Macy’s requests vaccination status of all U.S. employees.
A memo sent to the staff indicated that the retailer was preparing for the potential that vaccines or weekly testing could be mandated by the Biden administration.
Macy’s in Manhattan. The retailer has told employees in the United States that they must upload their vaccination statuses to a third-party platform by Jan. 16.Credit…Jeenah Moon for The New York Times
Macy’s began requesting the vaccination statuses of employees on Tuesday, a sign it was preparing for a potential mandate of vaccinations or weekly testing ahead of a special Supreme Court hearing about such rules on Friday.
In a memo sent to employees that was obtained by The New York Times, the retailer — which also owns Bloomingdale’s and Bluemercury — told workers in the United States to upload their vaccination statuses to a third-party platform by Jan. 16 “regardless of whether you work in a store, a supply chain facility, an office, or are remote/hybrid.” For employees who say they are unvaccinated, Macy’s said it would “review your submission and you may be contacted by someone from the Colleague Advisory team to discuss next steps.” The company also said it might require proof of negative tests to be uploaded to the same system starting on Feb. 16.
The Supreme Court is scheduled to hold the hearing this week to assess the legality of two measures from the Biden administration: a vaccine-or-testing mandate aimed at large employers and a vaccination requirement for certain health care workers. The retail industry had pushed back on a new rule issued in November by the Occupational Safety and Health Administration requiring companies with 100 or more workers to mandate vaccines or weekly tests, saying it could intensify a labor shortage that many retailers were dealing with during the busy holiday season.
Since then, the Omicron variant has sent global coronavirus cases to record levels, though recent data shows that people infected with it are far less likely to be hospitalized than those infected with the Delta variant, especially if they are vaccinated.
Macy’s said separately on Tuesday that it planned to shorten store hours from Monday through Thursday for the rest of January amid the spike and staffing shortages. The news was reported earlier by CNBC.
The National Retail Federation, a major industry lobbying group, said in a statement on Tuesday that it “continues to believe that OSHA exceeded its authority in promulgating its vaccine mandate, and we look forward to making that argument before the Supreme Court on Friday.” The group estimated that the order would require 20 million tests a week nationally, based on external data on unvaccinated workers, and that “such testing capacity currently does not exist.” Still, the memo from Macy’s, which has tens of thousands of employees, suggests that the industry is preparing to carry out the rule. Macy’s also said in its memo that it would adopt the new guidance from the Centers for Disease Control and Prevention that recommended shortening isolation periods for infected people to five days from 10 if they are asymptomatic or their symptoms are resolving.
The retailer asked in the fall that its corporate staff either be vaccinated or test negative for Covid-19 before returning to the office, but it did not make the same request of store employees.
When asked about the memo, a Macy’s representative said in an email that the retailer was “working to comply with federal and local guidelines related to Covid.”
Federal aviation officials have agreed not to ask for further delays to Verizon and AT&T’s new 5G cellular service, clearing the way for the companies to start their service while avoiding a major clash with regulators who said it could endanger flights.
In addition to delaying the start of their service by two weeks, the carriers will temporarily put in place measures designed to address the government’s safety concerns about the technology, particularly around certain airports.
The agency had expressed concerns that the new 5G service uses signals that clash with equipment pilots use to land in poor weather. Officials have said they could restrict the use of that equipment, known as radio altimeters, which could force airlines to ground or reroute flights under some conditions.
The new 5G service uses a portion of the airwaves, called C-Band, to operate; planes use an adjacent set of radio waves for their radio altimeters. The aviation industry has said the two signals could clash, with potentially dangerous results.
In a letter to the wireless companies on Monday night, federal officials said that absent “unforeseen” safety issues with the technology, they “will not seek or demand any further delays” in turning on the new technology.
“We are confident that your voluntary steps will support the safe coexistence of 5G C-Band deployment and aviation activities, helping to retain America’s economic strength and leadership role around the world,” said Transportation Secretary Pete Buttigieg and the administrator of the Federal Aviation Administration, Stephen Dickson, in a letter to the chief executives of the two companies.
The agreement forestalls a collision this week between AT&T and Verizon, which initially planned to debut the service on Wednesday, and the federal regulators who said they could restrict flights if their concerns were not met. The nation’s airlines had said that the restrictions could disrupt hundreds of thousands of passenger flights, not long after holiday travel was dogged by delays and cancellations driven by staff shortages and weather.
