Planet Money - The Rest Of The Story, Summer 2021

Episode Date: July 2, 2021

We follow up on takeout cocktails, college athletes at the Supreme Court, bankrupt Hertz, and the new shape of pasta. | Subscribe to our weekly newsletter here.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This is Planet Money from NPR. Hello and welcome to Planet Money. I'm Jacob Goldstein. Over the course of the past year, we have done a lot of stories on the show. And, you know, a lot of those stories kept going after we did the show. Big, interesting things kept happening in the world after we talked about them on the show. So today we are going to do something that we do a few times a year. We are going to tell you those big interesting things that happened after we hit publish on the podcast.

Today on the show, it is the rest of the story. First up today is a story that Sarah Gonzalez did last summer. Sarah, hi. Hey, Jacob. So, I remember this very well. It was last summer, and in the name of journalism, you and your mom went out for a drink. Okay, do you know what you're going to get, Mom? Okay, I'm going to have the two ceviche tostadas.

Would you like a tamarindo michelada to drink? But we're doing this to go. Okay, yes, of course. We can now do that. You can take your drinks to go, your micheladas, your wine to go, of course. We went to TJ Oyster Bar in San Diego in California. It's a place we've been going to forever. Love it.

But this was the first time that we could ever get our drinks, our michelada beers, to go. Because before the pandemic in California, like almost everywhere else, it was illegal to get beer or wine or margaritas or anything to go at a restaurant. And then, of course, California, like lots of other states, temporarily changed that rule, that law, last year to, you know, help out restaurants. Yeah, to help them, like, make some money that they'd been losing by not having indoor dining. But last summer, one of the owners of the restaurant, Monica Hasso, was like, people might want this rule to stay broken. We might not want to go back to the old way. Even if the pandemic is over, I do think it's going to stay for a little bit just because people are going to get used to it,

like ordering tacos and micheladas to go. And here's where we get to the rest of the story. A few weeks ago, the governor of California, Gavin Newsom, said this broken rule, booze to go, saved restaurants and bars and revitalized neighborhoods. So he is keeping the rule broken through the end of the year to give restaurants more ways to play catch-up, make more money.

And there's a bill in the California legislature that would change the rule, that would let restaurants sell drinks to go forever. And this is happening all around the country. I actually checked in with the National Restaurant Association, which, of course, is tracking this very closely. And they told me that 15 states and Washington, D.C. have all permanently legalized to-go cocktails, drinks, and another 12 have made them legal beyond next year,

in some cases all the way until 2025. It is kind of amazing that like this pretty significant change is happening for reasons that really have nothing to do with like studying the effects of to-go cocktails on a community or anything like that. Yeah, there were no studies, right? There were definitely no studies. What there was was a pandemic and a sudden change of a rule that nobody was really about to change. And it does seem like this really interesting reminder that, you know, the rules we live by, the laws we have are not really the result of some kind of like rational optimization process. You know, they're the result of historical events, you know. So like

we live in this world where you have a pandemic and then you have temporary legalization of take out drinks. And then suddenly, you know, eventually the pandemic goes away, but it looks like takeout drinks here to stay. Thanks, Sarah. I hope you and your mom can go get a drink to go soon. Thanks, Jacob. Still to come on the show today, how the Supreme Court ruled in that case about perks for college athletes. What happened to the people who bought stock in Hertz after it went bankrupt, and the inventor of a new pasta shape comes back on the show to tell us how his noodles blew up. James Sneed.

Jacob Gordstein, hello. Let's talk about the National Collegiate Athletic Association. I love it. Is that what it is? NCAA. Yeah. You, not long ago, did a story about the National Collegiate Athletic Association in court. I did.

Not just any court. The Supreme Court. The big one. The last Court. The big one. The last dance, the national championship, all the sports euphemisms. Very briefly, what happened with the NCAA at the Supreme Court earlier this year? So the case was over whether colleges could be allowed to give education-related perks to college athletes. And these education-related perks could include relatively small things like saxophones and tutors, science equipment. But it could also include bigger things

like academic awards up to $6,000 or scholarships for athletes to go to grad school or vocational school after they were done playing football or whatever. Right. And the NCAA said no, right? The NCAA had been saying no, colleges cannot offer that to college athletes. That's too much. Yeah, they were basically saying this is another version of pay for play, and it's going to destroy their model of amateurism, which is basically amateurs don't get paid. And just last week, the court issued its opinion.

