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Uninsured Americans can still access Covid vaccines for free, even now that the U.S. public health emergency is over. 
That’s partly because the availability and cost of coronavirus shots are determined by the federal government’s supply of free vaccines, not the emergency declaration.
But Covid-19 vaccines will also remain free to people without insurance after the Biden administration’s stockpile runs out.
The Department of Health and Human Services and drugmakers Pfizer and Moderna have announced programs that will fill the gap.

A healthcare worker prepares a dose of the Pfizer-BioNTech Covid-19 vaccine at a vaccination clinic in the Peabody Institute Library in Peabody, Massachusetts, on Wednesday, Jan. 26, 2022.
Vanessa Leroy | Bloomberg | Getty Images

Uninsured Americans can still access Covid-19 vaccines at no cost, for now, even though the U.S. public health emergency has ended. 
The Biden administration on Thursday lifted the 3-year-old emergency declaration, which had enabled the government to provide enhanced social safety net benefits and free Covid vaccines, tests and treatments during the pandemic. 

But the availability and cost of those vaccines are actually determined by the federal government’s supply of free shots, not by the public health emergency. 
That means people with or without insurance will not have to pay out of pocket for Covid jabs, as long as that stockpile lasts.
Providers of federally purchased Covid vaccines cannot charge patients, or deny them shots, based on a person’s insurance status, according to the Centers for Disease Control Prevention. 
The Biden administration ordered 171 million omicron Covid boosters last July. Since then, about 56 million omicron shots have been administered, the CDC says.
That leaves more than 100 million free shots available to the public. The government estimates that supply could last until the fall. 

“There are many, many doses still left. As you know, the booster uptake hasn’t been very good,” said Jen Kates, senior vice president of KFF, a health policy research organization. 

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But the vast majority of Americans will not have to pay out of pocket for Covid vaccines even after the federal government’s stockpile runs out. 
The government will shift Covid vaccine distribution to the private market as soon as that supply is gone.
That means vaccine makers Pfizer and Moderna will sell their shots directly to health-care providers at around $130 per dose — an almost fivefold increase over current prices.
Insured Americans will be able to access Covid shots as part of their coverage, without having to pay out of pocket.
Private insurers and the government-run Medicare and Medicaid programs are required to cover all shots recommended by the CDC.
But for uninsured Americans, federal and corporate programs are aiming to fill the gap.
There are still outstanding questions about what those efforts will look like.
Here’s what we know about those programs so far:

Vaccines for Children program

The CDC’s Vaccines For Children program will provide free Covid shots to children whose families or caretakers can’t afford them after the shots move to the commercial market.
Children and teens 19 or younger who are uninsured, underinsured or eligible for Medicaid qualify for the permanent VFC program.
That program already provides free shots for other diseases, such as measles and chickenpox.
The CDC’s decision to include Covid shots in the free vaccine program will be crucial to maintaining access for many children — especially those who will no longer be eligible for other programs.
As many as 5 million kids are expected to lose health insurance through Medicaid or the Children’s Health Insurance Program without the public health emergency in place, according to a report last year from the Department of Health and Human Services.

HHS Bridge Access Program

The Biden administration proposed creating a permanent program similar to VFC for uninsured adults who cannot afford Covid vaccines and shots for other diseases. But Congress so far has not enacted that proposal into law.
In the meantime, the administration last month launched the “HHS Bridge Access Program,” a temporary effort that will provide free Covid shots and treatments to uninsured Americans once those products move to the commercial market.
Under the arrangement, the CDC will continue to purchase Covid vaccines at a discount and distribute them through 64 state and local health departments. 
That HHS effort will leverage the “public commitments” by drug manufacturers to provide free Covid vaccines and treatments to uninsured people. HHS expects the manufacturers to directly supply shots to pharmacies for free as part of those commitments.
Kates said HHS appears to be referring to Pfizer’s and Moderna’s newly announced patient assistance programs, which are committed to providing free Covid vaccines and treatments to uninsured people.
“To my understanding, HHS is basically saying it will pay pharmacies the cost of administering vaccines and treatments to the public, while manufacturers will directly provide pharmacies with free vaccines and treatments as part of their patient assistance programs,” Kates told CNBC. 
Pfizer and Moderna have not said whether they would supply free shots to pharmacies.
Kates said the Bridge Access Program overall will “certainly help” some uninsured Americans, but added that it is still “hard to gauge” how many people will benefit and how long the program will stay in place.