“Last night’s agreement is a significant step in the right direction, and we’re grateful to all parties for their cooperation and good faith,” President Biden said in a statement on Tuesday. “This agreement ensures that there will be no disruptions to air operations over the next two weeks and puts us on track to substantially reduce disruptions to air operations when AT&T and Verizon launch 5G on January 19th.”
Under the agreement, the wireless carriers will follow through on their pledge to operate 5G stations at a lower power than they otherwise plan to. They will reduce the power even more around “no more than 50 priority airports,” according to the agreement.
The F.A.A. said it would assess whether some radio altimeters could be safely used even with the 5G service, potentially exempting those devices from future restrictions and limiting the number of planes that would face delays or cancellations.
Airlines for America, a lobbying group, had threatened to go to court to block the new 5G service. In a statement, Nicholas E. Calio, the organization’s chief executive, said it would “continue to work with all stakeholders to help ensure that new 5G service can coexist with aviation safely.”
A mistrial was formally declared for three counts of wire fraud against Elizabeth Holmes, the founder of the failed blood-testing start-up Theranos, according to a federal court filing released on Tuesday.
Ms. Holmes, 37, was found guilty on Monday of three counts of wire fraud and one count of conspiracy to commit wire fraud for lying to investors to raise money for her company. She was found not guilty on four counts related to defrauding Theranos’s patients.
The three hung counts were related to investments from three Theranos investors who testified that Ms. Holmes misled them. Jurors had said on Monday that they could not agree on verdicts on those counts. A hearing will be held next week to discuss those charges, which prosecutors could choose to retry.
Ms. Holmes — a Stanford University dropout and one-time start-up darling turned Silicon Valley pariah — is also expected to receive a sentencing date at next week’s hearing for the counts she was convicted on. Each wire fraud count carries a maximum sentence of 20 years in prison. Ms. Holmes can appeal her conviction, the sentencing or both.
The hung counts came after a jury of eight men and four women spent 50 hours over seven days deliberating a verdict. On Monday, they twice told Judge Edward J. Davila of the United States District Court for the Northern District of California, who presided over the case, that they were deadlocked on the three counts against Ms. Holmes. Verdicts were delivered on the other eight counts instead.
The three hung counts related to the investors Alan Eisenman, Chris Lucas of Black Diamond Ventures and Bryan Tolbert of the Hall Group. Each had invested in Theranos, with some of their transactions forming the basis of three counts of wire fraud.
Mr. Eisenman testified that he believed Ms. Holmes was hiding information from him. Mr. Lucas testified that Ms. Holmes was his main source of information about Theranos. Mr. Tolbert said in court that he backed Theranos on the understanding that its technology was ready to be deployed.
In total, Theranos raised $945 million from investors over its lifetime. Those investments were wiped out after the company’s blood tests — which were supposed to be able to discern various ailments from a few drops of a patient’s blood — were shown not to work.
The number of Americans quitting their jobs is the highest on record, as workers take advantage of strong employer demand to pursue better opportunities.
More than 4.5 million people voluntarily left their jobs in November, the Labor Department said Tuesday. That was up from 4.2 million in October and was the most in the two decades that the government has been keeping track.
The surge in quitting in recent months — along with the continuing difficulty reported by employers in filling openings — underscores the strange, contradictory moment facing the U.S. economy after two years of pandemic-induced disruptions.
Number of People Who Quit Jobs by Month
Much of the discussion about the increase in quitting, sometimes referred to as the Great Resignation, has focused on white-collar workers re-evaluating their priorities in the pandemic. But job turnover has been concentrated in hospitality and other low-wage sectors, where intense competition for employees has given workers the leverage to seek better pay.
“This Great Resignation story is really more about lower-wage workers finding new opportunities in a reopening labor market and seizing them,” said Nick Bunker, director of economic research at the Indeed Hiring Lab.
For some workers, the rush to reopen the economy has created a rare opportunity to demand better pay and working conditions. But for those who can’t change jobs as easily, or who are in sectors where demand isn’t as strong, pay gains have been more modest, and have been overwhelmed by faster inflation. Data from the Federal Reserve Bank of Atlanta shows that job-switchers are getting significantly faster pay increases than people who stay in their jobs.
Faster pay increases and faster inflation are both at least partly a result of the remarkable strength of the economic recovery. After collapsing in the first weeks of the pandemic, consumer spending quickly rebounded and eventually reached record levels, helped by hundreds of billions of dollars in federal aid. Businesses, whipsawed by the sudden reversals, struggled to keep up with demand, leading to supply chain snarls, labor shortages and rising prices.
