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Boston Celtics’ majority owner puts team up for sale…

1 July 2024
by admin

A “Believe in Boston” flag flies during the duck boat parade celebrating the Boston Celtics’ 18th NBA championship.

Stan Grossfeld | Boston Globe | Getty Images

The 2024 National Basketball Association champions are up for sale.

The Boston Celtics’ ownership group announced Monday that it plans to sell the team, according to a statement posted to the Celtics’ account on social media site X.

The controlling family of the ownership group, Boston Basketball Partners LLC, said it intends to sell all of its shares in the team “for estate and family planning consideration.”

The sale of a majority stake is expected to be completed by the end of 2024 or early 2025, with the remainder of the sale closing in 2028, according to the statement.

As sports franchise valuations soar, the Celtics could fetch a particularly high price. The team is among the most successful and most widely followed in U.S. professional sports, and won its NBA record 18th championship last month.

This, plus the soaring cost of sports media rights, will likely lead to a valuation close to — if not more than — the record $4 billion price tag the NBA’s Phoenix Suns received in 2023, sports consultants said Monday.

Sports valuations, media rights climb

The Celtics became the latest NBA champions after beating the Dallas Mavericks in Game 5 of the Finals in June. It was the team’s second championship under Grousbeck’s ownership.

U.S. professional sports teams, especially those in the National Football League and NBA, have been garnering high valuations when owners sell a stake, if not the entirety of the team.

In 2023, the NBA’s Phoenix Suns and WNBA’s Phoenix Mercury were sold to Mat Ishbia for a record valuation of $4 billion.

Meanwhile, the media rights for the leagues have never been more lucrative, as live sports beckon the biggest TV audiences.

Negotiations surrounding the NBA’s media rights are ongoing with an announcement expected soon. Comcast‘s NBCUniversal is expected to pay $2.5 billion per year, with Disney‘s ESPN and Amazon’s Prime Video among the other bidders, CNBC has previously reported.

— CNBC’s Jessica Golden contributed to this article.

Disclosure: NBCUniversal is the parent company of CNBC.

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Rivian secures up to $5 billion from Volkswagen, shares…

26 June 2024
by admin

Workers assemble second-generation R1 vehicles at electric automaker Rivian’s manufacturing facility in Normal, Illinois, on June 21, 2024.

Joel Angel Juarez | Reuters

Volkswagen Group plans to invest up to $5 billion in electric vehicle startup Rivian, starting with an initial investment of $1 billion.

The additional $4 billion is expected by 2026. It includes plans for $1 billion each in 2025 and 2026, followed by $2 billion in 2026 related to an expected joint venture to create electrical architecture and software technology, according to a release by the automakers Tuesday.

Shares of Rivian soared more than 50% during after-hours trading Tuesday, two days ahead of an investor event for Rivian, which has been under pressure from Wall Street due to its cash burn and significant losses. Rivian stock closed Tuesday at $11.96 a share, down roughly 49% in 2024.

The initial $1 billion from Volkswagen will be in the form of a convertible note, which could be converted to Rivian shares on or after Dec. 1, the release said.

The deal will help Rivian on its journey to become cash flow-positive, Rivian CEO and founder RJ Scaringe said Tuesday night during an investor call.

He noted the capital is expected to carry the company through the production ramp-up of its smaller R2 SUVs at its plant in Normal, Illinois, starting in 2026, as well as production of the midsize EV platform at a plant in Georgia, where Rivian paused construction earlier this year.

Volkswagen investing $5 billion in Rivian

“We believe the opportunity ahead is significant. This deal is possible because we’re focused on vertically integrating our network architecture, topology, V-CPUs, and associated software platforms,” he said. “I’ve spoken about the importance of these platforms in the past, and how difficult it is to replicate them.”

Volkswagen is expected to use Rivian’s electrical architecture and software stack for vehicles beginning the second half of the decade, according to Scaringe. He said the joint venture does not include anything with battery technologies, vehicle propulsion platforms, high voltage systems or autonomy and electrical hardware.

Scaringe said the expected joint venture will be led by a “balanced” leadership group, including two co-CEOs, with Rivian appointing the technical leadership and Volkswagen appointing a chief operating officer.

The closing of the joint venture is expected in the fourth quarter of this year, according to Rivian Chief Financial Officer Claire McDonough.

A provided image of Oliver Blume, CEO of Volkswagen Group and RJ Scaringe, founder and CEO of Rivian, as the companies announce joint venture plans on June 25, 2024.

Courtesy: Business Wire

Volkswagen will be the second legacy automaker to take a stake in the California-based company. Ford Motor was among Rivian’s largest stakeholders, at roughly 12%, alongside Amazon when Rivian went public in 2021. The Detroit automaker exited Rivian in 2023 after walking back a plan to codevelop EVs with the company.

The Volkswagen-Rivian partnership comes as automakers shift strategies amid slower-than-expected adoption of EVs.

Pietro Zollino, head of VW corporate communications, said the deal with Rivian does not change the German automaker’s plans to build a $2 billion EV plant for its announced Scout Motors trucks and SUVs in South Carolina.

“Our commitment towards Scout has not changed at all,” he said in an email Tuesday night.

Rivian has been on a cost-cutting mission for months. It has trimmed staff, retooled its Illinois plant to increase efficiencies and paused construction of a new multibillion-dollar factory in Georgia. That last measure is expected to save more than $2.25 billion in capital spending, including the impact of starting production of Rivian’s upcoming, less expensive R2 vehicles at its plant in Illinois instead of Georgia during the first half of 2026.

McDonough said Volkswagen’s investment is expected to carry the company through the ramp-up of its new, less expensive R2 vehicles in Illinois as well as the midsize EV platform at its plant in Georgia.

