Business

A handful of state financial officers who have criticized environmental, social and governance investing own stakes in the fossil fuel industry, according to their financial disclosures.
The investments could pose conflicts of interest, as those oil and gas companies could suffer from wider adoption of clean energy, according to ethics experts.
Republicans have increasingly criticized ESG investing platforms and pulled state funds away from BlackRock and other firms that have adopted them.

Climate activists with Stop the Money Pipeline hold a rally in New York City to urge companies to end their support for the proposed Line 3 pipeline project and stop funding fossil fuels and forest destruction, April 17, 2021.
Erik McGregor | LightRocket | Getty Images

In October, Scott Fitzpatrick, then-treasurer of Missouri, announced his state would pull $500 million out of pension funds managed by BlackRock.
He said he would move Missouri’s money away from the asset manager because it was “prioritizing” environmental, social and governance investing over shareholder returns. Fitzpatrick, a Republican who won election as the state’s auditor in November, used his office as treasurer to target BlackRock after years of criticizing Wall Street for a perceived turn toward investing focused on climate and social issues.

As he homed in on BlackRock, Fitzpatrick quietly held a financial stake in a massive fossil fuel company that could suffer from the broader adoption of alternative energy. Fitzpatrick and his wife owned a more than $10,000 stake in Chevron during both of 2022 and 2021, according to his latest financial disclosures filed with the state.

Fitzpatrick is among a group of powerful Republican state leaders who have waged similar fights against environmentally conscious investing as they held personal investments in, or saw political support from, the fossil fuel industry.
A handful of state financial officers who have similarly attacked ESG practices owned stock or bonds in oil, gas or other fossil fuel companies in recent years, according to the latest state financial disclosure reports reviewed by CNBC. Some of the state officials have received campaign donations from fossil fuel companies or their executives.
State leaders face possible conflicts of interest when they have a chance to see financial gains from the fossil fuel industry as they use their offices to defend the sector — or in some cases move their state’s dollars away from clean-energy investments, government ethics experts told CNBC. As the officials ramp up their criticism of Wall Street investment practices, a lack of state laws requiring regular stock disclosures makes it difficult for the public to monitor what personal stake their representatives could have in the actions they take in office.
Brandon Alexander, the chief of staff to the Missouri auditor’s office, told CNBC in an emailed statement that Fitzpatrick’s publicly traded securities are either in a trust or qualified retirement accounts that are managed by a financial advisor.

“Other than employer sponsored retirement accounts (the entirety of which are invested in target date funds over which he has no control), all of Auditor Fitzpatrick’s publicly traded securities, are held in a trust or in qualified retirement accounts which are actively managed by a financial advisor to whom he gives no direction,” Alexander said. “He has never ‘had private briefings tied back to the fossil fuel industry’ nor does he personally direct or execute trades himself. Auditor Fitzpatrick stands by his criticism of the ESG movement, especially as it relates to the application of ESG standards in the management of public funds.”
Unlike members of Congress, state financial officers in many cases only have to disclose their stock ownership once a year. In some states, they do not have to divulge their investments at all. In contrast with federal lawmakers, they also do not have to file regular records disclosing their new trades.
None of the officials mentioned in this story engaged in illegal conduct. But the fact that they have investments that could be helped by their high-profile campaigns against ESG investing may create trust issues with the people they represent, says ethics experts.
“This is a problem that we have elected officials at the federal and state level that are simply not willing to avoid personal financial conflicts of interest,” Richard Painter, who was the chief White House ethics lawyer in the George W. Bush administration, told CNBC in an interview. “You could have someone own stock in a company and pursue policy that could benefit that company. What’s good for Exxon Mobil’s stock is not necessarily good for America.”
Painter said that owning such stock is not illegal for state based leaders. Congressional lawmakers are also allowed to own stock but the 2012 STOCK Act disallows members of Congress to use non-public information to gain a profit and prohibits insider trading.
Another government ethics expert also cited an appearance of conflict as an issue for public officials.
“If an official has a financial interest in a company or an industry, it is reasonable to question whether that interest impacts how they approach their government work,” Donald Sherman, a senior vice president and chief counsel for watchdog group Citizens for Responsibility and Ethics in Washington, told CNBC in an interview.
The fight against ESG investment standards has become a core issue for some Republicans at the federal and state level. Many of those officials have used their positions to target companies they believe are too politically active or, in some cases, are hurting certain industries, such as fossil fuels.
In the case of state financial officers, they have the power to shift public assets or pension funds away from certain firms and to other institutions.