Pfizer’s and Moderna’s programs 

Pfizer and Moderna both intend to launch patient assistance programs for their Covid shots, but the companies have provided few details on those efforts. 
Patient assistant programs typically involve pharmacies and other vaccine providers paying a company upfront for a drug, according to Claire Hannan, executive director of the Association of Immunization Managers. 
She said those providers can then submit a reimbursement request to the program for the cost of that drug after they administer it to an eligible patient.
Pfizer’s patient assistance program will allow eligible uninsured Americans to access its Covid shot for free once vaccines shift to the commercial market, according to a company spokesperson. Pfizer already has an assistance program in place for its other medicines.
The company will share further information on the assistance program’s application process and eligibility guidelines when it is available, the spokesperson added.
Moderna in February said its patient assistance program would go into effect after the public health emergency ends.
The company did not immediately respond to CNBC’s questions about additional details on the program.
Lawmakers and health policy experts have heavily criticized patient assistance programs for being difficult to access and understand.
A 2018 study suggested providers don’t always know which patients would be best for those programs due to a lack of clear information on eligibility and benefits. 
Hannan said companies will have to ensure that people without insurance can easily access a free Covid shot through their patient assistance programs.
“If you make it challenging and make them jump through multiple hoops, vaccine uptake is probably not going to be where we would want to see it,” Hannan told CNBC. More

Pfizer CEO Albert Bourla said pharmaceutical companies will likely take legal action against Medicare drug price negotiations. 
Bourla referred to a provision in the Biden administration’s Inflation Reduction Act that will allow the Medicare program to negotiate prices on the costliest prescription drugs each year.
Bourla, who helms the company that creates Covid vaccines, called the plan “negotiation with a gun to your head.”

Pfizer CEO Albert Bourla talks during a press conference with the president of the European Commission after a visit to oversee the production of the Pfizer-BioNTech Covid-19 vaccine at the factory of U.S. pharmaceutical company Pfizer, in Puurs, Belgium, April 23, 2021.
John Thys | AFP | Getty Images

Pfizer CEO Albert Bourla on Thursday said pharmaceutical companies will likely take legal action against Medicare drug price negotiations, which aim to cut costs for older Americans, but will likely reduce company profits.
“I think that there will be legal action, but I’m not sure if we’ll be able to stop anything before 2026 or not,” Bourla said during a live-streamed interview with Reuters. 

Bourla referred to a provision in the Biden administration’s Inflation Reduction Act that will allow the Medicare program to negotiate prices on the costliest prescription drugs each year.
The first negotiations start in September and new prices will go into effect in 2026.
He said the most “certain way” to stop negotiations would be to call on Congress to introduce legislation that will revise the federal government’s plan. But Bourla noted he is “not optimistic” about that happening. 
Democrats control the Senate and President Joe Biden would likely veto any such bill.
Some drugmakers are already preparing to fight Medicare drug negotiations, industry sources told Reuters. 

Bourla called the plan “negotiation with a gun to your head.”
He argued it will cut pharmaceutical profits and force thousands of companies to pull back on developing life-saving medicines. 
“They will be very careful where and how much they invest in research,” he said. 
Bourla called it “unfortunate” the government enacted a law that “creates a lot of disincentives” for the industry, even after seeing the pivotal role companies played during the Covid-19 pandemic. 
“We’re coming out of a global health crisis that became a financial crisis as a result of Covid. But the only reason why we are here today was because we had a thriving life sciences industry,” Bourla said. “They did the tests, the vaccines, the treatments, you name it.”
Pfizer and rival drugmaker Moderna are the leading developers of Covid vaccines.
Despite his criticism, Bourla acknowledged some positive aspects of the law for patients, such as lower out-of-pocket costs for medicines.
Another provision of the Inflation Reduction Act requires Pfizer and other prescription drug companies to refund Medicare through rebates if the prices of their drugs rise faster than the rate of inflation. 
Five of Pfizer’s drugs are among the first set of 27 Part B prescription drugs that will be subject to Medicare inflation rebates starting April 1, the U.S. Department of Health and Human Services said in March. More

Adidas intends to sell part of its leftover Yeezy inventory and donate the money to charities that were harmed by Ye’s anti-Semitic comments, said the company’s CEO.
CEO Bjorn Gulden said it was the right thing for Adidas to terminate the contract of their biggest star, Ye, the artist formerly known as Kanye West.

Shoes are offered for sale at an Adidas store on February 10, 2023 in Chicago, Illinois. 
Scott Olson | Getty Images

Adidas intends to sell part of its leftover Yeezy inventory and donate the money to charities that were harmed by Ye’s anti-Semitic comments, the company’s chief executive said Thursday.
The CEO, Bjorn Gulden, did not name the charities he is considering.

“When we do that and how we do that, remains to be seen but we’re working on that” he said.
At one point, the company considered burning the merchandise.
“Burning the shoes cannot be the solution,” Gulden said. He says he came to that conclusion after talking with various NGOs and the learning of the environmental damage.
Appearing at his first annual meeting for the German company, Gulden said it was the right thing for Adidas to terminate the contract of their biggest star, Ye, the artist formerly known as Kanye West.
“He is a difficult person, but he’s arguably the most creative person in our industry,” he said. “He created a model with Adidas that was sought after around the world,” he added.