The stubborn nature of the pandemic itself contributed to the problems, upending spending patterns and keeping workers on the sidelines.
Number of Job Openings Per Month
There are signs that the worst of the turbulence was beginning to ease late last year. The number of job openings posted by employers fell in November, the Labor Department said Tuesday, though it remained high by historical standards. Hiring picked up, too. Earlier data showed that more people returned to the labor force in November, and various measures of supply-chain pressures have begun to ease.
But that was before the explosion in coronavirus cases linked to the Omicron variant, which has forced airlines to cancel flights, businesses to delay return-to-office plans and school districts to return temporarily to remote learning. Forecasters say the latest Covid-19 wave is all but certain to prolong the economic uncertainty, though it is too soon to say how it will affect inflation, spending or the job market.
Despite the demand for workers and the pay increases landed by some, Americans are pessimistic about the economy. Only 21 percent of adults said their finances were better off than a year ago, according to a survey released Tuesday — down from 26 percent when the question was asked a year earlier, even though, by most measures, the economy had improved substantially during that period. The survey of 5,365 adults was conducted last month for The New York Times by Momentive, the online research firm formerly known as SurveyMonkey.
Overall consumer confidence is at the lowest level in the nearly five years Momentive has been conducting its survey. Republicans have been particularly pessimistic about the economy since President Biden took office a year ago, but in recent months, Democrats, too, have become more dour. Other surveys have found similar results.
Inflation appears to be a big reason for people’s dark outlook. Most respondents in the Momentive survey said inflation had not yet had a major effect on their finances. But nearly nine in 10 said they were at least “somewhat concerned” about inflation, and six in 10 said they were “very concerned.” Worries about inflation cross generational, racial and even partisan lines: 95 percent of Republicans, 88 percent of independents and 82 percent of Democrats say they are concerned.
“Pretty much the only group of people who say they’re better off now than they were a year ago are people who’ve gotten a pay raise that matches or beats inflation,” said Laura Wronski, a research scientist at Momentive.
There aren’t many of them. Only 17 percent of workers say they have received raises that kept up with inflation over the past year. Most of the rest say either that they have received raises that lagged price increases or that they have received no raise at all; 8 percent of respondents said they had taken a pay cut.
Government data likewise shows that, in the aggregate, prices have risen faster than pay in recent months: The Consumer Price Index rose 6.8 percent in November, a nearly four-decade high; average hourly earnings rose 4.8 percent in November, and other measures likewise show pay gains lagging price increases.
Yet some workers are seeing much faster wage growth. Hourly earnings for leisure and hospitality workers were up 12.3 percent in November, much faster than inflation. Workers in other low-wage service sectors are also seeing strong gains.
In the Momentive survey, respondents who reported voluntarily changing jobs during the pandemic were more likely to say their wages had kept up with inflation, and more likely to rate the economy highly overall. Those who were laid off during the pandemic, or who have kept the same job throughout, were less likely to say their wages had kept pace.
Somer Welch, a 40-year-old survey respondent in Maine, lost her job in the pandemic when the brewpub where she worked shut down. She has since found a job at another restaurant, but her earnings haven’t fully rebounded. Her husband, who works at a local ship builder, has kept his job throughout the pandemic, other than a brief furlough, but he hasn’t gotten a raise.
The result: The family is losing ground relative to inflation.
“The cost of things rose, our rent increased, while our income decreased,” Ms. Welch said. The couple was able to build up some savings early in the pandemic, but that rainy-day fund has been largely depleted. “The rainy day came a lot sooner than we expected,” she said.
Ms. Welch isn’t ready to join the ranks of the quitters. She likes her job and its flexible hours. But she knows there are better-paying jobs out there, she said, and she will consider making a move if rising prices make it hard to afford basic needs for her four-person family.
Workers like Ms. Welch might have leverage in theory, said Daniel Zhao, senior economist at the career site Glassdoor. But to take advantage of that leverage, they have to be willing to use it.
“At a time when employers are competing and raising wages so quickly, if you’re not switching jobs right now then you can get left behind by the market,” Mr. Zhao said.
Mr. Zhao said it wasn’t clear whether concerns about inflation were directly contributing to people’s decision to switch jobs. But mentions of “inflation” in reviews on Glassdoor by companies’ current or former employees were up 385 percent in December from a year ago.
