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MLB dodged a disaster by agreeing to end the lockout, but other risks remain

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The empty Salt River Fields where Spring Training would be taking place at Talking Stick in Phoenix, AZ.

Patrick Breen | USA TODAY Sports

Major League Baseball Commissioner Rob Manfred flashed a massive smile on Thursday evening when he announced the return of baseball.

After nearly 100 days of an owner-imposed lockout, MLB agreed to a new five-year collective bargaining agreement with the MLB Players Association on Thursday. In the deal, players will see increased minimum salaries and a $50-million bonus pool for young players. Owners are get an expanded 12-team postseason and jersey patches that create new revenue.

But most importantly, MLB will play a full 162-game schedule after the Manfred, and team owners played the “deadline” strategy and initially threatened to cancel games and not pay players.

“The way the process of collective bargaining is designed to work under the stature — it’s really driven by two things,” Manfred said. “Time and economic leverage. No agreement comes together before those two things play on in a way that you find common ground. I think we made an agreement when it was possible to make an agreement.”

However, despite the agreement and the full season staying intact, MLB’s business may have endured some damage.

Los Angeles Dodgers center fielder Cody Bellinger (35) steals second base as St. Louis Cardinals second baseman Tommy Edman (19) takes the late throw at Dodger Stadium in the 2021 National League Wild Card game.

Robert Hanashiro | USA TODAY Sports

MLB teams missed their selling season

Former MLB executive Marty Conway followed baseball’s ninth work stoppage since it commenced in December 2021. He labeled talks a “vicious negotiating period” for MLB and players. Conway said the league would need to repair its image, especially in smaller markets.

“These periodic airing of the grievances weighs on that [MLB’s image],” Conway said. “For whatever reason, baseball has chosen to expose their inter-workings more than the NBA and NFL,” he added. “And it’s hurting.”

Conway, now a sports management professor at Georgetown University, said MLB clubs also missed its “selling season.” It’s when clubs promote new players, the 2022 schedule, ticket packages and stay engaged with season-ticketholders for renewals.  

During the pandemic, MLB said 40% of its $10 billion business is tied to attendance, which has been falling over the years. MLB drew a total of 45.3 million fans last season, partly due to restrictions around the pandemic. That was down from 68.5 million in the prepandemic 2019 season. MLB’s record high for attendance was 79.5 million fans in the 2007 season.

While MLB was wrapped up in in labor talks, the consumer price index increased, Russia started a war in Ukraine, and gas prices surged. That means small-market and non-competitive MLB clubs could especially be hurt if cash-strapped fans can’t pony up the money to pay for tickets.

The selling season might have helped alleviate this potential problem.

“It’s very important,” Conway said. “The day after the previous season, you want to message to your fans not only what the schedule is, ticket prices, and season-ticket packages. That selling season is essential.”

He added: “There’s going to be some markets where the bounce will be quick — Los Angeles, New York — but there are also a lot of markets — Baltimore, Tampa, Miami — they had a whole winter where they haven’t been able to capitalize on the selling of the season.”

On Thursday night, MLB apologized to fans.

“I know the last few months have been difficult. There was a lot of uncertainty at a point in time where there’s a lot of uncertainty in the world. Sort of like the way the process of collective bargaining works sometimes,” Manfred said. “But I do apologize for it.”

Major League Baseball Commissioner Rob Manfred answers questions during an MLB owner’s meeting at the Waldorf Astoria on February 10, 2022 in Orlando, Florida. Manfred addressed the ongoing lockout of players, which owners put in place after the league’s collective bargaining agreement ended on December 1, 2021.

Julio Aguilar | Getty Images Sport | Getty Images

Manfred wants to fix a broken relationship 

The commissioner’s apology came after Manfred said he’s “generally thrilled” MLB settled another labor dispute. And as a result, baseball once again avoided losing revenue under his commissioner’s watch.

On Wednesday evening, MLB threatened to miss games through April 14 after previously postponing the first two series of the 2022 season — roughly 90 games. Manfred then said players wouldn’t be paid for missed games.

“Let me say this about deadlines,” said Manfred on Thursday. “The use of deadlines, and extending deadlines, and figuring out when to set them and when to back up off them is part of the art of collective bargaining.

