Under The Radar – 14 January

This week, we discuss:

1. Has France Left it too late?

2. Private equity seeks medical help

3. Channel 5’s alive

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Has France Left it too late?

What Happened? It is increasingly likely that no Leftist candidate will qualify for the second stage of the French election, as far right favourite, Eric Zemmour, may also fall foul with a lack of support from local officials.

What does it mean? The French left can’t seem to get going for 2022. Anne Hidalgo, the Socialist party pick and current mayor of Paris, has called for the left to unify under one candidate. Off the back of a strong showing in the last election, Jean-Luc Melenchon is currently best placed to challenge but he faces a steep path to power with an inflated roster of candidates diluting the left vote. The serious threats to President Macron’s second term come in the form of his old nemesis, and far right candidate, Marine Le Pen, centre-right Valérie Pécresse, and anti-immigration candidate Eric Zemmour. Macron is polling far ahead of his rivals on the first round of voting at 27%, with Le Pen in second at 17.5%. Nevertheless, a second term is not a shoe-in. Zemmour, a former TV pundit, generated an early flurry of media activity in which he was depicted as a potential frontrunner. Now he may not even qualify for the election due to a lack of support from local officials with France’s political system controversially requiring 500 ‘endorsements’ from officials to take part. Other candidates, such as Hidalgo, will likely qualify instead despite Zemmour polling far ahead. Le Pen would be the obvious beneficiary if Zemmour were to be squeezed out at this stage. Yet even a united far right vote would be unlikely to propel Le Pen to the Elysée Palace and without a single challenger from the left, Macron remains the firm favourite.

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Private equity seeks medical help

What happened? Two of the world’s largest private equity firms, Bain Capital and CVC Capital Partners, are teaming up for a potential multi-billion pound takeover of Boots, which is expected to be sold by its US owner this year. What does it mean?

Rumours are swirling that Boots, the UK’s largest drugstore chain, will be put up for auction this spring by its US owners, the Walgreens Boots Alliance. A sale would represent one of the biggest UK retail deals in years, with price estimates ranging from £5b to £12bn. Bain Capital is understood to have buddied up with UK-based CVS Capital on a joint bid to take over the retail giant, owner of more than 2,000 outlets and employing more than 55,000 staff. Both firms have invested heavily in prominent British businesses such as the bakery chain Gail’s, Debenhams and the RAC. Bain Capital and CVC will stiff face competition for the takeover following Boot’s parent company announcing robust trading figures just last week. Other large private equity firms, including Apollo Global Management and Fortress Investment Group – who both missed out on the buyout of Morrisons last year – are also expected to consider a bid for the chain. Given the weighty names linked to the takeover, a bidding war involving some hefty fees appears imminent. Institutions like Boots don’t come on the market every day. Yet a fast-changing consumer environment is thought to be fuelling a rush on investment in British retail assets, with owners being forced to sell up or seek new funds. If this trend continues, Boots may be just one of many permanent residents of the British high street up for sale in the coming months.

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Chanel 5’s alive

What happened?

Channel 5 is on track to report record profits for 2021, following a boom in advertising revenues for the broadcaster during the pandemic.

What does it mean?

After a predictably difficult 2020, Channel 5 has bounced back in a big way this past year with the network expecting to generate profits in excess of £60m. The much-maligned broadcaster also saw a 17% increase in primetime viewing thanks to the success of shows such as All Creatures Great and Small and Our Yorkshire Farm. This comes as a timely boost to Channel 5 after its head of programming, Ben Frow, made headlines last week for dismissing government warnings that public service broadcasters should be making more “distinctively British” programming to combat the growth of international streaming services. While streaming giants such as Netflix and Disney+ were enjoying record-setting subscriber growth during the pandemic, TV advertising spend in the UK plunged at an alarming rate. But in May last year, industry heavyweights were already calling the end of the pandemic for broadcasters and the numbers now back them up. The current UK TV ad market boom appears to be all-encompassing with Channel 4 forecasting revenues to exceed £1 billion in 2021 and ITV set to bank £2.3 billion in external revenues. National lockdowns showcased the vulnerability of the UK’s ad-dependent broadcasters but with programme makers now seemingly in the clear from Covid disruption, the rapid recovery of the TV ad market shows there’s life in the old dog yet.

