AstraZeneca receives $1 billion in US funding for Oxford University coronavirus vaccine - CNBC
AstraZeneca has agreed to initially supply at least 400 million doses of Oxford University's coronavirus vaccine and secured total manufacturing capacity to produce 1 billion doses.
AstraZeneca has received more than $1 billion from the U.S. Health Department's Biomedical Advanced Research and Development Authority (BARDA) to develop a coronavirus vaccine from the University of Oxford. The British-Swedish drugmaker has agreed to initially supply at least 400 million doses of the vaccine and secured total manufacturing capacity to produce 1 billion doses, with first deliveries in September. AstraZeneca's development program of the vaccine includes a phase three clinical trial with 30,000 participants and a pediatric trial. Pascal Soriot, CEO of AstraZeneca, said the drugmaker would do everything in its power to make the vaccine "quickly and widely available." The coronavirus has now infected over 5 million and killed 328,227 people worldwide, according to data compiled by Johns Hopkins University. On Sunday, the British government announced it was putting £65.5 million ($79 million) in fresh funding toward the development of the Covid-19 vaccine, with 30 million doses expected to be rolled out as early as September. The University of Oxford announced it had partnered with AstraZeneca in April, to allow the drugmaker to develop and distribute the vaccine being researched by the Jenner Institute and Oxford Vaccine Group. Human trials began last month on over 1,000 volunteers in the south of England and AstraZeneca said in this latest announcement that data from the trials was "expected shortly which, if positive, would lead to late-stage trials in a number of countries." Although, given that no trial data has been released, we do not yet know if the vaccine will be effective and AstraZeneca has said it recognizes that it may not work. On Monday, U.S. drugmaker Moderna released positive data from its phase one human trial on its potential vaccine, in development with the U.S. government. Health-care publication STAT then reported Tuesday that vaccine experts were skeptical of Moderna's new data. However, Moderna Chairman Noubar Afeyan told CNBC Wednesday that the drugmaker would never put out coronavirus vaccine data that was different from "reality." Moderna said earlier in May that it was wrapping up the phase one trials and was moving to start phase two trials, expecting phase three to begin in July. If the vaccine was found to be safe to use, Moderna said it could be ready for the market in early 2021. BARDA has also provided funding for one of the two vaccines being developed by French pharmaceuticals company Sanofi, which it is working on with U.K. drugmaker GlaxoSmithKline, according to Reuters in a report which said there are more than 90 vaccines being developed around the world, with eight in clinical trials. CNBC's Chloe Taylor and Berkeley Lovelace Jr. contributed to this article.
Moderna would never release coronavirus vaccine data different from 'reality,' chairman says - CNBC
The company put out the extent of data it had available, Moderna Chairman Noubar Afeyan tells CNBC.
Moderna would never put out data on its potential vaccine for the coronavirus that was different from "reality," the biotech firm's chairman told CNBC on Wednesday. The comment came a day after health-care publication STAT News reported that some vaccine experts were skeptical of Moderna's new vaccine data, saying it did not provide critical information to assess its effectiveness. The report sent Moderna's stock and the broader U.S. market lower. The company put out the extent of data it had available, Moderna Chairman Noubar Afeyan said during an interview on "Power Lunch." "We take what we do very seriously. We would not, have not put out some of the data to make anything look any different from the reality." On Monday, the company released data from its phase one human trial on its potential vaccine, showing all 45 patients enrolled produced binding antibodies seen at similar levels of people who have recovered from the virus. The vaccine produced neutralizing antibodies, which researchers believe is important to protect against the virus, for eight of the patients whose data was available so far. Data on neutralizing antibodies for the remaining patients are expected to come out later. Afeyan said some experts may be "professing expertise and guessing on what we may or may not have." "That is not very useful to a world that is looking for some news that they can interpret," he said. "I would simply urge the public to pay attention to what we say." Moderna has been fast-tracking work with the National Institutes of Health to develop a vaccine. Earlier this month, Moderna announced that it was wrapping up phase one human trials on its potential vaccine with the U.S. government and is moving to start phase two trials that would include 600 participants. If the vaccine is found to be effective and safe to use, it could be ready for the market in early 2021, the company said. The company said it expects to begin a phase 3 trial in July.
Travel changed after 9/11; Here's how it will look after the Covid-19 pandemic finally recedes - CNBC
Coronavirus has brought travel and tourism to a standstill, and may irrevocably change the industry. Here's how and where we might start traveling again as we settle into a new vacation normal.
