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The PGA Tour’s announced merger with rival LIV Golf has many questioning the future of endorsements and sponsorships.
Sponsors are likely waiting to see the structure of the deal, and how regulators will react before making decisions, industry executives say.
While some sponsors may think twice due to the controversy surrounding the Saudi-backed LIV Golf, it could prop up endorsements in the future.

The proposed merger between the PGA Tour and its Saudi-funded rival LIV Golf stunned everyone from golfers to Wall Street bankers this week – leaving many with questions about what the merger could mean.
The deal was announced following months of feuding and antitrust lawsuits between the two leagues. The agreement would end all pending litigation.

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PGA Tour Commissioner Jay Monahan told CNBC’s “Squawk on the Street” on Tuesday that while there has been a lot of “tensions” between the two organizations, the deal was a benefit to the game of golf.
Despite those tensions being settled between the tour and LIV, they could be relevant when regulators comb over the deal.
“The commissioner’s statement that this is necessary to end all this tension leaves the question of what do we mean when we say tension? That could be from a competition angle, which is a good thing for pricing and consumers,” said Henry Hauser, a former FTC lawyer and currently an antitrust attorney at Perkins Coie. “It can also mean tension in the sense of a distraction.”
While the two organizations were feuding, golfers were divided between the PGA Tour and LIV. Some left for the hefty paychecks being doled out by LIV, even as they lost their endorsements. Others turned down big paydays to stay with the tour. Monahan has been outspoken in the past, saying he believed players would face “significant implications” for going to LIV. On Tuesday, he said he expected to be called a hypocrite and accepts the criticism.
Since the announcement, several players have voiced their frustration with the deal. Sponsors, likewise, have been slow to make statements or decisions, likely waiting to see how the deal is structured and the regulatory process goes, according to two sponsors close to the tour.

Aside from the lawsuits, LIV Golf has been surrounded by controversy and criticism since its launch in 2022. Backed by the Saudi Arabia Public Investment Fund – an entity controlled by the Saudi crown prince – critics have accused the sovereign wealth fund of “sportswashing” by using LIV Golf to distract from the kingdom’s history of human rights violations.

Antitrust concerns

Lawsuits rolled out from both sides last year as LIV aggressively lured high profile players, including Phil Mickelson and Bryson DeChambeau, away from the tour for big paychecks.
In response the tour had increased its prizes and player benefits, as well as secured loyalty agreements from its top players as it tried to prevent further poaching.
Both leagues had claimed that the other’s contracts and policies restricted golf talent and stifled proper competition. LIV Golf sued the tour, also citing anti-competitive practices for banning its players. The PGA Tour countersued.
The proposed deal, which includes Europe’s DP World Tour, puts an end to all of the fighting – in and out of court.
While Public Investment Fund Governor Yasir Al-Rumayyan said he expected the deal to be finalized in a matter of weeks, some question how quickly it’ll bypass U.S. regulatory agencies like the Federal Trade Commission and the Justice Department.

“Anything that happened before this announcement is still actionable,” said Hauser, noting the DOJ could still look into these claims outside of the merger process. “You can’t use a settlement as a masquerade.”
Hauser noted that while it’s always preferred to keep matters out of the courtroom, settlements themselves are bound by antitrust laws – “especially if there’s a legitimate legal dispute between the entities.”
Although the deal could close relatively quickly without requiring regulatory approval, lawmakers could raise issues afterward. This happened recently when the Justice Department ordered the end of American Airlines and JetBlue Airways alliance, saying the merger would hurt consumers by driving up fares. American Airlines plans to appeal the ruling.
The new entities need to show that the merger is to the benefit of consumers, especially on a global basis, by bringing the best talent together under one umbrella and expanding the reach of the game, said Timothy Derdenger, an assistant professor of marketing and strategy at Carnegie Mellon University’s Tepper School of Business.
“If the deal will be able to show it supports the growing purses for the golfers, and lead to more engagement and innovation to golf, which adds value to viewers, I don’t see much of a fight coming from the U.S. government,” Derdenger said.

