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    An art market full of cracks is about to face a $1 billion test

    Art auction sales at Christie’s, Sotheby’s and Phillips over the next two weeks are expected to total $1.2 billion, down 18% from a year ago, according to ArtTactic.
    Dealers and art experts say the auction art market is stalled over price.
    While the spring sales typically have more than a dozen works offered for more than $30 million each, this year there are just a few.

    A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
    The key May art sales at major auction houses are expected to be down from last year, as wealthy buyers and sellers take a breather from the frenzied prices of 2021 and 2022.

    Art auction sales at Christie’s, Sotheby’s and Phillips over the next two weeks are expected to total $1.2 billion, down 18% from a year ago and nearly half the total for the May 2022 sales, according to ArtTactic.
    It extends a recent decline for the art market from its post-Covid peak, when cheap money, a booming stock market and fiscal stimulus saw record sales. Last year, global auctions of fine art fell 27% from 2022 — the art market’s first contraction since the start of the pandemic in 2020 — and the average price dropped 32%, marking the biggest decline in seven years, according to ArtTactic.
    During the first quarter of this year, sales in the contemporary and postwar category — the big money maker and growth driver for the art market in recent years — plunged 48%, according to ArtTactic.

    The auction houses say demand from buyers remains strong. The problem, they say, is supply, as collectors hold back on selling their trophies for a better market environment. This spring, there are also no big single-owner collections up for sale, like the Macklowe Collection or Paul Allen Collections that helped power sales in previous years.
    “We’re seeing what people perceive as a smaller offering this season,” said Brooke Lampley, global chairman and head of global fine art at Sotheby’s. “The proof is in the pudding. It’s the buyers showing up and what the work will sell for that will define our perception of the art market right now. And I expect the results to be strong.”

    Price pressures

    Dealers and art experts say the auction art market is stalled over price, with sellers not willing to get a lower price than they might have gotten at the peak of the market in 2021-2022. Buyers, meanwhile, are demanding discounts due to rising interest rates, an uncertain election year and geopolitical uncertainty.
    “Sellers want 20% more, and buyers want 20% less,” said Philip Hoffman, CEO of the Fine Art Group, an advisory and art finance firm. “There is a stalemate.”

    CNBC’s Robert Frank before an Andy Warhol and Jean-Michel Basquiat collaboration at Sotheby’s.
    Crystal Lau | CNBC

    Dealers say today’s buyers don’t have the confidence they had two or three years ago: Persistent inflation, higher interest rates, fears of a slowing economy, the upcoming elections and geopolitical crises are all causing many collectors to pause their buying.
    “People feel hesitant,” said Andrew Fabricant, chief operating office at Gagosian, the mega-gallery and dealership. “It’s an election year, there is the situation with the Fed, are they going to cut or not. The cost of money is relatively high compared to a few years ago.”
    Even buyers who have the cash and are willing to pay aren’t buying, because there is a dearth of top-level art coming up for auction, according to experts.
    “Our clients have have a ton of cash,” Hoffman said. “The question they’re asking is, ‘Should we buy in to the art market right now?'”

    Fewer pieces

    While the spring sales typically have more than a dozen works offered for more than $30 million each, this year there are just a few.
    The most expensive works this auction season include Francis Bacon’s 1966 “Portrait of George Dyer Crouching,”— part of a series of 10 famous and monumental portraits Bacon did of Dyer between 1966 and 1968. It’s selling at Sotheby’s for an estimated $30 million to $50 million.

