Raphael Stevens

McDonald’s restaurants in the U.S. are now serving improved versions of the chain’s famous burgers.
The company made small tweaks that led to a noticeably more flavorful burger.
Years ago, the chain upgraded its quarter pounder and gained market share, but Wall Street is more skeptical that the “Best Burger” initiative will drive significant sales.

A man drinks a coke and eats a Big Mac at a McDonald’s in Cologne, Germany, on May 25, 2015.
Oliver Berg | picture alliance | Getty Images

McDonald’s has upgraded its burgers — but it’s unclear if its sales will get the same boost.
The fast-food giant has outperformed its rivals in recent quarters, helped by price hikes across its menu and higher-income customers trading down to its McNuggets and Big Macs. Still, McDonald’s U.S. traffic dipped in the third quarter as low-income diners cut back their visits.

When the company announces its fourth-quarter results Monday morning, analysts are expecting U.S. same-store sales growth of just 4.4%, according to StreetAccount estimates. That’s an obvious lag compared with the third quarter’s 8.1% U.S. same-store sales growth.
McDonald’s and rival fast-food chains will face pressure to grow traffic this year. Diners won’t stomach the double-digit price hikes that fueled last year’s sales. Instead, chains have to convince their customers that their food and drinks are worth their prices — and more frequent visits.
Enter McDonald’s “Best Burger” initiative: small tweaks to the chain’s burgers that create a noticeably more flavorful product.
“Our goal was to enhance the quality and the flavor and the overall eating experience of our core burgers, but we wanted to stay true to the tastes that everyone loves,” McDonald’s U.S. Chief Restaurant Officer Mason Smoot said at a media event on Monday.
McDonald’s didn’t change the beef patty itself, but rather the cooking and assembly processes. The grills give the patties a little more breathing room as they cook. For more flavor, only six are cooked at a time, down from eight.

Onions, too, are added before the patties are cooked so they can soak up the patty’s juices. The cooked patties are kept hotter, so the overall burger is still warm by the time it reaches the customer. The cheese is melted better, the buns are upgraded and Big Macs receive more of their special sauce.

McDonald’s previous iteration of the double cheeseburger, left, and the “Best Burger” version, right.
Source: Amelia Lucas

“This is a step in the right direction for improving some of their very core products, but staying very true to who they are as well,” said analyst Mark Kalinowski, CEO of Kalinowski Equity Research.
McDonald’s started rolling out the better-tasting burgers roughly a year ago, but it has finally launched them at all locations nationwide.
Some of the company’s most important international markets, such as Australia and Canada, have already implemented “Best Burger.” Australia and Canada have outperformed some of McDonald’s other big international markets, which can be at least partially chalked up to the burger improvements, Kalinowski said.
At McDonald’s investor day in December, CEO Chris Kempczinski said “Best Burger” was on track to hit 70 markets by the end of 2023. By the time 2026 wraps up, the company expects nearly all of its markets to serve the upgraded burgers.
“With initiatives like Best Burger, we are making small changes that are adding up to big differences that our customers are really noticing,” he told investors.
McDonald’s is promoting the changes through a familiar frenemy — the Hamburglar, a McDonaldland character used in its ads dating back to the 1970s. In markets with the “Better Burger,” the chain aired a TV commercial where the mascot touted the improved taste of the burgers. McDonald’s own website now splashes an endorsement from the Hamburglar across the homepage.
The changes affect all of McDonald’s burgers except the quarter pounder. The chain already gave that menu staple its own makeover in 2018, when it switched over from frozen to fresh beef for those patties. That change resulted in McDonald’s gaining market share in the burger category for the first time in five years.
But Wall Street has mixed opinions on whether the “Best Burger” can fuel significant growth.
In a research note last month, Wells Fargo analyst Zachary Fadem named “Best Burger” as an “upside driver” for McDonald’s in 2024. However, it’s still unclear how much of a lift the company expects to see from the initiative.
Kalinowski estimates the changes could raise 2024’s overall sales 0.5%.
“I do think the net effect of this will be positive, but it’s somewhat subtle,” Kalinowski said.
Others are more skeptical.
“I’m doubtful that this drives traffic,” BTIG analyst Peter Saleh said. “I think this is probably just part of the process of upping your game over time. A lot of these concepts have to improve the quality of their food over time.”
But there are some promising early signs that customers want to try the improved burgers for themselves.
“Despite receiving no advertising at the local level until just this week, our contacts indicated Better Burger drove a 10% lift on average to burger transactions to date,” Loop Capital analyst Alton Stump wrote in a note to clients in May.Don’t miss these stories from CNBC PRO: More

Macy’s new CEO Tony Spring starts his role Sunday.
As former CEO of Bloomingdale’s, Spring brings a deep retail background, a merchant’s sharp eye and credibility with coveted national and global brands from his decades at Bloomingdale’s.
Yet he will take over as the department store operator contends with slowing sales and activist investors.

