Business

The Washington Commanders are nearing a sale to an ownership group led by Philadelphia 76ers and New Jersey Devils Owner Josh Harris at around $6 billion, people familiar with the deal told CNBC.
The deal would represent a record price for a North American sports franchise.
The NFL’s finance committee and league owners still need to approve the deal.

Josh Harris speaks with members of the media during a news conference in Camden, N.J., Tuesday, May 14, 2019.
Matt Rourke | AP

The Washington Commanders are nearing a sale to an ownership group led by Philadelphia 76ers and New Jersey Devils Owner Josh Harris at around $6 billion, people familiar with the deal told CNBC.
The deal to purchase the embattled team still has to be submitted and approved by the NFL’s finance committee, and at least three-quarters of other team owners would need to approve it.

But those terms, first reported by Sportico, would represent the highest sale price paid for a North American sports team. The Walton family purchased the Denver Broncos in June for a then-record price of $4.65 billion.
Harris’ ownership group includes Washington D.C.-based billionaire Mitchell Rales and NBA legend Magic Johnson. Harris is a co-founder of Apollo Global Management. He’s also the founder and managing general partner of Harris Blitzer Sports & Entertainment and holds stakes in the Crystal Palace Football Club in the Premier League and in the Pittsburgh Steelers.
Amazon founder and Washington Post owner Jeff Bezos was exploring the sale process, but decided not to make an offer, according to ESPN.
Houston Rockets owner Tilman Fertitta told CNBC’s “Fast Money” Wednesday that he dropped out of the process after making an offer of $5.6 billion.
“If they can get somebody to pay them more than that, good luck to them. That’s all I can say. I own a franchise, so I love them selling for a lot. But at some point, I don’t think $6 billion is the right number,” Fertitta said.

Irwin Kishner, who represents a number of pro sports teams in the deal-making space, said he’s not surprised by the $6 billion sale price.
“You had some very, very wealthy competition to win the bid. This bid came out to be the strongest,” said Kishner, co-chair of the Sports Law Group with New York law firm Herrick, Feinstein.
Representatives for the Commanders, the NFL and Harris declined to comment.
For Commanders fans and former employees, progress in the sale process is welcome news.
“Today marks the end of a long, difficult chapter for all employees and fans of the Washington football organization,” said Lisa Banks and Debra Katz, attorneys who represent over 40 former Commanders employees, who alleged widespread misconduct from inside the Commanders front office. “We are proud of our many clients who made this moment possible – the brave women and men who came forward repeatedly and at great personal risk to expose the decades of sexual harassment and financial wrongdoing at the team. Their determination and perseverance forced this sale to happen.”
Commanders owner Dan Snyder announced in November of 2022, that he was putting the Commanders up for sale.
In July 2021, he was fined a record $10 million and removed from day-to-day operations after an investigation found the organization’s workplace “highly unprofessional.”
Snyder and his wife, Tanya, purchased the team in 1999 for $800 million.
Kishner said a sale marks the end of a “very long saga.”
“But alas, I think it’s best for the league. I think it’s best for the team, and I think it’s best for everyone to do well,” he said. More

The luxury watch market has seen soaring secondary market prices, boosted by new demand from younger generations.
Francois-Henry Bennahmias, CEO of Audemars Piguet, said the collectors are here to stay.
In response to claims of artificially tight supple, Bennahmias said, “We’re not playing the market. We’re not doing anything to make the price go one way or the other.”

The luxury watch market is well-positioned to avoid a crash as tight supply and a new generation of young collectors drive demand, according to the CEO of Audemars Piguet.
Luxury watch prices on the secondary market fell 8% last year, with some top models falling more than 20% from their peak, according to WatchCharts. Experts have been warning that the watch bubble could burst, along with crypto, NFTs and other trendy post-pandemic booms. Yet in the past two months, prices have begun to stabilize on the back of what some see as lasting, strong demand.

“I don’t see prices going much lower,” said Francois-Henry Bennahmias, CEO of Audemars Piguet — one of the so-called Big Three of the luxury watch world along with Rolex and Patek Philippe. “People still want to reward themselves, and when they want to reward themselves, they will look at the most respected companies, in watches, jewelry, fashion, you name it.”
Bennahmias said the luxury watch market is benefitting from a vast and structural shift to younger buyers. During the pandemic, a flood of millennials and Gen Z consumers poured into the collectible watch world, educating themselves online and coveting rare watches worn by sports stars and celebrities on social media.
With the top watchmakers built on the promise of limited production, supply can’t keep pace with demand.
“The quantities from the watch companies didn’t evolve,” Bennahmias said. “And the demand became crazy, because we saw the arrival of young people that just were more and more interested in watches. And some people with money who were not even looking at watches before found out that building a watch collection could be something interesting.”

