Raphael Stevens

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    Boston Celtics’ majority owner puts team up for sale weeks after NBA championship

    Boston Basketball Partners LLC, the ownership group behind the Boston Celtics, has put the team up for sale, according to a statement the team posted on social media site X on Monday.
    The controlling family of the ownership group announced the sale of the majority stake, and expects it to be completed later this year or in early 2025.
    Wyc Grousbeck led the ownership group to acquire the Celtics in 2002. He expects to remain governor of the team through 2028, when the second closing of the deal takes place.

    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.

    Read more CNBC media news

    Wyc Grousbeck led a team of buyers to acquire the Celtics for $360 million in 2002. Grousbeck, a native of Massachusetts and lifelong Celtics fan, expects to remain governor of the team until the second closing in 2028.

    Grousbeck is also part of the ownership group behind the tequila brand Cincoro, which includes other NBA team owners and Hall of Famer Michael Jordan.
    Representatives for Grousbeck and the team did not immediately respond to CNBC’s requests for comment.

    Jaylen Brown, #7 of the Boston Celtics, shoots a three-point basket against the Dallas Mavericks during Game 5 of the 2024 NBA Finals at TD Garden in Boston on June 17, 2024.
    Nathaniel S. Butler | National Basketball Association | Getty Images

    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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    Citadel’s Ken Griffin says he’s not convinced that AI will replace human jobs in the near future

    Ken Griffin speaks to Citadel and Citadel Securities interns during a discussion moderated by Citadel software engineer, and former intern, Bharath Jaladi.
    Courtesy: Citadel

    Ken Griffin, founder and CEO of Citadel, said he remains skeptical that artificial intelligence could soon make human jobs obsolete as he sees flaws in machine learning models applied in certain scenarios.
    “We are at what is widely viewed as a real inflection point in the evolution of technology, with the rise of large language models. Some are convinced that within three years almost everything we do as humans will be done in one form or another by LLMs and other AI tools,” Griffin said Friday during an event for Citadel’s new class of interns in New York. “For a number of reasons, I am not convinced that these models will achieve that type of breakthrough in the near future.”

    The rapid rise of AI has had the world pondering its far-reaching impact on society, including technology-induced job cuts. Elon Musk, CEO of Tesla, is among many who have repeatedly warned of the threats that AI poses to humanity. He has called AI “more dangerous” than nuclear weapons, saying there will come a point where “no job is needed.”
    Griffin, whose hedge fund and electronic market maker have been at the forefront of automation, said machine-learning tools do have their limits when it comes to adapting to changes.
    “Machine learning models do not do well in a world where regimes shift. Self-driving cars don’t work very well in the North due to snow. When the terrain changes, they have no idea what to do,” Griffin said. “Machine learning models do much better when there’s consistency.” 
    Still, the billionaire investor thinks the power of advanced technology can’t be dismissed in the long term, and he even sees cancer being eradicated one day because of it.
    “The rise of computing power is allowing us to solve all kinds of problems that were just simply not solvable five, 10, 15 years ago,” Griffin said. “This is going to radically transform healthcare. We will end cancer as you know it in your lifetime.” 

    Citadel has long placed a great emphasis on hiring, not hesitant about putting responsibility into the hands of young employees and even interns, the CEO said.
    The firm’s internship program has become one of the most competitive in the country. More than 85,000 students applied for about 300 positions this year, reflecting an acceptance rate of less than 0.5%, which is lower than that of Harvard University and the Massachusetts Institute of Technology.
    “The people we hire today are going to be the leaders of Citadel not in 30 or 40 years, but in just a few years,” Griffin said. More

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    Is the U.S. stock market too ‘concentrated’? Here’s what to know

    The 10 largest U.S. companies accounted for 14% of the S&P 500 stock index a decade ago. Today, they account for more than a third.
    Tech euphoria has helped drive up the “Magnificent Seven” stocks: Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla.
    Some experts fear that such concentration may put investors at risk. Others think it’s not a big deal.

    Jensen Huang, co-founder and chief executive officer of Nvidia Corp., displays the new Blackwell GPU chip during the Nvidia GPU Technology Conference on March 18, 2024. 
    David Paul Morris/Bloomberg via Getty Images

    The U.S. stock market has become dominated by about a handful of companies in recent years. Some experts question whether that “concentrated” market puts investors at risk, though others think such fears are likely overblown.
    Let’s look at the S&P 500, the most popular benchmark for U.S. stocks, as an illustration of the dynamics at play.

