Bankers in a Picket Line?

Plus: You can't sell certain US chips there, but China can eat all the McDonald's fries it wants. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

November 21, 2023

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TOGETHER WITH

Good morning.

The four-ounce gloves are off.

The Saudi-backed Professional Fighters League acquired Bellator MMA on Monday for an undisclosed amount, as it looks to challenge the Ultimate Fighting Championship for supremacy in the cage. UFC President Dana White has derided the PFL and Saudi Arabian events — like the recent boxing match between Tyson Fury and Francis Ngannou — saying they're just "burning cash." If this all plays out like the LIV Golf vs PGA Tour scenario, Saudi Arabia will likely start poaching UFC fighters, the UFC will sue, the PFL will counter-sue, and then out of nowhere, the two companies will merge and make it seem like they've been best friends all along.

Morning Brief

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The union domino effect.

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Who better to run crypto news than crypto people?

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McDonald's doubles down on China.

Labor

Wells Fargo Branches Join America's Union Push

If baristas and warehouse workers can do it, why not bankers?

Workers at two Wells Fargo locations launched efforts to unionize this week. While US labor groups have experienced a resurgence in recent years, this latest endeavor is happening in an industry very unfamiliar with the "U" word.

Workers Making Headway

The American worker has made plenty of progress recently following years of setbacks. The Writers Guild of America, the Screen Actors Guild, and the United Auto Workers all held strikes that successfully led to better contracts from their respective employers. But these are all groups that have been around for nearly a century each, and it can be difficult for unions to achieve similar gains when they don't have that kind of history.

Roughly 10% of the US workforce is part of a union, according to the Bureau of Labor Statistics, and the bulk of that is taken up by teachers and public sector jobs like cops and firefighters. The finance sector is one of the least organized industries with only 1.3% of its employees being members of a union in 2022. But now, a handful of Wells Fargo bankers in Albuquerque, New Mexico, and Bethel, Alaska, are looking to change that:

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On Monday, employees at the two branches informed the NLRB they intend to hold elections to decide whether to unionize. In addition to what they feel is poor compensation, workers from the branches told The Wall Street Journal that Wells Fargo didn't replace employees who left their jobs at the start of the pandemic, which has led to bankers doubling as tellers and longer wait times for customers.

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Wells Fargo's recent spate of scandals also served as a motivating factor, organizers told the WSJ, specifically citing a 2016 controversy in which the company set what many employees viewed as unreachable sales goals. That spurred many workers to create fake deposit and credit card accounts without customer knowledge, and, when all the info went public, many employees were fired and Wells Fargo paid a $3 billion civil settlement.

Hired Goons: For groups just getting into the union game, success has been a bit of a slow burn. In April 2022, Amazon warehouse workers in Staten Island, New York, unionized. But since then, Jeff Bezos and company have yet to bargain with the workers, and no other warehouses have unionized. Starbucks employees are now organized at more than 350 locations, but according to the NLRB, the coffee chain allegedly committed more than 1,000 illegal actions including closing stores and reducing shift hours in retaliation to its workers' union efforts. Sure, it's not as bad as Ford's Harry Bennett paying a small army to bust the heads of UAW members, but what is?

- Griffin Kelly

Cryptocurrency

Crypto Exchange Bullish Buys Crypto News Site CoinDesk

Do conflicts of interest exist on the blockchain?

On Monday, cryptocurrency news publication CoinDesk was acquired in an all-cash deal by Bullish, a crypto exchange run by former NYSE president Tom Farley. If you're a little surprised that a crypto company bought one of the biggest crypto journalism businesses in town, don't be. Keeping it in the family is the crypto way, just ask the Bankman-Frieds. We're sure the new owners will be chips off the old blockchain.