The EV maker reported a loss of $1.45 billion during the first quarter of this year, as it retooled its plant in Normal, Illinois, to launch updated versions of its R1T pickup and R1S SUV EVs ahead of its next-generation vehicles in 2026.

Rivian reported $7.86 billion in cash, cash equivalents and short-term investments to end March, with more than $9 billion in total liquidity.

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Experts say Shein’s U.S. IPO is all but dead

21 June 2024
by admin

The Shein logo can be seen on a smartphone, while the Chinese online retailer’s website is open on a laptop.

Monika Skolimowska | Picture Alliance | Getty Images

China-founded e-commerce company Shein’s hopes of going public in the United States are growing slimmer by the day, according to experts, as rising tensions between Beijing and the U.S. roil business and trade.

The company, last valued at $66 billion, confidentially filed to go public in the U.S. in November. Since then, it has faced resistance as it tries to join the American retail sphere, including through numerous rejected attempts to become a member of the National Retail Federation, the industry’s largest trade association, CNBC previously reported.

The e-commerce upstart filed to go public while becoming a household name in the U.S. by offering low prices and a facility to offer new styles quickly. The company is poised to take major market share from U.S. retailers, particularly Gap, TJX Companies and Macy’s, according to UBS data from last year, and continues to challenge Target, Walmart and Amazon.

But as political resistance to its U.S. IPO mounts, Shein is seemingly shifting gears, as it reportedly prepares to confidentially file for a £50 billion offering in London in the coming weeks. The company likely would have preferred to list in the U.S., because the offering could bring a higher valuation than in the U.K., said Angelo Bochanis, an IPO analyst at Renaissance Capital, which provides pre-IPO research and IPO-focused ETFs.

But its path hasn’t been easy, as federal and state officials call on the Securities and Exchange Commission to scrutinize or even block the initial public offering in the U.S.

“Scrutinizing companies with high-profiles and roots in China is very politically in-vogue right now in the United States,” Bochanis said.

A London IPO could, in theory, be easier than a U.S. offering, according to Bochanis. With the British parliament dissolved and the London Stock Exchange “desperate for big wins” as it suffers an IPO drought, Shein could circumvent some of the hurdles that it might have otherwise faced, he said.

If Shein’s London IPO succeeds, it is unlikely to keep pursuing a U.S. offering, said University of Florida finance professor Jay Ritter, who studies IPOs.

Not all China-linked companies are getting tangled in the webs of rising political tensions. Chinese electric vehicle company Zeekr went public in the U.S. last month. It became one of the first prominent Chinese companies to do so in the U.S. even as the Biden administration has increasingly cracked down on Chinese-made electric vehicles.

China ties and data privacy

Shein is “one of the few” China-tied companies that have gained deep brand awareness with U.S. consumers, Bochanis said.

The size of the potential offering, and the long, high-profile process accompanying it, have helped to make Shein an attractive target for politicians from both parties who want to look tough on Beijing-linked companies.

Shein was founded in China and has since moved its headquarters to Singapore. But a good chunk of the company’s supply chain is still based in the country.

In December, the House Committee on Energy and Commerce sent a letter to Shein seeking information about the company’s user data collection and its relationship to the Chinese government, calling a potential link to Beijing a “serious risk for e-commerce, consumer safety and people’s data privacy and security.”

The panel sent a similar letter to TikTok, the popular social media platform owned by China-based parent ByteDance.

The Chinese Communist Party can by law request any Chinese-owned company to share information on its customers, according to George Washington University professor Susan Ariel Aaronson. While Shein is headquartered offshore, its manufacturing ties in China and reports that it sought Beijing’s permission to go public in the U.S. raised concerns among U.S. officials about what data it could share with the Chinese government.

That relationship helped to spark a proposed U.S. ban on TikTok. Legislation that Congress passed last month aims to force the platform to sell its U.S. assets by Jan. 19 or cease all activity in the country.

ByteDance and several creators on the platform have filed lawsuits to block the bill.

While Shein does not have access to the magnitude of data that a social media giant like TikTok has, the proposed ban has raised more doubts about a U.S. IPO for the company.

“[Congress] just showed us that if a particular Chinese-owned company is perceived to be posing a threat, they can unify and pass a law, and that’s much stronger than an executive order or presidential order,” said Antonia Tzinova, a national security attorney at Holland & Knight.

Shein shipping concerns

The political scrutiny beyond data privacy may prove more difficult for Shein to overcome.

The retailer has long been criticized for its alleged use of forced labor in its supply chain and poor working conditions for its employees.

In 2021, the United States passed the Uyghur Forced Labor Prevention Act, which prohibits companies that manufacture goods in the Xinjiang region of China notorious for its Uyghur detention camps from selling in the U.S. Although U.S. government agencies claim Shein’s supply chain has links to the Xinjiang region, the company doesn’t manufacture its own goods and instead uses China-based micro-manufacturers that make materials tougher to track.

Shein has repeatedly denied the forced-labor allegations, saying it implements a system to support compliance with the U.S. law within the company.

The company has also come under fire for its use of U.S. customs law loopholes.

Because the company doesn’t import its products in bulk to sell from a U.S. warehouse and instead ships on an order-by-order basis, it’s exempt from some of the heaviest U.S. import taxes. Rivals have criticized this practice as giving Shein an unfair competitive advantage.

— CNBC’s Gabrielle Fonrouge and Reuters contributed to this report.

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Netflix hunts for a production partner for its Christmas…

13 June 2024
by admin

Brock Purdy #13 of the San Francisco 49ers prepares to take a snap in the first quarter against the Kansas City Chiefs0 during Super Bowl LVIII at Allegiant Stadium on February 11, 2024 in Las Vegas, Nevada.

Michael Reaves | Getty Images

Netflix is trying to get ready for some football.