Vocal ESG critics have fossil fuel ties

Georgia’s state treasurer, Steve McCoy, was appointed by Republican Gov. Brian Kemp in 2020. He was among state financial officers, including Fitzpatrick in Missouri, who last year co-signed a letter to President Joe Biden opposing policies that promote ESG. The Biden administration has promoted environmentally conscious investing, and the president used his first veto on a measure that would have shot down a Labor Department rule that promoted ESG policies.
The letter said the state officials “believe the White House should be spearheading a call to invest in American energy instead of pursuing ESG initiatives that divide American energy businesses and discourage investment in these reliable energy industries.” The group went on to say that “freedom is the key to addressing climate change. The depth and breadth of American innovation is unparalleled globally, including the development of green technologies. However, oil, gas, coal, and nuclear are currently the most reliable and plentiful baseload power sources for America and much of the rest of the world.”
McCoy is one of the state financial officers who held an investment in fossil fuels. He had a stake in the industry as recently as 2020 — though changes in disclosure rules mean he has not had to disclose his assets more recently.
McCoy disclosed in 2020 that he owns bonds in fracking company Halliburton and a stake in the U.S. Oil Fund, an ETF that tracks the benchmark price of U.S. crude oil. The disclosure says that these stakes are either “more than 5 percent of the total interests in such business or investment, or [have] a net fair market value of more than $5,000.”
The 2020 disclosure was the last time McCoy filed a document showing his investments. Some states, including Georgia, do not require officials who hold key state positions to file full disclosure forms, and require those leaders to publish only a one-page affidavit, according to Haley Barrett, a spokeswoman for Georgia’s Government Transparency and Campaign Finance Commission.
Two of McCoy’s affidavits filed with the state say virtually nothing about his business dealings and stock holdings. McCoy’s most recent affidavit, from 2022, shows his titles as treasurer and as a member of a variety of boards, including the state Depository Board.
McCoy also had to sign a statement to confirm that he has taken “I have taken no official action as a public officer in the previous calendar year which had a material effect on my private, financial or business interests.” That affidavit and a 2021 version of the document does not say whether McCoy currently owns any stocks in the fossil fuel industry.
When asked about what the state ethics commission does to verify if those signed statements are accurate, Barrett said in an email that “once these documents have been filed with our office and reviewed, there is an opportunity to determine if there are any discrepancies in the filings. Investigations can be initiated internally through our office or by a third party complaint.”
McCoy and his office did not return requests for comment.
McCoy is far from the only ESG critic who has a financial or political interest in fossil fuel companies.

Texas’ state comptroller, Glenn Hegar, argued in letters to money managers last year that he believes firms such as BlackRock, HSBC and UBS are boycotting the energy industry, saying in a statement at the time that he believes “environmental crusaders” have created a “false narrative” that the economy can transition away from fossil fuels. Hegar co-signed an open letter in 2021 with other state financial officers that was addressed to the U.S. banking industry and defended the fossil fuel industry.
“We will each take concrete steps within our respective authority to select financial institutions that support a free market and are not engaged in harmful fossil fuel industry boycotts for our states’ financial services contracts,” the letter reads.
He also co-signed the 2022 letter to Biden from a slate of other state financial officers defending the fossil fuel industry.
Hegar has since escalated his campaign against the institutions. Hegar sent letters to fellow state money managers arguing that they have not done enough to cut ties with BlackRock and other firms that he said boycotted the oil and gas industry, Bloomberg reported in February.
In the lead-up to his anti-ESG push, Hegar owned stock in the oil and gas industry. In 2021, the Texas comptroller and his spouse owned between 100 and 499 shares of Devon Energy and up to 99 shares of ConocoPhillips, according to his latest financial disclosure.
His financial records from all of the previous years since he became state comptroller in 2015 do not show any stock in these two companies or in the fossil fuel industry at large.
Hegar’s political ambitions have also seen a boost from the oil and gas industry — a dominating force in Texas. During his 2022 reelection, Hegar received donations from a range of PACs and executives from the oil and gas business.
His campaign received $10,000 last year from Ben “Bud” Brigham, the chairman of oil and gas development company Brigham Exploration, according to state campaign finance records. The PACs of Chevron, ConocoPhillips, Devon Energy, Calpine Corp. and Valero Energy were among Hegar’s fossil fuel donors during his run for reelection last year, according to state records.
Hegar and his office did not return requests for comment.

