Raphael Stevens

Michael Jordan’s NASCAR team is suing NASCAR and CEO Jim France for what it said are anticompetitive practices and monopolistic control of the sport.
Jordan said the way NASCAR is run is unfair to teams, drivers and sponsors.
The suit also said teams are struggling to make reasonable profits.

Michael Jordan, NBA Hall of Famer and co-owner of 23XI Racing looks on during the NASCAR Cup Series FireKeepers Casino 400 at Michigan International Speedway on August 18, 2024 in Brooklyn, Michigan. 
Logan Riely | Getty Images

Michael Jordan’s NASCAR team, 23XI Racing, and fellow team Front Row Motorsports filed an antitrust lawsuit against NASCAR and CEO Jim France on Wednesday, arguing that they have used anticompetitive practices to prevent fair competition in the sport.
“Together, we brought this antitrust case so that racing can thrive and become a more competitive and fair sport in ways that will benefit teams, drivers, sponsors, and, most importantly, fans,” 23XI Racing and Front Row Motorsports said in a joint statement.

23XI Racing was founded in 2020 by NBA legend Jordan, driver Denny Hamlin and Jordan’s longtime business partner, Curtis Polk. Front Row Motorsports, meanwhile, is owned by Bob Jenkins and has been racing full time since 2005.
The suit alleges that NASCAR and France operate without transparency, have stifled competition, and control the sport in ways that unfairly benefits them at the expense of team owners, drivers, sponsors, partners and fans.
The two teams take issue with the fact that NASCAR does everything from buying the premier racetracks that are exclusive to its races to allegedly requiring teams to buy their parts from a single-source suppliers chosen by NASCAR. They also are prevented from participating in any other stock car races.

The hood of Tyler Reddick (#45 23XI Racing Upper Deck Toyota) on pit road prior to the running of the 75th Cook Out Southern 500 on September 01, 2024 at Darlington Raceway in Darlington, SC. 
Jeff Robinson | Icon Sportswire | Getty Images

The suit said teams are struggling to make reasonable profits, while investors must put tens of millions of dollars into the team.
Jenkins, of Front Row Motorsports, said he’s been in the business for 20 years and has yet to make a profit.

“We need a more competitive and fair system where teams, drivers and sponsors can be rewarded for our collective investment by building long-term enterprise value, just like every other successful professional sports league,” he said.
Meanwhile, the suit alleged, NASCAR is not facing the same financial issues. Last November, the company signed a new seven-year media deal with Fox, NBC, Amazon and Warner Bros. Discovery valued at $7.7 billion, a 40% increase over its previous deal.
Unlike most pro sports leagues, which are owned and operated by their teams and team owners, NASCAR is privately owned and operated by the France family.
“No other major professional sport in North America is run by a single family that enriches themselves through these kinds of unchecked monopolistic practices,” the suit said.
The financial challenges have led to high turnover among teams. Of the 19 team owners that were originally granted charters in 2016, only eight teams remain in the sport, according to the suit.
It can cost about $18 million per year to run one chartered team for a full season of Cup Series races, the suit said.
Even with four charters and 14 Cup Series championships, Jeff Gordon, Hendrick Motorsports vice chairman and a former NASCAR driver, said his race team has not had a profitable season in years, and he has “a lot of fears that sustainability is going to be a real challenge.”
Jordan, a longtime racing fan, is the first Black majority owner of a full-time racing team in the NASCAR series since legendary driver Wendell Scott.
“Today’s action shows I’m willing to fight for a competitive market where everyone wins,” Jordan said in a statement. “Everyone knows that I have always been a fierce competitor, and that will to win is what drives me and the entire 23XI team each and every week out on the track. I love the sport of racing and the passion of our fans, but the way NASCAR is run today is unfair to teams, drivers, sponsors, and fans.”

