Raphael Stevens

Wonya Lucas is the CEO of Hallmark Media, the parent of cable-TV networks such as the Hallmark Channel.
She was tasked with expanding its audience as subscribers leave the pay-TV bundle.
Lucas has focused on diversifying the casts and storylines of Hallmark’s content while staying true to the feel-good brand.

President and CEO at Hallmark Media Wonya Lucas speaks onstage during Hallmark Media’s star-studded kickoff of ‘Countdown To Christmas’ with a special screening of “A Holiday Spectacular” featuring the world famous Rockettes at Radio City Music Hall on October 20, 2022 in New York City.
Mike Coppola | Getty Images

Wonya Lucas landed a job as the CEO of the Hallmark Channel with two directives: Keep its brand intact and disrupt its playbook. At the same time. 
Since mid-2020, Lucas has been the CEO of Hallmark Media, the parent of the cable-TV network known for its romantic storylines and feel-good holiday movies. In that time, Hallmark has diversified its casts and storylines — and changed how the channel itself is distributed as subscribers flee for streaming services. And she’s done it all while staying true to the Hallmark brand, which Lucas said is always on her mind. 

“My first goal was understanding the audience, but then also understanding what I called the opportunity audience,” Lucas said in an interview with CNBC. 
Lucas is a veteran in the media industry. She held top jobs at Turner Broadcasting networks like TNT and TBS and also at the Discovery Channel — years before they were brought together in the Warner Bros. Discovery merger — as well as The Weather Channel and TV One. She also spent parts of her career on the brand management side of household consumer companies like Coca-Cola and Clorox. 
She credits that brand expertise for her focus and success at Hallmark. Her colleagues also point to that brand consciousness, even as she makes changes at Hallmark. 

Content rules 

Hallmark rakes in some of its highest ratings and buzz during its “Countdown to Christmas,” which begins in October with weekly holiday content.    
Courtesy: Hallmark Media

Under Lucas, Hallmark’s “Countdown to Christmas” movie slate has increasingly changed. 
This past season one of its most successful movies, “Three Wise Men and a Baby,” a play on the 1980s flick “Three Men and a Baby,” didn’t feature a plot that revolved around romance at all. But the storyline departure paid off: The movie about three brothers taking care of a mystery baby during the holiday season was the most-watched cable-TV movie of the year, averaging 3.6 million viewers, according to Nielsen.

“I think she’s very committed to drawing in a new audience and figuring this out. I came here for Wonya because she shared her vision of things with me, and I said, ‘Yes, I am signing on for that,'” said Lisa Hamilton Daly, Hallmark’s head of programming.  
Other films included “Christmas at the Golden Dragon,” about the family behind a Midwestern Chinese restaurant; “Hanukkah on Rye,” a romance about two competing deli owners; and “All Saints Christmas,” a tale about an R&B singer heading home for the holidays. 

Arrows pointing outwards

Christmas at the Golden Dragon.
Hallmark Media

“At the end of the day,” Lucas said, “the consumer needs or desires to see themselves in the love story.”
When Lucas became CEO of Hallmark Media, which also includes the Hallmark Movies and Mysteries network, it had also been coming out from under a firestorm of controversy. Earlier in 2020, Bill Abbott, the longtime CEO who had helped turn the network into a behemoth, left the company following a controversy over commercials featuring a same-sex wedding ceremony. Facing pressure from a conservative group, Hallmark pulled the ads. It reversed course shortly after a gay-rights advocacy group tried to launch an advertising boycott. 
Neither Hallmark nor Abbott have commented on why he left, but the controversy did stir questions about the network’s content. 