About the survey: Data in this article came from an online survey of 5,365 adults conducted by the polling firm Momentive from Dec. 14 to Dec. 19. The company selected respondents at random from the nearly three million people who take surveys on its platform each day. Responses were weighted to match the demographic profile of the population of the United States. The survey has a modeled error estimate (similar to a margin of error in a standard telephone poll) of plus or minus 2 percentage points, so differences of less than that amount are statistically insignificant.
Wages are rising at their fastest pace in years, but prices are rising even faster.
Americans have noticed.
Only 17 percent of workers say they have received raises that kept up with inflation over the past year, according to a survey of 5,365 adults conducted last month for The New York Times by Momentive, the online research firm formerly known as SurveyMonkey. Most of the rest say either that they have received raises that lagged price increases or that they have received no raise at all; 8 percent of respondents said they had taken a pay cut.
Nearly nine in 10 Americans say they are at least “somewhat concerned” about inflation, and six in 10 are “very concerned.” Worries about inflation cross generational, racial and even partisan lines: 95 percent of Republicans, 88 percent of independents and 82 percent of Democrats say they are concerned.
Government data shows that wage gains are outpacing inflation in some corners of the economy, particularly the service sector, where competition for workers has driven rapid increases in pay. But in the aggregate, prices have risen faster than pay in recent months: The Consumer Price Index rose 6.8 percent in November, a nearly four-decade high; average hourly earnings rose 4.8 percent in November, and other measures likewise show pay gains lagging price increases.
Worries about inflation are dragging down overall confidence in the economy, which is at the lowest level in the nearly five years Momentive has been conducting its survey. Republicans have been particularly pessimistic about the economy since President Biden took office a year ago, but in recent months, Democrats too have become more dour.
“Pretty much the only group of people who say they’re better of now than they were a year ago are people who’ve gotten a pay raise that matches or beats inflation,” said Laura Wronski, a research scientist at Momentive.
Despite their concerns, however, most Americans said inflation had not yet had a major effect on their finances — although low-income households reported having a harder time dealing with rising prices than other groups. And only 11 percent said they planned to ask for a raise if inflation continued. That could be comforting to officials at the Federal Reserve, who are watching warily for evidence of a “wage-price spiral,” in which rising prices lead workers to demand raises, leading employers to raise prices to pay for them.
About the survey: Data in this article came from an online survey of 5,365 adults conducted by the polling firm Momentive from Dec. 14 to Dec. 19. The company selected respondents at random from the nearly three million people who take surveys on its platform each day. Responses were weighted to match the demographic profile of the population of the United States. The survey has a modeled error estimate (similar to a margin of error in a standard telephone poll) of plus or minus two percentage points, so differences of less than that amount are statistically insignificant.
The economic recovery in New York will continue to lag that of the United States for years, with the city not expected to rebuild its labor force to prepandemic levels until late 2025, a year later than initially projected, according to a new economic forecast by the city’s Independent Budget Office.
The report lays out a challenging road to recovery for New York, whose economy is underpinned by service industries closely tied to travel and tourism that collapsed at the start of the pandemic in spring 2020 and have been slow to recover.
Parts of the city’s economy have thrived during the pandemic — Wall Street firms and lately, residential sales — but the course of the coronavirus will largely dictate how and when New York rebounds, the city agency said. The broader national economy has regained nearly all the jobs lost during the pandemic, but New York has regained only about 35 percent of its lost jobs in 2020, the report said.
The prognosis also raises major questions about the impact of hybrid work on the value of office buildings, which pay a significant share of the city’s property taxes, and the future of brick-and-mortar retail, which was struggling even before the pandemic accelerated the move to online shopping.
“The increasingly unpredictable nature of the spread of Covid-19 variants continues to confound economic forecasts and will remain one of — if not the primary — risk to the stability of the city’s financial plan,” the report said.
The city government has avoided drastic cuts or tax increases because of $22 billion in federal aid for schools and city departments. The Independent Budget Office warned that the assistance has masked the true economic challenges confronting the city.
The city’s economy is expected to grow 4.4 percent in 2022, fueled by a demand for workers, but slow considerably in the following years, the agency said. The city could have 4.694 million workers at the end of 2025, a slight increase from the 4.679 million workers at the end of 2019.
But one key industry will take longer to recover: leisure and hospitality. By late 2025, the sector is projected to have 100,000 fewer employees than in late 2019 as tourism is slow to rebound and business travel is reduced significantly. A major source of income from tourism, the hotel occupancy tax, could reach $577 million in 2025, up from $85 million in 2021 but still below 2019 levels, the agency said.
“With so many New York City residents’ employment and well-being directly tied to the tourism industry, even modest declines in tourism could have major impacts on the city’s economy,” the report said.