    (L-R) Jean-Michel Basquiat’s “The Italian Version of Popeye has no Pork in his Diet,” 1982, and Francis Bacon’s “Portrait of George Dyer Crouching,” 1966.
    Crystal Lau | CNBC

    Sotheby’s also has a collection of four paintings by Joan Mitchell, with two expected to fetch over $15 million.
    Christie’s is featuring a large work by Brice Marden, who died last year, called “Event,” estimated at $30 million to $50 million. It also has an iconic 1982 work by Jean-Michel Basquiat, called “The Italian Version of Popeye Has No Pork In His Diet,” estimated at $30 million.
    Yet collectors and art advisors say there are few if any “masterpiece” works to create excitement this season.
    “They just don’t have the marquis material this season,” Fabricant said. “Unless you have something truly singular and special, I don’t think you’re going to have the same enthusiasm you had in past sales.”
    At the same time, art experts say now is a good time to hunt for bargains given the long-term prospects for the art market.
    “I do think if you can get deals with pre-2022 prices and if there is something of good quality, now is the time to buy,” Hoffman said. “My outlook for the art market for next 10 years is that it will be a fabulous investment. It’s a great time to buy, not the best time to sell.”
    While auction sales are weak, sales in the private markets and galleries remains strong, advisors say. Sales of new works in galleries are less dependent on investment returns, and are therefore less susceptible to economic and stock-market volatility. The auction houses are also seeing strong growth in their private sales, where they broker a deal directly between buyer and seller without a public auction.
    Christie’s sold a Mark Rothko painting to hedge fund billionaire Ken Griffin earlier this year for more than $100 million, CNBC previously reported. Collectors say selling a trophy work privately carries less risk of a failed auction, which can damage a work’s value.
    “With private markets, you can be very targeted in terms of who you’re approaching, what type of buyer you’re approaching,” said Drew Watston, head of art services at Bank of America. “You can be very targeted about the price that you’re going out and asking for in the market. There’s great discretion so you can kind of go out into the market and test a price and adjust depending on the feedback that you get.”
    Sign up to receive future editions of CNBC’s Inside Wealth newsletter with Robert Frank.

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    Moderna says FDA delayed RSV vaccine approval to end of May

    Moderna said the Food and Drug Administration has delayed the approval of its vaccine for respiratory syncytial virus to the end of May due to “administrative constraints” at the agency.
    The FDA was expected to make a decision on the RSV shot on Sunday.
    The agency has not informed Moderna of any issues related to the vaccine’s safety, efficacy or quality that would prevent its approval, the biotech company said in a release.

    Nikos Pekiaridis | Lightrocket | Getty Images

    Moderna on Friday said the Food and Drug Administration has delayed the approval of its vaccine for respiratory syncytial virus to the end of May due to “administrative constraints” at the agency.
    The FDA was expected to make a decision on the RSV shot on Sunday. The agency has not informed Moderna of any issues related to the vaccine’s safety, efficacy or quality that would prevent its approval, the biotech company said in a release.

    Investors are watching the upcoming approval closely as Moderna tries to rebound from the rapid decline of its Covid business last year. If cleared, the RSV shot would become the company’s second product to launch in the U.S. after its once-blockbuster Covid vaccine. It would also be the third RSV vaccine to enter the market after shots from Pfizer and GSK rolled out last year.
    Moderna said its RSV vaccine is still on track to be reviewed by an advisory panel to the Centers for Disease Control and Prevention during a meeting on June 26 and 27. That panel will vote on recommendations for the shot’s use and intended population, which is necessary before it enters the market.
    Moderna has been testing the shot in older adults, who are more vulnerable to severe cases of RSV. The virus kills between 6,000 and 10,000 seniors every year and results in 60,000 to 120,000 hospitalizations, according to CDC data.
    “Moderna is very grateful to the FDA for their continued efforts and diligence,” said Dr. Stephen Hoge, president of Moderna, said in a release. “We look forward to helping the agency complete the review of our application, and to the June [advisory] meeting.” 
    The approval would demonstrate the versatility of Moderna’s messenger RNA platform beyond treating Covid. The biotech company is using that technology to tackle a range of diseases. Those include RSV, cancer and a highly contagious stomach bug known as norovirus. 
    Investors have high hopes for the long-term potential of Moderna’s mRNA product pipeline: Shares of the company are up more than 20% this year after falling nearly 45% in 2023.

