Virgin America is No More

A photo of a Virgin America airplane in flight.

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Sad news for fans of Virgin America: the airline is all but finished after its recent merger with Alaska Airlines.

Last year Alaska Airlines purchased Virgin America for $2.6 billion, leaving many to wonder what would become of the two different airlines, as Virgin was popular for being flashy, fun, and more young-adult centric. Alaska plans on retiring the Virgin name and logo some time in 2019.

“While the Virgin America name is beloved to many, we concluded that to be successful on the West Coast we had to do so under one name—for consistency and efficiency, and to allow us to continue to deliver low fares,” said Sangita Woerner, Alaska Airlines’ vice president of marketing.

Frequent Virgin flyers can take solace in one thing: Alaska Airlines will be keeping the “flair” that Virgin offered, such as mood lighting, music, and free WIFI and entertainment.

One person who isn’t happy about Virgin’s departure is Virgin America founder Richard Branson.

“With a lot of things in life, there is a point where we have to let go and appreciate the fact that we had this ride at all,” Branson said in a blog post. “Many tears are shed today, this time over Alaska Airlines’ decision to buy and now retire Virgin America. It has a very different business model and sadly, it could not find a way to maintain its own brand and that of Virgin America.”

Starting next year, Virgin’s frequent flyer program will disappear, but members will not lose their status. Current frequent flyers have the option of converting their miles to Alaska’s at a rate of 1 to 1.3 miles, or they can wait it out and have their miles traded evenly when the program dissolves.

The merger between the two airlines created the fifth-largest airline in the United States, boasting 1,200 daily flights and close to 300 planes. Alaska Airlines plans on expanding their market to 21 new cities over the next year.

Using Export Complexity to Explain Income Inequality

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Researchers from MIT have developed a new method for predicting the economic success of countries around the world: the complexity of that country’s export economy. For the last decade or so, Professor César Hidalgo and his colleagues have been doing research and writing papers to back up this idea. They argue that “not just [the] diversity but the expertise and technological infrastructure required to produce [exports] is a better predictor of future economic growth than factors economists have historically focused on, such as capital and education.”

And what’s more, the most recent research shows that this complexity can also say a lot about income equality in those countries as well. Basically, countries with greater export complexity have lower income inequality because there are more workers in more industries that are generating exports and, subsequently, income. Looking at data collected between 1963 and 2008, researchers found that “countries whose economic complexity increased, such as South Korea, saw reductions in income inequality, while countries whose economic complexity decreased, such as Norway, saw income inequality increase.”

This research comes at a time of renewed interest, both politically and scientifically, in the issue of income inequality in many parts of the world. There are a number of factors that can be used to determine the current or future success of an economy, but not all of those factors are equally important. Relying solely on GDP, which is often the case, is much less useful than combining it with export complexity, education, and population. However, relying just on export complexity seems to work almost as well as using all of the aforementioned methods.

This development could be extremely useful to both governments and businesses in the future, as they seek to do right by their citizens and employees, respectively. Essentially, finding a new niche isn’t just good for a company, but it can help the country as well.

Burger King Buys Popeyes Chicken

A photo of the outside of a Popeyes Restaurant.

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Restaurant Brands International, the company that owns Burger King, will be buying Popeyes Louisiana Kitchen for $1.8 billion. Popeyes is known for its Cajun cuisine and extremely popular fried chicken which can be found in its 2,600 restaurants worldwide.

Daniel Schwartz, CEO of Restaurant Brands International, is excited about the new venture.

“RBI is adding a brand that has a distinctive position within a compelling segment and strong U.S. and international prospects for growth,” he said in a statement. “As Popeyes becomes part of the RBI family we believe we can deliver growth and opportunities for all of our stakeholders including our valued employees and franchisees. We look forward to taking an already very strong brand and accelerating its pace of growth and opening new restaurants in the U.S. and around the world.”

Restaurant Brands International is already doing well in the fast food market due to Burger King’s rising sales, but this Popeyes purchase can make it a formidable opponent in the fried chicken arena, where KFC is still king. Wall Street seems to think it has a chance. As of Tuesday morning, the company’s value rose 19% (up from Friday’s closing numbers), bringing Popeyes’ stock up to $79 per share.

Popeyes was founded in the early 1970s in New Orleans, and has since become a staple for chicken lovers in more than 25 countries. Cheryl Bachelder, CEO of Popeyes, is just as excited as Schwartz when it comes to the RBI/Popeyes partnership.

“As Popeyes enters its 45th year,” she said, “it’s success reflects the amazing brand entrusted to us by founder Al Copeland, Sr. and the unique high trust partnership that we enjoy with our franchise owners. RBI has observed our success and seen the opportunity for exceptional future unit growth in the U.S. and around the world.

Restaurant Brands International also owns Tim Horton’s, the Canadian coffee and doughnut chain.