Tony Spring speaks at an event unveiling the Macy’s new women’s apparel brand, On 34th, in July. Spring is former CEO of Bloomingdale’s and begins as Macy’s CEO in February 2024, succeeding longtime Macy’s CEO Jeff Gennette, right.
Melissa Repko | CNBC

Inside its headquarters in New York City’s Herald Square, Macy’s got ready to unveil its newest women’s clothing brand. Its incoming CEO Tony Spring prepared for his own reveal.
Spring took the stage in mid-July in front of fashion influencers, reporters and Macy’s employees, standing beside his soon-to-be predecessor, Jeff Gennette. He was at the pinnacle of his career, making his first public in-person appearance since being named CEO-elect of the 166-year-old department store operator.

Yet where many top executives would have lapped up the limelight, the 58-year-old retail veteran and leader of Macy’s higher-end department store chain Bloomingdale’s kept his remarks brief. He spoke for less than two minutes, then quickly stepped aside for On 34th, the company’s new brand of women’s clothing and accessories, to get the spotlight.
Spring will step onto a bigger stage and inherit the iconic department store’s issues when he takes over the role of Macy’s CEO on Sunday. His push to revive the retailer will depend in no small part on his ability to curate strong brands and store designs — and let the products win over shoppers.
Among the company’s challenges, Spring will contend with inflation-weary shoppers who continue to watch their discretionary spending, confront lower employee morale after more than 2,000 recent layoffs and stare down a contentious battle with activist investors. Macy’s has lost cachet with younger shoppers and brands who see its sprawling stores and endless aisles of merchandise as a relic of the past.
Investors have taken notice. Macy’s stock closed at $18.63 per share Friday, giving it a market cap of $5.11 billion. Shares have fallen about 24% in the last year.
Spring will face existential questions about how Macy’s can stay relevant and grow rather than shrink, as competitors such as Amazon, T.J. Maxx and even Target and Walmart steal away sales. He will also lead Macy’s promising efforts to chase suburban shoppers with smaller stores in strip malls, expand its offerings of trendier exclusive brands and luxury names, and build on the strong performance of newer businesses such as its beauty chain, Bluemercury, and its off-price business, Backstage.

In CNBC interviews, current and former Macy’s employees, industry leaders and investors said Spring will bring a deep retail background, a merchant’s sharp eye and credibility with coveted national and global brands from his decades at Bloomingdale’s.
Yet they acknowledged the new CEO will have his hands full. Some expressed concern that as a longtime executive at the company, Spring won’t bring the same scrutiny an outsider would.
“When you have an internal appointment, you don’t tend to see that much shake-up in the wider team, and sometimes that’s needed,” said Neil Saunders, managing director of research firm GlobalData. “The biggest risk is just really that. Someone new comes in the post, but we just see a continuation of the same old strategies without much new thinking.”
Macy’s declined interview requests for this story, but Gennette praised Spring as the right person for the job when the company announced his retirement and his successor’s appointment in March. Gennette pointed to Bloomingdale’s strong results — the higher-end department store has outperformed the namesake Macy’s brand in recent years — and described Spring as “an ally and trusted partner in advancing Macy’s, Inc.’s strategies.”
“Tony consistently innovates for the customer, is an exceptional brand builder and an excellent talent developer who has strengthened our culture through his leadership,” he said in the news release.

‘A merchant at heart’

Spring’s ascension to the top role at Macy’s is the culmination of nearly four decades with the retailer. Fresh from graduation from Cornell University, he was hired by Bloomingdale’s in 1987 as an executive trainee in the White Plains, New York, store.
He moved up the ranks, ultimately becoming CEO of the higher-end department store in 2014.
Even as he rose, Spring described himself as committed to one of retail’s key building blocks: making sure stores draw customers in, invite them to linger and surprise them with beautiful displays and items they didn’t know they needed. It’s a touch shoppers and Wall Street believe Macy’s could use as it fights for relevance.
“I’m a former merchant,” he told the audience at the launch event for Macy’s “On 34th” brand in July. “I still consider myself a merchant at heart.”
Bloomingdale’s is known for having a knack for understanding customers and which brands to carry. The chain, which has 55 locations across the country, has been a crown jewel of its parent company despite its smaller size. It carries pricey and prominent luxury brands, including Theory, Sandro and Alice + Olivia, but also has popular and more affordable in-house brands, such as Aqua.
It has also drawn shoppers with limited-edition pop-ups and collections of merchandise that tap into the cultural zeitgeist or cater to the Instagram and TikTok generations, such as an exclusive Barbie-themed clothing line.
Macy’s namesake brand accounts for most of its stores and revenue, yet Bloomingdale’s and Bluemercury have seen better sales trends.
On CNBC’s “Mad Money” in October, Spring said his time at Bloomingdale’s reinforced “it’s all about curation of product and the delivery of a better experience for the customer.”
“Retail is theater,” he said in the interview.
He described Bloomingdale’s as “a growth vehicle” but said the company’s namesake brand can be one, too.
“We’re talking to different customers and we can obviously learn from one another without becoming one another,” he said.
GlobalData’s Saunders has criticized Macy’s for sloppy displays, bland merchandise and poor customer service at its namesake stores. He said after leading “the better-run part of the business” in Bloomingdale’s, Spring needs to bring those “softer skills” to Macy’s.
“Get some pride back into the business,” he said. “That might mean making some investments. It might mean putting back in visual merchandising teams. It might mean investing more in staff and labor hours, but I think it’s a decision worth taking. And it’s a relatively easy win.”
Spring will have tougher tasks, though, Saunders said. In a competitive industry, Macy’s needs a sharper identity to compete with specialty retailers, big-box stores and off-price players that often beat the department store on convenience, value and fashion, he said.
And, he added, Spring must take a hard look at the company’s real estate footprint to decide where it should shut stores, shrink locations or expand outside the mall.

