Morning Brew Daily - TikTok Ready to Fight Ban in Court & The $20M Sporting Event at the Sphere

Episode Date: September 16, 2024

Episode 409: Neal and Toby catch up on the latest with the US attempt to fully ban TikTok and it seems to have the company…acting like a regular day. Then, the Biden administration is looking to close a loophole that allows Shein and Temu to avoid shipping fees that make its products so affordable. Next, the UFC has its first ever event in the Las Vegas Sphere powered by a multi-million dollar production. Meanwhile, winners from the Emmy’s and IG Nobel Prize awards. Lastly, the news you need to know in the weekend ahead. 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. To learn more about how Wise could work for your business, visit wise.com/business. 00:00 - 100 days ‘til Christmas 3:15 - TikTok has its day in court 8:20 - Temu and Shein prices could be going up soon 12:15 - UFC gets in the LV Sphere 15:20 - Shogun sweeps at the Emmy’s  18:10 - IG Nobel Awards pushes the boundaries 21:45 - Week Ahead Get your Morning Brew Daily T-Shirt HERE: https://shop.morningbrew.com/products/morning-brew-radio-t-shirt?_pos=1&_sid=6b0bc409d&_ss=r&variant=45353879044316  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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Good morning brew daily show. I'm Neil Fryman. And I'm Toby Howell. Today, the Ig Nobel Prizes were handed out to the wackiest science experiments. Did you know that deadfish can swim? Then the U.S. government and TikTok are heading to court today to see if that ban you've been hearing about for years now will actually happen or not. It's Monday, September 16th. Let's ride.

If you can believe it, today marks 100 days until Christmas. 2024 has absolutely flown by. This is also a good reminder that Spotify wrapped is coming down the pike, and there is nothing worse than broadcasting to the world. You are an unsophisticated music listener. So if you don't want Burlington, Vermont to be your Soundtown again, maybe listen to a little less Noah Khan over the next few weeks. Toby, where do you expect your Soundtown to be this year? So last year, I got Scottsdale, which no hate to Scottsdale, but isn't exactly known for its sonic innovation. Part of the reason is I got really into music soundtracks last year.

So my top song was from a Bollywood film. So Spotify didn't know what to do with me. This year, I've been curating very tastefully. A lot of underground stuff too. You got to check out this one act I found. You probably haven't heard of her. Sabrina Carpenter. Is that?

Yeah, I knew it. I'm literally cutting edge on those stuff. So all that to say, I hope Spotify doesn't do SoundTowns again because that was the most embarrassing week of my life. Now a quick word from our sponsor, Wise. Neil, you could probably guess this, but making international payments is truly a pain. There are always inflated exchange rates and hidden fees, and sometimes you even got open an overseas bank account.

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Well, it's probably been a minute since you've thought about TikTok's fate in the U.S. But the social media company is back in court today, fighting a law signed by Biden way back in April that would require it to divest within nine months to a non-Chinese. company. To recap, TikTok thinks the law is unconstitutional, saying that trying to effectively ban the app infringes on the First Amendment rights of people who use it to express themselves. The U.S. government, on the other hand, thinks TikTok's data collection and potential manipulation of the app's algorithm poses a clear national security threat. To make things even more complex, a lot of the information the government has regarding TikTok's national security concerns is classified.

So it faces an uphill battle convincing the court to accept a ban based on info that TikTok's lawyers can't even see. So a lot of this case comes down to if these murky national security risks are so great that they override TikTok's First Amendment claims, Neil. This has been looming over TikTok for a long time now. What are you looking at as these oral arguments kick off today? Yeah, these classified documents are very interesting because the government's entire argument rests with them, but they're entirely redacted. in a novel legal procedure. They're not even allowing TikTok to review them. You're supposed to allow your opponent in a legal case to review the evidence. One of the most glaring examples of this is there is a document published by an assistant director of national intelligence, Casey Blackburn,

that the government is presenting as evidence. There's an eight-page section called BiteDance and TikTok's history of censorship and content manipulation at PRC. Direction, PRC being the Chinese government, there's just one problem with that. It's almost entirely redacted. So there's just no way for the public or anyone else to know exactly what the U.S. government has on TikTok. We know the philosophy and big picture theory behind this. They think that the Chinese government could compel TikTok and its owner, Biden, to hand over user data on American users to the Chinese government. They also think that the Chinese government could tell TikTok to change its algorithm to promote its interests and push Americans or anybody out around the Americans, mostly, content that could

sway public opinion around the Chinese government. We just don't know exactly how they do that. I think the U.S. government is also saying just because there isn't a risk now, doesn't, or just because they haven't done it in the past, doesn't mean there is a risk going forward. So national security concerns have to override the First Amendment on this issue. Right. They're saying that China could be prepositioning here just because they haven't. It doesn't mean that they won't.