The coronavirus has devastated economies around the world and disrupted life in ways that were unimaginable just a few months ago. The world will never be the same. But at some point, industries will start coming back online and people will start going out again. We asked travel industry experts for their thoughts on what will restore confidence for people to begin traveling once the Covid-19 pandemic finally recedes. In the latest installment of our series "The Next Normal," we look at where and how we'll actually travel once we're willing to hit the road again. *** A road trip to a national park or other attraction in a neighboring state. A week-long stay at a sanitized vacation rental property nearby. How does that sound? Your next outing might be booked through a travel advisor and insured, too. That's what a typical family vacation might look like in the U.S. once travel and tourism starts to pick up again post-pandemic, say industry experts. Just when that might happen is up in the air, yet it could be as soon as early fall or as late as next spring or beyond. The hypothetical trip incorporates several trends coming to the travel business going forward. These include traveler preferences for domestic destinations reachable by car and stays at private rental properties instead of crowded hotels and resorts. What seems sure is that any rebound in travel and tourism, brought to a screeching halt by the coronavirus pandemic, will start slowly and stay closer to home. A recent study from Longwoods International found that 82% of travelers polled had changed their travel plans for the next six months. More from Personal Finance:Cooking more under quarantine? How to trim your grocery billsHere are the world's best attractions and worst tourist trapsHow Americans plan to spend their stimulus checks "Tourism recovery typically begins locally," said Elizabeth Monahan, spokesperson for TripAdvisor.com. "Travelers tend to first venture out closer to home, and visit their local eateries, stay local for a weekend getaway or travel domestically before a robust demand for international travel returns." Omer Rabin, managing director, Americas, for Guesty, an Israeli firm that develops property management software for companies like Airbnb and HomeStay, agreed. "There will be a lot of demand for domestic travel," he said. "I think that's clear to everybody in the industry right now. "We see a much better recovery and occupancy for drive-to destinations," he added. "People say 'we don't know what's going to happen with flights, but we do know that we're going to be able to get in the car and drive for three hours and have our own place and stay there for two weeks.'" In fact, the Longwoods survey found that of those that had changed their travel plans for this year, nearly a quarter, or 22%, had switched to driving from flying . Aviation industry group Airlines for America says U.S. airlines have idled 3,000 aircraft, or half the nation's fleet, due to the downturn, while the number of passengers passing through TSA checkpoints at airports is down 93% over last year. "Our clients are a little hesitant to get on an airplane right now," said Jessica Griscavage, director of marketing at McCabe World Travel in McLean, Virginia. "We're already preparing for the drive market for the remainder of the year, and probably into 2021." For its part, online travel insurance comparison site InsureMyTrip is finding that the continental U.S. is indeed the top draw for future client travel but it's also tracking some interest in domestic destinations like Hawaii, as well as the Bahamas and Caribbean destinations like Jamaica. "When people get more comfortable, they'll continue to go farther and farther away from home, starting with domestic and then moving to international, long-term," said Cheryl Golden, director of e-commerce at the Warwick, Rhode Island-based firm. (To wit, Sandals Resorts reportedly will open most of its Sandals and Beaches properties across the Caribbean June 4, and those in the Bahamas July 1.) There is a small degree of interest in flying from die-hard bargain seekers. "We've heard from a number of travelers that the low airfares available along many routes are tempting," said TripAdvisor's Monahan, although she cautions those willing to book flights that "airlines continue to adjust their cancellation and change policies for travelers across the globe in response to Covid-19." Until the virus is under control and efficient systems are in place to restore confidence in travel, it's simply too soon to tell when people can expect to start booking again. "Every day and every week, it just seems like things are changing and it's really dynamic," said Golden. "It's hard for us to say right now when we think people will be ready to travel but travel will come back." Erika Richter, senior director of communications at the American Society of Travel Advisors, said a new normal is probably necessary before bookings will pick up again. "We're still in that wait-and-see mode, because until the virus is under control and efficient systems are in place to restore confidence in travel, it's simply too soon to tell when people can expect to start booking again." And when they do, things will be different, thinks Anne Scully, a certified travel counselor and president of McCabe World Travel. "Travel's going to come back [but] we'd need a crystal ball to say when," she said. "It will be changed, I think, at least for the next 12 months." In the meantime, Scully's colleague Griscavage said she seeing a "standstill" in the agency's bookings through the holiday season meaning little in new business but not many cancellations, either. "Those [trips] are still bought, they are not cancelled yet, though it's just too soon to tell," she said. "I'm personally not seeing a surge in [holiday] travel bookings just yet though I think that can change very quickly as states are starting to open up." There's been good news at Guesty, however, said Rabin. In the last two weeks of April, more reservations than cancellations came in. "The most interesting thing is that there are more future reservations for the holidays right now than we have seen in that point of time in April 2019 for the holiday season last year," said Rabin. "Which means there's a lot of optimism and people are planning ahead." Reservations for