Raphael Stevens

A bankruptcy judge ordered Diamond Sports, the owner of a portfolio of regional sports networks, to make full payments to four MLB teams to keep carrying their games.
Diamond must pay the Diamondbacks, Guardians, Rangers and Twins in full, or the teams can walk away from their contract with the network owner.
Earlier this week, Diamond stopped making payments to the San Diego Padres. MLB has since began airing the Padres’ games.

The Ohio Cup Trophy on top of a Bally Sports logo prior to a game between the Cincinnati Reds and Cleveland Guardians at Progressive Field in Cleveland, May 17, 2022.
George Kubas | Diamond Images | Getty Images

Diamond Sports, the owner of regional sports networks, was ordered this week by a bankruptcy judge to make full media rights payments to four Major League Baseball teams.
Diamond, which runs a portfolio of 19 networks under the Bally Sports brand, filed for bankruptcy in March, seeking to not only restructure its debt load, but also reset some of its media rights deals with teams to reflect so-called market rates in the wake of rampant cord cutting.

The company had been looking to cut down the payments owed to four MLB teams — the Arizona Diamondbacks, Cleveland Guardians, Texas Rangers and Minnesota Twins — which caused it to go toe-to-toe with MLB officials in bankruptcy court this week. Diamond had already paid the teams up to 75% of the payments owed earlier in its bankruptcy, court papers show.
If Diamond doesn’t make the remainder of the payments owed to the teams, those teams can walk away from their contracts with the company, a judge ruled.
The decision comes after MLB earlier this week announced it would begin producing and distributing San Diego Padres games on pay-TV bundles and its MLB.TV streaming service after Diamond stopped making payments to the team. The in-court matter didn’t affect the status of the Padres situation.
“MLB appreciates the ruling from the Federal Bankruptcy Court in Houston requiring Diamond to pay the full contractual rate to Clubs,” an MLB spokesperson said in a statement Friday. “As always, we hope Diamond will continue to broadcast games and meet its contractual obligations to Clubs. As with the Padres, MLB will stand ready to make games available to fans if Diamond fails to meet its obligations.”
The judge’s ruling came after a two-day hearing that included testimony from MLB Commissioner Rob Manfred and showcased the tensions between the league and Diamond Sports.

A Diamond spokesperson said in a statement Friday that in keeping with the bankruptcy judge’s orders, “we look forward to engaging with MLB and our team partners to negotiate a go-forward rights package that works for all parties and positions Diamond for long-term success.”
In particular, Diamond has been pushing to hold the direct-to-consumer streaming rights to all MLB teams that air on its networks. Currently, Diamond has deals with all its NBA and NHL teams, plus a handful of MLB teams for the streaming rights.
The proliferation of consumers cutting their traditional pay-TV bundles in favor of streaming services has weighed on the regional sports network business. Last year, Diamond launched its streaming response with Bally Sports+.
Diamond pays fees to 42 teams across the MLB, NBA and NHL to broadcast the bulk of the local games in their markets.
During the hearing, a Diamond executive said Bally Sports+ had 203,00 subscribers, representing 55% of the subscriber goal for the company, The Athletic reported.
Diamond is also facing a more than $8 billion debt load, stemming from Sinclair Broadcast Group’s $10.6 billion acquisition of regional sports networks in 2019.
Diamond is now an unconsolidated and independently run subsidiary of Sinclair. More

Inflation is hitting the beer industry hard as brewers grapple with increased costs for packaging and transportation
Beer makers such as Anheuser-Busch and Molson Coors have raised prices on many of their popular beers.
Beer prices rose 5.9% in the 12 months through April 2023, and are up 72% since the year 2000.

Beer isn’t as much of a bargain as it used to be.
Americans are drinking fewer brews, and the sector is steadily losing market share to spirits. Beer companies, faced with rising operating costs in areas like packaging and transportation, have raised prices and seen bigger profits, with consumers footing the bill.

The price of beer bought at retail locations such as grocery stores rose 5.9% for the 12 months through April 2023 compared with the prior year, according to data from the Bureau of Labor Statistics. The rate topped the overall 4.9% inflation for the same period.
Since 2000, retail beer consumed at home has increased more than 72%. The cost of beer has climbed even more for people drinking outside the home, jumping 102% during that time.

