Morning Brew Daily - Trump's Historic Indictment, Disney curbs DeSantis, LA Taxing the rich

Episode Date: March 31, 2023

Episode 29: Neal and Toby break down the historic indictment against former President Donald Trump. They explain what it means, and what could come next in his arraignment. They also discuss how Disney restructured their district before Ron Desantis had authorities come in and take over power. Plus - why are millionaires in LA in a rush to sell their mansions? And Neal has been talking about the new Tetris movie all week. So allow him to finally share with you why you should also get excited. Finally, the Final Four this weekend, and ticket prices might surprise you. Learn more about our sponsor, Fidelity: https://fidelity.com/stocksbytheslice Listen Here: https://www.mbdailyshow.com/ Watch Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning, Brew, Daily's show, and happy first. Friday. I'm Neil Fryman. And I'm Toby Howell. Toby, you heard crazy legal news, right, last night? I just couldn't stop scrolling Twitter and watching TV. It was so nuts. I cannot believe Gwyneth Paltrow won her case. It's so good for America. I'm so happy for her. Yes, Gwineatho was found not at fault for a ski collision with an older gentleman in 2016 in a trial that captured the nation's hearts in minds. And she walked out of there with a dollar in damages. And what? What did she say to the guy after? Oh, she.

I can't remember. It was like, I wish you well. Yeah, I wish you. I wish you well. We're going to end shows like that now. Yes, so obviously that is not the biggest legal news and we'll get to that in just a bit. But first, our Friday tradition of fast week, slow week. Toby, fast week or slow week?

Okay, I have a hot take here, but the first three days of this week went by so, so slowly for me. And then the last two have gone by in a blink of the eye. So I know I'm hedging my becks here, but I guess since there are three slow days, and only two fast days, I'm saying it was a slow week. Okay, I think you're two and two right now. I am going slow week for the first time ever. Yeah, it's because I think there's a few things that I'm looking forward to next week. And when you're looking forward to something, inevitably, the time before it gets, you know, seems to slow down.

I believe Einstein said that, right? Yeah, totally equals MC squared. All right, a little table of contents for what we're going to talk about today. Disney shows DeSantis that it takes two to tango in their little feud, not little, big feud. mansions are for sale in L.A. And the rise of women's college basketball ahead of the final four tonight. Fun show, let's do it. But first, yes, there was some historic news last night.

President Trump became the first former president to face criminal charges after a New York grand jury voted to indict him yesterday. He's going to be coming to Manhattan next Tuesday to be arraigned and which should be a very chill day here in New York. Dear Lord. All right. So here are the broad strokes of the case. First of all, we don't know the specific charges. They haven't been released yet. We do know they probably are for falsifying business records relating to $130,000 in hush money sent to porn star Stormy Daniels during the 2016 election.

Daniels has an alleged an affair with Trump, so they wanted her to not really talk about that during the election. We also know that former Trump lawyer, Michael Cohen, made the payment, but prosecutors, the district attorney Alvin Bragg is claiming that Trump reimbursed Cohen and that could constitute an illegal campaign finance contribution. Yeah, thanks for breaking down, Neil. Honestly, there's so much we could talk about with this case. A lot of the coverage I was reading was actually like, well, can Trump still run for president? Because that's a huge question of like this, the legal fault from this case. But honestly, the Constitution only requires three things from candidates. You've got to be a natural born citizen, at least 35 years old, and a resident of the U.S. for at least 14 years.

There's really no, nothing that says, like, you can't be under investigation for it. There's one part of the 14th Amendment has a disqualification cause, which was written specifically for former Confederate soldiers. But if you have something to do with like espionage against the country, then you can't run. So there's, it's actually he's in fine legal standing to run for president. And he's going to. And I think he'll probably use this to his advantage. I was checking the prediction markets, predict it. And it seems like Trump is still in the lead over to Santis by six cents.

this dented it, dented his chances a little bit. But he's just going to lean into this. I mean, every single one, even before this, he plays the role of victim and that, you know, the witch hunt is out to get him. And this is only going to, you know, feed into that. And I'm sure he's just going to make this pretty much the main storyline of the election. But we should say that he, he, and he did last night, he, you know, denied the, he has always denied the affair and that he had anything to do with hush money payments. And then he also posted on truth social, this long denial. And he said it was, he said what was happening to him was the political persecution and election interference at the highest level in history. Sounds like him.

