Morning Brew Daily - Amazon Faces Pre-Holiday Strike & MrBeast Brings YouTube Magic to Hollywood

Episode Date: December 20, 2024

Episode 479: Neal and Toby break down the teamsters going on strike against Amazon, impacting facilities in seven states less than a week before Christmas. Next up, MrBeast's competition show comes to Amazon Prime Video that reportedly costs $100 million to make. Then, Darden restaraunts are making money and why is NBA viewership down? Finally headlines you need to know on this fine Friday. Build your Range Rover Sport at landroverusa.com Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash US slash brew AI. That's pwc.com slash us slash brew AI. Good morning brew daily show. I'm Neil Fryman. And I'm Toby Howell. Today the NBA's ratings have plummeted are too many three-pointers to blame. Then order your holiday gifts now because thousands of workers are officially on strike against Amazon. It's Friday, December 20th.

Let's ride. Here's some bittersweet news. This is our last regular news show of the. year. Starting on Monday, we're bringing you a string of special episodes on weekdays through New Year's so we can spend some time with our families. We've been hard at work pre-taping these episodes and they are excellent. So you should definitely tune in. And I should mention we tape this episode yesterday afternoon for a little head start on vacation. Sorry, not sorry. Sorry, not sorry. The slate of holiday episodes I'm very excited about, though. We have shows

with topics ranging from how to handle your personal finances going into the new year, some market trends you should keep an eye on. We also did a Who Said It episode where Neil and I tried to guess which one of us was responsible for some of the odder things that came out of our mouse this year. They are all great, so as you put your feet up and relax over the break, maybe toss on an episode or eight. Now a word from our sponsor, the Range Rover Sport. The new Range Rover Sport is a sophisticated take on sporting luxury, offering

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The Range Rover Sport is an awesome car, but the voice has got to go. All I'm saying is watch out, Matthew McConaughey. I am coming for your voiceover jobs. If you want a great car or support Toby's voice acting career, visit Land Rover USA.com to configure your Range Rover sport. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars.

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If you waited till the last minute to holiday shop, you might be out of luck. Teamsters union members officially went on strike at Amazon early on Thursday, affecting operations at seven facilities in multiple states. Okay, maybe some of that fear-mongering about late holiday gifts was a little overblown. The Teamsters represent roughly 9,000 Amazon workers nationwide, which is less than 1% of the company's total U.S. workforce. Despite their small size, though, the Teamsters who are fighting for basic benefits,

including better wages and hours, are looking to apply maximum pressure during the busy holiday season. It's unclear how long the strike might last, and things are muddied by the fact that Amazon refuses to negotiate since it does not even recognize the union. To be clear, a spokesperson for Amazon said, the Teamsters don't represent any Amazon employees

despite their claims to the contrary. this entire narrative is a PR play. Labor unrest is certainly a key theme to watch out for this holiday season, as Starbucks Workers Union representing over 10,000 breaches also recently authorized a potential strike. So this holiday period, Neil, it could be a bit of a rocky one. It could. Let's talk about the narrative that Amazon is accusing the Teamsters of creating or manufacturing. So Teamsters President Sean O'Brien said in a statement, If your package is delayed during the holidays, you can blame Amazon's insatiable greed.

We gave Amazon a clear deadline to come to the table and do right by our customers. They ignored it. So this is him trying to paint Amazon as the greedy major corporation. That deadline that he's talking about is a December 15th deadline that the union wanted Amazon to come to the table and begin negotiations for. They, as you mentioned, don't recognize the Teamsters as a union that represents their workers because these are, drivers that are hired by third-party delivery companies that Amazon works with. Amazon does not recognize them as their employees. The National Labor Relations Board does, and Amazon is currently in some legal wrangling with

the NLRB to figure that out. But these are the two sides here. Amazon shares are up as we're talking right now, so investors clearly don't think that this is going to be a big hit on business, but Washington Post talked to some labor experts who said that if you live in the cities where these strikes are happening, this is their last mile to go from the fulfillment centers to your house. You could see, perhaps see some delays as Amazon has to make some interesting decisions about which packages it prioritizes, and the major hotspots here are New York City, Atlanta, and California. Right. So it could delay stuff,

but it won't be widespread delays. What important variable here is time. Shorter strikes have become a more popular tool for striking workforces in recent years. The one that comes to mind is the Kaiser Permanente strike, where in 2023, it was very short just three days, but it also involved 75,000 healthcare workers, the biggest healthcare strike of all time. That was very successful. They did get a lot of the demands that they were asking for. These shorter strikes are different from the traditional strikes that you may think of that the automakers underwent, that the Hollywood riders underwent, that Boeing workers underwent, which are open-ended, strikes that go on until a new labor deal is released. Amazon workers or the Teamsters Union

