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    in Business

    Comcast shares tumble as executive calls broadband ‘intensely competitive’

    Comcast is expecting to lose more than 100,000 broadband customers during the fourth quarter, mirroring the first half of the year, Comcast Cable CEO Dave Watson said during a conference Monday.
    The CEO called the broadband environment “competitively intense,” especially for more price-conscious customers.
    Comcast shares fell nearly 10% Monday morning following the remarks.

    View from behind a Comcast truck parked on a residential street in Lafayette, California, on Sept. 28, 2021.
    Smith Collection/gado | Archive Photos | Getty Images

    Comcast Cable CEO Dave Watson told investors on Monday that the company expects to lose more than 100,000 broadband subscribers during the fourth quarter as the market remains “competitively intense.”
    Comcast shares dropped nearly 10% following Watson’s remarks at the UBS Global Media and Communications Conference on Monday.

    Cable broadband growth has been in the middle of an ongoing slump. While executives have also pinned the drop on the slowdown in the buying and selling of homes — noting that there are fewer people signing up for cable when they get a new house — the ramped-up competition from wireless providers such as Verizon and T-Mobile has played a big role, too.
    “Our competition remains competitively intense. That has not changed; it has been pretty consistent throughout the year,” particularly among “price conscious” consumers, Watson said Monday.
    Watson noted that the fourth quarter is likely to reflect the first half of the year, when the company lost “just under 100,000” customers per quarter.
    Despite the continued cable trends, Watson added that Comcast’s broadband business has remained stable when it comes to its higher-end internet packages.
    His warning comes after Comcast saw a relatively improved third quarter when it comes to losses.

    The company said in October that domestic broadband net losses totaled 87,000 during the third quarter. However, excluding the losses that stemmed from the end of the government’s Affordable Connectivity Program, which had offered a discount for qualifying low-income households, the company estimated there was a growth of 9,000 customers.
    Comcast had nearly 32 million domestic broadband customers as of Sept. 30.
    Watson on Monday attributed the third-quarter improvement to seasonality. The return to school often means improved broadband numbers. He also noted that NBCUniversal’s marketing of the Summer Olympics helped, too.
    Disclosure: Comcast owns NBCUniversal, the parent company of CNBC. NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032.

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    From ‘Fortnite’ to ‘Hogwarts Legacy’: One university fuels Utah’s $2 billion video game industry

    Watch Cities of Success: Denver/Boulder
    Watch Cities of Success: Nashville

    Utah’s video game industry has surged over 230% in a decade, bringing in more than $2.3 billion in revenue last year.
    The University of Utah’s top-ranked video game program supplies industry-ready graduates, supporting local growth and innovation.
    University of Utah graduates helped create top-grossing games such as “Hogwarts Legacy” and “Fortnite,” strengthening Utah’s reputation as a gaming hub through strong ties with local studios.

    Rice–Eccles Stadium, an outdoor college football venue at the University of Utah in Salt Lake City, stands against a stunning mountain backdrop.
    University of Utah

    This article is part of CNBC’s Cities of Success series, which explores cities that have transformed into business hubs with an entrepreneurial spirit and attracted capital, companies and employees.
    The video game industry in Utah has become a powerhouse, growing more than 230% in the last decade and bringing in more than $2.3 billion in revenue last year.

    And it’s not stopping: The market is expected to reach an impressive $4.5 billion in economic contribution within five years, according to market research firm IBISWorld.
    One of the key drivers behind the growth is the University of Utah’s cutting-edge video game program.
    Inside a classroom in Salt Lake City, students here are immersed in studying video games — not just playing them, but also creating them, fueling an industry that has deep roots at the campus.

    Those were the kind of people I wanted on my team.

    Donald Mustard
    Former Epic Games chief creative officer, ‘Fortnite’ co-creator

    The university boasts a legacy that includes industry luminaries Doug Bowser, president of Nintendo of America, and Nolan Bushnell, founder of Atari and creator of the iconic game “Pong.”
    Alumni of the school have gone on to create games generating more than $2 billion in lifetime revenue, according to the university.