Sponsorships and the Saudis

The deal also prompted questions about how it might affect sponsors of the PGA Tour, as well as its players’ endorsements.
Many have been outspoken about LIV’s financial backer, PIF, and have even protested at events.
Family members of those who perished in the Sept. 11, 2001, terrorist attacks have protested LIV events due to its Saudi ties. U.S. officials have concluded that Saudi nationals helped fund the terrorist group al-Qaeda, which were linked to the terrorist attacks on Sept. 11, although the investigations haven’t found that the Saudi officials were complicit in the attacks.
On Tuesday the group 9/11 Families United slammed the merger, especially after Monahan, the PGA Tour commissioner, raised this publicly last summer in an interview. “I would ask any player who has left or any player who would consider leaving, ‘Have you ever had to apologize for being a member of the PGA tour?'” Monahan said during an interview with CBS Sports last year.
Major sponsors of the tour have yet to speak out or make decisions. At least one sponsor is waiting to see how the regulatory process plays out for the deal before making decisions, according to a person familiar with the matter, who declined to be named because the internal discussions are private. Other sponsors have not yet commented publicly on the matter.
Marketers, advertisers and sponsors have pulled out from other partnerships when controversies have raised concerns.
“The fundamental reason why the brands we work with decide to invest in something is to leverage the power of that equity to connect with their customers,” said Sampson Yimer, a senior vice president of sponsorship consulting at Momentum Worldwide. “When that equity is degraded in any sort of way or has potential to do so, it causes these brands to potentially rethink their investments or to press pause.”
Soon after joining LIV, Mickelson made disparaging comments about the tour and showed his support for the Saudis. The top golfer lost his endorsements from the likes of KPMG and others, some of which were more than a decade old.
“If it’s at all a consideration, it’s something we counsel our clients on,” said Yimer. “I imagine this deal could have a chilling effect.”
However, the combination of the leagues could also lead to more endorsements, at least in the long run.
“The players that left and lost their endorsements, they will be able to reengage those sponsorships and endorsements because this brings them back into the fold,” said Derdenger. More

Many a business deal is sealed on the golf course. So it was on June 6th, when America’s PGA Tour and Europe’s DP World Tour, the biggest organising bodies in men’s golf, said they had agreed to merge with LIV Golf, a Saudi Arabian upstart. The deal, which will reportedly see LIV’s backers invest around $3bn in the combined entity, ends a costly split in the game and gives the Saudis membership of one the most august clubs in sport.LIV Golf teed off last June, financed by Saudi Arabia’s $650bn sovereign-wealth fund. It brought made-for-TV razzmatazz to a normally genteel game. Shorter tournaments feature teams with names like Crushers. Polite applause gave way to whooping. Star players were paid a fortune to take part, despite misgivings that the Saudis were “scary motherfuckers”, in the words of Phil Mickelson, one who took the money. To hang on to talent, the old tours More

Taco Bell is testing a Vegan Crunchwrap made using a beef substitute and cheese alternatives.
Last year, nearly a quarter of the items sold by the Yum Brands chain were vegetarian or vegan.
But the plant-based category is struggling as consumer interest wanes.

Taco Bell’s Vegan Crunchwrap
Source: Taco Bell

Taco Bell will sell a vegan version of its popular Crunchwrap, made with plant-based beef and cheese, in three U.S. cities for a limited time, it said Wednesday.
Starting Thursday, customers in Los Angeles, New York and Orlando will be able to order the Vegan Crunchwrap. The Yum Brands chain said it selected those three cities because of their high vegan populations. The item will stick around as long as supply lasts, which is expected to be roughly a week.

Taco Bell has long been a favorite for customers who don’t eat meat, thanks to its vegetarian substitutes such as beans and potatoes. Nearly a quarter of the items it sold last year were vegetarian. Vegetarians were also among the fans who successfully pushed Taco Bell to bring back its cult-favorite Mexican Pizza.
The Mexican-inspired chain was originally slow to embrace the plant-based meat trend but said in early 2021 it would test a menu item made with Beyond Meat. Since then, sales of plant-based meat have slowed as consumer interest wanes. Many large restaurant chains have pulled plant-based items from their menus or stayed away altogether.
Taco Bell hasn’t progressed beyond the testing stage for plant-based meat options. Most recently, it finally tested Beyond Carne Asada in dozens of Ohio restaurants in October. The chain hasn’t shared any plans for a broader launch of the product.
The chain has also been testing its own proprietary meat substitutes, including the alternative used in the Vegan Crunchwrap.
Taco Bell used pea protein and soy to make the vegan beef in the new Crunchwrap. The chain tested this iteration last August in its Crispy Melt Taco at restaurants in Birmingham, Alabama.