    The top 10 stocks in the S&P 500, the largest by market capitalization, accounted for 27% of the index at the end of 2023, nearly double the 14% share a decade earlier, according to a recent Morgan Stanley analysis.

    In other words, for every $100 invested in the index, about $27 was funneled to the stocks of just 10 companies, up from $14 a decade ago.
    That rate of increase in concentration is the most rapid since 1950, according to Morgan Stanley.
    It has increased more in 2024: The top 10 stocks accounted for 37% of the index as of June 24, according to FactSet data.
    The so-called “Magnificent Seven” — Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla — make up about 31% of the index, it said.

    ‘A bit riskier than people realize’

    Some experts fear the largest U.S. companies are having an outsized influence on investors’ portfolios.
    For example, the Magnificent Seven stocks accounted for more than half the S&P 500’s gain in 2023, according to Morgan Stanley.
    Just as those stocks helped push up overall returns, a downturn in one or many of them could put a lot of investor money in jeopardy, some said. For example, Nvidia shed more than $500 billion in market value after a recent three-day sell-off in June, dragging down the S&P 500 into a multiday losing streak. (The stock has since recovered a bit.)
    The S&P 500’s concentration “is a bit riskier than people realize,” said Charlie Fitzgerald III, a certified financial planner based in Orlando, Florida.
    “Nearly a third of [the S&P 500] is sitting in seven stocks,” he said. “You’re not diversifying when you’re concentrating like this.”

    Why stock concentration may not be a concern

    The S&P 500 tracks stock prices of the 500 largest publicly traded companies. It does so by market capitalization: The larger a firm’s stock valuation, the larger its weighting in the index.
    Tech-stock euphoria has helped drive higher concentration at the top, particularly among the Magnificent Seven.
    Collectively, Magnificent Seven stocks are up about 57% in the past year, as of market close on June 27 — more than double the 25% return of the whole S&P 500. Chip maker Nvidia’s stock alone has tripled in that time.
    More from Personal Finance:Americans struggle to shake off a ‘vibecession’Retirement ‘super savers’ have the biggest 401(k) balancesHouseholds have seen their buying power grow
    Despite the sharp increase in stock concentration, some market experts believe the concern may be overblown.
    For one, many investors are diversified beyond the U.S. stock market.
    It’s “rare” for 401(k) investors to own just a U.S. stock fund, for example, according to a recent analysis by John Rekenthaler, vice president of research at Morningstar.
    Many invest in target-date funds.
    A Vanguard TDF for near-retirees has a roughly 8% weighting to the Magnificent Seven, while one for younger investors who aim to retire in about three decades has a 13.5% weighting, Rekenthaler wrote in May.

    There’s precedent for this market concentration

    Additionally, the current concentration isn’t unprecedented by historical or global standards, according to the Morgan Stanley analysis.
    Research by finance professors Elroy Dimson, Paul Marsh and Mike Staunton shows that the top 10 stocks made up about 30% of the U.S. stock market in the 1930s and early 1960s, and about 38% in 1900.

    The stock market was as concentrated (or more) around the late 1950s and early ’60s, for example, a period when “stocks did just fine,” said Rekenthaler, whose research examines markets since 1958.
    “We’ve been here before,” he said. “And when we were here before, it wasn’t particularly bad news.”
    When there were big market crashes, they generally don’t appear to have been associated with stock concentration, he added.
    When compared with the world’s dozen largest stock markets, the U.S. market was the fourth-most-diversified at the end of 2023 — better than that of Switzerland, France, Australia, Germany, South Korea, the United Kingdom, Taiwan and Canada, Morgan Stanley said.

    ‘Sometimes you can be surprised’

    Big U.S. companies also generally seem to have the profits to back up their current lofty valuations, unlike during the peak of the dot-com bubble of the late 1990s and early 2000s, experts said.
    Present-day market leaders “generally have higher profit margins and returns on equity” than those in 2000, according to a recent Goldman Sachs Research report.
    The Magnificent Seven “are not pie-in-the-sky” companies: They’re generating “tremendous” revenue for investors, said Fitzgerald, principal and founding member of Moisand Fitzgerald Tamayo.
    “How much more gain can be made is the question,” he added.

    You’re not diversifying when you’re concentrating like this.

