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    Berkshire’s mounting cash pile could top $200 billion as Buffett continues selling stock

    Berkshire Hathaway’s cash hoard is likely to exceed its previous record of $189 billion when it reports second-quarter earnings Saturday morning.
    Buffett has been offloading winning investments in Apple, Bank of America and BYD, making some believe the Oracle of Omaha has grown concerned that the bull market is overheated.
    Buffett confessed at Berkshire’s annual meeting in May that he is open to putting more capital to work, but high prices give him pause.

    Warren Buffett in Omaha, Nebraska, on May 3, 2024.
    David A. Grogan

    Berkshire Hathaway’s highly scrutinized cash pile could top $200 billion — more than the entire annual gross domestic product of Hungary — amid CEO Warren Buffett’s rare sale of some of his favorite stocks.
    The Omaha-based conglomerate is likely to say its cash hoard topped the previous record of $189 billion, set in the first quarter, when it reports second-quarter earnings Saturday morning. Berkshire’s results come at a time when Buffett has been offloading winning investments in Apple, Bank of America and BYD, leading some to believe the Oracle of Omaha has grown concerned that the bull market is overheated.

    “It does look like he wants to de-risk the portfolio a little bit,” Bill Stone, chief investment officer at Glenview Trust Company and a Berkshire shareholder, said early in the week. “He’s trimming two top holdings and you don’t get anything more economically sensitive than the banks. The market seems so sure right now of a soft landing, and maybe he’s taking more of a contrarian view.”

    Arrows pointing outwards

    Berkshire has been a net seller of stocks for six straight quarters. Notably, Buffett trimmed his massive Apple bet by 13% in the first quarter for tax reasons after reaping enormous gains. The selling could have resumed in the second quarter as shares of the iPhone maker jumped 23% during the period.
    Meanwhile, in a surprising move, the conglomerate recently started dumping Bank of America shares, its second-biggest holding after Apple. Over the past 12 trading sessions, Berkshire has sold $3.8 billion of the Charlotte-based bank’s shares. The Bank of America sales began in July and will not be reflected in the second-quarter report.
    Buffett’s gigantic war chest has been earning sizeable returns due to the jump in Treasury yields over the past two years, but with interest rates set to decline from multiyear highs, his mounting cash pile could once again draw questions. If invested in three-month Treasury bills at about 5%, $200 billion in cash would generate about $10 billion a year, or $2.5 billion a quarter, but those returns are set to decline once the Federal Reserve starts lowering interest rates.
    “It’s just a question of how long they are going to sit on it,” Andrew Kligerman, TD Cowen’s Berkshire analyst, said in an interview, referring to Berkshire’s enormous cash pile.

    ‘Things aren’t attractive’
    Buffett, who turns 94 at the end of the month, confessed at Berkshire’s annual meeting in May that he is open to putting more capital to work, but high prices give him pause.
    “I think it’s a fair assumption that [cash holdings] will probably be about $200 billion at the end of this quarter,” the investment icon said at the time. “We’d love to spend it, but we won’t spend it unless we think [a business is] doing something that has very little risk and can make us a lot of money … it isn’t like I’ve got a hunger strike or something like that going on. It’s just that … things aren’t attractive.”

    Stock chart icon

    Berkshire Hathaway

    Weakness in noninsurance
    Investors will also closely study the quarterly results for Berkshire’s BNSF Railway and Berkshire Hathaway Energy utility business, which recently showed signs of weakness. BNSF is grappling with wage increases and revenue declines, while BHE faces pressure from being held liable for damage caused by wildfires.
    “The non-insurance side will weigh on the results, whether it’s the sluggish volumes in railroad coupled with higher labor costs, or utilities, which could put up a good quarter, but nobody’s going to be excited about that just given the liability exposure,” said TD Cowen’s Kligerman, who recently initiated research coverage of Berkshire with a hold rating.
    Conversely, Berkshire’s insurance business has been a bright spot, with a 185% year-over-year increase in insurance underwriting earnings in the first quarter.
    Shares of Berkshire have rallied more than 21% this year, outperforming the S&P 500’s 14% return, through Thursday. The conglomerate’s market capitalization has ballooned to $956 billion, close to joining the tiny number of U.S. stocks valued at $1 trillion or more.