Elizabeth Holmes, the founder of the blood-testing start-up Theranos, was found guilty of four charges of fraud on Monday, capping a stunning fall of a prominent entrepreneur in a case that came to represent hazards of Silicon Valley’s “fake it till you make it” ethos.
The verdict stands out for its rarity. Few technology executives are charged with fraud and even fewer are convicted. And Theranos, which dissolved in 2018, is likely to stand as a warning to other start-ups that stretch the truth to score funding and business deals.
Here are five takeaways from the verdict.
The technorati in Silicon Valley and beyond have long tried to separate themselves from Theranos. But the fraud trial of Ms. Holmes has shown that just as Bernard Madoff was a creature of Wall Street and Enron represented the get-rich-quick excesses of the 1990s, Theranos and its leader were very much products of Silicon Valley. READ MORE
Ms. Holmes’s resolve was so forceful, and fit so neatly into the Silicon Valley clich? of achieving the impossible by refusing to admit it was impossible, that it inspired belief until the end. The verdict signaled the end of an era. In Silicon Valley, where the line between talk and achievement is often vague, there is finally a limit to faking it. READ MORE
The trial had everything: a charismatic, attractive and youthful female defendant; celebrities; sex; vast sums of money; the long shadow of Steve Jobs; lives of real people at risk. If it was one of the most famous criminal cases ever to come out of Silicon Valley, it was also a rare moment of judicial reckoning in tech. There are a lot of complicated reasons for this shortage of courtroom action. READ MORE
The case captivated the public — and spawned books, documentaries and even a fan club for Ms. Holmes — because she was a young female entrepreneur in heavily male Silicon Valley and because she appeared to push the boundaries of start-up culture and hubris to the limit. READ MORE
Ms. Holmes, 37, was found guilty of three counts of wire fraud and one count of conspiracy to commit wire fraud. She was found not guilty on four other counts. The jury was unable to reach a verdict on three counts, which were set aside for later. After the verdict was read, defense and prosecution lawyers discussed plans for Ms. Holmes’s sentencing, the status of her release and the fate of the three hung charges. READ MORE
Tesla came under fire from political leaders and human rights groups Tuesday after announcing it would open a dealership in the Xinjiang region, where China is accused of detaining hundreds of thousands of Muslims in indoctrination camps.
“Together let’s start the journey of pure electricity in Xinjiang,” Tesla said in a post on Weibo, the Chinese social media site. The post included photos of a ribbon cutting at the dealership in Urumqi, the regional capital, and a Tesla sedan decorated with red and white balloons.
“Nationless corporations are helping the Chinese Communist Party cover up genocide and slave labor in the region,” Senator Marco Rubio, Republican of Florida, said on Twitter.
Mr. Rubio noted that the announcement came soon after President Biden signed legislation that would ban the import of a wide array of products made in Xinjiang unless companies can prove that they were not made with forced labor.
Tesla is not the only carmaker operating in Xinjiang. Volkswagen, which sells more cars in China than any other country, has faced criticism for operating a factory in Urumqi. The automaker has said that it does not use forced labor.
China is the world’s largest car market and is growing, while sales in Europe and the United States are stagnant. Carmakers’ dependence on China makes them susceptible to pressure from government officials to establish operations in Xinjiang, an arid region in the country’s northwest that has lagged other regions in economic development.
Tesla, which dominates sales of electric cars around the world, operates a factory in Shanghai that Chinese officials have allowed it to run without a local joint venture partner, a privilege that it had not previously granted to other foreign automakers. China is one of the biggest markets for the company’s cars, and Tesla exports vehicles from the Shanghai factory to other countries, too.
China has denied repressing members of the Uyghur ethnic group, and mounted a determined propaganda campaign to push the narrative that Xinjiang is a happy, prosperous place.
The criticism of Tesla tarnishes what was otherwise a triumphant moment for the carmaker after it announced that sales in 2021 rose almost 90 percent, to 936,000 vehicles. The increase was more than analysts expected and prompted Tesla shares to soar 13 percent. The stock lost ground Tuesday.
Michael Forsythe contributed reporting.
Officials from OPEC, Russia and other oil producers agreed on Tuesday to continue their program of gradual monthly output increases in February, bolstering output by 400,000 barrels a day, but there are growing doubts about whether they can deliver on the additional barrels.
A persistent failure to step up production according to a schedule approvedin July is helping to keep oil prices relatively high, even though a surge in coronavirus cases from the Omicron variant threatens to dampen economic activity and oil demand.