Wooing investors and brands

In his new role, Spring will have to charm investors, shoppers and hot brands. It’s a delicate balance, as its efforts to boost sales, make the store experience more appealing to customers and win over investors hungry for profits could at times clash.

As its stock value has eroded, Macy’s has gotten smaller by most other key metrics, too. Over the past decade, the company has closed about a third of its namesake stores. Its annual net sales have fallen during that same period, from about $28 billion in 2013 to $24.4 billion in the last full fiscal year it has reported, which ended in late January 2023.

Its employee count has fallen by about 45% from 2013 to 94,600 people as of the end of that fiscal year.
Macy’s announced Jan. 18 that it will shrink its head count and store footprint even more. It laid off more than 2,300 employees and announced it will shutter five more of its namesake stores.

Macy’s struggles have turned the retailer into a target for the activist investors Spring will face down as he becomes CEO. Its board last month rejected a $5.8 billion proposal by Arkhouse Management and partner Brigade Capital Management to acquire the shares of the retailer that they don’t already own and take the department store operator private.
In an interview on CNBC after that rejection, Arkhouse managing partner Gavriel Kahane signaled that he hasn’t given up yet. He called on Macy’s to open up its books to the investors, or the firm will take the matter to shareholders, he said.

Investors will get their best glimpse into the health of the company Spring is inheriting in late February, when Macy’s is expected to report its holiday-quarter results and its outlook for the year ahead. In the previous quarter, the retailer said it expected same-store sales to decline by up to 7% in the fiscal year that ended in late January.
Though the company’s sales are sagging, Spring will take over promising pockets of the business, as well. Its smaller stores, which Macy’s is opening in a growing number of strip malls, have outperformed sales at its traditional, mall-based locations. After launching the women’s clothing brand On 34th, Macy’s plans to debut and refresh other lines that shoppers can find only at its stores and on its website. That private brand strategy has succeeded for other retailers, such as Target.
Spring’s career as an insider has raised concerns among some industry analysts. A Macy’s spokesperson said that while Spring came up through Macy’s, he has pushed for adding fresh perspectives to the retailer’s leadership team. Many of the company’s recent top hires have come from the outside.
Those include his successor at Bloomingdale’s, Olivier Bron, who was most recently CEO of department stores in Thailand; and Sharon Otterman, Macy’s new chief marketing officer, who came from Caesars Entertainment.
Having the right national brands will also shape Macy’s future success. It’s another area where Spring’s experience as a merchant could benefit the company.
Compared with rival Nordstrom, Macy’s has been slow to add younger and newer brands that can draw fashion-forward customers.
As Macy’s expands its third-party marketplace, some new brands have joined its website. One of those is Untuckit, a men’s apparel brand typically sold directly through its own stores and website.
Just ahead of the holiday season, the company’s clothing debuted on Macy’s website. It was Untuckit’s first meaningful push into wholesale, said the brand’s CEO and co-founder Aaron Sanandres.
Sanandres said he saw Macy’s as a way to reach shoppers who haven’t yet discovered Untuckit. Now, he said, it’s considering its next moves in wholesale — including the possibility of selling apparel at Macy’s stores.
Yet he said he has grappled with the same questions that other popular brands may have. Will merchandise get confined to a corner of Macy’s huge stores? Will its reputation take a hit from being carried by a retailer associated with old-school malls or 40%-off signs? Can it keep tight control over its own brand’s level of promotions?
“There are a lot of conversations around that, and it’s partly why we’re baby-stepping into the relationship to make sure we don’t see any negative pushback from our customer,” he said.
One of the most crucial parts of Spring’s job will be attracting millennial and Gen Z shoppers who don’t share the same loyalty as their parents and grandparents to Macy’s namesake stores and website, said Oliver Chen, an equity research analyst for TD Cowen.
Winning those shoppers over will come down to having better merchandise and a sense of style, he said.
“You need to be inspired by Macy’s,” he said. “The customer doesn’t necessarily want the cheapest thing from Macy’s. They want a nice, fashion-forward thing.”
Some of those shoppers are like Annie Rush. On a recent weekday, she zipped in and out of Paramus Park mall in New Jersey to make a purchase for one of her teenage sons.
Rush said she prefers to shop online, where she can search for what she wants with the help of filters. At a Macy’s store, the sea of options can be overwhelming, she said.
“Sometimes they offer too many things,” Rush said. “It’s like decision paralysis. You can’t find what you want or have to dig.”
With an Old Navy bag in hand, she cut through Macy’s only to get to the mall’s parking lot.
— CNBC’s Gabriel Cortes contributed to this report. More