Zola ad of same-sex marriage.
Courtesy of Zola

Diversity was of the utmost importance when Lucas took over. Hallmark had been criticized for its films and series often dominated by storylines of heterosexual romance featuring primarily white casts. That meant that large swaths of the audience looking for more relatable content might feel shut out . 
“Her towering strengths met exactly what we needed to do in the business, at a time when we were trying to broaden the content and storytelling,” said Mike Perry, the CEO of Hallmark Cards, the parent company of Hallmark Media. 
“We needed someone strong strategically and someone who has a keen insight into our viewer. That’s Wonya,” Perry said.  
Tapping into the brand, Lucas thought about what they could draw from the greeting card line and its verticals, such as Mahogany, Hallmark’s decades-old line of Black American cards and products.
During Lucas’ short tenure, there have been more films centered on self-love, and others with storylines such as a plus-size woman finding love and a family helping their autistic son during the holidays. Although storylines are morphing, and the casts, while still chock full of fan favorites like “Mean Girls” and “Party of Five” star Lacey Chabert, have changed, Lucas and Hamilton Daly continue to work to keep the content true to Hallmark’s love-centric brand. 

Lisa Hamilton Daly, Hallmark’s head of programming (far left) and Wonya Lucas (far right) with actors Holly Robinson Peete and Lyriq Bent, who costarred in “Our Christmas Journey,” a 2021 film about family with an autistic son.  
Courtesy: Hallmark Media

Hallmark is also leaning more into content throughout the year, such as a summer movie theme — last year was travel, this year is weddings — and on various seasons besides the winter holidays. This month is “Loveuary” on the Hallmark Channel, with movies focused on love, but each with a twist, such as one about a chocolatier rumored to have the recipe to finding true love, and another about two strangers on a road trip realizing new priorities.
Hamilton Daly, who came to the cable-TV network after working as the director of scripted series at Netflix, stressed it was the change coming under Lucas that was her sole reason for taking the leap. 
“That was clear to me. There needed to be more diversity in both casting and storylines,” Hamilton Daly said. She pointed to “Three Wise Men and a Baby” and the new series called “Ride,” a drama about a family in the rodeo that has “Yellowstone” vibes, as examples of that push. 
“We took the leash off of some of our creators and told them to stay inside the bumpers of the brand, but have more leeway to think of stories in a different way,” said Hamilton Daly. “We also brought in new producers, from different places that I knew before.” 

Distribution diversity 

As the number of subscribers leaving the pay-TV universe accelerated in recent years, it was important to make sure Hallmark’s expanded audience had access to its content. 
But even with successes like “Three Wise Men and a Baby,” and Hallmark’s strong holiday season ratings, the network still saw a decline in viewership year over year as cord-cutting ramped up. 

Arrows pointing outwards

Three Wise Men and a Baby
Hallmark Media

In December, a peak ratings month for Hallmark, the network averaged about 1.3 million viewers, down about 40% from five years earlier. Overall in 2022, Hallmark Channel averaged 980,000 viewers, down 20% from 2018. 
Still, Hallmark commands some of the highest ratings on entertainment cable TV. “Countdown to Christmas” begins as early as October, and the channel is the top-watched entertainment cable network among households, total viewers and various age groups among women during the fourth quarter of the year. 
While Lucas thinks there’s life left in linear TV, Hallmark streaming is a chief priority.
Hallmark does have a subscription streaming service, Hallmark Movies Now, which begins at $4.99 a month. Last month, Lucas hired Emily Powers, who helped grow niche streamer BritBox’s North America business, to run Hallmark’s streaming and digital platform division. She’s tasked with relaunching Hallmark’s streaming service and future ad-supported channels. 
Additionally, Hallmark is available not only on virtual pay-TV bundles like FuboTV, but also smaller competing services like FrndlyTV and Philo, which have cheaper subscriptions and target audiences only looking for entertainment channels. News and sports, which snag the highest ratings, elevate the costs of pay-TV bundles. 
Lucas also has been thinking outside of the box. She said she isn’t interested in the typical licensing deals with streaming services where they just provide content that gets lost in the shuffle.
This speaks to the deal Hallmark signed with NBCUniversal’s Peacock last year. 
“To be honest, when Peacock knocked on the door, I thought it was going to be the same conversation and I went into it thinking, ‘OK, this will be over in like 10 minutes,'” said Lucas. “But they had me when they described their services as being centered around fandom.” 
The deal made Lucas think of when she worked at TNT and the network had rights to WWE wrestling matches. WWE taught her the importance of fandom when delivering content. 
What made the deal different was that it included simulcasts of Hallmark networks on Peacock.  
“It took a lot of forward thinking for Wonya to think, ‘How do I get better distribution and streaming distribution for my content, and still maintain [traditional pay-TV deals], which I think she navigated successfully,'” said Mark Lazarus, NBCUniversal’s head of TV and streaming, who worked with Lucas decades ago at Turner. 
Lucas admitted it did take some negotiating to smooth any ruffled feathers with their traditional distribution partners. 
“I think Hallmark is a great fit for her because it aligns with her values and positive energy,” said Lazarus.
Lucas’ focus on the integrity of brands tends to steer most of her thinking, something that stuck out to several leaders she’s worked with in the industry. 
“She’s an ace at navigating brands, from The Weather Channel to Hallmark. She’s always thinking about how you propel the brand and what partnerships do that,” said Rashida Jones, president of MSNBC. Jones was an up-and-coming producer at The Weather Channel when Lucas was in charge. 
The two ran into each other recently at the Sundance Film Festival. Jones said it has been probably 20 years since they’d last seen each other. “I finally got to tell [Lucas] how much I looked up to her at the time I worked with her,” Jones said.
“You know the phrase, ‘If you can see it, you can be it?’ I know it’s cliche, but it’s true. She was one of the earliest examples of a woman, and a woman of color at that, at the helm,” Jones added. “I always said if I can do a quarter of what Wonya did in her career, I would consider myself successful.” 
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC and MSNBC.