Missy Schaaphok, the chain’s director of global nutrition and sustainability, told CNBC that the chain thinks this take on the Crunchwrap might resonate more with vegans than the Crispy Melt Taco.
For the vegan blanco sauce and vegan nacho sauce, Taco Bell used soy as the main base. Most vegan cheeses are made from softened cashews, but the chain wanted to stay away from using nuts because of customer allergies.
As Taco Bell tests demand and seeks customer feedback for the Vegan Crunchwrap, the chain won’t allow customers to substitute the vegan beef or cheeses in other menu items during the trial.
The limited-time menu item will cost as much as Taco Bell’s original Crunchwrap. The chain said offering affordable vegan and vegetarian items is a priority.
Plant-based meat companies such as Beyond Meat and Impossible Foods have also striven to achieve price parity with animal meat to appeal to more consumers.
Correction: This story has been corrected to attribute a comment to Missy Schaaphok, Taco Bell’s director of global nutrition and sustainability. More

Chris Licht is out at CNN after leading the news network for a little more than a year.
The chief executive’s departure came as he faced a rebellion among CNN’s talent and staff.
His tenure was riddled with programming missteps and rock-bottom ratings.

Chris Licht, Chairman and CEO of CNN Worldwide.
Courtesy: CNN

Chris Licht is out at CNN after leading the news network for a little more than a year, parent company Warner Bros Discovery announced Wednesday morning.
The company said it is seeking a replacement. In the meantime, executives Amy Entelis, Virginia Moseley, Eric Sherling and David Leavy will lead CNN, the company said.

Licht’s departure came as he faced a rebellion among CNN’s talent and staff. His tenure, which effectively started when he eliminated the network’s expensive CNN+ streaming service, was riddled with programming missteps and rock-bottom ratings.
He drew even more heated criticism in recent weeks after the network hosted a town hall with Donald Trump that was packed with scores of the former president’s cheering fans. While the event drew 3.3 million viewers, CNN’s ratings plummeted afterward. Two days after the town hall, CNN’s primetime viewership came in below right wing outlet Newsmax, a much smaller network.
But it was an unflattering 15,000-word profile of Licht in The Atlantic – titled “Inside the Meltdown at CNN” – that might have sealed his fate. He apologized to staffers Monday morning, but top brass at CNN’s parent company, Warner Bros. Discovery, including CEO David Zaslav, weren’t happy with the article and the aftermath.
“I have great respect for Chris, personally and professionally,” Zaslav said in a news release. “The job of leading CNN was never going to be easy, especially at a time of huge disruption and transformation, and he has poured his heart and soul into it. While we know we have work to do as we look to identify a new leader, we have absolute confidence in the team we have in place and will continue to fight for CNN and its world class journalism.”
The move comes soon after Leavy, a key Zaslav ally, was named the network’s new chief operating officer. Leavy was tasked with taking over marketing, public relations, advertising sales, facilities and other logistics.