doesn't have the same amount of leverage that those auto workers or Boeing workers did. And so you probably will see this become a much shorter strike because there is no open-ended, you know, leverage that they can apply because it is just- The leverage that they can apply is the holiday shopping season. So that is what they're doing right now. Exactly. So I would think it would be a shorter strike, even though they are trying to inflict maximum pain at this current moment. And then you also mentioned Starbucks. Starbucks, Starbucks Worker United, which represents 10,000 Starbucks barista. 98% of those workers voted to authorize a strike as they start to want to, you know, come to a contract with Starbucks. And again, this is all about leverage.

They're saying, hey, we have 98% of our members ready to go on strike if you don't come to the table. Starbucks and this union have been going at it for three years now. Starbucks has a new CEO, Brian Nichols, trying to calm the waters. Previous CEOs, Howard Schultz, was a lot more antagonistic towards the union. Brian Nicol wants to play nice, it seems. He wrote a letter a week into his tenure, you know, saying, I want to work with you. And then earlier this week, Starbucks announced that it was tripling eight, tripling its paid parental leave from six weeks to 18 weeks as perhaps a sign of good faith.

But you know what? after, it felt like there wasn't a lot of, you know, labor strife stewing after hot strike summer in 2022 with the UAW auto workers and UPS. And then we had Hollywood writers and then Boeing. But recently, it's been a little calmer waters. Maybe it's a sign of a thawing labor market, but it is heating up right now ahead of the holidays. Jimmy Donaldson has conquered YouTube and now the 26-year-old, you all know, as Mr. Beast, is

taking his talents to a slightly bigger screen. Thursday was the premiere of Beast Games, a squid game-inspired game show hosted by Mr. Bees that will stream exclusively on Amazon Prime Video. It's an expensive bet by Amazon that at least some of Mr. Beasts world-leading 337 million followers on YouTube. He has a little more than us, Toby, will follow him over to the streaming service. And by expensive, I mean this deal was reportedly worth $100 million, and everything else about the show is big too.

Amazon claims the show is the biggest live game show in history, with 1,000 players competing for a prize of $5 million, the biggest single prize in TV history. Mr. Bees claims he spent more than $100 million on the show and says he broke 40 world records along the way. I can't even fathom what kind of world records that would be. But Toby, the big question here, do you think Mr. Bees can successfully bring his YouTube magic to Hollywood? That is the big question, because on the one hand, if you are Hollywood looking at this, you've seen some. pretty epic failures in the past. I mean, this production was riddled with a lot of controversy workers were talking about bad working condition. Contestants were saying the same thing. So maybe if you're a Hollywood exec saying, ah, this YouTuber can't run a big production like this.

One of the other biggest YouTubers in the world, Ryan Kaji, is this 12-year-old who has this toy review empire. He tried to go the Hollywood route and release a full-length feature film that absolutely bombed in theaters. Charlie Demelio and the Demelio family launched this reality TV show that was soon after canceled. So there's a lot of L's in the influencer to Hollywood pipeline. On the other hand, though, YouTube is absolutely a force. And most of America is spending their time in front of televisions watching YouTube. Two and a half billion people tune into YouTube monthly. So social media and television culture are definitely blending into one. And right now you have the biggest YouTuber launching one of the biggest game shows of all time.

So we're going to really see where that line is drawn. And if you can, you know, go from the smaller screen to the slightly larger screen. Right, which raises the question, I think, for me is, why is Mr. Bees even doing this? And I guess it's that $100 million check, but he probably gets way more viewers on YouTube than anyone who's going to see this show on Amazon Prime video. And then when it comes to the money that is made, I mean, separate the, I guess you can't separate the $100 million he's being paid. But YouTube actually spends more on content and paying its creators than Netflix.

YouTube has paid out an average of $23 billion a year to creators and media companies compared to Netflix, which spends about $15 billion a year. So you are right that the lines are being blurred and YouTube is not necessarily just a user-generated content anymore. Mr. Bees has 250 employees. Like, this is an actual company, but you're right. It didn't seem like you ran a tight chip. So there were accusations of mistreatment of workers on set.

