Raphael Stevens

Restaurant Brands International is committing another $300 million to remodeling Burger King’s U.S. restaurants.
Altogether, the restaurant company is planning to spend $2.2 billion to revive the fast-food chain’s U.S. business.
Burger King expects that 85% to 90% of its roughly 7,000 U.S. restaurants will have the same modern design by 2028.

The Burger King logo is displayed at a Burger King fast food restaurant on January 17, 2024 in Burbank, California. 
Mario Tama | Getty Images

Burger King will invest another $300 million to remodel about 1,100 of its U.S. restaurants as part of a broader turnaround effort, the chain’s parent company said Tuesday.
Owner Restaurant Brands International kicked off Burger King’s comeback strategy a year and half ago with $250 million to renovate restaurants and upgrade its technology and equipment, plus an additional $150 million to invest in its mobile app and advertising.

In January, the parent company bought Burger King’s largest U.S. franchisee, Carrols Restaurant Group, for $1 billion to speed up the remodeling process. The company estimates it will spend an additional $500 million updating 600 Carrols’ locations.
Including the investment announced Tuesday, Restaurant Brands is planning to spend around $2.2 billion to revitalize the chain’s U.S. business. The company expects 85% to 90% of its roughly 7,000 U.S. restaurants will have the same modern design by 2028.
“It was the first time in a long time that RBI had invested a significant amount of capital back into the business to co-invest with franchisees,” Burger King U.S. President Tom Curtis told CNBC. “I think the process was, ‘Let’s see how this works’… and we’re seeing early results on remodels.”
About 100 Burger King locations have been remodeled and updated so far. Those locations have seen sales climb following their facelifts, according to Curtis.
The latest round of remodels will follow Burger King’s new “Sizzle” design, which includes drive-thru pickup for mobile orders and self-order kiosks. Those new features are expected to encourage customers to order even more Whoppers and fries.

Still, Burger King has had to chip in its own money to incentivize franchisees to remodel. Renovations can be costly — especially with high interest rates — and often require the locations to temporarily shutter.
As with the initial round of investment from Restaurant Brands, Burger King franchisees who opt in to remodel their locations will receive cash once construction is completed. Burger King will let operators choose how much of a discount they get on the royalties they pay to the company.
Starting Tuesday, Curtis will be on a roadshow across the U.S. pitching the remodeling strategy to franchisees and starting the sign-up process for the $300 million investment.
Shares of Restaurant Brands were flat in premarket trading on Tuesday after the company reported weaker-than-expected earnings, but its quarterly revenue topped Wall Street estimates. Burger King’s same-store sales grew 3.8% in the the first quarter, falling shy of StreetAccount estimates of 4.1%.

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Walmart said it will close all of its healthcare clinics across the country, a stunning reversal of its plans to bring its low-priced reputation to the dentist and doctor office along with the grocery aisle. 
The big-box retailer said it would also shutter its telehealth provider, which it acquired for an undisclosed amount in 2021.
In a release, the company said it could not operate a profitable business due to a challenging reimbursement environment and rising costs.

The front desk is visible Friday, March 29, 2024, at the new Walmart Health Center in Sugar Land which will offer primary care, dental, counseling, lab and X-ray services at the location on Highway 6.
Kirk Sides | Houston Chronicle | Hearst Newspapers | Getty Images

Walmart on Tuesday said it will close all of its health-care clinics across the country, a stunning reversal of its plans to bring its low-priced reputation to the dentist and doctor’s office along with the grocery aisle. 
The big-box retailer said it would also shutter its telehealth provider, which it acquired for an undisclosed amount in 2021.

Walmart will close 51 clinic locations across Arkansas, Florida, Georgia, Illinois and Texas, plans that won’t affect the company’s 4,600 pharmacies and more than 3,000 vision centers, the company said in a release. The clinic will close over the next 45 to 90 days, two people familiar with the matter told CNBC. 
Walmart blamed its plans to shutter clinics on a broken business model. In the release, it described the move as “a difficult decision,” but said it couldn’t operate a profitable business because of “the challenging reimbursement environment and escalating operating costs.”
The shortage of health-care workers in the U.S. has also increased the company’s labor costs, according to the sources familiar with the matter. 
The announcement comes just a month after Walmart said it planned to double the size of its clinic footprint by opening up 22 new locations this year and more in 2025. 
Walmart’s announcement is also another sign of how challenging it is to disrupt and radically improve American health care – an expensive, complicated and entrenched system of doctors, insurers, drug manufacturers and other players that costs the nation more than $4 trillion a year. 