I guess we can go into the reaction, I guess, from both sides of the aisle. So you had Democrats kind of saying that the charges show that the U.S. justice system works, that no one is above the law. And then obviously you have the Republicans kind of echoing Trump's position that this is a witch hunt and like the Manhattan DA is a Democrat. And it's a more political, motivated trial than anything else. So, yeah, it's definitely, you said it's going to be, like, the main storyline for this Glashon cycle. Even some Democrats are a little, you know, a little spooked by this was the case that was

brought against Trump because he's under three other criminal investigations for things like January 6th, mishandling of classified documents. And they're like, well, you want to go forward with this one about the hush money payment to a porn star is maybe not the best look. Plus, to make it a felon. he needs to have commit use these payments to or use falsification of business records to cover up or commit a separate crime and the National Association of Criminal Defense Lawyers says this is a novel legal theory that has never been tested in court so they're going after Trump with an untested

creative workaround which prosecutors do a lot but this is kind of a high profile target to start like throwing darts yeah no so many angles to this story and I'm really I don't want to say excited, but obviously, like, the thing that's coming up is he's going to be arraigned. Right. And part of that is he will be processed and have his fingerprints taken and his mugshots. And I read in the newsletter this morning that that will probably be the most viral. You have to think. Yeah.

It'll break the internet. A Trump mugshot. It's not necessarily going to be released to the public. But if it is, I mean, I'm scared for Twitter. I know, seriously. And if it's not released, you know we're going to have some AI images recreating it. Let's go through a little bit of what the legal process. process looks like now. So an indictment is not a conviction. It's just the start of building a

criminal case. You have to convince a grand jury that there was probable cause of a crime being committed. So like low standard of proof or evidence. It's not without beyond reasonable doubt. Right. When this, this is going to head to trial and then Bragg has to convince a jury that Trump is guilty beyond a reasonable doubt, which is a much higher bar. So that this will play out. Before we head out, I just want to talk about past examples of presidents in legal trouble because I was reading. Obviously, Trump is the first to be criminally charged, but they say that Nixon would probably have been charged over Watergate if Gerald Ford hadn't pardoned him. Bill Clinton, after he left office, admitted to lying under oath and had to pay a fine and agreed to give up his license. And then a final president was arrested.

Ulysses S. Grant in 1872. He was speeding on his horse and buggy. He was going 90 and a 35. and so they arrested him in D.C. But then let him go. That's really funny. That's some good trivia right there. Okay, that's the Trump saga.

I'm sure we'll be talking about it going forward. But let's go down to the Sunshine State real quick. Neil, we've actually kind of already covered this story on the show a little bit. It centers on the so-called Disney District in Florida. So basically just some background on the Disney District. Disney has carved out this special district that includes the park and the surrounding developments and that they've had special rights within Florida for over like half a decade, half a century at this point. So things like allowing them to build past the maximum build height, stuff like that.

But in February, Florida lawmakers pass a bill that gave Governor Ronda Santis effective control over the district. And that was in retaliation to Disney speaking out against the don't say gay bill that was passed in Florida. So it's been this back and forth hit for tat thing that's been going on. But yesterday we learned that Disney had kind of totally outmaneuvered DeSantis. While it still had control of the board, the members basically voted to handicap their powers. So then when the DeSantis controlled board was instituted, they had no powers whatsoever. So it's just this hilarious thing where all the board members are like, what the heck? We can't do anything.

We just got kneecapped. It's so funny because they only learned about this this week and started tweeting being like, what just happened to us. Yeah. And this happened at a public meeting, too. So my takeaway is pay attention to what happens at public meetings. Because the day before Disney had to hand over control of the board, they just pushed through all of these clauses that basically, yeah, neutered the new governments or the new board's ability to do anything. They can't use Disney's name, Mickey Mouse or other characters without the company's approval. Basically, they're saying that they can't do anything except build roads and do construction.

