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 Paramount Global is set to merge with Skydance after months of negotiations, marking a significant shift in the entertainment industry. The Redstone family will step down from controlling the renowned movie studio and media company.

On Sunday, Paramount’s special committee approved the merger, just days after Shari Redstone’s National Amusements, Paramount’s controlling shareholder, reached a preliminary agreement with Skydance. A previous attempt at the deal had stalled weeks earlier.

The new agreement involves the buying consortium, including RedBird Capital Partners and KKR, investing over $8 billion into Paramount and acquiring National Amusements. This deal values National Amusements at $2.4 billion, including $1.75 billion in equity.

“It’s a new Paramount, it’s not just a catchphrase,” said RedBird’s Jeff Shell, former NBCUniversal CEO, during a call with investors on Monday. “We think it’s going to be a new day for these combined assets.”

David Ellison, founder of Skydance and son of Oracle founder Larry Ellison, will lead the combined company as CEO, with Shell serving as president.

The merger, which is subject to regulatory approval, includes a 45-day “go-shop period” allowing Paramount’s special committee to seek other offers.

This merger would represent a major change for Paramount and Hollywood as a whole. The Redstone family has long controlled Paramount, known for films like “The Godfather,” “Top Gun,” and “Forrest Gump,” as well as CBS, MTV, and Nickelodeon.

The merger will position Ellison at the helm of a major studio, elevating him to a key player in Hollywood.

As of Monday premarket trading, Paramount’s shares were around $12 per share. The stock has been volatile over the past year due to a weak advertising market and declining cable TV customers. Paramount+ has yet to reach profitability.

Last year, Paramount began discussions with potential buyers, including Warner Bros. Discovery. Paramount faces industry challenges and a significant debt load of nearly $15 billion.

Skydance and Paramount have been negotiating a deal for months. Bob Bakish recently stepped down as CEO of Paramount, replaced by CBS CEO George Cheeks, Paramount Media Networks CEO Chris McCarthy, and Paramount Pictures CEO Brian Robbins.

Other interested bidders have emerged recently, including media mogul Barry Diller.

 Record summer air travel demand hasn’t translated to record U.S. airline profits, a disconnect airlines must address when they report quarterly results this month.

Despite some airlines forecasting record demand and revenue, higher labor and operational costs have impacted their bottom lines. To cope with slower demand growth and other challenges, some carriers have slowed or halted hiring compared to the post-pandemic hiring sprees.

Airlines are also dealing with delays in receiving new, more fuel-efficient aircraft from Airbus and Boeing, compounded by a Pratt & Whitney engine recall grounding dozens of jets.

U.S. airlines have increased capacity, flying about 6% more seats in July compared to July 2023, according to aviation data firm OAG. This expansion has kept airfare stable, but airline stocks have lagged behind the broader market. The NYSE Arca Airline Index, tracking 16 primarily U.S. airlines, is down nearly 19% this year, while the S&P 500 has risen over 16%.

The third quarter outlook for airlines remains to be determined. Raymond James analyst Savanthi Syth described it as “clear as mud,” citing potential weaker spending from coach-class travelers, the impact of the Paris Olympics on Europe bookings, and possible changes in corporate travel demand.

U.S. air travel in 2024 continues to surpass pre-pandemic levels and break records. Travelers are increasingly choosing trips in late spring and early summer, raising questions about late-summer demand.

Investors will gain more insight into the traditionally slower tail end of summer and the rest of the year when airlines report quarterly results, starting with Delta Air Lines on Thursday. Analysts consider Delta the strongest performer, largely due to its success in marketing premium seats and its lucrative deal with American Express.

In April, Delta, the most profitable U.S. airline, forecast quarterly adjusted earnings of $2.20 to $2.50 per share for the second quarter, down from $2.68 per share a year earlier. Delta, United Airlines, and Alaska Airlines are top picks for Wolfe Research analyst Scott Group, who noted they have less earnings risk and better free cash flow than other carriers. Delta and United shares are each up about 14% this year through July 5, while Alaska shares are down about 2%.

Airports are bustling this summer, with nearly 3 million people passing through U.S. airport checkpoints on June 23 alone, setting a record, according to the Transportation Security Administration. Airlines have expanded schedules domestically and internationally, reducing fares. U.S.-Europe capacity for July is up nearly 8% from a year ago, targeting leisure travelers.

Fare-tracking company Hopper reported that summer flights between the U.S. and Europe in coach were averaging $892, compared to $1,065 last summer. Airfare was down nearly 6% in May from a year earlier, according to the latest U.S. inflation data.

Despite the higher passenger numbers, some carriers have reported weaker-than-expected sales due to increased flights. American Airlines cut its second-quarter revenue and profit forecasts on May 28 and announced the departure of its chief commercial officer after a sales strategy misfired. CEO Robert Isom cited a weaker domestic pricing environment due to an imbalance in supply and demand.

Southwest Airlines also cut its second-quarter forecast in late June, citing shifting demand patterns. The Dallas-based airline, under pressure to revamp its profitable business model with no seat assignments and one class of service, is trying to fend off activist investor Elliott Investment Management, which called for leadership changes after disclosing a nearly $2 billion stake in June.

Some money-losing carriers, such as JetBlue Airways and Frontier Airlines, are making changes. JetBlue has been cutting unprofitable flights and ensuring its high-end Mint business cabin is on the right routes. Frontier and Spirit Airlines have eliminated change fees for standard coach tickets and introduced bundled fares including seat assignments and other add-ons.