Audemars Piguet’s Royal Oak Offshore Selfwinding Chronograph in black ceramic, celebrating the 30th anniversary of the collection.
Source: Audemars Piguet

Bennahmias said unlike the fickle meme-stock investors of 2021, today’s young watch collectors are here to stay. The average age of an Audemars customer is now 10 or 12 years younger, he said, than in the company’s recent history. Despite living most of their life online and immersed in digital products, Gen Z and millennials have developed a particular attraction to highly crafted, mechanical watches.

“When the Apple Watch came out in 2014, everyone was telling us that we will actually die,” Bennahmias said. “They said no young person would ever wear a watch again, if they did it would be a smartwatch. The funny thing is, we thought that young people couldn’t appreciate exclusivity, craftsmanship, watchmaking. They did.”
Bennahmias said younger generations are becoming some of the brand’s top ambassadors.
“They are the ones preaching the choir with social media and everything. They are our best advertising campaign, and they are bringing their parents actually to the brand,” he said.

Market markups

The big challenge for watchmakers is the secondary market, where pre-owned watches can sell on any of the dozens of online watch sites.
With demand for watches outpacing supply of new inventory, prices for pre-owned watches have skyrocketed, along with online sites like Chrono24, Watchfinder and Watchbox that buy and sell pre-owned watches. Preowned watch sales reached $22 billion in sales in 2021, accounting for nearly one-third of the overall $75 billion luxury watch market, according to a recent report from Boston Consulting Group.
Prices for pre-owned versions of some of the top “trophy” models — like the Patek Philippe Nautilus, the Rolex Daytona and the Audemars Piguet Royal Oak — can run two or three times their retail price. A pre-owned Audemars Piguet Royal Oak “Jumbo” that retails new for $35,000 is currently listed on Chrono24 for $115,000. Some have listed for over $130,000.
The mark-ups have sparked widespread frustration among collectors, who claim watchmakers are deliberately limiting production to boost prices and resale values — making their watches more attractive as investments. Bennahmias said many of the price corrections are “healthy” and that the watchmakers prefer customers who are true, long-term watch-lovers rather than speculators trying to pump up prices.
“I want this to be very clear for everyone,” Bennahmias said. “We’re not playing the market. We’re not doing anything to make the price go one way or the other. We make a certain amount of watches that we think could be accepted by the world. We say this is the right number, then the market is free and will do whatever they want.”
Audemars Piguet produced only 50,000 watches last year and is expected to produce about 51,000 this year, Bennahmias said. The brand, founded in 1875 and still family-owned, has long championed quality, craftsmanship and exclusivity over revenue growth.
Audemars Piguet is continuing to expand its production and facilities in Switzerland. But Bennahmias said that even if the company wanted to meet demand, which would be well over 80,000 watches a year, the company wouldn’t be able to find and train watchmakers fast enough.

Francois-Henry Bennahmias, CEO of luxury watchmaker Audemars Piguet.
Credit: Audemars Piguet

“The board of directors, meaning the family members, have never ever asked me in my 11 years for any growth in percentage terms, ever,” Bennahmias said. “They have never said ‘Francois, we want 10% or 15% or more.’ No. They say, ‘Francois, we still want to be around 200 years from now.’ That’s a completely different vision on how to build the success of a brand.”
Bennahmias admits the company has “made mistakes” when it comes to handling customers who arrive at their stores only to be told there are no watches available or that the wait time, if they’re lucky enough to get on the list, is up to two years. He said sales staff are now better trained to explain the limited production, the low numbers of each model produced and how many are delivered to each country.
He also said he wants 30% of all watches to go to buyers who have never owned an Audemars Piguet, to keep bringing in new customers.
“We are learning every single day, and it’s not always perfect,” he said. “What we found out through the course of the last three, four years, is that we need to educate people more.”

Audemars Piguet’s Royal Oak Offshore Selfwinding Chronograph in black ceramic, celebrating the 30th anniversary of the collection.
Source: Audemars Piguet

Audemars is now celebrating the 30th anniversary of its popular Royal Oak Offshore model, a larger version of its signature Royal Oak. When the Offshore was first launched, however, the model was widely scorned, according to Bennahmias.
“People trashed it,” he said. “When the watch came out people looked at it and said, ‘You guys are crazy.’ And we were not so confident in launching it. Slowly but surely it took off, to the point where it was a huge success.”