A few producers in the 23-member OPEC Plus group, including Saudi Arabia and Iraq, are increasing output handily, but others are lagging. A range of issues, including political strife and underinvestment in drilling, are holding them back.
The slow ramp up in production could lead to tension with the Biden administration, which wants the producers to pump more oil in an effort to lower gasoline prices in the United States. Gas prices, nationally at $3.28 a gallon, are now about one-third higher than they were a year ago, according to the Energy Information Administration, a government agency, and contributing to rising inflation.
What Saudi Arabia decides to do is crucial. The most logical route to meeting the scheduled increases in output would be for Saudi Arabia, which now has most of the world’s extra capacity, to agree to produce more than its quota.
At this point, the dynamics in the oil market are working for the benefit of producers like Saudi Arabia who have kept investing in their energy industries. Reflecting Saudiinterests in avoiding overproduction, a statement released after Tuesday’s meeting mentioned “the critical importance of adhering to full conformity” on quotas. There was no sign of concern about producing less than those allocations.
Saudi Arabia, the leader of the Organization of the Petroleum Exporting Countries, has much to be pleased about. Saudi production is back around the 10-million-barrel-a-day level that the kingdom prefers, prices are relatively high, and Riyadh’s influence over oil policy is strong.
“If they didn’t have to deal with Washington, this would be a very optimal outcome,” said Helima Croft, head of commodities at RBC Capital Markets, an investment bank, speaking of large OPEC producers.
In November, the White House coordinated a planned release of strategic oil reserves with other nations in an effort to dampen the market, but prices have since edged up, and continued to rise on Tuesday. Brent crude, the international benchmark, was once again selling for more than $80 a barrel, while West Texas Intermediate, the American standard, topped $77 a barrel.
In the spring of 2020, the early days of the pandemic, OPEC Plus sharply curbed production by almost 10 million barrels a day, or almost 10 percent of world supply at the time.
Building output back up again has not been easy for several countries, including Nigeria and Angola.
In its December Monthly Oil Report, the International Energy Agency estimated that OPEC Plus fell short of its November target by 650,000 barrels a day, substantially more than the 400,000 barrels a day the group had planned to increase each month.
Even Russia, the group’s second-largest exporter after Saudi Arabia, appears to have hit a wall at about 9.9 million barrels a day, about 600,000 less than it pumped in April 2020 before the big cuts and well short of Russia’s 10.2 million barrel a day allocation for next month Saudi Arabia has the same quota. For Russia to increase substantially from here will require improved tax policies and the development of new fields, analysts say.
“Russia is temporarily near its limits,” said Bhushan Bahree, an executive director at IHS Markit, a research firm.
Nigeria, Africa’s largest producer, in November pumped 360,000 barrels a day below its quota — almost enough on its own to wipe out the agreed 400,000-barrel-a-day monthly increase for the overall group. “A poor regulatory framework, sabotage and vandalization of oil facilities” are deterring needed spending in Nigeria, the International Energy Agency said in its report.
Angola, another African country, is also pumping well under its quota, while Libyan production has recently fallen off rapidly because of political turmoil.
Topps, the business that put Bazooka bubble gum together with baseball cards more than half a century ago, now belongs to a fast-growing sports memorabilia empire that nearly knocked Topps out of the baseball-card game.
On Tuesday, Topps announced that it had sold its sports card business to Fanatics, a multibillion-dollar, 10-year-old company whose licensing business was built on sports fandom, technology and networking. The deal values Topps’s sports and entertainment division at slightly more than $500 million, according to people with knowledge of the situation, speaking on the condition of anonymity because the information is confidential.
Topps had previously announced a deal to go public. But in August, the company was blindsided when it lost its licensing agreement with Major League Baseball and the Major League Baseball Players Association to Fanatics, putting its future in doubt. Fanatics and Topps began discussing the acquisition of Topps’s card business roughly a month after Topps lost the baseball contract, a person familiar with the situation said.
“Topps is synonymous with card collecting — it’s the primary brand that people think of when you think of baseball cards and sports cards,” said Chris Ivy, the director of sports auctions for Heritage Auctions. “So the fact that they will be continuing going forward, I think is a great thing both for collectors and the industry as a whole.”
The Topps deal mirrors Fanatics’s purchase of the apparel company Majestic, which it acquired after winning the rights to make major-league uniforms, contracts that Majestic had previously won. The deal announced on Tuesday also underscores the breadth of businesses Fanatics has built, aiming to grow beyond ticketing and television, both of which are difficult to expand rapidly. Leagues are looking to new places for revenue, including advertisements on jerseys and legalized sports gambling — and trading card licensing agreements.
