Welcome to the Weekly Scan. Here’s what we’re following for the week of August 31, 2020.
Make sure to check back as we update these stories.
NBA warms the bench for a cause. Players for the Milwaukee Bucks went on strike last week in protest of the shooting of a Black man named Jacob Blake by police in Kenosha, Wisconsin. The rest of the league followed the Bucks’ refusal to play in the National Basketball Association’s playoff game, bringing the playoffs to a halt for 48 hours. After discussions between players, coaches, owners, and officials, the NBA agreed to turn arenas and stadiums into voting centers ahead of the 2020 election. The NBA also said it would start a social justice coalition and work with networks and advertisers to promote voting during commercials.
- The takeaway: Professional athletes have become important voices for social change and justice, exercising their right to withhold their labor and call for change. The NBA strike took place exactly four years after former NFL player Colin Kaepernick first took a knee during the national anthem in protest of systemic racism. The NBA strike also inspired strikes from the WNBA, Major League Baseball, Major League Soccer, and tennis.
Attention, younger shoppers! Retail giant Walmart announced that it would join Microsoft in its potential acquisition of U.S. operations of TikTok, the social media app owned by Chinese company ByteDance. Microsoft has been in talks to take over TikTok since President Trump issued two executive orders that would prevent the app from functioning in the U.S. under Chinese ownership after 90 days from August 14th. The two companies could reportedly acquire TikTok for $35 billion to $40 billion. TikTok is also reportedly discussing deals with Twitter and Oracle.
- The takeaway: The deal could allow Walmart, a stalwart in traditional brick and mortar retailing, to more easily reach Gen Z shoppers. The generation, born after 1997, is one of the biggest users of the app, and is a largely untapped market that Walmart is depending on for future growth. In an announcement, Walmart said that acquiring TikTok would allow the retailer to move into social commerce, potentially allowing TikTok users to shop directly from the app. A partnership with Microsoft could add tech functionality, Walmart said.
A home run for at home fitness. It’s not all gloom and doom in the economy. Sporting goods store Dick’s reported a strong second quarter with record profits, as demand for home fitness items spiked due to stay at home orders, the shift to remote work, and closed gyms. As consumers stockpiled bikes, golf clubs, and treadmills, Dick’s reported e-commerce sales for its second quarter nearly tripled. Combined, online sales and curbside pickup orders accounted for roughly 30% of second quarter sales, the company reported, compared to 12% in the second quarter a year ago.
- The takeaway: Dick’s isn’t the only company benefitting from online sales. Best, Buy, Target, Walmart and e-commerce giant Amazon, among others, have all reported big online sales boosts during the pandemic. Dick’s warned that its current quarter sales may not be as strong, as difficulties replenishing inventory could dampen prospects.
Airlines sing the blues. Delta and American Airlines, two of the largest passenger airlines in the U.S., recently announced a massive round of layoffs slated for early October, 2020. American said it will cut 19,000 workers, and Delta said it had plans to get rid of 2,000 pilots. In July, United also announced it would cut approximately 36,000 workers in early October. Airlines have struggled since April, when travel bookings hit a five-decade low, as the U.S. responded to the Covid-19 pandemic with massive lockdowns.
- The takeaway: Top U.S. airlines, including American, Delta, and United accepted $25 billion in aid earlier in the year, as part of the multi-trillion dollar economic bailout package from the federal government. The money came with the stipulation that airlines keep their employees until September 30, 2020. Airlines may be using the layoffs to put pressure on the government to provide additional bailout money, experts say.