Thanksgiving, Christmas and New Year's stays are up 38%, 40% and 23%, respectively, compared to the same time in 2019, Guesty found. "This also means that a lot of people are unable to take summer vacations or don't feel comfortable making bookings and travel plans for June, July, August," said Rabin, so are planning for later in the year. New flexibility in vacation-rental cancellation policies is helping, too, he added. "Travel has changed," said Scully at McCabe World Travel. "It changed after 9/11, and it changed after the economy blew up in 2008-09." Yet travel advisors then showed clients it was still possible to travel despite any economic or geopolitical changes, and perhaps "better than ever," she said. Griscavage said she foresees a big surge in family and multi-generational travel once people are willing to book trips again. "They didn't get their spring breaks, they're unsure of their summer trips," she said. "Maybe you didn't get to go to Mom and Dad's 50th anniversary or Grandma's 80th birthday. "All of these families haven't been able to be together," she added. "I think we're going to see a lot of family and multi-gen travel but in a different way, a safer way." How so? Accommodations perceived as cleaner and more isolated will find greater favor. "The question on every traveler's mind will be 'what are resorts doing to make us feel safe?'" Griscavage said. "I think we're going to see a big increase [in bookings of] villas and private homes and less crowded experiences moving forward." Scully suggested that traditional hotel properties may pivot to operate more like private villas, selling entire floors staffed "not so much with a butler but a handler who could go down to pool, for example, and make sure the lounge chairs are separated." Hotel rooms may also sit empty for several days and be completely disinfected before a new guest can check in. "These are going be not only game-changers but maybe a healthier way for us moving forward," Scully mused. "You've probably seen ridiculous shows on TV where they ask 'Is that hotel bedspread really clean?' Well, I bet now that it's really going to be spotless." Rabin agreed that sanitization will be "a very big thing." Many of Guesty's vacation home hosts are installing automatic locks that can be opened via cellphone app, are arranging for contactless food deliveries to guest units and space out rental periods, "sometimes for days," to ensure complete unit disinfecting, he said. There's a definite move toward vacation homes over hotels, Rabin said. "People feel much more comfortable staying short-term rentals like vacation homes," he said. "Hotels have a lot of turnover of guests, a lot of volume, a lot of people at check-in and check-out and in the dining room." The trend is even influencing how hosts market their rental units. "If you search today for apartments on Airbnb, you will see that a lot of the hosts will put in the name of the property 'Sanitized, highly clean, Covid-friendly' a lot of things like that to basically signal to their customers, 'We are a safe location.'" It works: Those hosts are seeing more reservations, according to Guesty data. The firm is working to ensure all hosts can offer such contactless, cleaner stays to prospective guests, said Rabin. InsureMyTrip, for its part, is seeing a 6% increase in vacation-unit rentals over 2019, along with a decrease in hotel bookings, said Golden. "It's a trend that's just starting to happen, but I do expect we'll start to see more of this as people look to travel closer to home for vacation." If anyone booked without a travel advisor during this period, they learned they should have. Other areas of travel and tourism from pricing and flexibility to insurance and booking methods are also evolving: Flexibility: Once you've paid, you are now, in many cases, free to cancel flights, accommodations and other travel components almost up to the last minute. "All the vendors really need the revenue stream, and so they offer this kind of flexibility at the moment," said Rabin. "The biggest chance that they have to recoup a lot of the losses for a weak summer is in a strong winter," so they're doing what they can to encourage bookings. Scully at McCabe World Travel would like to see another change when it comes to prepayment. "When we give a hotel, a tour operator or a cruise line money, those funds for that client should be held in a kind of escrow," she said. "They don't get to use it for marketing or for something else, so when something happens, they have to give clients back money that they paid in good faith." Pricing: Costs for travel autumn-onward have not dropped much. "Most of the vendors really understand that their path to profitability and recovery in 2020 is trying to protect their prices into winter season," said Rabin. "And so we see that most of them, for very obvious reasons, want to actually sacrifice the flexibility and not sacrifice the margin." Duration: Rabin said short-term accommodations rentals, once typically between 3.5 and 5 days, are trending longer in duration, with an average 8.5- to 9-day stay. The trend stared a few weeks back when urbanites were booking month-long escapes from city centers that pushed the length of the average stay up "but now we see it as something that's really a sustainable trend, for the last month or so." Types of trip: Apart from close to home road trips, people seem willing to consider booking vacations that normally require a year or more of advanced planning, said ASTA's Richter. "While some travelers are booking for 2021, it really is going to depend on the traveler and where they're going," she said. African safaris, for example, require a year or more in advance of booking, especially for popular times of the year. "Those are the types of planning discussions that travel advisors are having with some of their clients," she said. "You also have to think about all of the destination weddings and honeymoons that were put on hold and need to be readjusted, and then maybe readjusted again, and again." Travel insurance: Travel insurance, once an afterthought shunned by travelers looking for a bargain, may seen an uptick. "Now more people than ever are aware of travel insurance and how it could possibly help them," said Golden at InsureMyTrip.com. "Every time we've had an event like this in the past, there's