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    NASA weighs Boeing vs. SpaceX choice in bringing back Starliner astronauts

    NASA management has been discussing this week whether it should return the agency’s astronauts on board Boeing’s misfiring Starliner capsule or send back the spacecraft empty.
    SpaceX’s Crew Dragon spacecraft would serve as the likely alternative to return the crew from the ISS.
    For its part, Boeing remains confident that Starliner can return the astronauts safely, and no decision has been made yet.
    But the concerns reveal that there is less confidence internally on Starliner than the agency has publicly disclosed.

    Boeing spacecraft Starliner is seen from the window of SpaceX’s Dragon capsule “Endeavour” on July 3, 2024 while docked with the International Space Station during the crew flight test.

    NASA management has been in deep discussion this week about whether to return the agency’s astronauts on board Boeing’s misfiring Starliner capsule or to go with the alternative of using a SpaceX craft to rescue the crew.
    The agency’s concern with Starliner — which flew NASA astronauts Butch Wilmore and Suni Williams to the International Space Station in early June — comes from not having identified a root cause for why multiple of the spacecraft’s thrusters failed during docking, a person familiar with the situation told CNBC.

    NASA this week has been discussing the possibility of returning Starliner empty and instead using SpaceX’s Crew Dragon spacecraft to return its astronauts. There is no consensus among those responsible for making the decision, that person said, calling the outcome of NASA’s ongoing discussions unpredictable given the variety of factors involved.
    The Starliner capsule “Calypso” has now been in space 59 days and counting. The mission is intended to serve as the final step toward proving Boeing’s long-delayed spacecraft is safe to fly lengthy crew missions to-and-from the ISS.
    The Boeing crew flight was initially planned to last a minimum of nine days. But it has been extended several times while the company and NASA conduct testing both back on the ground and in space in an attempt to understand the thruster problem.
    While NASA and Boeing leadership have publicly characterized the extensions as a data-gathering exercise, the concerns raised in recent days reveal that there is less confidence internally on whether Starliner is safe to return the astronauts than the agency has disclosed.

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    Ars Technica first reported NASA’s mixed opinion on Starliner’s situation. NASA previously noted that SpaceX serves as a backup but has sought to deemphasize that possibility, calling Boeing’s spacecraft the “primary option” for return.

    For its part, Boeing says it has the “flight rationale” to return Starliner with the astronauts on board, meaning the company believes the spacecraft can return without too much risk.
    “We remain confident in the Starliner spacecraft and its ability to return safely with crew. We are supporting NASA’s requests for additional data, analysis and data reviews to affirm the spacecraft’s safe undocking and landing capabilities,” a Boeing spokesperson said in a statement to CNBC on Friday.
    If Starliner returns empty, the most likely alternative would be to bring the astronauts back using SpaceX’s Crew Dragon by removing two astronauts from the Crew-9 mission — currently planned to launch four people in the coming weeks. That would open up two seats for Wilmore and Williams.

    Members of NASA’s Crew-9 stand by SpaceX’s Falcon 9 rocket. From left: NASA pilot Nick Hague,

    NASA did not respond to CNBC’s request for comment on the ongoing Starliner discussions, but told Ars Technica in a statement that the agency “is evaluating all options for the return.”
    “No decisions have been made and the agency will continue to provide updates on its planning,” NASA said.

    Trusting the thrust

    After testing this past weekend, NASA noted that 27 of Starliner’s 28 thrusters appear to be healthy. The thrusters, also known as its reaction control system, or RCS, engines, help the spacecraft move in orbit.
    But from an engineering perspective, not having a root cause for why five of the thrusters failed on the flight to the ISS means that risk remains for more thrusters to malfunction during the return flight.
    Boeing’s Mark Nappi, vice president of the Starliner program, said during a press conference on July 25 that testing of the thrusters has resulted in “very significant” findings that “are likely the root cause.” But despite that, the company has not identified the root cause yet.
    “We’re going to continue to take that hardware apart so that we can finally prove this,” Nappi said at the time.
    NASA now needs to decide if it’s willing to trust that the unknown issue with Starliner’s thrusters does not arise again, or even potentially cascade into other problems.