Walmart Offers Free Two-Day Shipping

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Walmart has been gunning for Amazon’s top spot in the online shopping world, and it’s coming up the ranks pretty fast. As of this week, Walmart customers will receive free two-day shipping on millions of items store-wide for purchases of $35 and up.

One of Amazon Prime’s most popular features is its two-day shipping. That’s what made Prime so successful, despite its $99 annual fee. Walmart took notice and introduced its ShippingPass program, which offered two-day shipping for an annual cost of $49.

However, Amazon Prime offers a lot more benefits and perks other than just shipping, making it a better deal overall. Walmart must have realized this because they are now offering free shipping without the annual fee. This is a great way to attract customers who want no frills and their packages delivered quickly. Users don’t have to enroll in a program, either.

Marc Lore, CEO of Walmart US e-commerce, told reporters that “at a very fundamental level, we just don’t believe in having to charge for a membership.”

Lore seems to be sticking to his word, because anyone who purchased a ShippingPass will have their money refunded.

While the free shipping will not count for every item sold, it will for more than two million of the most popular items people usually buy from Walmart, such as food, toiletries, clothes, baby items, electronics, and household supplies. For those who have little time to go shopping but can’t really afford the extra shipping costs usually tagged onto online orders, this is a huge blessing. Orders must be placed before 2pm PST to arrive in two days.

Another added bonus: Walmart doesn’t plan on raising prices to offset the shipping costs.

“It won’t affect our pricing at all,” Lore said. “In fact, we are looking to get more aggressive on the pricing side.”

Online Media Moving to Quality Video Content In Order to Catch Up With Television

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Will online media ever shut out print and television as sources of news and entertainment? The answer to that question is a resounding, “maybe.”

The Internet has done a great job of gobbling up print media through its ability to share timely news, information, and classified ads.

As far back as 2008, Bill E. Ford, President and CEO of General Atlantic, saw the possibilities in digital media. “One of the biggest shifts that we’ve been focused on is the shift from offline to online media,” he said in an interview with Financial Times. “We have several investments taking advantage of that trend.”

Those investments include the digital publishing platform Vox Media, Snap (the company that owns Snapchat), and Buzzfeed.

But digital media still has some distance to go before it catches up with television in the sheer hours of media consumed.

According to recent surveys, people spend more than four hours a day watching TV but approximately an hour a day on Facebook.

The difference, arguably, is video, and digital platforms are picking up the pace on producing just such material.

Social media giant Facebook is working on the premise that video is the digital space trend of the future. Facebook founder Mark Zuckerberg said he believes that within five years, most of what people consume online will be video. At that pace, online video ads could give Facebook a good shot at competing for dollars currently spent on television advertising.

“People are creating and sharing more video, and we think it’s pretty clear that video is only going to become more important,” Zuckerberg said. As a result, Facebook is going to a “video first” mentality, prioritizing video content across its apps and taking steps to make it easier for people to express themselves through enhancements such as live video.

However, a big challenge to digital media is quality. People are still largely turning to television for news and information, probably because of an underlying belief that TV is a more reliable and trustworthy source than social media.

General Atlantic Vice President Zack Kaplan, who serves on the Board of Directors of Vox Media, said in a recent article, “For digital content companies, success will increasingly require a prioritization of quality programming and meaningful journalism over commoditized and replicable clickbait; the creation of content that sustainably and uniquely captures real consumer time—not unique visitors, clicks, page views, video views, or swipes.”

The market is already reflecting the need to move to high-quality online media. In 2016, MLB Advanced Media agreed to pay $50 million a year through 2023 for League of Legends streaming rights. League of Legends generated more than 360 million hours of live consumption per year.

“Continued strategic investment is following brands and platforms that can similarly capture this kind of consumer attention,” Kaplan said. “Time is the metric that links big deals in the market.”

Online media platforms will need to invest real money to bring that higher-quality content and programming to their users. This will cause users to spend more time on their platforms over those of the competition. Twitter is experimenting with live sports, and Snap is working with TV broadcast networks to produce original and exclusive shows. Only time will tell how Twitter and Snap do in the face of digital behemoths like Amazon and Netflix, who are already making a great deal of high-quality, original content.

But the movers and shakers of the world’s digital platforms aren’t the only ones who need to understand the value of capturing viewers’ time through high-quality video and reliable news and information. Investors also need to understand the changing landscape of digital media and the growing online video trend in order to make strategic and profitable investments, both today and in the future.

Paul McCartney is Suing Sony for Song Rights

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Paul McCartney wants his music back.

The Beatle is suing Sony/ATV Music Publishing to regain the rights of the Beatles songs he both wrote and co-wrote with John Lennon. That equates to 267 songs in total.