Gulden took the helm of Adidas on Jan. 1, following CEO Kasper Rorsted’s departure. He previously worked at rival Puma.
What to do with the tarnished sneaker brand stoked debate. Gulden has said he has received more than 500 offers for Yeezy leftovers.
Adidas’ most recent earnings beat expectations but were weighed down by Yeezy inventory piling up. “The decline in lifestyle and the loss of Yeezy are of course hurting us,” Gulden said during his company’s May 5 earnings call.
The company parted ways with Ye in October following months of bizarre behavior and antisemitic comments from the hip hop artist.
The split left Adidas with inventory levels of $500 million worth of sneakers, with selling value of over $1 billion, according to the company. More

Disney shares sank Thursday after the company reported subscriber losses at Disney+ for the most recent quarter.
The company posted profit and revenue for the fiscal second quarter that were in line with Wall Street estimates.

The Disney+ logo is displayed on a TV screen in Paris, December 26, 2019.
Chesnot | Getty Images

Disney shares fell nearly 9% Thursday after the company reported subscriber losses at Disney+ during the most recent quarter.
The company, which posted profit and revenue for the period that were in line with Wall Street estimates, reported a loss of four million Disney+ subscribers. That downtick was offset by price increases, which led to a narrowing of operating losses at the streaming unit by $400 million for the fiscal second quarter.

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Still, Wall Street expected a gain of more than one million Disney+ subscribers, according to StreetAccount, and the surprise subscriber loss spooked the Street.
Shares of the company closed at around $92 per share Thursday. The stock is now up over 6% for the year year.

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Disney’s stock sank on Thursday following its fiscal second-quarter earnings report.

Disney will face headwinds from reductions in ad budget, intense streaming competition with Netflix’s new ad tier and continued economic uncertainty, according to a note from Paul Verna, principal analyst at research firm Insider Intelligence.
“While Disney managed to stem its streaming revenue losses, it did so mainly by raising prices, and that strategy is not sustainable in the long term,” Verna wrote. “Disney plans another price hike later this year, but it will soon run out of headroom for further increases.”
Analysts at SVB MoffettNathanson lowered their price target for the stock by $3 to $127 following the report, but maintained the firm’s outperform rating. The firm sees aggregate subscriptions being roughly flat in the fiscal third quarter and rising in the fiscal fourth quarter.

Tim Nollen, Macquarie senior media tech analyst, also maintained an outperform rating, noting Disney “has the essential assets to successfully transition to streaming, but it’s a multi-faceted effort.”
“Disney is making headway in its cost-saving and operating-efficiency efforts amid a deteriorating linear TV business, both structurally and cyclically,” Nollen wrote in the note.
Disney CEO Bob Iger is overseeing a broad restructuring at the company, including about 7,000 total job cuts, which are planned to be completed before summer.
The company also said Wednesday it would add Hulu content to its Disney+ streaming app, while expecting to raise the price of its ad-free streaming service later this year.
Shares of fellow streaming services Warner Bros. Discovery and Paramount also fell Thursday, down roughly 4% each. Netflix shares were little changed. More

The U.S. Consumer Product Safety Commission is recalling more than two million Peloton bikes for injury and fall concerns.
Peloton shares tumbled Thursday.
Peloton’s stated intent to collaborate with the CPSC marks a change of tune for the company.
The news arrives on the heels of a disappointing earnings report from Peloton.

Rafael Henrique | LightRocket | Getty Images

Peloton shares tumbled Thursday after the U.S. Consumer Product Safety Commission said it is recalling 2.2 million of the company’s bikes over injury and fall concerns.
The stock dropped nearly 9% on Thursday.

The seat post on Model Number PL01 bikes can detach and break unexpectedly during use, according to Peloton and the CPSC. Peloton has received 35 reports of unexpected seat breakages between January 2018 and this month. During that period, over two million units of the bike were sold in the U.S.
There were 12 reported injuries, including one wrist fracture, related to the part defect, according to an internal Peloton memo. 
The recall does not affect bike owners in the United Kingdom, Germany or Australia, the company added.
“Our commitment to Member safety is unwavering,” Peloton said in a statement. “For Peloton, it was important to proactively engage the CPSC to address this issue and to work swiftly and cooperatively to identify a remedy.”
The New York-based company will offer free, updated seat posts to anyone using the recalled model. Peloton noted that while only 35 breaks were reported, all models of the bike in the U.S. could potentially have the issue.

The latest recall adds to a growing list of issues with Peloton’s hardware. Peloton has disclosed several product recalls in recent years.
In 2021, the company halted sales on its Tread+ treadmill after a young child died after being swept under the treadmill. That product is still off the market and the company continues to issue refunds.
In past recalls, Peloton has expressed disagreement with the government when it identified potential flaws, and was slow to cooperate with officials. This time around, the company’s stated intent to proactively collaborate with the CPSC marks a change of tune for the company.
In a memo sent to employees, Peloton said it took swift action for the relatively small number of affected bikes as part of its efforts to be a “member-first company.” Peloton added it aims to work with regulators and follow their lead on safety matters.
The news comes a week after the company reported a wider-than-expected loss for its fiscal third quarter. Notably, Peloton also forecast its first-ever decline in subscribers, citing an uncertain economic environment.
Some analysts last week said the company had shown some signs of progress in its turnaround plan as it pushes new business initiatives. More

Bowlero is the subject of a sprawling federal investigation into age discrimination and retaliation that authorities want to settle for $60 million, CNBC has learned. 
Former employees allege mistreatment as the bowling center operator expanded rapidly in recent years, documents show.
Bowlero’s attorneys call accusations of discrimination meritless and deny any wrongdoing on the part of the company.
Following the publication of this report, Bowlero’s intraday losses accelerated, and the stock traded as much as 9% lower Thursday afternoon.