Walmart opened its first Walmart Health clinic in Georgia in 2019, and then gradually opened more clinics next door to its big-box stores. Customers, who typically shopped Walmart’s aisles for groceries or household items, could also stop by for a doctor or dentist appointment or therapy session. The clinics offered other services, too, such as flu tests, X-rays and stiches.
Those health-care services came with a low price tag, such as $30 for an annual check-up for adults, $45 for a 45-minute counseling session or as little as $25 for an adult teeth cleaning.
At a conference in fall 2019, then-Walmart CFO Brett Biggs touted the company’s ambitions to investors. He referred to how Walmart had used its large size to bring down the price of many common generic drugs to as low as $4 at its pharmacies and planned to do that for other parts of healthcare.
“It’s more than test and learn because we know that this is a place we can have a massive difference on how people live,” he told investors at the time. “When we think about ‘Save money, live better,’ we can do both with what we can do in healthcare. And so, we plan to be a big player going forward in what happens in healthcare.”
Yet in the following years, Walmart opened new clinics at a slow pace and faced new challenges and competitive dynamics — including keeping its store shelves stocked and locations staffed during the Covid-19 pandemic. Walmart struggled with high executive turnover and cycled through numerous leaders of Walmart Health. And CVS Health, Walgreens Boots Alliance and Amazon all announced their own ambitions to open or acquire doctor offices. Amazon last year closed a $3.9 billion deal to buy primary-care provider One Medical.
Meanwhile, on earnings calls and at investor meetings, Walmart CEO Doug McMillon and other company leaders instead highlighted other emerging and higher-margin businesses, such as its growing advertising business and its third-party marketplace.
Going forward, Walmart will return to the health services it offered before the Walmart Health push: It will continue to operate its thousands of pharmacies and vision centers.
Walmart said its clinics will continue to see patients with scheduled appointments until their doors close, the people familiar with the matter told CNBC. The company will also help patients find high-quality providers in their insurance networks to ensure they continue to get care, the people said.
Walmart Health marks the latest failed push into health care by a high-profile company, following the disbandment of a joint venture between JPMorgan Chase, Berkshire Hathaway and Amazon in 2021. 
Before it announced the closures, Walmart was among a slate of retail giants racing to build up their primary care presence as demand grows for convenient and affordable medical care. Walmart grew its clinic business at a slower pace than its competitors, but some companies have struggled to balance their expansion plans with their swelling networks of patients. 
Walgreens said in March it had closed 140 of its VillageMD primary care clinics and plans to shutter 20 more to boost the profitability of its broader health-care division. Walgreens also recorded a nearly $6 billion charge in the first quarter related to the decline in value of VillageMD, which has generated disappointing returns since the company became a majority owner of the business in 2021. 
Meanwhile, Amazon’s health clinic operator One Medical now has more than 125 locations nationwide.
Walmart has made several other plays in the health-care space, including partnering with an insurer and health system on care coordination in Florida. But Walmart will no longer see patients under that partnership moving forward, according to the two sources familiar with the matter.
Walmart bought a chronic condition management platform called CareZone in 2020 for an undisclosed amount.  More

A federal judge in New Jersey rejected Johnson & Johnson’s and Bristol Myers Squibb’s legal challenges to the Biden administration’s Medicare drug-price negotiations, ruling that the program is constitutional. 
The decision is another win for the White House in a bitter legal fight with several drugmakers over the constitutionality of the price talks.
The ruling also weakens the pharmaceutical industry’s strategy of seeking split decisions in lower courts scattered across the U.S., which could escalate the issue to the Supreme Court. 

Jonathan Raa | Nurphoto | Getty Images

A federal judge in New Jersey on Monday rejected Johnson & Johnson’s and Bristol Myers Squibb’s legal challenges to the Biden administration’s Medicare drug-price negotiations, ruling that the program is constitutional. 
The decision is another win for the White House in a bitter legal fight with several drugmakers over the price talks. The ruling also weakens the pharmaceutical industry’s strategy of seeking split decisions in lower courts scattered across the U.S., which could escalate the issue to the Supreme Court. 