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This week’s must reads:

1. “Boris Johnson’s shambolic government is doing the SNP’s job for them” by Alyn Smith for The Times

2. “Now Prince Andrew is facing trial, the palace must find a way to ‘de-royal’ him” by David McClure for The Guardian

3. “Is it over?” by James Forsyth for The Spectator

4. “Novak Djokovic and why the world is turning on anti-vaxxers” by Megan Gibson for The New Statesman

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Under The Radar – 07 December

This week, we discuss:

1. Tesla expands…. to Xinjiang

2. UK Government in a bid to make foreign takeovers harder

3. NY Attorney investigates Trump Organization

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Tesla expands to … to Xinjiang

What Happened? Tesla has opened a showroom in the contentious province of Xinjiang, China. The move has been criticised with the Chinese government accused of carrying out a campaign of ethnic cleansing against the region’s Uighur population. What does it mean? China has come under increasing fire for what has been deemed by many- including the US, but notably not the UK government- as a “genocide” against the Muslim Uighur population.

The Chinese Communist Party (CCP) has hit back against allegations, insisting it is “fighting terrorism” by sending Uighurs to “re-education and vocational training centres”, despite evidence of widescale abuse obtained by the BBC. While no stranger to controversy, Musk’s latest decision to open a Tesla branch in Urumqi, the capital of Xinjiang, has caused quite a stir with politicians and Human Rights advocates condemning the company. This comes as President Biden enacted a bill banning imports from Xinjiang, putting pressure on the UK government to do the same. Tesla’s move into the territory, however, is not unprecedented for a ‘Western corporation’. A number of Fortune 500 companies are said to be doing business in the province; PepsiCo and General Electric have offices in Xinjiang, while Amazon, Ford Motors, and General Motors have substantial ties to the province. On the flip side, a number of companies, like H&M and Intel, have made public statements against the sourcing of materials from the region. With China becoming an increasingly powerful market on the global stage, large corporations now face tough decisions over doing business in Xinjiang as a boycott by Chinese consumers, or even sanctions from the government itself, could impact their supply chains and bottom line going forward. Furthermore, should more governments impose embargoes on products originating from Xinjiang, the situation may escalate further, sending ripples throughout the global economy.

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UK Government in a bid to make foreign takeovers harder

What happened? New rules under the expanded National Security and Investment Act, which came into effect this week, have granted Ministers greater powers to intervene in foreign takeovers of British businesses. What does it mean?

In the biggest shake-up of national security in two decades, the government has made it harder for foreign firms to buy British businesses that are considered key to national security. Since Tony Blair put in place the Enterprise Act in 2002, just a handful of takeovers have been subject to scrutiny on security grounds. However, the new law dramatically increases the number of deals the Government will be able to intervene in. It identifies 17 areas of the economy – from defence and military technology, to robotics, AI and transport – that will warrant greater scrutiny when overseas investors seek to make an acquisition. Under the new rules, up to 1,800 takeovers a year can expect to be impacted by the Act. The government has shown themselves to be much more willing to pull the national security card and investigate takeovers in recent months, with the CMA and FCA significantly ramping up activity. The new legislation has been enacted retrospectively, allowing the government to investigate any deals initiated since November 2020. Deals including the acquisition of defence suppliers Ultra Electronics and Meggitt, as well as the sale of chip designer Arm to Nvidia, have been subject to regulatory investigations. The new rules are viewed by many as a response to growing concern about Chinese takeovers of strategically important businesses – even relatively small deals are being identified for investigation by officials, especially if the Chinese company looking to buy is in any part backed by the state. However, the criticisms that the scope of the legislation could prompt needless intervention by government regulatory authorities are being seen as a potential deterrent to future foreign investment in the UK. Business Secretary Kwasi Kwarteng said that the “UK is world-renowned as an attractive place to invest” but with growing concern over Brexit and new legislation such as this, the attraction may wane as investors look to alternate markets without such stringent regulatory oversight.

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NY Attorney General issues subpoenas in Trump business investigation

What happened?

New York Attorney General Letitia James, who is investigating the Trump Organization relating to the valuation of their properties, has broadened the scope of the investigation into the corporation by issuing subpoenas to the former president and his children, Ivanka and Donald Trump Jr.

