Business

Starbucks Chief Operating Officer John Culver is departing the company after two decades with the coffee chain.
His exit comes in the middle of a broader executive reshuffling at Starbucks.
The company will eliminate the role of COO, instead shifting many of its responsibilities to its head of strategy and transformation.

Starbucks Chief Operating Officer John Culver is departing the company after two decades with the coffee chain, as part of a restructuring that will eliminate his role.
His exit comes in the middle of a broader executive reshuffling at Starbucks. Former CEO Kevin Johnson retired earlier this year, leading Howard Schultz to return to the helm of the company as interim chief executive until long-term successor is named.

Effective Oct. 3, Culver will step down from his current role and become an executive advisor until he leaves the company at the end of the year.
Starbucks said it will eliminate the role of chief operating officer, with many of Culver’s direct reports being managed by Schultz. Frank Britt, the company’s chief strategy and transformation officer, will supervise the rest, including the global supply chain and technology divisions.

John Culver, Starbucks
Source: Starbucks

Since his return, Schultz has promised that bold changes are on the way. Investors will hear more details on that strategy at the company’s investor day in Seattle on Sept. 13. Cowen analyst Andrew Charles assigned a 50% probability that the new CEO is announced at the investor presentation in a note to clients on Thursday.
“As we speak to the external candidates in consideration for the ceo position, we’ve shared the Reinvention Plan and our aspirations for the future,” Schultz wrote in his letter to employees on Thursday addressing Culver’s departure. “The candidates are extremely excited and positive, and each is pleased to see we are investing ahead of the growth curve, and reimagining the partner, customer and store experience.”
Starbucks has used its chief operating officer role as a training ground for future chief executives, and Culver was seen as a potential candidate for the top job. However, Schultz said in June that the company is looking externally for the new chief executive, who is expected to be announced in the fall.

Culver has served as chief operating officer and president of the company’s North American business for a little more than a year. Prior to that, he oversaw Starbucks’ international, channel development and global coffee, tea and cocoa divisions. Culver is also on the boards of Columbia Sportswear and Kimberly-Clark.
“Given the moment we find ourselves in with our Reinvention underway, this is the right decision as we chart the course and the future path for Starbucks,” Culver wrote in a letter to employees on Thursday.

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Sales of previously owned homes fell nearly 6% in July compared with June, according to a monthly report from the National Association of Realtors.
Sales dropped about 20% from the same month a year ago.
“In terms of economic impact we are surely in a housing recession because builders are not building,” said Lawrence Yun, chief economist for the Realtors.

Sales of previously owned homes fell nearly 6% in July compared with June, according to a monthly report from the National Association of Realtors.
The sales count declined to a seasonally adjusted annualized rate of 4.81 million units, the group added. It is the slowest sales pace since November 2015, with the exception of a brief plunge at the beginning of the Covid pandemic.

Sales dropped about 20% from the same month a year ago.
“In terms of economic impact we are surely in a housing recession because builders are not building,” said Lawrence Yun, chief economist for the Realtors. “However, are homeowners in a recession? Absolutely not. Homeowners are still very comfortable financially.”
The July sales figures are based on closings, so the contracts were likely signed in May and June. Mortgage rates spiked higher in June, with the average rate on the 30-year fixed loan crossing 6%, according to Mortgage News Daily. It then settled back into the high 5% range. That rate started this year around 3%, so the hit to affordability in June was hard, especially coupled with soaring inflation.

A sign is posted in front of a home for sale on July 14, 2022 in Corte Madera, California.
Justin Sullivan | Getty Images

Homebuyers are also still contending with tight supply. There were 1.31 million homes for sale at the end of July, unchanged from July 2021. At the current sales pace, that represents a 3.3-month supply.
While demand is falling off due to weaker affordability, prices remain stubbornly high. The median price of a home sold in July was $403,800, an increase of 10.8% year over year. Price gains are now moderating, though, as this is the smallest annual rise since July 2020.

“The median home sales price continued to climb, but at a slower pace for the fifth consecutive month, shining a light on how downshifting buyer demand is moving the housing market back toward a more normal pace of activity,” said Danielle Hale, chief economist at Realtor.com. “A look at active inventory trends shows that home listings were nearly twice as likely to have had a price cut in July 2022 compared to one year ago.”
Sales activity continues to be stronger on the higher end of the market, although that too is fading fast. There is simply more supply available on the top tiers. Sales of homes priced between $100,000 and $250,000 were 31% lower compared with the year before, while sales of homes priced between $750,000 and $1 million were down 8%. Sales of homes priced above $1 million fell 13% from a year ago.
First-time buyers represented just 29% of buyers in July. Historically they usually make up about 40% of sales, but they are clearly struggling the most with affordability. High rents are also making it harder for them to save for a down payment.
Even as sales slow, this is still a fast-moving market. A typical home in July went under contract in just 14 days, which matches the fastest ever recorded in June. One year ago, it was 17 days. Yun called that “unusual.”