Illustration by Gene Kim

Bowlero, the buzzy bowling company that was one of the few successful stocks to emerge from the SPAC boom, is the subject of a sprawling federal investigation into age discrimination and retaliation that authorities now want to settle for $60 million, CNBC has learned.
Negotiations over the settlement, proposed by the U.S. Equal Employment Opportunity Commission in early January, failed in April and the case is being referred to the EEOC’s general counsel “for potential enforcement action,” a letter sent by the EEOC shows. 

If the EEOC decides to sue and if it prevails in court, the company could face even steeper fines, experts said. 
Before the agency can sue Bowlero in federal court, the EEOC’s commissioners need to vote on the matter. 
The $60 million resolution proposal has not yet been publicly disclosed and was revealed to CNBC by attorney Daniel Dowe, who represents more than 70 former employees with claims against Bowlero. The EEOC briefed him about the settlement proposal so he could obtain authorization from his clients before agreeing to settle, he said.  
The EEOC’s probe into Bowlero, the world’s largest owner and operator of bowling centers, is wide-ranging and has been ongoing since 2016, company filings with the Securities and Exchange Commission show. It involves at least 73 former employees who claim they were fired based on their age, or out of retaliation, according to the filings. 
The company disclosed in the filings that EEOC’s investigation resulted in a determination of reasonable cause that Bowlero has been engaging in a “pattern or practice” — a term that indicates systemic issues — of age discrimination since at least 2013, which Bowlero denies.

The agency typically finds reasonable cause in only a small fraction of cases each year, EEOC data shows. 
Experts say the settlement proposal is particularly large for the agency, especially when compared with the monetary benefits the EEOC secured for victims of age discrimination in previous years.
The company has repeatedly denied allegations of discrimination and other wrongdoing.
If Bowlero — which went public in late 2021 through a special purpose acquisition company, or SPAC — ends up settling the case or losing in court, it won’t be a major blow to the company’s balance sheet or operations now, experts said. But the indirect costs could plague Bowlero well into the future, they said.
Following the publication of this report, Bowlero’s intraday losses accelerated, and the stock dropped as much as 9% Thursday afternoon. Shares closed about 4% lower.

A Bowlero location at Chelsea Piers in New York City. 

Bowlero CEO Thomas Shannon is accused of hosting “obvious beauty contests” with prospective hires over brief video calls to evaluate a candidate’s appearance as part of the hiring process, according to a complaint filed by a former employee and a sworn affidavit filed by another staffer to the EEOC.
At times, Shannon even screened candidates for lower-level, customer-facing roles at the company, which had nearly 10,000 employees across more than 300 bowling centers as of July, documents filed by former employees say. Shannon directed staff to replace aging employees with candidates perceived as young, hip and attractive, documents say.
CNBC sent a detailed message to Bowlero outlining the allegations of discrimination and retaliation made to the EEOC included in this story. When asked for comment, the company’s lawyers sent the same response for each: “This is a meritless claim.”
“Defamatory statements about Mr. Shannon will not be taken lightly,” the attorneys warned.
The 73 EEOC claims brought by individual former employees against the company sparked the larger pattern or practice investigation into age discrimination.
The EEOC has found reasonable cause in 55 of the cases and in the pattern or practice probe, Bowlero has said in filings. The other 18 individual claims remain under investigation, according to a February filing.
Only a fraction of EEOC age discrimination complaints — 2.8% in fiscal 2021 — resulted in reasonable cause determinations, EEOC data show. 
Robert Levy, an employment law attorney who has filed hundreds of EEOC claims on behalf of his clients over the last 20 years, said he was struck by the number of reasonable cause determinations the EEOC made in the complaints against Bowlero. 
“It’s sort of the difference between the organism being sort of rotten to the bone and, you know, a piece of a large organization maybe having some bad actors who handled a individual situation poorly or unlawfully,” Levy, who is not involved with the Bowlero case, told CNBC. 
“I think it cuts right to the heart of the way a company is alleged to be doing business,” he said.
Levy added that the findings raise concerns about “institutional disregard for the anti-discrimination laws.”
The EEOC is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person’s race, color, religion, sex, gender identity, sexual orientation, national origin, age, disability or genetic information. 
When people face such discrimination in the workplace, they can file complaints with the EEOC, which has the authority to investigate the charges and works to settle the cases with employers.   
When settlement negotiations with the EEOC fail, the agency can decide to file suit against the company. If it chooses not to file suit, the victim can typically pursue their own private lawsuit. 
The EEOC declined to comment, citing federal law.
In filings, Bowlero informed investors about the reasonable cause determinations and said the company “contests such determination and intends to defend vigorously.”
While the proposed $60 million settlement with Bowlero was just a proposal, the number stands out when compared with other claims the EEOC has successfully settled out of court. 
EEOC data from fiscal 2021, the most recent available, shows the agency secured a total of $83.8 million in monetary benefits for victims of age discrimination across hundreds of cases over that entire year.