“And it is an art form that’s important in terms of making a deal,” Manfred added.

Asked whether MLB was outmaneuvered, as players still made up significant economic ground in the lockout, Manfred responded that it’s not about “who outflanked who.” He said: “My view is — there’s only one win, and that’s getting an agreement. We got one.”

Manfred said he would be more diligent about building relationships with players, some of whom called for his ouster. He then labeled terms of the deal —which include increasing minimum salaries to $700,000 with $20,000 per year increases — an “olive branch” to players to repair the fractured relationship.

“One of the things I’m supposed to do is promote a good relationship with our players,” Manfred said. “I tried to do that. I have not been successful in that.”

Manfred said he called MLBPA executive director Tony Clark “and expressed my desire to work with him. And it’s going to be a priority of mine moving forward to try and make good on the commitment.”

Seattle Mariners shortstop J.P. Crawford (3) slides into third to advance on a sacrifice fly against the Oakland Athletics during the third inning at T-Mobile Park, Sept. 28, 2021..

Joe Nicholson | USA TODAY Sports | Reuters

Player injuries and Covid concerns 

With the lockout concluded, Conway suggested the league address fan displeasure by relying on national events, including the “Field of Dreams” game between the Chicago Cubs and Cincinnati Reds.

MLB makes it return to Dyersville, Iowa, in a ballpark built next to a cornfield, echoing the scene from the 1989 film starring Kevin Costner. Last year’s Field of Dreams game was a viewership success for Fox, bringing in an average of 5.9 million viewers.

In addition, Conway said MLB would use fan giveaways around the 2022 All-Star Game held in Los Angeles at Dodger Stadium. But player health will be critical in determining the success of those national events.

The lockout wiped out most of spring training, a time when players prepare their bodies for a 162-game campaign. Usually, players get nearly two months to prepare, but since MLB will start its year on April 7, players have only three weeks.

On Friday, Clark said player health is a concern heading into this season with another shortened spring training. He referenced MLB’s 2020 season when spring training was interrupted due to the pandemic.

After sports shut down in March 2020, MLB didn’t start again until July – weeks before it started a 60-game campaign. MLB returned to its 162-game schedule in 2021. But, coming off a year when player routines were affected by Covid, injures piled up.

Stan Conte, a former MLB head trainer, was cited last June in the New York Times after he noticed an increase in leg injuries, including hamstrings, during 2021 spring training. Also, during the 2020 season, stars, including New York Yankees’ Giancarlo Stanton and Aaron Judge, missed time due to leg injuries.  

“Those (injuries) are always a concern,” Clark said Friday, responding to a CNBC inquiry on the matter. He added MLB players are conditioned throughout the year, and “we take some solace in that, but we’re always paying attention to how the schedule and how the travel associate with it.”

There could be muscle overuse leading to injuries as MLB needs to make up roughly 90 games it postponed due to the lockout. In a regular-season — pre-Covid — that’s up from 39 games MLB rescheduled in 2019, 54 games in 2018 and more than 30 in 2017.

MLB will use doubleheaders to make up most of the games in 2022, though is still unclear how the league will reformat. But it could add three to five days to the season, which usually ends in early October.

Injuries aside, another concern for MLBPA: unvaccinated players. Restrictions in Canada don’t allow unvaccinated players to enter the country. Hence, players who miss games in Toronto due to vaccination status will not be paid and would lose service time.

MLB told CNBC that data from 2021 show that 81% “Tier 1 personnel,” including players and key staff who have access to players, were fully vaccinated.

Player gambling deals part of MLB’s new deal

As MLB repairs its image among fans and players want to avoid injuries, the parties will see more revenue streams.

MLB can start applying jersey patches and helmet decals immediately. The new uniform sponsorships are estimated to be worth $11 million per MLB team, according to measurement company Nielsen.   

MLBPA chief negotiator Bruce Meyer said players could now monetize from promotional endorsement deals with sports betting companies.

Under previous labor deals, MLB players were banned from promoting gambling companies, including casinos. In 1979, Hall of Famer Willie Mays was banned from MLB for accepting a promotional deal with Bally’s. MLB revoked the ban in 1985.