    Charlie Fitzgerald III
    certified financial planner based in Orlando, Florida

    Concentration would be a problem for investors if the largest companies had related businesses that could be negatively impacted simultaneously, at which point their stocks might fall in tandem, Rekenthaler said.
    “I’m having trouble envisioning what would hurt Microsoft, Apple and Nvidia at the same time,” he said. “They’re in different aspects of the tech marketplace.”
    “In fairness, sometimes you can be surprised: ‘I didn’t see that type of danger coming,'” he added.
    A well-diversified equity portfolio will include the stock of large companies, such as those in the S&P 500, as well as that of middle-sized and small U.S. companies and foreign companies, Fitzgerald said. Some investors might even include real estate, too, he said.
    A good, simple approach for the average investor would be to buy a target-date fund, he said. These are well-diversified funds that automatically toggle asset allocation based on an investor’s age.
    His firm’s average 60-40 stock-bond portfolio currently allocates about 11.5% of its total holdings to the S&P 500 index, Fitzgerald said.

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    Chewy shares rally more than 10% after SEC filing reveals ‘Roaring Kitty’ Keith Gill has 6.6% stake

    Keith Gill, aka Roaring Kitty, hosting a YouTube livestream on June 7th, 2024.
    Source: Roaring Kitty | YouTube

    Shares of Chewy popped in premarket trading Monday after a Securities and Exchange Commission filing showed meme stock trader “Roaring Kitty” took a stake in the pet food e-commerce retailer.
    The filing showed Roaring Kitty, whose legal name is Keith Gill, bought just over 9 million shares — amounting to a 6.6% stake in the company. That makes him the third-biggest Chewy shareholder, according to FactSet. Based on Friday’s close, that stake is valued at more than $245 million.

    Stock chart icon

    CHWY rallies

    The stock was up more than 10% before the bell.
    The SEC filing also included a section that read: “Check the appropriate box to designate whether you are a cat.” There was an “x” next to a response that read: “I am not a cat.” This line was included in Gill’s statement in a series of congressional hearings about 2021’s GameStop trading mania.

    Arrows pointing outwards

    SEC filing

    Chewy shares took a wild ride last week after Gill posted a picture on social media platform X of a cartoon dog that resembled Chewy’s logo. Shares were up as much as 34% on Thursday but ended the day down slightly.
    CNBC emailed Chewy PR seeking comment on the new shareholder.
    Gill is known to be a champion of GameStop and has been stirring up trading in the video game company in the last few months. In mid-June, he disclosed a stake of 9.001 million GameStop shares after exiting his massive call options position. It’s unclear if he sold his GameStop bet to fund the purchase of Chewy.

    GameStop shares fell over 7% in premarket Monday following the news.There’s a big connection between GameStop and Chewy. GameStop CEO Ryan Cohen was the founder and CEO of Chewy, who was instrumental in PetSmart’s takeover of Chewy in 2017 and its subsequent initial public offering in 2019.
    Cohen joined the GameStop board of directors along with two other Chewy executives in January 2021, partly helping fuel the initial GameStop rally. He later took over as GameStop CEO in 2023, leading a turnaround in the brick-and-mortar video game retailer.
    In a recent YouTube livestream, Gill said GameStop is in the second stage of a reinvention, and it has become a bet on Cohen himself, who’s been leading a turnaround and pivot to e-commerce.
    Gill is a former marketer for Massachusetts Mutual Life Insurance. He came into the limelight after successfully encouraging retail investors to buy GameStop shares and call options in 2021 to squeeze out short-selling hedge funds. More

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    Boeing agrees to buy fuselage maker Spirit AeroSystems in $4.7 billion deal

    Boeing said in March that it was in talks to acquire fuselage maker Spirit AeroSystems.
    The deal comes after a big leadership shake-up at Boeing and a midflight door panel blowout that sparked a fresh safety crisis.
    Both Spirit and Boeing have struggled to stamp out manufacturing flaws on Boeing’s top-selling plane.

    Boeing Co. 737 fuselage sections sit on the assembly floor at Spirit AeroSystems in Wichita, Kansas.
    Daniel Acker | Bloomberg | Getty Images

    Boeing said Monday that it will buy back its struggling fuselage maker Spirit AeroSystems in an all-stock deal that the plane maker has said will improve safety and quality control.
    It said it agreed to pay $37.25 a share in Boeing stock for Spirit, giving the aerospace company an equity value of $4.7 billion. Including Spirit’s debt the deal has a transaction value of $8.3 billion Boeing said. Spirit’s shares closed Friday at $32.87 a share, giving it a market capitalization of about $3.8 billion.