‘Fresh young faces’ to fuel a growth boom

In mid-February, Bowlero wowed investors when it announced what it called a record-breaking $273.4 million in sales in the three months that ended Jan. 1 — a 33.2% year-over-year increase. It posted a net income of $1.4 million.
A little over a month before its second-quarter earnings report was released, Bowlero announced its trailing 12-month revenue had topped $1 billion and its same-store sales had grown about 48% in the period. 
The stock, which started trading around $10 a share in December 2021, has climbed as high as $17 a share this year. It is now trading around $13 a share with a market cap of about $2.2 billion.
Bowlero’s ascent to becoming a profitable public company, which has caught the attention of big bank analysts and even CNBC’s Jim Cramer, started some 26 years ago in a rundown bowling alley in downtown Manhattan.
In 1997, Shannon was in his early 30s and living in New York City when he attended a party at a Union Square bowling alley and immediately saw potential in the pins and smoke-stained walls, he has said.
“It was the very traditional, warm beer, cold food, smelly bathroom, scary person on the lane next to you bowling center,” Bowlero Chief Financial Officer and President Brett Parker said during a presentation at the Raymond James Institutional Investors conference in March. Parker is leaving his role as the company’s chief financial officer later in May to focus on what Shannon called “strategic relationships,” the company announced Tuesday. Parker will remain as vice chairman of the board and president. 
“But thank you to Tom, because he had the vision to see that and know that it could and should be something more,” Parker said. 

The Bowlero location at Chelsea Piers in New York City.

With a $3,000 cash down payment and “$2 million borrowed,” Shannon bought the bowling alley and transformed it from a “dingy” hole in the wall to an “upmarket experience” with elevated food and drink offerings, sleek renovations and world-class customer service, the company has said. 
Shannon would spend the next two decades replicating that model in tired bowling alleys across America and building an empire that embodied his vision of cool. 
The company reached a turning point in 2013. It went from running six bowling alleys to 272 overnight after it acquired AMF, which was then the largest bowling company in the world and was in bankruptcy.
The following year, Shannon’s company acquired the Brunswick Corporation, the second-largest bowling company in the world, and changed his company’s name to Bowlero.
As aging alleys across the country began to get the Bowlero makeover, another part of the plan was unfolding behind closed doors, former employees say. Not only did the centers need a refresh, but Shannon determined its staff did as well, according to complaints filed to the EEOC. 
Between 2013 and 2015, at least 287 managers from 351 bowling centers were fired, according to employment data filed to the EEOC compiled by Dowe from former employees. 
Senior managers who survived the purge told the EEOC they were pressured to replace longtime staffers because “they were too old” and the company wanted “fresh young faces,” according to an affidavit filed by a former employee.

Customers arrive at a Bowlero location in Eden Prairie, Minnesota, March 18, 2017.
Andy King | Getty Images Entertainment | Getty Images

One top-performing employee in his mid-50s was fired “shortly after being stricken with a medical condition that caused his face to become disfigured,” a former member of the human resources team told the EEOC in a sworn affidavit.
Among staff, the top executive was also known to make condescending jokes about women, off-handed remarks that were “racially motivated” and negative comments about LGBTQ people, the affidavit says. Some female employees didn’t openly disclose their marital status or their pregnancies out of fear of losing their jobs, the former HR employee told the EEOC.
“It was well-known within the company that motherhood is the end of your career at the company if you work for Shannon,” said the employee. “Pregnancy was totally against Shannon’s practices of having attractive, sexually appealing persons at the forefront of his company, regardless of merit and competence.”
The employee recalled an instance where a “highly-qualified pregnant woman … was denied future opportunities because she ‘was showing.'” 
Bowlero called all of those allegations “meritless.”
In March 2022, the EEOC made its finding of reasonable cause that Bowlero has been engaging in a pattern or practice of age-related discrimination since 2013, which coincides with the company’s acquisition of AMF and its expansion, securities filings show.

Bowlero goes public

In July 2021 — nearly five years into the EEOC’s investigation into Bowlero — the company announced it would merge with Cayman Islands-based blank check company Isos Acquisition Corporation and go public at a valuation of $2.6 billion. 
The SPAC’s two CEOs were George Barrios and Michelle Wilson, who served as co-presidents of WWE until their departure from the company in January 2020. They are now back at the wrestling giant. 