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Some of the largest airline industry unions launched a campaign against airlines buying back their stock when a ban ends this fall.
The ban on stock buybacks was a condition of $54 billion in Covid pandemic aid for payroll expenses.
The unions, with many members under contract negotiations, say airlines need to first stabilize operations and invest in workers.

A United Airlines flight crew walks through the terminal at San Francisco International Airport on April 12, 2020 in San Francisco, California.
Justin Sullivan | Getty Images

The largest U.S. airlines are making money again. Labor unions don’t want them to spend it on stock buybacks.
A condition of the $54 billion in federal aid that airlines received to pay workers during the Covid pandemic prohibited carriers from share buybacks. That ban is in effect through Sept. 30.

But in a campaign and public petition that launched Thursday, some of the largest airline labor unions — representing more than 170,000 pilots, flight attendants, customer service agents and other industry staff — are urging carriers to stabilize operations and invest in workers before spending on buying back their own stock.
“We can’t allow executives to send one dime to Wall Street before they fix operational issues and conclude contract negotiations that will ensure pay and benefits keep and attract people to aviation jobs,” Sara Nelson, international president of the Association of Flight Attendants, which represents some 50,000 cabin crew members, said in a release announcing the anti-buyback campaign Thursday.
The campaign is also supported by the Association of Professional Flight Attendants, Air Line Pilots Associations, International Association of Machinists and Aerospace Workers, the International Brotherhood of Teamsters, the Transport Workers Union of America, and the Communications Workers of America.
The four biggest U.S. carriers — Delta, United, American and Southwest — spent about $40 billion buying back their companies’ stock between 2015 and early 2020, according to S&P Global.
“Our highest financial priorities right now are restoring our balance sheet and investing in our employees and customers,” United said in a statement. The carrier is in the middle of a fleet refresh with close to 300 aircraft set for delivery in the coming years.

Southwest declined to comment and American and Delta didn’t immediately respond.
Many of the workers represented by the unions advocating against a resumption of buybacks are in contract negotiations with their carriers. In addition to higher pay, unions are pushing airlines for more predictable schedules after last-minute airline travel chaos roiled plans for customers and staff alike.
Flight delays and cancellation rates rose this year after airlines struggled with staffing shortages that exacerbated routine problems such as bad weather. “Every dollar that goes toward stock buybacks is a dollar that could have been used to reduce disruption by addressing understaffing, high turnover, excess overtime, and low starting wages,” said Richard Honeycutt, chair of CWA’s Passenger Service Airline Council.
Labor unions pushed lawmakers for the aid package early in the pandemic in 2020, after initial opposition in Congress, some of which was rooted in airlines’ share buybacks before the pandemic. “No blank check industry bailouts,” Sen. Richard Blumenthal, D-Conn., said at the time.
Despite a surge in bookings, a jump in costs including fuel and labor have taken a bite out of U.S. carriers’ bottom lines and their stock prices are trailing the broader market.
Those challenges could make it difficult for airlines to resume buybacks or dividends, which are also barred through Sept. 30, under the terms of the aid package.
“Given the economic uncertainty and perhaps even operations that are still not fully back to pre-COVID levels, we do not expect any to initiate dividends or buybacks this year,” said Savanthi Syth, airline analyst at Raymond James.
She estimated that the earliest that airlines would resume would be mid-2023, with Alaska Airlines and Southwest the most likely candidates among U.S. carriers.
The NYSE Arca Airline Index, which mostly tracks carriers in North America, is down about 21% so far this year, around twice as much as the S&P 500.

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The NFL and NFLPA have settled on an 11-game suspension for Cleveland QB Deshaun Watson.
Watson, who also agreed to the settlement, was also fined $5 million, which will go to nonprofits that work to prevent sexual harassment.
The league said Watson will be eligible for reinstatement on Nov. 28.

Deshaun Watson #4 of the Cleveland Browns takes off his helmet during Cleveland Browns training camp at CrossCountry Mortgage Campus on August 09, 2022 in Berea, Ohio.
Nick Cammett | Getty Images

The NFL and NFL Players Association settled on an 11-game suspension and a $5 million fine for Cleveland Browns quarterback Deshaun Watson, the league announced on Thursday.
Watson, who also agreed to the settlement, initially received a six-game suspension for alleged misconduct, but, according to NBC Sports, NFL Commissioner Roger Goodell pushed for a full-season suspension and the fine because of Watson’s “predatory behavior.”

Watson, who was traded to Cleveland in March, had 24 lawsuits filed against him from women alleging sexual harassment during massage treatments. He settled 23 of these suits. He previously signed a fully guaranteed $230 million, five-year contract.
“I apologize once again for any pain this situation has caused. I take accountability for the decisions I made,” Watson said in a statement Thursday. “My focus going forward is on working to become the best version of myself on and off the field and supporting my teammates however possible while I’m away from the team.”
The decision concludes the appeal process, and the league says there will be no additional legal steps. Watson will be eligible for reinstatement on Nov. 28. The 17-game NFL season begins Sept. 8.
“Deshaun has committed to doing the hard work on himself that is necessary for his return to the NFL,” Goodell stated. “This settlement requires compliance with a professional evaluation and treatment plan, a significant fine, and a more substantial suspension. We are grateful to Judge Robinson and Peter Harvey for their efforts in addressing these matters, which laid the foundation for reaching this conclusion.”
Watson’s $5 million fine will combine with $1 million each from the NFL and the Browns to create a fund to support the work of nonprofits that educate young people on healthy relationships, promote education and prevention of sexual misconduct and assault.