The streaming giant has been reaching out to broadcasters this week in the hopes of finding a partner to produce the NFL games it will air on Christmas Day this year, according to people familiar with the matter. Netflix will show two games on Christmas Day this year, followed by at least one matchup in both 2025 and 2026, the company announced last month.

This is Netflix’s first real foray into traditional live sports, driven by the company’s ambitions to grow its advertising tier. The company signed a deal earlier this year with WWE to be the home for its live “Raw” events, but Netflix dubbed that deal as “sports entertainment.” Unlike WWE, Netflix’s deal for Christmas NFL games doesn’t come with a full production team. That’s left the streamer looking for help.

Netflix has been in touch with the broadcasters that currently air NFL games, including Disney’s ESPN, Comcast’s NBCUniversal and Paramount Global’s CBS Sports, said the people familiar, who asked not to be named because the discussions have been private. Disney won’t produce the games because it already has college football obligations the same day, two of the people said.

In-depth discussions haven’t begun with the other broadcasters, but Netflix’s options may be somewhat limited.

Fox and CBS Sports already produce various games in different regions each week, which could make taking on additional games for Netflix a burden, some of the people said.

There’s also competition to consider.

Amazon inked a deal with NBCUniversal to produce its NFL games before its first season of “Thursday Night Football” in 2022, but there may be more resistance among current NFL partners to help out Netflix, according to people familiar with the matter. That’s because Netflix could be auditioning as a future long-term media rights partner for NFL games in place of a legacy media company, such as Paramount, Fox or NBC.

The NFL has an out clause in its current media contracts that allows it to select new media partners after the 2029-30 season.

Representatives for Netflix, the NFL, NBCUniversal, CBS, ESPN and Fox declined to comment.

Welcoming Netflix

Netflix announced its entry into the NFL in mid-May ahead of its Upfront presentation, when it tried to woo advertisers for its burgeoning ad-supported platform. Netflix said last month it has reached 40 million global active users for its advertising tier, which costs $6.99 per month in the U.S. and debuted in November 2022.

In May, co-CEO Ted Sarandos told CNBC that the NFL was the right fit for Netflix because it matched the streamer’s event strategy — effectively allowing Netflix to own the day. Netflix will pay the NFL roughly $75 million per game, CNBC previously reported.

For the NFL, Netflix represents the chance to reach a global, younger audience. There’s also the potential to lay the groundwork for Netflix to become a future bidder on a larger package of games.

The NFL signed long-term deals in 2021 with Disney, Paramount, NBCUniversal, Fox and Amazon for its five primary packages of games.

While there is some trepidation among current media partners to produce games for a potential rival, pressure from the league — and a hefty paycheck from Netflix — could convince broadcasters to strike a deal, according to people familiar with the matter.

“There aren’t that many players in the space who are capable of doing this at a level that you would want to trust when you’re launching as a new partner with a league as important as the NBA or the NFL,” said Shirin Malkani, co-chair of the sports industry group at law firm Perkins Coie, adding that the production side “can be a big hole for streaming partners.”

Netflix and the league are looking to mirror the partnership that Amazon’s Prime Video lined up with Comcast’s NBC Sports for “Thursday Night Football” games.

While NBC Sports’ Fred Gaudelli produced the 2022 season of “Thursday Night Football,” Amazon appointed Mark Teitelman, one of its own employees, to the role of lead game producer in 2023.

Amazon produces all of its pregame, halftime and postgame coverage, but NBC Sports handles the extensive production work that goes into an NFL game, and employs the vast majority of those workers.

Netflix is interested in finding a similar partner, according to people familiar with its plans.

If a deal can’t be made with one of the incumbents, Netflix could find other options with third-party producers. Endeavor Group Holdings’ IMG is the production partner for Major League Soccer, which is offered through Apple.

“It’s not easy to do an NFL game at a level that people are used to watching, which is a very high level and well produced,” said Jonathan Miller, chief executive of Integrated Media, which specializes in digital media investment. “But there’s a number of options out there that can pull it together without [Netflix] having a fully staffed sports division.”

Shifting to streaming

Amazon Prime Video was the first streamer to obtain exclusive rights to NFL games as the league pushed to broaden its media partners and have more streaming offerings to widen its audience.

Amazon reached its deal to carry “Thursday Night Football” in 2021 in conjunction with the rest of the media rights deals for the NFL — an 11-year media rights agreement worth over $100 billion, with an opt out clause at the seven-year mark.

Given the recent NBA media rights negotiations, which are beckoning top dollar from various media companies, many in and around the industry expect the NFL to exercise the clause and look for new partners.

Since the NFL has inked its deal, streaming services for Comcast, ESPN and Paramount have begun to simultaneously stream games, and in some cases, hosted games exclusively. Alphabet’s YouTube TV is also the new home of the “Sunday Ticket” package of games.

Sports, particularly the NFL, have been the glue holding the traditional TV bundle together — and have also proved to be a boost to streaming. NBCUniversal said in April its exclusive NFL wild-card game on Peacock helped to add, and then retain, more customers than expected.

The league has been vocal in its push to add more streaming partners in an effort to widen its audience.

That was the thinking behind the deal with Netflix to stream these Christmas Day games.

When the “Sunday Ticket” rights negotiations were underway, NFL Commissioner Roger Goodell told CNBC the longtime package offered only by DirecTV would move to streaming.

“I think that’s best for consumers at this stage,” Goodell said at the time.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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Advertisers boost spending at retailers like Walmart and Amazon…

24 May 2024
by admin

An M&M’s advertisement seen on a gas pump.

Courtesy: GSTV

The next frontier for the ad market isn’t on TV — it’s in stores and on your phone.

Television had long been the key target for advertisers, until tech companies like Alphabet and Meta-owned platforms like Facebook began to gobble up market share. While ad dollars are rapidly shifting from traditional TV to streaming, retail and consumer product companies are now taking up a significant part of the mix.