The subpoenas are believed to seek “interviews under oath” in relation to the aforementioned.

What does it mean?

For the past two years, the Trump Organization and their team of lawyers have sought to block the Attorney General’s office from questioning the former president and his children. This latest turn of events comes after the Attorney General indicated there would be more charges emerging from her investigation into Trump’s business practises. The (literal) million-dollar question is whether the Trump Organization interfered with the valuation of its properties – inflating it to obtain bank loans and deflating it when it came to tax returns. This should come as no surprise as Trump himself frequently gave vastly different estimations of his own net worth. So far the Trumps have moved as a bloc to quash the subpoenas arguing that James is attempting to circumvent the grand jury process, reflecting the argument as to whether the case should be handled through criminal or civil proceedings, with Trump lawyers arguing for the former due to the more restrictive process prosecutors must adhere to. While Donald Trump and his representatives have repeatedly denounced the investigation as a “political witch hunt” perpetuated by the Democrats, it appears he may soon have to face the music as James is intent on making the family “play by the same rules as everyone else”. As pressure mounts and the investigation progresses, it will be interesting to see whether factions within the family start to appear, akin to those in the Roy family in US hit TV show Succession, or whether the family close rank and continue to operate as one.

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This Week’s Must Reads

1. “The cost-of-living crisis is going to upend British politics in 2022” by Aditya Chakrabortty for The Guardian

2. ‘Labour is finally loving to love Tony Blair again’ by Sebastian Payne for The FT

3. “How Britain falls apart” by Tom McTague for The Atlantic

4. “Novak Djokovic is treating Australians like mugs” by Terry Barnes for The Spectator

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Under The Radar – 31 December

Photo by Vincentas Liskauskas on Unsplash

This week, we discuss:

1. 2021: Under The Radar’s Year in Summary

2. A small step forward for Amazon workers

3. What is rotten in the UK’s Police Forces

4. Once upon a Dime in Hollywood

2021: Under The Radar’s Year in Summary

As 2021 draws to a close, we took a look back at every story we covered last year to see who and what dominated Under the Radar’s attention.

The most mentioned issue in 2021 was China. As the world remained focused on COVID-19, with pockets of the media transfixed on the lab leak hypothesis, we picked up on trends like China’s increasing grip on Hong Kong, the Evergrande property crisis and mounting tensions with Taiwan.

Boris Johnson, Joe Biden and the BBC were tied in second place. Regarding Joe Biden, our focus was primarily on his efforts to reconfigure the economy and the immigration crisis on the southern US border. When it came to Boris, we covered his green agenda, televised Downing Street briefings and his meeting with Belarusian opposition leader Sviatlana Tsikhanouskaya.

The BBC was the last major topic that came up in various guises throughout 2021, including a number of stories relating to the BBC’s attempts to spread its wings and move away from the London bubble.

As we head into 2022 it is hard to predict what the news will bring, but at Under the Radar there is one thing we can say for sure: what the mainstream media overlooks, we won’t!

A small step forward for Amazon workers

What happened?

Amazon reached an agreement with the National Labor Relations Board that could pave the way for its almost 1m US employees to form a union. The agreement requires Amazon to notify all its employees of their right to organise with colleagues without interference. 

What does it mean?

At the very least, this agreement suggests that lawmakers are now willing to enforce existing labor laws after decades of allowing companies like Amazon to sack workers for attempting to organise. Substantial legislative action to further protect workers may now follow, given President Biden’s vocal support of unions.

This should be welcomed regardless of your political leanings considering what is known about the conditions in these warehouses. Just this month, six workers were killed in an Illinois depot during a tornado, after apparently continuing to work to meet the tech giant’s strict productivity metrics. Meanwhile, an Amazon union in Alabama recently claimed that six workers died on site this year, with one even having a stroke after being denied sick leave.

This has been a massive PR failure for Amazon, whose brand is increasingly becoming associated with Victorian era working conditions. The company has been on the backfoot as a result of sustained union pressure, with high-ranking executives even starting Twitter spats with Senator Bernie Sanders, a vocal supporter of the workers.