Medicare drug-price negotiations are a key policy under President Joe Biden’s Inflation Reduction Act that aims to make costly medications more affordable for seniors. In doing so, it could take a bite out of drugmakers’ profits. Final negotiated prices for the first round of drugs subject to the talks, which includes one each from J&J and Bristol Myers, will go into effect in 2026. 
J&J and Bristol Myers Squibb did not immediately respond to requests for comment on the ruling. 
In separate lawsuits, the drugmakers argued that the negotiations are an unconstitutional confiscation of their drugs by the government and a violation of their right to freedom of speech. They also argued that the talks are an unconstitutional condition to participate in the Medicaid and Medicare programs.
But Judge Zahid Quraishi of the District of New Jersey wrote in a 26-page opinion that participation in the price talks and Medicare and Medicaid markets is voluntary.
The negotiations don’t require drugmakers to “set aside, keep or otherwise reserve any of their drugs” for the use of the government or Medicare beneficiaries, he wrote. Quraishi added the talks don’t force manufacturers to physically transmit or transport drugs at a new negotiated price.

“Selling to Medicare may be less profitable than it was before the institution of the Program, but that does not make [J&J and Bristol Myers Squibb’s] decision to participate any less voluntary,” Quraishi wrote. “For the reasons provided, the Court concludes that the Program does not result in a physical taking nor direct appropriation” of medications from the two drugmakers. 
J&J, Bristol Myers Squibb, Novo Nordisk and Novartis presented their oral arguments before Quraishi during the same hearing in March.That same month, a federal judge in Delaware rejected AstraZeneca’s separate lawsuit challenging the negotiations. In Texas, a third federal judge tossed a separate lawsuit in February.A federal judge in Ohio also issued a ruling in September denying a preliminary injunction sought by the Chamber of Commerce, one of the largest lobbying groups in the country, which aimed to block the price talks before Oct. 1.

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Paramount Global announced Bob Bakish is stepping down as CEO of the media company.
He’ll be replaced by three executives in what the company called the “Office of the CEO.”
Bakish’s exit comes as Paramount continues merger talks with Skydance.

Bob Bakish, president and chief executive officer of Viacom, attends the fourth day of the annual Allen & Company Sun Valley Conference, July 11, 2023 in Sun Valley, Idaho. 
David A. Grogan | CNBC

Paramount Global CEO Bob Bakish is stepping down, the company announced Monday, as merger negotiations with Skydance Media continue.
Bakish climbed the corporate ladder after joining Viacom in 1997, until he became CEO of the company in 2016. Following the merger of Viacom and CBS, he became CEO of the combined company in 2019, which was later renamed Paramount Global. He is also leaving the company’s board of directors, Paramount said Monday.

Bakish will be replaced by what the company called an “Office of the CEO.” Paramount will now be led by CBS president and CEO George Cheeks; Chris McCarthy, president and CEO of Showtime/MTV Entertainment Studios and Paramount Media Networks; and Brian Robbins, the head of Paramount Pictures and Nickelodeon. The company said the three executives will work closely with Paramount CFO Naveen Chopra and the board.
In the release Monday, Paramount said the new leadership is “working with the board to develop a comprehensive, long-range plan to accelerate growth and develop popular content, materially streamline operations, strengthen the balance sheet, and continue to optimize the streaming strategy.”
Paramount also reported its first-quarter earnings after the bell Monday and held an earnings call during which the newly appointed company heads gave a brief statement and said they would be back “in short order” to share details on future plans.
Chopra led the call, which lasted under 10 minutes and didn’t include questions from analysts.

Streaming boost

The company posted mixed results for the first quarter, beating on earnings but missing on revenue. Paramount reported 62 cents per share for the period, excluding items, versus estimates of 36 cents a share, according to analysts polled by LSEG. For revenue the company posted $7.69 billion versus analyst estimates of $7.73 billion, according to LSEG.