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    European companies in China are under pressure from slower growth, overcapacity

    European companies in China are finding it harder to make money in the country as growth slows and overcapacity pressures increase, according to a survey released Friday by the EU Chamber of Commerce in China.
    In the metropolis of Shanghai, business members even reported delays in getting paid as it became more difficult to enforce contracts versus the prior year, according to chapter head Carlo D’Andrea.
    EU Chamber President Jens Eskelund noted how Beijing’s recent visa-free policy for several EU countries has allowed executives the flexibility to plan China trips one week in advance, instead of two to three months previously.

    A robot is producing auto parts on the production line of an auto parts company in Minhou County, Fuzhou, China, on May 7, 2024.
    Nurphoto | Nurphoto | Getty Images

    BEIJING — European companies in China are finding it harder to make money in the country as growth slows and overcapacity pressures increase, according to a survey released Friday by the EU Chamber of Commerce in China.
    In the metropolis of Shanghai, business members even reported delays in getting paid as it became more difficult to enforce contracts versus the prior year, according to chapter head Carlo D’Andrea.

    “State-owned enterprises, they postponed payments and they are using this in order to get some defacto loans from companies, especially from small, medium enterprise,” D’Andrea said, citing members’ comments.
    China’s growth has slowed in recent years amid geopolitical tensions. A slump in the real estate sector, which has close ties to local government finances, has also dragged down the economy.
    Only 30% of EU Chamber survey respondents said their profit margins were higher in China than their company’s worldwide average — an eight-year low.

    Back in 2016, just 24% of respondents said their profit margins were better in China than they were globally, the report said.
    That reflected a crash in the Chinese stock market in the summer of 2015, alongside a slowdown in the real estate market at the time, EU Chamber President Jens Eskelund pointed out to reporters.

    He said the current slowdown in Chinese growth had similar cyclical aspects, but there are questions about how long and deep it would be this time.
    The Chamber’s latest survey covered 529 respondents and was conducted from mid-January to early February.
    This year’s questionnaire included a new question about whether members faced difficulties in transferring dividends back to their headquarters. While more than 70% reported no issues, 4% said they were unable to do so, and about one-fourth said they experienced some difficulties or delays.
    It was not immediately clear whether this was due to a new regulatory stance or typical tax audit requirements.

    What is happening now is that companies are beginning to realize some of these pressures … are taking on perhaps a more permanent nature.

    Jens Eskelund
    EU Chamber of Commerce in China, president

    China’s economy is now far bigger than it was in 2015 and 2016. Trade tensions with the U.S. have also escalated in recent years, with Beijing doubling down on manufacturing to bolster tech self-sufficiency.
    “Our members saw to some extent that their ability to grow and make profit in the Chinese market — [the] correlation with the GDP figure is becoming weaker,” Eskelund said.
    “What is important to foreign companies is not necessarily sort of a headline GDP figure, 5.3% or whatever, but the composition of GDP,” he said. “If you have a GDP figure that is growing because more investment is being made into manufacturing capacity, that is not good for foreign companies. But if you have a GDP that is growing because domestic demand is growing, then that is a good thing.”
    China’s National Bureau of Statistics is due to release fixed asset investment, industrial production and retail sales for April next Friday.

    Overcapacity overhang

    China’s emphasis on manufacturing, coupled with modest domestic demand, has led to growing global concerns that overproduction will reduce profit margins.
    More than one-third of EU Chamber survey respondents said they observed overcapacity in their industry in the last year, and another 10% expect to see it in the near future.
    The civil engineering, construction and automotive industries had the highest share of respondents reporting overcapacity.
    More than 70% of respondents said overcapacity in their industry resulted in price drops.
    “This is not just European companies whining,” Eskelund said. “This is equally, if not more painful, for Chinese companies.”

    Market opening in some industries

    Chinese authorities have meanwhile bolstered high-level efforts to attract foreign investment.
    Eskelund noted how Beijing’s recent visa-free policy for several EU countries has allowed executives the flexibility to plan China trips one week in advance, instead of two to three months previously.
    He added that Beijing’s extension of tax exemption policies has also encouraged more international staff and their families to stay in China.