The so-called retail media networks — the advertising publishing platforms — of e-commerce, retail and consumer companies like Amazon, Walmart and Kroger are attracting billions of dollars in advertising, according to data from eMarketer and GroupM, the media investment arm of WPP, the world’s biggest advertising group.

Global retail media ad spending is expected to more than double from $114.18 billion in 2023 to $233.89 billion in 2027, according to eMarketer. Retail media is expected to represent a larger percentage of digital advertising spending, which has begun to eclipse traditional media spending, growing from 18.9% of that segment in 2023 to 25.7% in 2027, according to eMarketer.

“What we hear from brands most directly is they no longer wake up with a recipe to buy X amount of TV, X amount of social, X amount of digital. They wake up every day trying to buy growth, trying to buy outcomes for their business,” said Sean McCaffrey, president and CEO of GSTV, an on-the-go media network with over 29,000 screens at refueling points tied to convenience retail stores.

GSTV screens reach 115 million viewers per month across 49 states.

Brands are “more open-minded as to where they can find those audiences,” McCaffrey said.

“It’s the new TV for mass reach advertising,” said Mark Boidman, head of media and entertainment investment banking at Solomon Partners. “If you want to reach someone fast, it’s best to get them in a store or on your app. … It’s a 360-degree approach.”

Cookies to carts

Walmart is turning the approximately 170,000 digital screens across its U.S. stores into advertising opportunities. For example, a company that makes a snack or a beauty product can advertise in the TV aisle of the electronics department.

Walmart

The kind of advertising purchased through retail media networks is often found on in-store displays and screens, websites, mobile apps, streaming services, smart TVs and social media. Not only is it fertile ground for an advertiser to get their offerings in front of consumers looking to spend, it comes with a lot of first-party data.

The amount of data that retailers have on customers — from one-time buyers to loyalists — is extremely valuable to advertisers who want to optimize their exposure.

“If [brands] advertise with a digital ad, for example, and a customer transacts a week later in a store or club, we can connect that up for them and let them know that the ad really worked,” Walmart CEO Doug McMillon told CNBC earlier this year. “That’s the differentiating advantage that we’ve got.”

Walmart has been a particularly big player. While it’s still a new frontier for the retailer, advertising has propelled profits at the giant retailer in recent quarters. The company also recently agreed to buy TV maker Vizio in a bid to further boost its ad business.

Of the companies eMarketer tracks, Amazon was considered the biggest retail media network in the U.S., with a roughly 75% share of retail media ad revenue. Other top networks by revenue include Walmart, Instacart, eBay and Etsy.

The shift toward retail media comes as advertisers are faced with tech privacy changes that has led to a pullback in the collection of data.

Earlier this year, Google began its revamp of how it and other companies track users online, namely the use of cookies, which keep tabs on the activity of internet users so that advertisers can target them with relevant ads.

In January, Google began to restrict cookies for 1% of its Chrome browser users, with the goal of completely removing third-party cookies by the third quarter of this year. Advertisers have been grappling with how to make the transition.

Advertising and media executives note that retail media networks now dominate conversations at conferences and other gatherings, such as the Cannes Lions advertising festival. It’s often a highlight on earnings calls, too.

“[Retail media networks] have that balance with targeting and privacy and compliance. I think that’s where the money really starts shifting,” Tim Hurd, vice president of media activation at Goodway Group. “I think that’s key. These retailers have that kind of data”

Taking away from TV

Big brands that have in some cases sat out for years the TV advertising frenzy around the biggest US sporting event — the Super Bowl — are returning Sunday and spending big amid record ad prices. It’s been a bumpy couple years marked by pandemic-era restraint and political polarization, but the American football championship offers an increasingly unequalled viewership too big to pass up.

Olivier Douliery | AFP | Getty Images

The rise of retail media ads comes against a backdrop of major shifts in the media landscape. Pay-TV customer numbers and traditional TV viewership (outside of sports) continue to decline as more viewers move toward streaming.

And although ad buying in digital and streaming is rebounding, traditional TV still lags. That much was clear in the first-quarter earnings reports of media giants like Comcast’s NBCUniversal and Warner Bros. Discovery.

Disney saw a first-quarter decline in ad revenue for its traditional cable networks and Hulu, despite an increase at cable crown jewel ESPN; Warner Bros. Discovery reported a drop in ad revenue; Paramount Global got an expected boost from airing the Super Bowl; and NBCUniversal’s domestic ad revenue was flat. Streaming ad revenue for the legacy media giants, however, showed growth.

Outside of tentpole moments on TV, such as the Super Bowl and other live sports, advertisers are now strategizing on multiple fronts and divvying up spending across TV, social media, e-commerce and digital, said Goodway Group’s Hurd.

“Linear TV advertising is still declining,” said Kate Scott-Dawkins, GroupM’s global president of business intelligence, noting the last decade has seen ad revenue shift from print and radio to TV and now toward digital.

Retail media revenue grew from less than $1 billion in the U.S. a decade ago to a projected $42 billion this year — or $129.4 billion globally, said Scott-Dawkins, citing GroupM’s data, noting that brand advertising budgets may not directly shift from traditional TV into on-site retail advertising.

She added traditional TV revenue may move to smart TVs, however, informed by the data on customer spending habits that retailers can provide.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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Media giants lean on sports as Hollywood strikes still…

18 May 2024
by admin

Michael Reaves | Getty Images

Media giants relied on sports last year when they had to woo advertisers during the Upfronts meeting week at a time when a Hollywood strike and cost cutting bit into their content and star power.

This year, while stars once again graced the stages following the end of the strikes, the presentations still leaned more on sports than scripted shows.

The hangover from last year’s work pause meant some media companies had fewer series and movies to highlight during their presentations. Cost cutting from companies including Disney and Warner Bros. Discovery didn’t help matters.

