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    Billionaire Tom Gores to buy 27% of the LA Chargers for $750 million

    Private equity billionaire Tom Gores has agreed to pay $750 million to buy 27% of the National Football League’s Los Angeles Chargers.
    The deal was struck at an enterprise value of $4 billion, more than a 30% discount to the team’s value of $5.83 billion, according to CNBC’s Official 2024 NFL Team Valuations.
    Gores also owns the National Basketball Association’s Detroit Pistons.

    Detroit Pistons team owner Tom Gores claps during the press conference on July 30, 2021 at the Pistons Performance Center in Detroit, Michigan. 
    Nic Antaya | Getty Images Sport | Getty Images

    Private equity billionaire Tom Gores has agreed to pay $750 million to buy 27% of the National Football League’s Los Angeles Chargers at an enterprise value of $4 billion, according to two people with knowledge of the deal who spoke on the condition of anonymity to discuss nonpublic details.
    The $4 billion valuation is more than a 30% discount to the team’s value of $5.83 billion, according to CNBC’s Official 2024 NFL Team Valuations. Limited partners with no path to control of the team typically get about a 20% to 25% discount in these deals.

    Gores likely got a larger than usual discount because he bought such a large chunk of the Chargers — 27%, just 3% shy of the required stake for a controlling owner, though he will be a limited partner with no say in how the team is run.
    The deal is also subject to a “flip tax” of 10% the sale amount, with the obligation to pay falling on the seller, which will be equally divided among the other 31 teams in the league. The flip tax was an agreement the Chargers made with the league in 2015 as part of the pact to move the team to Los Angeles and is similar to the deal the Las Vegas Raiders made with the NFL before moving from Oakland, California.
    Gores is buying the entire 24% stake previously held by Dea Spanos Berberian as well as 1% each from Dean, Alexis and Michael Spanos, according to one of the people familiar with the deal.
    When the sale in completed, Dean, Alexis and Michael Spanos will own 69% of the team combined, the person said, while Gores and his wife, Holly, will hold 27% and two long-time limited partners will retain a combined 4%.
    Dean Spanos remains the controlling owner and chairman of the board of the Chargers. His father, the late Alex G. Spanos, bought the team in 1984 for $72 million.

    This transaction will also resolve, in their entirety, all of Berberian’s legal disputes with her three siblings and with the Chargers. These disputes date back to 2021, when Berberian brought a lawsuit seeking to force a sale of the franchise. The legal action, and related actions filed by Berberian and her family, all ultimately failed to proceed.
    Gores also owns the the National Basketball Association’s Detroit Pistons. The private equity founder along with this firm, Platinum Equity, bought the team for $325 million in 2011. Gores bought Platinum’s stake in 2015 giving him 100% of the team’s equity.
    The purchase of the Chargers stake is solely by Gores and not affiliated with Platinum Equity. The NFL declined to comment on the deal.
    Although stadium economics are an important factor in determining team valuations, when it comes to sports Gores seems to prefer being a renter rather than an operator.
    The Pistons play in Little Caesars Arena, which is home to the National Hockey League’s Detroit Red Wings. The Ilitch family, which own the Red Wings, operates the arena, meaning they get the money from non-NHL and non-NBA events.
    Likewise, the Chargers play in SoFi Stadium, which is also the home of the Los Angeles Rams. Stan Kroenke, who owns the Rams, also owns the stadium, which is the main reason why the Rams are worth $8 billion compared with $5.83 billion for the Chargers, according to CNBC’s 2024 rankings.
    But renting has its advantages: You don’t have to pay the financing or operating expenses of the stadium, nor do you have the responsibility of booking events.

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    Correction: Tom Gores’ deal for a stake in the Los Angeles Chargers is subject to a “flip tax” of 10% the sale amount, with the obligation to pay falling on the seller. A previous version mischaracterized the tax. More

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    TNT Sports to air new women’s basketball league Unrivaled

    Unrivaled, the new pro women’s basketball league, signed an exclusive multiyear media rights deal with Warner Bros. Discovery’s TNT Sports.
    The league, which was founded by WNBA stars Breanna Stewart and Napheesa Collier, will begin its inaugural season in January. Games will air on cable networks TNT and truTV, as well as streaming platform Max.
    TNT Sports will also invest an undisclosed amount in the league as part of the media rights deal.