Another weird legal wrinkle to this case is that Congress's decision to single out a single company like this is very unique. TikTok also is arguing that it's not just unique. It is unlawful. The Constitution itself actually prohibits what are known as Bill of Attainter laws, which are when you single out a single individual or a company without due process. But what Congress did to get around this is that the bill they passed to force this divestment. They named some criteria that companies have to meet if they are controlled by foreign adversaries, foreign adversaries that theoretically any company can meet, but in reality, only TikTok is the one named in the bill, and only TikTok could satisfy those criteria.

So that's another thing that legal experts are looking at this and saying, not only is an uphill battle to push back against First Amendment rights, which are obviously extremely important in the United States, but you have this other constitutional aspect that is making it hard. So just a very complex case with a lot of redacted, a lot of blacked out sentences in the government's case. So it'll be interesting to see how they kind of put it together. Yeah. Meanwhile, 170 million Americans are using TikTok, including two presidential candidates, Kamala Harris and former president Trump.

And Trump used to, he tried to ban TikTok while he was in office. He's reversed course and said he no longer supports a ban. Meanwhile, there's been recent polling on whether Americans support. a TikTok ban and support for it actually continues to decline. This poll was taken by Pew in August. And the share of Americans who support the U.S. government banning TikTok stands at just 32 percent, which is down from 38 percent last fall and 50 percent in March 2023 and 28 percent oppose a ban, which is up from 22 percent in March 2023. So it seems like most Americans don't really want this ban. Meanwhile, the U.S. government is saying this is not a ban.

we want TikTok to stay. We want it just to be sold to an American entity, but I haven't heard anything on that front. I know as soon as this law was passed in April, there were a bunch of American companies and American individuals putting together groups to buy TikTok, but I don't think there's been any movement. Meanwhile, this deadline is January 19th for this ban or divestment to take place, which is one day before inauguration day. It looks like this case will reach the Supreme Court before then. Your fit checks might be getting a list. more expensive in the coming months because the Biden administration just proposed new rules that would force fast fashion purveyors like Shian and Timu to pay tariffs on their products for the

first time. Since the 1930s, there's been this loophole in the tax code known as Day Minimus that allows low-cost imports, aka anything under 800 bucks, to pass through customs without additional fees or scrutiny. The idea is to not bog down customs with checking every small knick-knack that flows into the country. But the loophole has also paid the way for companies like Sheehan and Tamu to overuse and abuse the import tax, allowing them to sell their wares very cheaply in the U.S. So the aim of this new rule is to reduce the amount of packages entering the country under the exemption because it is a lot. Ten years ago, about 140 million packages entered the U.S. under Day Minimus. Now that number has jumped to over

one billion. Neil, plugging up the Day Minimus exemption definitely throws a wrench into Tamu and Sheehan's business model. And just like the U.S. government is not directly mentioning TikTok in its recent ban of the platform, the U.S. Secretary of Commerce also is not explicitly mentioning Sheehan or Tamu. They say, she said Gina Raimondo said American workers and businesses can outcompete anyone on a level playing field. But for too long, Chinese e-commerce platforms have skirted tariffs by abusing this exemption. So it's kind of a wink and a nod to Sheehan and Tamu, which have driven a lot.

large amount of that increase from 140 million per year to one billion over 10 years. The U.S. government also thinks that by this surge in lower cost imports coming in, the customs authorities are just kind of missing more important things that like fentanyl or other drug trafficking, that they just can't check everything. So that's another reason why they want to stem the tide of all these fast fashion things coming to the United States. Right. There's a lot of reasons behind this.

One of them, too, is that they just want U.S. fashion retailers to be able to compete because right now, Cheyenne and Tamu are just so incredibly cheap. I mean, if you look at the average price of a dress on Sheehan as of June 1st, it was $28.51. Compare that to H&M, which is another low-cost retailer. Their average dress price is $40. Zara is $79. So you just see how much Sheen can undercut the prices of even. its closest competitors who also deal in so-called fast fashion.

It would be a big effect on consumers as well, though, because any time you pass a tariff, inevitably those costs do get passed on to consumers. But again, the U.S. government is saying that as long as we are protecting consumers and protecting them from potential goods that don't meet health and safety standards, also helping business compete, like we're okay with maybe having consumers pay a little bit more in this specific case. Right. I mean, there are estimates that it's possible sheen's prices because of if this loophole were to get closed, that they would rise by 20%, which would certainly put it more on parity with other e-commerce companies. Meanwhile, other e-commerce companies are also trying to adopt this model of what Sheehan and Tamu are doing, which is bypassing bulk shipments that go to warehouses and then to your front step.