Yeah, and it wasn't that surprising, but it made a statement. It was a unanimous decision. The court basically said the NCAA, you can't prevent colleges from offering these things. Not that colleges have to, but the NCAA can't stop them. My favorite part of the ruling is actually not even a word. It's, I guess, a punctuation mark. Near the very beginning of the ruling, it says, speaking of the college sports in general, basically, it says that profitable enterprise relies on, quote, amateur, quote, student athletes. And I feel like those quotes around amateur tell a lot of the story.

They speak volumes. It's almost like a little bit of foreshadowing of just like this is what we really think about this. It's almost like a little bit of foreshadowing of just like, this is what we really think about this. And so it just seems like this is probably like a crack in the facade of the NCAA, and the writing is on the wall. I will just say, in terms of this sort of broader issue of college athletes getting paid, there is another related issue that we've covered in the past on Planet Money, and that actually came up again just this week, just a couple days ago. After a long fight, the NCAA changed its rules

so that student athletes can now make money from endorsement deals for things like sneakers and appearing in video games and that kind of thing. The jargon for this, which you might have heard, is name, image, and likeness. Yeah, this is all very convenient timing by the NCAA, and it seems like they're probably seeing the writing on the wall too. You know, after you get dunked on sometimes,

you just got to gather yourself and get back on the court and play the game. You want to give me one more sports metaphor before we get out of here? Yeah, I'd say for students. Time is running out. For the student athletes, this was a touchdown. That was not my best metaphor. I mean, it wasn't bad. Thanks, James.

Thanks, Jacob. A few months ago, we did an episode with Dan Pashman. He's the host of a food podcast called The Sporkful. And we talked with him about this pasta quest that he had been on. I set out on this quest about three years ago to invent a new pasta shape, and not just in a theoretical way, but to actually get it made and to actually sell it. And it's proven to be much more difficult than I anticipated. Pashman spent thousands of dollars of his own money. He talked to pasta experts around the

world and things just kept not working out for him. But eventually he did manage to design this new shape of pasta. It's called cascatelli, is italian for waterfalls because the pasta shape looks kind of like a little waterfall and that was where we left it and dan didn't know when we talked to him if people were going to want to try his pasta or if he'd wind up you know thousands of dollars in the hole with a basement full of cascatelli so the other day i called dan up and asked him to tell me the rest of the story. So what happened? You came, you know, when you were on the show, it was right when it was all about to happen. What happened after you were on our show?

I mean, the thing went on sale. Then CBS This Morning hit. Today's show on Good Morning America mentioned it. Then the New York Times covered it. Then Sarah Jessica Parker put it on her Instagram. You made it. You mentioned it. Then the New York Times covered it. Then Sarah Jessica Parker put it on her Instagram. You made it. You made it. I mean, that, you know, what more can you ask for?

And then it went international. This guy, Dan Pashman, I think it's Dan Pashman, who is a journalist, I think. He has a podcast. It's called Sportful. It's a podcast. It's a podcast. It's a podcast.

It's a podcast. All across Western Europe, I was doing interviews for a German business magazine, an Irish radio, an Israeli TV. The initial batch of 3,600 boxes of pasta that Pashman had made sold out in just a couple of hours. Basically, it sold out immediately. The company he was working with, it's a little pasta company called Sfolini, they could keep cranking out the pasta, but they had this problem. They needed to order more boxes to put the pasta in, and that was going to take a while, partly because the pandemic has meant more online shopping, which has meant more demand for boxes, which means the paper that goes into the boxes was,

like so many other things, in short supply. But they did manage to get an order in. In fact, there was so much demand for Cascatelli that they ordered 100,000 boxes. And then that order got held up because of the Suez Canal. No! Yes, and our boxes are coming from America, but other bigger companies shifted orders from other parts of the world to American paper when the Suez Canal thing happened. And, you know, me and Sfolini got bumped to the back of the line.

The boxes did finally arrive and they are now filling all those back orders. OK, we've got one more rest of the story to go. Okay, we've got one more rest of the story to go. Remember last year when Hertz, the rental car company, went bankrupt and then lots of people started buying stock in the bankrupt company, which seemed like a bad idea? After the break, how bad of an idea was it? Kenny Malone, we're here to talk about Hertz. Let's talk about Hertz.

