Raphael Stevens

Box office analysts currently forecast a $125 million debut for Universal’s “Jurassic World: Dominion.”
“Top Gun: Maverick” will have fewer premium format theaters, but older audiences are expected to continue buying tickets to see the Tom Cruise-led film.
“Dominion” won’t have any major competition from an action flick until July 8, when Marvel’s “Thor: Love and Thunder” hits theaters, but it has been receiving poor reviews.

Tom Cruise attends the UK premiere and Royal Film Performance of ‘Top Gun: Maverick’ in Leicester Square on May 19, 2022 in London, England (L) and still of Jurassic World: Dominon (R)
Getty Images | Universal Studios

Dinosaurs are destined to steal the box office crown from Tom Cruise this weekend, but it’s not clear by how much.
Universal’s “Jurassic World: Dominion” enters domestic theaters this Friday, and it will snag the majority of pricier premium format screens from Paramount and Skydance’s “Top Gun: Maverick.”

Box office analysts forecast a $125 million debut for “Jurassic World,” which should easily be the top grossing film at the box office his week. “Dominion” is the sixth film in the “Jurassic” franchise, which dates back to summer 1993, when Steven Spielberg’s “Jurassic Park” stomped all sorts of box office records.
“Interestingly, two blockbusters jockeying for screens is a ‘problem’ that hasn’t presented itself much if at all over the course of the pandemic,” said Paul Dergarabedian, senior media analyst at Comscore. “The dominance of one film for weeks on end has become the new normal, but one that is not beneficial for the overall health of theaters who need multiple popular films on their screens particularly in the summer season.”
Prior to the pandemic, it was not unusual for the summer movie season to see a stacked slate of film releases. Often blockbuster features opened back-to-back or with only a week or two between debuts.
“We’ve pointed to numerous litmus tests for moviegoing’s rebound over the past year, and this weekend will present yet another one,” said Shawn Robbins, chief analyst at BoxOffice.com. “Can two giant blockbusters coexist relatively close to each other? Pre-pandemic, especially during summer, the answer was often yes with one caveat: the strength of word of mouth.”
“Top Gun: Maverick” has soared at the box office since it opened two weeks ago, tallying more than $546 million globally. Domestically, the film saw only a 32% drop in ticket sales in the during its second weekend in theaters, generating $86 million. Typically, films will see between a 50% and 70% drop between the first and second weekend. Analysts predict “Maverick” could snare another $50 million during its third domestic weekend.

“‘Maverick’ is clearly living up to and beyond its side of the bargain with a record-breaking run and near-immaculate audience reception, but it will lose out on IMAX and other premium screen ticket price boosts when ‘Jurassic’ opens,” said Robbins.
The average regular movie theater seat costs between $10 and $12, while premium seats average around $16. In some cases, premium formats like IMAX can cost $20 or more per seat. Domestically, the studio and movie theater chains typically split film proceeds evenly.
Still, the “Maverick” run at the box office is far from over. Robbins noted that the film has generated a lot of goodwill in cinemas, and while younger audiences may be courted into seeing the new “Jurassic World” film, older audiences will likely still turn up for Cruise’s sequel. More than half the audience for “Maverick” has been 35 or older, according to Paramount.
“The expected impact of ‘Jurassic World’ on the marketplace is one that has been baked into the strategic cake for ‘Top Gun: Maverick,'” said Dergarabedian. “The film will likely see another surge in popularity in late June and, of course, on the Fourth of July holiday.”
For “Jurassic World: Dominion,” however, this game of diminishing returns could be much more severe. The blockbuster feature has received overwhelmingly negative reviews from critics and could see a steep drop off in ticket sales after its opening weekend if word of mouth from moviegoers is also sour.
“Dominion” won’t have any major competition from an action flick until July 8, when Marvel’s “Thor: Love and Thunder” hits theaters. However, counterprograming like “Lightyear,” “Elvis,” “The Black Phone” and “Minions: The Rise of Gru” could draw potential moviegoers away.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Jurassic World: Dominion.”