And what they do is just ship it straight from China to your doorstep. and that's how they get through this loophole. But, you know, it takes a lot longer, but they're like, well, you don't have to pay a lot. Amazon is reportedly exploring a discount arm that goes straight from the manufacturer in China, straight to you. So there's a lot of pressure being applied on these two e-commerce platforms from all directions. TAMU is already a public company, or it's owned by a public company, PDD Holdings, which whose revenue grew by 90% over the past fiscal year. Sheen is trying to IPO.

It's trying to go public. It is a massive company. Took it more than $30 billion in revenue. It wanted to go public over the past year in New York. That seems like it's DOA based on all of the pressure from the White House and D.C. on them. So now they're trying to make this happen in London. But this has been a long and fraught IPO process for Sheen, even though it would be one of the biggest in years.

Two of the biggest forces in entertainment joined up Saturday night when UFC held its UFC Noce event at the Las Vegas sphere. UFC president and CEO Dana White went all out spending $20 million to produce what he predicted would be the quote greatest sporting event of all time. Was it?

No, it wasn't even the greatest sporting event of the weekend, which was my five set spike ball match. Still, it represents a new frontier for live sports productions showing how futuristic venues with massive video screens like the sphere can support the on the court action through storytelling.

telling. For UFC, the night was definitely a financial success. It brought in ticket sales of $22 million, the highest gate in UFC history, and it broke its all-time record for merch sales at an event. It was also an important milestone for the $2.3 billion sphere to show off its versatility. Remember, until now, the venue has hosted only concerts such as U2, the Eagles, and Dead & Co, and also puts on a movie and hosted the NHL draft. But this was its first time hosting live sports, and the UFC fight brought in the most ticket revenue of any event it has hosted. I don't think it will be the last. I don't think, well, it might be the last actually because it's interesting.

Yeah, for UFC. Interestingly enough, UFC does have this exclusive venue partner in Las Vegas, MGM's T-Mobile arena, but they double-booked themselves. And so this one-time scheduling era allowed the UFC to kind of go try out the sphere, which Dana White, as soon as he saw it, called up like the VP and said, like, hey, we got to have an event here because it truly was a spectacle in every sense. Just to show how much maybe the sphere was the start of the show rather than the fights, tickets in the nosebleed section where you could have a better view of the actual screen,

we're selling better or sometimes more expensive than floor seats close to the action. So if that doesn't show how much the actual venue was maybe the main draw here rather than the actual fighting itself, then I don't know what does. Right. I mean, they also tried to leverage that massive video screen, 163. square feet to try to support the fights because there's a lot of dead time in between fights at a UFC event. And the night was really a love letter to Mexico.

UFC Noche on Independence Day, Mexican Independence Day, is today. And Mexico has a wonderful tradition of combat sports. So they told these stories. They showed these movies, highly produced movies on the screen in between fights. And Dana White said it was his love letter to Mexico. UFC set has such a large Hispanic following. So you're starting to see how certain live events in live sports will leverage these venues with massive video screens to support the actual on the ground action. I don't know whether this is going to lead to a sea change in how UFC

or live sports in general will be produced. But it certainly as a one-off event was very much a spectacle. Up next, the Emmys weren't the only award show to happen this weekend. 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.

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Just steps from the water. The Hilton sale is on now. Book on Hilton.com or the Hilton app and save up to 20% to get the stay you expected. When you want savings, not surprises. It matters where you stay. Hilton, for the stay. Welcome back to winners of the weekend, the segment where Toby and I picked two things that popped many bottles of bubbly.

I won the pre-show burping the ABC's competition, so I get to go first. And my winner is the TV series Shogun, because it took home the most Emmy Awards ever by a show in a single year. At last night's Emmy Awards, FX's saga about feudal Japan won Best Drama, Best Actor in a Drama, and Best Actress in a Drama, extending its total Emmy count to 18. which has never been done before. It's a milestone moment for foreign language series overall because nearly 70% of the show's dialogue was in Japanese. Some other foreign language series have won Emmys before, such as Squid Game, but none has ever brought home hardware in a top category like Shogun did.