Jimmy Patronis, Florida’s chief financial officer, has been railing against ESG investment standards since around the time he was reelected to the position in November. Patronis was also among the co-signers of the 2022 letter to Biden defending the fossil fuel industry.
By December, Patronis announced that the Florida Treasury would start divesting $2 billion of assets managed by BlackRock. In an interview on CNBC’s “Squawk Box” in February, Patronis explained the decision.
“The bottom line: I’m seeing dollars are being siphoned off. I’m seeing individuals, like [BlackRock CEO Larry] Fink and others that are using the state of Florida’s money for a social agenda,” he said.
He added: “I just care about returns. And I’m not seeing that.”
Heading into 2022, he also had a financial interest in the fossil fuel industry.
Patronis owned 100 shares combined of Exxon Mobil and Chevron — the two largest gas companies in the world — at the end of 2021, according to his most recent publicly available disclosure.
His personal interest in fossil fuel companies has grown in recent years. In 2018, he disclosed only about 10 shares of Exxon and did not list any Chevron stock.
The document was the first time since 2018 that Patronis listed investments in the sector.
Frank Collins III, the state’s deputy chief financial officer, told CNBC in a statement that Patronis believes ESG efforts are part of a campaign to decimate the oil and gas industry. He said Patronis does not personally make trading or investment decisions for the state’s retirement systems.
“The CFO wants great returns for those in Florida’s retirement funds, nothing else. While the ESG movement has been on a campaign to erase America’s oil and gas industry from the map, those industries were making returns for investors,” Collins said. More

NBCUniversal CEO Jeff Shell is out.
“I had an inappropriate relationship with a woman in the company, which I deeply regret,” Shell said in a statement.
Shell’s executive team will start reporting to Comcast President Mike Cavanagh.

Jeff Shell, CEO of NBCUniversal, walks to lunch at the Allen & Company Sun Valley Conference on July 07, 2022 in Sun Valley, Idaho.
Kevin Dietsch | Getty Images

Jeff Shell left his role as NBCUniversal CEO on Sunday after he admitted an “inappropriate relationship” with a woman in the company, corporate parent Comcast announced.
“Today is my last day as CEO of NBCUniversal. I had an inappropriate relationship with a woman in the company, which I deeply regret. I’m truly sorry I let my Comcast and NBCUniversal colleagues down, they are the most talented people in the business and the opportunity to work with them the last 19 years has been a privilege,” Shell said in a statement.

Comcast hired outside counsel to begin an investigation following a complaint. The complaint was filed by the woman with whom Shell said he had an “inappropriate relationship,” according to people familiar with the matter. They declined to be named due to the sensitive nature of the developments.
A company email said Shell’s team will report to Comcast President Mike Cavanagh. The company hasn’t been interviewing or searching for a replacement, and has no plans to do so immediately, said a person close to the matter. Shell, as well as other leaders at NBCUniversal, have already been reporting into Cavanagh for some time and he knows the business well, the person said.
“We are disappointed to share this news with you. We built this company on a culture of integrity. Nothing is more important than how we treat each other. You should count on your leaders to create a safe and respectful workplace. When our principles and policies are violated, we will always move quickly to take appropriate action, as we have done here,” Cavanagh and Comcast CEO Brian Roberts said in a separate statement Sunday.
Roberts will also get more involved with the NBCUniversal business alongside Cavanagh, the person said.
Shell, who is married, took over as CEO of NBCUniversal in January 2020. He oversaw the company’s theme parks, its Peacock streaming service, sports production operations, television stations group, and entertainment and news television networks like NBC News.

Much of his time as CEO was shaped by the Covid pandemic, which forced the U.S. and much of the world to shut down weeks into his new position. During that time theme parks and movie theaters were shuttered, and the entertainment industry was upended as film and TV production shut down.
Shell, who succeeded Steve Burke, ushered in the launch of Peacock in mid-2020, NBCUniversal’s answer to the streaming wars. While Peacock was formulated under Burke, the streaming service grew and added more subscribers and content with Shell at the helm.
Peacock’s losses have weighed on NBCUniversal’s overall business. During the company’s last earnings call, Cavanagh said Peacock’s 2022 losses were in line with its earlier outlook of $2.5 billion. Comcast has said it expects Peacock’s losses to be up to around $2 billion in 2023. Comcast is due to report earnings Thursday. Shares of Comcast are up about 8% so far this year.
Just months after taking the CEO post, Shell reshaped NBCUniversal’s business and broke down the fiefdoms in the TV segment, with the aim of streaming and traditional TV working more closely together.
As part of the restructuring, layoffs took place that had been expected to effect less than 10% of the then-35,000 full-time employees. Cuts had been made across all of NBCUniversal’s business segments.
NBCUniversal has also assessed its portfolio of cable TV networks under Shell. In 2021, the company shut down NBC Sports, shifting much of its sports programming to USA Network and Peacock. Peacock has also become the streaming home of the Olympics.
During the same time, longtime NBCUniversal executive Ron Meyer left the company after disclosing he was under extortion threat due to a private settlement he reached with a woman after an extramarital affair.
At the time, Shell informed employees of Meyer’s exit, saying, “Ron Meyer informed NBCUniversal that he had acted in a manner which we believe is not consistent with our company policies or values.”
Shell had risen through the ranks of Comcast and NBCUniversal over the years.
One of his earliest roles was as president of Comcast’s programming group, where he managed national and regional TV networks, including E! He had also previously served as the chairman of NBCUniversal International, and later served as the chairman of the Universal Filmed Entertainment Group from 2013 to 2019. Before taking the helm as CEO, Shell was chairman of NBCUniversal Film and Entertainment.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC. More