been an uptick in travel insurance that sticks." Before 9/11, about 7% of people bought travel insurance; after a surge in post-attack sales, the figure reached around 15%, she said. "We expect there will be a similar rise after coronavirus," Golden said. "It's now spiked pretty dramatically." Twenty-five percent to 30% of travelers will buy travel insurance going forward, the firm estimates. Advisor Scully has sold a lot of travel insurance of late, especially the comprehensive kind. "We upgraded our clients on insurance to 'cancel for any reason,'" she said, noting she also offers clients medical evacuation services. "Whenever we're taking a client's money and they say, 'I'm not going to insure this,' the first thing I'll say is 'Are you comfortable losing $25,000 should you not be able to travel?'" Travel advisors: The rise of Internet booking engines and online travel agencies from the mid-90s hit the traditional travel agent industry hard. But the trouble many travelers have had getting self-booked plans refunded or rescheduled amid the pandemic may fuel a renaissance in the fortunes of agents, who've now rebranded themselves as "travel advisors." "If anyone booked without a travel advisor during this period, they learned they should have," said Scully at McCabe World Travel. "Trying to even call the airlines because the phones were just so jam-packed could take 16 hours, could take two to three days." It's not just consumers who are noticing. "Our partners, our hotel partners, our cruise partners, our airline partners, our partners on land, they all know moving ahead, how valuable that travel advisor will be to their future growth," said Scully. "The role of the travel advisor has evolved so much and we are not merely transactional agents anymore," said Richter at ASTA, whose thousands of members represent 80% of all travel sold in the U.S. through the travel advisor distribution channel. "We believe strongly that the future will have a heavy emphasis on the travel advisor facilitating the future of travel." She favorably compared the roles advisors can play in both travel and personal finance. "During this crisis, folks who are concerned about their 401(k), savings and investments, they're talking to their financial advisors, [who] are helping them reassess and make short-term and long-term adjustments to their financial portfolio," said Richter. "The same is true for savvy travelers. "They are working with their travel advisor to adjust their short-term and long-term travel goals, and it's a relationship that is ongoing."
Barack Obama couldn't afford a ticket to see Michael Jordan play with the Bulls in the '80s: 'I was pretty broke' - CNBC
When Michael Jordan started playing for the Bulls in 1984, a young, cash-strapped Barack Obama, who had recently moved to Chicago, couldn't afford to go watch him play. "When Michael first came to town, I didn't have the money to buy tickets for a Bulls game,…
After being selected No. 3 overall by Chicago in the 1984 NBA draft, Michael Jordan made an immediate impact on the Bulls organization. Just weeks into his professional career, "everybody on that Bull team ... knew he was the best player we had," said the team's former general manager Rod Thorn on an episode of "The Last Dance," a 10-part documentary about Jordan's rise and the dynasty he built in Chicago. The series was originally supposed to be released during the NBA finals in June, but with sports leagues and events suspended amid the coronavirus pandemic, ESPN, which co-produced "The Last Dance" with Netflix, moved up the release date to offer viewers an escape. Since April 19, ESPN has been releasing two episodes every Sunday night. The first episode details Jordan's early basketball career, at UNC and then with the Bulls starting in 1984. His rookie year, everyone in Chicago wanted to see the young phenom play the stadium went from being two-thirds empty to selling out every game, the documentary reports. One Chicago resident couldn't afford a ticket at the time: a young Barack Obama, who had recently graduated from Columbia University and moved to Chicago to work with the Developing Communities Project. "When Michael first came to town, I didn't have the money to buy tickets for a Bulls game, even the discount ones back in the day," recalled the former president. "I was pretty broke." In the early '80s, Obama had undergraduate loans from Columbia University, where he earned a degree in political science in 1983. He would later take out more loans to attend Harvard Law School from 1988-1991. Combined, he and his wife Michelle, who also attended Harvard Law, owed a total of $120,000 in student debt. "We didn't come from wealthy families," Obama told an audience in North Carolina in 2012. "When we graduated from college and law school, we had a mountain of debt. When we married, we got poor together." For years, Obama lived frugally as a cash-strapped student. He drove a beat-up, yellow Datsun with a "rusted-out, four-inch hole" in the car's floor, the former First Lady describes in her book "Becoming." Through it, she "could see the pavement rushing beneath us." The couple didn't finish paying off their debt until they were in their 40s. Obama, who became president when he was 47, is now worth millions, thanks to book and Netflix deals. Plus, after leaving office, ex-presidents remain on the government payroll and earn an annual pension of about $200,000 (in office, the president earns $400,000 a year). It's safe to say that the basketball fan could afford to be a Bulls season ticket-holder today if he wanted to. Of course, he wouldn't get to see the greatest of all time in action it's been nearly two decades since Jordan played his last game at the United Center. Episodes seven and eight of "The Last Dance" will premiere on Sunday, May 10 at 9 p.m. ET. It will air on ESPN in the U.S. and on Netflix outside of the US. Don't miss: NBA legend Scottie Pippen started out as the equipment manager in college before earning a spot on the team Check out: The best credit cards of 2020 could earn you over $1,000 in 5 years
Gilead CEO says remdesivir available to coronavirus patients this week: 'We've donated the entire supply' - CNBC
Gilead Sciences coronavirus fighting drug will be in the hands of patients as early as this week, the biotechnology company's CEO said Sunday.