The move was intended to allow Licht to focus more on programming. Licht helped launch MSNBC’s “Morning Joe” as its executive producer in 2007 and later became executive producer and showrunner of “The Late Show with Stephen Colbert” on CBS.
Read Warner Bros. Discovery’s full release:
New York, NY – June 7, 2023 – Warner Bros. Discovery (Nasdaq: WBD) today announced that Chris Licht, Chairman and CEO of CNN Worldwide, has stepped down, effective immediately.
As the company undertakes an active search for a replacement, it has put in place a strong interim leadership team comprising seasoned programming leaders Amy Entelis, EVP of talent and content development, Virginia Moseley, EVP of editorial, and Eric Sherling, EVP of US programming, as well as David Leavy, chief operating officer, on the commercial side.
“I have great respect for Chris, personally and professionally,” said David Zaslav, president and CEO, Warner Bros. Discovery. “The job of leading CNN was never going to be easy, especially at a time of huge disruption and transformation, and he has poured his heart and soul into it. While we know we have work to do as we look to identify a new leader, we have absolute confidence in the team we have in place and will continue to fight for CNN and its world class journalism.”
Licht assumed his position in May 2022, following a distinguished career in broadcast and network television, most recently as EVP of special programming at CBS and executive producer and showrunner for “The Late Show with Stephen Colbert.” Prior to that, he was vice president of programming for CBS News and executive producer of the network’s morning news program, “CBS This Morning,” which he helped launch in 2012. Prior to CBS, Licht was the co-creator and original executive producer of MSNBC’s popular morning news show, “Morning Joe.”
Disclosure: NBCUniversal is the parent company of MSNBC and CNBC. More

The two-year long fight between the PGA Tour and Saudi Arabia’s LIV Golf came to a stunning conclusion with the Tuesday news that the arch-rivals are now joining forces.
American lawmakers, commentators and sports fans are calling the deal “hypocritical” and accusing the PGA Tour of taking “Saudi blood money” and “sportswashing.”
Financial analysts say the merger will elevate golf globally and give it new resources to expand its fan base.

The two-year long fight between the PGA Tour and Saudi Arabia’s LIV Golf ended with a stunning announcement that the arch-rivals are now joining forces — news that’s been met with derision by many American commentators, lawmakers and golf fans.
The decision, announced on Tuesday, concluded a battle for golf’s best players and prompted an about-face from the PGA Tour, which had in a previous lawsuit accused Saudi Arabia of offering athletes “astronomical sums of money … to use the LIV Players and the game of golf to sportswash the recent history of Saudi atrocities.”

It also ends pending litigation between the two organizations. The agreement, which includes the DP World Tour — also known as the PGA European Tour — will combine the commercial businesses and rights of the PGA Tour and LIV Golf into a new, yet-to-be-named for-profit company.
Founded in 2021 with the goal of becoming the world’s premier professional golf tour, LIV Golf is backed by Saudi Arabia’s Public Investment Fund (PIF) — a massive $600 billion sovereign wealth fund controlled by Saudi Crown Prince Mohammed bin Salman. It’s lured some of the biggest golf stars away from the PGA Tour with huge paychecks, spurring antitrust lawsuits with the American organization.
“The game of golf is better for what we’ve done today,” PGA commissioner Jay Monahan told CNBC in an interview after the news broke.
A lot of people vocally disagree.
“This is Saudi Arabia buying the PGA tour,” sports talk show host Rich Eisen said in his broadcast after hearing the news.

“The hypocrisy is obvious. The PGA Tour takes the Saudi money after 2 years grandstanding against it,” North Carolina-based sports reporter Pat Welter wrote on Twitter. “They sold their soul to #LIVGolf and where it’s really going to cost them is control. Because the person signing the checks always wins.”
USA Today sports columnist Christine Brennan called the move “a total wimp-out by the PGA Tour. Just an awful about-face,” saying the organization “caved to Saudi blood money. PGA Tour now in sports-washing business.”

US golfer Tiger Woods reacts on the 9th green during his second round on the day 2 of The 150th British Open Golf Championship on The Old Course at St Andrews in Scotland on July 15, 2022.
Glyn Kirk | AFP | Getty Images

Social media was rife with self-described golf fans vowing to never again watch the PGA Tour. Even golfing legend Tiger Woods, who previously turned down an offer from the LIV Tour that could have earned him more than $700 million, criticized the Saudi league before the merger was announced, saying late last year that “an endless pit of money” was not a way to “create legacies.”

‘Shameless cash grab’

Members of Congress weighed in too.
“Hypocrisy doesn’t begin to describe this brazen, shameless cash grab. I’m going to dive into every piece of Saudi Arabia’s deal with the PGA”, Oregon Senator Ron Wyden wrote on Twitter. “U.S. officials need to consider whether a deal will give the Saudi regime inappropriate control or access to U.S. real estate.”
Connecticut Senator Chris Murphy wrote in a Twitter post, “So weird. PGA officials were in my office just months ago talking about how the Saudis’ human rights record should disqualify them from having a stake in a major American sport. I guess maybe their concerns weren’t really about human rights?”
CNBC has reached out to the PGA Tour for comment.