    An unpredictable outcome

    NASA’s lack of consensus arose when the Commercial Crew Program Control Board met earlier this week to discuss Starliner’s return. PCBs are a standard part of NASA’s decision-making process, dating back to the Space Shuttle era, and are an effort to make sure any risks can be elevated to the highest levels of the agency’s authority.
    The PCB, chaired by Commercial Crew program manager Steve Stich, did not come to a decision on whether to move forward with a flight readiness review, the next major agency step toward establishing a date for Starliner to return. The next PCB meeting is expected in the coming days, with NASA noting in a blog post on Thursday that return planning will continue into next week.
    If any members of the PCB dissent on the decision to return Starliner with crew, the decision would go up the chain of command until the dissent is addressed. As it stands, the discussions within the PCB do not have a predictable outcome as NASA personnel discuss the level of risk involved on returning crew with Starliner.

    Making a choice

    NASA often emphasizes that “astronaut safety remains the top priority” for the agency in making decisions about human spaceflight, an inherently risky endeavor.
    But the choice NASA faces has further ramifications, which threaten Boeing’s involvement in the agency’s Commercial Crew Program. Already, Boeing’s Starliner losses total more than $1.5 billion due to repeated setbacks and years of delays in developing the spacecraft.
    If NASA backs Boeing and returns Wilmore and Williams on Starliner, the agency is accepting a currently unquantifiable amount of risk. A major failure during the return, with the astronauts’ lives at stake, would put NASA leadership under pressure to end Boeing’s contract and involvement in the program.
    If NASA decides to send Starliner back empty, it’s a vote of no confidence in Boeing that may lead the company to cut its losses and withdraw from the program.
    Additionally, if NASA takes the SpaceX alternative and Starliner returns home without incident, the agency faces blowback from being seen as overreacting to a situation that it publicly declared for weeks was not a significant risk. More

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    in Finance

    Here’s where the jobs are for July — in one chart

    The information services sector was a notable weak spot for July, posting a job loss of 20,000.
    Professional and business services and financial activities experienced payroll declines of 1,000 and 4,000, respectively.

    People walk through a Manhattan mall on July 05, 2024 in New York City.
    Spencer Platt | Getty Images News | Getty Images

    Hiring in the U.S. slowed significantly last month, with information and financial sectors registering job losses.
    The information services sector was a notable weak spot for July, posting a job loss of 20,000. Professional and business services and financial activities experienced payroll declines of 1,000 and 4,000, respectively.

    “These sectors are known for creating higher-wage, higher-quality jobs,” said Julia Pollak, chief economist at ZipRecruiter. “The labor market is clearly no longer normalizing. Further deterioration could set off a negative cycle of job losses, consumer spending declines, business revenue declines and more job cuts.”

    Nonfarm payrolls grew by just 114,000 for the month, well below the Dow Jones estimate for 185,000. The unemployment rate climbed to 4.3%, its highest since October 2021.
    To be sure, there were some relative bright spots.
    Health care again led in job creation, adding 55,000 to payrolls. Other notable gainers included construction (25,000), government (17,000), and transportation and warehousing (14,000). Leisure and hospitality, another leading gainer over the past few years, added 23,000.
    “The latest snapshot of the labor market is consistent with a slowdown, not necessarily a recession. However, early warning signs suggest further weakness,” said Jeffrey Roach, chief economist at LPL Financial.

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    Morgan Stanley tells wealth advisors they can pitch bitcoin ETFs in a first for a big bank

    Morgan Stanley on Friday told its army of financial advisors that it will soon allow them to offer bitcoin ETFs to some clients, a first among major Wall Street banks, CNBC has learned.
    The firm’s 15,000 or so financial advisors can solicit eligible clients to purchase shares of two exchange-traded bitcoin funds starting Aug. 7, according to people with knowledge of the policy.
    Those funds are BlackRock’s IShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund, the people said.