Gilead Sciences' coronavirus fighting drug will be in the hands of doctors and patients as early as this week, the biotechnology company's CEO said Sunday. "We intend to get [remdesivir] to patients in the early part of this next week, beginning to work with the government which will determine which cities are most vulnerable and where the patients are that need this medicine," Gilead Sciences chairman and CEO Daniel O'Day told CBS' "Face of the Nation." "We've donated the entire supply that we have within our supply chain and we did that because we acknowledge and recognize the human suffering, the human need here, and want to make sure nothing gets in the way of this getting to patients," O'Day added. The deadly coronavirus has caused unprecedented societal and financial disruption in the U.S. and worldwide. Gilead's antiviral drug remdesivir has been a source of hope for the more than 1.1 millions Americans diagnosed with the fast-spreading illness as well as market participants hoping for a swift reopening of the economy. Gilead released preliminary results from its clinical trial on its antiviral drug remdesivir last week, showing at least 50% of the COVID-19 patients treated with a five-day dosage of the drug improved. The National Institute of Allergy and Infectious Diseases then released a study that showed Covid-19 patients who took remdesivir usually recovered after 11 days, four days faster than those who didn't take the drug. Following these successful trials, the Food and Drug Administration granted emergency use authorization for the drug to treat Covid-19. That means the drug has not undergone the same review as FDA-approved treatments, but doctors will be allowed to administer remdesivir to patients hospitalized with the disease. All of the drug supply will go to the government to allocate around the nation. "What we will do is provide that donation to the U.S. government and they will determine based upon things like ICU beds, where the course of the epidemic is in the United States they will begin shipping tens of thousands of treatment courses out early this week and be adjusting that as the epidemic shifts and evolves in different parts, in different cities in the United States," O'Day added. Gilead expects to produce more than 140,000 rounds of its 10-day treatment regimen by the end of May and anticipates it can make 1 million rounds by the end of this year. Shares of Gilead Sciences are up nearly 25% this year.
Moderna could begin manufacturing unproven coronavirus vaccine in July, CEO says - CNBC
The race to develop a vaccine is intensely competitive and investors are watching closely for signs of progress on treatments and vaccines.
Moderna hopes to begin manufacturing its as-yet unapproved coronavirus vaccine "as early as July," CEO Stephane Bancel told CNBC on Friday. The biotech company announced earlier Friday a 10-year partnership with Swiss drugmaker Lonza to accelerate production of the experimental vaccine. "We are hoping with Lonza to start making product for the corona vaccine as early as July," Bancel said on "Squawk Box." "Our team is ready to start dosing as soon as we get the green light." Moderna is pushing forward with manufacturing the potential vaccine, called mRNA-1273, in hopes that it proves safe for humans and effective against the coronavirus. However, the vaccine candidate remains in a phase 1 trial. The potential vaccine, which was developed by researchers at Moderna and the National Institutes of Health, became the first candidate to enter a phase 1 human trial in March and full results have not been released. Bancel added that data from the phase 1 trial "looks positive" with regard to safety. Earlier this week, Moderna announced it has submitted an application to the Food and Drug Administration to move the candidate to a phase 2 trial. The company says a phase 3 trial could begin as soon as fall of 2020. The NIH said their researchers were able to quickly produce a candidate with Moderna because the two organizations were already partnered, researching "related coronaviruses." Moderna, as well as other companies in the race to develop a vaccine for the coronavirus, is ramping up manufacturing ahead of approval so that it can rapidly distribute doses if their candidate proves effective against the virus. Bancel said his team on their own could manufacture about 100 million doses per year, but with the Lonza partnership, they hope to produce about 1 billion doses per year. "If you can only make a few million vials, it's not going to be really helping the global public health issue we have," he said. "Our goal is to make the vaccine available around the world." Last month, Moderna announced it received a $483 million contract from the Biomedical Advanced Research and Development Authority to accelerate the development of its vaccine candidate. Shares of Moderna rose more than 15% on the news. The company's shares were up more than 6% in early trading Friday. The vaccine uses synthetic messenger RNA to inoculate against the virus. Such treatments help the body immunize against a virus and can potentially be developed and manufactured more quickly than traditional vaccines. The race to develop a vaccine is intensely competitive and investors are watching closely for signs of progress on treatments and vaccines. Bancel said it will take more than one company to beat back the coronavirus, which according to data from Johns Hopkins University has infected more than 3.2 million people around the world and killed at least 230,000. "No one company can help the entire planet," he said.