Bed Bath & Beyond filed for bankruptcy protection.
The struggling home goods retailer has been warning of a potential bankruptcy since early January. 
The company’s 360 namesake stores and 120 buybuy Baby locations will remain open as it begins to wind down the business and liquidate its assets

A “Store Closing” banner on a Bed Bath & Beyond store in Farmingdale, New York, on Friday, Jan. 6, 2023.
Johnny Milano | Bloomberg | Getty Images

Bed Bath & Beyond on Sunday filed for Chapter 11 bankruptcy protection after it failed in several last-ditch efforts to raise enough money to keep the company alive.
The beleaguered home goods retailer has been warning of a potential bankruptcy since early January, when it issued a “going concern” notice that it may not have the cash to cover expenses after a dismal holiday season. Shares of the company closed at 29 cents Friday, giving it a market value of $136.9 million. The stock is down about 88% this year. Last April, it was trading around $20 a share.

The company’s 360 namesake stores and 120 Buybuy Baby locations will remain open as it begins to wind down the business and liquidate its assets. But it has filed motions in New Jersey bankruptcy court asking permission to auction the two brands, the company said in a release. It has already committed to closing all of its Harmon FaceValue stores.
As of late November, Bed Bath had about $4.4 billion in assets and $5.2 billion in debts, court filings show. Alongside a long list of creditors, including vendors like Pinterest, Keurig and Blue Yonder, it owes the most to BNY Mellon at $1.18 billion, the documents show.
“Millions of customers have trusted us through the most important milestones in their lives – from going to college to getting married, settling into a new home to having a baby. Our teams have worked with incredible purpose to support and strengthen our beloved banners, Bed Bath & Beyond and buybuy BABY,” CEO Sue Gove said in a statement.
Sixth Street has agreed to lend Bed Bath $240 million in debtor-in-possession financing so the company can have the cash flow necessary to support operations through the bankruptcy process. It said it plans to continue to pay employees wages and benefits, maintain customer programs and honor obligations to vendors.

The downward spiral

Bed Bath has been hanging on by a thread since January but has refused to go down without a fight. It secured what was then-considered a Hail Mary stock offering in early February that was expected to infuse more than $1 billion in equity into Bed Bath, but the plan faltered and brought in only $360 million, the company said.

At the end of March, Bed Bath announced another stock offering it hoped would bring in $300 million, but that news sent the share price tumbling and it struggled to raise the funds it hoped the offering would provide. As of April 10, the company had sold approximately 100.1 million shares and raised only $48.5 million.
In filings, the company warned if it didn’t raise the anticipated proceeds from the offering, it would likely have to file for bankruptcy protection.

Days after the second stock offering was announced, Bed Bath said it had partnered with liquidator Hilco Global to boost its inventory levels. Under the agreement, Hilco subsidiary ReStore Capital agreed to buy up to $120 million in merchandise from the company’s key suppliers after relationships with Bed Bath’s vendors soured because of its liquidity issues.
However, the plans ultimately proved futile.
The retailer has struggled to maintain relationships with its vendors and has been grappling with low inventory levels, lagging sales and a rapidly dwindling cash pile. 
Going into the holiday season, Bed Bath had difficulty keeping its shelves stocked and because of its liquidity issues, some vendors began asking for prepayments, the company said in securities filings. 
Gove had been leading the company through an attempted turnaround she hoped could save the business, but those efforts coincided with high inflation that affected consumer spending while rising interest rates slowed the housing market. 
Plus, consumers who had spent 2020 and 2021 staying at home and updating their living spaces amid the pandemic were now spending on travel, eating out and other out-of-home experiences. 
In mid-January, the company was looking to find a buyer willing to keep it afloat with an infusion of cash. Soon, though, Bed Bath revealed in a securities filing that it didn’t have enough cash to pay its debts and had defaulted on its credit line with JPMorgan. 
The company was able to make its interest payments using funding gained from the first stock offering, but at the time it warned it would “likely” have to file for bankruptcy and see its assets liquidated if the deal didn’t go as planned.
The company had loans with JPMorgan and Sixth Street that were reduced in late March after its second stock offering was announced. At the time, its total revolving commitment decreased from $565 million to $300 million and its revolving credit facility was reduced from $225 million to $175 million. Under the reduced credit agreements, Bed Bath was on the hook for monthly interest payments.
The company said it was attempting to lower costs by reducing capital expenditures, closing stores and negotiating lease deals but warned in filings the efforts “may not be successful.” 
At a popular Bed Bath outpost in New York City, a since laid-off staffer recently told CNBC that workers were standing around not knowing what to do after the company suddenly cut off in-store pickup and deliveries at the location. The worker was told liquidators would be coming the following day and soon learned employees wouldn’t receive severance after more than two decades with the company.
“It was just so fast,” the worker said.  More

McDonald’s, Chipotle Mexican Grill and Domino’s Pizza are among the restaurant companies reporting their earnings next week.
Investors are anticipating strong first-quarter results, but the rest of the year may be rougher for the restaurant industry.
Consumers have been pulling back on restaurant spending, and a recession is expected later this year.