    Cosmetics and food and beverage companies have benefited from China’s recent efforts to open its market, he said, noting that a record high of 39% of respondents said the local market was fully open in their industry.
    China has restricted the extent to which foreign businesses can own or operate in certain industries. Beijing removes some off-limits categories each year via a “negative list.”

    Record high skepticism

    However, the EU Chamber and other business organizations have said that China can do much more to implement its 24 measures for improving the environment for foreign companies.
    The Chamber’s latest survey found a historically large number of respondents said conditions were worsening:

    a record high said they were skeptical about their growth potential in China in the next two years
    a record high of respondents expect competitive pressure to intensify
    a record share doubt their profitability in China
    a record high plan to cut costs this year, primarily by reducing headcount and trimming marketing budgets
    a record number of respondents said they missed opportunities in China due to regulatory barriers, the size of which was equal to over half their annual revenue
    a record low in expectations that regulatory obstacles will decrease

    “When you compare to the previous years we can see that a lot of the concerns actually remain the same regarding the predictability, the visibility of the regulatory environment,” Eskelund said. “These concerns pretty much remain the same.”
    “What is happening now is that companies are beginning to realize some of these pressures that we have seen in the local market, whether it’s competition, whether it’s lower demand, that they are taking on perhaps a more permanent nature,” he said. “That is something that is beginning to impact investment decisions and the way the go about thinking about developing the local market.” More

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    Shareholders push casinos to reassess indoor smoking

    Shareholders at Boyd Gaming, Bally’s Entertainment and Caesars Entertainment will put on the ballot at the respective casino companies proposals to force them to study the costs associated with permitting smoking indoors.
    Boyd, Bally’s and Caesars collectively operate 75 U.S. casinos that permit indoor smoking, where state law allows.
    Advocates for smoking bans point to research by C3 Gaming that concluded smoke-free casinos generate more revenue and outperform competitors that allow smoking.

    A new strategy has emerged in the battle to ban smoking in casinos: the shareholder vote.
    Shareholders at Boyd Gaming, Bally’s Entertainment and Caesars Entertainment will put on the ballot at the respective casino companies proposals to force them to study the costs associated with permitting smoking indoors.

    The proposals are sponsored by Trinity Health, a nonprofit health care network, and the Americans for Nonsmokers’ Rights Foundation. Trinity Health, based in Livonia, Michigan, has used its shareholder status to fight for various health initiatives despite the fact that it owns just a tiny fraction of these companies. For example, public records show Trinity owns just 440 shares of Bally’s stock, or about 0.001% of the company.
    Boyd, Bally’s and Caesars fought to keep the proposals out of the proxy materials distributed to shareholders. The Securities and Exchange Commission denied the casinos’ requests, and the proposals as well as the rationale behind them were delivered to all shareholders.
    Boyd will face a vote over a smoke-free assessment at its annual shareholder meeting Thursday. Bally’s holds its annual meeting on May 16, and Caesars will follow with its own meeting, likely in June.
    The three companies collectively operate 75 U.S. casinos that permit indoor smoking, where state law allows. About 14 states permit indoor smoking in commercial casinos.
    States like Nevada and New Jersey have prohibited indoor smoking more broadly, but carved out exceptions for casinos. Legislation to end indoor smoking at casinos is in various stages in several states across the country, including New Jersey, Pennsylvania and Rhode Island.