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A little-known conglomerate of companies including Vitamin Shoppe, Pet Supplies Plus and a home furnishing chain known as Buddy’s is suddenly the talk of the retail industry.
Franchise Group, a publicly traded business with a market capitalization of about $1.6 billion, has entered into exclusive sale talks with Kohl’s.
Analysts and experts are pointing to Franchise Group’s track record and its recent acquisitions for a better sense of what Kohl’s future could hold.

Shoppers enter a Kohl’s store in Peoria, Illinois.
Daniel Acker | Bloomberg | Getty Images

A little-known conglomerate of companies including The Vitamin Shoppe, Pet Supplies Plus and a home furnishing chain called Buddy’s is suddenly the talk of the retail industry.
Franchise Group, a publicly traded business with a market capitalization of about $1.6 billion, has entered into exclusive sale talks with Kohl’s. It proposed a bid of $60 per share to acquire the retailer at a roughly $8 billion valuation. Franchise Group and Kohl’s are in a three-week window during which the two businesses can firm up any due diligence and final financing arrangements.

Questions have since been swirling about what all this will mean for Kohl’s, should a deal go through: What will happen to the Sephora beauty shop-in-shops within Kohl’s, or the retailer’s returns partnership with Amazon? Will Kohl’s CEO Michelle Gass stay on with the company? Are store closings inevitable?
Also, why would Franchise Group want to own Kohl’s in the first place, as retailers including Kohl’s confront inventory challenges and inflation? Just a few weeks ago, Kohl’s slashed its financial forecast for the full fiscal year as more Americans pull back on discretionary spending. Meanwhile, investors are wrangling with rate hikes from the Federal Reserve and the potential for a recession in the near term.
The deal is still in flux, so those questions don’t have firm answers at this point. Instead, analysts and experts point to Franchise Group’s track record and its recent acquisitions for a better sense of what Kohl’s future could hold.
Spokespeople from Franchise Group, Sephora and Amazon didn’t immediately respond to requests for comment on this story. Kohl’s declined to comment.

What Franchise Group wants

“What Franchise Group does is look for good businesses and well-known, strong brand names with a good consumer following,” said Michael Baker, a senior research analyst at D.A. Davidson.

“And then they have a different strategy on how to capitalize or how to monetize those acquisitions,” he added. “Sometimes it’s turning them from company-owned stores into franchise stores.”
Franchise Group was founded in 2019 through a $138 million merger between Liberty Tax Service and Buddy’s, according to the company’s website.
Under President and CEO Brian Kahn, who has a private equity background, Franchise Group went on to scoop up Sears’ outlet business; Vitamin Shoppe; American Freight, which sells furniture, mattresses and appliances; Pet Supplies Plus; Sylvan Learning; and Badcock, a home furnishings chain that caters to lower-income households.

A Vitamin Shoppe store in New York.
Scott Mlyn | CNBC

Franchise Group is mostly in the business of owning franchises. But the consensus is that Kahn likely won’t employ the same strategy at Kohl’s, which has more than 1,100 bricks-and-mortar stores across 49 states.
“The strategy there would be to work with the current management team to run [Kohl’s] better, or replace management if needed,” said Baker. “They’ve done that with some of their assets. … Kahn has a track record of doing good deals.”
Baker used Franchise Group’s most recent acquisition of Badcock, a deal valued at about $580 million, as one example. The company has since entered into two different sale agreements, one for Badcock’s retail stores and another for its distribution centers, corporate headquarters and additional real estate, to net roughly $265 million altogether. Rob Burnette remains in his role as Badcock president and CEO.
On an earnings call in early May, Franchise Group’s Kahn told analysts — without naming Kohl’s directly — what he looks for in any transaction.
“Management, for us, is always the key,” he said. “Whether we do very small transactions or very large transactions.”
“We’ve got a lot of conviction in the brands that we operate now,” Kahn also said on the call.
He added that all of Franchise Group’s past acquisitions generate plenty of cash to support the company’s dividend and to allow for further M&A activity, and any deals it considers in the future would also have to fit this mold.