Live sports remained the darling of the Upfront meetings, as it still beckons the biggest audiences, and, therefore, the most advertising dollars.

“I think [the companies] benefited in terms of earnings during the strike. And I think there was hesitance to ramp up because of all the issues of trying to understand how content expenditure was really driving return,” said Tom Rogers, Oorbit Gaming and Entertainment executive chairman and former NBC Cable president.

“There used to be this kind of automatic, where you put out a certain amount of programs for the new season and it was relatively formulaic without much sense of being able to understand how content drove profitability,” he added.

He noted two key issues for the traditional media companies: the decline of traditional TV and the increasing fees companies have to pay to air live sports.

“If you’re going to maintain a reduced level of content spending, by definition, that means your entertainment programming has to be reduced,” Rogers said.

Light on entertainment

A scene from Marvel’s Daredevil season 3 on Netflix

Source: Netflix

Disney played up trailers for the upcoming Disney+ series “Agatha All Along” and “Daredevil: Born Again,” but for its cable network FX, only highlighted the next season of the popular series “The Bear,” which also streams on Hulu. The company also announced the “Golden Bachelorette,” the next installment in the popular reality series on broadcast network ABC.

Warner Bros. Discovery put series like “House of the Dragon” and “And Just Like That” — both spinoffs of HBO series — front and center.

“A strong content slate — be it sports or entertainment — is only one piece of the puzzle, however,” said Amy Leifer, chief advertising sales officer at DIRECTV Advertising. “With the explosive growth of [ad-supported streaming], the modern TV experience is as dependent on content as it is on the ads that support it.”

Some films played a big role in the Upfronts, especially after streaming services like NBCUniversal’s Peacock got a boost from blockbusters like “Oppenheimer” recently.

Comcast’s NBCUniversal focused on the upcoming musical film “Wicked,” and the renewal of some Peacock original series.

The summer movie box-office season, which runs from the first weekend in May though Labor Day, is expected to shrink around $800 million this year as the season brings a limited and unsteady stream of blockbuster films. It follows a second quarter that lagged nearly 50% behind ticket sales seen during the same period last year.

The movie calendar is expected to ramp up in the fourth quarter, with major titles like Warner Bros.’ “Joker: Folie a Deux,” Paramount’s “Gladiator II,” Disney Animation’s “Moana 2” and Universal’s “Wicked” arriving in cinemas. Calendar 2025 and 2026 are slated to have a significant boost in titles, including features from major franchises like Marvel, Star Wars, Batman, Super Mario Bros. and rollover tickets from a third Avatar film.

Meanwhile, tech giants like Netflix and Amazon Prime Video that recently added cheaper, ad-supported tiers to their streaming platforms entered Upfronts week in full force, showcasing not only sports but also upcoming films and series.

Amazon, which now owns MGM Studios, noted the renewals and upcoming seasons of original series such as “Mr. and Mrs. Smith,” “The Boys,” and “The Summer I Turned Pretty.” Actor Jake Gyllenhaal announced a sequel to “Roadhouse,” and Will Ferrell and Reese Witherspoon discussed their film, “You’re Cordially Invited.”

Netflix, meanwhile, announced the sequel to Adam Sandler’s “Happy Gilmore,” as well as a slate of other series.

Sports domination

The Olympic Rings being placed in front of the Eiffel Tower in celebration of the French capital won the hosting right for the 2024 Summer Olympics.

Sopa Images | Lightrocket | Getty Images

The NFL once again reigned supreme at most Upfront presentations this year.

Tentpole sports programming from the Summer Olympics to the NBA — which beckon the biggest TV and streaming audiences, and vast amounts of advertising dollars — were also key parts of the presentations.

“We often hear from top clients that the significance of upfront buying has diminished outside of securing placements in live sports,” said Mike Dupree, chief revenue officer at Teads, a global premium publishing platform. “Access to quality content in an on-demand world has reduced the scarcity that historically drove the upfront model. Live sports seems to be the last bastion, as proven through rights renegotiations.”

NBCUniversal dedicated much of its presentation on the upcoming Summer Olympics in Paris. The NFL played a role in all presentations, including for the newcomer to the ad-supported streaming landscape, Netflix. It made perhaps the biggest sports splash during Upfronts week, when it was announced hours before its presentation that it reached a deal to air NFL games on Christmas Day over the next three years.

Amazon showcased Thursday Night Football, its second Black Friday game, and an upcoming wild card playoff game in January — the first ever for Prime.

“This year, we saw media giants banking on big bets like “Wicked,” the Olympics, and sports superstars like Jason Kelce to generate buzz,” said Tim Hurd, vice president of media activation at digital marketing agency Goodway Group. “There was a lot of excitement around the evolving live sports landscape and leveraging college sports, NFL games, and the Olympics as an omni-platform experience.”

Kelce, who recently retired from the NFL after 13 years with the Philadelphia Eagles, appeared at Disney’s upfront to announce he would be a commentator for ESPN beginning this season. His appearance made headlines — as he and brother Travis Kelce are prone to doing — when he picked up “Abbott Elementary” star and creator Quinta Brunson during the event.

— Sarah Whitten contributed to this article.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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The NBA is picking its TV partners — and…

17 May 2024
by admin

NBA Commissioner Adam Silver speaks to the media during a press conference as part of the 2022 All-Star Weekend at Rocket Mortgage Fieldhouse on February 19, 2022 in Cleveland, Ohio.

Jason Miller | Getty Images

Whether it’s two people in a marriage or a company and a sports league, it’s not easy to break up a 40-year partnership.

The NBA and Warner Bros. Discovery‘s Turner Sports have been in business together for nearly four decades. The relationship is now in jeopardy, as Comcast‘s NBCUniversal is attempting to steal away its package of games with a $2.5 billion per-year offer, as CNBC has previously reported.