    Advocates for smoking bans point to research by C3 Gaming that concluded smoke-free casinos generate more revenue and outperform competitors that allow smoking.
    Proposal sponsors argue shareholders should know how much casinos pay in higher health insurance premiums for employees, greater maintenance costs and keeping away customers who hate the smoke.
    In its proxy, Boyd argues it’s seen a negative impact in states that banned indoor smoking. It argues these decisions are best left up to the properties to follow local trends and says if shareholders succeed in implementing a ban (which Boyd claims is the true goal in forcing an assessment), the company will lose customers to competitors who continue to allow smoking.
    Caesars board member Jan Jones Blackhurst said Wednesday at the SBC Summit North America, an online gaming conference, that she believes the decision of whether to ban smoking in casinos should be left up to governments. She pointed out that experience has shown that smoke-free casinos can take an economic hit.
    “Generally, if you look across the United States, when casinos prohibit smoking, revenues fall anywhere from 20% to 25%, which also then have a huge layoff factor with people starting to lose their jobs,” she said.
    Unions are mixed in their responses. While some worry about the potential of job losses, the United Auto Workers, which represents more than 10,000 table game dealers across the country, has ramped up its efforts in the fight against in-casino smoking, citing secondhand exposure for employees.
    The Centers for Disease Control and Prevention says “no amount of exposure to secondhand smoke is safe and the only way to fully protect nonsmokers from secondhand smoke is through 100% smoke free indoor air environments.”
    The U.S. Surgeon General says that many common practices found in casinos such as separating smoking versus non-smoking sections, cleaning the air and ventilating buildings are not effective protections against secondhand smoke.
    Casino operator Parx, which runs locations in Pennsylvania, decided to stay smoke-free during the Covid pandemic at its property in Bensalem, north of Philadelphia. It competes with four other local casinos that allow smoking indoors, but said it hasn’t seen its market share suffer.
    “Financially, we know we’ve lost some customers, but we also know we’ve gained some customers. We don’t think we’ve seen a significant impact either way,” Parx spokesperson Marc Oppenheimer told CNBC.
    Instead, the company said it focuses on guest satisfaction scores and surveys that indicate a boost to employee morale.
    In Las Vegas, MGM Resorts opened the first casino resort on the Strip to prohibit indoor smoking and even smoking on the pool deck. On its website, the property declares, “Here at Park MGM, we’re not afraid to be different and, as you may have noticed, we’re all about what’s fresh. Now, that includes the air you breathe. ”
    For now, Park MGM is the exception, but smoke-free advocates hope soon, it’ll be the rule.

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    Planet Fitness is raising prices even as it warns customers are growing cost-conscious

    Planet Fitness is hiking its base-level membership prices for new customers for the first time since 1998, even as the gym operator warns that customers are growing increasingly cost-conscious.
    The company reported weaker-than-expected first-quarter revenue and cut guidance for the fiscal year.
    Interim CEO Craig Benson said several macro conditions weighed on an increasingly price-sensitive consumer.

    People work out at a Planet Fitness in Alexandria, Virginia, Jan. 8, 2024.
    Leah Millis | Reuters

    Planet Fitness said it’s hiking its base-level membership prices for new customers for the first time since 1998, even as the gym operator warns that customers are growing increasingly cost-conscious.
    Classic card membership will be priced at $15 per month for new members starting this summer. Current members will continue to pay $10 per month “for the duration of their membership,” Planet Fitness said Thursday alongside its quarterly earnings report.

    “It will take some time for the benefit of the price change to expand our store level margins as the price increase will only be on new classic card membership,” said Tom Fitzgerald, the company’s outgoing chief financial officer.
    The change comes after months of price testing in several markets countrywide. Planet Fitness also said it will start testing higher prices for its top-tier membership, known as the Black Card, this summer. That membership offers customers access to any Planet Fitness location, as well as to digital content and other benefits, for a starting price of $24.99 per month.
    The decision to raise prices comes after the company reported weaker-than-expected first-quarter revenue and cut guidance for the fiscal year, in contrast to competitor Life Time Holdings, which posted better-than-expected results and strong membership growth for its most recent quarter.
    Life Time members tend to be older, more affluent gymgoers, whereas Planet Fitness appeals to a younger, more budget-conscious consumer.
    In the company’s earnings release, interim CEO Craig Benson said several macro conditions weighed on an increasingly cost-conscious consumer.