2024 Regular Season Champion, Tyler Reddick, driver of the #45 Upper Deck Toyota, poses with Curtis Polk, 23XI Racing co-owners, NBA Hall of Famer, Michael Jordan, and Denny Hamlin, driver of the #11 Sport Clips Haircuts Toyota, after the NASCAR Cup Series Cook Out Southern 500 at Darlington Raceway on September 01, 2024 in Darlington, South Carolina. 
Meg Oliphant | Getty Images

Jordan’s team, led by driver Tyler Reddick, won its first regular-season championship last month, in its fourth year of existence. He currently sits in ninth place in NASCAR’s standings.
23XI Racing and Front Row Motorsports said they will seek discovery from both NASCAR and France, and will seek damages for the anticompetitive terms they said they have been subject to under the 2016 charter agreement.
The teams are being represented by one of the most prominent sports lawyers in the country, Jeffrey Kessler, co-executive chairman of Winston & Strawn.
Kessler said they will file a preliminary injunction to enable the teams to race in the next calendar year while continuing to pursue antitrust litigation.
NASCAR did not immediately respond to a request for comment on the suit.
Disclosure: NBC and CNBC are owned by Comcast’s NBCUniversal unit.

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Eli Lilly will invest $4.5 billion to construct the Lilly Medicine Foundry, a center aimed at finding better ways to make medicines.
The investment seeks to build upon Lilly’s success from Mounjaro and Zepbound, which are riding a wave of popularity in so-called GLP-1 drugs.
Lilly has 11 obesity drugs in its pipeline and wants to develop more treatments for Alzheimer’s disease, ALS and other brain diseases, Chief Executive Officer David Ricks told CNBC.

Eli Lilly will spend $4.5 billion to build a center aimed at finding better ways to manufacture its medicines. 
The facility, called the Lilly Medicine Foundry, will house development of new manufacturing methods with an eye toward efficiency. It’s a strategy that’s already paying off with Lilly’s obesity and weight loss drugs Mounjaro and Zepbound, and Lilly wants it to propel the rest of its pipeline.

The foundry serves a dual purpose: researching new manufacturing procedures, then putting them into practice with production of drugs for clinical trials. Lilly says the facility will be the first of its kind to combine research and production in a single location. 
“The idea is to take molecules from a bench in a lab to scaled for medicines in a pharmacy, and this research and development site will do that work,” Eli Lilly Chief Executive Officer David Ricks said in an interview from the company’s headquarters in Indianapolis. 
The center, which is slated to open in late 2027, will be equipped to make small molecules, biologics and genetic medicines. It will be near a $9 billion manufacturing complex Lilly is building in Lebanon, Indiana, to produce pharmaceutical ingredients like tirzepatide, the active ingredient in Mounjaro and Zepbound.
The cranes and steel frames of the active construction site stick out amid the flat farmland, about a 40-minute drive from Lilly’s Indianapolis headquarters. 
The investments are part of Lilly’s plan to build upon its success with Mounjaro and Zepbound, which are riding a wave of popularity in so-called GLP-1 drugs with Novo Nordisk’s Ozempic and Wegovy.

Mounjaro and Zepbound are expected to bring in $50 billion alone by 2028 – almost twice the company’s entire full-year revenue in 2022. That gives Lilly more freedom to invest, but it also puts pressure on the company to find and develop more new medicines to keep growing in the years to come. 
Lilly is already charting its future beyond tirzepatide. The company also wants to develop more drugs for Alzheimer’s disease and other neurodegenerative conditions like amyotrophic lateral sclerosis, or ALS.
“There are all of these huge opportunities to improve human health that are hiding in plain sight,” said Dr. Dan Skovronsky, Lilly’s chief scientific officer. “In our industry, people usually like to see what’s popular and then follow the leader. So a lot of the other companies are now stopping their different research projects so they can try and figure out how to catch up to us in obesity and Alzheimer’s disease. OK, we’re working on the next thing. Sorry.” 