    “There were just a whole host of people who came here to go to school and then graduated and were pivotal in the games industry,” Michael Young, chair of the University of Utah’s division of games, said in an interview for CNBC’s “Cities of Success: Salt Lake City,” which premieres Dec. 10 at 10 p.m. ET.

    Leveling up

    Name
    Achievement

    Doug Bowser
    President of Nintendo of America

    Nolan Bushnell
    Founder of Atari, Creator of “Pong”

    John Blackburn
    Vice President and Studio Head at WB’s Avalanche Studios, Lead on “Hogwarts Legacy”

    Ed Catmull
    Co-founder of Pixar, Former President of Walt Disney Animation Studios

    Richard Evans
    Pioneer in AI for Video Games, Known for “The Sims”

    Before it became a formalized program, the University of Utah’s gaming initiative began modestly within the computer science department, according to Young.
    It wasn’t until 2008, when a group of students proposed a dedicated gaming area of study, that it gained traction.
    By 2010, the entertainment arts and engineering program, known around campus as EAE, was established with a structured curriculum with a dedicated focus on gaming and interactive entertainment.
    In 2017, the EAE program launched a bachelor’s degree in gaming, marking a significant step in its development. By 2021, it had become the university’s 10th-largest major, attracting around 1,200 undergraduates each year.
    “The demand has just skyrocketed,” Young said.
    In the Princeton Review’s 2024 rankings for top game design schools, the University of Utah rose to No. 4 for both undergraduate and graduate programs, up from No. 7 and No. 6, respectively, in 2023.
    Today, the program attracts a global student body, with 72% of its graduate students coming from outside Utah.
    The university has committed $25 million to support further expansion of the program.

    Top-grossing games

    John Blackburn, vice president and studio head at Avalanche Software, a division of WB Games, Inc., and a University of Utah alumnus, credits the success of 2023’s bestselling game, “Hogwarts Legacy,” to a talented team in Salt Lake City that includes many graduates of the university.
    The game surpassed $1 billion in revenue last year.

    Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

    “There are probably at least 30 people here directly from that program,” Blackburn said.
    According to Blackburn, the University of Utah’s contributions to the gaming industry extend back to pioneering work in 3-D graphics, including the creation of the first 3-D graphics image and the development of early flight simulators by companies such as Evans & Sutherland.
    “That has really bled into the local games scene,” said Blackburn. “And so people leave those companies and then make game companies.”
    Blackburn cofounded Avalanche Software in 1995, initially gaining recognition for its development of “Mortal Kombat” for the Super Nintendo and Genesis and later developing a reputation with titles such as “Cars” and “Toy Story 3” during its collaboration with Disney.
    In 2017, Epic Games, headquartered in Cary, North Carolina, launched “Fortnite” — one of the world’s most popular games, with more than 500 million registered users.
    Teams from around the world contributed to its creation, including some in Salt Lake City, where Donald Mustard, former chief creative officer at Epic and the game’s co-creator, was based.
    “The University of Utah and [Brigham Young University], as well as some of the other schools in Utah, have done a really good job building relationships with the developers that are in the area,” Mustard said.
    He also highlighted Utah’s unique approach to education: “While some of these students are in school, they have to make their own video game. That’s a very unique skill set that not a lot of people have.”
    “Those were the kind of people I wanted on my team,” Mustard said. More

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    A Florida ‘condo cliff’ is coming as owners deal with fallout from 2021 Surfside collapse

    Buildings that are at least 30 years old, as was the Champlain tower that fell, have to undergo special inspections, make repairs and gather reserve funds for future maintenance. The deadline is at the end of this month.
    For some associations, the costs are in the millions of dollars, and condo owners, many of whom are retirees on fixed incomes, are on the hook.
    Some owners are hoping to sell their units rather than comply, others are walking away, and still others are looking to investors to bail them out.