And so they can't do anything. Disney completely. Yeah, Disney still has the control. Okay, and then there's one part of this saga that is so, so funny. So Disney made the agreements valid until 21 years after the death of the last surviving descendant of King Charles III, King of England. So this actually has a really interesting legal history. Basically, you cannot have, like, contracts that extend in perpetuity. So what you have to do is select someone.

one's lifetime plus 21 years. That's like a legal precedent. And for some reason, a lot of people use the royal family because their lineage is easy to trace, like their ancestry is easy to trace, plus 21 years. So right now, the last surviving, the surviving descendant of King Charles III is one-year-old Princess Lilibet. So these, like, rules will be in place for a long, long time because it's Lilibet's entire lifetime plus 21 years. So it's such a funny, like, clause within this, this case that is.

Yeah, apparently it's happening in the U.S. too, and people use the Kennedys and the Rockefellers. That's our royal presidents. Those are our royal families. So, yeah, Disney wants this to extend into perpetuity, but expect a lot more legal challenges from the current board. They're vowing to correct this. Yeah. So the fight between Disney and DeSantis is not close to over, but it extended a little longer than we were expecting. Yeah. All right, Toby. I've got a real estate investment opportunity for us. Oh, gosh. I think we can make it happen if we go in together, maybe get a few listeners.

We'll work out the math on air. There are mansions for sale all over Los Angeles because there's a new real estate tax known as the mansion tax that's kicking in tomorrow. So this is a new tax on big ticket property sales that aims to generate revenue for affordable housing and homelessness prevention in the city. There's going to be a 4% tax on property sales above $5 million and $5.5% on properties worth more than $10 million. So it's led to this mad dash to mark down prices for mansions and all of these sweeteners as like Hollywood A-lister's look to offload their homes before this goes into effect tomorrow. Yeah. Some of these like mansion incentives are crazy where they're promising to buy if they can sell these these multimillion dollar mansions before the cutoff date. They'll purchase a brand new luxury car or they'll toss in a one million bonus to any agent.

So they're really just all they want to do is get their mansions sold before this. tax comes into it because 5%, 4.5% on multimillion dollar mansions, that's not nothing. That's not chump change. Right. And then there are some lower ones that were being sold in the low 5 million range that are now priced at 4.9. Yeah. So that's where I think. Yeah, we could get in there. But that's a good point because in L.A., the opponents of this bill are saying $5 million should not be considered a mansion in Los Angeles. If we looked at Zillow for $4.9 million in L.A. would probably get, you obviously a nice place, but I don't know if it would be considered a mansion. Right.

They're saying, like, this is a nice house and a nice area, but it is, yeah, certainly not a mansion. It's more of a normal because the median price for a house in L.A. is right around a million dollars right now, which is just crazy to think about. Yeah, and I always think with these laws, the unintended consequences are just really hard to see when you're, obviously, it's coming from a good place. Like, they're trying to help alleviate the homelessness crisis. But then you have people, yeah, changing the price of their houses, rushing to get deals

done, kind of undermining what the rule is supposed to do. And they're also saying, like, this tax hurts people, it's hard to call them, like, normal people because a $200,000 tax on a $5 million home sale hurts you more than a, I don't know, $2 million tax on a $50 million home sale. So it's not going to hurt the ultra-rich. It's going to hurt the medium-rich. I mean, it's hard. I'm playing a violin over here.

Yeah, I know. It is kind of a tiny. No, but it is interesting because it could be a disincentive to build an L.A. And to build, you need to build more units to lower prices. And this doesn't apply dust to mansions, but also commercial properties and multifamily properties. So opponents of the bill say that it is going to, or the tax say that's going to encourage development outside of the city. Obviously, proponents of them say of the bill say it's going to raise $672 million. And it's going to provide 26,000 affordable housing units for a city that is,

having an immense affordability crisis, and that is fueling the homelessness crisis because people can't afford homes. Yeah, something to watch going forward. Maybe we'll have a house by the end of this episode if we actually have to close by end of business. We got to close end of business day. All right, before we jump in the next story, we're going to take a quick break. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills starting $179 like the next grill three burner gas grill or get $50 off the 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 to homedipo.com slash price match for details. All right. It's time for our Friday segment, Stock of the Week, dog of the week, where we profile a stock that did well this week and we profile a stock that did not do well this week. That's the dog of the week.