What’s worse, Amazon – who deny any involvement – appear to be behind thousands of bot Twitter accounts that claim to be happy Amazon workers. These accounts churn out suspiciously similar content and attempt to discredit unflattering news stories surrounding the treatment of workers, whilst arguing why unionising would leave their colleagues worse off.

Despite having more resources than most nation states, by publicly gaslighting politicians, the media and their own workers, Amazon has ended up with egg on its face.

Something is rotten in the UK’s Police Forces

What happened?

UK Police Forces are ending a year of embarrassment with another case of an officer acting indecently: Merseyside PC Ryan Connolly committed multiple disciplinary offences over a six-year period, including sending racist WhatsApp images and taking selfies at a murder scene.

What does it mean?

PC Connolly’s case is eerily similar to the two convicted Met police officers who took photos at the crime scene of murdered sisters Nicole Smallman and Bibaa Henry. Rocked by countless scandals over the past 12 months, public confidence in law enforcement has dropped with 48% of the public saying they are unconfident in the police, according to a recent poll.

Unsurprisingly, London’s Met have experienced the largest change in trust. The murder of Sarah Everard by a serving police officer shocked the city and nation alike, as did the high-profile murder of Sabina Nessa. The Met’s “botched”, and “unsatisfactory” response was met with calls for Met Commissioner Cressida Dick’s resignation.

The slogan “one rule for them, and another for us” is often banded about Westminster in regard to the double standards enjoyed by politicians, particularly during the pandemic. However, this phrase can similarly be applied to UK forces and not just in relation to offences committed by serving officers.

Fictional Crime-thriller TV show Line of Duty perhaps hit a little too close to home in highlighting some of the institutional failures and incompetencies of the force which, in reality, have enabled and perpetuated a culture of secrecy, impunity and lack of accountability.

It seems incredulous that the very institutions which are meant to protect us – the supposed stalwarts of law and order – can act above the law. Questions must be answered, and immediate action taken to fill the current void of passive negligence. However, without a major upheaval of current institutions, it is hard to see how any meaningful change can come about.

Once upon a Dime in Hollywood…

What happened?

The return to pre-pandemic film production levels has driven a spike in the market for real estate in Hollywood and other production hotspots as demand outstrips supply.

What does it mean?

Private Equity firms are investing billions to acquire production facilities across North America and Europe as the ‘streaming wars’ hot up. The likes of Netflix, Amazon and Disney are pumping in cash to compete in the increasingly saturated streaming market.

For some time, mega streamers have been prioritising producing original television series over films with noticeable knock-on effects. US TV shows are typically shot in Los Angeles where most actors and production companies are based. Films, on the other hand, are more likely to be spread out across different locations. This trend has meant that the demand for locations in LA has spiked in recent years, with everything from industrial warehouses, malls, churches and even an IKEA store being repurposed for filming.

Investors, including Blackstone and TPG, have committed over $4bn to acquire production facilities across North America and Europe in recent months. TPG have acquired studios in Chicago, Toronto and Germany while Hackman Capital has invested over $7.5bn on studio spaces since 2018.

Streaming has facilitated the investment in larger scale production facilities due to the scale of production. The streaming giants can commit to much longer leases than the dominant production companies of ten years ago due to the volume of productions lined up. In the past these investments were more of a risk.

The spike in demand for real estate is symptomatic of the streaming market as a whole. Netflix and Amazon have set a pace that Disney, Apple, Universal and others are attempting to match, but with new subscribers ‘drying up’, pretty soon the market may simply run out of space.

This week’s must reads:

1. “‘One rule for them’: how a simple slogan helped change the political landscape” by Ben Nunn for The Guardian

2. “Air strikes or invasion: what are Putin’s military options for Ukraine?” by Max Seddon for The FT

3. “What Ghislaine Maxwell’s conviction in Jeffrey Epstein sex trafficking trial means for Prince Andrew” by Victoria Ward for The Telegraph

4. “Brexit passporting: Little appetite among EU finance firms to stay in London as FCA applications disappoint” by Michiel Willems for City A.M.

Chart of the week:

“National Parliament Voting Intention” – Published online at Politico.eu. Retrieved from: ‘https://www.politico.eu/europe-poll-of-polls/united-kingdom/’ [Online Resource]

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