    Napheesa Collier, #24 of the Minnesota Lynx, scores the game-winning basket during the game against the New York Liberty in Game 1 of the 2024 WNBA Finals at Barclays Center in Brooklyn, New York, on Oct. 10, 2024.
    Nathaniel S. Butler | National Basketball Association | Getty Images

    Warner Bros. Discovery is ensuring pro basketball will stay on TNT Sports.
    Unrivaled, the new and upcoming pro women’s basketball league, signed an exclusive, multiyear media rights deal to air its games on TNT and truTV, as well as streaming platform Max. Terms of the deal were undisclosed.

    The three-on-three league was co-founded earlier this year by WNBA stars Breanna Stewart of the New York Liberty and Napheesa Collier of the Minnesota Lynx as the popularity of women’s sports — basketball in particular — rises.
    The WNBA got a lift this season from rookies Caitlin Clark and Angel Reese — with big increases in regular season attendance and viewership. That has carried through to the postseason and most recently the Finals, which feature both Collier and Stewart. That has even translated to changes to the WNBA’s season next year, which will expand from 40 games to 44 games, and its Final series from five games to seven games.
    Unrivaled will operate in a new format and in the months before the WNBA season, allowing athletes another option to play basketball in the U.S. during the offseason, rather than having to play overseas. It will also give players equity in the new league, and feature contract opportunities that will offer the highest average salary in women’s pro sports league history.
    Reese and other top WNBA players have confirmed they will play in the new league, along with Stewart and Collier.
    Beginning Jan. 17, there will be more than 45 primetime regular season matchups airing across TNT Sports platforms during the season. Games will be featured on TNT Sports’ platforms three nights a week, including two games a week on TNT on Mondays and Fridays, and additional broadcasts on truTV on Saturdays, according to the release.

    Unrivaled highlights and other content will be also be available on other TNT platforms such as Bleacher Report and House of Highlights.
    Unlike other sports leagues, Unrivaled’s games will air solely across TNT Sports rather than having various partners.
    “I think consistency is key for us. If you build a consistent home, the fans know where to go,” said Alex Bazzell, Unrivaled president. “The second side of this is you want to partner with someone who wants to tell the story outside of the games and help push that forward. So them having Bleacher Report and House of Highlights … is pretty valuable for us.”
    The heightened interest in the WNBA led to the league’s most recent media rights deal being valued at $2.2 billion for 11 seasons, CNBC previously reported. The WNBA’s media rights deal is negotiated as part of the NBA’s agreement.
    The NBA’s recent 11 year, $77 billion media rights deal — which begins in the 2025-2026 season — with Amazon, Disney’s ESPN and Comcast’s NBCUniversal saw the end of a nearly 40-year relationship with Warner Bros. Discovery’s Turner Sports. Warner Bros. Discovery has sued the NBA in a bid to maintain its rights.
    The media rights deal with Unrivaled gives Turner Sports the opportunity to keep basketball on its air if it is not successful in its lawsuit.
    Unrivaled and TNT Sports will partner with Mediapro North America for audio and TV production.
    Star broadcaster and NBA Hall of Famer Charles Barkley recently said he wouldn’t leave TNT Sports even if the company doesn’t have NBA media rights in the future. Barkley is part of TNT Sports’ popular “Inside the NBA” program.
    TNT Sports will develop the pregame, postgame and other studio content, but specific talent has yet to be decided upon, spokespeople for Turner and Unrivaled said.
    TNT Sports has recently beefed up its roster — which already includes Major League Baseball and the National Hockey League — with some college football playoff games and The French Open, among other sports.