Read more of CNBC’s coverage on inflation

While beer lovers have felt inflation in their wallets, price increases in the last year helped to drive strong performances for some of the world’s largest beer makers.
In its latest quarterly earnings report, Anheuser-Busch InBev, the world’s largest brewer and the maker of Bud Light, reported a jump in profit driven by price increases and getting consumers to spend more on premium offerings. As a result, the brewing giant saw its core profit increase by 13.6% year over year to $4.76 billion. At the same time, beer sales increased only 0.4% from a year ago.
Other beer makers such as Molson Coors and Heineken are also reporting better-than-expected profits as consumers absorb higher prices.

Danelle Kosmal, vice president of research at the Beer Institute, said beer is still a staple product in many American households and remains an “affordable luxury.” She notes that other beverage categories, such as juice and carbonated drinks, have seen double-digit increases far above the overall rate of inflation.
Meanwhile, drinkers of distilled liquor and wine beverages are faring much better amid the nation’s soaring inflation. Prices for both categories have seen only moderate increases of about 1% to 2.5% year over year. More

Consumers are more likely to cut back on their restaurant visits instead of trading down to preserve their budgets, according to a report from AlixPartners.
In April, prices for food away from home rose 8.6% compared with the year-earlier period, according to the Bureau of Labor Statistics.
That same month, traffic at restaurants open at least a year fell 3.5% compared with a year earlier, according to Black Box Intelligence data.

People sit outdoors at the Petite Crevette Restaurant on June 05, 2021 in the Brooklyn borough of New York City.
Robert Nickelsberg | Getty Images

During the Great Recession, consumers hunted for bargains, trading down to cheaper restaurants or picking the least expensive menu options.
But today, as inflation puts pressure on their wallets, consumers are more likely to cut back on their restaurant visits instead to preserve their budgets, according to a report from AlixPartners.

The cost of eating out has been rising for more than a year. In March, for the first time since inflation began accelerating in mid-2021, prices for meals eaten away from home rose faster than prices at grocery stores.
In April, prices for food away from home rose 8.6% compared with the year-earlier period, according to the Bureau of Labor Statistics. Prices for food at home climbed 7.1% during the same period.
In response, diners have been visiting restaurants less frequently. In April, traffic at restaurants open at least a year fell 3.5% compared with a year earlier, according to Black Box Intelligence data.
In a survey conducted by AlixPartners in December, 74% of respondents said they planned to reduce dining out. Just 39% said they would choose less expensive restaurants. Those surveyed could choose more than one option.
Back in January 2009, just 12% of respondents said they would eliminate or reduce visits to cut back on their restaurant spending.

“History would tell you that people just trade down but continue to eat out as much,” said AlixPartners Managing Director Andrew Sharpee.

Read more of CNBC’s coverage on inflation

But in the decade and a half since the financial crisis, consumers have changed. The pandemic made many people more comfortable cooking at home. Sharpee said he thinks that consumers will budget their restaurant spending for experiences that can’t be replicated at home, rather than trading down from casual dining to fast food.
“What you’re going to see now is winners and losers across the board,” he said.
Young consumers, in particular, are cutting back their takeout and food-delivery orders but still plan to dine in person, according to the report. Delivery orders are usually more expensive because of the associated fees and sometimes higher prices for the food itself, to offset the commission fees that the restaurants have to pay.
“Delivery has just gotten too expensive,” Sharpee said.
First Watch Restaurant Group said in early May that its customers haven’t been ordering their meals as often through third-party delivery services.
For its part, DoorDash is starting to push back against inflated delivery prices by giving eateries with the same delivery and in-store pricing more favorable placement in its app.
The shifts in consumer spending showed up in other restaurant companies’ quarterly earnings. El Pollo Loco, Domino’s Pizza and Outback Steakhouse owner Bloomin’ Brands were among the companies that reported declining traffic in the U.S., even though they faced easy comparisons to last year’s metrics, when the Covid omicron outbreak hurt industry sales.
But some restaurants have insisted they haven’t seen any significant changes. Starbucks said its customers haven’t been trading down or spending less at its cafes. And Josh Kobza, chief executive of Burger King owner Restaurant Brands International, said Tuesday the company hasn’t seen a major shift in its business.
“You can have some folks who are existing customers who trade down, but we also probably benefit from a certain trade down into the category. It’s hard to pull these two dynamics apart too much, but we haven’t seen a huge shift in the business that we could attribute directly to inflation,” Kobza said at Bernstein’s Annual Strategic Decisions Conference.
The companies that have seen changes to consumer behavior are switching up their strategies. Chipotle Mexican Grill, for example, plans to pause price hikes unless inflation heats up again.
Elsewhere, Chili’s parent Brinker International is phasing out its Maggiano’s Italian virtual brand, which was only available for delivery orders. And Noodles & Company is leaning into its value offerings. More