    After the deadly collapse of a 12-story condominium tower in the Surfside suburb of Miami, Florida, in 2021, state lawmakers implemented new requirements for older condominiums. Buildings that are at least 30 years old, as was the Champlain tower that fell, have to undergo special inspections, make repairs and gather reserve funds for future maintenance. The deadline is at the end of this month.
    With inspections now underway, the bills are coming due. For some associations, the costs are in the millions of dollars, and condo owners, many of whom are retirees on fixed incomes, are on the hook.

    Roughly 1 million units are subject to the new capital-intensive rules. Some owners are hoping to sell their units rather than comply, others are walking away, and still others are looking to investors to bail them out.
    Longtime analyst Peter Zalewski, founder of Miami-based real estate consultancy Condo Vultures, calls it the condo cliff.
    “I would compare it to what we saw in during the Great Recession, which is effectively zombie buildings. These are the units where a small minority are going to have to basically bear the cross or pay for everyone else who’s not able to pay, whether they can’t or they choose not to pay,” said Zalewski.
    According to Zalewski’s count, in South Florida, including Miami-Dade, Broward and Palm Beach counties, three-quarters of all the condo units for sale are more than 30 years old and subject to the new rules. In the usually busy summer season, sales were down 21.5% year over year and the average price was down 2.4%. In the third quarter of this year, active listings were up 60% from the same period the year before.

    Search and Rescue teams look for possible survivors in the partially collapsed 12-story Champlain Towers South condo building on June 29, 2021 in Surfside, Florida.
    Chandan Khanna | AFP | Getty Images

    Special assessments, levied to undertake the repairs, have been as high as $200,000 per unit owner, and repair bills have come in for as much as $15 million, according to a recent report from the Palm Beach Post.

    “What’s going on right now is these reports are coming in, maintenance fee budgets are being put together, and many boards do not want to acknowledge how much it’s going to be,” Zalewski said. “All the bills will be sent, and people will receive their little booklets where it says how much you have to pay every month. They’ll get them in January. So right now it’s kind of the calm before the storm.”
    In September, Florida Gov. Ron DeSantis called for a special session to deal with this condo association financial cliff. Legislative leaders, however, decided to wait until the regular session begins in early 2025 to consider making any changes to the law, saying they need to get a better idea of the financials involved, according to the Palm Beach Post.
    Stefania Ancona, a real estate agent in Miami, says the pool of buyers now is extremely limited, so sellers have to either pay the new assessments first or slash their prices. But there is another exit: investors.
    One such building — the Bay Garden Manor condo building on West Avenue in Miami — is set to be sold to a large investor and torn down to make way for luxury waterfront property, Ancona said.
    “I think it’s safe to say that foreclosures or short sales may happen. I don’t know yet. I haven’t seen many yet, because, again, the investors are buying out the buildings that they feel are in a desirable location,” she said.
    Condo prices were down about 2% in the summer season, and Zalewski said that’s just the beginning. 
    “It was only in September that the area started to get bombarded with information about the pitfalls,” said Zalewski. “Uninformed buyers saw cheaper prices [in the summer] and figured they better buy now so that they could own a piece of South Florida. There is a lot of buyer regret right now.” More

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    ‘Low-hire, low-fire’: The U.S. job market is stagnant right now, economists say

    The U.S. job market is seeing a low rate of layoffs but also a slow pace of hiring among employers.
    That comes amid signs of labor market strength overall: Unemployment is historically low, for example.
    This means while employers are holding on to workers, job seekers are having a tough time.

    Rudi_suardi | E+ | Getty Images

    The U.S. job market has been stagnant of late, a dynamic that contains both good and bad news for U.S. workers.
    On the one hand, businesses are holding on to their existing workforce, meaning employees are unlikely to lose their jobs, economists said. But it also may be hard for jobseekers to land a new gig as employers pull back on hiring, economists said.