    “We faced several headwinds which impacted our results including a shift in consumer focus in the New Year to savings and concern over the increase in Covid infections and other illnesses,” said Benson.
    He also said the company’s national advertising campaign failed to resonate with consumers as broadly as anticipated.
    Despite the warning, analysts still see positive catalysts ahead for the company.
    “Despite lowered guidance, results today were not as weak as feared,” said Piper Sandler analyst Korinne Wolfmeyer. “And we’ve now seen two key changes occur that have been needed to recharge shares, including a new CEO and White Card pricing.”
    Piper Sandler maintains a “buy” rating on Planet Fitness stock and an $80 price target. Shares currently trade for about $65 apiece, having gained more than 5% Thursday.
    The Street is bullish on a company turnaround from Planet Fitness’ incoming CEO, Colleen Keating, who assumes the role on June 10.
    “We see the new CEO’s past experience in brand building and leading consumer-facing companies as being instrumental here,” said Wolfmeyer.

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    Promoters of Mike Tyson-Jake Paul Netflix fight offer $2 million VIP package as ticket, bettor interest spike

    Mike Tyson will return to the ring on July 20th to fight Jake Paul in a boxing match streamed on Netflix.
    Fans are already betting on the fight, and is expected to be the most wagered on match of the year.
    Promoters are offering a $2 million VIP package to the fight.

    In this composite image a comparison between Former Boxer Mike Tyson (L) and Jake Paul (R). Tyson and Paul face in July 2024 exhibition fight. 
    Francois Nel | Christian Petersen | Getty Images

    Mike Tyson’s return to the boxing ring to fight Jake Paul this summer is already seeing soaring ticket prices and strong bettor interest.
    The July 20 bout, which will take place at AT&T Stadium in Arlington, Texas and be streamed globally on Netflix, is expected to be the most heavily bet on boxing match of the year. Fans are already lining up for tickets to see the former heavyweight champion Tyson, who will be 58 at that time, take on the 27-year old social media influencer turned boxer Paul.

    The fight, which will be sanctioned as a professional bout, will be 8 rounds, consisting of two minutes each. Tyson last fought in an exhibition match in 2020, but his last professional fight took place in 2005.
    The event will also feature lightweight world champion Katie Taylor vs. boxing trailblazer and unified featherweight champion Amanda Serrano. The two previously achieved the first ever sold out women’s headline boxing event at Madison Square Garden.
    Most Valuable Promotions, the company co-owned by Paul that is promoting the event, said more than 121,000 fans have signed up for presale access for the fight. Tickets go on sale officially next Thursday.
    “This is a once-in-a-lifetime event that literally touches six generations,” said Nakisa Bidarian, co-founder of MVP.
    Bidarian said 35,000 people have indicated they want to sit on the floor of the venue and over 10,000 have said they want VIP seats.

    Most Valuable Promotions also has a unique offer for the fight — a $2 million VIP package. The promotion said it will include two ringside seats, which it said have never been offered before in boxing.
    The package will also include four first-row floor seats for the event, four second-row floor seats, a pre-fight locker room photo with both Paul and Tyson, gloves signed by both fighters and two-night luxury penthouse accommodations at the hotel where the fighters will stay.
    “We’re trying to bring awareness and exposure back to boxing in a gigantic way. That has not been the case for many, many years,” Bidarian said.
    For those who can’t shell out the $2 million, secondary market sites like Gametime have released ticket prices for the event. Currently, the lowest-cost tickets are available for $357 each, and ringside seats are selling for $8,067 each.
    Gambling interest in the fight has increased, too. BetMGM is already taking bets on the bout. The odds show Jake Paul as the current favorite (-145), but 70% of the money is being bet on Tyson.
    “This is the type of mega fight that will draw in multiple demographics: Tyson supporters, Jake Paul haters and casual sports fans,” said Alex Rella, senior trader at BetMGM. “I fully expect this to be the most bet on boxing match of the year.”
    Financial terms of the fight, and what Netflix will receive from it, have not been released. Netflix will make the bout available to all subscribers at no cost as the streaming giant continues its push into sports.
    Tyson and Paul are expected to make eight figures, Bidarian said.
    “We’re hoping that this becomes the most viewed streaming event in sports in the U.S.,” he added. More

