their refusal last week to play games in order to draw attention to police brutality was a watershed moment that has radically altered the balance of power between ownership and labor. “Quietly, I think league executives are scared about this,” Amira Rose Davis, an expert on sports and labor history at Penn State, told The Times’s Noam Scheiber. “It shows the potential of athletic labor power and that’s why they’ll try to limit it by trying to co-opt it, contain it and declaw it.”
• This is a very different situation from when Mr. Cohen bought a minority stake in the Mets in 2012, or even when a previous bid to take control of the team fell apart in February. Burnishing his reputation as the owner of a team in the new era of player power may not be what he had in mind, but now comes as part of the deal.
Will other owners approve his bid? He needs 23 of the 30 team owners on his side to be successful, and that might be tricky. Beyond the insider trading issues that brought down SAC, Mr. Cohen’s new fund, Point72, has been accused of hostility to women. What’s more, Mr. Cohen, a longtime Mets fan with deep pockets, may be willing to spend in a way that could disrupt the pay scales, endearing him to players but not owners who lack his resources. On the other hand, baseball is ailing, and a big price tag for the Mets could raise team valuations for other owners.
• There is also the matter of the Mets’ lack of on-field success. “If Cohen leads the Mets to a win, he’ll have a table at any restaurant he wants,” said Jeffrey Klein, a prominent sports attorney and partner at Weil Gotshal & Manges. Younger fans won’t care about his past, he added, if they even know about it.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut, Lauren Hirsch in New York, and Michael J. de la Merced and Jason Karaian in London.
Credit...Lucy Hewett for The New York Times
Confirmed coronavirus cases in the U.S. passed six million, just 22 days after hitting the five million mark. The head of the F.D.A. said that the agency might approve a coronavirus vaccine before clinical trials were complete, but denied that politics would play a role in the decision.
Warren Buffett is betting big on Japan. Berkshire Hathaway invested $6 billion in the country’s five biggest trading firms, according to a new filing. It’s a classic contrarian bet by Mr. Buffett: investors have mostly sold Japanese stocks in recent years, disappointed with stalled economic overhauls.
New day, new Dow. The Dow index starts trading today with three new members — Amgen, Honeywell and Salesforce — and, perhaps more important, a lot less Apple. Apple’s four-for-one stock split cut its weight in the Dow to 3 percent from 12 percent, giving it far less influence than it has on the S&P 500, where it’s worth nearly 7 percent of the index. Apple and other high-flying tech stocks like Amazon and Facebook (which are not in the Dow) have helped the S&P 500 outperform the Dow recently, a gap that seems likely to grow.
United abandoned change fees for domestic travel, and has made it easier for passengers to book standby places on same-day flights. The customer-friendly policies come amid a deep slump in travel during the pandemic.
Poaching Lionel Messi will be hugely expensive. After the soccer star said he wanted to leave his longtime club, Barcelona, the Spanish league said that any team that acquired him — the lead contender is Manchester City of the English Premier League — must pay a release fee of 700 million euros, or $833 million.
Credit...Lionel Bonaventure/Agence France-Presse — Getty Images
The Chinese government over the weekend imposed new restrictions on technology exports, including what sound like the algorithms that underpin TikTok, and the move has thrown a wrench into negotiations to sell the video app to an American company.
The surprise move may be China’s attempt to dictate terms of the sale, which is happening under orders from President Trump. “At a minimum they’re flexing their muscles and saying, ‘We get a say in this and we’re not going to be bystanders,’” Scott Kennedy of the Center for Strategic and International Studies think tank told The Times.
Or, it could be an effort to block the sale. China effectively killed Qualcomm’s 2018 bid to buy the Dutch chip maker NXP by withholding approval. As The Times notes, “If Beijing blocks the sale of TikTok, it would effectively be calling the Trump administration’s bluff, forcing the U.S. government to actually go through with restricting the app and potentially incurring the wrath of its legions of influencers and fans.”
People briefed on the talks had warned that Beijing’s approval was always important, and appeasing both Mr. Trump and Chinese officials was a top priority for TikTok’s main suitors, Microsoft and Oracle. (Given their extensive business interests in China, the buyers now have to tread even more carefully.) The FT notes that a deal — which could have been announced as soon as this week — has probably been delayed in light of the new rules.
Wall Street is eager for Zoom to report earnings after the market closes today. Last quarter will be a tough act to follow for the videoconferencing company: One analyst called it the “the greatest quarter in enterprise software history.” Investors also want to see how the pandemic is affecting Campbell Soup and the workplace messaging servicing Slack, which both report earnings on Thursday.