    It’s a “low-hire, low-fire environment,” Bank of America economists wrote in a research note Friday.
    “The labor market is currently characterized by a lack of churn: soft hiring and low layoffs,” they said.
    That news may be disappointing for many workers: About half, or 51%, of U.S. employees were seeking a new job as of Nov. 1, the highest share since 2015, according to a Gallup poll published Tuesday. Overall job satisfaction has dipped to a record low, it found.

    The ‘great resignation’ became the ‘great stay’

    By many metrics, the job market is strong for American workers.
    The unemployment rate — which was 4.2% in November — is near historical lows dating to the late 1940s. The layoff rate in October was also at its lowest since the early 2000s, when record keeping began, and has hardly budged since 2021.

    However, employer hiring in October was sluggish: The hiring rate was at its lowest since 2013. The average duration of unemployment ticked up to 23.7 weeks in November, from 19.5 weeks a year earlier.  
    The current lack of dynamism in the job market represents whiplash for many workers, said Julia Pollak, chief economist at ZipRecruiter.

    Workers quit their jobs at a torrid pace in 2021 and 2022, as the U.S. economy awoke from its pandemic-era hibernation. Job openings ballooned to record highs and businesses competed for labor by raising wages at the fastest clip in decades, incentivizing workers to leave their gigs for better opportunities.
    This era, dubbed the “great resignation,” has been replaced by the “great stay,” Pollak said.
    This is due to a variety of factors, labor economists said.
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    Many businesses were scarred by their recent experience of holding onto workers amid fierce labor competition and have reacted by “labor hoarding,” said Cory Stahle, an economist at the job site Indeed.
    Employers have shifted their policies more toward retention and away from recruiting, Pollak said.
    The labor market has also gradually cooled.
    The U.S. Federal Reserve raised borrowing costs aggressively starting in 2022 to slow the economy and tame inflation, which applied the brakes on the job market. The central bank started cutting interest rates in September, as inflation declined significantly and the labor market flashed some warning signals.

    A ‘diverging’ labor market

    While strong in the aggregate, the job market is “diverging” for workers, Stahle said.
    Overall job growth has been “robust” but the bulk of job gains are occurring in a handful of industries like health care, government, and leisure and hospitality, Stahle said.
    Meanwhile, job growth in white-collar fields like software development, marketing, and media and communications “has been very, very slow,” he said. “Right now your experience with the labor market will depend on the type of job you’re doing,” he said.

    Hiring may bounce back if the Fed continues to cut interest rates, as employers may be more inclined to invest more in their businesses if borrowing costs are lower, economists said.
    In the meantime, “things are going to be a little more competitive than they were a couple years ago,” Stahle said.
    Job seekers should be sure to align their resumes with the skills that employers list on job posts, especially since many businesses use “applicant tracking systems” to automatically screen applications, he said.
    “People who really want out [of their job] may need to widen their search, expand their parameters, and get a bit uncomfortable and reskill,” Pollak said.
    But those with jobs they really like “have unprecedented job security,” she said. More

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    How much oil can Trump pump?

    Donald Trump, a man not renowned for the length of his attention span, likes simple formulas. Scott Bessent, his nominee to be treasury secretary, has one: “3-3-3”. He wants to cut America’s federal budget deficit to 3% of GDP, lift annual economic growth to 3% and boost the country’s oil and gas output by the equivalent of 3m barrels per day (b/d) by 2028, up from 30m in 2024. More

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    Ex-Dodge, Ram boss Tim Kuniskis returning to Stellantis after CEO’s exit

    Stellantis executive Tim Kuniskis had retired from the automaker in May.
    Kuniskis will once again lead the company’s Ram Trucks brand, according to two people familiar with the decision.
    His return comes roughly a week after Stellantis CEO Carlos Tavares unexpectedly resigned from the automaker following problems with its North American market.