    Star investor lineup

    The new league has a hot lineup of investors, which will now also include TNT Sports.
    In the Wednesday announcement, Unrivaled said it has “sustained stability and financial security for all players and stakeholders through at least 2028.”
    When Unrivaled was announced earlier this year, it had just closed on a seed fund rounding and its investors included media executives such as former ESPN President John Skipper, ex-Turner President David Levy, and former Warner Bros. CEO Ann Sarnoff. The investors also included athletes like former NBA All-Star Carmelo Anthony and others who invested through the venture capital firm led by Alex Morgan, the recently retired star and captain of the U.S women’s national soccer team.
    Levy, who invested through his Horizon Sports & Experiences, and Skipper spearheaded the media rights discussions.
    TNT Sports has also agreed to invest an undisclosed amount in Unrivaled’s latest funding round, which is expected to close in coming weeks.
    The investment fits in with Warner Bros. Discovery CEO David Zaslav’s interest in doing sports deals that include ownership of intellectual property, which was earlier reported by CNBC. More

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    Novavax says FDA put hold on combination Covid-flu shot and influenza vaccine; shares plunge

    Novavax said the Food and Drug Administration has put a hold on its application for a combination shot targeting Covid and influenza and a stand-alone flu vaccine, sending shares of the company down sharply. 
    The so-called clinical hold is due to a single report of nerve damage in a patient who received the combination shot in a phase two trial that finished in July last year. 
    it appears to be a setback for the biotech company, which is scrambling to bring new products to market as demand for its Covid vaccine plummets worldwide.

    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

    Novavax on Wednesday said the Food and Drug Administration has put a hold on its application for a combination shot targeting Covid and influenza and a stand-alone flu vaccine, sending the company’s shares down sharply. 
    The biotech company’s stock fell nearly 20% on Wednesday. The so-called clinical hold is due to a single report of nerve damage in a patient who received the combination shot in a phase two trial that finished in July last year. 

    A clinical hold is an order issued by the FDA to a manufacturer to delay or suspend a proposed clinical investigation on a drug.
    It is unclear if the pause will impact Novavax’s ability to start and release data on phase three trials on those vaccines. Still, it appears to be a setback for the biotech company, which is scrambling to bring new products to market as demand for its Covid vaccine plummets worldwide.
    Novavax said it was working with the FDA to resolve the clinical hold on its combination shot and stand-alone flu vaccine. The company said other trials of its Covid and flu shots had not shown any safety concerns related to the type of nerve damage reported in the patient. 
    Novavax said it does not believe there’s an established connection that the vaccine had caused the nerve damage in the patient, but said it is working to provide more information to the FDA. 

    More CNBC health coverage

    “Our goal is to successfully resolve this matter and to start our Phase 3 trial as soon as possible,” Dr. Robert Walker, Novavax’s chief medical officer, said in a release. 

    Public health officials see Novavax’s protein-based Covid vaccine as a valuable alternative for people who don’t want to take mRNA shots from Pfizer and Moderna, which use a newer vaccine method to teach cells how to make proteins that trigger an immune response against Covid.
    Novavax’s shot, meanwhile, fends off the virus with protein-based technology, a decades-old method used in routine vaccinations against hepatitis B and shingles.

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    Here’s why the U.S. retirement system isn’t among the world’s best

    The U.S. retirement system gets a C+ grade and ranks No. 29 out of 48 in the Mercer CFA Institute Global Pension Index.
    Retirement plan coverage and 401(k) “leakage” are among the two primary problem areas, experts said.
    Policymakers have taken some steps to improve the system.

    Mixetto | E+ | Getty Images

    The U.S. retirement system doesn’t get high marks relative to other nations.
    In fact, the U.S. got a C+ grade and ranked No. 29 out of 48 global pension systems in 2024, according to the annual Mercer CFA Institute Global Pension Index, released Tuesday. It analyzed both public and private sources of retirement funds, like Social Security and 401(k) plans.

    A similar index compiled by Natixis Investment Management puts the U.S. at No. 22 out of 44 nations this year. Its position has declined from a decade ago, when it ranked No. 18.
    “I think [a C+ grade] would describe a rating where there is a lot of room for improvement,” said Christine Mahoney, global retirement leader at Mercer, a consulting firm.
    The Netherlands placed No. 1, followed by Iceland, Denmark and Israel, respectively, which all received “A” grades, according to Mercer. Singapore, Australia, Finland and Norway got a B+.
    Fourteen nations — Chile, Sweden, the United Kingdom, Switzerland, Uruguay, New Zealand, Belgium, Mexico, Canada, Ireland, France, Germany, Croatia and Portugal — got a B.