Well, they actually filed five on. unnamed participants filed a lawsuit against Mr. Bees in Amazon. So he has to face that. He said the accusations are blown out of proportion, but that has been a scandal for this show for months. Yeah, and you mentioned, too, that Will, why is he even doing this? Because he does get so many views on YouTube,

his Squid Game video, which is his most popular video ever, where he recreated the viral Netflix TV show in real life without, obviously, the death component involved. That got 678 million views. You'd be hard. impressed to think that Amazon will get even a tenth of that, but it is just another example of these worlds colliding, and we'll see if he is one of the first creators to really make a successful

jump from YouTube to television. It is Stock of the Week, Dog of the Week time, where Neil and I pick one stock who had a better week than the kid who got to open one of their presence early, and one who got a paper cut while trying to wrap their presence. Neil, I took you down in the pre-show game of Red Rover, so I am up first. And my stock of the week is Darden Restaurants. The owner of brands like Olive Garden and Longhorn Steakhouse popped nearly 10% following a better than expected fourth quarter earnings. Even as the casual dining restaurant segment as a whole is looking worse than Week's

old shrimp scampy leftovers, Darden Stallworth's Olive Garden and Longhorn Steakhouse are bucking the broader trend. Same store sales at Longhorn grew 7.5% in the quarter. as its middle-of-the-road prices for solid stakes resonated with deal-savvy customers. Contrast that to Darden's fine dining segment, which includes upstale steakhouses like the Capitol Grill and Ruth Chris, which reported a 6% sales decline, which was steeper than expected. So, Neil Darden is a pretty perfect microcosm of the restaurant industry as a whole right now. People are looking for good value.

People are looking for good value. When you go to the Capitol Grill and Roost-Christ steakhouse, at least from my experience, you know, the thought going in is like, I'm going to get some maybe some mediocre food. I'm going to pay a lot. So it has to be an interesting occasion for it. But when you look at its other brands like Olive Garden Longhort Steakhouse, you are thinking, wow, I'm going to get pretty good value here. I'm going to pay not so much. And at least I'll get like a lot of food. So maybe those why, that's maybe that's why those two brands are doing so well on bucking the broader industry trends. Olive Garden has this never ending possible. what else is what else you know showcases value than something that's that's called never ending and then it also partnered remember with Uber on delivery so now Olive Garden can be delivery it's opening up its distribution network so when you're looking at the winners and losers of restaurants this year and this is going to be the last time we're talking about restaurants you see the winners are those value chains like Chili's and Olive Garden Long Longhorn Steakhouse that are providing value the ones that are losers are the luxury ones that don't provide luxury. You're absolutely right.

It seems like they think demand is going to be returning as long as you are threading that needle between good value and good food. I do think it's funny, too, some of the other restaurant chains that have struggled this year, like the Red Lobsters of the world, like the TGI Fridays of the world, just didn't resonate with consumers. You still need your food to resonate. And it is funny. You mentioned the never-ending possible promotion that was of big success.

They extended it for a month longer than they normally do. at Olive Garden. But then you go back to the endless shrimp debacle that didn't fully sink a red lobster, but ended up contributing to its demise. So it's a tale of two endless offers right there. Clearly pasta is the way to go a little bit more profitable for the company. Up next, dog of the week is coming your way. We're the Hartford, with decades of experience

ensuring millions of unique small businesses. When it comes to your small business insurance. Thank you. One size, absolutely, does not fit all. Get a quote or find an agent today at thehartford.com slash small business. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting at $179, like the next grill 3-burner gas grill. Or get $50 off a select Weber Spirit grill and bring big flavor to your backyard. Then set the scene with Hampton Bay string lights that bring it all together.

Shop spring backyard days for seven days at the Home Depot. Now through May 6th. Exclusion supplies, see Home Depot.com slash price match for details. My dog of the week is the NBA because a lot fewer people are watching it this season. Through last Saturday, ratings on national TV for the NBA have plunged 19% year over year. Ticket prices for the NBA Cup, the in-season tournament, which Milwaukee won earlier this week, were about half of what they were last year. The grim viewership numbers have sparked lots of navel gazing about why the NBA is in such a big slump this year. Is it cord cutting? Is it losing the attention battle to streaming? Is it a problem with the product? Are there too many three-pointers? Are there not enough superstars in a league that relies on superstars? Is it the fact that these superstars are European? Is it the fact that these superstars are on bad teams? Lots of questions. And Commissioner Adam Silver addressed some of them during a huddle with reporters this week. He acknowledged that ratings were down but said that this wasn't an indication of waning interest in the NBA, but larger structural factors. He pointed to

stats that showed the last two years were the highest attendance in NBA history, and that its social media audience is the highest of any league and continues to grow. Toby, should the NBA be concerned? I mean, I think you mentioned a lot of the reasons why they are concerned right there. And the form of very hypothetical questions. They're not, they're hypothetical, but they are questions posed by the audience, by the fan base who watches the NBA. Let's start with the product on the court, because that is one thing that you have to protect. All the other things, streaming market changes, like the entertainment market shifts, but you need the product to be good. And one of the big criticisms is that basketball has almost become a solved game at this point.