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This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
U.S. markets rose, expecting inflation to moderate further. They might be surprised by tomorrow’s consumer price index.

What you need to know today

Ford Motor announced Monday that it will work with a Chinese supplier on a new $3.5 billion battery plant for electric vehicles. The facility will be built in Michigan and is expected to open in 2026.

The bottom line

Months of steadily declining prices have given investors the sense that inflation is on a linear, downward trend. But inflation is more complex than it initially seemed and could surprise markets still.
Economists are expecting January’s consumer price index to rise 0.4% on a monthly basis — that’s a jump from December’s -0.1% figure, which means that prices actually fell. So far, market chatter is that service inflation — the price of travel, dining out and hospitality, for example — has proven more persistent than goods inflation, largely because of an extremely tight labor market.
But logistic managers are warning that the supply chain is clogging up again, which could contribute to higher prices for goods. “Late fees and warehouse fees are passed onto the consumer, which is why we are not seeing products fall as much as they should,” said Paul Brashier, vice president of drayage and intermodal for ITS Logistics.
Nonetheless, markets showed optimism on Monday. The Dow rose 1.11%, the S&P 500 climbed 1.14% and the Nasdaq Composite advanced 1.48%. Investors may have been hoping for a “Goldilocks-like mix of industrial production recovery and falling inflation,” said Ray Farris of Credit Suisse in a Monday note. Time will tell if that comfortable narrative of disinflation — and the defiant optimism in the markets — hold up.
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In a survey last year, Chinese travelers said that they were most interested in visiting Europe, Australia, Canada, Japan and South Korea.
But that’s not where they’re going — at least not yet.

Flight restrictions, visa issues and entrance rules aimed only at them are complicating matters for Chinese residents who are ready to travel abroad.
Chinese travelers favored Southeast Asia for trips during the Lunar New Year holidays, which ended in early February, according to Trip.com Group’s Chinese language booking website, Ctrip.
Travel bookings by Chinese residents outside of the mainland grew by 640% from last year’s holiday period — and Bangkok, Singapore, Kuala Lumpur, Chiang Mai, Manila and Bali were the top destinations, according to Ctrip’s data. 
Overseas hotel bookings by mainland Chinese travelers quadrupled from last year too, Ctrip said. Yet one place stood out — Bangkok, where “hotels over the holiday increased by more than 33 times,” said Ctrip.

Top spot for tour groups

Thailand is the also the top choice for Chinese tour groups for now, said Thomas Lee, Trip.com Group’s senior director of international business operations.