    Of course, retirement systems differ since they address a nation’s unique economies, social and cultural norms, politics and history, according to the Mercer report. However, there are certain traits that can generally determine how well older citizens fare financially, the report found.

    The U.S. system is often referred to as a three-legged stool, consisting of Social Security, workplace retirement plans and individual savings.
    The lackluster standing by the U.S. in the world is largely due to a sizable gap in the share of people who have access to a workplace retirement plan, and for the ample opportunities for “leakage” of savings from accounts before retirement, Mahoney said.
    Employers aren’t required to offer a retirement plan like a pension or 401(k) plan to workers. About 72% of workers in the private sector had access to one in March 2024, and about half (53%) participated, according to the U.S. Bureau of Labor Statistics.  
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    “The people who have [a plan], it’s probably pretty good on average, but you have a lot of people who have nothing,” Mahoney said.
    By contrast, some of the highest-ranked countries like the Netherlands “cover essentially all workers in the country,” said Graham Pearce, Mercer’s global defined benefit segment leader.
    Additionally, top-rated nations generally have greater restrictions relative to the U.S. on how much cash citizens can withdraw before retirement, Pearce explained.
    American workers can withdraw their 401(k) savings when they switch jobs, for example.
    About 40% of workers who leave a job cash out “prematurely” each year, according to the Employee Benefit Research Institute. A separate academic study from 2022 examined more than 160,000 U.S. employees who left their jobs from 2014 to 2016, and found that about 41% cashed out at least some of their 401(k) — and 85% completely drained their balance.
    Employers are also legally allowed to cash out small 401(k) balances and send workers a check.
    While the U.S. might offer more flexibility to people who need to tap their funds in case of emergencies, for example, this so-called leakage also reduces the amount of savings they have available in old age, experts said.
    “If you’re someone who moves through jobs, has low savings rates and leakage, it makes it difficult to build your own retirement nest egg,” said David Blanchett, head of retirement research at PGIM, Prudential’s investment management arm.

    Social Security is considered a major income source for most older Americans, providing the majority of their retirement income for a significant portion of the population over 65 years old.
    To that point, about nine out of 10 people aged 65 and older were receiving a Social Security benefit as of June 30, according to the Social Security Administration.
    Social Security benefits are generally tied to a worker’s wage and work history, Blanchett said. For example, the amount is pegged to a worker’s 35-highest years of pay.
    While benefits are progressive, meaning lower earners generally replace a bigger share of their pre-retirement paychecks than higher earners, Social Security’s minimum benefit is lesser than other nations, like those in Scandinavia, with public retirement programs, Blanchett said.
    “It’s less of a safety net,” he said.
    “There’s something to be said that, as a public pension benefit, increasing the minimum benefit for all retirees would strengthen the retirement resiliency for all Americans,” Blanchett said.
    That said, policymakers are trying to resolve some of these issues.
    For example, 17 states have established so-called auto-IRA programs in a bid to close the coverage gap, according to the Georgetown University Center for Retirement Initiatives.
    These programs generally require employers who don’t offer a workplace retirement plan to automatically enroll workers into the state plan and facilitate payroll deduction.
    A recent federal law known as Secure 2.0 also expanded aspects of the retirement system. For example, it made more part-time workers eligible to participate in a 401(k) and raised the dollar threshold for employers to cash out balances for departing workers. More

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    Morgan Stanley tops estimates on better-than-expected wealth management, trading and banking results

    Morgan Stanley topped analysts’ estimates for third-quarter profit as each of its three main divisions generated more revenue than expected.
    The bank said profit rose 32% to $3.2 billion, or $1.88 per share, and revenue jumped 16% to $15.38 billion.