    Getty Images

    Morgan Stanley on Friday told its army of financial advisors that it will soon allow them to offer bitcoin ETFs to some clients, a first among major Wall Street banks, CNBC has learned.
    The firm’s 15,000 or so financial advisors can solicit eligible clients to purchase shares of two exchange-traded bitcoin funds starting Wednesday, according to people with knowledge of the policy.

    Those funds are BlackRock’s iShares Bitcoin Trust and Fidelity’s Wise Origin Bitcoin Fund, the people said.
    The move from Morgan Stanley, one of the world’s largest wealth management firms, is the latest sign of the adoption of bitcoin by mainstream finance. In January, the U.S. Securities and Exchange Commission approved applications for 11 spot bitcoin ETFs, heralding the arrival of an investment vehicle for bitcoin that is easier to access, cheaper to own and more readily traded.
    Bitcoin has weathered market sell-offs, the spectacular collapse of crypto exchange FTX and criticism from the most established figures in finance including JPMorgan Chase CEO Jamie Dimon and Berkshire Hathaway CEO Warren Buffett.
    So it’s not surprising that Wall Street’s major wealth management businesses didn’t immediately embrace the new ETFs, forbidding their financial advisors from pitching them and only allowing trades if clients actively sought out the product.
    Goldman Sachs, JPMorgan, Bank of America and Wells Fargo still follow that policy, according to spokespeople at the four banks.

    ‘Aggressive’ tolerance

    Morgan Stanley made the move in response to demand from clients and in an attempt to follow an evolving marketplace for digital assets, said the people, who declined to be identified speaking about the bank’s internal policies.
    The bank is still striking a note of caution, however, in the rollout: Only clients with a net worth of at least $1.5 million, an aggressive risk tolerance and the desire to make speculative investments are suitable for bitcoin ETF solicitation, said the people. The investments are for taxable brokerage accounts, not retirement accounts, they added.
    The bank will monitor clients’ crypto holdings to make sure they don’t end up with excessive exposure to the volatile asset class, according to the sources.
    The only crypto investments approved for solicited purchase at Morgan Stanley are the pair of bitcoin ETFs from BlackRock and Fidelity; private funds from Galaxy and FS NYDIG that the bank made available starting in 2021 were phased out earlier this year.
    Morgan Stanley is watching how the market for newly approved ether ETFs develops and hasn’t committed to whether it would provide access to those, the people said.

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    Correction: Private funds from Galaxy and FS NYDIG that Morgan Stanley made available starting in 2021 were phased out earlier this year. An earlier version of this story included inaccurate information from Morgan Stanley sources about the company’s crypto investment offerings. More

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    Olympics draw new investments to niche sports and women’s teams

    USA women’s rugby sevens, water polo, and women’s track and field scored major investments around the 2024 Paris Olympics.
    Flavor Flav, Alexis Ohanian and Michele Kang are among those contributing to lesser-known sports and women’s teams.
    “Niche sports often don’t get the spotlight they deserve, but they are packed with incredible talent and heart,” Flavor Flav said in announcing his support for water polo.

    Players of Team United States celebrate following victory during the Women’s Rugby Sevens Bronze medal match between Team United States and Team Australia on day four of the Olympic Games Paris 2024 at Stade de France on July 30, 2024 in Paris, France. 
    Michael Steele | Getty Images Sport | Getty Images

    The 2024 Paris Olympics are attracting new funds for lesser-known sports and women’s teams, with USA women’s rugby sevens, water polo and women’s track and field scoring major contributions this year.
    The USA women’s rugby sevens team earned a $4 million gift from investor Michele Kang earlier this week. Rapper and reality TV personality Flavor Flav threw his support behind water polo, and Alexis Ohanian, the husband of tennis superstar Serena Williams and the co-founder of Reddit, is investing in women’s track and field.

    “Niche sports often don’t get the spotlight they deserve, but they are packed with incredible talent and heart,” Flavor Flav said in announcing his support for water polo in July.
    Flavor Flav announced a five-year partnership with USA water polo, which includes funds for the 2024 USA women’s team as well as serving as the “official hype man” for both the men’s and women’s teams. The size of his contribution wasn’t disclosed.