    Dodge CEO Tim Kuniskis unveils the Charger Daytona SRT concept electric muscle car in Pontiac, Michigan, Aug. 17, 2022.
    Michael Wayland / CNBC

    DETROIT — Well-known Stellantis executive Tim Kuniskis is returning to the automaker effective immediately, CNBC has learned.
    Kuniskis, who retired from the automaker in May, will once again lead the company’s Ram Trucks brand, according to two people familiar with the decision. The people, who agreed to speak on the condition of anonymity in order to discuss the move, said the company’s leadership team alerted employees about the decision earlier Monday.

    His return comes roughly a week after Stellantis CEO Carlos Tavares unexpectedly resigned from the automaker following problems with its North American market.
    “Today’s changes will enable us to operate in a structure that will drive the best outcomes for the region, unlock significant potential and win in the market. A main lever is for the Ram brand to have its CEO singularly focused on that brand,” the company said in an emailed statement confirming the appointment.
    Kuniskis, who has overseen several of the carmaker’s brands in North America, had led the company’s Ram and Dodge brands before retiring.
    Kuniskis is arguably best known for leading Dodge for most of the last decade or so. He is considered the “father” of Dodge’s high-performance Hellcat models and “the unofficial spokesman” for American muscle cars.
    During his tenure, Dodge reestablished itself as a quintessential American muscle car brand. The brand did so with vehicles such as the more-than-700-horsepower Challenger and Charger Hellcat models and controversial Challenger Demon drag race cars. He also introduced the Hellcat-powered Ram TRX pickup truck.

    Kuniskis’ return was announced in conjunction with several other changes for the automaker’s North American operations. Chris Feuell, who had been leading the Ram and Chrysler brands, will now oversee Chrysler and Alfa Romeo; Jeff Kommor will solely lead North American sales; and Larry Dominique, who was leading Alfa Romeo for North America, will depart.
    Stellantis’ U.S. sales struggled under Tavares’ leadership, despite increases in the overall market. That includes a 17% year-over-year decline for the company through the third quarter, including a 24% sales decline for Ram. More

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    Another activist takes aim at Macy’s, seeking spending cuts and real estate restructuring

    Barington Capital has partnered with private equity firm Thor Equities to mount an activist push at struggling department store operator Macy’s.
    The dissidents are looking for the company to trim capital expenditures, beef up buybacks and take a hard look at options for its luxury brands and real estate portfolio.
    It’s the fourth activist push at the company in the last decade.

    People walk past the Macy’s Herald Square flagship store in New York City, Nov. 29, 2024.
    David Dee Delgado | Getty Images

    Activist investor Barington Capital revealed Monday it has a position in Macy’s and wants the company to cut spending, explore selling its luxury brands and take a hard look at its real estate portfolio.
    It marks the fourth activist push at the struggling department store in the last decade.

    Macy’s shares rose roughly 3% on the news in premarket trading. The activist has partnered with private equity firm Thor Equities in its push, according to a Barington presentation. The two investors did not disclose the size of its stake.
    The activist said it believes Macy’s can trim back its inventory and sales and administrative costs, according to a slide deck the firm provided. Barington said in the presentation that while the business continues to generate cash, management has chosen to spend nearly $10 billion on capital expenditures while neglecting buybacks or dividends.
    Macy’s shares have underperformed the S&P 500 and Retail Select indexes over the last 10 years.
    In a statement Monday, Macy’s stood by its plans to close struggling namesake stores and invest in the stronger parts of its business.
    “We remain confident in our Bold New Chapter strategy,” Macy’s said in the statement. “We look forward to engaging with our shareholders, including Barington and Thor.”