    Morgan Stanley on Wednesday topped analysts’ estimates for third-quarter profit as each of its three main divisions generated more revenue than expected.
    Here’s what the company reported:

    Earnings:$1.88 a share vs $1.58 LSEG estimate
    Revenue: $15.38 billion vs. $14.41 billion estimate

    The bank said profit rose 32% to $3.2 billion, or $1.88 per share, and revenue jumped 16% to $15.38 billion.
    Morgan Stanley had several tail winds in its favor, starting with buoyant markets that helped its massive wealth management business, a rebound in investment banking after a dismal 2023, and strong trading activity. The Federal Reserve began taking down rates in the quarter, which should encourage more of the financing and merger activity that Wall Street firms capitalize on.
    “The firm reported a strong third quarter in a constructive environment across our global footprint,” Morgan Stanley CEO Ted Pick said in the release.
    Shares of the bank advanced 3.6% in premarket trading.
    The bank’s wealth management division saw revenue jump 14% from a year earlier to $7.27 billion, exceeding the StreetAccount estimate by nearly $400 million.

    Equity trading revenue rose 21% to $3.05 billion, compared with the $2.77 billion estimate, while fixed income revenue edged 3% higher to $2 billion, also higher than the $1.85 billion estimate.
    Investment banking revenue surged 56% from a year earlier to $1.46 billion, exceeding the $1.36 billion estimate.
    Investment management, the firm’s smallest division, also exceeded expectations, posting a 9% increase in revenue to $1.46 billion, modestly higher than the $1.42 billion estimate.
    Morgan Stanley’s Wall Street rivals also posted better-than-expected Wall Street revenue. JPMorgan Chase, Goldman Sachs and Citigroup topped estimates on strong revenue from trading and investment banking.
    This story is developing. Please check back for updates. More

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    Alibaba’s international arm says its new AI translation tool beats Google and ChatGPT

    Chinese e-commerce giant Alibaba’s international arm launched an updated version of its artificial intelligence-powered translation tool that, it says, is better than products offered by Google, DeepL and ChatGPT.
    The product supports 15 languages: Arabic, Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Turkish and Ukrainian.
    “The idea is that we want this AI tool to help the bottom line of the merchants, because if the merchants are doing well, the platform will be doing well,” Kaifu Zhang, vice president of Alibaba International Digital Commerce Group and head of the business’ artificial intelligence initiative, told CNBC.

    Chinese e-commerce company Alibaba has invested heavily in its fast-growing international business as growth slows for its China-focused Taobao and Tmall business.
    Nurphoto | Nurphoto | Getty Images

    BEIJING — Chinese e-commerce giant Alibaba’s international arm on Wednesday launched an updated version of its artificial intelligence-powered translation tool that, it says, is better than products offered by Google, DeepL and ChatGPT.
    That’s based on an assessment of Alibaba International’s new model, Marco MT, by translation benchmark framework Flores, the Chinese company said.

    Alibaba’s fast-growing international unit released the AI translation product as an update to one unveiled about a year ago, which it says already has 500,000 merchant users. Sellers based in one country can use the translation tool to create product pages in the language of the target market.
    The new version is based only on large language models, allowing it to draw on contextual clues such as culture or industry-specific terms, Kaifu Zhang, vice president of Alibaba International Digital Commerce Group and head of the business’ artificial intelligence initiative, told CNBC in an interview Tuesday.
    “The idea is that we want this AI tool to help the bottom line of the merchants, because if the merchants are doing well, the platform will be doing well,” he said.
    Large language models power artificial intelligence applications such as OpenAI’s ChatGPT, which can also translate text. The models, trained on massive amounts of data, can generate humanlike responses to user prompts.
    Alibaba’s translation tool is based on its own model called Qwen. The product supports 15 languages: Arabic, Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Turkish and Ukrainian.

    Zhang said he expects “substantial demand” for the tool from Europe and the Americas. He also expects emerging markets to be a significant area of use.
    When users of Alibaba.com — a site for suppliers to sell to businesses — are categorized by country, developing countries account for about half of the top 20 active AI tool users, Zhang said.
    Chinese companies have increasingly looked abroad for growth opportunities, especially e-commerce merchants. PDD Holdings’ Temu, fast fashion seller Shein and ByteDance’s TikTok are among the recent global market entrants. Many China-based merchants also sell on Amazon.com.