Eventually, we'll actually just get pictures of dogs and forget the other part, but for now we're doing that. And I won the coin toss, so I get to do stock of the week, and I'm picking Lulu Lemon, because Lulu Lemon chairs are up 16% after revealing a very good holiday shopping quarter and hiking its guidance. My takeaway is at a time when apparel brands boom and busts so quickly, it's all so trendy. Lulu Lemon seems to have real staying power, and it's only expanding. It is honestly a juggernaut right now because it's crazy that they still have so much runway to expand because, I mean, you gave me the stat, but they haven't even entered China yet, which is just this massive, massive market with, as you said, a lot of legs up for... 2.8 billion legs that Lulmin could fit into. Yeah. The one, like, negative spot on this stock of the week was obviously they acquired Mirror kind of during the height of the pandemic for $500 million. in. And that business has been almost completely written off at this point because it turns out

that the at-home fitness market probably didn't have the staying power that a lot of people thought it was going to have. So a mirror is like a mirror that you do home workouts with? Yeah. Like a high-tech mirror. Right. It has like someone on the mirror teaching you what to do and you can see yourself in the mirror. Again, it seemed like a good idea at the time that it had seemed synergistic with Lou Lemon. But it's so funny because in the, in the, some of the, some of the articles I was reading, the mirror acquisition was supposed to rival Peloton. And now Peloton is not someone you want to rival at all. It is rivaling Pelotony and how much it's collapsed. It's collapsed. So that was good stock of the week, Neil. I actually forgot to say my favorite part of the show is

none of this is financial advice. We are just podcast hosts. Do not take this as financial advice. Not just podcast hosts. We're people. We're people too, yes. Okay, thanks for the stock of the week, Neil. Now it's time for the dog of the week. And the dog of the week is Bed Bath and Beyond. It fell 26% yesterday to close that 59 cents a share after saying that it was struggling and needed to raise $300 million through a share sale in a last-ditch effort to stave off bankruptcy. So, Neil, I have some numbers here to kind of illustrate Bed Bath and Beyond struggles. They are closing 400 stores out of a total of 760. So over half, like really, really pairing down to bare bones. Spirit Halloween is about to move in.

Licking their chops. They are rubbing their hands together. Yeah, it's part of their struggles is they just aren't making sales. Sales dropped 40 to 50% during the fourth quarter from a year prior. And yeah, it's been just struggling for a while now. There was the meme stock craze during the pandemic. But even Ryan Cohen, who is like the e-commerce like Whisperer, who kind of created some of this meme stock madness, said, like, I'm not holding. Like, I'm selling these shares, which is.

tank the stock. It's just been bad all around for Bedbath and Beyond. I don't have really much more to add, except it just feels like we're watching the slow death of a company. If they don't raise this money, they're going to go bankrupt. There's a bed bath and beyond near us in the office that I walk by every morning, and I just... I hope it's still there. I shed a little tear. I go in sometimes. I like it. What do you get? I don't get anything. I just look around at all the gizmos and gadgets. But yeah, yeah, so that's Stockle Week, Dogle Week, not financial advice. I had to say that. All right, Neil. This is a really. This is a really fun story. There's a Tetris movie coming out, which... Oh, I know. Again, doesn't sound like the most exciting thing, but it looks like it's going

to be a banger. So the movie centers around an American who sees, encounters Tetris at Expo, and travels to Russia to meet the creator to get the game out from behind the Iron curtain and kind of spread it with the world. It's really like a geopolitical thriller and also kind of a bromance between this American businessman and the Russian developer. So they had to go smuggle the IP, the Tetris IP on a floppy disk out of the Soviet Union at the time to bring it to the world. I guess that's the crux of the of the drama. But this is based on a true story. This actually happened, right?

Yes. Tetris was created by a bored Russian programmer and it caught the eye of an American and they were like, and he saw potential, brought it to Game Boy. And then it became one of the probably one of the best selling video games of all time. selling 520 million copies. Yeah. They're the quotes that we were reading about, honestly, like, the history of Tetris. And some of the quotes from, like, game developers and, like, professors of game design are saying that Tetris is, like, one of the best games ever. Here's a quote from a professor.

Tetris offers the seductive potential of agency and control in a sea of apparent chaos. It's also one of the only games where you're building up something. you're like constructing rather than destructing in a way. And yeah, it's just like it's the prime example of a game that's easy to play but hard to master. People are just raving at the beauty and simplicity of this game. And you watch competitive Tetris on YouTube. Oh, I know. Competitive Tetris is electric because it's basically everyone,

whenever the announcers, someone gets a Tetris, which is when you have five or four blocks fully lined up and you get one of those really nice, satisfying straight pieces. It goes down. That's called a Tetris. So the announcers go crazy when someone gets a Tetris. Like, boom, Tetris for Jeff. Boom, Tetris for Jonah.

