☕ Book brouhaha

Plus, Nancy Pelosi's big visit to Asia...
August 01, 2022 View Online | Sign Up | Shop

Morning Brew


Good morning and welcome to August. It really is the best month, and not just because my birthday is in it. It's the perfect time to commit to improving your data skills with the Brew's Business Analytics Accelerator.

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Neal Freyman














*Stock data as of market close, cryptocurrency data as of 7:00pm ET. Here's what these numbers mean.

  • Markets: Investors head into the new month with surprisingly positive vibes—particularly in the battered tech sector. The Nasdaq's 12.3% gain last month was its best since April 2020, and Amazon's July was its best month in 13 years.


Book publishing trial a real page-turner

Gromit reading a book Aardman Animations via Giphy

Not sure if it'd make the cut for a John Grisham legal thriller, but a spicy court battle in the world of book publishing is going down today—and it's a major test for the Biden administration's competition crackdown.

A trial will begin Monday over the proposed $2.2 billion merger of Penguin Random House and Simon & Schuster. The DOJ has sued to block it on antitrust grounds, arguing that the deal would not only raise book prices for consumers, it would also disadvantage authors by reducing their bargaining power for advances of more than $250,000. Even Stephen King will leave his writing dungeon to testify as a witness for the government.

Big picture: The publishing world is more exclusive than your roommate's book club. Five publishers account for 90% of the market for anticipated top-selling books, and a combined Penguin Random House–Simon & Schuster would reduce that number to four, with the new company being the clear leader.

  • Among its roster of celeb authors, Penguin Random House has the Obamas, Bill Clinton, and novelist John Grisham.
  • Simon & Schuster has Hillary Clinton, journalist Bob Woodward, and prolific biographer Walter Isaacson.

Combined, the two publishers made up 49% of the top 100 best-selling print books last year, per NPD BookScan.

The other side: The publishers want you to think of all the ~synergies~ that would be unleashed when combining Simon & Schuster's powerhouse authors with Penguin Random House's expertise in getting books on shelves. They reject the government's accusations that their merger would reduce competition and argue that the book publishing world is far more vast than just the "Big Five," pointing to Amazon and Disney as influential publishers in their own right.

Why this matters: On the surface, a $2.2 billion merger in the obscure world of book publishing may not seem like it would draw the attention of the government's antitrust ax. But Biden has made fighting corporate consolidation a major focus of his economic policy, and the contention that mergers could harm workers, and not just consumers, represents a new front in this crusade. A decision in the publishing case could inform other ongoing legal battles, such as mixed martial artists who've sued the UFC for allegedly using its market power to depress wages.



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Tour de headlines

Bill Russell Ethan Miller/Getty Images

RIP Bill Russell: The NBA icon and civil rights activist, 88, died "peacefully" with his wife at his side, according to a statement on social media. While it may read like a typo, Russell did actually win 11 NBA championships in 13 years as a member of the Boston Celtics, and secured the last two titles as the first Black head coach in NBA history. He was awarded the Presidential Medal of Freedom, the nation's highest honor given to civilians, in 2011.

RIP Nichelle Nichols. The trailblazing Black actress who played Lieutenant Uhura on the OG Star Trek series died at 89, her son said. In 2011, Nichols told the WSJ that she planned to leave the show after the first season, until a chance meeting with an admiring fan changed her mind. That fan: Martin Luther King Jr. In addition to her work as a performer, Nichols was influential in pushing NASA to recruit more candidates from underrepresented groups.

Biden tested positive…again. The president was Covid positive on Saturday after first popping a negative on Tuesday; he'll go back into isolation even though he says he isn't experiencing any symptoms. Biden is one of a minority of people who has gotten a "rebound case" after taking Paxlovid, an antiviral drug that treats Covid.


The most scrutinized travel itinerary in the world

Nancy Pelosi Kent Nishimura/Los Angeles Times via Getty Images

House Speaker Nancy Pelosi has embarked on a visit to Asia, and no one—not even the Geoguessr TikTok guy—knows whether she'll make a highly controversial stop in Taiwan. If she does, she'd be the highest-ranking US official to visit the island in 25 years.