Elsewhere at the Emmys, the biggest surprise of the night was in Best Comedy, where the Max Show Hacks defeated the Juggernaut, The Bear. That the Bear was even included in Best Comedy had already stirred controversy given its serious. subject matter. Eugene Levy, who hosted this show with his son, Dan, said in the opening monologue, in the true spirit of the bear, we will not be making any jokes. Toby, what stood out to you on TV's biggest night? I mean, it was the categories were a bit of a mess this year because it is so ironic. One of my favorite things about the bear being a comedy is people will find clips within it that they're like, what are you talking about? Of course it's funny, even though most of it is just

like people shouting at each other. If you've ever worked in a kitchen, then you're probably saying, how is this a comedy at any sense of the word? But yeah, it was a good show overall. I mean, there was definitely some viral moments. John Oliver got played off while he was talking about his dead dog. And he dropped an F-bomb and saying, like, you don't play me off during that. So it was funny. It got kind of some of that buzz that these award shows have been missing for a little bit.

Some people got mad because there was this weird sort of ad break in the middle of the show where they did an ad for a whiskey brand. in the show themselves, and everyone's like, is this an ad or is this a sketch or anything like that? But overall, I think the night went pretty smoothly for the Emmys. But they need more people because the last Emmys had just over 4 million viewers, which is not a lot. It's the lowest ever recorded. And this is actually the second Emmys within a year because those were in January because of the strike.

So there's been two Emmy Awards in the last nine months. So I'm not necessarily bullish that more people tuned in this time around. because we literally just had it a few months ago. Right. It was confusing, too, because the bear already has a season three out, but this was honoring the season two show. So very confusing overall. Also, when Shogun was nominated for all of these awards, I was like, all right, come on, Toby, you got to do your two jealousons here and watch it. Still haven't seen it. So it's literally the most nominated and most awarded show ever. So I think this is a sign.

It's a great show. My winner of the weekend is the silliest of serious scientific award shows, the annual Ig Nobel Prizes. The prestigious ceremony honors the achievements that first make people laugh and then make them think according to the website of the Nobel Prize parody show. This year, some of the winners included an experiment to see if putting live pigeoned inside missiles could guide their flight pass, that one in the peace category, a test to see if people's hair swirls differently in different hemisphere. Spoiler alert, it does. And findings that confirmed a coin flip is not exactly 55. but it's instead more likely to land on the side it starts on when you flip it.

All in all, a fun show, but before you go dedicating your career to trying to win an Ig Nobel Award, just know that the prize is a transparent box that is almost impossible to open, and a worthless $10 trillion Zimbabwean dollar banknote that is selling for $22 bucks on eBay right now. Neil, apologies to the Emmys, but this was the award show of the year. Absolutely, no, this is always so much fun. I love when this comes around. One experiment that I think a lot of people here might be very interested in is because you talked about it on the show, Blue Zones, which are these regions of the world that are supposed to have a lot of centigenarians, a lot of people who live longer. We're supposed to learn a lot from these places like Mediterranean climes where people eat a lot of vegetables.

There's a strong sense of community. And it's been this huge push among even real estate developers in the United States to say that their new developments are part of a blue. zone or have a blue zone sensibility that will promote living longer. But one of the awardees of the Ig Nobel was Saul Justin Newman, who's

a scientist at Oxford University, and he's been on this crusade to show that blue zones are just completely bunk. And the reasons why we see so many older people in these regions is straight up pension fraud because these people are actually dead, but they are alive

on paper because their family members want to collect their pensions. So in Japan, which is considered part of it, which is considered a blue zone, according to Newman, 82% of the 100-year-olds turned out to be alive on paper, but dead in reality. And then he found out that the world's oldest man a few years ago actually had three birthdays. So he just discovered that there's rampant fraud in these areas of, you know, just manipulating documents to show that people are older, alive when they're old.

In fact, when they're dead. So it kind of dispels the notion of blue zones, which has had been this massive cottage industry to show how you can live longer. And he says, you know, there's no such thing. Just to zoom out here, though, the Ig Noble Awards does award real scientific experiments, but it is a satirical news show or not an award show. So what is funny, too, is that if you go on a little long in your acceptance speech, a kid will come out and say, I'm bored. And instead of playing you off, they'll just have a kid whine at you. So it is all in good fun, even though these are. are real scientists conducting real experiments.

I mean, you mentioned at the beginning of a show that a dead fish can swim. And that's because the experiment that this researcher conducted was that fish are so efficient at conserving their energy that when they're swimming in a stream, mostly they're just current surfing, not actually swimming. So they just toss a dead fish in there, a dead rainbow trout. And it maneuvered the river in the same way a live fish did.