A real estate play

Earlier this year, Kohl’s deemed a per-share offer of $64 from Starboard-backed Acacia Research to be too low. In late May, the retailer’s stock traded as low as $34.64 and it hasn’t been as high as $64.38 since late January. Kohl’s shares closed Wednesday at $45.76.
Franchise Group likely views its $60-per-share offer as somewhat of a steal, particularly if the company can finance most of the transaction through real estate.
Franchise Group said in a press release earlier this week that it plans to contribute about $1 billion of capital to the Kohl’s transaction, all of which is expected to be funded through debt rather than equity. Apollo is in talks to potentially be Franchise Group’s term loan provider, according to a person familiar with the matter. Apollo declined to comment.
Meanwhile, the majority of this deal is anticipated to be financed through real estate. CNBC previously reported that Franchise Group is working with Oak Street Real Estate Capital on a so-called sale-leaseback transaction. Oak Street declined to comment.
If it plays out this way, Franchise Group would receive an influx of capital from Oak Street, and it would no longer have Kohl’s real estate sitting on its balance sheet. Instead, it would have rent payments and lease obligations.
As of Jan. 29, Kohl’s owned 410 locations, leased another 517 and operated ground leases on 238 of its shops. All of its owned real estate was valued at a little more than $8 billion at that time, an annual filing shows.
“If Franchise Group can get the $7 billion or $8 billion out of the real estate, they’re only paying about $1 billion for the assets. So it’s pretty cheap,” said Susan Anderson, a senior research analyst at B. Riley Securities. “And I think [Kahn] wouldn’t do the deal unless he already has the sale lined up and agreements already in place.”

‘A playbook in place’

But some retail experts are pouring cold water on the plan, saying such a substantial real estate sale could end up putting Kohl’s in a much weaker financial position.
“This is completely unnecessary and will only serve to weaken the firm and restrict investments that are needed to revitalize the business,” said Neil Saunders, managing director of GlobalData Retail. “Takeovers of other retail businesses that have followed this model have never ended well for the party being taken over.”
To be sure, some sale-leaseback transactions, and particularly those on a much smaller scale, have been seen as successful.
In 2020, Big Lots reached a deal with Oak Street to raise $725 million from selling four company-owned distribution centers and leasing them back. It gave the big-box retailer additional liquidity during near the onset of the Covid-19 pandemic.
Also in 2020, Bed Bath & Beyond completed a sale-leaseback transaction with Oak Street, in which it sold about 2.1 million square feet of commercial real estate and netted $250 million in proceeds. Bed Bath CEO Mark Tritton touted the deal at the time as a move to raise capital to invest back in the business.
Franchise Group could be eyeing Kohl’s as a way to create more efficiencies on the backend, between all of its other businesses, according to Vincent Caintic, an analyst at Stephens. Cobbling together resources such as fulfilment centers and shipping providers could be a smart move, he said.
“They have the furniture stores, a rent-to-own store, and a lot of them deal with consumer goods,” Caintic said. “Maybe they can get some additional pricing power by becoming a larger player.”
At the same time, he said, this would be Franchise Group’s largest acquisition to date, which could come with a steeper learning curve.
All of Franchise Group’s retailers combined did $3.3 billion in revenue in calendar year 2021. Kohl’s total revenue surpassed $19.4 billion in the 12-month period ended Jan. 29.
“Franchise Group has a history of buying businesses, levering them up, and then freeing up capital very quickly to pay off that debt,” Caintic said. “They do have a playbook in place.”
But, he added, the companies Franchise bought before it pursued Kohl’s were much smaller – “And those were done when it was very cheap to get debt.”

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Topps’ parent company, Fanatics, will launch a line of trading cards featuring college athletes.
The company didn’t disclose how much some of the athletes will be paid, but says their compensation will vary depending on several factors.
The Florida company says the college market is an “untapped category” that can bring in new collectors.