It's pushed the game towards a very three-ball heavy approach. If you look at a heat map of where players used to shoot from in the 80s and 90s, there was all these sprinkled mid-range jumpers in there, which people thought led to more interesting basketball. Now it is basically concentrated behind the three-point arc or at the rim, which fans are saying not a great product right there. So that is, I think, the biggest issue that the NBA is grappling with, that they don't have a really good answer to because you can't disincentivize teams for playing the most

optimal basketball. Let me just put some stats behind the three-pointer numbers because they are kind of mind-blowing. Teams are averaging about 37.5 three-point attempts per game, which is the most ever and about 15 more than the league average a decade ago. So remember the 2015-2016 Golden State Warriors, we thought they put up a lot of the last lot of threes. They would rank near the bottom in the NBA this season. Their average of 31.6 threes per game, about 20 fewer than the Celtics this year. The Celtics have kind of revolutionized this three point game this year. They chuck up 51 threes per game, which accounts for more

than half their total shot attempt. So these are the kind of numbers where people are watching and they're saying, man, there's so many threes going on right now. I wonder if the game is a little bit broken because that's all the teams do. It's harming the product. It's harming viewer numbers. One thing that I think is a bright spot for the NBA is their ability to expand internationally, though, because you mentioned that a lot of their best players in the league right now are international players or at least European players. They have floated this idea of expanding to a starting a league in a Europe. They've been in talks with FIbo, which is the international governing body for basketball. And they want to start up like a sister league over in Europe,

which I think is a great idea. Europe loves basketball. The NBA doesn't have a huge presence there outside of most of the best players come over and play in their league. So I do think that the horizon is bright if you can kind of nail these international. But that doesn't solve U.S. viewership.

It doesn't, but if you can make it up in aggregate across the world, then you are making the pie bigger as a whole. Yeah, just to go down some of the other reasons the NBA might be something, it's just overall cord cutting. So people are watching more streaming. Maybe they're watching Mr. Boll.

on Amazon or YouTube and they're not watching the NBA. And illegal streams. If you look through any NBA like Reddit thread, everyone's like, of course NBA viewership is down. We all watch illegally. Like, they self-admit to it. So that is another aspect that the league doesn't want to confront but is happening. And then I guess my final point here is that this all doesn't really matter. Because the NBA just signed a gargantuan $76 billion broadcast rights package for the next

11 years with Disney, with Amazon, with NBC, so they are locked and loaded. They have an $11-760 billion-year contract. This mid-year slump that they're going through right now, they just probably don't care about because they are rolling in. They're flesh with cash. Now let's sprint to the finish with some headlines you may have missed. Poland is running low on a critical resource ahead of its presidential elections, but it's not oil or grain.

It's butter. Poland is selling 1,100 tons of its frozen strategic butter reserves in order to stabilize prices its blaming on a global milk shortage. Nations don't just keep emergency reserves of things like oil or gold. Some countries also keep a stockpile of products. It seems essential to local diets, which is why you'll find things like strategic maple syrup reserves in Canada or pork reserves in China or butter in Poland, Neil. Yeah, well, now I'm going to call all of the stuff in the back of my refrigerator, my strategic reserve that I haven't touched in a while. That's very moldy. Just my reserves, and I'm just waiting for the right time to unleash it. Yeah, this is the butter shortage. Higher butter prices has been plaguing a bunch of European countries.

Recently, some Russian supermarkets have actually put butter behind glass like CVS does with higher priced things in order to prevent thefts. because butter has increased 26%. So there is a dairy shortage, and you're seeing inflation go up for butter, and it's becoming a big political issue. By the way, it is unsalted butter, too, which for my bakers out there, they know that you want to use unsalted butter

so you can control the amount of salt you're adding to dishes. If you use salted butter, it can be a little bit uneven with the amount of salt in a salted butter stick. So unsalted butter, that's usually the way to go if you're serious about... I think Bobby Fly. Wait, so what do you use salted for?