A sign with the company logo sits outside of the headquarters of Eli Lilly in Indianapolis, Indiana, on March 17, 2024.
Scott Olson | Getty Images

Lilly wants to look for “breakthrough ideas” in areas where the company already has a foothold such as oncology and immunology, as well as newer areas like cardiovascular disease, chronic pain and hearing loss, Skovronsky said.
Neuroscience is one area where he and Ricks want to put particular focus. Lilly has a long history in the space between its antidepressant Prozac and its newly approved Alzheimer’s drug Kisunla, but they see more work to do. 
“Neuropsych is a huge unmet need,” Ricks said. “Addiction and mental health, but also neurodegenerative conditions, so we’re investing heavily there. And perhaps the gains we’ve made in obesity can help fund the research in new areas.”
That’s not to say Lilly is done with obesity.

More CNBC health coverage

Ricks acknowledged that one drug won’t meet all needs and that Lilly needs to keep moving the science forward. The company has 11 obesity drugs in its pipeline with different mechanisms of action and modes of delivery, he said. That includes two closely watched drugs in Phase 3 trials: an experimental pill called orforglipron and another injectable medicine called retatrutide. 
Lilly is investing everywhere it thinks makes sense in obesity, Ricks said, but he recognizes other companies might explore new mechanisms that it’s possible Lilly hasn’t. He wants to see more pills, especially ones that can go after multiple targets. He’s also interested in technologies that mean giving injections less frequently, such as short interfering RNA. 
Any new advances could help Lilly become the first trillion-dollar health-care company. The company’s stock has soared nearly 65% over the past year, giving Lilly a market capitalization of about $840 billion.
Ricks downplays the importance of hitting the trillion-dollar mark, saying it would be an outcome, not a goal, for Lilly. 
“We want to do valuable things, and if we’re successful, we create value,” Ricks said. “That’s how we’ll get to a bigger number.” 

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Nike withdrew is full-year guidance and said it was postponing its investor day, which had been scheduled for November.
Nike beat earnings expectations by 18 cents, but it fell short on revenue as it works to fix its product assortment and rework its approach to innovation.
The sneaker giant is gearing up for a new CEO to take the helm.

An employee carries shoe boxes at the Footlocker retail store in the Barton Creek Square Mall on August 28, 2024 in Austin, Texas. 
Brandon Bell | Getty Images

Nike on Tuesday said it was withdrawing its full-year guidance and postponing its investor day as it gears up for a new CEO to take the helm.
Last month, the company announced that CEO John Donahoe would be stepping down in October and replaced with longtime company veteran Elliott Hill, effective Oct. 14. Given the impending CEO change, the company has decided to withdraw its full-year guidance and intends to provide quarterly guidance for the balance of the year, executives said.

“This provides Elliot with the flexibility to reconnect with our employees and teams, evaluate the current strategies and business trends and develop our plans to best position the business for fiscal ’26 and beyond,” finance chief Matthew Friend said on an earnings call with analysts.
When reporting fiscal fourth-quarter results in June, Nike cut its guidance for fiscal 2025 and said it was expecting sales to be down mid-single digits after it previously expected them to grow. Friend said since the fiscal year started, the company’s “revenue expectations have moderated… given traffic trends on Nike Digital, retail sales trends across the marketplace and final order books for spring.”
“We continue to see indications of slight second-half improvement in revenue trends versus our first half,” said Friend. “As we plan to introduce and scale newness and innovation across the marketplace, we now expect gross margins to decline versus the prior year.”
Nike said it expects revenue in its current quarter to be down between 8% and 10% and gross margin to be down about 1.5 percentage points. That’s worse than the 6.9% drop in revenue that LSEG analysts had expected.
It’s also postponing its investor day, originally scheduled for November. It’s unclear when the meeting will be rescheduled. 