The league ended its exclusive window to renew a deal with its two current media partners, Disney and Warner Bros. Discovery, on April 22. Since then, the league has set a framework to renew with Disney, bring in Amazon as a new third partner, and sell its other package to either Warner Bros. Discovery or NBCUniversal, according to people familiar with the matter. The league stands to triple the total value of a new deal from about $24 billion to $76 billion or more.

Warner Bros. Discovery continues to have discussions with the NBA about keeping the rights, according to people familiar with the matter. The league could still decide to simply renew with its incumbent partner, but it’s not likely, said two of the people, who asked not to be named because the talks are private.

The more probable path would be for the league to sign papers with NBCUniversal, formally securing its bid. That would trigger a contractual option for Warner Bros. Discovery to match the offer.

This is where things might get thorny.

Both the NBA and Warner Bros. Discovery have begun poring over legal language to determine if the league can reject a potential match, the people said. The contractual wording is vague, and it’s unclear if the NBA has full discretion to walk away from Warner Bros. Discovery if it matches the bid, said the people.

If Warner Bros. Discovery decides to match, and the NBA moves to choose NBCUniversal’s offer, the sides may be headed for a lawsuit. Warner Bros. Discovery believes it’s fairly well protected by the contractual language, one of the people said.

Still, that remains hypothetical at this point. It’s possible Warner Bros. Discovery won’t match NBCUniversal’s bid, which would avoid potential conflict.

Some league officials are worried Warner Bros. Discovery’s balance sheet can’t handle spending $2.5 billion a year on the NBA, according to people familiar with the matter. Warner Bros. Discovery has a market valuation of about $20 billion and an enterprise value of about $60 billion, including $43.2 billion of gross debt, as of the end of the company’s fiscal first quarter. The company had a leverage ratio (net debt to adjusted earnings before interest, taxes, depreciation and amortization) of 4.1.

Warner Bros. Discovery CEO David Zaslav has both publicly and privately preached the importance of financial discipline for the company.

NBCUniversal parent Comcast has a market capitalization of about $154 billion and an enterprise value of $244 billion. Comcast’s leverage ratio is about 2.5.

NBA officials are more comfortable Comcast can pay what would amount to more than double the previous price for the package, according to the people familiar to the matter.

Warner Bros. Discovery had been paying $1.2 billion per year to air NBA games. The new package also includes fewer games than the current one because the NBA is likely to introduce a third partner — most likely to be Amazon.

Spokespeople for Warner Bros. Discovery and the NBA declined to comment.

The fate of Venu

Warner Bros. Discovery, Disney and Fox announced Thursday they plan to name their new sports streaming platform Venu, taking inspiration from where live sports are played. The new joint venture, one-third owned by each media company, will offer a bundle of sports networks and ESPN+ at a still to be determined price that’s less expensive than traditional cable. CNBC reported earlier this year the price could be around $45 or $50 a month. The service will debut in the fall, the companies have said.

The three companies haven’t yet formally signed paperwork on the venture as they await regulatory approval. If Warner Bros. Discovery loses the NBA, that will diminish the value of the service for consumers, as NBCUniversal and Amazon aren’t partners in the product.

Warner Bros. Discovery licenses the rights to other sports leagues and groups, including MLB, the NHL and the National Collegiate Athletic Association’s March Madness. The company will also have the NBA next year no matter what, as the new rights deal doesn’t kick in until the end of the 2024-25 season.

There’s been no discussion about shutting down the venture before it launches if Warner Bros. Discovery loses the NBA, according to a person familiar with the matter. Still, without the NBA, Disney and Fox would be contributing the lion’s share of sports content for the service. Disney’s ESPN and Fox own both college football and NFL packages, unlike Warner Bros. Discovery. The three companies plan to split revenue commensurate with the affiliate fees associated with their linear networks.

Warner Bros. Discovery could use the money it saves from not obtaining NBA rights to spend on other sports, such as more MLB games or bidding for UFC, which will likely begin renewal discussions with media companies in early 2025.

ESPN plans to launch its own “flagship” streaming service in the fall of 2025.

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.

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Netflix to stream Christmas Day NFL games for three…

15 May 2024
by admin

Netflix will stream Christmas Day National Football League games for the next three years, in its first true step into live sports.

The streaming platform will show two games on Christmas Day this year, followed by at least one matchup in both 2025 and 2026, the league announced Wednesday. The games will continue to be available on broadcast TV in local team markets and on the NFL+ mobile app.

Terms of the deal were not disclosed, but people familiar with the matter said Netflix will pay in the ballpark of $75 million per game. Spokespeople for the NFL and Netflix declined to comment.

The streamer will hire its own announcers for the games and partner with existing production companies. Sarandos told CNBC he felt the NFL was the right fit because it matched the streamer’s event strategy, allowing Netflix to effectively own the day.

Netflix has drawn large audiences with sports programming, from the “Formula 1: Drive to Survive” documentary to its “Quarterback” series following NFL signal callers. While the company took major strides into live programming with a deal to stream the WWE’s “Raw” and a boxing fight between Mike Tyson and Jake Paul, the company suggested it had not found a live sports rights strategy that worked for it.

“We have not seen a profit path to renting big sports,” Sarandos said in December 2022.

“We’re not anti-sports, we’re just pro-profit,” Sarandos said.

Now, Netflix will stream games for the most-watched U.S. sports league, at a time when it is trying to boost profits by raising subscription prices, pushing users toward an ad-tier membership and cracking down on password sharing.

The games could give Netflix a major draw for advertisers. The three Christmas Day NFL games averaged 28.68 million viewers last year, according to Sports Media Watch.

The Christmas Day matchups can function as a marketing ramp up for Netflix before it starts airing “Raw” in January.