NBA team execs, agents are calling on the league to cancel the rest of the season - CNBC
The NBA says it is still exploring ways to safely resume play for the season.
Even though the current NBA season is still technically suspended due to the coronavirus pandemic, its return this year seems less and less likely with each passing day. Team executives are starting to feel the pressure, frustrated with the lack of information from the league and pushing for an outright cancellation of the season so everyone can focus on safely resuming play next season. NBA team executives and players' agents spoke to CNBC in recent weeks about the challenges in resuming play. They said team owners are concerned with liability issues and are conflicted about whether or not to give up on the current season. The individuals spoke on condition of anonymity as they aren't authorized to discuss league matters publicly. Billions of dollars are on the line if the NBA can't rescue its season. NBA teams split the roughly $2 billion per year in national TV money the NBA receives from ESPN and Turner Sports. But clubs also gain revenue from local media deals with Regional Sports Networks. For more coronavirus developments see this. If the NBA cancels the remainder of the regular season, leaving open the possibility of only a postseason, it hurts nonplayoff teams who want to collect the remainder of local TV dollars. But nonplayoff team owners would also benefit as they don't incur the costs associated with resuming under postseason formats. The NBA's revenue sharing system among teams is confusing even to executives. Despite their massive media rights deal, teams are still reporting losses. One of the individuals said a Western Conference team has already lost roughly $50 million this season and doesn't have much incentive to restart the season anymore. And team owners already mitigated their biggest cost: player contracts. The league and National Basketball Players Association agreed to withhold 25% of players' checks starting next month. With that settled, team executives say many owners have no desire to return, saying the league's other sources of revenue has temporarily dried up. "What [owners] are saying is, 'If we return, where is the revenue that is going to justify the additional cost of returning?" one team executive said. "They are looking at the cost side versus the revenue side. What revenue comes in now?" Also, NBA clubs have many limited partners who are taking losses. "These owners aren't just sitting there with an ATM that's printing more than ever before," said Andy Dolich, the Memphis Grizzlies former president of business operations. "Some of them are looking at vast losses outside of just their basketball team." Though the NBA was first to pause operations due to Covid-19 last month, team executives also criticized the league office over a lack of information, like the recent plan to allow players to return to practice sites. Despite all the signals that it will be nearly impossible to rescue the rest of the NBA season, a league spokesperson told CNBC the league is still working on plans to resume. "It is the responsibility of the league office to explore all options for a return to play this season," the spokesperson told CNBC in a statement. "We owe that to our fans, teams, players, partners and all who love the game. While our top priority remains everyone's health and well-being, we continue to evaluate all options to finish this season. At the same time, we are intensely focused on addressing the potential impact of Covid-19 on the 2020-21 season." With so much uncertainty still surrounding coronavirus, agents are also privately calling on NBA Commissioner Adam Silver to cancel the remainder of the season. "I'm surprised because [Silver] always errs on the side of caution and doing what's right," said one agent, who added he felt Silver would have decided to cancel by now. Player representatives have also questioned why the league continues to drag on what appears to be an inevitable cancellation of the season. With so many concerns the league must address, including how to deal with trigger dates in coaches and player contracts, few see the upside. And should the NBA get its own house in order, challenges from the government await. In an interview with The New York Times this week, Dr. Anthony Fauci, the White House's health advisor on the coronavirus pandemic, said he doubts most sports will be able to return this year. "If you can't guarantee safety, then unfortunately you're going to have to bite the bullet and say, 'We may have to go without this sport for this season,'" Fauci said. Team executives said the league office hasn't considered more ideas about next season, especially since some local and state governments are threatening to ban live events until 2021. Some large companies such as Facebook and Microsoft have canceled plans to hold large, in-person events until as late as July 2021. In his post-board of governors media call on April 17, Silver said owners want to save the year, including regular-season games, "almost" viewing the challenge as a "civic obligation." But it's the NBA that also wants to recover some of what Silver said is now "zero revenue." Sports marketing executive Marty Conway estimated the NBA would lose over $1 billion if it cancels the rest of the season, factoring in media, corporate sponsorship and game-day revenues. "You'd be looking a billion dollar hole that would then play into next year's salary cap," said Conway, a professor at Georgetown University's McDonough School of Business. The NBA is signaling that it doesn't want to take the financial hit that comes with canceling the season. According to one of the individuals, another proposal is to restart games in July. The model points to the defunct Orlando Summer League, where fans weren't allowed, as a potential way to honor any social distancing guidelines. But it only adds to the many other models tossed around from a tournament in Las Vegas, to playing in protected bubble environments, to considering Florida, a state that considered the WWE an "essential" business. Longtime sports television executive Neal Pilson questioned the perception suspended leagues like the NBA are sending by still considering plans to resume. "You're saying, 'You guys go ahead and risk getting the disease, as long as we have TV money,'" he said, echoing that restarting involves has too many "risk factors." Pilson also predicted a summer with limited sports due to Covid-19. "Are we going to know enough on May 1 or June 1, to schedule live sports on July 1 or Aug. 1?" Pilson said. "I doubt we will know enough in the next 30 to 60 days to project live sports." If the NBA does cancel, it could have an impact on how the National Football League moves forward. NFL Commissioner Roger Goodell said in a memo to employees Wednesday that the league plans to cut pay and furlough workers due to the financial strain caused by the pandemic. "How can we start if [the NBA] didn't get to finish their sport?" an NFL league insider told CNBC. "The NBA finishing their season would be a positive for all sports getting back to work."