‘Sportswashing at its finest’

Human rights group Amnesty International called the merger “sportswashing at its finest,” saying “we must not allow this announcement to overshadow Saudi Arabia’s atrocious human rights record.”
Further criticism came from family members of victims of the Sept. 11 attacks, via the organization 9/11 Families United, which the PGA Tour previously invoked in its attacks on LIV Golf.
“PGA Commissioner Jay Monahan co-opted the 9/11 community last year in the PGA’s unequivocal agreement that the Saudi LIV project was nothing more than sportswashing of Saudi Arabia’s reputation,” the group said in a statement Tuesday. “But now the PGA and Monahan appear to have become just more paid Saudi shills.”

A demonstrator dressed as Saudi Arabian Crown Prince Mohammed bin Salman (C) with blood on his hands protests outside the Saudi Embassy in Washington, DC, on October 8, 2018, demanding justice for missing Saudi journalist Jamal Khashoggi. 
Jim Watson | AFP | Getty Images

Fifteen of the 19 hijackers on Sept. 11 were from Saudi Arabia, and U.S. officials concluded that Saudi nationals helped fund the terrorist group al-Qaeda, although investigations did not find that the Saudi officials were complicit in the attacks.
CNBC contacted Saudi Arabia’s embassy in Washington D.C. and the Saudi Foreign Ministry for comment. The Saudi government generally denies accusations of human rights abuses and says it acts to safeguard its national security and stability.

‘Immense potential to elevate the sport of golf’

Not everyone is angry about the deal.
Professional golfer Bryson DeChambeau, an early recruit to the LIV Tour, told CNN that the merger “is the best thing that could ever happen for the game of golf and I am extremely proud to get to be a part of that… in the end the game of golf wins.”
In response to the statement from 9/11 Families United, DeChambeau said of the Saudis, “What they’re trying to do … is to be better allies… they are trying to do good for the world and showcase themselves in a light that hasn’t been seen in awhile, and nobody’s perfect but we’re all trying to improve in life.”
Pro golfer Phil Mickelson, another member of the LIV Tour, tweeted “Awesome day today” in response to the news.

Saudi Arabian Crown Prince Mohammed bin Salman attends the G20 Leaders’ Summit via videoconference in Riyadh, Saudi Arabia on October 30, 2021.
Royal Court of Saudi Arabia | Anadolu Agency | Getty Images

Investment banking firm Jeffries wrote in a note Tuesday that “this unexpected agreement holds immense potential to elevate the sport of golf to new heights … the infusion of capital from PIF signifies a strong commitment to the growth and promotion of golf on a global scale.” The PIF’s investment figure is not yet publicly known.
In a memo to players obtained by CNBC, Monahan called the deal “a transformational agreement” and said that “with PIF’s collaborative investment, the immeasurable strength of the PGA Tour’s history, legacy and pro-competitive model not only remains intact, but is supercharged for the future.”
The board of the new commercial entity will include PIF Governor Yasir Al-Rumayyan as Chairman and Monahan as CEO.

The Saudi PIF on a mission

Portuguese football star Cristiano Ronaldo poses for a photo with the jersey after signing with Saudi Arabia’s Al-Nassr Football Club in Riyadh, Saudi Arabia on December 30, 2022.
Al Nassr Football Club / Handout/Anadolu Agency via Getty Images

Saudi Arabia also lured soccer legends Cristiano Ronaldo and Karim Benzema with contracts worth hundreds of millions of dollars to play in local Saudi leagues, and it’s expected to bid to host the 2030 World Cup.
As one sports journalist pointed out at the time of Ronaldo’s signing with Saudi team Al-Nassr, the kingdom wasn’t paying top dollar just for a nearly retired athlete to play in its globally obscure team. It was paying for his following, for a new level of international reach to promote its image via one of the most-followed celebrities in the world.
Pro golfer Rory McElroy was one of the players that refused to join LIV as it fought with the PGA Tour, calling the Saudi venture a “money grab.” But sports analysts note that McElroy now works for LIV, too — as does every pro in the PGA Tour, many of which, according to ESPN, only learned about the merger via Twitter.— CNBC’s Lillian Rizzo contributed to this report. More