Overall revenue was up 6% compared with the same period last year, propelled by streaming and the Super Bowl.
The company’s direct-to-consumer streaming segment, which includes flagship service Paramount+, Pluto TV and BET+ saw revenue rise 24% to about $1.88 billion.
Paramount said it added 3.7 million Paramount+ subscribers during the quarter, bringing the total to 71 million. Losses related to streaming narrowed to $286 million compared with losses of $511 million during the same period last year.
Advertising revenue in the streaming segment was up, largely due to the Super Bowl, which aired in February on CBS, cable TV channel Nickelodeon and Paramount+.
Similarly, advertising revenue in Paramount’s TV media unit, which includes broadcaster CBS and cable TV channels such as MTV and Nickelodeon, grew 14% due to the Super Bowl.
The top NFL event provided a boost during what has been a sluggish advertising environment for traditional TV networks. Still, streaming platforms and digital companies have reported advertising revenue growth, indicating the market is rebounding, at least for those areas.
Overall, TV Media revenue was up 1% to $5.23 billion. Affiliate and subscription revenue fell 3% as cord-cutting continued, and licensing and other revenue dropped 25%, including the impact of the Hollywood writers’ and actors’ strikes on content available for licensing.
Revenue for Paramount’s filmed entertainment unit increased 3% to $605 million due to the releases of “Mean Girls” and “Bob Marley: One Love.”

Bakish departure

Bakish’s ouster comes as Paramount and Skydance Media inch closer to a possible merger, CNBC previously reported. The companies are in exclusive talks to pursue the deal until May 3, and a special committee is already in place.
Bakish has privately dissented against the merger, claiming it will dilute common shareholders, CNBC reported. As part of the proposed deal, nearly 50% of the merged company would be owned by Skydance and its private equity backers, while common shareholders would own the remainder of Paramount, which would remain publicly traded.
On Saturday CNBC reported Bakish could be out as CEO as soon as Monday, and ahead of the earnings call, after losing the trust of Paramount Global controlling shareholder Shari Redstone, who could see his removal as a means to accelerate a Skydance deal, CNBC reported Monday.
The departure also comes as Paramount has been in negotiations with cable company Charter Communications for the carriage of its TV networks including CBS and MTV. The deadline for those negotiations is Tuesday.
The special committee — which is in charge of accepting or rejecting transactions — and Skydance, which is backed by private equity firms KKR and RedBird Capital Partners, have been narrowing in on how to value Skydance’s assets as part of a merger, as well as how much equity to add to the company, CNBC previously reported.
Skydance intends to name its CEO, David Ellison, as head of Paramount if the deal happens, CNBC previously reported.
— CNBC’s Alex Sherman contributed to this report.

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Comcast’s NBCUniversal is raising the price of its streaming service, Peacock, this summer.
Ad-supported subscriptions will increase by $2 to $7.99 a month, while ad-free customers will see prices rise by the same amount to $13.99 a month.
The price increase goes into effect for new customers beginning in July, ahead of the Olympics, which will air on NBC TV networks and Peacock. Existing customers will see the increase on or after Aug. 17.

Scott Mlyn | CNBC

The price of Peacock is flying higher.
Subscription prices for Peacock, Comcast’s answer to the streaming wars, will increase by $2 this summer. The price adjustment is a way for Comcast’s NBCUniversal to capitalize on the Summer Olympics in Paris, which will air on NBC’s TV networks and streaming platform.

Peacock’s ad-supported option will increase by $2 to $7.99 a month, and its ad-free offering will rise by the same amount to $13.99 a month. The annual price for Peacock with ads will be $79.99, while the ad-free version will cost $139.99 a year.
The price will rise for new subscribers beginning July 18, while existing customers will get hit with the new pricing on or after Aug. 17. The Summer Olympics begin in late July.
Media companies have looked for ways to make streaming profitable, as most still lose money on the venture. Advertising has been a key part of this strategy, as well as price increases.
This price increase is Peacock’s second in the last year. Effective last August, ad-supported Peacock’s price rose $1 to $5.99, and ad-free went up $2 to $11.99 per month.
While parent company Comcast touted Peacock as a bright spot during its recent earnings call, losses stemming from the streamer have weighed on earnings. Losses were said to have peaked in 2023, and executives expect they’ll narrow in upcoming quarters. Peacock now has 34 million subscribers.