Ctrip’s first group tour left on Feb. 7, with travelers bound for Bangkok and the nearby beach town of Pattaya, said Lee.
The second-most popular spot for group tours is Maldives, and after that, Egypt, he said.
China resumed group tours organized by travel agencies on Feb. 6. Tours to 20 countries are allowed, including Southeast Asian nations like Thailand, Indonesia, Cambodia, the Philippines, Malaysia, Singapore and Laos, as well as United Arab Emirates, South Africa, Hungary, Cuba and Russia.  
Group tours to Japan, South Korea and Vietnam are not permitted yet.

Why Thailand is popular

A major reason Chinese tourists are choosing to go to Thailand is that it’s easy for them to get in, Thailand’s Deputy Prime Minister Anutin Charnvirakul said on “Squawk Box Asia” Monday. 
“At the end of the day, we were able to open up our country with very minimum restrictions,” he said.
He said Thailand has tried “all possible ways to make sure that our Chinese tourists, as well as tourists from all over the world, will be able to come to our country to spend their holidays.”
The day after China relaxed its borders in early January, Thailand announced that all incoming visitors must be vaccinated to enter.

But within days, Thai authorities abandoned the rule, amid rising anger from China toward countries imposing new rules on Chinese residents.
Charnvirakul said Thailand’s policy U-turn was related to science, not fears about upsetting Chinese travelers, adding that “more than 75% of our people have [Covid] antibodies both from vaccinations and from being infected.”
He said of the 30 million tourists Thailand is expecting this year, 12 million to 15 million may come from China.
“Chinese tourists have been very vital for our tourism industry,” Charnvirakul said.

The Chinese aren’t the only ones choosing Thailand as a vacation destination.
Russia was Thailand’s seventh-largest tourism market in 2019, but in November 2022, Russian visitors were third in terms of tourism arrivals, after travelers from Malaysia and India, according to Reuters. In late 2022, one in four visitors to Phuket were Russian, said Yuthasak Supasorn, governor of the Tourism Authority of Thailand, according to a Reuters article.
Russians saw their tourism options minimized in 2022, when many countries stopped flying in and out of Russia in the wake of the country’s invasion of Ukraine.

Top concerns

“At present, top concern for customers are issues with visas,” said Trip.com Group’s Lee.
Chinese travelers have been blocked from obtaining visas to places like South Korea and Japan, after both countries stopped processing them over concerns about China’s recent Covid-19 surge. South Korea announced last week it would resume issuing short-term visas to Chinese travelers, according to Reuters.

In other places, Chinese residents face long waits to obtain visas because of high demand.  Before the pandemic, visa applications to enter the European Union were processed in a matter of days, but now applicants are facing waiting times of up to two months, according to the website SchengenVisaInfo.com.
Visas aside, Chinese travelers are also worried about getting sick, said Lee.
That’s why group tours are mainly being booked by “Post-90s and Post-80s” travelers, he said, referring to Chinese generational terms for those born during the 1990s and 1980s, respectively.  

Price may be no problem

Rising travel prices may be of less concern for some Chinese travelers.
A report published by Morgan Stanley on Feb. 7 shows a growing demand for high-end and luxury hotels among Chinese consumers.
Interest in luxury hotels jumped from 18% to 34% from 2022 to 2023, while “mentions of budget hotels and mid-range hotels fell universally,” according to the report.
More travelers expect their top travel expense to be hotel accommodations too, up from 17% in 2017 to 20% in 2023.
Travelers may have to be willing to open their wallets, even in places like Thailand, which has long been popular with backpackers and budget travelers.
Average hotel booking prices in Bangkok in late January jumped by around 70%, according to Ctrip. More

Ford said it will collaborate with a Chinese supplier on a new $3.5 billion battery plant for electric vehicles in Michigan, despite ongoing tensions between the U.S. and China.
Ford will own the new facility through a wholly owned subsidiary instead of operating it as a joint venture with CATL, which several automakers have done with non-China partners in the U.S.
The plant is expected to open in 2026 and employ about 2,500 people, according to the Detroit automaker.