Bowlero CEO Thomas Shannon, center, at the New York Stock Exchange, Dec. 16, 2021.
Source: NYSE

In its first S-4, filed to the SEC on July 21, 2021, Bowlero said, “there are currently a number of claims and legal proceedings pending against us.” It noted any potential liabilities were “not expected to have a material effect on our consolidated financial condition, results of operations or cash flows.” But Bowlero did not disclose the scope of the EEOC’s probe. 
The company used the same language under the heading “legal proceedings” in its next three amended S-4s until it received a letter from the SEC asking about the EEOC probe. 
“We are aware that certain former employees of Bowlero have filed charges with the U.S. Equal Employment Opportunity Commission alleging certain unlawful employment practices and discrimination,” says the SEC’s letter, dated Nov. 5, 2021. “Please advise what consideration you have given to disclosing these charges pursuant to Item 103 of Regulation S-K.”
Three days later, the company filed another amended S-4 and disclosed the scope of the EEOC’s probe. Bowlero reiterated in the edited filing that it did not expect the probe to have a “material effect” on its financial health.
The filing said that “management believes such claims to be in the ordinary course and without substantive merit.”
The SEC flagged the omission before Bowlero’s stock started trading, and correspondence with the agency is a routine part of the process. Still, experts questioned why the investigation was not disclosed at first.
“If the EEOC was investigating you, why didn’t you disclose this initially?” said Anthony Sabino, a longtime business attorney and law professor at The Peter J. Tobin College of Business at St. John’s University.
“Why did it take four tries?” he asked. “The bottom line is, it’s got to be disclosed.”
Bowlero, through attorneys, said it did not withhold material information at the time.
“The Company believed in 2021 and continues to believe that the EEOC claims at issue are without merit, is defending the claims aggressively and is confident that it will prevail,” the company’s lawyers said.
The attorneys said “there was no need” to disclose the probe when Bowlero went public, but the company later did so and has “updated its disclosures as appropriate since its IPO.”

Preplanned stock sales

In the midst of Bowlero’s settlement negotiations with the EEOC, which began Aug. 22, 2022, and failed in April, Shannon entered into a prescheduled trading plan, or a 10b5-1, to sell some of his holdings, filings show.
Between Jan. 6 and March 3, Shannon sold 2.4 million shares of his stock for about $35 million, securities filings show. The shares represent a fraction of Shannon’s overall holdings and the sales didn’t affect his over 80% voting power, which largely comes from his holdings in “super voting shares” of class B common stock.
Bowlero’s lawyers said the timing of the stock sales was set in November 2022 and that Shannon entered into the plan “at a time when he had no material non-public information about the company.” They added he “had no discretion over the timing or magnitude of sales” once the plan was established.
In December, the EEOC made 42 more reasonable cause determinations after the stock sale plan was enacted. Bowlero did not disclose the update until it filed a quarterly report on Feb. 15. 

The Bowlero location at Chelsea Piers in New York City.

The company’s lawyers said that although “disclosure of the additional [reasonable] cause filings may not have been required, [Bowlero] elected to do so in its quarterly filings—precisely as is contemplated by the securities laws. [Bowlero] has been, and will continue to be, in full compliance with its disclosure requirements.” 
There is no evidence that Bowlero broke federal law in regard to its disclosures, experts said.
Most executives receive stock as part of their compensation and the plans are a way for them to safely sell those holdings without spooking shareholders or arousing suspicion that they are engaging in insider trading.
They serve an important purpose, because without them, executives could face liability for selling their holdings, which they are entitled to do. 
However, in general, 10b5-1 plans have also come under criticism for the shield they could provide to executives — and how the plans could allow them to time the release of positive or negative information. 
For example, executives could wait to disclose negative information until after sales from a 10b5-1 are complete, to avoid a drop in the stock price, experts said. They may also release positive information prior to the start of the sale plan so they can benefit from any boost in the share price, according to experts. 
In a December 2020 white paper, Joshua Mitts, a law professor at Columbia University and one of the leading experts on securities laws and 10b5-1 plans, found that public companies disproportionately disclose positive news on days when executives sell shares under predetermined 10b5-1 plans.  

Failed negotiations, court battle could come

In an April 11 letter sent by the EEOC to Bowlero and the plaintiffs’ attorney Dowe, the agency said efforts to settle the allegations had been “unsuccessful” and the matter was being referred to the EEOC’s Office of General Counsel “for potential enforcement action.”
Dowe said negotiations fell apart when Bowlero countered the EEOC’s $60 million settlement proposal with a proposal of $500,000. 
Patrick Boyd, a labor and employment law attorney with The Boyd Law Group, said Bowlero could benefit from fighting the case in court, if the EEOC sues.
“They get a chance to really scrutinize the individual plaintiffs and the claims that they have and maybe lop off some of the claims or scare some plaintiffs away,” Boyd said. 
On the other hand, it can be very “advantageous” for discrimination victims if the EEOC decides to prosecute their case and it could result in higher settlements, said Levy, the employment law attorney who has worked on EEOC claims.
In Levy’s experience, settlements obtained through litigation tend to be higher than the amounts decided on during EEOC mediation, he said. Further, victims’ damages and attorneys fees accrue more the longer the case goes on, which also contribute to higher settlements, he said. 

The Bowlero location at Chelsea Piers in New York City.