Next steps

Bennahmias, who will be leaving his role as CEO at the end of this year, declined to identify his potential successor or his next position.
He more than tripled Audemar Piguet’s sales during his tenure to over $2 billion and is well known in the watch world for his close ties to Jay-Z and other hip hop stars, as well as Hollywood celebrities, professional athletes and artists.
Some have speculated his next job is as likely to be in sports or music as it is luxury or watches.
“I think I’ve done what I was supposed to do with Audemars Piguet,” he said. “I’ve got so many other things I want to do with my life. I’ve got many different passions. Music is one. Sports is another one. And luxury obviously, and I want to do other things. I’m not done yet.” More

COOLIDGE, Arizona – From engines to landing gear, the hunt is on for aircraft parts as airlines prepare their jets for swarms of summer travelers, with new planes from Boeing and Airbus still in short supply.
The search for parts leads some aircraft owners here, where older, retired planes are stripped for parts that will be prepared to fly on other planes or repurposed altogether. Some parts can be turned into high-end furniture, like $42,000 desks. What’s left can be crushed into scrap and melted down.

Until they’re picked apart, the planes are stored in arid climates, like the Arizona desert, to avoid damaging weather and humidity.

Arrows pointing outwards

An Airbus plane with parts removed in Coolidge, Arizona.
Leslie Josephs | CNBC

The used-parts business was worth about $3 billion to $5 billion before the pandemic, according to Mike Stengel, a principal at AeroDynamic Advisory. It’s now riding a boom in global aircraft maintenance, repair and overhaul, an industry that is set to expand 22% this year to $94 billion, consulting firm Oliver Wyman estimated in a report in February.
The current demand for aircraft parts is the result of the industry’s deep demand swings resulting from the Covid pandemic. In an effort to cut costs when demand collapsed amid travel restrictions, airlines raced to retire planes, only to need aircraft later when demand returned. Carriers also deferred maintenance and prioritized using engines with more time left on them.
Meanwhile, Boeing and Airbus are still trying to stabilize their supply chains and train workers after thousands left the industry during the pandemic’s slump.

Arrows pointing outwards

One challenge is locating feedstock of aircraft. Travel demand is recovering — the International Air Transport Association last week said global air traffic is nearly 85% recovered to 2019 levels. In the U.S. it’s already past that point.

With deliveries of new jets behind schedule, airlines are holding onto planes longer, repairing or overhauling them, adding to demand for parts and labor.

Technicians remove an engine covering from a retired plane in Marana, Arizona
Leslie Josephs/CNBC

Last year, 273 commercial jets were retired, the fewest in almost two decades and half the number in 2019, said Aerodynamic’s Stengel, citing data from the Centre for Aviation.
“There are supply chain issues across the aviation industry at the moment where these highly valuable parts made out of often-rare and precious materials can’t be produced quick enough,” said Lee McConnellogue, chief executive of ecube, a U.K.-based company that provides “end-of-life” services for aircraft. “So airlines and maintenance companies alike have to find an alternate source other than brand new.”

A used airplane is dismantled in Marana, Arizona.
Leslie Josephs/CNBC

Ecube recently expanded, opening a facility here adding to its portfolio that includes Spain and Wales. The new site features a crush pad where old planes are shredded before being carted off.
“Engine shops are really full,” said Rob Morris, global head of consultancy at aviation data firm Cirium. “Used material’s in demand.”

Technicians remove an engine covering from a retired plane in Marana, Arizona
Leslie Josephs/CNBC

Morris said that’s also driving up the prices to rent engines. For example, a CFM56 engine that powers some older models of the Boeing 737 is renting for $65,000 a month, up from $55,000 a month last year.

Airbus A320 landing gear in a repair shop in Marana, Arizona.
Leslie Josephs | CNBC

Boeing and Airbus executives are planning to pick up the pace in production and aircraft deliveries this year, however, which could boost plane retirements and in turn add to supplies of used parts and drive down the price.
“There are a couple of stars that have to align for the retirement floodgates to accelerate, and one big one is Airbus and Boeing being able to consistently deliver aircraft according to schedule — and for airlines to believe them,” Stengel said. More

There is a good tale about Samsung’s entry into the silicon-chip business, which at the time—1983—was dominated by Japanese and American manufacturers. Lee Byung-chul, the founder of the South Korean chaebol, announced the new strategy in what he grandiloquently called the Tokyo Declaration. He said that though his country lacked raw materials such as oil, it had an educated and diligent workforce that was well equipped to turn its hand to chipmaking. As Geoffrey Cain recounts in his book, “Samsung Rising”, shortly afterwards some Samsung executives were sent on an overnight march across the mountains from Seoul to toughen them up for the challenge. They arrived at Samsung’s first semiconductor factory, built in a record six months, and signed a pledge before breakfast to make the business a success. Then, without sleeping, they put in a 16-hour work day.Listen to this story. Enjoy more audio and podcasts on More