So it just shows that if you thought you were lazy, you are not quite on the level of a fish swimming at the same cadence that a... a deceased fish is. It is Monday. So here is your preview of the big events of the upcoming week. For the U.S. economy, there's really only one question that matters, 25 or 50. The Fed is pretty much guaranteed to cut interest rates after its meeting on Wednesday, but the size of the rate cut, 25 basis points or a meteor 50 is still uncertain. Either way, it's going to be a historic moment that will reverberate across the global financial system. The Fed hasn't looked at it.

lowered interest rates since the early days of the pandemic in 2020. And the cut is a sign Jerome Powell is getting a little worried by a slowing labor market and wants to avoid a recession. I feel like I'm sitting down in the barber chair and the barber says, what do you want? And I'm not sure. Do I want a lot off the top? Do I want a little? It's a confusing moment right now. But yeah, this has been one of the most aggressive inflation fighting campaigns since really the 1980s. So we're in times that we haven't seen in a long time now. There are three more. meetings for the rest of the year, including the one on Wednesday. So we could go 25, 25, 25. We could go 50, 25, 25. Those are probably the most likely outcomes, but people are saying,

penciling in pretty much 100% chance of rate cut. It really is just how big. It's a coin flip, but actually one of the Ig Nobel Prizes that reward showed that there's a 51, it's not 50-50. It's a 51% chance that it'll land on the side. You start the flip on, so it is not 50-50, and we learn that from the Ig Nobel Prizes. Today is a big day. investigation around the Ocean Gate submersible disaster last year. The U.S. Coast Guard is kicking off a public hearing in Charleston to try and find answers to key questions, including why the sub imploded on its way to the Titanic wreck, whether any negligence or incompetence was involved, and crucially, whether any laws were broken. Five people died aboard that submersible, including

the CEO of the company that made it, Stockton Rush. Since the tragedy, he's been criticized for ignoring safety warnings and scoffing at industry regulations when building the sub. It's also a big day for fans of Robert Carrow, the legendary American writer. His seminal biography of Robert Moses, the power broker, turns 50 today, and the famous book is being released in a digital edition. So you can finally download all 1,162 pages on your Kindle. But that's kind of besides the point, because the most important part of reading the power broker is showing off to other people you are reading the power broker. Neil, you have this on your bookshelf, and it is pick. You maybe see it as an interplay between power, politics, and urban development. I see it as something

that would hurt my back if I carried around a book bag. Do you have like a 15 second synopsis? Is that even possible to do? Yeah. Well, I would say if you've been to New York City and you look at a bridge or you look at a highway or you look at a particular park, chances are it was built by this one guy, Robert Moses, who was his urban planner and public official in New York City in the 20th century. And this book highlighted his rise to power and also some of the seedier things, some of the more controversial things he did to get those projects through, like pushing a highway through a minority neighborhood. And it's just a very interesting exploration of power as, as Caro does it. But he does it in more than a thousand pages in very meticulous detail.

I highly recommend this documentary called Turn Every Page, which came out a few years ago, which explores Caro's relationship with his editor because Caro writes on a typewriter. He's very old school and so is his editor and these are just kind of two cranky old guys from New York City. And Carol, I should say, is also known not just for this book, but for his biographies of Lyndon Johnson as well. But yeah, it's a meaty, but it's a really interesting history of this city and, you know, how power works in the United States government. Not only do I have to read a thousand page book, now you're telling me I've got to watch a documentary about the editing process. I got homework. I know.

That editing process does not sound like a scintillating documentary subject, but it actually is very, very interesting. Let's wrap it up there. Thanks so much for starting your morning with us and have a wonderful start to the week. For any feedback, questions, or comments on the show,

send an email to Morningbrewdaily at morningbrew.com. And do not hesitate to share Morningbrewdaily with your friends, family, and coworkers. So you don't have to explain what the de minimis exception is. If you need some info, Toby has got some ideas. the first day of fall is coming up next weekend. So I want you to share today's episode or of the podcast with someone who just loves fall,

someone who bust out that flannel at the first hint of a chill in the air or is the apple cider donut purveyor in the office. This one is for you, Autumn. All right. I'm expecting to get a lot of text sharing Morning Brew Daily with me because I'm a big fall guy. Let's roll the credits. Emily Milliron is our executive producer.

Raymond Liu is our producer. Olivia Graham is our associate producer. Yuchinawa Ogu is our technical director. Jacob Schmidt is on audio, hair and makeup got snubbed at the Emmys. Devin Emery is our chief content officer and our shows of production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Spring just slid into your DMs. Grab that boho look for that rooftop dinner.

Those sandals that can keep up with you? And hang some string lights to give your patio a glow up. Spring's calling. Ross, work your magic.