The streaming giant’s forays into live events have not come without issues. Its live reunion event for the hit reality TV show “Love Is Blind” in April 2023 had a technical bug that delayed the stream for more than an hour, at which point the show was no longer live.

The announcement comes as streamers across the industry show increasing interest in live sports programming, particularly the NFL.

In January, NBCUniversal’s Peacock showed an NFL Wild Card game between the Kansas City Chiefs and the Miami Dolphins, marking the first time a playoff game was broadcast exclusively on a streaming service. Amazon‘s Prime Video has already snatched the exclusive rights to an NFL playoff game next season.

Amazon also signed a media rights deal with the NFL in 2021, where it agreed to pay about $1 billion per year to have exclusive Thursday Night Football rights for 10 years, starting with the 2023 season. The deal was the first time a streaming service carried a full package of games exclusively.

Netflix could be looking to branch out into basketball, as well. CNBC reported last year that Netflix, along with Amazon, Apple, YouTube TV and Comcast’s NBCUniversal/Peacock, have all had preliminary conversations with the National Basketball Association about possible interest in media rights when the league’s deal with Walt Disney and Warner Bros. Discovery comes to an end after next season.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

— CNBC’s Alex Sherman and Lillian Rizzo contributed to this report

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Jeff Bezos’ Blue Origin to replace CEO Bob Smith…

25 September 2023
by admin

Bob Smith, chief executive officer of Blue Origin LLC, (L), and Dave Limp, senior vice president of devices and services for Amazon.com Inc.

Getty Images

Jeff Bezos’ Blue Origin will replace CEO Bob Smith with outgoing Amazon executive Dave Limp, CNBC has learned.

Smith is retiring effective Dec. 4 and will remain with the company until Jan. 2 for the CEO transition, according to notes to Blue Origin staff written by Smith and Bezos that were obtained by CNBC.

Limp joins Blue Origin at a key phase of the company’s multiple space projects. Blue needs to ramp production of its BE-4 rocket engines, return its space tourism rocket New Shepard to flight, and launch its next-generation New Glenn rocket for the first time – as well as deliver on a recently-won NASA contract for a crewed lunar lander.

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In a statement to CNBC, a Blue Origin spokesperson praised Limp as “a proven innovator with a customer-first mindset” who has “extensive experience in the high-tech industry and growing highly complex organizations.”

Amazon announced last month that Limp would be stepping down later this year. As Amazon’s devices and services chief, Limp oversaw Amazon’s Alexa, Echo and Ring units, as well as some of its more experimental divisions like Zoox autonomous vehicles, and the Project Kuiper internet satellite business.

Limp’s Amazon success

Dave Limp, Senior Vice President, Devices & Services, speaks at Amazon’s HQ2 in Crystal City, Virginia on September 20, 2023.

Eric Lee | The Washington Post | Getty Images

Limp’s resignation came as a shock, as he spent more than 13 years at Amazon. He became a top lieutenant of CEO Andy Jassy and a member of Amazon’s vaunted S-Team, a tight-knit group of senior executives across almost all of its businesses.

Additionally, Limp and Bezos worked closely together when the Amazon founder was still CEO. Amazon’s Alexa voice assistant and Echo smart speakers were pet projects of Bezos’, and Limp steered both of the high-profile launches.

Amazon has not announced a replacement for Limp yet, but Bloomberg and other outlets have reported that the company is expected to hire Microsoft product chief Panos Panay.

Smith’s few Blue Origin results

Billionaire American businessman Jeff Bezos walks with Blue Origin’s President and CEO Bob Smith after Bezos flew on the company’s inaugural flight to the edge of space, in the nearby town of Van Horn, Texas, U.S. July 20, 2021.

Joe Skipper | Reuters

Smith took the reins at Blue Origin in 2017 after 13 years at aerospace conglomerate Honeywell, with Bezos annually spending billions to transform his space venture into a sector powerhouse.

Under Smith’s leadership, Blue Origin heavily built up infrastructure across the U.S. – adding a key rocket engine manufacturing and testing site in Alabama, expanding its rocket production and launch facilities in Florida, and opening locations in California, Arizona, and Colorado.

The most high-profile success during Smith’s tenure came in July 2021, when Bezos flew with the first crew of Blue Origin’s New Shepard rocket to the edge of space and back.

But delays and setbacks marred each of Blue Origin’s major programs under Smith. Both its marquee New Glenn rocket and BE-4 engines – the latter of which is also needed for fellow rocket company United Launch Alliance’s Vulcan vehicle – are years behind schedule. It lost out on a lucrative round of Pentagon launch contracts in 2020, and needs to fly New Glenn to show the U.S. Space Force is can be awarded military missions in the upcoming round of awards.

Earlier this year Blue Origin won a $3.4 billion NASA contract to build a lunar lander for the agency’s astronauts. But the competition was a second-chance contest that NASA organized after Elon Musk’s SpaceX was the sole winner of the first lander contract in 2021 – an award decision that Blue Origin took to federal court and lost.

Those schedule slips were compounded by allegations from current and former employees that the company had a toxic and sexist workplace. Smith addressed those claims by saying Blue Origin had “no tolerance for discrimination or harassment of any kind,” but the company suffered from an elevated turnover rate in 2021. However, Blue Origin has since hired aggressively. Bezos on Monday noting noted the company had grown to more than 10,000 employees, from around 4,000 about two years prior.

Read Bezos’ message to Blue Origin employees on Monday:

I’m excited to share that Dave Limp will join Blue starting December 4th as CEO, replacing Bob, who has elected to step aside on January 2. The overlap is purposeful to ensure a smooth transition.

Before I provide some background on Dave, I’d like to take the time to recognize Bob and the significant growth and transformation we’ve experienced during his tenure. Under Bob’s leadership, Blue has grown to several billion dollars in sales orders, with a substantial backlog for our vehicles and engines. Our team has increased from 850 people when Bob joined to more than 10,000 today. We’ve expanded from one office in Kent to building a launch pad at LC-36 and five million square feet of facilities across seven states.