DETROIT – Ford Motor said Monday it will collaborate with a Chinese supplier on a new $3.5 billion battery plant for electric vehicles in Michigan, despite tensions between the U.S. and China.
The anticipated announcement of the deal between Ford and Contemporary Amperex Technology Co., or CATL, follows Virginia Gov. Glenn Youngkin saying he was withdrawing the state from a competitive process to attract the planned Ford plant over its connection to the Chinese company.

Lisa Drake, Ford’s vice president of EV industrialization, said the automaker will own the new facility through a wholly owned subsidiary instead of operating it as a joint venture with CATL, which several automakers, including Ford, have done with non-China partners in the U.S. She said the company will license the technology from CATL, including technical expertise.
“The LFP technology is already here in the U.S. It’s in a lot of consumer electronics devices, it’s actually in another OEM product, but, unfortunately, it’s always imported,” Drake said during a media call. “This project is aimed at de-risking that by actually building out the capacity and the capability to scale this technology in the United States, where Ford has control.”
Ford Chair Bill Ford said CATL will assist in getting the automaker “up to speed so that we can build these batteries ourselves.”
“Manufacturing these new batteries in America will help us build more EVs faster and will ultimately make them more affordable for our customers,” he said Monday during an event announcing the investment.

Read more about electric vehicles from CNBC Pro

Ford declined to comment on the financial details of the licensing agreement with CATL.

The plant is expected to open in 2026 and employ about 2,500 people, according to the Detroit automaker. It will produce new lithium iron phosphate batteries, or LFP, as opposed to pricier nickel cobalt manganese batteries, which the company is currently using. The new batteries are expected to offer different benefits at a lower cost, assisting Ford in increasing EV production and profit margins.
Ford follows EV leader Tesla using LFP batteries in a portion of its vehicles in part to reduce the amount of cobalt needed to procure to make battery cells and high-voltage battery packs.

Ford CEO Jim Farley on Feb. 13, 2023 at a battery lab for the automaker in suburban Detroit, announcing a new $3.5 billion EV battery plant in the state to produce lithium iron phosphate batteries, or LFP, batteries.
Michael Wayland/CNBC

Ford CEO Jim Farley said Monday the batteries will be among the least expensive to produce, citing better pricing for customers and wider profits for the automaker.
Drake said Ford is not necessarily concerned about the Chinese government interfering with the deal, saying the companies “certainly thought through that and those are provisions,” including optionality in the contract.
Ford’s ownership, rather than a joint venture, may assist it in avoiding additional political criticism and potentially qualify for federal EV tax credits.
Marin Gjaja, chief customer officer of Ford’s EV unit, said once production at the Michigan plant begins, the vehicles are expected to qualify for half of the up to $7,500 federal tax incentives for consumers purchasing an EV. They’re expected to meet local production requirements but not material sourcing rules for the batteries, he said.
In August, President Joe Biden signed the $430 billion Inflation Reduction Act, which included stricter consumer tax credits of up to $7,500 for the purchase of an EV as well as substantial incentives for companies to produce batteries domestically to wean the U.S. auto industry off its dependency on China for batteries.
Farley said the company has “absolutely” been talking to the Biden administration about the plant, citing the IRA incentives to assist with the American manufacturing of battery cells. He said the “economics in the IRA really made a difference.”
Ford said it expects the production of the battery cells to qualify for federal incentives of $35 per kilowatt hour produced and $10 per module. The plant is expected to be capable of producing 35 gigawatt hours (GWh) of LFP battery capacity
Before the IRA, Ford said it would team with CATL to explore increasing battery packs for the electric Mustang Mach-E crossover this year in North America. It was part of a plan for Ford to establish 40 GWh of battery capacity, capable of powering 400,000 Ford EVs, Drake said.
The new LFP plant is in addition to Ford’s collaborations with LG Energy Solution and South Korea-based SK, including a joint venture for twin lithium-ion battery plants in Tennessee and Kentucky. Those plants are expected to come online in 2025 and 2026.
Ford plans to deliver an annual run rate of 600,000 electric vehicles globally by the end of this year and 2 million globally by the end of 2026. The company aims to achieve an 8% adjusted profit margin on its EV business by then.
The automaker said it expects to begin offering the LFP batteries in the Mustang Mach-E later this year, followed by the F-150 Lightning pickup next year. It will source those batteries from CATL, the company said.
With this $3.5 billion investment, Ford says it and its battery partners have announced $17.6 billion in investments in electric vehicle and battery production in the United States since 2019. Ford, citing a “2020 independent study,” said those investments over the next three years are expected to create more than 18,000 direct jobs in Michigan, Kentucky, Tennessee, Ohio and Missouri, and more than 100,000 indirect jobs.
Michigan Gov. Gretchen Whitmer called the investment a “big win” for the state, which has moved to attract more battery production after missing out on previous multibillion-dollar investments.
“We’re working together to make Michigan the next Silicon Valley,” she said Monday at the event.
– CNBC’s Lora Kolodny contributed to this report.