🏛 In a series of speeches, Fed officials will explain the implications of the central bank’s momentous announcement last week that it will tolerate higher inflation to foster a stronger labor market. Richard Clarida, the Fed’s vice chair, speaks today; Lael Brainard, a Fed governor, speaks on Tuesday; and the New York Fed president John Williams speaks on Wednesday.
📈 The biggest economic news is due on Friday, with the release of the monthly U.S. jobs report. Economists expect that the U.S. economy added 1.4 million jobs in August, and that the unemployment rate dropped below 10 percent. Both would be big improvements, but far from restoring all the jobs lost during the pandemic. Similar trends are playing out in the European Union, which releases its latest jobs numbers on Tuesday, and in Canada, which reports on Friday.
🗓 From the TimesMachine: On August 31, 1976, a relatively new firm named Vanguard listed the first index mutual fund open to retail investors, known as the First Index Investment Trust. “Such funds have become popular with some professionals,” The Times wrote before the I.P.O. The newfangled fund aimed to raise $150 million, but the listing took in only $11 million. Today, Vanguard has more than $6 trillion in assets under management.
Credit...Andrew Harnik/Andrew Harnik, via Associated Press
The coronavirus is an opportunity for the Treasury secretary to redefine his legacy, The Times’s Jim Stewart and Alan Rappeport write in a big profile of Mr. Mnuchin. Here are a few of the most eye-catching anecdotes they dug up:
“You’re to blame.” President Trump reportedly snapped at Mr. Mnuchin this spring and said he “never should have signed” the original coronavirus rescue bill, which his Treasury secretary crafted with help from Democrats. Conservative pushback has made prospects of a second stimulus bill murky at best.
“His politics appall me.” Mr. Mnuchin’s father, Robert, reportedly told an acquaintance that he didn’t approve of his son’s work for Mr. Trump. (“But he’s my son,” he added). Mr. Mnuchin’s stepmother “has reminded people that she is not Steven’s biological mother,” Jim and Alan write, and “pretended her arm was injured in order to avoid having to shake hands with Mr. Trump” at Mr. Mnuchin’s wedding.
“He occasionally impersonates Inspector Clouseau from the ‘Pink Panther’ films.” Though he appears “stiff and aloof” in public, Jim and Alan write, Mr. Mnuchin has a go-to move to break the ice in private.
Read the whole story — it is worth your time.
Credit...Matt Kennedy/Marvel Studios/Disney, via Associated Press
Over the weekend, the entertainment world mourned the death from cancer of the 43-year-old actor who portrayed icons like James Brown, Thurgood Marshall and Jackie Robinson. But he was best known as a star of Marvel’s “Black Panther,” a superhero movie that shattered conceptions of how popular Black-led films could be.
Before its release, “Black Panther” labored under pervasive worries that a film with a primarily Black cast wouldn’t live up to the ticket sales of other Marvel blockbusters, especially overseas. Instead, it became the fourth-highest grossing movie ever, with $1.3 billion in box office revenue, evenly split between the U.S. and abroad. And it spurred conversations about Black-centered entertainment getting its due, thanks in no small part to Mr. Boseman’s widely praised performance.
• AT&T is reportedly in talks to sell a majority stake in its embattled DirecTV satellite-TV arm. (WSJ)
• Nestle agreed to buy Aimmune Therapeutics, a maker of treatments for peanut allergies, for $2.6 billion. (Bloomberg)
• Mick Mulvaney, President Trump’s former chief of staff, has started a hedge fund that draws on his experience with financial regulation. (Politico)
Politics and policy
• Heather Boushey, a top economic adviser to Joe Biden, argues that fixing economic inequality is crucial to bolstering America’s growth. Democratic lawmakers are urging the Fed to fight racial income inequality as part of its mandate. (NYT, Politico)
• The fintech start-up Carta publicly called for fairness for workers. Current and former employees of the company said it didn’t live up to its mission. (NYT)
• Facebook’s top policy executive in India expressed public support for the country’s governing party, which some say violated company rules about political neutrality. (WSJ)
Best of the rest
• Warren Buffett turned 90 yesterday. Bill Gates baked him a cake and shared what he has learned from his longtime friend. (Gates Notes)
• The “rarest of book breeds”: A middle grade memoir about a teenager’s start-up. (NYT)
• The Bank of Jamaica dropped a new reggae music video, promoting the virtues of financial stability and featuring the “low, stable and predictable inflation dancers.” (@CentralBankJA)


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