    Boeing in March disclosed it was in talks to acquire the Wichita, Kansas-based company, weeks after a fuselage panel blew out midair from a nearly new Boeing 737 Max 9 on an Alaska Airlines flight, sparking a fresh crisis for Boeing. Spirit makes the fuselages for the 737 and other parts, including sections of Boeing’s 787 Dreamliners.
    In 2005, Boeing spun off operations in Kansas and Oklahoma that became the present-day Spirit AeroSystems. Boeing accounted for about 70% of Spirit’s revenue last year, while roughly a quarter came from making parts for Boeing’s main rival, Airbus, according to a securities filing.
    Boeing CEO Dave Calhoun, who has said he will step down at the end of the year, on Monday said bringing Spirit in-house will “fully align” the companies’ production systems and workforces.
    “Among the many actions we’re taking as a company, this is one of the most significant in demonstrating our unwavering commitment to strengthen quality and make certain that Boeing is the company the world needs it to be,” Calhoun said in a message to employees.
    He said he expects the deal to close mid-2025, subject to approval by regulators, Spirit shareholders and the sale of Spirit’s operations dedicated to Airbus planes.

    Spirit’s CEO, Pat Shanahan, is considered a possible successor for Calhoun.
    Airbus, meanwhile, said Monday it has reached an agreement with Spirit so that the European aircraft manufacturer is compensated $559 million by Spirit to acquire its manufacturing lines dedicated to Airbus planes. Those include operations in Belfast, Northern Ireland, where the wings and mid-fuselage of the A220 are produced, A220 pylons in Wichita and A350 fuselage sections in North Carolina.

    Mounting pressure

    A preliminary report from the National Transportation Safety Board into the Alaska Airlines incident on Jan. 5 said it appeared the bolts that hold the door plug in place weren’t attached to the Max 9 when it left Boeing’s factory and was handed over to Alaska Airlines months prior.
    That was the most serious of a host of production problems on Boeing planes, which also included Spirit-made fuselages that had misdrilled holes and misconnected fuselage panels. One way Boeing has tried to improve quality is to accept only fuselages without defects so that repairs or additional manufacturing steps won’t have to be made out of sequence, reducing the chances of errors.
    The broader safety crisis stemming from the door plug blowout on the Alaska flight has slowed Boeing’s deliveries of new planes to airlines, and has driven financial hits for both Spirit and Boeing. Boeing’s CFO in May said the company would burn, rather than generate cash this year — about $8 billion in the first half of 2024.
    Boeing’s shares are down more than 30% this year.

    The Federal Aviation Administration has said it won’t let Boeing expand production until it is satisfied with its production lines.
    Calhoun was skewered by lawmakers in a June Senate hearing over the company’s safety record and what some senators lamented as a lack of improvement in the wake of two deadly Max crashes.

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    U.S. plans to seek guilty plea from Boeing over fatal 737 Max crashes

    U.S. prosecutors plan to seek a guilty plea from Boeing for misleading a federal regulator in the development of the 737 Max.
    The flight-control system Boeing included was later implicated in to fatal 737 Max crashes that killed 346 people.
    The Justice Department had said in May, months after a door panel blew out of a new Max 9, that Boeing violated an earlier settlement for failing to implement a certain compliance program.

    The fuselage plug area of Alaska Airlines Flight 1282 Boeing 737-9 MAX, which was forced to make an emergency landing with a gap in the fuselage, is seen during its investigation by the National Transportation Safety Board (NTSB) in Portland, Oregon, U.S. January 7, 2024.
    NTSB | Via Reuters

    U.S. prosecutors plan to seek a guilty plea from Boeing over a charge tied to two fatal crashes of 737 Max planes, attorneys for the victims’ family members said Sunday, blasting a potential agreement as a “sweetheart deal.”
    Justice Department attorneys and victims’ family members and their lawyers spoke for about two hours on Sunday, discussing the plan, lawyers said.