LVMH is making a push to gain share of the global luxury watch business, with a newly formed watch division and an array of new, higher-priced models.
Sales of luxury watches are expected to grow as global wealth increases and Generation Z and millennials become more interested in high-end mechanical watches.
The luxury giant now has 10 watch brands — including TAG Heuer, Hublot and Zenith, along with fashion and jewelry brands like Louis Vuitton, Bulgari and Dior.

Luxury giant LVMH is making a push to gain share of the global luxury watch business, with a newly formed watch division and an array of new, higher-priced models.
Sales of luxury watches worldwide are estimated at about $30 billion this year, according to market research firm IMARC Group. They’re expected to grow to more than $37 billion by 2032, as global wealth increases and Generation Z and millennials become more interested in high-end mechanical watches.

LVMH’s jewelry and watch division posted sales of $11.8 billion in 2023, representing a 7% increase in organic growth. The luxury giant now has 10 watch brands, including TAG Heuer, Hublot and Zenith, along with fashion and jewelry brands such as Louis Vuitton, Bulgari and Dior that also make watches.
Last month, the company named Frederic Arnault, the 29-year-old son of LVMH Chairman and CEO Bernard Arnault, CEO of LVMH Watches, which includes the TAG Heuer, Hublot and Zenith brands.
Analysts estimate sales of those three brands reached about $2 billion last year.

A Zenith luxury watch at 2024 Watch Week in Miami.

Frederic Arnault, who launched an array of highly popular new models at TAG Heuer, is expected to bring his focus on innovation, cutting-edge materials and creative designs to the larger brand group. Analysts say LVMH may also continue to acquire attractive brands if they become available.
In interviews with CNBC during LVMH’s Watch Week in Miami, the brands’ chief executives said 2024 is already shaping up to be stronger than 2023, when rising interest rates and fears of recession tempered demand. Executives say they are especially encouraged by the resilience of the American luxury consumer.

“It’s all about cycles, and the beauty of America is that the cycles are very short,” said Benoit de Clerck, CEO of Zenith. “We go through ups and downs and all that, but I can reassure you today Zenith is definitely on an upswing with good traction within the U.S. markets.”

Zenith luxury watches at 2024 Watch Week in Miami.

Watch sales are following a similar pattern to the broader luxury market, where the wealthiest consumers remain strongest. Executives say the wealthy are less affected by rising rates and economic uncertainty, so more and more brands are catering to the “super-spenders” and VIP collectors who continue to spend on the highest quality and craftsmanship.
“The high end has been really one of the main drivers of our growth,” said Jean-Christophe Babin, CEO of Bulgari. “I think the wealthy more than ever are eager to invest in authentic, reputable and timeless brands.”
Babin said he’s seeing rising strength at the high end throughout Bulgari’s businesses, which now include hotels, fashion and fragrances.
“We sold more high-end jewelry, more high-end watches, more high-end bags,” Babin said, showing off one of Bulgari’s coveted yellow-gold Serpenti Secret watches that retails for $350,000.

A Bulgari Serpenti Secret watch at 2024 Watch Week in Miami. 

LVMH is also targeting the fastest-growing segment of luxury watches: women’s watches. While women’s watches account for only about a third of total sales, women’s interest in luxury mechanical watches has soared from more exposure on social media and a growing number of models designed for women. The rising global population of wealthy women — both self-made and inherited — is also fueling sales growth.
“The trend is toward more and more feminine and more unisex watches,” said Babin. “Women have increasing power, in terms of independence, autonomy and purchasing power. We think that will continue.”

Reinvention

In the highly competitive luxury watch world, brands have to constantly innovate with materials, complications and designs to gain share and keep collectors engaged.

Carrera Plasma Diamant d’Avant-Garde Chronograph Tourbillon at 2024 Watch Week in Miami. 