    Contextual clues

    Since Alibaba launched the first version of its AI translation tool last fall, the company said merchants have used it for more than 100 million product listings. Similar to other AI-based services, the basic pricing charges merchants by the amount of translated text.
    Zhang declined to share how much the updated version would cost. He said it was included in some service bundles for merchants wanting simple exposure to overseas users.
    His thinking is that contextual translation makes it much more likely that consumers decide to buy. He shared an example in which a colloquial Chinese description for a slipper would have turned off English-speaking consumers if it was only translated literally, without getting at the implied meaning.
    “The updated translation engine is going to make Double 11 a better experience for consumers because of more authentic expression,” Zhang said, in reference to the Alibaba-led shopping festival that centers on Nov. 11 each year.
    Alibaba’s international business includes platforms such as AliExpress and Lazada, which primarily targets Southeast Asia. The international unit reported sales growth of 32% to $4.03 billion in the quarter ended June from a year ago.
    That’s in contrast to a 1% year-on-year drop in sales to $15.6 billion for Alibaba’s main Taobao and Tmall e-commerce business, which has focused on China.
    The Taobao app is also popular with consumers in Singapore. In September, the app launched an AI-powered English version for users in the country.
    Nomura analysts expect that Alibaba’s international revenue slowed slightly to 29% year-on-year growth in the quarter ended September, while operating losses narrowed, according to an Oct. 10 report. Alibaba has yet to announce when it will release quarterly earnings. More

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    Tom Brady and partner Tom Wagner to pay over $200 million for stake in Las Vegas Raiders

    NFL owners approved former superstar quarterback Tom Brady as a minority owner of the Las Vegas Raiders.
    Brady also owns a small stake in the WNBA’s Las Vegas Aces.
    Brady retired from the NFL in 2023 and holds a lucrative broadcast deal with Fox Sports.

    Las Vegas Raiders owner Mark Davis walks off the field with former NFL quarterback Tom Brady before the preseason game between the Dallas Cowboys and the Las Vegas Raiders at AT&T Stadium in Arlington, Texas, on Aug. 26, 2023.
    Matthew Pearce | Icon Sportswire | Getty Images

    National Football League owners approved Tom Brady as a minority owner of the Las Vegas Raiders on Tuesday.
    The seven-time Super Bowl champ bought about a 10% stake in the Raiders with his business partner, Knighthead Capital founder Tom Wagner.

    Brady and Wagner are buying into the Raiders at about a $3.5 billion valuation, with an equity investment of about $220 million as part of the partnership, according to people familiar with the negotiations. On top of that amount, Brady and Wagner also had to pay a 10% “flip tax,” the proceeds of which will be divided among the league’s 31 other owners.
    Separately, former NFL player Richard Seymour purchased a less than 1% stake in the Raiders, also at a $3.5 billion valuation, the people said.
    The NFL’s 32 team owners signed off on the deal unanimously at the league meeting in Atlanta, the person told CNBC. Brady and Wagner did not attend the meeting, according to a person familiar with the matter.
    “I am eager to contribute to the organization in any way I can, honoring the Raiders’ rich tradition while finding every possible opportunity to improve our offering to fans…and most importantly, WIN football games,” Brady said in a statement.
    CNBC’s Official 2024 NFL Team Valuations pegged the Raiders as the NFL’s fifth-most valuable franchise, worth $7.8 billion, meaning Brady and Wagner got over a 50% discount. The typical discount for a limited partner with no say in how the team is run and no path to control ownership is 20% to 25%, according to sports bankers.

