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Bloomberg donates $100 million to Black medical students
The former New York City mayor today plans to announce a large donation to four historically Black medical schools, in an effort to improve the health and wealth of Black communities, particularly during the pandemic.
The immediate goal is to ease the financial burden on about 800 medical students, who will each receive grants of up to $100,000. The donation to four institutions — Charles R. Drew University of Science and Medicine, in Los Angeles; Howard University College of Medicine, in Washington; Meharry Medical College, in Nashville; and Morehouse School of Medicine, in Atlanta — is one of the biggest by a single donor to historically Black schools.
• It follows other pledges to historically Black institutions by Reed Hastings of Netflix and his wife, Patty Quillin, and MacKenzie Scott. Mr. Bloomberg’s gift is the first major donation from the Greenwood Initiative, a racial justice program he started in the waning days of his presidential campaign.
Its broader aim is to increase the number of Black doctors in the U.S. The data-driven Mr. Bloomberg and his team were convinced by statistics showing that Black doctors help provide better health outcomes for Black patients and are more likely to work in underserved communities. That became even more of a concern amid the pandemic’s disproportionate impact on Black people. “By increasing the number of Black doctors, we hope the gift will help to save more Black lives and reduce the health problems that limit economic opportunity in Black communities,” Mr. Bloomberg told DealBook.
Discussions began about four weeks ago when Mr. Bloomberg’s representatives began reaching out to college and university officials about ways to increase Black communities’ wealth, said Dr. Wayne Frederick, the president of Howard University. He and other officials said that the Bloomberg team asked for potential solutions instead of offering them from the start, and took a lot less time to donate than many other philanthropies.
School officials hope other deep-pocketed donors will follow. Dr. James E.K. Hildreth, the president of Meharry, noted that the historically Black medical schools’ alumni often lacked the opportunity to earn the kind of wealth of their white counterparts, limiting how much they can donate to their alma maters.
• One ambition is to follow in the footsteps of N.Y.U.’s School of Medicine, which made education free in 2018 after raising $450 million from donors like the billionaire Ken Langone.
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.
Here’s what’s happening
The C.D.C. told states to prepare for a Covid-19 vaccine by early November. The directive has heightened concerns that the Trump administration may seek to rush the distribution of a vaccine, or hype the possibility of one, before Election Day.
The labor market is looking unsteady. United Airlines announced that it will furlough 16,000 workers, while Ford said it plans to cut 1,400 salaried jobs in North America. And data from ADP, the private payrolls processor, showed that U.S. companies added just 428,000 jobs last month, less than half of what forecasters expected. We’ll get another read on jobs when weekly unemployment claims data is released at 8:30 a.m. Eastern today.
Oracle suffered a setback in its fight over a Pentagon contract. A federal appeals court ruled that the Defense Department didn’t violate its rules when it awarded a $10 billion cloud-computing contract to Microsoft. Oracle argued that it had been unfairly excluded from consideration.
The S.E.C. is reportedly investigating Robinhood for civil fraud. The inquiry is focused on how the trading app disclosed to customers that it sold their orders to high-speed trading firms, The Wall Street Journal reports. Robinhood may be facing a fine of $10 million or more.
Prince Harry and Meghan are Netflix’s latest star producers. The Duke and Duchess of Sussex have signed a multiyear production deal with the streaming giant, in which they’ll make documentaries, films and other content. It’s unclear how much they will earn, but The Times reports that the couple had held talks with video services for a deal of around $100 million.
The Justice Department’s merger manual gets a makeover
The agency will update its merger remedies manual today, the first revision since 2011. The guidelines reveal how it will seek to fix deals it thinks are anti-competitive — and shed light on its approach to current antitrust investigations. DealBook got an exclusive look at the major changes:
Private equity to the rescue. For the first time, the manual has a section dedicated to how the Justice Department will evaluate private equity bidders for a business that a company is forced to sell in order to clear a deal. It says that it views private equity firms as just as good — if not better — than corporate buyers of divested assets.
• This is based on the fact that private equity groups like Silver Lake and Blackstone have ample access to capital, in-house expertise and make longer-term investments than they used to, said a person familiar with the agency’s thinking. That is a big contrast to the position of progressive lawmakers like Senator Elizabeth Warren, who made reining in private equity a priority with her proposed Stop Wall Street Looting Act.
• It could have significant implications for companies considering a deal, but worried that there are not enough other players in an industry for divestments to create a viable competitor. In a twist, DirecTV — which the Justice Department’s antitrust chief, Makan Delrahim, unsuccessfully pushed for AT&T to divest in its deal with TimeWarner — is now reportedly in talks with Apollo Global Management and other firms about a sale.
When in doubt, divest. If the agency has antitrust concerns, the new guidelines say it “strongly” prefers structural remedies, which generally means divestitures, to “conduct remedies,” which regulate how a company acts. The Justice Department has been trending in this direction, but now it’s being explicit about it.