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    Sinclair explores selling roughly 30% of its broadcast stations, sources say

    Sinclair is looking to sell more than 30% of its 185 owned or operated broadcast stations, according to people familiar with the matter.
    The media company has hired Moelis as an investment bank to assess possible asset sales, including the stations and the Tennis Channel, the people said.
    Sinclair recently settled litigation with subsidiary Diamond Sports Group, which owns the largest portfolio of regional sports networks and is under bankruptcy protection.
    Last year, Sinclair rebranded and restructured, separating the company into two operating units, the broadcast business and Sinclair Ventures, which includes non-media holdings.

    Signage stands outside the Sinclair Broadcast Group Inc. headquarters in Cockeysville, Maryland, U.S., on Friday, Aug. 10, 2018. 
    Andrew Harrer | Bloomberg | Getty Images

    Sinclair, one of the largest owners of broadcast stations in the U.S., is looking to sell more than 30% of its footprint, according to people familiar with the matter.
    The company has hired Moelis as its investment banker and has identified more than 60 stations in various regions of the U.S. that it would be willing to sell, said the people, who asked not to be named because the discussions are private. Sinclair owns or operates 185 TV stations in 86 markets.

    The stations are a mix of affiliates including Fox, NBC, ABC, CBS and the CW. If sold together, their average revenue for 2023 and 2024 is an estimated $1.56 billion, the people said. Sinclair is willing to sell all or some of the stations, which are in top markets like Minneapolis; Portland, Ore.; Pittsburgh; Austin, Texas and Fresno, Calif., among others.
    Sinclair CEO Chris Ripley said Wednesday that the company is open to offloading parts of its business, without providing specifics.
    “As we’ve always stated, we have no sacred cows,” Ripley said during his company’s earnings conference call. “We want to unlock the sum of the parts valuation that we think we’re grossly undervalued for. And to the extent that asset sales makes sense in order to unlock that value and help us de-lever, then that’s something that we’d be open to as well.”
    The company began officially shopping them in February, one of the people said.
    Spokespeople for Sinclair and Moelis declined to comment.

    Sinclair is also exploring options for its Tennis Channel, a cable TV network that features the sport and pickleball matches, the people said. Bloomberg earlier reported that development.
    Broadcast TV station groups have suffered in the past five years as millions of Americans have canceled traditional pay TV. Most stations make money from so-called retransmission fees, paid on a per-subscriber rate by traditional TV distributors, such as Comcast, DirecTV, and Charter, for the right to carry the stations.
    Sinclair has lost more than 70% of its market value in the last five years. The company’s market capitalization is about $975 million with an enterprise value of about $4.7 billion.

    Sinclair changes

    Last year, Sinclair rebranded and reorganized, splitting the company into two operating units — Local Media, which focuses on the stations, and Ventures, which houses Tennis Channel but can also act as an investment vehicle.
    The split in the company divisions, and the recent sale process for some of its stations, stems from tension within the Smith family, the shareholders and the board directors who helped build Sinclair, some of the people said.
    The stations are up for sale in the months before the 2024 election, which usually draws high political advertising revenue for broadcast TV companies. Sinclair said during earnings on Wednesday that it pre-booked $77 million in political advertising for the second half of the year through Election Day, compared with $21 million at the same point in 2020, the last time former President Donald Trump and President Joe Biden were on the ticket.
    The company’s overall revenue and advertising revenue both rose slightly during the first quarter. Sinclair’s stock was up 12% on Thursday.
    Sinclair’s broadcast stations have been known for having a conservative editorial voice, and the company faced backlash in 2018 after requiring some of its stations to read promos criticizing the media about “fake stories.”