Regardless, Bowlero appears to be well-situated to pay damages if it loses in court. Raphael Duguay, an assistant professor of accounting at Yale University’s School of Management, reviewed Bowlero’s balance sheet and said a multimillion-dollar settlement or verdict wouldn’t have a major impact on its operations or cash flow and would represent a loss of only a few cents per share. 
Analysts who cover the company agreed. They told CNBC they weren’t concerned about the EEOC’s probe or any potential settlements.
Steven Wieczynski, a managing director at Stifel who initiated coverage of Bowlero at a price target of $26 in late March, said he doesn’t care about the ongoing EEOC case and its settlement proposal. He said if Bowlero was ordered to pay a settlement “it would have no impact” on his view of the company “even if they had to pay $100 million.”
Still, Duguay said that the indirect costs of the EEOC’s investigation, while hard to calculate, could be damaging in the long term and larger than the agency’s proposed settlement given the rise in consumer activism. 
“That indirect cost would take the form of reputational damage because there’s public shaming; this comes out and then people don’t go to their bowling alleys anymore, so they’re losing a lot of revenue,” Duguay said. “I think that’s the key concern.”
“If the EEOC conveys the message that Bowlero is a serious offender in terms of discrimination and lack of inclusion, the indirect effects of that can be very significant,” Duguay said. 
In response, Bowlero’s attorneys reiterated that the company expects to withstand any outcome of the probe.
“Most importantly, the Company believes the EEOC claims are meritless and that it ultimately will prevail,” the lawyers said. “Second, the Company has more than sufficient resources to resolve the matter if it chooses to do so.”
Disclosure: “Mad Money with Jim Cramer” airs on CNBC. More

The Senate is holding its first hearing Thursday on the Secure and Fair Enforcement Banking Act.
Last month, a group of bipartisan lawmakers reintroduced the SAFE Banking Act in the House and Senate.
The legislation will free up banking services for the cannabis industry.

Aaron Smith, CEO of the National Cannabis Industry Association, speaks during a news conference on the Safe Banking Act outside the U.S. Capitol in Washington, Sept. 14, 2022.
Ting Shen | Bloomberg | Getty Images

The Senate banking committee is holding its first-ever hearing Thursday on a bipartisan bill that would allow the cannabis industry to access traditional banking services, which marijuana businesses see as critical to their survival.
The meeting, titled Examining Cannabis Banking Challenges of Small Businesses and Workers, will hear testimony from lawmakers on both sides of the aisle, including Sens. Jeff Merkley, D-Ore., and Steve Daines, R-Mont., who reintroduced the stand-alone bill last week. The committee will also hear from witnesses including the Cannabis Regulators of Color Coalition, Drug Policy Alliance and the United Food and Commercial Workers International Union.

Thursday’s hearing will determine next steps in getting the bill to the Senate floor for a vote, as Senate Majority Leader Chuck Schumer and other key lawmakers express support for it. It comes as the marijuana industry, which is facing a downturn even as more states approve legal markets, has pushed Congress to take action on the issue.
“Without full access to the banking and payments system, legal cannabis businesses are forced to operate in the shadows,” said Sen. Sherrod Brown, D-Ohio, who is also chair of the committee.
Many business owners also rely on funds from friends and family in lieu of small business and bank loans because “they might go through all the cost and effort, only to be denied,” Brown said.
Echoing Brown, committee ranking member Sen. Tim Scott, R-S.C., said “Congress has a responsibility to ensure all legal industries have access to financial institutions and services.”
But he added lawmakers must eliminate the possibility of loopholes in money laundering laws before the act becomes law. Any loopholes could make it harder for law enforcement to catch drug and weapons traffickers, Scott said.

Senate action on the bill is welcome news to executives across the industry, including Craig Sweat, owner of Uncle Budd NYC, the company that first brought mobile dispensary trucks to New York City. 
“I’ve been held up for so long that I have product that is sitting and getting old,” said Sweat, who after years of operating his mobile dispensary company and then a delivery service, has entered into a lucrative manufacturing and licensing partnership with Omnium Canna to produce his products.
“I have no way of transferring funds, I can’t pay staff, I’m just sitting on my hands,” Sweat said, adding his latest business venture hasn’t been able to launch as banks, fearful of federal prosecution, have been giving him the ‘runaround.'”