Wholesale used vehicle prices reached their lowest level of the year in May, as sales fell amid high interest rates and inflated retail prices.
Cox Automotive reported Wednesday a 2.7% decline from April to May in its Manheim Used Vehicle Value Index, which tracks vehicles sold at its U.S. wholesale dealership auctions.
Used retail sales are estimated to have been down 11% year over year in May, Cox reports.

A sign reads ‘We Buy Used Cars!!’ at an auto dealership on February 15, 2023 in Glendale, California.
Mario Tama | Getty Images

DETROIT – Wholesale used vehicle prices reached their lowest level of the year in May, as sales fell amid high interest rates and inflated retail prices.
Cox Automotive reported Wednesday a 2.7% decline from April to May in its Manheim Used Vehicle Value Index to 224.5. It marks the second consecutive monthly decline and the index’s lowest level since 219.3 in December.

The index, which tracks vehicles sold at its U.S. wholesale dealership auctions, remains elevated from historical levels but is expected to continue to decline this year amid improving new vehicle inventory levels and high interest rates that appear to be scaring off consumers.
“Taking a longer view, May’s year-over-year decline accelerated from April and March; however, the rate of decline might slow over the next several months as we encounter the lower prices seen at auction from May through November last year,” said Chris Frey, Cox senior manager of economic and industry insights, in a release.
Used retail sales are estimated to have been down 11% year over year in May, Cox reports. The notable decline comes as many Americans, especially those with lower credit ratings, are being priced out of the market and repairing their vehicles instead of replacing them.
The declines in sales and wholesale prices signal the used vehicle market is weakening, according to Cox. That’s not good for U.S. auto dealers but a win for the Federal Reserve’s battle to taper inflation by ratcheting up interest rates.
Used vehicle prices have increasingly become a barometer for inflation since early last year when the Biden administration blamed the market for rising inflation rates.

Used vehicle prices have been elevated since the early days of the coronavirus pandemic, as the global health crisis combined with supply chain issues caused production of new vehicles to sporadically idle. That led to a low supply of new vehicles and record-high prices amid resilient demand. The costs and scarcity of inventory led consumers to the used vehicle market, boosting those prices as well.
Continued declines could help bring used vehicle pricing down for consumers, since retail prices traditionally follow changes in wholesale prices. However, that has not been the case thus far, as the average retail listing price for a used vehicle moved 0.8% higher over the last four weeks, Cox reports. More

The Screen Actors Guild and American Federation of Television and Radio Artists begin contract talks with the Alliance of Motion Picture and Television Producers on Wednesday.
Hollywood’s talent wants to create guardrails for the use of artificial intelligence in future television and film productions.
Hollywood is already contending with 11,500 writers refusing to work, which has led to dozens of production and writers room shutdowns.

People picket outside of FOX Studios on the first day of the Hollywood writers strike on May 2, 2023 in Los Angeles.
David Mcnew | Getty Images

Hollywood is gearing up for another labor fight, and once again worries about artificial intelligence are front and center.
The Alliance of Motion Picture and Television Producers has three weeks and two days starting Wednesday to seal a deal with the Screen Actors Guild and American Federation of Television and Radio Artists – or see swarms of picketers outside studio gates.