One Happy Family

Bullish isn't CoinDesk's first owner with deep structural ties to its coverage subjects, either. Prior to Monday's sale, the site was owned by a cryptocurrency-focused VC firm called Digital Currency Group (DCG). Meanwhile, crypto news outlet The Block revealed at the end of last year that it had been the beneficiary of $27 million in loans from, you guessed it, Sam Bankman-Fried. Unfortunately for many in the crypto-journalism industry, that meant reporting juicy stories was often akin to drinking from a poison chalice.

It was CoinDesk, after all, that published the first story about the creative company accounting at FTX, which turned out to be the first pebble in the avalanche that shook the branches of the entire crypto-economy — including CoinDesk's own parent company:

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Genesis, the lending subsidiary of DCG, had funds tied up with FTX and subsequently filed for bankruptcy in January. In September, Genesis hit DCG with a lawsuit in an attempt to claw back $620 million in loans.

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Just a month later both Genesis and DCG were named as defendants alongside Winklevii-owned Gemini in a lawsuit filed by New York City Attorney General Letitia James, who argued that the firms had misled investors to the tune of $1 billion.

CoinDesk announced that in light of its new ownership, it will be establishing a committee to safeguard editorial independence. The committee will be chaired by former editor-in-chief of The Wall Street Journal Matt Murray.

Worth's Words: The crypto market has experienced a bit of a reprieve lately, something CoinDesk CEO Kevin Worth mentioned in his statement about the company's acquisition by Bullish. "With renewed momentum in the crypto economy as well as investment from Bullish, we look forward to capitalizing on the many opportunities ahead for product development and expansion," said Worth. With all that unpleasantness behind it, the crypto market can finally take off in earnest… right?

- Isobel Asher Hamilton

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Consumer

McDonald's Buys Back a Piece of Its China Business

(Photo by Declan Sun on Unsplash)

Now this is how you "Super Size" an order.

On Monday, McDonald's bought out the 28% stake of its Chinese business owned by private equity giant Carlyle Group, bringing the fast food kings' overall ownership of its Chinese enterprise to 48%. The move comes as McD's prepares for a massive expansion of the Golden Arches across the Middle Kingdom — just as many Western brands take a step back.

Ronald Meets the Red Dragon

Running a massive fast-food chain is hard work, which is why McD's has franchised out roughly 95% of all its US locations to independent owners, allowing franchisees with regional and local know-how to operate their own businesses. In 2017, McDonald's essentially took the same concept to a macro level when it sold off a controlling stake of its operations in China, Hong Kong, and Macau for $2.1 billion — with Carlyle grabbing 28% and Beijing-backed conglomerate Citic owning a 52% share.

But the french-fried winds have shifted. Since 2017, China has evolved into a major piece of the brand's business. So when Carlyle started looking for buyers of its one-fifth stake earlier this year, McD's jumped on the chance to reacquire the disparate piece of its massive empire:

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In July, Bloomberg reported that Carlyle was seeking to sell its McDonald's stake, with GIC Private Limited and Mubadala Investment Co. — the sovereign wealth funds of Singapore and Abu Dhabi, respectively — named as potential buyers in a deal possibly worth as much as $4 billion. On Monday, Bloomberg reported that McDonald's bested that offer, though details remain undisclosed.

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McDonald's currently has 5,500 locations across China, Hong Kong, and Macau, more than double what it had in 2017. It's now planning to increase that number to as much as 10,000 by 2028. Citic still owns its 52% share.

"We believe there is no better time to simplify our structure, given the tremendous opportunity to capture increased demand," CEO Chris Kempczinski said in the statement.

Fed Up: Carlyle's push to get out of China tracks with just about every other Western investment firm. China just recorded its first-ever quarterly deficit in foreign direct investment, according to preliminary balance of payments data, as overseas businesses fret the growing geopolitical tensions between the nation and the Western world. Then again, perhaps there's nothing a little Big Mac diplomacy can't solve.

- Brian Boyle

Extra Upside

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What a gem: Owners of luxury jewelry store give business to longtime employees for free.

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Not recycling: Cambodian brick kilns fueled by clothes from Adidas, Walmart and more are leaving workers sick.

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