The hunt for oil storage space is on — here's how it works and why it matters - CNBC
An unprecedented collapse in U.S. oil prices has prompted market participants to reflect on the difficulty and costs of storing crude.
A truck drives past an oil storage facility next to the Phillip 66 oil refinery on April 21, 2020 in Houston, Texas. An unprecedented collapse in U.S. oil prices has prompted energy market participants to reflect on the difficulty and costs of storing crude. At a time when the coronavirus crisis continues to crush global demand, the world is awash with oil and quickly running out of places to put it. It resulted in the May contract for U.S. West Texas Intermediate futures tumbling into negative territory for the first time ever on Monday. Remarkably, this meant traders were effectively having to pay to get oil taken off their hands. The May WTI contract, which expired on Tuesday, settled at $10.01 a barrel. It had closed at a discount of $37.63 in the previous session. Wild swings in the May contract for WTI this week were thought to have been exaggerated by its imminent expiration, leaving many concerned the situation could repeat itself when the June contract expires next month. The contract for June delivery of WTI traded at $10.85 on Wednesday morning, down over 6%. It had plummeted more than 40% in the previous session. Meanwhile, international benchmark Brent crude stood at $17.01, nearly 12% lower. Why is oil storage so important? A global public health crisis has meant countries around the world have effectively had to shut down, with many governments imposing restrictive measures on the daily lives of billions of people in an effort to slow the spread of the coronavirus. It has created an extreme demand shock in energy markets, with storage space both onshore and offshore quickly filling up. In the U.S., the situation is thought to be particularly acute, with storage facilities at the country's main delivery point in Cushing, Oklahoma expected to be full within weeks. The Cushing storage hub was reported to be 77% full as of April 17, according to analysts at Goldman Sachs, with the last two-week builds "pointing to a stock-out by the first week of May." In short, U.S. oil futures posted their largest one-day sell-off ever on Monday as a result of an oversupplied market testing storage capacity, analysts at Goldman said. Will companies consider shutting in wells? President Donald Trump said on Monday that he would consider the prospect of preventing incoming Saudi Arabian crude oil shipments in an attempt to ease pressure on U.S. shale producers. Trump also reaffirmed his intention to top up the country's emergency fuel storage of petroleum. With many oil tanks filling up, the U.S. Department of Energy is currently in the process of leasing some of the 77 million barrels of available oil space in the Strategic Petroleum Reserve, Reuters reported on Tuesday. A pipeline at the Federal Strategic Petroleum Reserve in Beaumont, Texas. The Trump administration had initially wanted to purchase the crude oil, but Congress has not yet approved the funding. In any case, if storage tanks are full and it is not possible to store crude on floating tankers at sea, analysts expect producers to start shutting in wells a process that can physically damage reservoirs and threatens the prospect of reviving future output. Could WTI at Cushing cease to exist? Such unprecedented price action has raised some "serious questions," Tamas Varga, senior analyst at PVM Oil Associates, said in a research note published Tuesday. Among them, Varga pondered: Does the price point to a broken U.S. physical market? Will WTI at Cushing cease to exist as the main price market? And, was the carnage a one-off or is there a chance that the June contract will overtake the role of the expiring front month? "One can only guess the answers," he conceded. Brent is priced on an island in the North Sea roughly 500 meters from the water, where tanker storage is accessible. In contrast, WTI is landlocked and 500 miles from water. "This illustrates an important point," analysts at Goldman Sachs said earlier this month. They argued waterborne crudes were likely to be "better positioned" than landlocked price grades like crude oils in the U.S., Canada and Russia because they had comparatively easy access to tanker storage. Oil traders are scrambling to find alternative storage options for crude both on land and at sea, Reuters reported on Friday, citing unnamed shipping sources, with an estimated record of 160 million barrels of oil now held in floating storage on ships. Nordic American Tanker, Scorpio Tankers and Teekay Tankers all closed in positive territory on Tuesday.