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Hollywood’s talent wants to create guardrails for the use of artificial intelligence in future television and film productions.
A recent series of viral deep fake trailers featuring the visages of Bill Murray, Scarlett Johansson, Tilda Swinton and Timothee Chalamet as Wes Anderson-style versions of Star Wars and Lord of the Rings characters only exacerbated worries that actors could be replaced in film and television shows without proper permissions or payment.
“Certain unauthorized AI uses may effectively devalue some of our members’ performances, but the concerns go far beyond that,” Duncan Crabtree-Ireland, national executive director and chief negotiator for SAG-AFTRA, told CNBC in an emailed statement.
“Our members have the right to know what projects they are working in, what dialogue they are saying, what cause their character is advocating for, what actions their body will be tasked with doing,” he said. “Our members are human beings, not puppets, and it is a violation to use AI technology to make them do or say something without their informed consent.”
Read more: A.I. poses a new threat to newsrooms, and they’re taking action

AI has been a major concern for all of Hollywood’s guilds, who see their jobs as especially vulnerable to this new technology. For its part, the AMPTP has said AI tech “raises hard, important creative and legal questions for everybody.”
The Directors Guild of America was able to secure a preliminary deal with producers over the weekend that would guarantee wage hikes starting at 5% the first year, an increase in residuals from streaming and a guarantee that artificial intelligence could not replace the duties performed by members. The DGA’s board unanimously approved the agreement, paving the way for members to vote on it.
Both the Writers Guild of America and SAG-AFTRA are seeking protections against AI use in their negotiations, in addition to increases in compensation for streamed content.
SAG-AFTRA has acknowledged that AI technology can have its benefits in the industry, but it wants to ensure that any use of AI to replicate an actor or create a new performance is done with the actor’s consent and payment. The guild has similar rules already in place when it comes to computer-generated image capture.
“Generative AI tools should be deployed to assist and augment human beings, rather than to replace them,” said Crabtree-Ireland. “Our members fundamentally want to ensure a human-centered approach to the implementation of AI in our industry, where the AI serves humans, not the other way around.”
Already, some performers, such as James Earl Jones, have agreed to have their voices cloned for use after their deaths. Jones, 92, famously voiced Darth Vader in the Star Wars franchise and sought to wind down from the role. Jones was compensated and the technology was used to bring Vader’s iconic voice to Disney+’s “Obi-Wan Kenobi.”
Actors have varying comfort levels with how AI is used, which is why SAG-AFTRA is looking to advocate for informed consent when it sits down with the AMPTP. Essentially, the guild wants to ensure that if and when an actor agrees to having their image or voice used for a specified project it is only used for that intended purpose and that actors are properly compensated.
The fear is that studios could try to cut costs and boost revenue by using AI to pump out new content by feeding it existing material, like how the Anderson parodies were created.

A brave new world of A.I. gods and monsters

Jaap Arriens | Nurphoto | Getty Images

Over the past year, generative AI has exploded in use and development — especially since the fall of 2022, when OpenAI released its AI chatbot, ChatGPT.
A few months and 100 million monthly active users later, the tool set records for the fastest-growing app in history. Overall, the sector’s growth has generated billions of dollars in deals. And the phenomenon didn’t stop at text-based generative AI: models for generating images and video went viral, too. Five weeks after OpenAI released image-generation model DALL-E 2, more than 3 million people reportedly used it to generate over 4 million images daily.
Comparable image-generation tools like Stable Diffusion and Midjourney quickly picked up steam, and tech giants like Meta, Google and Amazon – which has its own film studio – released AI models for generating video content.
“AI concerns are similar in certain ways to concerns about the ethical use of CGI, but are much more wide-ranging due to the immense flexibility available in the use of generative AI along with the modest technological requirements to achieve surprisingly believable results,” said SAG-AFTRA’s Crabtree-Ireland. “The combination of these elements make generative AI a much more capable and much more dangerous technological development, and one that merits our attention and our efforts.”
Hollywood’s concerns about AI aren’t going away anytime soon, either. On Monday, SAG-AFTRA members gave its negotiators the ability to authorize a strike should negotiations stall. If actors leave the bargaining table without a deal, 160,000 performers will walk off film and TV sets, leading to a massive shutdown of production.
The industry is already contending with 11,500 writers refusing to work, which has led to dozens of production and writers room shutdowns.
Already Netflix has postponed the production start of the fifth and final season of “Stranger Things,” Warner Bros. Discovery’s “Game of Thrones” prequel “A Knight of the Seven Kingdoms: The Hedge Knight” shuttered its writers room, and Disney and Marvel’s “Thunderbolts” and “Blade” have paused production.
Some productions have been able to continue in the wake of the writers strike, as scripts were already completed. However, if SAG-AFTRA strikes, those shows and films will immediately stop shooting – and the debate over AI in movies will rage on.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is a member of the Alliance of Motion Picture and Television Producers. More

Millionaire Survey

Millionaire investors are adding to their mountains of cash, betting on higher interest rates and weak stock markets in 2023, according to the CNBC Millionaire Survey.
Millionaires are more bearish on the overall economy, however.
Inflation and higher interest rates are starting to affect the spending of the wealthy, although the changes are still small.