TAG Heuer, which has its roots in car racing, scored a huge hit with its Carrera Plasma, using lab-grown diamonds. Its Carrera Plasma Diamant d’Avant-Garde Chronograph Tourbillon is priced at upward of $500,000 — and has a waitlist of more than two years.
TAG Heuer also unveiled a teal-green Carrera Glassbox Chronograph with a teal-green dial, referencing a shade of green used in auto racing in the 1920s and 1930s.

A TAG Heuer luxury watch at 2024 Watch Week in Miami. 

TAG Heuer CEO Julien Tornare said LVMH’s advantage over other watch brands and groups is its relentless focus on reinvention and desirability.
“The Swiss watchmaking industry has been quite conservative to some extent,” he said. “But at LVMH, we are pushed to try new things, to move forward. I think if we want to still be appealing to [a] new generation, it’s very important to show that we will work for the future and not for the past.”
Many of the LVMH brands are mining their storied pasts for new designs and models.
Zenith launched its Chronomaster Triple Calendar, featuring a triple calendar moonphase chronograph, inspired by its rare prototype El Primero watch from 1970. The company also launched a new Chronomaster Sport in green, the hottest color for luxury watches in recent years.

A Zenith luxury watch at 2024 Watch Week in Miami.

De Clerck said that part of Zenith’s appeal to younger watch buyers and collectors is its price. While Zenith sells highly complicated watches, it tries to deliver value, like the Triple Calendar that sells for about $14,000 but could probably be priced “thousands more” based on the level of craftsmanship and complications required, he said.
“We have a very good proposition in terms of price versus the competition,” he said. “You get a lot of watch for the money, and we want to remain and keep that spirit.”
At the same time, many LVMH brands are moving up the price ladder, with more expensive, limited editions. Hublot, known for its bold, large watches, just launched a $250,000 limited-edition watch, called the MP-10 Tourbillon Weight Energy System. Only 50 of the futuristic watches will be produced, and it’s expected to quickly sell out.
“We call it the art of fusion in watchmaking,” said Hublot CEO Ricardo Guadalupe. “We are connecting the tradition of watchmaking of over 400 years, with innovation. We do that through design, through materials, new mechanics and new ways of making movements.”
— CNBC’s Crystal Lau contributed to this report. More

Paramount Global controlling shareholder Shari Redstone has increased the seriousness of sale talks in recent months.
Sector-related reasons, as well as personal and financial motivations, have added complexity to the deal-making process.
Paramount Global’s carriage deal with Charter, set to expire in April, looms over potential sale discussions.

Shari Redstone, president of National Amusements, speaks at the WSJ Tech Live conference in Laguna Beach, California, on Oct. 21, 2019.
Mike Blake | Reuters

Paramount Global nonexecutive chair and controlling shareholder Shari Redstone has been talking to potential buyers interested in acquiring her media company — or parts of it for years — but the seriousness of those discussions has heightened in recent months.
There are sector-related reasons for why a deal seems increasingly urgent. The media world is changing rapidly. During the Covid-19 pandemic, legacy media companies seemingly had a path to growth by launching their own streaming services. But Wall Street turned its collective back on that narrative after Netflix growth stalled in 2022, leaving companies such as Paramount Global twisting in the wind.

Paramount Global’s flagship streaming service, Paramount+, has successfully accumulated 63 million subscribers, and it’s still growing. But it’s also still losing money, albeit not as much as it used to. Third-quarter streaming operating losses were $238 million. A year ago, they were $343 million.
Without a clear growth narrative, Paramount Global has struggled as a publicly traded company. Shares are down 56% in the past two years. This has piqued the interest of some private equity firms and other potential buyers, including David Ellison at Skydance Media and media mogul Byron Allen.
If Paramount Global — which owns Paramount Pictures, CBS, cable networks such as Nickelodeon and Comedy Central, and intellectual property such as “Star Wars” and “SpongeBob SquarePants” — is withering as a publicly traded company, perhaps taking it private or selling some of the assets for parts makes more sense.
Redstone has personal reasons for considering selling now, too. She has long had an active interest in Jewish causes, including having served on the board of Combined Jewish Philanthropies.
Redstone’s focus on fighting antisemitism has increased since the Oct. 7 Hamas terrorist attack on Israel, which killed about 1,200 people, according to people familiar with Redstone’s thinking.

“Look, I’m not doing well, to be honest,” Redstone told The Hollywood Reporter in October. “I think there are no words to describe what took place, and all I do every day is try to do something that’s going to make a difference and help people.”