The Topps playing card business may not immediately transform under its new ownership. Topps cards will still carry the Topps logo, and the division’s roughly 350 employees will work for the Topps brand independently within Fanatics. But longer term, Fanatics hopes to create for Topps the digital agility that helped transform its licensed apparel business, which is set up to respond quickly to quick shifts in the popularity of an athlete.
Fanatics started its playing card business last year, around the same time it struck deals with unions for N.F.L. and N.B.A. players to produce football and basketball trading cards. The business raised $350 million in September in a deal that valued it at more than $10 billion. With the acquisition of Topps, Fanatics has the right to design, manufacture and distribute baseball cards starting immediately. (Fanatics’ original deal with Major League Baseball and the players’ union had allowed for a 2026 start.)
Michael Rubin, the chief executive of Fanatics, called trading cards and collectibles “a significant pillar” in the company’s plans to become a “leading digital sports platform.” Mr. Rubin, whose circle includes Jay-Z and the baseball commissioner Rob Manfred, has in the last decade created a licensing and manufacturing company valued at $18 billion. Beyond hoodies and hats, Fanatics has also begun gambling and video game businesses.
Its bet on trading cards reflects a pandemic-driven interest in memorabilia, as nostalgia-driven investors have found themselves flush. In January, a Mickey Mantle card sold for $5.2 million. In August, a Honus Wagner card sold for $6.6 million. In October, a Michael Jordan card sold for $2.7 million.
Topps has ridden that wave, bringing in record sales of $567 million in 2020, a 23 percent jump over the previous year. Now Fanatics faces the question of whether it can sustain momentum given the trading card industry’s susceptibility to booms and busts.
The nearly century-old Topps has been through both. The company was started in Brooklyn in 1938 as Topps Chewing Gum, an effort to revive a struggling family tobacco distribution business. A little over a decade later, it began to package its gum with “Magic Photo Cards,” which featured Babe Ruth, Cy Young and other baseball stars. It started its annual set of baseball cards in 1952.
In 2007, Topps was acquired for $385 million by Tornante, an investment firm founded by Michael Eisner, the former Walt Disney Company chief executive, and the private equity firm Madison Dearborn Partners. Under its new ownership, Topps started Topps Now, which sells of-the-moment cards to capture a defining play or a pop culture meme. It also began to offer its cards as NFTs.
Mr. Eisner said in a statement on Tuesday that “the strong emotional connection between Topps collectibles and consumers of all ages” would make it “a jewel in the Fanatics portfolio.”
Topps’s plan to go public had valued its entire business at roughly $1.3 billion. That deal included its confectionary brands like Bazooka gum and its gift card business, which Tornante and Madison Dearborn continue to own. The candy and gift card unit brought in a third of Topps’s sales last year, according to an investor presentation prepared for the transaction. It has been renamed Bazooka Companies.
Tornante also maintains the rights to produce movies and television shows based on Topps brands, including the video game franchise MechWarrior/BattleTech and Garbage Pail Kids, a series of sticker trading cards introduced in 1985 as a parody of Cabbage Patch Kids.
Kevin Draper and Katherine Rosman contributed reporting.
Stocks dipped on Tuesday as government bond yields continued to rise sharply, pushing tech stocks and major indexes lower.
The S&P 500 was slightly lower, while the Nasdaq tumbled 1.3 percent.
Yields on 10-year U.S. Treasury notes climbed to 1.66 percent from 1.63 percent on Tuesday as investors sold some of their safer assets. The 10-year yields stood at about 1.5 percent on Friday.
A rise in bond yields can dampen investor interest in riskier investments like stocks, and the sudden jump in yields left big tech stocks, which have proved sensitive to changing views on interest rates, lower. Microsoft, Amazon and Apple fell more than 1 percent on Tuesday.
“Tech investors would likely feel more comfortable if rates move at a more gradual rate over a longer period of time,” said Lindsey Bell, chief markets strategist at Ally Invest.
Economists will be watching Wednesday’s release of minutes from the Federal Reserve’s December meeting, which could signal how quickly central bank officials expect to start raising interest rates. Rate increases are broadly expected this year as officials try to bring inflation under control, and many investors anticipate that they could begin as soon as March.
Fed policymakers signaled in December that they could raise interest rates three times in 2022, and the minutes could provide details on what economic evidence officials will be parsing as they decide whether to stick with that pace, slow it down or speed it up.