What do we go with on the Hertz story? Was it Hertz so good? I think it was Hertz so good. It might have been love Hertz. Was it love Hertz? Hold on, hold on, hold on. I'm looking it up. Owner of a broken Hertz.

Owner of a broken Hertz is good. Because Hertz went bankrupt last year, broken. And people kept buying shares in its stock, strangely. They were owners. They were owners. They were owners of that broken Hertz. That's correct. And Kenny, you did this show last spring about this very strange phenomenon,

because normally people do not buy stock in a bankrupt company. Yeah. And that's because when a company goes bankrupt, it is saying we don't have enough money to pay everybody that we owe money to. And so what happens is that a bankruptcy court sort of lines up every single person that has an IOU against, in this case, Hertz and decides who's going to get paid first, who's going to get paid second, who's going to get paid last, where's the money run out, who's not going to get paid at all. And almost all of the time, the shareholders lose all of their money. Basically, as a rule, this is the case. Right. That's the totally reasonable, normal thing to think. In fact, if I recall correctly, around the time you did this show, when there was this like mini frenzy on Hertz's stock, Hertz itself was saying to what?

Saying to shareholders, like, don't buy our stocks. You're going to lose the money. Yeah. Like you're probably not kidding. This stock's probably not going to be worth anything after bankruptcy. And so that is where we left it. And yet in this case, in the case of the Hertz bankruptcy, the extraordinary has now happened. The shareholders are getting paid. They're getting paid, Jacob. And look, here's what happened differently in this case. So Hertz is in bankruptcy. Things are going terribly, pandemic, et cetera, et cetera.

But then, as one source put it to me, there is whatever the opposite of a perfect storm is. Like, I guess, perfect weather, perfectly amazing things happen. The vaccine starts to roll out. Rental car demand starts skyrocketing. And suddenly you have Hertz sitting in bankruptcy looking like a potentially very valuable company. And so what happens when a company is in bankruptcy is other companies come and look at buying that company out of bankruptcy, right? That's right. And in this case, in the case of Hertz, there's an auction.

Like, there's an auction to buy Hertz. And it just goes bananas. It goes up and up. This group of investment firms pay so much to buy Hertz that there is enough money to cover like everything Hertz owes all the way to the back of this IOU line, all the way back to the shareholders. And so the shareholders are going to get paid $1.53 for each of their Hertz shares. Plus, plus, Jacob, they will get some stock in the new and improved Hertz that will emerge from bankruptcy. Plus, plus, plus, also get the opportunity to buy more stock at a likely discounted rate in the new Hertz. So the shareholders did okay. Oh, they did well.

They did great. They did unexpectedly, incredibly. You cannot overstate how well this went because they should have made nothing. They were going to make nothing. And, you know, when I look back at this story, I feel like you can see Hertz as almost the perfect mascot of this horrible year and a half. Because it not only represents the financial catastrophe of the whole thing, but also a rental car company represents our hopes and dreams of doing fun things, of going places and taking vacations and being with other people.

And having that zeroed out and then having it grow back so dramatically, I do think it captures the whole thing just, you know, turned up to 11. What other stories should we tell the rest of? Email us at planetmoney at npr.org or find us on the social media. We're at planetmoney. Kenny, there's one more little rest of the story that maybe you can give us right now.

And that is the rest of the story about Microface, the comic book character slash merchandising vehicle that you revived on Planet Money recently. It has turned into a merchandising juggernaut. We now have five different shirts, Jacob, two different hats. We have socks, we have coasters, there's a bandana,

a Microface mask that is now on clearance. You can find all of that stuff at npr.org slash microface. And I will give one update that if you ordered any of that stuff along with our comic book, it's going to ship when the comic book is ready. Should be around September, we're hoping.

It's hard to make a comic book, it turns out. Our show today was produced by Darius Raffion, engineered by Gilly Moon, edited by Brian Erstadt. Our supervising producer is Alex Goldmark. And the phrase, the rest of the story, was invented by radio legend Paul Harvey. Now you know the rest of the story. I'm Jacob Goldmark. And the phrase, the rest of the story, was invented by radio legend Paul Harvey. Now you know the rest of the story. I'm Jacob Goldstein. I'm Kenny Malone.

This is NPR. Thanks for listening. And a special thanks to our funder, the Alfred P. Sloan Foundation, for helping to support this podcast.