President of National Amusements Shari Redstone arrives at the annual Allen and Co. Sun Valley media conference in Sun Valley, Idaho, on July 5, 2022.
Brendan Mcdermid | Reuters

Then there’s a significant financial consideration related to National Amusements Inc., or NAI, the holding company that owns the majority of Paramount Global’s voting shares.
When Redstone’s father, Sumner Redstone, the founder of National Amusements, died in 2020, Shari Redstone inherited his shares. National Amusements directly or indirectly through subsidiaries owns 77% of the Class A voting stock of Paramount Global and 5.2% of the Class B common stock, constituting about 10% of the overall equity of the company.
According to tax law, Shari Redstone must pay taxes on the shares tied to their value at the time of her father’s death. That amounts to more than $200 million, according to a person familiar with the matter.
Redstone has deferred the tax bill for 10 years, until 2034, and only owes about $7 million this year, said the person, who asked not to be named because the details are private. Still, the looming tax payment, along with an additional $37 million debt payment due to Wells Fargo in March, could be compelling motivation to sell off National Amusements for cash, rather than a trade of equity with a strategic partner.
National Amusements will make its March payment on time, according to a Redstone spokesperson.
“National Amusements has significant assets including our well-located movie theaters in the US, UK and Latin America, owned real estate properties and shareholding in Paramount Global. We continue to take steps to improve our financial position including through debt reduction with a meaningful paydown in March,” the spokesperson said.

The right kind of deal

Redstone’s varied motivations for selling mean she’s looking for the right kind of deal, at the right price — and so far, she has had options.
Warner Bros. Discovery has held preliminary talks to acquire Paramount Global. While Warner Bros. Discovery board member John Malone suggested in an interview with CNBC in November that Paramount Global could be a future distressed asset, that fate can be avoided if CEO Bob Bakish can make Paramount+ profitable.
There could be structural issues with a Warner Bros. Discovery deal, in terms of a cash-stock split, including how much debt a combined company would want to carry. It’s also possible Warner Bros. Discovery may choose to wait to see if Comcast is willing to part with NBCUniversal.
In early talks with buyers, Redstone has pushed for a high premium for both National Amusements and Paramount Global, according to people familiar with the matter. Paramount Global has a market capitalization of nearly $10 billion and about $13 billion of net debt.
Redstone also has fiduciary duties as Paramount Global’s nonexecutive chair. If she agrees to sell either National Amusements or all of Paramount Global, she’ll need buy in from other investors.
Banker Byron Trott, who is helping Redstone navigate sale talks, has long been an advisor for Warren Buffett, whose Berkshire Hathaway is Paramount Global’s largest Class B shareholder.
No deal is imminent, said people familiar with the process. As CNBC reported last month, Skydance is interested in acquiring NAI as part of a two-step transaction that would involve merging Skydance with Paramount Pictures.
Talks are further along with Redstone regarding NAI than they are with Paramount Global, two of the people said. Still, Skydance is only interested in acquiring NAI if it can get a deal done with Paramount Global, CNBC reported in January.
Spokespeople for Skydance, National Amusements and Paramount Global declined to comment.

Charter renewal

There’s also the issue of Charter’s looming carriage deal with Paramount Global, which is set to expire in April, according to people familiar with the matter. This may not be guiding Redstone’s urgency for a sale, as a likely deal will be reached long before an acquisition closes, but it’s certainly looming over the company’s future prospects.
While Comcast, the largest U.S. cable provider, and Paramount Global renewed their deal with little fanfare in December, Charter is a different animal. The second-largest U.S. cable operator struck a deal with Disney last year that paved the way for Charter to begin lopping off little-watched cable networks while directly selling subscription streaming services to its millions of broadband customers.
Paramount Global charges $5.99 per month for Paramount+ with advertising. Most of what airs on CBS and Paramount Global’s cable networks is available on Paramount+. That gives Charter two advantages in a renewal deal.
First, Charter will likely argue Paramount Global has set a price of $5.99 for the value of all its cable networks and CBS. Charter can point to that as the ceiling price for what it’s willing to pay for Paramount Global’s linear channels.
Second, Charter now has some blackout leverage with consumers because they can point them toward Paramount+ as a relatively inexpensive way of accessing Paramount’s content. Charter will make the same argument it did with Disney: The existence of the same content on both the streaming service and the linear channels is effectively double charging the consumer.

Bob Bakish, CEO of Paramount, speaks with CNBC’s David Faber on Sept. 6, 2023.

Paramount Global probably can’t afford to lose carriage for the bulk of its networks with Charter, given Paramount+ continues to lose money. Paramount Global is still dependent on its linear business, which earned $15 billion of its $22 billion in revenue in the first nine months of 2023 from traditional TV. More than $6 billion of that was from cable affiliate fees.
Bakish has always successfully reached renewal deals with the major pay TV distributors since taking over as CEO in 2019 and even dating back to his time running Viacom, beginning in 2016. Still, given Bakish’s lack of leverage, he may have to settle for lower affiliate fees or an agreement that devalues Paramount+.Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
WATCH: CNBC’s Jim Cramer on Paramount Global

Don’t miss these stories from CNBC PRO: More

Activist investor Barington Capital is pushing Mattel to consider selling off its American Girl and Fisher-Price brands, citing underperformance within the divisions.
Mattel shares trade at the same levels they did more than 20 years ago, but jumped on the news.
Barington has pursued campaigns at Bath & Body Works, Darden Restaurants and Chico’s.