The pandemic embedded video into the workplace. Workers who had never previously been on camera suddenly spent every hour of the day getting used to the sight of themselves and their colleagues on screen. Executives realised that they could send video messages to their workforces rather than having to convene town halls. Listen to this story. Enjoy more audio and podcasts on More

In FEBRUARY TECK RESOUrCES finally announced its slow move into the future. The Canadian miner plans to spin off its relatively dirty steelmaking-coal operations. Under the plan, Teck would focus on mining copper and zinc, while continuing to get the majority of the severed coal company’s profits. Holders of Teck’s super-voting “class A” shares would retain control over the rump firm’s strategic moves for six years. After that its dual-shareholding structure would be scrapped.Glencore, a much bigger commodity firm based in Switzerland, has something much more radical in mind. It proposes a merger between it and Teck that would then create two giant versions of Teck’s proposed entities. The first would amalgamate Glencore’s and Teck’s metals and minerals businesses. It would be listed in London and have an enterprise value of perhaps $100bn. With copper mining expected to make up roughly half its profits, “GlenTeck” would be a red-metal giant poised to take advantage of a green commodities supercycle. The second company would combine the parent firms’ coal businesses, to be listed in New York. This “CoalCo” would shovel all cash it generates to shareholders as the world weans itself off the black stuff.Glencore publicly announced its unsolicited offer on April 3rd. Its boss, Gary Nagle, said that the deal, with an implied premium of 20% over Teck’s share price, would cut costs and unlock shareholder value. After swiftly rejecting the offer, his opposite number at Teck, Jonathan Price, called the transaction a “non-starter”, complaining that it would expose Teck’s shareholders to Glencore’s thermal-coal business, which may command less enthusiasm from investors than coking coal for steel mills. Mr Nagle fired back on April 11th, offering Teck’s shareholders their quarter of CoalCo in cash rather than shares. If later this month shareholders scupper Teck’s original restructuring plan, which requires approval from supermajorities of both share classes, the firm could be forced to the negotiating table. Even then, securing a merger will be difficult. It would be the biggest acquisition of a Canadian miner since 2007. The Keevil family, which owns many of Teck’s super-voting shares, is a hard sell. Norman Keevil, the patriarch and Teck’s chairman emeritus, has made plain his desire to keep the firm in Canadian hands. Canada’s government shares his wariness: it is tightening foreign-investment rules in its critical-minerals sectors.To placate the Keevils and the Canadian authorities, Glencore promises to keep GlenTeck’s industrial head office in Canada. In addition, it has pledged domestic employment guarantees and a secondary listing on Toronto’s stock exchange. If Glencore’s overtures to Teck fail despite all these sweeteners, the Swiss company may still want to put its coal business up for sale. Other mining bosses may be ready to start shaking hands, too. On April 10th Newmont, an American mining giant, raised its takeover offer for Newcrest, an Australian gold miner, to almost $20bn. Years of dwindling capital expenditure and a commodities boom have left miners flush with cash. With their shares often trading close to the replacement value of their assets, buying looks more attractive than building. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

FOR YEARS nutritionists have advised Americans to steer clear of grocery shops’ central aisles and instead fill their trolleys from the outlying shelves. Fresh meat, dairy products, fresh fruit and vegetables often line supermarket walls; cans, boxes and other packages of less salubrious processed food are stacked in the middle. Some shoppers have heeded that advice: sales of canned soup have been lacklustre in recent times, even as those of fresher refrigerated potages have grown. Now makers of the packaged stuff are staging a comeback. This says as much about shifting economic conditions as it does about products on shelves.Listen to this story. Enjoy more audio and podcasts on More

TikTok is becoming the West’s favourite time sink. Last month it said it had 150m users in America, putting it ahead of Instagram and within striking distance of Facebook, two social networks owned by Meta. For its Chinese parent company, ByteDance, it remains a money sink. ByteDance can afford to be patient with the lossmaking Western app thanks to its lucrative Chinese version, Douyin. Last year the tech group as a whole made a gross operating profit of $25bn or so, most of it at home. On that measure, it overtook China’s reigning tech titans, Alibaba and Tencent. The gap between Meta’s overall profits per user and those of ByteDance’s apps is narrowing—and will shrink further once TikTok starts making money. Unless, that is, Western politicians act on their threats to ban TikTok on national-security grounds.■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More