Shares fell about 5% in extended trading after the updates and after Nike delivered mixed results for its fiscal first quarter.
Here’s how the world’s largest sneaker retailer performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: 70 cents vs 52 cents
Revenue: $11.59 billion vs $11.65 billion

The company’s reported net income for the three-month period that ended August 31 was $1.05 billion, or 70 cents per share, compared with $1.45 billion, or 94 cents per share, a year earlier.
Nike beat earnings expectations by 18 cents, but it fell short on revenue as it works to fix its product assortment and rework its approach to innovation.
Sales dropped to $11.59 billion, down about 10% from $12.94 billion a year earlier.
Nike’s gross margin grew by 1.2 percentage points in the quarter to 45.4%, higher than the 44.4% that StreetAccount analysts had expected. Still, profits fell by nearly 28% during the quarter.

Innovation

Over the last year, Nike has been accused of falling behind on innovation and ceding share to competitors as it focused on selling directly to consumers through its own websites and stores rather than through wholesalers such as Foot Locker and DSW. 
At first, the strategy was a boon to Nike’s profits and sales during the Covid pandemic, but as it scaled, it got more complex and consumers started returning to stores and other in-person activities.
During the quarter, Nike Direct sales were down 13% to $4.7 billion, while Nike digital sales were down 15%.
Critics say Nike’s focus on direct selling also led it to take its eye off innovation.
Under Donahoe’s leadership, the company grew annual sales by more than 31%, but it got there by churning out legacy franchises such as Air Force 1s, Dunks and Air Jordan 1s — not the groundbreaking styles that turned the company into a global powerhouse. 
Sales for those legacy franchises are no longer boosting sales in the same way they had previously, and as a result, the company has worked to cut off supply to drive up demand and recapture their cool factor.
During the first quarter, sales for those franchises declined more than the overall business. Online sales for Air Force 1s, Dunks and Air Jordan 1s combined were down nearly 50%. Jordan brand alone was down double-digits during the quarter, and the company expects it to be down at the same rate for fiscal 2025.
The company also expects overall online sales to be down double-digits in fiscal 2025.

Wholesale

Last year, Donahoe started to acknowledge Nike needed to mend its relationships with wholesalers, but the company’s board decided that Hill, who spent 32 years with Nike before retiring in 2020, would be the right person to lead its next chapter. 
Hill is known to be well-regarded among Nike’s retail partners, when he takes over later this month, he’ll have work to do to rebuild those relationships.
Wholesalers have previously spoken out about Nike’s product lineup and how the same old recycled franchises weren’t doing enough to drive sales. They’ve also been working to keep their own inventories in line and have been careful about ordering too much product.
Nike’s fiscal first-quarter wholesale revenue was down 8% to $6.4 billion.
“The multi-brand environment is very competitive today, and it will take time to expand market share. This was reflected in our spring ’25 order books, which came in roughly flat versus the prior year,” Friend said on the earnings call, adding orders were a “little lighter” than expected.
Compounding the issue is the overall sneaker market, which has been relatively stagnant in the U.S., and a slowdown in consumer spending on discretionary goods such as new clothes and shoes.

Footwear sales in the U.S. are projected to grow by just 2% in 2024 compared with 2023 after barely budging between 2022 and 2023, according to Euromonitor. Athletic footwear is expected to grow by about 5.6%, the firm said. 
During the most recent quarter, Nike footwear sales in North America were down 14%, and apparel sales fell 10%.
Converse, which Nike acquired in 2003, is also weighing down the company’s overall performance. Sales fell 15% to $501 million during the quarter but performed better than the $493 million that analysts had expected, according to StreetAccount.