The Mattel Inc. logo is displayed outside the headquarters of the toy company known for products including Barbie and Hot Wheels in El Segundo, California, on June 8, 2023.
Patrick T. Fallon | AFP | Getty Images

Activist investor Barington Capital is pushing Mattel to consider selling off its American Girl and Fisher-Price brands, citing underperformance within the divisions.
Mattel shares gained 4% in Friday trading following a letter sent to Mattel on Thursday, which was first reported by The Wall Street Journal. The toymaker’s shares trade at roughly the same level as they did 20 years ago. Barington has an undisclosed stake in the company.

American Girl and Fisher-Price, two iconic brands, are among the most popular in their respective markets.
While the broader market has grown for the kind of toys that Fisher-Price makes, Barington’s James Mitarotonda said in the letter to CEO Ynon Kreiz that Fisher-Price’s revenue has fallen from $1.9 billion in 2015 to less than $1 billion by 2023.
Mitarotonda said that if Mattel cannot stymie continued erosion in both Fisher-Price and American Girl, which has suffered similar declines, the company “may not be the right owner of these brands.”
Barington suggested the company should “immediately” explore strategic alternatives for those two segments.
“We believe that these brands are now detracting from the success at Mattel’s other segments and hurting shareholder value,” Mitarotonda said in a release.

A Mattel spokesperson said in a statement to CNBC, “We look forward to engaging with Barington as we do with all our shareholders. We welcome this initial outreach and we are reviewing their letter.” 
The letter also highlighted “excessive” stock-based compensation that was higher than a group of peer companies, and claims Mattel continues to add back share-based compensation to the company’s adjusted EBITDA, a practice Barington called “shocking.”
Barington also told Kreiz that the company should pause continued merger and acquisition efforts in favor of a $2 billion share repurchase operation, which would be an expansion of the company’s existing share buyback program, and elevate lead director Michael Dolan to chair, a position Kreiz currently holds.
Dolan is the former CEO of Bacardi, IMG and Young & Rubicam, an advertising firm.
Barington has pursued campaigns at Bath & Body Works, Darden Restaurants and Chico’s. It was founded in 2000.Don’t miss these stories from CNBC PRO: More

Help Wanted

U.S. manufacturing and construction companies are looking for workers as federal money flows into those industries.
They face a challenge in trying to fill the jobs, as some require specialized training, and as baby boomers leave the workforce and younger people decide whether to enter the trades.
The Manufacturing Institute has projected that more than 2 million jobs could go unfilled in the sector by 2030 if workers do not pursue manufacturing careers.

Construction workers erect a building in downtown Miami, Florida, on June 14, 2023.
Jim Watson | AFP | Getty Images

At Ample’s manufacturing facilities in the Bay Area, employees work on the floor alongside robots, making battery packs and other parts for its EV battery-swapping technology.
The job is clean, high-tech and skilled — all key recruitment points as the company looks to add to its ranks in the year to come. It hopes to double its 100-person manufacturing workforce by the end of the year.

Finding people who have the training to do those jobs may prove challenging.
Ample is working with brands from Daimler to Stellantis to Uber to swap out depleted EV batteries with fully charged ones and get electric cars back on the road quickly. It expects business will get a boost as the U.S. works toward its renewable energy goals.
Ample is facing a problem that has plagued many manufacturers for years: a shortage of skilled workers. The company is seeking experienced workers to handle high-voltage machinery and complex robotics. It is also filling less-skilled positions.
“I think the important thing to … wrap our head around is that as the machines are getting more sophisticated, the manufacturing is getting more automated,” Ample CEO Khaled Hassounah told CNBC. “That means we’re expecting a lot more of the people who are managing the process, the people who are actually doing the manufacturing, and that naturally means that job becomes a lot more sophisticated.”
The company is taking matters into its own hands. Ample is running apprenticeship partnerships with the City College of San Francisco, Laney College and the College of San Mateo, launched as a result of the Inflation Reduction Act.

Those training programs make the company confident it can meet its growth goals. He said some of the positions Ample is recruiting for do not require a college degree.
“We’re realizing that we can lean on community colleges to give that. You don’t have to go to college for two years just to get started. But there are classes you will take that will fundamentally increase your ability to the job really, really well, or do it safely even, or be able to be more effective,” Hassounah said.