The Secure and Fair Enforcement Banking Act, also known as SAFE, hit a wall in Congress last year after lawmakers excluded it from a $1.7 trillion government funding bill. It was the seventh time the legislation, which has always had strong bipartisan support, failed to get through the Senate after passing in the House of Representatives.
Last month, the bill, which has been tweaked since last session, was reintroduced by Sens. Merkley and Daines, and Reps. Dave Joyce, R-Ohio, and Earl Blumenauer, D-Ore. The bill has strong bipartisan support with 38 additional co-sponsors in the Senate and eight more co-sponsors in the House.
Under federal law, banks and credit unions face federal prosecution and penalties if they provide services to legal cannabis businesses since it is still a Schedule I substance, along with heroin and LSD. Schedule I substances, according to the federal Drug Enforcement Administration, are defined as drugs with no currently accepted medical use and a high potential for abuse. 
Without access to traditional banks, legal marijuana businesses can’t access loans and capital, or even use basic bank accounts. As such, businesses are forced to operate in a cash-only model, which can result in robbery, money laundering and organized crime.
Cat Packer, chair of the Cannabis Regulators of Color Coalition, told senators small cannabis businesses and workers are forced to operate in a “gray market” dealing in cash-only transactions. The term “black market” has negative connotations for Black and brown business operators disproportionately affected by funding access.
“We don’t want to equate black with illegal,” Packer, who is Black, said. A Black man behind her nodded enthusiastically.
“I want to just emphasize this: the only way to eliminate the criminality of small businesses and workers is to completely remove cannabis from the Controlled Substances Schedule,” Packer added.
Key components of the bill protect banks that work with state-legal cannabis businesses. The legislation would shield them from being penalized by federal regulators, creating a safe harbor from criminal prosecution, liability and asset forfeiture for banks, their officers or employees. 
The latest version of the plan also extends safe harbor to organizations that assist underserved communities, including the Community Development Financial Institutions and Minority Depository Institutions, smaller institutions tailoring to communities that have often lacked access to banking services.
This week, the American Bankers Association, which represents banks of all sizes from every state in the country, sent a letter thanking the committee for taking up the matter and urging senators to “markup and advance the legislation as soon as possible.”
In a joint statement released after the hearing, Schumer and Sens. Cory Booker, D-N.J., and Ron Wyden, D-Ore., said they were “encouraged” to see the bill reintroduced after key improvements to the legislation. The lawmakers co-authored the Cannabis Administration and Opportunity Act together, which would remove marijuana from the federal list of controlled substances.
“We look forward to watching this legislation progress through the banking committee and working with bipartisan partners to include additional improvements, such as the Harnessing by Pursuing Expungement (HOPE) Act, which would support states that want to expunge cannabis record with grants,” they said. More

Sony’s Pure Flix, a faith-based streaming service, will merge with Great American Media, the owner of two cable networks.
Content will cross both platforms as both look to beef up their viewership base. Pure Flix has about 1 million subscribers.
Great American launched its cable TV networks in 2021, which prominently feature holiday content, as a rival to the Hallmark Channel.

Actress Maria Conchita Alonso attends the Los Angeles premiere of “God’s Not Dead: We The People” at Hilton Los Angeles/Universal City on September 21, 2021 in Universal City, California.
Paul Archuleta | Getty Images

Sony Pictures Entertainment and its streaming service Pure Flix are making room on the cable TV dial. 
The company’s streaming service, known for faith-based content, is merging with Great American Media, a recent upstart cable rival to the Hallmark Channel. 

The combination will give Pure Flix’s content a place in front of traditional TV viewers. It will also beef up the slate for Great American’s TV networks Great American Family and Great American Living. 
As part of the deal, which has yet to close, content from both Pure Flix and Great American Media will cross each other’s platforms. 
Sony acquired Pure Flix in December 2020 for an undisclosed sum. The service, which features content such as the “God’s Not Dead” film franchise and “The Chosen” series, costs $7.99 a month and has approximately 1 million subscribers in the U.S. and Canada. 
The deal will also give Great American’s fledgling TV networks a streaming home. 
Great American Media and its two cable TV networks were launched in 2021 by Bill Abbott, former CEO of Crown Media, the parent of the Hallmark Channel. During his tenure at Hallmark, he helped turn the network into a Christmas movie behemoth, which continues to beckon some of the highest cable TV ratings during the holiday season. 

Lori Loughlin is seen on December 31, 2018 in Los Angeles, California.
SMXRF | Star Max | GC Images

Abbott left Hallmark in 2020 after backlash involving commercials featuring a same-sex wedding ceremony. The network pulled the ads after facing pressure from a conservative group, then reversed its course shortly after a gay rights advocacy group attempted to launch an advertising boycott. 
Soon after, Abbott launched Great American Media and signed deals with some of the top stars known for their Hallmark Channel movies and series.

Familiar faces at Great American Media

Danica McKellar, who starred as Winnie Cooper in the original “Wonder Years”
Candace Cameron Bure, the longtime queen of Hallmark holiday films who recently found herself mired in controversy over comments regarding same-sex couples
Lori Loughlin, the former “Full House” cast member, who had been fired from Hallmark for her role in the 2019 college admissions scandal

Abbott will remain as CEO of the merged companies, and report to the board of directors. Terms of the deal weren’t disclosed, but Great American Media will hold the majority interest in the merged company. 
Great American Media took the step of launching its content on traditional cable networks rather than a streaming service during a time when more and more customers are fleeing cable bundles in favor of streaming. Cable subscriber losses continued to accelerate in the most recent quarter. 
While the company’s networks are available in 50 million pay TV homes, and touts that it is the fastest-growing TV network based on Nielsen ratings, it has yet to start its own streaming service. 
Instead, the networks have been featured in internet TV bundles, such as Frndly TV and Fubo. Great American Media also has a free, ad-supported channel for its content.  More