China

Nike’s performance has also been weighed down by the uneven economy in China, Nike’s third-largest market by revenue. Nike’s performance in China is often an indicator of the region’s financial health, and in late June, it warned of a “softer outlook” in the region.
During its fiscal first quarter, Nike posted $1.67 billion in revenue in the region, slightly above the $1.62 billion that analysts had expected, according to StreetAccount. Still, traffic was “soft” in the region and Friend said that Nike is “not immune” to China’s challenging consumer environment.
China’s central bank recently unveiled its largest stimulus measures since the Covid pandemic, which is expected to give the region’s economy a much-needed boost. 
Nike’s fiscal first quarter concluded prior to those stimulus measures, but executives may share color on how sales are performing during the current period. 
Shares of Nike closed at $89.13 on Tuesday, down about 18% so far in 2024, significantly underperforming the S&P 500’s gains of about 20%. More

Baristas at a Starbucks in Bellingham, Washington, successfully voted to unionize on Monday, marking the 500th store to join Starbucks Workers United.
The union now represents more than 11,000 baristas across the country.
Starbucks and Workers United are negotiating a framework for collective bargaining agreements for unionized cafes.

Demonstrators protest outside a closed Starbucks Corp. location at 505 Union Station in Seattle, Washington, US, on Saturday, July 16, 2022. 
David Ryder | Bloomberg | Getty Images

Baristas at a Starbucks in Bellingham, Washington, became the 500th store to join the Starbucks Workers United union on Monday.
Since the first location voted to unionize in 2021, more than 11,000 baristas have joined the union, according to a Tuesday press release.

“This milestone is a testament to workers building power from the ground up,” said Lynne Fox, president of Workers United. “Starbucks partners have boldly demanded a voice on the job and with it, strong contracts that ensure respect, living wages, racial and gender equity, fair scheduling and more.”
The union and Starbucks announced together in February that negotiations would be taking place through a collaborative process to work toward a foundational framework. They have been meeting at the bargaining table monthly since April, and 100 new locations have successfully unionized in the past six months, the union said.
CEO Brian Niccol, who assumed the coffee chain’s top spot in September, said last week that the company is committed to bargaining in good faith with the union as the two sides work to craft a labor deal. The framework they are negotiating would be the basis for collective bargaining agreements between individual stores and the company.
Both the union and Starbucks noted that negotiations have been productive and have advanced measures.
Baristas from the Bellingham location sent a letter to Niccol outlining their reasons for organizing.

“Starbucks’ ultimate success in rebuilding hinges on whether we as baristas have the support we need to do our jobs well so that, in turn, we can ensure customers enjoy their Starbucks experience and keep coming back,” they wrote.
In a statement, a Starbucks spokesperson said “we respect our partners rights to have a choice on the topic of unions,” and added that “we are proud of the progress we have made on bargaining and are committed to continuing to work together to achieve our shared goals.” More

PepsiCo is buying Mexican American food company Siete Foods for $1.2 billion.
Siete’s tortilla chips and other products are designed to meet dietary restrictions.
Packaged food companies are turning to deal-making to drive sales growth.

Siete Foods Tortilla Chips
Courtesy: Siete Foods

PepsiCo said Tuesday that it’s buying Mexican American food company Siete Foods for $1.2 billion, marking the company’s first food acquisition in roughly five years.
Like many food companies, Pepsi has been trying to shift its portfolio to include healthier options in recent years, usually through acquisitions. Recent additions include Bare Snacks, Health Warrior and PopCorners.

Soon that will also include Siete. Founder Veronica Garza started the company in 2014, when she began selling grain-free tortillas. Since then, its portfolio has grown to include tortilla chips, taco shells, salsas and seasonings, often designed to accommodate different dietary restrictions. Retailers like Target, Kroger, Whole Foods and CVS carry the company’s products.
“We look forward to expanding our multicultural portfolio with these incredible products and even more consumers discovering and enjoying Siete,” Pepsi CEO Ramon Laguarta said in a statement.
The deal is expected to close in the first half of 2025, assuming it receives regulatory approval.
Deal-making has picked up this year for packaged food companies, who are turning to acquisitions to drive sales growth as shoppers buy less of their products. In August, M&M’s owner Mars announced it would purchase Pringles parent Kellanova in a deal valued at nearly $36 billion. This March, Campbell Soup completed its $2.7 billion acquisition of Rao’s pasta sauce maker Sovos Brand.

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