    The department store operator announced in February that it would shut about 150 – or nearly a third – of its namesake stores by early 2027. It plans to invest in the roughly 350 locations that remain and invest in its stronger chains, higher-end department store Bloomingdale’s and beauty retailer Bluemercury.
    Barington wants Macy’s to beef up its share buybacks and consider selling off its Bluemercury and Bloomingdale’s brands.
    Barington, like other activists that have preceded it, also believes that Macy’s should take a fresh look at its real estate portfolio. Barington values it at anywhere from $5 billion to $9 billion, echoing analyses done by other activist investors. Barington said Macy’s should create a separate subsidiary, which could in turn charge rent to Macy’s parent company while the subsidiary’s management assessed how to maximize value from those assets.
    Barington pointed to smaller department store operator Dillard’s, where it also criticized management, as an example of effective capital allocation. Dillard’s has a market cap of more than $7 billion and says it operates 273 stores in the U.S.
    Macy’s has become an activist target again as sales at the company’s namesake stores decline and it continues to close many of the mall anchors.
    In the most recent quarter, which ended Nov. 2, Macy’s said the company’s sales fell 2.4% to $4.74 billion. Comparable sales for its owned and licensed businesses, plus its online marketplace, dropped 1.3%.
    Macy’s postponed releasing full results for the quarter as it faces scrutiny for another reason. The company said it is investigating after it discovered an employee intentionally hid up to $154 million in delivery expenses on its accounting books for nearly three years. It said it plans to share full results and its outlook by Dec. 11.
    Selling real estate as Macy’s closes stores could free up cash for the business. Macy’s owns many of its mall-anchor stores, but has not said which locations it has sold. In late November, it said asset sale gains in the most recent quarter totaled $66 million and were higher than its expectations.
    In recent quarters, Macy’s has started to report the sales performance of stores that will remain open once it closes the latest round of namesake locations. That cuts out some mall stores that are struggling. At the Macy’s stores that will remain open beyond early 2027, comparable sales were down 0.9% on an owned-plus-licensed basis, including the third-party marketplace.
    Barington has mounted campaigns at other big consumer names, including Mattel, The Children’s Place, Hanes and Steve Madden. Thor Equities is a retail-focused private equity firm and was part of the buyout group that acquired Hurley several years ago.
    Correction: A previous version of this article misnamed the private equity firm that Barington Capital has partnered with. It is Thor Equities. More

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    AI’s growth is just getting started, BlackRock’s thematic ETF head says

    BlackRock expects infrastructure and cybersecurity plays to shine in 2025.
    Jay Jacobs, the firm’s U.S. head of thematic and active ETFs, cites the artificial intelligence boom as a major catalyst.

    “It’s still very early in the AI adoption cycle,” he told CNBC’s “ETF Edge” this week.
    According to Jacobs, AI companies need to build out their data centers. Plus, keeping that data safe is also a sound investment play for the new year.
    “If you think about your data, you want to spend more on cybersecurity as it gets more valuable,” he said. “We think this is really going to benefit the cybersecurity [and the] software community which is seeing very rapid revenue growth based off of this AI.”
    Jacobs also sees a wider impact in terms of the supporting infrastructure.
    “I think what people forget is kind of, magical as technology is, there’s real physical things on the ground that run that technology, whether it’s power, whether it’s data centers and real estate, whether it’s chips. It’s not just something that lives in the ether, in the cloud, there’s real physical things that have to happen, and that means energy, that means more materials like copper, that means more real estate. You really have to think about kind of the physical infrastructure that underlies it,” he added.

    So, for Jacobs, the theme is widening one’s investment scope.
    “It’s not just about megacap tech names. There’s other semiconductor companies, there’s other data center companies, there’s other software companies that are benefiting from the rise of this theme,” he said.
    Jacobs cited BlackRock’s iShares Future AI & Tech ETF (ARTY) and iShares AI Innovation and Tech Active ETF (BAI) as potential ways to benefit from the rise in AI. The iShares Future AI & Tech ETF is up around 13% for the year so far, while the iShares AI Innovation and Tech Active ETF is up around 13% since its Oct. 21 launch as of Friday’s close.

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