Pedestrians carry McDonald’s bags in New York, US, on Wednesday, April 6, 2023. 
Victor J. Blue | Bloomberg | Getty Images

As restaurants prepare to present their first-quarter earnings, investors are anticipating strong results.
But the rest of the year may prove bumpier for the sector.

McDonald’s, Chipotle Mexican Grill and Domino’s Pizza will all announce quarterly results next week. The following week, Starbucks, Burger King’s parent company Restaurant Brands International and Taco Bell’s owner Yum Brands are due to report their results.
When restaurants released their fourth-quarter reports in February, many touted impressive sales growth in January. But those results faced easy comparisons to weak sales a year earlier, when Covid omicron outbreaks caused staffing shortages and forced more consumers to stay home.
The industry saw less impressive growth in February and March. Same-store sales rose 6.8% in February and 3.2% in March, compared with January’s increase of 14.1%, according to Black Box Intelligence, which tracks restaurant industry metrics.
Fast-casual and casual-dining restaurants saw the biggest sales declines month over month, according to Bank of America data, based on its customers’ credit and debit card transactions.
While inflation accelerated over the past year, investors worried about consumers’ willingness to spend at restaurants. Some segments, like fast food and coffee shops, usually fare better during tough economic times, because of their relatively cheap prices and perception of being an affordable luxury.

But even as inflation cools, some diners are still pulling back their restaurant spending.
Investors will likely look to April for a better idea of consumer-spending trends, Bank of America Securities analyst Sara Senatore wrote in a research note published Wednesday.
But even if consumers’ buying habits hold steady, restaurants’ same-store sales growth won’t look as impressive for the rest of the year as the comparable numbers from a year ago become harder to top.
The first quarter of this year “is likely the last quarter of outsized pandemic-era comps,” Morgan Stanley analyst Brian Harbour wrote in a note to clients on Monday.
Starting in the second quarter, restaurants will face comparisons to last year’s sales bump driven by double-digit price increases, so they’ll have to depend on higher traffic to drive sales growth. Weak traffic numbers have been an ongoing issue for many restaurants, with some notable exceptions like McDonald’s.
Companies may also hold off on hiking their sales forecasts despite a strong first quarter, given the growing consensus that a recession will occur later in 2023, Stifel analyst Chris O’Cull said in a research note on Friday.
Kevin McCarthy, portfolio manager of Neuberger Berman’s Next Generation Connected Consumer ETF, acknowledged that his outlook on restaurants is more negative than it has been for awhile. He said McDonald’s and Chipotle were two names that can play offense and gain market share, in spite of the tough environment.
The relatively high valuations for restaurant stocks bring a downside for the industry, McCarthy said. McDonald’s, Starbucks, Chipotle, Papa John’s and Yum are all trading at more than 30 times their price-to-earnings ratio, according to Factset data.
“Valuation isn’t cheap anywhere. It’s probably a standard deviation above anything that I would consider to be value. So we’re not value sniffing, and we don’t really have growth,” McCarthy said.
Even strong first-quarter results could weigh on restaurant stocks as a result, especially if executives stick to their conservative forecasts or strike a vague tone on conference calls with analysts.
Morgan Stanley’s Harbour wrote that stocks could fall even on solid results “if the path forward is less clear.” More

The last two weeks have crystalized the divergence of HBO and Netflix.
Warner Bros. Discovery is attempting to wall off HBO from the broader Max streaming service.
Netflix is leaning into what it sees as its competitive advantage: broad breadth of audience and programming.

Getty Images

A decade ago, then-Netflix chief content officer — and now co-CEO — Ted Sarandos told GQ, “‘The goal is to become HBO faster than HBO can become us.”
But, to quote HBO’s “The Wire,” “The thing about the old days: they the old days.”