MLBPA didn’t provide specifics around the rules of the deals. Still, agreements will likely mimic other arrangements that allow players to use their intellectual property in ads using non-MLB logos and apparel.  

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Trump media company subpoenaed in federal criminal probe of SPAC deal

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Former U.S. President Donald Trump gives the keynote address at the Faith & Freedom Coalition during their annual “Road To Majority Policy Conference” at the Gaylord Opryland Resort & Convention Center June 17, 2022 in Nashville, Tennessee.

Seth Herald | Getty Images

Donald Trump’s media company was subpoenaed by a federal grand jury in connection with a criminal probe, according to the company with which the former president’s firm plans to merge.

Digital World Acquisition Corp. said in a filing Friday that Trump Media and Technology Group received a subpoena from the grand jury in Manhattan on Thursday. The Trump company also received a subpoena from the Securities and Exchange Commission regarding a civil probe on Monday, DWAC said.

DWAC also said some current and former TMTG employees have also recently received grand jury subpoenas.

The filing came days after DWAC said the government investigations could delay or even prevent its merger with Trump’s newly formed company, which includes Truth Social, a social media app intended to be an alternative to Twitter.

Neither TMTG nor a spokeswoman for Trump immediately responded to CNBC’s requests for comment.

The Justice Department and the SEC, which regulates the stock market, are investigating the deal between DWAC and Trump Media. By merging with DWAC, which is a kind of shell company called a special purpose acquisition company, or SPAC, Trump’s firm would gain access to potentially billions of dollars on public equities markets.

Trump established Truth Social months after Twitter banned him for his tweets on Jan. 6, 2021, when hundreds of his supporters stormed the U.S. Capitol in a bid to overturn Joe Biden’s victory in the presidential election. Trump Media’s CEO is former Rep. Devin Nunes, one of the former president’s most ardent loyalists in the Republican Party. Trump is also considering whether to run for president in the 2024 election.

Trump has continued to spread the lie that the election was stolen from him. His alleged involvement in the Jan. 6 insurrection is being probed by a House select committee that has accused the former president of being at the center of a multipronged conspiracy to block the peaceful transfer of power to Biden.

Early criticism of the Trump-DWAC deal came from Sen. Elizabeth Warren, D-Mass. In calling for an investigation, she wrote to SEC Chair Gary Gensler in November, telling him that DWAC “may have committed securities violations by holding private and undisclosed discussions about the merger as early as May 2021, while omitting this information in [SEC] filing and other public statements.”

DWAC shares are far off their highs, closing Friday at $24.20. The stock had surged above $90 in October, after the deal with Trump’s group was announced.

DWAC on Monday revealed in a securities filing that it learned June 16 that each member of its board of directors received subpoenas from the same federal grand jury.

The grand jury sought documents similar to those the SEC already requested as part of its civil probe, DWAC said. The company itself was served with a subpoena a week ago with similar requests, along with other requests relating to communications, individuals and information involving Rocket One Capital.

DWAC also revealed Monday that a board member, Bruce J. Garelick, had told management that he would quit the board during the previous week. Garelick said his resignation “was not the result of any disagreement with Digital World’s operations, policies or practices,” according to the company filing.

— CNBC’s Kevin Breuninger and Thomas Franck contributed to this story.

This is breaking news. Please check back for updates.

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Walmart is working on a response to the Supreme Court’s abortion decision, CEO says in memo

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Walmart CEO Doug McMillon speaks at the CNBC Evolve conference November 19th in Los Angeles.

Jesse Grant | CNBC

Walmart CEO Doug McMillon told employees on Friday that the company is weighing how to respond to a Supreme Court decision that ended the federal right to an abortion.

“We are working thoughtfully and diligently to figure out the best path forward, guided by our desire to support our associates, all of our associates,” he said in a memo sent to employees on Friday. “We will share details on our actions as soon as possible, recognizing that time is of the essence.”

He did not say what changes the company is considering, such as if it may cover travel expenses for workers who must travel to another state where abortion is available.

The memo was previously reported by The Wall Street Journal.

Arkansas, home to Walmart’s headquarters, is one of several states with severe limits or bans on abortions that went into affect after the high court’s ruling.