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NBC Sports is prepared to make an aggressive offer to win back NBA rights after more than 20 years without them.
The NBA can’t begin formal negotiations with companies other than Warner Bros. Discovery and Disney before April 2024 unless they waive their exclusive negotiation rights.
Disney is expected to bid on the NBA to keep games on ESPN and ABC.
Apple and Amazon have already expressed interest in buying rights to the NBA, sources said.

Boston Celtics forward Jayson Tatum (0) attempts a basket in front of Golden State Warriors forward Draymond Green (23) in the second half during game three of the 2022 NBA Finals at TD Garden.
Kyle Terada | USA Today Sports

Cue up John Tesh’s “Roundball Rock” – “The NBA on NBC” may be returning, if NBC Sports gets its way.
Comcast’s NBCUniversal is preparing to make a strong bid to win back National Basketball Association broadcast rights more than 20 years after the company lost them to Disney and Turner Sports, according to people familiar with the matter.

NBCUniversal executives have informed the NBA of their interest, said the people, who asked not to be named because the discussions are private. NBC Sports wants a package that would include playoff games to air on NBC’s broadcast network, two of the people said. Some regular season games could be exclusive to NBCUniversal’s streaming service, Peacock. The NBA could also decide to force media companies to simulcast all games on streaming to increase reach, the people said.
Apple and Amazon have also expressed interest to the NBA in buying carved-out streaming packages, said people familiar with the matter. Amazon currently has a deal with the NBA allowing it to stream games in Brazil.
No formal discussions can take place with non-incumbent bidders unless Warner Bros. Discovery, which owns Turner Sports, and Disney agree to waive their exclusive negotiation windows, which end in April 2024, according to people familiar with the matter. Disney and Warner Bros. Discovery own the NBA rights until the end of the 2024-2025 season — more than two more years from now. It’s possible the NBA could simply re-up with both existing parties and never open negotiations to outside bidders. That’s what happened in 2014, the league’s most recent renewal.
An NBA spokesperson confirmed no talks have taken place with NBCUniversal at this time over national rights while adding the league has had “a longtime relationship with Comcast/NBA as a previous NBA national TV rightsholder and through many of our teams’ partnerships with NBC Sports regional sports networks.”
But that’s not likely to happen this time as streaming has taken over as the dominant distribution method of TV watching, the people said. The NBA is likely to carve out one or two new packages for bidders, pushing their media rights partners from two to either three or four, two of the people said.

Disney is expected to bid on a package of rights for ESPN, ESPN+ and ABC, said the people.

Charles Barkley on Inside the NBA
Source: NBA on TNT

Warner Bros. Discovery’s interest in the NBA is murkier. CEO David Zaslav said in November, “We don’t have to have the NBA.” Turner’s relationship with the league features the long-running “Inside the NBA” studio show, hosted by Ernie Johnson and former NBA stars Charles Barkley, Kenny Smith and Shaquille O’Neal. Zaslav and Warner Bros. Discovery sports head Luis Silberwasser will likely use this year to decide what type of future relationship they want with the NBA, according to a person familiar with their thinking.
Spokespeople for NBCUniversal, Disney, Warner Bros. Discovery and Amazon declined to comment. A spokesperson at Apple couldn’t immediately be reached for comment.