Investors were also looking over a snapshot of the labor market in November, a period before the Omicron variant of the coronavirus was in full swing in the United States.
The Labor Department said that job openings decreased to 10.6 million in November, while the number of people quitting their jobs rose to a record 4.5 million. In October, the report showed that 4.2 million people quit their jobs, a decline of about 205,000 from September, while job openings rose 431,000 to 11 million.
Oil prices rose on Tuesday as officials from OPEC, Russia and other oil producers agreed to continue their program of gradual monthly output increases, increasing production each month by 400,000 barrels a day. West Texas Intermediate, the U.S. crude benchmark, was up 1.2 percent, to $76.99 a barrel.
In Europe, stock indexes rose, with the Stoxx Europe 600 closing 0.8 percent higher.
Jim Rowan, chief executive of Ember Technologies, has been named the next C.E.O. of Volvo Cars. He will take over from Hakan Samuelsson, who has led the automaker since 2012, the company said Tuesday. The move comes as part of a push at Volvo, founded in Sweden in 1927, toward a fully electric lineup. The Chinese industrial giant Geely Holding bought the automaker in 2010. Mr. Rowan previously served as chief executive for the Dyson Group, known for its cordless stick vacuum cleaners, and before that as chief operating officer at Blackberry.
Protesters gathered outside China Evergrande offices in Guangzhou on Tuesday to demand that the indebted real estate developer give them their money back, as the company’s sales across China continued to plunge. Last spring, Evergrande turned to many of its employees and their family members for money that it packaged as high-interest loans as part of its wealth-management unit. Some of those investors and employees gathered on Tuesday morning outside Evergrande offices in Guangzhou to demand repayment.
Verizon and AT&T said late Monday that they had agreed to delay their deployment of new wireless technology for two weeks, giving in to the demands of federal aviation regulators who have raised concerns that the signals could create an airline safety hazard. The companies made the decision after initially rebuffing a request for a delay made last week by Transportation Secretary Pete Buttigieg and Steve Dickson, the head of the Federal Aviation Administration.
Apple‘s market value touched the $3 trillion level on Monday, making the tech giant the first publicly traded company ever to reach that milepost. Apple now accounts for nearly 7 percent of the total value of the S&P 500. The shares fell off that level later in the day.
Facebook on Monday suspended for 24 hours the account of Representative Marjorie Taylor Greene for spreading misinformation about the coronavirus, a day after Twitter permanently banned one of her accounts for posting a similar message. Ms. Greene, a Georgia Republican, had posted falsely about “extremely high amounts of Covid vaccine deaths.”
Airlines canceled more than 8,000 flights in the United States were canceled from Saturday through Monday, affecting more than one in 10 scheduled flights, according to FlightAware, a tracking service. The recent cancellations were caused by storms that produced heavy snowfall in the Midwest over the weekend and over the eastern United States on Monday, the worst day of the holiday season with more than 3,000 canceled flights. Southwest Airlines and SkyWest Airlines, which operates regional flights for several major carriers, were responsible for about a third of all cancellations over the weekend and Monday.
The tools presented to combat the coronavirus crisis have often led to political strife and aggravated existing divides. First it was masks, then vaccines and now tests. As the Biden administration pushes to help keep the economy open despite a surge in cases, coronavirus tests will play an increasingly important role.
For businesses, this presents a new set of challenges, the DealBook newsletter reports:
Accuracy: Some public health officials have suggested that rapid tests are not terribly effective at diagnosing infectiousness. These tests may not always identify infections in their earliest days, but they can flag people who have high viral loads and are thus most likely to be transmitting the virus.
Supply: The Biden administration has promised 500 million more tests, but that may take time to fulfill. This might not be a problem for big companies, which have been stockpiling tests, but might be for smaller firms trying to get workers back in offices. Ron Hsu of Lazy Betty, a restaurant in Atlanta, said he spent $800 on tests when one of his employees tested positive for the virus.
Logistics: Will companies monitor employees taking tests or adopt the honor code? How will they record and track the results? Who will pay for all this?
Politics: Amid testing shortages in Florida, the state’s surgeon general said he wanted to “unwind” the “testing psychology.” The declaration was criticized by medical experts but foreshadows more political clashes over how to manage the virus, particularly given high numbers of mild or asymptomatic cases produced by the Omicron variant.
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Today in the On Tech newsletter, Shira Ovide looks back at past tech misjudgments so we can better look ahead in 2022.