McCartney filed the suit this week, stating that he has the rights to obtain his music due to copyright termination. Copyright termination is when the original creators have the right to reclaim ownership of their work after a specific length of time has passed. Sir Paul is citing the 1976 U.S. Copyright Act, which over the past few years has allowed many performers to regain control over their work. McCartney argues that the act would allow him to receive the rights back as early as next year.

This lawsuit is one of many attempts by McCartney to gain back control of his music, as he has been in a decades-long battle with Sony for the rights. He first lost those rights back in the ’80s, when Michael Jackson outbid him for the whole ATV catalog, paying $41.5 million. In 1995, Sony and Jackson formed Sony/ATV, thus giving Sony a 50% share of the music. Last year, Jackson’s estate sold his 50% stake to Sony for $750 million, and now McCartney only has to battle one entity for his catalog. He has been sending notices to Sony/ATV about his wishes since 2008.

That said, McCartney’s lawyers are fearful that Sony will push back with its win against Duran Duran, who filed a similar suit against them and lost. The problem: the British court says that any contracts signed in the U.K. take precedence over any rights they may have in the U.S. Plus, British law says music publishers can keep the rights for up to 70 years after a musician’s death. McCartney filed the lawsuit in New York City hoping that will work in his favor.

While Sony has continued to fight McCartney over the years, a statement by the company said it has “the highest respect for Sir Paul McCartney with whom we have enjoyed a long and mutually rewarding relationship with respect to the treasured Lennon and McCartney song catalogue.”

New Visa Option for Foreign Entrepreneurs

An image that reads, "work visa approved."

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A new ruling by the U.S. Citizenship and Immigration services may make it easier for foreign entrepreneurs to start businesses in America.

Beginning July 17, 2017, foreigners will be able to apply for a visa to work in the United States. It’s called the International Entrepreneurs Rule and it gives foreigners the chance to stay in America and build their businesses.

While foreigners currently have visa optionssuch as the H1Bthis ruling will make it easier for them to set up shop and legally work in the country. The H1B currently asks that employees from other countries prove that they are the best person for the job, and that all hiring (and firing) decisions come from the employer already in the United States. Naturally, that makes it hard for anyone to come in and start their own company.

The International Entrepreneurs Rule could change that. But that doesn’t mean there won’t be red tape to cut through. Under the new ruling, foreign business owners have to prove their fledgling businesses (no older than five years) have the potential for job creation and rapid growth, mainly through private investments of $250,000 or more and/or government grants of at least $10,000.

Additionally, founders must own a minimum of 10% company stake when going through the application process and they must prove that they can operate legally in America. Unfortunately, this ruling excludes small businesses.

The visa costs $1,200 and will last for 2.5 years and can be renewed for another 2.5 thereafter. Once the five years are up, successful business owners are expected to apply for a different visa. The government has the right to revoke the visa at any time if it believes the company is no longer compliant or beneficial to the public.

The government expects close to 3,000 applications per year, and acceptance will be determined on a case-by-case basis.

Lighten Up; Wendy’s ‘Pepe’ Meme Was An Honest Mistake

A photo of a Wendy's sign.

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On Wednesday, Wendy’s found itself in some serious trouble after posting a picture of Pepe the Frog on Twitter. It all started when a Twitter user by the name of MrRespek asked the company, “Got any memes?” Wendy’s replied with an image of Pepe the Frog dressed up as the Wendy’s mascot.

Little did Wendy’s know that Pepe was officially declared a symbol of hate speech by the Anti-Defamation League. The ADL claims that because Pepe has been used in so many anti-Semitic and racist memes, the image itself represents bigotry.

I say give ‘em a break. Wendy’s wasn’t aware that it was a hate symbol and quite frankly, neither was I. It was an honest mistake. It was meant to be funny and lighthearted, not racist or offensive.

Amy Brown, Wendy’s social media manager, assured the public that the person who posted the meme was uninformed about its symbolic meaning.

“Our community manager was unaware of the recent political connotations associated with Pepe memes, and it has since been removed. Since this used to be purely an innocuous meme, he had this fan content saved from a year or two ago,” Brown stated.

The fast-food chain did the next best thing they could by deleting the meme immediately and then apologizing for it afterward. Trust me when I say that I would be the first person to lash out against a company that was being overtly racist or hateful. But that’s not the case, here.

Instead, we have a case of an honest mistake being made in a rather unforgiving realm: the Internet. People blew it way out of proportion and made it a much bigger deal than it was. The person who did this is already embarrassed enough as is, I really don’t find it necessary that we add to their humiliation.

68 Macy’s Stores Are Closing

A picture of a Macy's sign.

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After experiencing disappointing holiday sales, Macy’s has decided to close 68 stores. As a result, nearly 4,000 employees will be laid off. But that’s not all. There are even more closures to come.

Macy’s has laid out a long-term plan to close 100 stores in the next couple of years. That means that even more people will lose their jobs. In the mean time, the 68 stores that will be closing almost immediately will have liquidation sales that begin on Monday, January 9. The sales are expected to last anywhere from 6-12 weeks.