I know. I love Tetris. We get hype about games. I'm excited for the seller as a Katan game, which I don't know. Or a game movie, which I just made up. But that would be fun. That would be fun to see another geopolitical thriller about that. All right.

Final story. I don't think I can even get Tetris out of my mind. Now I'm so hype. Final story is tonight there are two women's basketball games. This is the final four. and it's not an exaggeration to say that the women's tournament is getting as much, or if not more attention than the men's tournament this year. The viewership numbers are through the roof.

Almost 2.5 million fans tuned in to ESPN on Sunday to watch Caitlin Clark and Iowa beat Louisville. That's more than the viewership for any NBA game on ESPN this season by 400,000 people. And then overall, the tournament viewership for the tournament is up 42%. And then last week's round of 16 games rose 73% compared to last. season. That's crazy. And I truly think it's because we have just some electric players. Obviously, like Caitlin Clark, unreal. I was looking at some of her stats. They give her percentage from like different areas of the court. She's shooting 44% from 25 to 30 feet. That's like Steph Curry. Yeah, it's like NBA range. Like these are deep, those deep threes you see, 44%. Like she would be

like fifth in the NBA in total three point percentage. So she's electric. And also just this broader idea of women's sports kind of having their moment. We were just going through and looking at some of the other like hallmark moments that happened in women's sports just in the last few years. One of them is 87,000 fans going to London's Wembley Stadium

to watch the Euro final between England and Germany. That was a huge deal. I remember watching it on TV. Electric crowd. The New Zealand women's rugby team played the World Cup final in 2022 in front of 40,000 people. So it's definitely like women's sports are having their

They're getting more investment. They're getting more eyeballs on it, which only leads to like further development of the leagues and the players. For sure. And hopefully that translates to a payday for these contract rights. So I think the March Madness contract rights are up soon and they're renegotiating. And they're looking for more than $100 million per year. So it's super exciting to see. And it seems like it's global across many different sports.

But yeah, I think this women's tournament has really aided by the superstar players. Well, I guess we can touch on the men's, which it doesn't have any top seats. No one, I would say it's not really a big deal. But if Yukon loses, then I win a lot of money in your dad's pool, correct? That's true. That is true. Yeah, Neil's rooting against the Huskies because he's in the top three right now. Yeah. No, yeah, the men's team has field no top three seed for the first time ever.

Also, just one final business angle to the men's tournament is the NIL, which is name, image, and likeness deal. It's in effect now in the NCAA. and one of the big spotlights has been on this transfer who came to Miami. His name is Nigel Pack. He was paid $400,000 annually plus a car by this rich Miami booster to play for the University of Miami. So we're finally starting to see these high-profile NIL deals that are propelling teams to Final Four. So it will be interesting to see how many, like, maybe by in 10 years, the University of Kentucky will have like five.

The payroll will rival mess. Right. They'll literally be having an NBA pay roll. So we'll see. All right. That is our show, Pump for the Games tonight. Toby, you want to just do a brief talk about the giveaway that we're doing? Yes.

So at the beginning of Wednesday's show, we got this awesome reader email that showed that he had shared the show in his like businesses like Slack group essentially with 2,500 people in it. And we love that hustle. So we asked you all to do the same thing and send us picture proof of, of you like sharing the show with your company or your friends in a group chat. So we just wanted to say that that giveaway is still going on. If you send us email proof of you sharing the show with your friends, you will be entered for a chance to win one of our beautiful Morning Brew Daily mugs.

And Neil, what's the email that they can send? Morningbrewdaily at morningbrew.com. That is Morningbrewdaily at morningbrew.com. All right. As always, a hearty mazzledove to our team in the control room. The show's producer and editor is Emily Milliron. and the show's technical director is Justin Orlando. Our supervising producer is Bryce Belloff.

Tetris' biggest fan is Dan Bousa. Maybe second biggest at Toby. Hair and makeup started summer Fridays really early. Devin Emery is our chief content officer. A show is a production of Morning Bureau. Neil, I wish you well. I wish you well. We'll see you on Monday.

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