    The value of the Raiders has climbed since the team relocated from Oakland in 2020. Prior to the move, the team was valued among the bottom half of the league’s 32 teams.
    Since the team moved to Las Vegas and its new stadium, its revenue has increased significantly. The Raiders earned $780 million in revenue in 2023, the third highest in the league, and generated EBITDA of $115 million, according to CNBC’s valuations.
    While Allegiant Stadium is among the smallest in the NFL at 65,000 seats, the Raiders compensated by charging the highest ticket price in the league, CNBC previously reported. The average general ticket price last season was $169.
    Allegiant Stadium, which is operated by the Raiders, also hosts numerous non-NFL events throughout the year, which brings in additional revenue for the franchise. In 2023, the Raiders took in over $50 million from concerts and other events like college football.
    Brady’s bid for a piece of the team began in May 2023 but has been held up because some owners felt the initial offer was too discounted.
    After he first retired from the NFL, Brady signed a 10-year, $375 million broadcasting deal with Fox Sports in 2022. Brady’s new ownership will come with restrictions on how he covers the team.
    For example, Brady would be allowed to broadcast Raiders games, but he would not be permitted to attend in-person or online production meetings. He also may not have access to team facilities, players and coaches.
    Brady will also be subject to the league rules that prohibit public criticism of officials and other clubs.
    The five-time Super Bowl MVP is not new to the Las Vegas sports scene. He is also a minority owner of the Women’s National Basketball Association’s Las Vegas Aces, which, like the Raiders, is owned by Mark Davis.
    Brady will be just the third former NFL player to become a team owner.

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    United Airlines plans $1.5 billion share buyback, forecasts fourth-quarter earnings above estimates

    United Airlines’ third-quarter revenue and earnings topped Wall Street estimates.
    The airline said it will buy back $1.5 billion worth of shares, its first buyback since before the Covid-19 pandemic.
    United’s fourth-quarter earnings estimates came in above analysts’ forecasts.

    A United Airlines Boeing 737-MAX 8 aircraft departs at San Diego International Airport en route to New York on Aug. 24, 2024.
    Kevin Carter | Getty Images

    United Airlines said Tuesday that it is starting a $1.5 billion share buyback as the carrier reported higher-than-expected earnings for the busy summer travel season and forecast strong results for the last three months of the year.
    United expects to earn an adjusted $2.50 to $3.00 a share in the fourth quarter, compared to $2.00 a share a year earlier and the $2.68 analysts polled by LSEG estimated.

    Here is what United reported for the third quarter compared with what Wall Street expected, based on average estimates compiled by LSEG:

    Earnings per share: $3.33 adjusted vs. $3.17 expected
    Revenue: $14.84 billion vs. $14.78 billion expected

    The share buyback would be United’s first since before the Covid-19 pandemic. U.S. airlines received more than $50 billion in government aid during the pandemic travel slump that prohibited share repurchases and dividends, though airlines were still fighting for financial stability.
    Southwest Airlines announced a $2.5 billion share repurchase program last month.
    “Like other leading airlines and companies, we are initiating a measured, strategic share repurchase program,” United CEO Scott Kirby said in a note to staff on Tuesday. “Importantly, my commitment to you is that investing in our people and our business will always be my top priority even while we institute this share repurchase program.”

    Read more CNBC airline news

    For the third quarter, United posted revenue of $14.84 billion, up 2.5% from a year earlier and above analysts’ estimates. It reported net income of $965 million, down 15% from a year ago.

    United said domestic unit revenue was positive in August and September compared to last year as airlines trimmed a glut of flights that were pushing down fares. United expanded capacity by 4.1% in the third quarter. The carrier said corporate revenue rose 13% in the quarter; premium revenue, including business class tickets, rose 5%; and sales from its no-frills basic economy tickets were up 20%.
    The airline last week unveiled a far-flung expansion for next year that included new flights to Mongolia, Senegal, Spain and Greenland in a chase for international travel demand.
    Adjusting for one-time items, United reported earnings per share of $3.33, topping Wall Street forecasts and United’s estimate in July of $2.75 to $3.25 a share.
    Airline executives will hold a call with analysts at 10:30 a.m. ET on Wednesday and will likely face questions about demand for the end of the year and into 2025, as well as production problems at Boeing, where most factories have been idled during a more than monthlong machinist strike.
    United’s flight attendants’ union, which hasn’t yet reached a new labor agreement with the company slammed the airline’s decision to resume buybacks.
    In a statement, Sara Nelson, president of the Association of Flight Attendants-CWA, which represents crews at United, Spirit, Alaska and other carriers, said: “That money United just promised Wall Street belongs to Flight Attendants who worked throughout the pandemic and during this taxing recovery for all of us on the frontlines.”

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