Today, the apparent goal for both companies is to avoid becoming one another.
The past two weeks have crystalized the media giants’ diverging priorities. Parent company Warner Bros. Discovery decided to remove HBO from the name of its flagship Max streaming service to protect the HBO brand from becoming … Netflix. Rather than risk diluting HBO’s prestige brand with oodles of reality TV programming from Discovery+, Warner executives want HBO to stay pristine.
“HBO is HBO. It needs to stay that way,” Warner Bros. Discovery head of streaming JB Perrette said at an April 12 event unveiling the new Max brand. “We will not push it to the breaking point by forcing it to take on the full breadth of this new content proposition had we kept the name in the service brand.”
In a not-so-subtle shot at Netflix, HBO CEO Casey Bloys touted Max by highlighting its brand strength.
“We’re not a giant undifferentiated blob of programming,” he said at the event.

Protecting HBO, rather than expanding it, hasn’t always been the priority. Under the ownership of AT&T, then-WarnerMedia CEO (and now AT&T CEO) John Stankey appeared comfortable leaning on the HBO brand to challenge Netflix. This was the driving force behind making HBO Max — combining HBO’s programming with other original content and library programming from the WarnerMedia catalog. Stankey believed HBO couldn’t compete against Netflix on its own because it was too limited in scope.

John Stankey, AT&T CEO speaks at the Boston College Chief Executives Club luncheon in Boston, Massachusetts, March 24, 2023.
Brian Snyder | Reuters

“We need hours a day,” Stankey said at an internal town hall in 2018 after AT&T closed its acquisition of Time Warner, HBO’s parent company. “It’s not hours a week, and it’s not hours a month. We need hours a day. You are competing with devices that sit in people’s hands that capture their attention every 15 minutes.”
That sentiment didn’t sit well with HBO chief Richard Plepler, who would leave the company just months after the town hall. Plepler’s mantra, which he often repeated, was: “More is not better. Only better is better.” 
AT&T would merge WarnerMedia with Discovery in a transaction that closed last year. Warner Bros. Discovery CEO David Zaslav will still chase Netflix, but he won’t be doing it by expanding HBO or its brand.

Netflix’s shift from HBO

Meanwhile, Netflix seems distinctly focused on delivering content that has as wide of an audience as possible. This is far from becoming HBO, which was Netflix’s goal in and around 2013. At the time, Netflix was just beginning to dabble in original content, bidding against HBO for shows such as the Kevin Spacey-led drama “House of Cards.” When Netflix hit again with the drama “Orange Is the New Black,” Sarandos seemed on his way to making Netflix the new HBO.

But as the years went by, Netflix’s ambitions grew. Investors cheered on more spending. Simply buying prestige shows seemed like small potatoes. HBO’s U.S. audience was typically about 35 million subscribers, and Netflix quickly blew past that mark as it built a global streaming service whose target became the entire traditional pay-TV ecosystem rather than simply HBO.
Netflix said this week it ended the first quarter with more than 232 million global subscribers.
But the importance of making prestige shows to compete with HBO appears to be less and less essential to Netflix with every year. It’s also fair to argue Netflix hasn’t had the same hit rate as HBO when it comes to making prestige TV shows. From 2013 on, HBO has won dozens more major Emmys than Netflix.

Ted Sarandos attends the 94th Oscars at the Dolby Theatre in Hollywood, California on March 27, 2022.
Angela Weiss | AFP | Getty Images

“When we talk about our content, it sometimes sounds like a laundry list,” Sarandos said this week during Netflix’s earnings conference call. “Everyone has remarkably varied taste that you have to have very different things for different fans, and that’s what we are good at doing at scale.”
Netflix has decided its competitive advantage is its breadth of programming. Sarandos told The New Yorker earlier this year that Netflix’s new strategy is to function as “equal parts HBO and FX and AMC and Lifetime and Bravo and E! and Comedy Central.”
Ten years after Sarandos’ quote to GQ, it’s clear HBO won’t become Netflix, and Netflix won’t become HBO. And that’s fine with both of them.
WATCH: Netflix’s password sharing is just a form of price increasing, says MMTN’s Mark Douglas More