NBC’s NBA pitch

It’s possible NBCUniversal will be directly competing with Warner Bros. Discovery to be the league’s second traditional TV partner, along with ESPN. NBCUniversal can offer a broadcast network (NBC) to air NBA games if pay TV providers begin dropping cable networks, such as TNT and TBS, that run mostly reruns of scripted programming when sports aren’t on. Comcast also owns Sky, which could give the NBA another international broadcast outlet.
“What you have today is programmers selling us content at increasingly higher prices and asking us to distribute that to largely all of our customers, and at the same time, selling that exact same content either into streaming platforms or creating a direct-to-consumer product themselves at a much lower cost,” said Chris Winfrey, CEO of Charter, the second largest U.S. cable provider, in comments published by CNBC last week. “Our willingness to continue to fund that for programmers when that content is available for free elsewhere is declining. That means within the linear video construct, you’ll see an increasing number of distributors deciding it no longer makes sense to carry certain content.”
Warner Bros. Discovery can counter with a larger global streaming service — the combined HBO Max/Discovery+ (likely to be called Max) — which launches later this year. Warner Bros. Discovery ended September with about 95 million streaming subscribers, far outpacing Peacock’s 20 million, which are U.S.-only. The NBA has been partners with Turner Sports for nearly 40 years.

Michael Jordan #23 and Scottie Pippen #33
Nathaniel S. Butler

Many NBA fans fondly remember “The NBA on NBC” for its dramatic “Roundball Rock” theme song and era-defining broadcasts of the Michael Jordan-led Chicago Bulls winning six titles during the 1990s. NBC aired its last NBA games during the 2002 finals, when the Los Angeles Lakers swept the New Jersey Nets. Games have been split between Disney’s ESPN and ABC and Turner Sports’ TNT and TBS for the last two decades. ABC airs the NBA Finals.

The NBA’s value

The NBA offers live programming that’s valuable to advertisers and routinely commands millions of viewers. Regular season NBA games across ABC, ESPN and TNT are averaging 1.6 million viewers this season. That’s flat from a year ago, even as the total number of U.S. homes that subscribe to cable TV has fallen from 70 million to 62 million, according to NBA data.
NBA rights are coming up for renewal while global media companies are cutting costs, which could pressure the the league to lower its expectations on the size of a price increase. Warner Bros. Discovery laid off thousands of employees and cut billions in content costs last year. Disney announced last week it plans to eliminate 7,000 jobs and cut $5.5 billion in costs, including $3 billion in non-sports content savings. The NFL obtained 40% to 80% increases for its media rights when it renewed its deal for 11 years in 2021.
It’s too early to say how much the NBA will be able to increase revenue from its new TV deal, but initial suggestions of a 200% increase from about $25 billion to more than $70 billion over nine years are probably too optimistic, according to people familiar with the matter. An annual increase closer to 100% may be more likely, given secular declines in the linear pay TV and streaming businesses that are still losing billions of dollars each year, two of the people said.
WATCH: CNBC’s full interview with Warner Bros. Discovery CEO David Zaslav

Disclosure: NBCUniversal is CNBC’s parent company.

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This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
Inflation is proving more complex than it seemed at first. But markets still believe in a straightforward disinflationary path.

What you need to know today

Ford Motor announced Monday that it will work with a Chinese supplier on a new $3.5 billion battery plant for electric vehicles. The facility will be built in Michigan and is expected to open in 2026.

If Tuesday’s consumer price index report comes hotter than expected, the S&P 500 could plummet up to 3%, according to JPMorgan’s sales and trading desk.