Salted if you're just lazy and you just want to have a little extra flavor, but if you want to control the salt content in a dish, you should use unsalted butter. Okay. Finally, someone is doing something about the arcade claw machine. We've all been there. You position the claw perfectly above the toy you want. It descends. The anticipation builds. It catches the toy, but then despair. It closes just a millimeter above where it needs to, catching nothing but air and leaving the toy in the pile below. Well, Hong Kong has heard your frustrations. the city's consumer watchdog called for a review of regulations on claw machines, saying these machines capitalize on consumers' enthusiasm for testing their luck. It cited one complaint from a man who spent $65 over 45 minutes to win a waffle maker but only ended up grabbing more than a few trinkets. Toby, I'm all about this. It's about time we take down Big Claw.

See, I am not about this because I think the experience of playing a Claw game is about the fact that it's difficult. If you just, you're not paying to grab like a plush toy. Like you're not expecting that your dollar is translating directly into the prize you're getting. It's about trying to grab that plush toy. Where I do think that they have a point where I draw the line is where some of these machines have features where if you spend X amount of money, you will be guaranteed a grab. That feels a little scummy because you would hope that you're guaranteed a chance at a grab every time you attempt one. So I am generally on the side of like it should be difficult, but it shouldn't be unfairly difficult.

Okay. My conception of you, Toby, is that you would be somebody who would spend like a half hour to an hour in front of a claw machine until you got one. Just keep feeding it. Is that true? Well, it would be true the fact that I don't, if I live in like a cashless society, so I only ever have like $2 on me. So I'm limited by the very fact that I just don't carry cash with me. But otherwise, you are spot on, Neil. Now let's finish off the show with some more holiday-themed headlines. Up first, if you have a kid who loves stuffed animals, maybe skip the unicorn and dragons this year, and not for the world's largest rodent instead. That's right, the it animal for this holiday season is the Cappy Bearer. Powered by a wave of videos on social media, capy bears are the latest animal to become an unexpected star. It helps that interest in plush toys is peaking, too. Plush toy animal sales are up 115% in the first nine months.

of this year compared to the same period in 2019 as people look for some velvety comfort. And let's face it, Neil, a capy bearer is a lot cooler of a gift to receive than something boring like a cat or a dog. I'm so happy the cabibara is having its due because I thought I was the only one who knew about this animal back where I grew up at the Forest Park Zoo, there were a bunch of cabby baras that I would go and love to watch because they are incredible. They just look amazing. They're a huge freaking rodent, but they're very cute.

So I thought no one else knew about them. And then when I saw that sales were of Cabi Bar, they were the It Animal. I was like, it's about time. Everyone should know about this animal. But apparently, each holiday season, according to toy manufacturers, there's been a new It Animal. So in 2021, I think I'm pronouncing this correctly. It's the Auxelotel. You nailed it, actually.

I looked it up. Have you heard of this? Yeah, it is like this little salamander-looking creature. Got it. That wrote a wave of attention because Minecraft added it to its game, so that propelled it. but you are dead right that that was the it animal a few years ago. What's going to be the it animal next year? I mean, it's hard to say.

What other animals have been in movies recently? I don't know. Dinosaurs? Something like that. Yeah, no one ever thinks about dinosaurs or pies anything about dinosaurs. Toby, really under the radar. Okay, finally, Timothy Shalamee lookalikes are out and Jesus lookalikes are in. At least in Utah, where some long-haired and bearded men are charging $100 to $200 per hour

in the growing market for Jesus. Jesus models, the Wall Street Journal reported. They're being hired for occasions like the family photo shoot for the Christmas card or wedding announcements. The hourly rate is so high because the labor pool is low. Many people who live in Utah are Mormons and the men who work or volunteer for the Church of Jesus Christ of Latter-day Saints tend to not look like Jesus because they frequently shave and have short hair. So there's a lucrative side hustle opportunity for good-looking dudes with long hair and beards who haven't aged into the mall Santa market yet. I am out on the beard front right there.

The problem is that this goes beyond just looks, because when you show up looking like Jesus, dressed like Jesus, people kind of expect you to act like Jesus as well. So a lot of these Jesus lookalikes have said, people come up to them, they want to hold their hand, they want to talk to them,

and they feel this burden to act like Jesus, even though they are just some random guy. So it seems like the hardest lookalike gig you could possibly do. I would much rather opt for the mall of Santa. gig. Okay, let's wrap it up there. Thanks so much for spending your mornings with us all year and have a wonderful holiday, whatever, or wherever you're celebrating. For any questions, comments, or feedback, send an email to Morning Brew Daily at Morningbrew.com, though just a suspicion you might get hit

with an out-of-office message. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lou is our producer. Olivia Graham is our associate producer. Yuchinawa Ogu is our technical director. Billy Minino is on audio, hair and makeup, which is everyone a happy holidays. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show, Daniel. I wish you all well.