A fascinating case study on the exercise of power within an organisation has just reached a conclusion in Britain. Dominic Raab resigned as the country’s deputy prime minister and justice secretary on April 21st, after an independent investigation into whether he is a workplace bully found that he had crossed a line. The civil servants who lodged complaints against him will feel justified. His supporters, and the man himself, contend that his departure sets an unhealthily low bar for being found guilty of bullying. Adam Tolley, the barrister who conducted the probe, found that Mr Raab had displayed “unreasonably and persistently aggressive conduct” while he held the job of foreign secretary. Mr Tolley also concluded that Mr Raab’s style at the ministry of justice was sometimes “intimidating” and “insulting”. Mr Raab may not have intended to upset but that is not enough to get him off the hook: the British government’s own website says that bullying is “behaviour that makes someone feel intimidated or offended”. The context of the Raab affair is unusual. Media interest is high, and the relationship between civil servants and British government ministers is a very particular one. But the question of what distinguishes someone who merely sets high standards, which is Mr Raab’s version of events, from someone who is a bully is of interest in workplaces everywhere. In a survey published in 2021 around 30% of American workers, for example, said they had direct experience of abusive conduct at work; in two-thirds of cases, the bully was someone above them in the food chain. It is hard to read the report and not feel an unexpected twinge of sympathy for Mr Raab. Unfashionable though it is to admit it, fear is a part of organisational life. Hierarchies hand managers the power and remit to weed out poor performers. Driven, demanding types are often the people who make it up the ladder. Mr Raab is definitely that. Mr Tolley describes an exacting boss: hard-working, impatient and direct. He interrupts when he is not getting a straight answer. He does not want to spend time rehearsing arguments that have already been aired. If he thinks work falls short of the required standard, he says so. Mr Raab shares many of the attributes of a desk light: he is bright, glares a lot and is not known for empathy. But he appears to be motivated principally by achieving better outcomes. The investigation found no evidence that Mr Raab shouted or swore at people, or that he targeted individual civil servants. Mr Tolley was unpersuaded by allegations from officials that he made threatening physical gestures, whether banging the table loudly or putting his hand out towards someone’s face to stop them talking. The “hand out” gesture was not as emphatic as alleged, writes the lawyer; the banging was unlikely “to cause alarm”. If Mr Raab is a bully, he is not nearly as aggressive as some media reporting had implied.Yet that twinge of sympathy passes, as twinges are wont to do. The number and consistency of complaints about Mr Raab is itself evidence that something was genuinely amiss. The civil servants who spoke out about him had worked for other ministers before; they were not greenhorns. Mr Tolley is persuaded that the complainants acted in good faith, despite protests from Mr Raab that he is the victim of “activist civil servants”. Mr Tolley’s most acute observation is to recognise that working life is not a series of discrete incidents, each bearing no relation to the other. Some of the complaints people had about Mr Raab might seem innocuous in isolation. A propensity to bang the table or interrupt people is discourteous but plenty of bosses do the same. Cutting people off in meetings would have mattered less if he was not also the sort of person to describe work he received as “utterly useless” and “woeful”. Bullying can be a one-off, but more often it is incremental: stresses accumulate, anxiety builds, atmospheres form. And even if you think Mr Raab has been unfairly labelled as a bully, it is hard to overlook another problem—his effectiveness as a manager. If enough people think you are a bad boss, you are a bad boss. If employees try to avoid you, the pool of talent available to you shrinks. Mr Tolley himself, who has done a scrupulously fair job, clearly found the deputy prime minister trying. He describes Mr Raab’s approach to the investigation as “somewhat absolutist”. That sounds suspiciously like British-lawyer-speak for “he is a complete nightmare”. ■Read more from Bartleby, our columnist on management and work:What makes a good office perk? (Apr 20th)How to be a superstar on Zoom (Apr 13th)The resistible lure of the family business (Apr 5th)Also: How the Bartleby column got its name More

Eli Lilly CEO David Ricks, Sanofi CEO Paul Hudson and Novo Nordisk CEO Lars Fruergaard Jorgensen will testify before the Senate Health Committee, Sen. Bernie Sanders of Vermont said.
Those companies control 90% of the market for insulin, which treats diabetes. A quarter of all U.S. health-care spending is on people with diabetes.
Top executives from the three major pharmacy benefit managers CVS Health, Express Scripts and Optum RX will also testify.

In this photo illustration, an insulin pen manufactured by the Novo Nordisk company is displayed on March 14, 2023 in Miami, Florida.
Joe Raedle | Getty Images News | Getty Images

The top executives of the three drug companies that control 90% of the global insulin market will testify May 10 before the Senate Health Committee on lowering prices of their diabetes drugs, panel Chairman Sen. Bernie Sanders said Friday.
Those companies — Eli Lilly, Novo Nordisk and Sanofi — had announced in March that they will slash prices of their most widely used insulin products by 70% or more.

Sanders on Friday called that move an important step forward that was the result of “public outrage and strong grassroots efforts.”
But the Vermont independent added that Congress must ensure that insulin, whose price has increased by more than 1,000% since 1996, is affordable for everyone.
“We must make certain, however, that those price reductions go into effect in a way that results in every American getting the insulin they need at an affordable price,” Sanders said in a statement announcing the scheduled testimony of Eli Lilly CEO David Ricks, Sanofi CEO Paul Hudson and Novo Nordisk CEO Lars Fruergaard Jorgensen.
The companies’ versions of insulin cost at least $275 before the announced price slashes, Sanders noted.
Eli Lilly declined to comment when asked about the scheduled hearing. A Sanofi spokesperson said the company supports efforts to lower costs and believes other parts of the health-care system need to do more to help patients. Novo Nordisk said its CEO looks forward to “a productive and collaborative discussion about this important issue.”