Our mission has grown too – we’ve flown 31 people above the Kármán Line, almost five percent of all the people who have been to space. Flight-qualified BE-4 engines are ready to boost Vulcan into orbit. New Glenn is nearing launch next year, and, with our recent NASA contract, we will land Americans back on the Moon, this time to stay. We have also engaged and inspired millions of children and educators through our Club for the Future efforts. We’ve made tremendous progress in building a road to space for the benefit of Earth, thanks to each of you and Bob’s leadership.

I’ve worked closely with Dave for many years. He is the right leader at the right time for Blue. Dave joins us after almost 14 years at Amazon, where he most recently served as senior vice president of Amazon Devices and Services, leading Kuiper, Kindle, Alexa, Zoox, and many other businesses. Before Amazon, Dave had roles at other high-tech companies, including Palm and Apple. Dave is a proven innovator with a customer-first mindset and extensive experience leading and scaling large, complex organizations. Dave has an outstanding sense of urgency, brings energy to everything, and helps teams move very fast.

Please join me in welcoming Dave and thanking Bob. Through this transition, I know we’ll remain focused on our customer commitments, production schedules, and executing with speed and operational excellence. I look forward to the many exciting and historic milestones ahead of us!

Jeff

Read Smith’s message to Blue Origin employees:

Team Blue,

It’s been about six years since I joined Blue Origin. During that time, our team, facilities, and sales orders have grown dramatically, and we’ve made significant contributions to the history of spaceflight.
With pride and satisfaction in all that we’ve accomplished, I’m announcing that effective December 4, I will be stepping aside as Chief Executive Officer of Blue Origin. I will remain with Blue until January 2 to ensure a smooth transition with the new CEO.

It has been my privilege to be part of this great team, and I am confident that Blue Origin’s greatest achievements are still ahead of us. We’ve rapidly scaled this company from its prototyping and research roots to a large, prominent space business. We have the right strategy. a supremely talented team, a robust customer base, and some of the most technically ambitious and exciting projects in the entire industry. We also have a team that cares deeply about its mission, legacy, and how we contribute to the next generation and bring everyone into a brighter future.

Jeff and I have been discussing my plan for months, and Jeff will announce Blue’s new CEO in a separate note shortly. I’m very excited about the operational excellence and culture of innovation this new leader will bring to Blue. building on the foundation we’ve created over the past few years.

I’m committed to ensuring this transition is flawless, and everyone should know that Ill always be on Team Blue.

Gradatim Ferociter.

Bob Smith

Correction: An earlier version of this story mischaracterized Dave Limp’s status at Amazon.

Science & Environment

Blue Shield of California taps Amazon, Mark Cuban’s Cost…

17 August 2023
by admin

Source: Blue Shield of California

Blue Shield of California is teaming up with Mark Cuban’s Cost Plus Drug Company and Amazon Pharmacy — turning away from traditional drug store chains and ditching in part health giant CVS — in a move to save on drug costs for its 4.8 million members.

The CEO of the nonprofit health insurer, which spent over $3 billion on member prescriptions in 2022, calls the move a major milestone in its efforts to move toward a value-based model for pharmacy care.

“I expect we’re going to — when this ramps up completely — we’re going to be saving $500 million a year,” said Paul Markovich, CEO of Blue Shield of California. “So, this is a very significant reduction in cost that we ultimately, as a nonprofit that caps our income, will be putting back into our premiums.”

The health insurer will continue to use CVS Caremark for specialty drugs to provide prescriptions and services for patients with complex conditions, but the online pharmacies will provide services for the rest.

Shares of CVS fell about 6% in early trading Thursday.

CVS Health has been Blue Shield’s pharmacy benefits partner for more than 15 years. Analysts at Evercore ISI estimate that specialty drugs represent roughly 50% of Blue Shield’s pharmacy costs.

“Helping customers achieve common goals is one of the many ways we provide value to health plans of all shapes and sizes,” said Michael DeAngelis, a spokesman for CVS Health in a statement. “We look forward to providing care for Blue Shield of California’s members who require complex, specialty medications — as we have for nearly two decades.”

For Amazon, the new contract represents a shift from its retail pharmacy model.

Amazon Pharmacy, which launched a $35 per month insulin program this week, will provide what the companies are calling up-front pricing, free delivery and round-the-clock access to pharmacists through its online services.

“Innovation is in our DNA, and we’re excited by the potential savings this new partnership unlocks for customers,” said John Love, vice president of Amazon Pharmacy. “We’re thrilled to add upfront pricing, free delivery and 24/7 access to a pharmacist to Blue Shield of California’s innovative new offer.”

California Blue Shield is only the second insurer to sign with Cost Plus, which sells drugs at 15% above wholesale prices, since the online pharmacy launched in January 2022. Capital Blue Cross, based in Harrisburg, Pennsylvania, with 1 million members, signed with Cuban’s venture last fall.

“It takes time. There are a lot of bad habits they need to break,” said Cuban, Cost Plus co-founder, about the challenges of contracting with health insurance plans, which are often called payers.

“I think all payers realize that now that Cost Plus has made the price of medications transparent, providers and patients can see what prices should be, and the entire industry will have to adjust,” Cuban said.

For Blue Shield of California the transition to Cost Plus and Amazon will begin with its own workers in 2024, before being introduced to members, to ensure that the online pharmacies will have the scale to meet its members’ needs.

“We’re talking about lifesaving drugs, in many cases,” Markovich said. “So, making sure we get it right is important. And that’s why you need a lot of lead time.”

The health insurer expects to launch the program for its members in 2025.

Tag: <span>Amazon.com Inc</span>

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