    Diamond woes

    The process also comes after Sinclair faced headaches in the regional sports networks business.
    Sinclair acquired the largest portfolio of regional sports networks from Disney in 2019 for $10.6 billion, including $8.8 billion in debt. Between ramped-up cord-cutting and the hefty debt load, Diamond Sports, the independently run and unconsolidated subsidiary of Sinclair, sought bankruptcy protection last year.
    Diamond later sued parent Sinclair, and the litigation was settled in January. Sinclair made a $495 million payment to settle lawsuits related to Diamond. More

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    CFPB rule to save Americans $10 billion a year in late fees faces possible last-minute freeze

    A Consumer Financial Protection Bureau regulation that promised to save Americans billions of dollars in late fees on credit cards faces a last-ditch effort to stave off its implementation.
    Led by the U.S. Chamber of Commerce, the industry in March sued the CFPB in federal court to prevent the new rule from taking effect.
    A judge in the Northern District of Texas is expected to announce by Friday whether the court will grant the industry’s request for a freeze just days before it was to take effect on Tuesday.

    Epoxydude | Fstop | Getty Images

    A Consumer Financial Protection Bureau regulation that promised to save Americans billions of dollars in late fees on credit cards faces a last-ditch effort to stave off its implementation.
    Led by the U.S. Chamber of Commerce, the card industry in March sued the CFPB in federal court to prevent the new rule from taking effect.

    That effort, which bounced between venues in Texas and Washington, D.C., for weeks, is now about to reach a milestone: a judge in the Northern District of Texas is expected to announce by Friday evening whether the court will grant the industry’s request for a freeze.
    That could hold up the regulation, which would slash what most banks can charge in late fees to $8 per incident, just days before it was to take effect on Tuesday.
    “We should get some clarity soon about whether the rule is going to be allowed to go into effect,” said Tobin Marcus, lead policy analyst at Wolfe Research.
    The credit card regulation is part of President Joe Biden’s broader election-year war against what he deems junk fees.
    Big card issuers have steadily raised the cost of late fees since 2010, profiting off users with low credit scores who rack up $138 in fees annually per card on average, according to CFPB Director Rohit Chopra.

    New fees, higher rates

    As expected, the industry has mounted a campaign to derail the regulations, deeming them a misguided effort that redistributes costs to those who pay their bills on time, and ultimately harms those it purports to benefit by making it more likely for users to fall behind.
    Up for grabs is the $10 billion in fees per year that the CFPB estimates the rule would save American families by pushing down late penalties to $8 from a typical $32 per incident.
    Card issuers including Capital One and Synchrony have already talked about efforts to offset the revenue hit they would face if the rule takes effect. They could do so by raising interest rates, adding new fees for things like paper statements, or changing who they choose to lend to.
    Capital One CEO Richard Fairbank said last month that, if implemented, the CFPB rule would impact his bank’s revenue for a “couple of years” as the company takes “mitigating actions” to raise revenue elsewhere.
    “Some of these mitigating actions have already been implemented and are underway,” Fairbank told analysts during the company’s first-quarter earnings call. “We are planning on additional actions once we learn more about where the litigation settles out.”

    Trial ahead?

    Like some other observers, Wolfe Research’s Marcus believes the Chamber of Commerce is likely to prevail in its efforts to hold off the rule, either via the Northern District of Texas or through the 5th Circuit Court of Appeals. If granted, a preliminary injunction could hold up the rule until the dispute is settled, possibly through a lengthy trial.
    The industry group, which includes Washington, D.C.-based trade associations like the American Bankers Association and the Consumer Bankers Association, filed its lawsuit in Texas because it is widely viewed as a friendlier venue for corporations, Marcus said.
    “I would be very surprised if [Texas Judge Mark T.] Pittman denies that injunction on the merits,” he said. “One way or another, I think implementation is going to be blocked before the rule is supposed to go into effect.”
    The CFPB declined to comment, and the Chamber of Commerce didn’t immediately respond to a request for comment.

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