What we do know: Pelosi is leading a small congressional delegation to Singapore, Malaysia, South Korea, and Japan for discussions on Covid, climate change, and "democratic governance."

But a visit to Taiwan, which has been rumored for months but not confirmed by Pelosi, would change the tone of the trip entirely. Taiwan is a self-governing democracy that China claims as its own territory, and Chinese officials have been warning the US to mind its own beeswax. The Chinese foreign ministry ominously warned last week that "those who play with fire will perish by it."

The Biden administration tried to play down a potential visit by Pelosi, saying it wouldn't indicate any change to its "One China" policy, which takes no position on the Taiwan matter. Seriously—the White House's official policy toward China–Taiwan is known as "strategic ambiguity."

But: The US is obligated under law to ensure that Taiwan has sufficient arms capabilities to defend itself, and that pledge of support is raising concerns of a potential US–China clash should China take military action against Taiwan, which some officials predict could happen in the next 18 months.



The week ahead

igns calling on voters to vote no or vote yes are displayed in Prairie Village, Kansas, on July 28, 2022 Caitlin Wilson/AFP via Getty Images

Last week had it all—Big Tech earnings, a GDP report, the Fed meeting, and a new Beyoncé album. This week is no less chaotic.

Kansas holds first post-Roe abortion vote: Residents of the Midwestern state will vote Tuesday on a constitutional amendment that, if passed, would strike a 2019 Kansas Supreme Court ruling that enshrined the right to terminate a pregnancy. It's the first of many upcoming state-level legislative referendums on abortion following the overturning of Roe v. Wade.

Earnings: 148 S&P companies will spill the beans on Q2, including Activision Blizzard, Tesla, Caterpillar, Uber, DraftKings, CVS, eBay, and Alibaba. So far this earnings season, reports have not been as terrible as expected.

Jobs: Fed Chair Jerome Powell said last week that economic data will guide his next interest rate decision in September. Well, a major data point—the July jobs report—will drop on Friday. Despite a slowing economy, economists are expecting another strong month of job gains and the unemployment rate to stay at low levels.

Everything else:

  • The Sandman hits Netflix on Friday.
  • The Premier League returns on Saturday. #YNWA
  • Join me in boycotting National Ice Cream Sandwich Day on Tuesday to protest the egregious treatment of the Choco Taco.


Key performance indicators

Key performance indicators

Stat: 13-36-45-57-67, Mega Ball: 14. If you were the person in Illinois who bought that Mega Millions ticket, then you probably have better things to do than reading this newsletter because you were the winner of the third-biggest jackpot in US lottery history. The lump sum prize, which most lottery winners opt for, is an estimated $780.5 million. Fun fact: The Des Plaines, IL, store that sold the winning ticket will also receive $500,000.

Quote: "Next couple days are going to be hard."

Kentucky Gov. Andy Beshear warned that more rain—and the threat of flash floods—were on their way to the areas of the state that were devastated by flooding last week. At least 26 people have been killed in the floods, but Beshear said responders will "be finding bodies for weeks" as the recovery process continues.

Read: In a California town, a militia is welcomed by some, cautioned by others. (NBC News)


Dive back into the week:

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  • Oleksiy Vadatursky, one of Ukraine's wealthiest businesspeople, was killed along with his wife in a Russian missile attack on their home in the port city of Mykolaiv.
  • England's national soccer team won their first major women's tournament by beating Germany in extra time at the Euro 2022 final.
  • New York City called the monkeypox outbreak a public health emergency. NY has the most cases out of all US states.
  • Debris from a large Chinese rocket fell back to Earth on Saturday, drawing criticism for its uncontrolled re-entry. US officials have knocked China three times now for being careless with rocket debris.
  • The horror: Hershey said it won't be able to meet demand for candy this Halloween.


How Brew readers are dealing with inflation

illustration of balloons

We asked Morning Brew readers about their thoughts on inflation, and found out most of you have already cut back on spending. So...basically no more ordering DoorDash 7x per week (congrats).

See how other readers are cutting back on spending with the full poll results here.


The puzzle section

Turntable: New month, same word puzzle. Play Turntable here.

First frame

The following image is the first frame of which Disney movie?

A movie still of an animated forest Disney


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Beauty and the Beast


Written by Neal Freyman

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