Fanatics display at the All-Star Players House Presented by MLBPA located at the Corner Alley Bar & Grill on July 07, 2019 in Cleveland, Ohio.
Duane Prokop | Getty Images

Topps is launching a line of trading cards featuring college athletes this fall, in a deal that parent company Fanatics said will cut some players in on the profits and pair them up with school logos on cards for the first time.
Fanatics, which sells sports apparel and acquired Topps earlier this year, said the program will include more than 150 schools featuring both current and former athletes. The company also has deals with more than 200 individual student-athletes at those schools to use their names and likenesses. And the plan is to keep adding schools and athletes, Fanatics said.

The majority of the Power Five conference schools are participating, including Alabama, Georgia, Kansas, Kentucky, Oregon and Texas A&M.
“We think this entire category is one that will not only bring new collectors into the space, but will also benefit student athletes to expand product offerings available in the marketplace,” Derek Eiler, executive vice president of Fanatics’ college division, told CNBC.
Terms of the deals with schools were not disclosed, but most of the athletes at those schools will not get money. Fanatics also declined to say how much the individual student-athletes with their own deals will be paid, but said compensation will vary based on their position, their public profile and how high they’re expected to be drafted. For players who go on to play professionally, the demand for their football or basketball card will likely increase.
Fanatics said it will be the first time school logos are licensed for use on trading cards. In other trading card deals with college athletes, school logos had to be airbrushed out.
“We are excited that Kentucky student athletes are a part of this exclusive new program with Topps and Fanatics which allows fans to collect official trading cards of their favorite current UK Wildcat athletes for the first time,” Jason Schlafer, University of Kentucky’s executive associate athletic director, told CNBC.

The deal also includes digital cards that can be produced quickly. Eiler said those can be used to try and capitalize on key moments or big plays during games.
Physical cards will be sold in packs and individually at Fanatics retailers, Fanatics’ website, hobby stores and some college bookstores.
For Fanatics, the deal helps establish relationships with student-athletes before they reach the professional ranks.
“With Fanatics shrewdly leveraging the iconic Topps brand they recently purchased, their launch into physical and digital trading cards will simultaneously boost their own revenues while creating yet another avenue for student athletes to monetize their name-image-likeness,” said Patrick Rishe, director of the sports business program at Washington University.
Rishe said the deal could energize the autograph market for current and past stars.
“Imagine what a card signed by Ed Pickney and others from the Cinderella 1985 Villanova basketball team could earn,” he said.
Fanatics acquired Topps in January in a deal worth an estimated $500 million as it sought to dive deeper into the sports collectibles market. The company was founded in 2011 by Michael Rubin, co-owner of the Philadelphia 76ers and New Jersey Devils. In March, Fanatics raised $1.5 billion to give it a valuation of $27 billion.
The company ranked No. 21 on this year’s CNBC Disruptor 50 list. More

The Food and Drug Administration said it needs to review changes to Novavax’s manufacturing before deciding whether to authorize its Covid-19 vaccine in the U.S.
The FDA’s committee recommended the Novavax vaccine for use in the U.S. on Tuesday.
The FDA is not obligated to follow the committee’s recommendation, though the agency normally does so.

A health worker prepares a dose of the Novavax vaccine as the Dutch Health Service Organization starts with the Novavax vaccination program on March 21, 2022 in The Hague, Netherlands.
Patrick Van Katwijk | Getty Images

The Food and Drug Administration needs to review changes to Novavax’s manufacturing process before it can authorize the biotech company’s Covid-19 vaccine in the U.S., an agency spokesperson said on Wednesday.
The FDA’s committee of independent vaccine experts on Tuesday voted overwhelmingly to recommend Novavax’s vaccine for use in the U.S., after an all-day meeting in which they reviewed data on the shot’s safety and its effectiveness at preventing Covid.