Here is a list of stores that will be closing, listed first by state and then by specific locale:

California:

  • Paseo Nuevo, Santa Barbara
  • Simi Valley Town Center, Simi Valley
  • Mission Valley Apparel, San Diego

Florida:

  • Lakeland Square, Lakeland
  • Oviedo Marketplace, Oviedo
  • Sarasota Square, Sarasota,
  • University Square, Tampa
  • CityPlace, West Palm Beach

Georgia:

  • Georgia Square, Athens

Idaho:

  • Nampa Gateway Center, Nampa

Illinois:

  • Alton Square, Alton
  • Eastland, Bloomington

Kentucky:

  • Greenwood, Bowling Green
  • Jefferson, Louisville

Louisiana:

  • Esplanade, Kenner

Maine:

  • Bangor, Bangor

Massachusetts:

  • Westgate, Brockton
  • Silver City Galleria, Taunton

Michigan:

  • Lakeview Square Mall, Battle Creek
  • Eastland Center, Harper Woods
  • Lansing, Lansing
  • Westland, Westland

Minnesota:

  • Minneapolis Downtown, Minneapolis

North Carolina:

  • Carolina Place, Pineville
  • Northgate, Durham

North Dakota:

  • Columbia, Grand Forks

New Jersey:

  • Moorestown, Moorestown
  • Voorhees Town Center, Voorhees
  • Preakness, Wayne

New Mexico:

  • Cottonwood, Albuquerque

Nevada:

  • Las Vegas Boulevard, Las Vegas

New York:

  • Douglaston, Douglaston
  • Great Northern, Clay
  • Oakdale Mall, Johnson City
  • The Marketplace, Rochester

Ohio:

  • Eastland, Columbus
  • Sandusky, Sandusky
  • Fort Steuben, Steubenville
  • Mall at Tuttle Crossing, Dublin

Oklahoma:

  • Promenade, Tulsa

Pennsylvania:

  • Neshaminy, Bensalem
  • Shenango Valley, Hermitage
  • Beaver Valley, Monaca
  • Lycoming, Muncy
  • Plymouth Meeting, Plymouth Meeting
  • Washington Crown Center, Washington

Oregon:

  • Downtown Portland, Portland
  • Lacaster Mall, Salem

Texas:

  • Parkdale, Beaumont
  • Southwest Center, Dallas
  • Sunland Park, El Paso
  • Greenspoint, Houston
  • West Oaks Mall, Houston
  • Pasadena Town Square, Pasadena
  • Collin Creek, Plano
  • Broadway Square, Tyler

Utah:

  • Layton Hills, Layton
  • Cottonwood, Salt Lake City

Virginia:

  • Landmark, Alexandria
  • River Ridge, Lynchburg

Washington:

  • Three Rivers, Kelso
  • Everett, Everett

Wisconsin:

  • Oakwood Mall, Eau Claire
  • Valley View, La Crosse

Owl Rock, Others Vie for PDI Awards

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The Private Debt Investor Awards are the only independent industry awards voted on and awarded to the industry. Last year, more than 90 private debt companies in 30 categories across three regions competed for recognition. This year, accolades include Lender of the Year, Law Firm of the Year, and many more.

The competition is tight in many of the categories. With 1,000 respondents so far casting votes in 40 different areas, one of the biggest battles is happening in Global Newcomer of the Year (entries include Marc Lipschultz’s Owl Rock Capital Partners, Bon French’s Adam Street Partners, Jakob Lindquist’s CORDET Direct Lending, and Jeff Pentland’s Northleaf Capital). The running is also close in Asia Pacific Lender of the Year, Fundraising of the Year, and Europe Law Firm of the Year.

So if you’re involved in the industry, there’s no question that your vote will count!

The annual awards are held by Private Debt Investor, a publication of record for the private credit market. Founded in London in 2001, Private Debt Investor is written for providers and users of debt for private assets. PDI covers institutions, funds, and transactions shaping the private debt market. The monthly magazine comes out 10 times a year and helps those in the industry look at both short and long-term trends and themes so they can better serve their clients.

Their website and publications also cover global news and research directly affecting the world’s private debt markets.

In addition to their reports, articles, books, and databases, Private Debt Investor hosts more than 50 conferences and forums all over the world. In 2017 they will host a conference in Germany and one in New York City.

PDI is overseen by its parent company, PEI, a global B2B information group focused on private equity, private real estate, private debt, infrastructure, and agri investing.

The 2016 PDI Awards are off to a great start, but there’s still time to get your vote in! The nomination form will be available until midnight PST on Thursday, January 7. Participants are encouraged but not required to vote in each category. Votes are only accepted from official company emails, and participants may not vote for themselves or their own firms.

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