• Conduct remedies have been put to the test in high-profile deals like the 2010 merger of Live Nation and Ticketmaster. To get the deal cleared, the companies promised that they wouldn’t retaliate against venues using competing ticketing services. The Justice Department said last year that they violated this pact.
A world of debt and deficits
The surge of borrowing during the pandemic will push the U.S. federal debt to levels not seen since World War II, according to new projections by the Congressional Budget Office.
The numbers would have horrified budget hawks not long ago, but many are now urging lawmakers to borrow even more to help the economy recover. Underscoring the fragility of the economy, a new Fed survey of business across the country makes for grim reading. The C.B.O. expects government debt to reach a record figure relative to G.D.P., 107 percent, in 2023.
Is this a problem? The ballooning debt has been driven by a sharp rise in the deficit, amid shrinking government revenues and spending on trillion-dollar stimulus measures. Negotiations on more pandemic relief spending have stalled, in part on fears of rising debt and deficits. But as Maya MacGuineas, the president of the hawkish Committee for a Responsible Federal Budget, put it to The Times, “We should think and worry about the deficit an awful lot, and we should proceed to make it larger.”
• Although the deficit will look bigger relative to a shrinking economy, consider this: In absolute terms, over the next 10 years the aggregate deficit is expected to be $100 billion smaller than what the C.B.O. projected in March, with savings from lower inflation and interest rates (thanks to Jay Powell) more than offsetting a shortfall in revenue and rise in spending.
Investors don’t seem too worried. Despite the eye-opening forecasts, the S&P 500 cleared yet another new high yesterday. It has posted a gain in nine of the past 10 trading days.
Another electric car SPAC — but with Bill Gates
QuantumScape, which makes batteries for electric vehicles, is announcing a deal today to go public through a special purpose acquisition company, or SPAC, Kensington Capital Acquisition Corp., in a transaction that values the company at about $3.3 billion. The deal is the latest in an ever-growing list of electric vehicle SPACs.
Bill Gates is an investor, as are Kleiner Perkins and Volkswagen. Mr. Gates, who has poured money into fighting climate change, recently discussed his involvement in the company on his website. He cited QuantumScape as one of several companies making more affordable batteries so that fully electric cars become “a realistic option for every car owner.” QuantumScape says it is developing a battery that charges in less than 15 minutes.
The other details: Fidelity Management and Janus Henderson are anchoring a $500 million infusion as part of the $700 million deal. It will list on the New York Stock Exchange under the ticker “QS.”
DraftKings jumps on Michael Jordan deal
Shares of DraftKings soared on Wednesday when the online betting company disclosed that Michael Jordan had taken an undisclosed stake in the company and was joining the board as a special adviser.
The stock pop was driven by the publicity that the N.B.A. Hall of Famer brings, said Bernie McTernan, an analyst with Rosenblatt Securities. Mr. Jordan’s enormous media profile will help DraftKings grab market share in states that open up to online betting (18 states, plus Washington, D.C., now allow it). Mr. Jordan’s equity stake will motivate him to hustle for it — not that anyone has ever accused him of lack of hustle. The former Chicago Bulls star’s first priority might be Illinois, which permitted sports betting earlier this year.
• Some have raised questions about Mr. Jordan’s checkered gambling history and potential conflicts given his ownership of the N.B.A.’s Charlotte Hornets. Lawyers who spoke to DealBook said they did not see either as an issue. They noted that other team owners are allowed to invest in gambling ventures.
The deal reflects how sports, entertainment and gambling are mixing to keep fans engaged. DraftKings went public via a SPAC led by two Hollywood executives, Harry Sloan and Jeff Sagansky. One of its largest shareholders is Disney, the parent of ESPN, which co-produced the hit Jordan documentary “The Last Dance.” Mr. Jordan’s N.B.A. ties give DraftKings a stronger profile in basketball, adding to its links to prominent figures in other sports. We’re told to keep an eye on this space more broadly.
The speed read
• Airbnb reportedly rejected a takeover bid by the SPAC run by Bill Ackman’s Pershing Square that would have taken the home-rental company public. It favors a traditional I.P.O. instead. (Bloomberg)
• Blackstone and Global Infrastructure Partners have reportedly offered to buy the $17 billion Kansas City Southern railroad. (WSJ)
Politics and policy
• France plans to pump 100 billion euros, or about $118 billion, into its economy, the biggest economic stimulus as a percentage of G.D.P. of any eurozone country. (Reuters)
• The Postal Service has paid XPO Logistics, which previously employed Postmaster General Louis DeJoy, $286 million since 2013, and has increased business ties with the company since he took office. (NYT)
• Larry Ellison of Oracle has shut down his philanthropic foundation and said he would instead focus on donating money to combat the pandemic. (Recode)
• The inside story behind Saudi Arabia’s courtship of Silicon Valley. (Business Insider)
Best of the rest
• Retailers hoping the holiday shopping season will make up for a pandemic-ravaged year are preparing to be disappointed. (NYT)
• The Financial Times reporter Dan McCrum recounts how he helped expose fraud at the payments company Wirecard — and dealt with harassment, hacking attempts and more. (FT)
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