Traders work on the floor of the New York Stock Exchange. 

Millionaire investors are adding to their mountains of cash, betting on higher interest rates and weak stock markets in 2023, according to the CNBC Millionaire Survey.
More than a third of millionaire investors, 34%, report keeping more of their money in cash, according to the survey, which surveys households with $1 million or more in investible assets. They now have 24% of their portfolio in cash, up substantially from the 14% they held in cash a year ago, according to the survey.

Of the survey respondents, 28% said they have purchased more fixed income, as they expect interest rates to remain high.
The results echo a recent survey by Capgemini that found global high-net-worth investors had a record 34% of their portfolios in cash or cash equivalents, such as money markets, CDs and other vehicles.
“These investors are moving from growth to value, to protecting their assets,” said Elias Ghanem, global head of Capgemini Research Institute for Financial Services. “Right now, it’s better to be safe than sorry.”
Wealthy investors are still cautious on the stock market, but not as bearish as they were at the start of the year. While 38% of millionaire investors say the S&P 500 will end the year down, a slightly larger portion, 40%, say the market will end the year higher.
That market sentiment has brightened substantially since last year, when 69% of survey respondents expected to end 2023 down and only 22% expected markets to end higher.

“They’re becoming more comfortable with the market volatility and the fact that markets keep going up despite all the reasons it should be going down,” said George Walper, president of Spectrem Group, which conducts the Millionaire Survey with CNBC. “A lot of people are just confused as opposed to predicting further declines.”
Millionaires are more bearish on the overall economy, however. A majority, at 60%, expect the economy to be “weaker” or “much weaker” at the end of 2023.
One reason for their caution: inflation. Millionaire investors are still betting inflation will persist for years, potentially keeping interest rates higher for longer. More than half of millionaires say inflation will not fall to the Federal Reserve’s 2% target for at least two years, with 11% saying it will last at least five years.
There are wide disparities by generation, since an inflationary stock market and economy are new phenomena for younger investors. Three-quarters of millennial millionaires say inflation will come down to 2% within two years, with one in four saying it will hit the 2% target within a year. That compares with 59% of older investors who say it will take longer than two years.
“They haven’t experienced rate increases and inflation like this,” Walper said.
Inflation and higher interest rates are starting to affect the spending of the wealthy, although the changes are still small. More than a third of millionaire investors have cut back on restaurant spending over the past six months due to inflation, according to the survey, and 18% have delayed the purchase of a car. More than one in four millionaire investors say they have given less to charity because of inflation, suggesting higher prices could also affect giving.
If inflation persists, a growing number of millionaires, 18% of respondents, say they will cancel a trip or vacation, according to the survey. They’re also borrowing less, with a third saying they plan to borrow less this year due to higher rates.
One bright spot for millionaires is bank deposits. Despite the turmoil in the regional banking system, with the failures of Silicon Valley Bank, First Republic and Signature Bank, more than two-thirds of millionaires say they are not concerned or are “neutral” about the safety of their deposits at banks. Only 7% said they were “very concerned.”
Just 6% of millionaires surveyed moved cash deposits out of a bank because of the SVB collapse. Yet, two-thirds of millionaires support Congress raising the limit on cash deposits as regulated by the Federal Deposit Insurance Corporation.
“They saw the government take action quickly, so they were not as worried,” Walper said.
CNBC’s Millionaire Survey was conducted online in April. A total of 764 respondents, with $1 million or more of investable assets, qualified for the survey. Respondents had to be the financial decision-maker or share jointly in financial decision-making within the household. The survey is conducted twice per year, in the spring and the fall. More