Top executives from the three major pharmacy benefit managers CVS Health, Express Scripts and Optum Rx also testify, according to Sanders’ office. Those executives are David Joyner, president of CVS Health pharmacy services; Adam Kautzner, president of Express Scripts; and Heather Cianfrocco, CEO of Optum Rx.
Pharmacy benefit managers are the middlemen who negotiate drug prices with manufacturers on behalf of health insurance plans. PBMs have come under criticism for allegedly inflating drug prices and not passing on all the discounts they negotiate to consumers.

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The Health and Human Services Department estimates that 17% of patients using insulin in 2021 had to ration the drug due to high costs.
About 19% of insulin users with private insurance rationed the drug, and 29% of the uninsured who use insulin did so, according to HHS.
The decision by the drugmakers to slash insulin prices came a month after President Joe Biden called in his State of the Union address for Congress to cap insulin prices at $35 per month.
Biden’s Inflation Reduction Act introduced that cap for people on Medicare, the government-run health coverage program for primarily senior citizens, but the law did not include people with private insurance.
More than 2 million patients with diabetes who take insulin are privately insured, according to HHS.
And about 150,000 patients who take insulin do not have insurance, the department says.
On Thursday, two senators, Jeanne Shaheen, D-N.H., and Susan Collins, R-Maine, introduced bipartisan legislation that would require private health insurance to cap prices at $35 per month for one of each insulin type and dosage form. The bill includes other measures to reduce prices.
Insulin types include rapid, short, intermediate and long acting, as well as pre-mixed. Dosage forms include vials, pens and inhalers. More

Four of the suspended players were from the Detroit Lions, which released the two players on its roster who were suspended indefinitely.
Shaka Toney of the Washington Commanders was also suspended indefinitely.
The NFL’s policy bars anyone in the league from engaging in any kind of gambling in league facilities or venues.

Nick Laham | Getty Images

Five NFL players have been suspended for violating the National Football League’s gambling policy, the league announced today.
The policy bars anyone in the NFL from engaging in any kind of gambling in league facilities or venues, including practice facilities. The league said its review uncovered no evidence that inside information was used.

No games were compromised as a result of the gambling, the NFL added.
Three players — Quintez Cephus and C.J. Moore of the Detroit Lions, and Shaka Toney of the Washington Commanders — will be suspended indefinitely, at least until the end of the 2023 season, for betting on NFL games last season.
Those players will be able to petition for reinstatement at the end of the season.
Two other Lions athletes — Stanley Berryhill and Jameson Williams — are suspended from playing in the first six regular season games. They will be able to participate in offseason and preseason activities.

Quintez Cephus #87 of the Detroit Lions catches the ball for a first down during the second quarter against the Minnesota Vikings at U.S. Bank Stadium on October 10, 2021 in Minneapolis, Minnesota. (Photo by Elsa/Getty Images)
Elsa | Getty Images Sport | Getty Images

The NFL’s crackdown comes as 33 states, including Michigan, and Washington, D.C., have launched legal betting markets since a landmark 2018 U.S. Supreme Court case paved the way for states to offer legal sports wagering.

Earlier this week, major pro leagues — the NFL, NBA, NHL, MLB, WNBA, NASCAR and MLS — announced they were joining media companies NBCUniversal and Fox to form a coalition that aims to regulate sports-betting advertising as it floods television, internet and print media.
Soon after the suspensions were announced, the Detroit Lions said they were releasing Cephus and Moore. According to ESPN, the Lions became aware of the NFL’s investigation “about a month ago.”
“We are disappointed by the decision making demonstrated by Stanley and Jameson and will work with both players to ensure they understand the severity of these violations and have clarity on the league rules moving forward,” Detroit Lions executive vice president and general manager Brad Holmes said in a statement.
The Commanders said the team is aware of Toney’s suspension. “We have cooperated fully with the NFL’s investigation since receiving notice and support the league’s findings and actions,” the team said in a statement.

Shaka Toney #58 of the Washington Commanders stands during the national anthem against the Houston Texans at NRG Stadium on November 20, 2022 in Houston, Texas.
Cooper Neill | Getty Images Sport | Getty Images

Toney’s suspension is the latest hit for the Commanders. Last week, the district’s attorney general said the Commanders will pay $625,000 to settle allegations that the organization failed to return fans’ tickets deposits. 
Former D.C. Attorney General Karl Racine, who sued the Commanders last year, alleged that since 1996 the football team has promised to return fans’ security deposits for premium seating but instead pocketed the money and spent it.
A Commanders spokesperson said in a statement the team hasn’t collected security deposits in more than a decade and has been “actively working to return any remaining deposits since 2014.”
Disclosure: NBCUniversal is the parent company of CNBC. More