    Flavor Flav of United States of America during the Women’s Water polo Group B match between Greece and United States of America on Day 1 of the Olympic Games Paris 2024 at Aquatics Centre on July 27, 2024 in Paris, France. 
    Defodi Images | Getty Images

    He pledged to his support after player Maggie Steffens posted on Instagram that she and her teammates often have to work a second or third job in order to compete, given that water polo doesn’t garner as much attention as other sports.
    The USA women’s water polo team has won gold for the past three Olympics, and Flavor Flav aims to elevate their visibility. The partnership includes his commitment to boosting USA water polo on social media, beyond cheering poolside.

    Growing support

    Kang’s contribution to women’s sevens rugby will span four years, providing resources for players and coaching staff ahead of the 2028 Summer Olympics in Los Angeles.

    Kang, who founded Kynisca Sports for the advancement of women’s athletics globally, said that 2024 has been a “banner year” for women’s sports with record-breaking engagement. As sponsors and networks increasingly recognize the value of women’s sports, she said that now is the time to invest in them.

    Team United States celebrate victory as they pose for a photo with the Bell after the Women’s Rugby Sevens Quarter Final match between Team Great Britain and Team United States on day three of the Olympic Games Paris 2024 at Stade de France on July 29, 2024 in Paris, France. 
    Michael Steele | Getty Images Sport | Getty Images

    The support comes after the women’s rugby sevens team won bronze, collecting the first Olympic medal for the United States in rugby sevens, among both the men’s and women’s teams. They also set a new record for a women’s rugby event, with 66,000 fans packed into Stade de France, according to World Rugby.
    “This Eagles team, led by players like Ilona Maher and co-captains Lauren Doyle and Naya Tapper, has captivated millions of new fans, bringing unprecedented attention to the sport,” Kang said in the announcement.
    Maher told CNBC this week that without a strong performance at the Games, the team may not have survived.
    “Our coach said to us if we don’t win a medal, we might not have a program next year, and so that really stuck with me, those words, and so we delivered,” Maher said.

    Beyond the Games

    Ohanian already co-own’s a women’s soccer club, and he told CNBC’s “Squawk Box” this week that he aims to extend the popularity of women’s track and field beyond its Olympics peak.
    He announced in April that his venture capital firm will host a competition in late September with the largest ever prize pool for a women’s track and field event. Ohanian is doubling the stakes of the Paris Games with a $30,000 top prize.
    “Nothing about this is charity nor should it be charity,” Ohanian said. “This is about excellence, about celebrating it.”
    — CNBC’s Jessica Golden, Kasey O’Brien and Nicolas Vega contributed to this report.
    Disclosure: CNBC parent 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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    Buffett’s Berkshire sells $3.8 billion worth of Bank of America in 12-day selling spree

    Warren Buffett speaks during the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, May 4, 2024.

    Warren Buffett is not done selling Bank of America.
    Berkshire Hathaway shed a total of 19.2 million BofA shares on Tuesday, Wednesday, and Thursday for almost $779 million at an average selling price of $40.52 per share, according to a new regulatory filing.

    The conglomerate has now been offloading the bank stock for 12 consecutive days with total sales now exceeding $3.8 billion. Its remaining 942.4 million shares have a market value of $37.2 billion at Thursday’s close of $39.50.
    As of Thursday’s close, Bank of America fell to the No.3 spot on Berkshire’s list of top holdings, trailing behind Apple and American Express, which is currently valued at $37.7 billion. Before the selling spree, BofA had long been Berkshire’s second biggest holding.
    Berkshire remains the bank’s largest shareholder with a 12.1% stake.
    The bank stock has dropped 5.2% so far this week, going as low as $38.98 in Thursday’s trading as recession fears plague the financial sector. Year to date, BofA is up more than 17%, outperforming the S&P 500.

    Stock chart icon

    Bank of America

    Buffett famously bought $5 billion worth of BofA’s preferred stock and warrants in 2011 in the aftermath of the financial crisis, shoring up confidence in the embattled lender struggling with losses tied to subprime mortgages. He converted those warrants in 2017, making Berkshire the largest shareholder in BofA, vowing that it would be a “long, long time” before he would sell.