During the pandemic, the FDA has moved quickly to authorize Covid shots after the committee has given its endorsement. Pfizer, Moderna and Johnson & Johnson’s vaccines received FDA authorization the day after the committee recommended their use in the U.S. FDA authorization of Novavax’s vaccine could take longer.
The FDA, in a statement to CNBC, said Novavax informed the agency of changes to its manufacturing process on June 3, days before the committee was scheduled to review its vaccine’s safety and efficacy data.
“FDA will carefully review this and any additional information submitted by the firm as part of its ongoing assessment and prior to authorizing the vaccine for emergency use,” FDA spokesperson Abby Capobianco told CNBC.
The FDA is not obligated to follow the committee’s recommendation with its authorization, though the agency normally does so. Capobianco said the FDA will take the committee’s recommendation into consideration when deciding about authorizing the Novavax vaccine.
Novavax, in a statement, said it shared updated information with the FDA about improvements to its manufacturing process. The biotech company wouldn’t provide any further specifics.

FDA authorization would allow Novavax to start shipping doses to the U.S. from its manufacturing partner Serum Institute of India. However, the Centers for Disease Control and Prevention would still need to sign off on the vaccine before pharmacies and other health-care providers could start administering the shots.
Novavax was one of the original participants in the U.S. government’s race to develop a Covid vaccine in 2020, receiving $1.8 billion from Operation Warp Speed. However, the small Maryland biotech company struggled to build a manufacturing base from scratch and its clinical data came much later than Pfizer or Moderna, which rolled their shots out at breakneck speed.
Novavax asked the FDA to authorize its two-dose vaccine in late January. Dr. Doran Fink, a senior official at the FDA’s vaccine division, told CDC advisors in April that reviewing Novavax’s application has been “incredibly complex” because it involves clinical and manufacturing data.
While the vaccine still awaits authorization in the U.S., Novavax has started rolling out its shots around the world. The biotech company’s shots have been authorized in more than 40 countries, including Australia, Canada and the European Union. Dr. Peter Marks, who leads the FDA’s vaccine division, said the U.S. has high regulatory standards when it comes to vaccines and does not base its decisions on authorizations in other countries.
“We take manufacturing very seriously,” Marks said told the FDA committee Tuesday. “We don’t benchmark ourselves against other countries when it comes to manufacturing, we consider that we have a very high standard, and it’s why we’re often considered a gold standard for our manufacturing, and particularly in the area of vaccines.”

CNBC Health & Science

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Nio lost $281.2 million in the first quarter, wider than the $68.8 million it lost a year ago.
Covid shutdowns hampered Nio’s production in the first five months of 2022.
But two new models set to launch later this year remain on track, the company said.

Nio’s et5 electric sedan is set to begin deliveries in Sept. 2022.

Chinese electric-vehicle maker Nio lost $281.2 million in the first quarter, wider than the $68.8 million it lost a year ago, as it scrambled to keep pace with intense demand amid China’s recent Covid-related shutdowns.
Here are other key numbers from Nio’s first-quarter earnings report.

Revenue: $1.56 billion, up 24% from the first quarter of 2021.
Adjusted loss per share: 13 cents, versus 4 cents in the first quarter of 2021.
Gross margin: 14.6%, versus 19.5% a year earlier and 17.2% in the fourth quarter of 2021.
Cash at quarter-end: $8.4 billion, down slightly from $8.7 billion as of the end of 2021.

Nio’s shares were down about 6% in premarket trading Thursday as investors digested the decline in gross margin.
Rising commodity costs have continued to squeeze margins, CEO William Bin Li said during the company’s earnings call. But he expects Nio’s gross margin to begin to recover in the third quarter as offsetting cost cuts take hold.
Nio said its new factory, the company’s second, has begun pre-production builds of the upcoming ET5 sedan, due in September. The company also confirmed plans to launch a new upscale, five-passenger SUV, the ES7, later this month, with deliveries beginning in August.
Nio delivered 25,768 vehicles in the first quarter, up from 20,060 a year ago. Second-quarter deliveries are on pace to reach between 23,000 and 25,000 vehicles, the company said, suggesting a particularly strong June. Covid-19 shutdowns and supply-chain issues limited Nio’s total deliveries in April and May to just over 12,000.
Demand has remained strong through China’s most recent pandemic disruptions, however. Li said Nio “achieved an all-time high order flow” in May.
This is breaking news. Please check back for updates.

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