“Now that a decision on discipline has been reached, we understand this is a real opportunity to create meaningful change,” read a statement from Browns owners Dee and Jimmy Haslam. “Since Deshaun entered our building, he has been an outstanding member of our organization and shown a true dedication to working on himself both on and off the field. We will continue to support him as he focuses on earning the trust of our community.”
The NFLPA declined to comment on the matter.
CNBC’s Jessica Golden contributed to this report.

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Embracer Group agreed to acquire Middle-earth Enterprises from the Saul Zaentz Company.
The deal gives Embracer the rights to “The Lord of the Rings” and “The Hobbit” film trilogies and any Tolkien-related movies, video games, board games, merchandising, theme parks and stage productions.

Still from “Lord of the Rings: The Fellowship of the Ring.”
New Line Cinema

Swedish company Embracer Group said Thursday that it agreed to acquire Middle-earth Enterprises, which owns worldwide rights to “The Lord of the Rings” and “The Hobbit” film trilogies as well as other properties related to the books by J.R.R. Tolkien.
Embracer is buying Middle-earth Enterprises from the Saul Zaentz Company, which has owned the film rights to the fantasy works since 1976.

The companies did not disclose the financial terms of the deal, which gives Embracer the rights to movies, video games, board games, merchandising, theme parks and stage productions relating to Tolkien’s works.
“I am truly excited to have The Lord of the Rings and The Hobbit, one of the world’s most epic fantasy franchises join the Embracer family,” said Lars Wingefors, the company’s founder and CEO, in a release. “Going forward, we also look forward to collaborating with both existing and new external licensees of our increasingly stronger IP portfolio.”
The purchase was a part of six acquisitions by Embracer Group totaling 6 billion Swedish krona (about $572.8 million).
Embracer Group is a games and entertainment-focused company with a market capitalization of 87.5 billion Swedish krona (about $8.36 billion). The company said it plans to use the Tolkien intellectual property with Asmodee, its board and card game subsidiary that has licensed Tolkien IP in the past, and Freemode, its new entertainment and video game group.
The company said it will explore “additional movies based on iconic characters such as Gandalf, Aragorn, Gollum, Galadriel, Eowyn and other characters from the literary works of J.R.R. Tolkien.”

The purchase comes ahead of the premiere of Amazon’s “Rings of Power” series on Sept. 2. Amazon spent nearly $250 million to license the rights in 2017. An animated movie from Warner Brothers is expected in 2024, and a mobile game from Electronic Arts is also in the works.
Representatives from Embracer Group did not immediately respond to CNBC’s request for comment.

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Taco Bell is testing a plant-based meat substitute made from soy and pea protein at its restaurants in Birmingham, Alabama.
The new menu item is separate from its partnership with Beyond Meat, but the chain said it plans to have a Beyond product available by the end of the year.
Despite being a longtime favorite of vegetarians, Taco Bell took a while to embrace plant-based meat alternatives.

Taco Bell’s new Crispy Melt Taco, made with a plant-based meat substitute
Source: Taco Bell

Taco Bell is testing a plant-based meat substitute made from soy and pea protein at its restaurants in Birmingham, Alabama.
It’s the third trial of proprietary meat alternatives made by the Yum Brands chain since it announced a partnership with Beyond Meat, which hasn’t resulted in any public tests yet. Last year, Taco Bell piloted a meat substitute made from peas and chickpeas in its Cravetarian taco and another alternative made from pea protein and breaded to create a plant-based shell for its Naked Chalupa.

A representative for Taco Bell said the new meat alternative is an improved version of the one tested in the Cravetarian taco.
Taco Bell also said Thursday that a Beyond Meat product will be available before the end of the year. Its parent company Yum signed a deal with Beyond in early 2021 to create exclusive menu items for KFC, Pizza Hut and Taco Bell, but the buzzy partnership hasn’t resulted in many permanent menu items available nationwide.
Despite being a longtime favorite of vegetarians, Taco Bell took a while to embrace plant-based meat alternatives that more closely resemble meat. Before last year, the chain said it would instead focus on its existing meatless replacement options, like potatoes and beans. But a series of menu cuts during the pandemic angered its vegetarian customers, leading Taco Bell to bring the items back and invest in new plant-based options, too.
Its latest plant-based meat alternative is inspired by “classic Taco Bell flavors,” according to the chain. The Crispy Melt Taco features a fried white corn shell tortilla, filled with shredded cheddar, mozzarella, Monterey pepper jack, warm nacho cheese, lettuce, tomato, sour cream and the new soy and pea protein. The taco will sell for $2.49.
The alternative will also be featured in Nachos BellGrande, the chain’s take on loaded nachos.

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