    The legendary investor said then that he liked the business, valuation and management of the Charlotte-based bank “very much.”
    BofA, under the leadership of Brian Moynihan since 2010, recently reported blowout results for the second quarter that showed rising investment banking and asset management fees as well as a positive outlook on net interest income. More

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    Singapore’s monetary authority sets up review group in bid to revive its equities market

    The group will focus on addressing market challenges, fostering listings, and facilitating market revitalization, as well as enhancing regulations to facilitate market growth and foster investor confidence.
    MAS said another key goal will be to identify methods for encouraging private sector participation, including from capital market intermediaries, investors and listed companies. 

    Signage for the Monetary Authority of Singapore (MAS) is displayed outside the central bank’s headquarters in Singapore.
    Sam Kang Li | Bloomberg | Getty Images

    Singapore’s central bank established a task force to bolster the city-state’s stock market.
    The Monetary Authority of Singapore announced that the review group will evaluate measures to “improve the vibrancy” of the Singapore equities market.

    MAS said on Friday the panel will focus on addressing market challenges, fostering listings, and facilitating market revitalization, as well as enhancing regulations to facilitate market growth and foster investor confidence.
    It said another key goal will be to identify methods for encouraging private sector participation, including from capital market intermediaries, investors and listed companies. 
    The authority noted that a “dynamic equities market is an important part of the capital formation value chain,” and that a liquid market enables companies to not only access capital as they expand, but also “allows asset owners and the investing public to participate in the growth of quality companies.”
    “Improving the attractiveness of Singapore’s equities market can therefore enhance Singapore’s standing as a vibrant enterprise and financial hub,” the MAS said, adding that this will also “[complement] Singapore’s innovation and start-up ecosystem, private markets, as well as asset and wealth management sectors.”

    Stock chart icon

    Despite the Straits Times Index rising in three of the last four years including 2024, Singapore’s stock market has been long plagued by thin trading volumes and more delistings than listings. This has led observers to describe the exchange as “boring,” “unexciting” and even once in 2021, a “zombie” bourse.

    Turnover velocity at the SGX, a measure of market liquidity, stood at 36% for the whole of 2023, compared to 57.35% at the Hong Kong Exchange in the same period, and 103.6% at the Japan Exchange.
    Analysts who previously spoke to CNBC outlined ways to revive interest in the SGX, including taking lessons from “value up programs” in Japan and South Korea.
    The review group announced Friday will be chaired by Chee Hong Tat, Singapore’s second minister of finance, and also include members like Koh Boon Hwee, the current chairman of the SGX.
    The SGX said it welcomes the announcement and pledged to work closely with the review group.SGX RegCo, the regulatory arm of the exchange, will also aim to “increase accountability, transparency and market discipline.””Only a whole-of-ecosystem approach can lead to transformative actions that will give fresh impetus to improving liquidity and listings in Singapore’s equities market,” SGX said in a statement to CNBC. More

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    Venu, a $42.99 per month sports streamer, has a tough marketing challenge to find an audience

    Venu Sports will be a case study in the value of marketing.
    Sling TV already sells a product that’s similar to Venu Sports, and it’s been losing customers for five years.
    Venu said Thursday the streaming service will cost $42.99 per month when it launches this fall.

    Actor Jon Hamm playing Don Draper in Mad Men.
    Michael Yarish | AMC | AP

    Call Don Draper, Venu Sports may have a marketing problem
    The Disney, Fox and Warner Bros. Discovery jointly-owned streaming service said Thursday it will launch this fall at $42.99 per month. That’s much more expensive than Netflix, Max, Peacock or any other major subscription streaming service. It’s a lot less than the $73-per-month YouTube TV or a standard cable bundle — but those offerings include a wide variety of entertainment content beyond sports.