    Boeing declined to comment, and it wasn’t immediately clear if it would accept a plea deal. A guilty plea could complicate its ability to get government contracts. Boeing is a major defense contractor.
    The Justice Department didn’t immediately respond to a request for comment.
    The DOJ said in May that it was reviewing whether Boeing violated a 2021 settlement that protected the company from federal charges tied to the 2018 and 2019 crashes of its best-selling 737 Max planes, which killed all 346 people on the two flights. Under that agreement, Boeing said it would pay $2.5 billion.
    The DOJ revisited the agreement after a door panel blew out of a new 737 Max 9 midair during an Alaska Airlines flight in January, sparking a new safety and quality control crisis for one of the world’s two suppliers of large commercial airplanes. The so-called deferred prosecution agreement was set to expire days before the door panel blew out.
    Boeing admitted in 2021 that two of its pilots defrauded the Federal Aviation Administration by concealing its addition of a new flight-control system to the planes before they were flown commercially. That system was later implicated in the two crashes.
    The plea deal would require Boeing to pay an additional fine of about $247 million and call for the installation of an outside monitor on Boeing, according to Paul Cassell, one of the lawyers. Cassell called the new deal a “slap on the wrist.” More

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    ‘Inside Out 2’ tops $1 billion at the global box office, first film to do so since ‘Barbie’

    Disney and Pixar’s “Inside Out 2” is the newest member of the billion-dollar club.
    The animated feature is the highest-grossing film of 2024 and the first film since Warner Bros.’ “Barbie” to top $1 billion at the global box office.
    Before “Inside Out 2,” no Disney animated feature from Pixar or its Walt Disney Animation studio had generated more than $480 million at the global box office since 2019.

    Amy Poehler and Maya Hawke voice Joy and Anxiety, respectively, in Disney and Pixar’s “Inside Out 2.”
    Disney | Pixar

    Disney and Pixar’s “Inside Out 2” is the newest member of the billion-dollar club.
    The animated feature has tallied $1.014 billion worldwide as of Sunday, making it the highest-grossing film of 2024 and the first film since Warner Bros.′ “Barbie” to top $1 billion at the global box office.

    “On behalf of movie theatre owners across the country and around the world, we want to congratulate Disney’s ‘Inside Out 2’ for grossing $1 billion faster than any animated movie in history,” said Michael O’Leary, president and CEO of the National Association of Theatre Owners. “The film’s stunning global success once again illustrates that audiences the world over will respond to compelling, entertaining movies, and that they want to enjoy them on the big screen.”
    The billion-dollar benchmark is a much-needed win for Disney’s Pixar animation hub. A once prolifically successful studio, Pixar has suffered at the box office in the wake of the pandemic. Much of its difficulties have come, in part, because Disney opted to debut a handful of animated features directly on streaming service Disney+ during theatrical closures and even once cinemas had reopened.
    As a result, before “Inside Out 2,” no Disney animated feature from Pixar or its Walt Disney Animation studio had generated more than $480 million at the global box office since 2019.
    “Inside Out 2” has also showcased how vital the family audience is to the box office. This underserved crowd accounted for more than 70% of those in attendance during the film’s domestic debut, according to data from EntTelligence.
    While this audience came out in droves for Universal’s “The Super Mario Bros. Movie,” which generated more than $1.36 billion at the global box office, there was little for them to feast on until the recent releases of Sony’s “The Garfield Movie” and Paramount’s “IF.”

    “Inside Out 2” also drove the coveted teen demographic to cinemas, with 14% of foot traffic coming from those aged 13 to 17. This younger generation has been largely absent from the market in recent years.
    As the future of moviegoing, this group is particularly important to the industry. Getting them back to the big screen has become a top priority for studios and movie theater operators.
    Next up for family and teens is Universal and Illumination’s “Despicable Me 4,” due out in theaters during the July Fourth holiday weekend.
    Disclosure: Comcast is the parent company of NBCUniversal and CNBC. More

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    Ukraine has a month to avoid default

    War is still exacting a heavy toll on Ukraine’s economy. The country’s GDP is a quarter smaller than on the eve of Vladimir Putin’s invasion, the central bank is tearing through foreign reserves and Russia’s recent attacks on critical infrastructure have depressed growth forecasts. “Strong armies,” warned Sergii Marchenko, Ukraine’s finance minister, on June 17th, “must be underpinned by strong economies.”Following American lawmakers’ decision in April to belatedly approve a funding package worth $60bn, Ukraine is not about to run out of weapons. In time, the state’s finances will also be bolstered by G7 plans, announced on June 13th, to use Russian central-bank assets frozen in Western financial institutions to lend another $50bn. The problem is that Ukraine faces a cash crunch—and soon. More