Inflation has strained some household budgets, yet consumers continue to shell out on vacations.
Domestic airfare has moderated but international flights are up sharply from 2019 and last year.
International travel has been especially strong since the end of pandemic-entry restrictions.

Francesco Riccardo Iacomino | Moment | Getty Images

Persistent inflation and higher interest rates have strained many household budgets, and consumers are shying away from some purchases such as home improvement projects or apparel. But millions of U.S. consumers aren’t giving up their vacations.
A Deloitte survey from last month found that 50% of respondents planned to take a vacation that includes paid lodging during the summer, up from 46% last year. In a sign of strong demand, the Transportation Security Administration screened close to 10 million people over Memorial Day weekend, slightly more than the same period in pre-pandemic 2019. And American Airlines this week raised its adjusted earnings forecast for this quarter, thanks to strong demand and cheaper fuel.

Many travelers are seeing some relief when they book airline tickets or fill up the tank before a road trip, at least compared with last year.
Prices for airline tickets, for example, were down 0.9% in April from a year ago, according to the latest federal inflation read.

Read more of CNBC’s coverage on inflation

And yet, consumer spending has begun moderating overall but “the categories that are holding up the strongest are the travel categories,” said Jason Gaughan, head of consumer credit card products at Bank of America.

Location is everything

Prices vary wildly depending where travelers are planning to go. A round-trip domestic flight is averaging $306 this summer, down 19% from last year, though still 6% higher than in 2019, according to travel site Hopper.
Capacity constraints due to shortages of aircraft and pilots have affected airline growth and kept fares elevated for months.

International travel has roared back this year as countries around the world lift pandemic restrictions. But there’s still plenty of demand for domestic destinations that dominated travel during the pandemic. That’s especially true because airlines have ramped up capacity to Europe and other international destinations, but bargains are hard to find during the peak late spring and summer months.
Airfare to Europe is averaging $1,167 round trip this summer, up 36% from last year, Hopper data showed.
Lodging also has been more expensive this year, even within the U.S. Hotel occupancy averaged 60.6% from January though April, with per-night average rates of $152.68, according to hotel data firm STR. That’s up from 63% occupancy and average nightly rates of $130.05 during the same period in 2019, and up from 58.4% occupancy and average rates of $141 a night last year.
But there are vast differences between some destinations because of changing travel patterns. Nightly hotel rates for Maui, Hawaii, have increased more than 53% since 2019 to $535.90, the biggest percentage increase in the U.S., according to STR. Meanwhile, hotel rates in the San Jose and Santa Cruz areas of California are down nearly 17% from 2019 to $171.52 as business travel in tech and other sectors still hasn’t recovered to pre-pandemic levels.

Arrows pointing outwards

Money-saving strategies

Consumers looking to save money on travel need to be flexible. Travel experts suggest booking outside of traditional peak periods, like during shoulder season in the fall, though there are trade-offs, such as the possibility for worse weather.
Kobe Guerrero, a Caribbean travel specialist at Raleigh, North Carolina-based agency Trip and Sip Travel, said some customers could find cheaper rates and fares booking in September or October for the northern Caribbean, but that it comes with a risk.
“But then you might have a hurricane ruin your whole vacation,” Guerrero said. She said she would require the buyers to get travel insurance. 
Some travelers are also trying to prepare by booking far ahead.
“Luxury resorts are getting booked two years in advance,” Guerrero said.
Others are giving up some spending elsewhere to pay for trips.
Pervez Virani, an IT project manager, said he and his wife, Zoha Karmali, a property manager, used American Airlines frequent flyer miles to visit New York City over Memorial Day weekend but that they saved money by returning on Wednesday instead of at the end of the weekend.
Virani said the couple had been cooking dinner at home to save on dining out before their trip with their 10-year-old Yorkie, Jordan.
“We’re cutting costs at home,” he said. More