    Venu will give consumers access to a bundle of networks: ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, Fox, FS1, FS2, BTN, TNT, TBS, and truTV. Subscribers will also get ESPN+. The plan is to debut in time for the football season. It doesn’t include CBS and NBC, two networks that have the rights to many sports, including college football and NFL games.
    Venu’s theoretical user is someone willing to pay a hefty monthly subscription for a narrow segment of media — live sports, but not all live sports. The service is marketing itself as a product for so-called “cord nevers” — a set of younger consumers who haven’t wanted to pay for cable because it’s too expensive but have been yearning for access to ESPN and other live sports.
    It’s entirely unclear this user base will materialize.
    There are two major obstacles for Venu to succeed. First, the total addressable market of users who are OK with paying $43 per month for some sports but not OK with paying for cable may not be that high. Many non-cable subscribers are content to watch highlights on YouTube and their favorite influencers for commentary. According to a survey by Kantar, cited by YouTube at its 2024 upfront, 54% of people would rather watch creators break down a major live event than actually watch the event.
    On the other end of the spectrum, NFL-crazed younger people will have to buy Peacock and Paramount+ — the streaming services attached to NBC and CBS — to get a full slate of NFL games. They could also get a digital antenna to pair with Venu, but antenna uptake among younger viewers may be a tad oxymoronic.

    Other major sporting events — such as the ongoing Olympics — simply won’t be available on Venu, because Olympic broadcaster Comcast’s NBCUniversal isn’t a part of the service.

    An existing player

    The second problem is potentially bigger: A product like Venu already exists — and it may already be a better deal than Venu.
    For $60 per month, Echostar’s Sling TV offers the popular networks that come with Venu — ESPN, TNT, TBS, Fox and ABC — but it also includes NBC. Moreover, it also comes with CNN, Fox News, MSNBC, Bravo, USA, HLN, Discovery NFL Network, and a slew of other networks — 46 in all, to Venu’s 14. Plus, it comes with an introductory offer where consumers can pay just $30 for the first month.
    For those that just want ESPN, Sling TV also offers a $40-per-month package that doesn’t include the broadcast networks but does come with TBS, TNT, CNN, and more than 20 other networks.

    Sinseeho | Istock | Getty Images

    As of the end of March, Sling TV had 1.92 million subscribers, and it’s not growing. It lost 135,000 customers in the first quarter, which was actually a narrower loss than the 234,000 subscribers it lost in the first quarter a year ago.
    At the end of 2021, Sling TV had 2.5 million customers, down from the 2.7 million subscribers it topped out at in 2019.
    The company blamed the existence of other streaming services for its decline last quarter.
    “We continue to experience increased competition, including competition from other subscription video-on-demand and live-linear OTT service providers, many of which are providers of our content and offer football and other seasonal sports programming direct to subscribers on an a la carte basis,” Echostar said in a filing.
    To sum up, Sling TV — a more robust offering than Venu for about $17 more per month — has been losing subscribers for five years and never got more than 2.7 million as its peak.
    That’s quite the marketing challenge for Venu, which will need to convince consumers that it’s worth signing up for on the strength of branding and technology.
    Or, it will hope that its $43 per month offer lasts long enough that it can take advantage of the $17 delta. The typical pattern for bundles of live networks is they start with an introductory offer only to raise prices. Venu hinted at this in its press release, telling consumers they could lock in the $43 per-month price for 12 months from time of sign-up — suggesting a price increase may be coming.
    Venu wants to add more sports to the service in time, but that will likely cause the price to increase, making the value proposition an even tougher sell for cord-nevers.
    Further undercutting Venu, Disney is already planning an ESPN Flagship streaming service in the fall of 2025, which will include ESPN for a lower price than Venu.
    Disney, Warner Bros. Discovery and Fox will argue that they’re going for maximum coverage here — kind of like the Apple iPad mini did in slotting into the tech company’s existing product line-up between its phones and larger tablets. Maybe there’s an audience for Venu, and if there is, the companies want to serve it. Fox CEO Lachlan Murdoch has already predicted the service can get 5 million subscribers in the next five years.
    But even 5 million seems ambitious given Sling TV’s struggles. Getting there will require a lot of money spent on marketing.
    And that effort may be so costly that it defeats the purpose.
    Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032. NBC Sports broadcasts NFL games. More