Peacock features a range of live sports content, from the NFL to the Premier League, and often sees an uptick in subscribers during marquee events.
The streaming service launched in 2020 in time for the Summer Olympics in Tokyo — which was pushed to 2021 due to the pandemic.
Executives said Thursday that Peacock’s exclusive NFL Wild Card game during the first quarter helped to add, then retain, more customers than expected.
The streamer has also benefited recently from being the first exclusive home to Universal Pictures’ Academy Award darling and box-office hit “Oppenheimer.”
Peacock’s revenue rose 54% to $1.1 billion during the first quarter compared with the same period last year. This was due in part to increased advertising revenue, which has lagged for traditional TV networks recently.
Executives last week said the Summer Olympics is expected to bring in record advertising revenue since more events will be featured on broadcast network NBC, in addition to many being streamed solely on Peacock.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.

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Family offices have 46% of their total portfolio in alternative investments, according to the JPMorgan Private Bank Global Family Office Report.
Alternatives include private equity, real estate, venture capital, hedge funds and private credit.
Unlike stocks, which can swing wildly, alternatives such as private equity and private companies have more gradual valuation changes, smoothing out volatility.

Westend61 | Westend61 | Getty Images

Large family offices have nearly half their investments in private markets and alternatives, as they move out of the stock market in search of higher returns and lower volatility, according to a new study.
Family offices have 46% of their total portfolio in alternative investments, which includes private equity, real estate, venture capital, hedge funds and private credit, according to the JPMorgan Private Bank Global Family Office Report, released Monday. The family offices covered by the survey had 26% of their assets invested in publicly traded stocks.

The study surveyed 190 single family offices around the world, with an average of $1.4 billion in assets.
Large family offices in the U.S. are even more concentrated in alternatives, the study found. American family offices with upward of $500 million in assets had more than 49% invested in alternatives, with 22% in public stocks, according to the survey.
Of the alternative investments detailed by the survey, 19% of family office holdings was in private equity, 14% in real estate, 5% in venture capital, 5% in hedge funds and 4% in private credit.
The move from public to private markets represents a major shift in family offices, the private investment arms of wealthy families that have exploded in size and number in recent years. With family offices now deploying more than $6 trillion in assets, they are becoming a powerful force in private equity markets, direct deals, venture capital and private credit.
William Sinclair, head of the U.S. Family Office Practice at JPMorgan Private Bank, said that while stocks and bonds remain important for family offices, they are increasingly moving to alternatives for higher returns.

Family offices typically have longer time horizons, investing for the next 50 to 100 years or more, so they can hold assets for decades and benefit from the so-called “liquidity premium” of higher returns for more patient capital. Unlike stocks, which can swing wildly from day to day or even hour by hour, alternatives such as private equity and private companies have more gradual valuation changes, smoothing out volatility.
“These clients are taking a multi-decade view of their wealth, and they can take the illiquidity,” Sinclair said. “Many of them are seeing opportunities outside of public markets.”
The report also said many family office founders started as entrepreneurs themselves and sold a business. Those founders now want to use their family offices to take ownership stakes in other private companies and apply their experience to helping the companies grow.
“[JPMorgan] is fortunate enough to work with 60% of the billionaires in this country,” Sinclair said. “So there are companies that want our clients on their board and on their cap table to be alongside some of the biggest venture capital and private equity firms out there.”
Sinclair said he thinks the growth of family office investments in alternatives will continue.
“In particular, I think you’ll see growth in private credit,” he said. “And I think many clients are under-allocated in infrastructure, and in particular digital infrastructure, when you think about some of these data centers that are being built now and the power that is required.”
On their other investments, U.S. family offices had an average of 9% in cash, which is historically high, and 10% in bonds.
Surprisingly, less than half of family offices have an overall investment return target, according to the survey. In the U.S., only 49% of family offices have a long-term target return for their portfolio. Among those who do have a target return, the median return target was 8%.
Still, family offices use various benchmarks for their investment portfolios, with more than three-quarters of those surveyed using some benchmark to evaluate performance. Larger family offices are more likely to use customized benchmarks, according to the survey.
Increasingly, family offices are looking to outsource more functions to reduce costs, especially among smaller family offices of under $500 million. The report said 80% now use external advisors, mainly for investment management, access to managers, trade execution and portfolio construction.
Family offices are also increasingly turning to companies such as JPMorgan for help with cybersecurity to protect against hacking. Of the family offices surveyed, 40% said cybersecurity is their biggest “gap” in capabilities and nearly 1 in 4 said they have been a victim of a cyberattack.
“They’re looking to us for help,” Sinclair said.
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