Meltdown in oil continues as Brent plunges 14% - CNBC
Oil prices continued to plummet on Wednesday as concerns over limp demand and limited remaining storage capacity lingered.
Oil prices continued to plummet Wednesday as concerns over limp demand and limited remaining storage capacity lingered. In the afternoon of Asian trading hours, international benchmark Brent crude futures 14% to $16.55 per barrel. Meanwhile, the June contract for West Texas Intermediate shed all of its earlier gains as it fell 6% to $10.82 per barrel. The July contract for WTI dipped and last traded below $19 per barrel. Per Magnus Nysveen, senior partner and head of analysis at Rystad Energy, warned that the situation in the oil markets is "going to be worse." "The world is running out of place to store the oil," Nysveen told CNBC's "Street Signs Asia" on Wednesday, adding that storage acts as "a kind of buffer." "When the supply and demand balance is positive or negative, then you can build or draw from storage," he said. "But when the storage gets full, then there is no buffer for this very strong imbalance that we're seeing." Pictet Wealth Management's Jean-Pierre Durante agreed with Nysveen's assessment of the situation, commenting in a Wednesday note that the "world is overflowing in oil" despite a recent decision by the Organization of the Petroleum Exporting Countries and its allies known collectively as OPEC+ to cut oil supply. "World storage capacity will rapidly reach saturation point," said Durante, who is head of applied research at Pictet Wealth Management. Global demand for oil has fallen dramatically, with major economies worldwide effectively frozen as a result of coronavirus-induced lockdowns imposed by authorities scrambling to contain the spread of the disease. Wednesday's moves in oil followed recent sharp declines in the sector. The May contract for WTI, which expired Tuesday, plunged below zero for the first in history before clawing its way back into positive territory. The June WTI contract plunged more than 40% on Tuesday while international benchmark Brent dropped from levels above $24 per barrel.
Netflix says these three effects of the coronavirus crisis are impacting its business - CNBC
Netflix has seen its stock outperform in the past quarter, as the Covid-19 crisis keeps people home and in need of entertainment.
Netflix Co-founder, Chairman & CEO Reed Hastings attends a Q&A during a Transatlantic Forum in Lille, France. Netflix released its Q1 2020 earnings on Tuesday. In a letter to shareholders, the company said there are three ways the coronavirus crisis is impacting its business. "First, our membership growth has temporarily accelerated due to home confinement," Netflix said. "Second, our international revenue will be less than previously forecast due to the dollar rising sharply. Third, due to the production shutdown, some cash spending on content will be delayed, improving our free cash flow, and some title releases will be delayed, typically by a quarter." Social distancing increased subscriptions Netflix said it expects subscriptions and viewing numbers to spike as people stay at home, but that subscription growth will likely decline once social distancing mandates are eased. The company announced it added 15.77 million paid international subscribers, versus the 7.2 million Wall Street expected. It said it expects to add 7.5 million global subscribers in Q2, but "given the uncertainty on home confinement timing, this is mostly guesswork. "The actual Q2 numbers could end up well below or well above that depending on many factors including when people can go back to their social lives in various countries and how much people take a break from television after the lockdown," Netflix said. "Hopefully, progress against the virus will allow governments to lift the home confinement soon. As that happens, we expect viewing and growth to decline," the company said. A stronger U.S. dollar is impacting international pricing Netflix expects a stronger U.S. dollar, partly due to the pandemic, to have a drag on international revenue growth. The company pointed toward Brazil as an example, where its standard subscription plan used to cost $8.50 per month but is now $6.50 per month due to April 2020 foreign exchange rates. That decline in the average subscription price offsets its membership growth, Netflix said. Coronavirus paused production The Covid-19 pandemic has also caused Netflix to pause the majority of its production around the world due to government lockdowns and recommendations. Netflix said thwill only have a "modest" impact on its new releases in Q2, though the company can't anticipate when production will resume. "No one knows how long it will be until we can safely restart physical production in various countries, and, once we can, what international travel will be possible, and how negotiations for various resources (e.g., talent, stages, and post-production) will play out," Netflix said. Shares of the streaming platform jumped 10% before steadying around a 1% bump in after-hours trading. Subscribe to CNBC on YouTube.