Big Business This Week is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
ESPN'S BIG BET
ESPN is going all in on sports betting with a naming deal that will rebrand an existing app as ESPN Bet. Penn Entertainment will pay $1.5 billion to use one of the most recognizable sports brands in the U.S. It's a surprising move for ESPN, which is co-owned by Disney, a brand whose family-friendly image seems to be in contrast to the vice of gambling. Penn also announced it sold Barstool Sports back to founder Dave Portnoy, who was itching to get control back.
DISNEY STREAMING CRACKDOWNS
Speaking of the House of Mouse, Disney CEO Bob Iger announced plans to make its streaming services profitable by this fall, and that means customers will have to pay up. The price of ad-free Disney+ and Hulu are going up $3 per month to about $14 and $18, respectively. The company is also planning to crack down on password sharing. Making the service less appealing to customers comes at an interesting time: Disney+ reported the second straight quarter of subscriber losses. Still, with everything going on this week, Disney ended the week up almost 3 percent.
WEWORK STILL DOESN'T WORK
Let's time travel back to 2019: nobody had heard of Covid-19, SPACs were all the rage, and co-working giant WeWork had taken the real estate work by storm…until it all came crashing down. Just as the company was going to IPO with a $47 billion valuation, questions about its finances and founder Adam Neumann's governance sank it. SoftBank took over, Naumann was ousted, and the company went public in 2021. Now, it warns it could go be in trouble again if it can't renegotiate its leases, control spending and find additional sources of cash in the next year.
CAMPBELL SOUP BUYS RAO'S
Campbell Soup announced it will be snapping up the company behind Rao's pasta sauces for about $2.7 billion. Fans of the popular tomato sauces were quick to register worries that Campbell will mess with the beloved recipes, but CEO Mark Clouse told CNBC, “We’re not touching it! Anyone who thinks we’re going to touch the sauce, no." Campbell Soup ended the week down less than 1 percent.
LUXURY FASHION MERGER
Coach's parent company Tapestry announced it will buy Capri Holdings, the company that runs some of fashion's biggest names, like Versace, Michael Kors and Jimmy Choo. When the $8.5 billion deal closes next year, Tapestry hopes it will put it in a better position to compete with LVMH and Kering – two luxury fashion powerhouses. Capri Holdings' stock jumped 50 percent on the news this week while Tapestry dropped 17 percent.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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