Walmart is also the country’s largest private employer. It has about 1.6 million employees across the country, including many who live and work in states across the Sunbelt with abortion restrictions such as Texas, Oklahoma and Florida.

Since the Supreme Court reversed Roe v. Wade, companies across the country have had a mix of reactions. Some, including JPMorgan Chase, Dick’s Sporting Goods and Target, have announced new plans to cover employee travel to other states for abortions. Others, such as Kroger and Apple, said they already cover travel for medical treatments and reproductive health care. And still others have remained quiet.

Amazon, the second-largest private employer in the country, said in May that it would pay up to $4,000 in travel expenses each year for non-life-threatening medical treatments, including abortions.

Walmart already covers employee travel for some medical procedures, such as certain heart surgeries, cancer treatments and organ transplants.

Walmart health benefits cover only some abortions. According to the company’s employee handbook, charges for “procedures, services, drugs and supplies related to abortions or termination of pregnancy are not covered, except when the health of the mother would be in danger if the fetus were carried to term, the fetus could not survive the birthing process, or death would be imminent after birth.”

Plan B, an over-the-counter form of contraception, is covered only if the person gets a prescription. The pill, often called the “morning after pill,” works by preventing ovulation or preventing a fertilized egg from attaching to the womb. It can be taken after unprotected sex or when contraception fails.

Other forms of contraception are also covered with a prescription, including birth control pills, injections and intrauterine devices, or IUDs. Some anti-abortion activists also oppose IUDs because they can stop a fertilized egg from implanting in the uterus.

In Friday’s memo, McMillon said Walmart has gathered input from employees as it decides what to do. He also alluded to the size and diversity of both the company and its customer base.

“We know our associates and customers hold a variety of views on the issue, and this is a sensitive topic about which many of us feel strongly,” he said. “We want you to know that we see you, all of you. No matter what your position on this topic is, we want you to feel respected, valued and supported.”

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FCC authorizes SpaceX to provide mobile Starlink internet service to boats, planes and trucks

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The Starlink logo is seen in the background of a silhouetted woman holding a mobile phone.

Sopa Images | Lightrocket | Getty Images

The Federal Communications Commission authorized SpaceX to provide Starlink satellite internet to vehicles in motion, a key step for Elon Musk’s company to further expand the service.

“Authorizing a new class of [customer] terminals for SpaceX’s satellite system will expand the range of broadband capabilities to meet the growing user demands that now require connectivity while on the move, whether driving an RV across the country, moving a freighter from Europe to a U.S. port, or while on a domestic or international flight,” FCC international bureau chief Tom Sullivan wrote in the authorization posted Thursday.

SpaceX did not immediately respond to CNBC’s request for comment on the FCC decision.

Starlink is SpaceX’s network of satellites in low Earth orbit, designed to deliver high-speed internet anywhere on the globe. SpaceX has launched about 2,700 satellites to support the global network, with the base price of the service costing users $110 a month. As of May, SpaceX told the FCC that Starlink had more than 400,000 subscribers.

SpaceX has signed early deals with commercial air carriers in preparation for this decision: It has pacts with Hawaiian Airlines and semi-private charter provider JSX to provide Wi-Fi on planes. Up until now SpaceX has been approved to conduct a limited amount of inflight testing, seeing the aviation Wi-Fi market as “ripe for an overhaul.”

The FCC’s authorization also includes connecting to ships and vehicles like semi-trucks and RVs, with SpaceX having last year requested to expand from servicing stationary customers. SpaceX had already deployed a version of its service called “Starlink for RVs,” with an additional “portability” fee. But portability is not the same as mobility, which the FCC’s decision now allows.

The FCC imposed conditions on in-motion Starlink service. SpaceX is required to “accept any interference received from both current and future services authorized,” and further investment in Starlink will “assume the risk that operations may be subject to additional conditions or requirements” from the FCC.

The ruling did not resolve a broader SpaceX regulatory dispute with Dish Network and RS Access, an entity backed by billionaire Michael Dell, over the use of 12-gigahertz band – a range of frequency used for broadband communications. The FCC continues to analyze whether the band can support both ground-based and space-based services, with SpaceX pushing for the regulator to make a ruling.

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