As it ramps up hiring, Ample is bucking a slowdown in manufacturing jobs in the U.S. and around the globe. The sector added only 12,000 net jobs in 2023, for varying reasons, including automotive worker strikes last fall, according to the Bureau of Labor Statistics.
The U.S. added 23,000 jobs in manufacturing in January, but there were 601,000 open positions in the industry in December, a three-month high, according to Bureau of Labor Statistics data. This year is projected to be challenging for the sector, as the economic outlook is uncertain and companies struggle to staff adequately in a tighter job market, according to an industry outlook from consulting firm Deloitte.
Companies relying on blue-collar workers in the trades face challenges in finding the right job candidates as baby boomers retire and younger people choose between college and the workforce. The Manufacturing Institute, an industry advocate, projected in 2021 that some 4 million jobs will need to be filled in the industry by 2030, and more than 2 million jobs could go unfilled in the sector by that time if workers don’t pursue modern manufacturing careers.
“The biggest misperception about manufacturing is what modern manufacturing really looks like; people just don’t know,” said Carolyn Lee, president of the Manufacturing Institute. “They think that it’s antiquated or that you come in and you do one job. They don’t know that modern manufacturing today is all about technology.”
The group is broadening its recruitment efforts among workers of all demographics, backgrounds and ages, even starting to tell kids in middle schools about the opportunities in the industry.

Construction industry also faces shortage

More manufacturing jobs are likely on the way in the coming years, as funding hits from the CHIPS Act, the Inflation Reduction Act and the bipartisan infrastructure deal. But the growth will go beyond that.
Construction hiring has also picked up, as the sector added an average of 16,000 jobs per month in 2023. Manufacturing-related construction jobs have also grown over the last year. Industry watchers expect more to come. 
“It’s hundreds of billions of dollars over the next four or five years,” Ben Brubeck, vice president of regulatory, labor and state affairs at trade group Associated Builders and Contractors, said of the federal funds tied to construction and manufacturing projects. “And that’s going to have a big impact on skilled labor and the shortage we’re facing right now.”
The construction industry will need to bring on an estimated 501,000 additional workers on top of the normal pace of hiring in 2024 to meet the demand for labor, according to a proprietary model developed by the trade group.

Smaller employers are likely feeling the trades hiring crunch in a more meaningful way. The National Federation of Independent Business reported quality of labor ranked among the top three concerns for small business owners in December, just behind inflation.
Thirty-three percent of all small business owners surveyed had openings for skilled labor, and the group mentioned hiring challenges were most acute in the construction and transportation sectors. 
To ease the hiring issues, companies in part aim to bring on younger workers and train them to work in manufacturing and construction. It’s something even high schools are doing in unique ways.
At South San Francisco High School, a course that was designed as a traditional woodshop elective has been transformed into a two-year trades course for the construction industry.
“Really, going from building a birdhouse to learning how to form walls, roofs on buildings — so it was really out of just understanding: What is it that students will need to be competitive in the work environment? And what can we do to help support them to get there?” said Jason Brockmeyer, director of innovation, community outreach and special projects at South San Francisco High School District. “We really focus on trying to ensure not just that students are prepared for college but also career.” More

Spotify has signed a new multiyear deal with Joe Rogan, host of popular podcast “The Joe Rogan Experience.”
The show was previously exclusive to Spotify, but the company said it will now be available on additional platforms.
The deal extends a partnership that has drawn scrutiny and controversy.

Podcaster and comedian Joe Rogan.
Vivian Zink | SYFY | NBCUniversal

Spotify has signed a new blockbuster deal with polarizing podcaster and comedian Joe Rogan, but this time, his show won’t be exclusive to Spotify, the company announced Friday in a news release.
The multiyear deal with Rogan, the founder of “The Joe Rogan Experience,” is said to be worth about $250 million, according to The Wall Street Journal, which first reported on the deal. The show was the No. 1 podcast in the U.S. for the third quarter of last year, according to Edison Research.

Spotify also said it’s expanding the partnership to allow the show to be available on other platforms. Shares of the audio streaming giant rose roughly 1.5% Friday.
Spotify first brought “The Joe Rogan Experience” to its platform exclusively in 2020 in a deal that was reportedly worth more than $100 million.
The talk-show style podcast is known — and often criticized for — its edgy approach and guests. Last year, for example, Tesla CEO Elon Musk appeared on the show and said he bought social media site X to save it from the “woke mind virus.”
Rogan faced backlash in 2022 after a compilation of videos surfaced of him using the N-word. He was also chastised by medical professionals and others for spreading Covid-19 misinformation and conspiracy theories.
Spotify came under fire for hosting those videos, and dozens of Rogan’s episodes were removed from the platform. Musicians including Neil Young and Joni Mitchell also pulled their music libraries from Spotify in protest.Don’t miss these stories from CNBC PRO: More