The bottom line

Months of steadily declining prices have given investors the sense that inflation is on a linear, downward trend. But inflation is more complex than it initially seemed.
Economists are expecting January’s consumer price index to rise 0.4% on a monthly basis — that’s a jump from December’s -0.1% figure, which means that prices actually fell. So far, market chatter is that service inflation — the price of travel, dining out and hospitality, for example — has proven more persistent than goods inflation, largely because of an extremely tight labor market.
But logistic managers are warning that the supply chain is clogging up again, which could contribute to higher prices for goods. “Late fees and warehouse fees are passed onto the consumer, which is why we are not seeing products fall as much as they should,” said Paul Brashier, vice president of drayage and intermodal for ITS Logistics.
Nonetheless, markets showed optimism on Monday. The Dow rose 1.11%, the S&P 500 climbed 1.14% and the Nasdaq Composite advanced 1.48%. Investors may have been hoping for a “Goldilocks-like mix of industrial production recovery and falling inflation,” said Ray Farris of Credit Suisse in a Monday note. Time will tell if that comfortable narrative of disinflation — and the defiant optimism in the markets — hold up.
Subscribe here to get this report sent directly to your inbox each morning before markets open. More

Ukraine’s use of SpaceX’s satellite internet service remains a crucial yet contentious part of the country’s fragile infrastructure as it battles Russian invaders.
Comments by SpaceX President Gwynne Shotwell last week reignited the debate, leading CEO Elon Musk and high-profile former NASA astronaut Scott Kelly to weigh in.
“Starlink is the communication backbone of Ukraine,” Musk tweeted before saying that SpaceX “will not enable escalation of conflict that may lead to WW3.”

Ukrainian forces set up Starlink satellite receivers to provide connection for civilians at Independence Square after the withdrawal of the Russian army from Kherson to the eastern bank of Dnieper River, Ukraine on November 13, 2022.
Metin Atkas | Anadolu Agency | Getty Images

Ukraine’s use of SpaceX’s satellite internet service remains a crucial yet contentious part of the country’s fragile infrastructure, as Russia’s invasion nears its one-year mark.
Comments by SpaceX President Gwynne Shotwell last week reignited the debate around how the company’s Starlink hardware and service should be used in the Ukrainian conflict – leading CEO Elon Musk and high-profile former NASA astronaut Scott Kelly to weigh in.

Kelly on Saturday called on Musk to “restore the full functionality of your Starlink satellites.”
“Defense from a genocidal invasion is not an offensive capability. It’s survival,” argued Kelly, whose twin brother, Mark Kelly, is a Democratic U.S. senator from Arizona.
In a pair of replies on Sunday, Musk tweeted that “Starlink is the communication backbone of Ukraine,” before saying that SpaceX “will not enable escalation of conflict that may lead to WW3.”
“We have not exercised our right to turn them off,” Musk noted in a separate tweet.
The Twitter exchange came after Shotwell last week said that the company has been “really pleased to be able to provide Ukraine connectivity and help them in their fight for freedom,” but she emphasized that Starlink “was never intended to be weaponized.”

“Ukrainians have leveraged it in ways that were unintentional and not part of any agreement, so we have to work on that at Starlink,” Shotwell said, speaking at a space conference in Washington, D.C on Feb. 8.

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In a roundtable conversation after her remarks, Shotwell said that Ukraine using Starlink as a communications system “for the military is fine.”
“But our intent was never to have them use it for offensive purposes,” Shotwell said.
She specifically noted reports about Ukraine using Starlink “on drones.” Ukrainian soldiers have described using Starlink to connect drones and identify and destroy enemy targets, the Times of London reported in March 2022.
“I’m not going to go into the details; there are things that we can do to limit their ability to do that … there are things that we can do and have done,” Shotwell said.
SpaceX did not respond to CNBC’s request to clarify what those limitations are or whether they are still in place. A company spokesperson pointed to the Starlink terms of service agreement for the U.S., which describes modifications to the SpaceX equipment or service that would be in violation of U.S. export laws.
“Starlink is not designed or intended for use with or in offensive or defensive weaponry or other comparable end-uses,” the Starlink terms of service document for the U.S. says.

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