Spirit, facing the fallout from a judge’s ruling blocking JetBlue from buying the airline and the impact of the Pratt engine grounding, warned 200 pilots of potential furloughs this year. At Spirit’s annual shareholder meeting in June, CEO Ted Christie dismissed suggestions of Chapter 11 bankruptcy protection, despite a more than $1 billion debt payment due in September 2025.

 As Pride month comes to a close, the corporate world’s approach this year has been noticeably more cautious.

June typically sees a surge in rainbow-themed merchandise, affirming ads, and social media posts from retailers and consumer brands, aligning with parades and events celebrating the LGBTQ+ community.

However, with the presidential election approaching, some companies have become quieter about diversity, equity, and inclusion efforts to avoid getting caught in culture wars or facing backlash from conservative customers, as seen last year with Target and Bud Light.

The most notable example emerged late Thursday: Tractor Supply, a retailer of animal feed, cowboy boots, and lawn supplies in rural areas, announced it would cease all spending on diversity and environmental causes, including sponsoring Pride festivals.

While this move is extreme, it highlights a trend of companies that previously committed to inclusion now treading carefully.

Tracking how many companies shared supportive messages, donated to LGBTQ+ causes, or sold rainbow-themed merchandise this June compared to previous years is challenging. According to Gravity Research, a reputational research firm based in Washington, D.C., 45% of Fortune 100 companies had at least one Pride-related social media post on LinkedIn or X by June 21 this year, down from 51% last June.

Gravity Research President Luke Hartig noted that the volatility of the presidential election and the candidates’ willingness to call out companies have made businesses more hesitant to publicly state their positions.

“There’s a sense of ‘let’s keep our heads down during the election,’” Hartig said.

Tim Bennett, cofounder of Tribury Productions, a marketing company specializing in reaching LGBTQ+ Americans, works with Fortune 500 companies, including recent projects with Procter & Gamble. He observed that more clients are taking a “wait-and-see” approach to marketing to LGBTQ+ consumers or spreading their efforts throughout the year instead of focusing on a single month.

“June this year has not been like the last five or six,” Bennett said.

This shift may not be detrimental to LGBTQ+ initiatives and charities. Sarah Kate Ellis, CEO of nonprofit advocacy group GLAAD, noted that more companies are engaging in meaningful year-round philanthropy and activism.

She also referenced a Gravity Research survey indicating that 78% of companies did not plan to change their Pride strategy this year. Thirteen percent were uncertain about changes, and 9% intended to revise their strategy. Gravity Research surveyed 45 corporate executives and Fortune 500 leaders across industries in April.

“The visibility of companies displaying flags and having products to celebrate our Pride and mark a significant month for our community is crucial, and I don’t want to devalue that,” Ellis said. “However, companies must also ensure that their internal policies and HR practices align with their outward marketing.”

Major companies continue to support LGBTQ+ causes financially. A GLAAD spokesperson stated that the organization has not seen a decline in donations or corporate support this Pride month, though a total tally is not yet available.

The business community also backed the opening of the Stonewall National Monument Visitor Center on Friday, commemorating the New York City bar that played a pivotal role in the LGBTQ+ rights movement. Supporters included Google, Amazon, JPMorgan Chase, and Booking.com. President Joe Biden also attended and made remarks at the event.

The Bud Light and Target effect

Consumer staples brands were most likely to adjust their Pride month strategy this year, possibly due to conservative boycotts of Target and Bud Light last year.

Target has carried a Pride collection for over a decade but removed some items and moved displays last year after employees faced threats. Boycotters targeted items for transgender shoppers and criticized separate Pride merchandise for kids.

This year, Target only carried Pride merchandise in stores accounting for 90% of total Pride sales in 2022 and 2023, and stopped selling any Pride apparel for kids. On the company’s website and in select stores, shoppers can still find a variety of Pride-themed items.

A Target spokesperson noted that the volume of negative feedback about the Pride collection, both externally and internally, is significantly lower this year than in 2023.

Target stated it is “committed to supporting the LGBTQIA+ community during Pride Month and year-round” and would participate in Pride events nationwide, support LGBTQ+ groups, and offer Pride products.

Anheuser-Busch InBev and other large beer brands have pulled back from public support of the LGBTQ+ community. Conservatives like singer Kid Rock and Florida Gov. Ron DeSantis called for a boycott of Bud Light after it sent personalized cans to transgender influencer Dylan Mulvaney. The marketing campaign coincided with the March Madness college basketball tournament.

Bud Light sales dropped by around 25%, and the brand lost its position as the best-selling beer in the U.S. to Constellation Brands’ Modelo. AB InBev distanced itself from Mulvaney and fired Bud Light’s vice president of marketing. In October, AB InBev CEO Michel Doukeris said the brand would focus its marketing on events like sports games and concerts and returned as the official UFC sponsor.

In recent months, some consumers have returned to Bud Light, with RBC Europe analysts estimating the brand’s U.S. volume is down only about 10%. Bud Light has not posted support for Pride month on its Instagram or X pages this year.

The boycott’s persistence can be attributed to several factors, according to Neil Reid, a geography professor at the University of Toledo who researches the beer industry. Studies show that consumer loyalty to top-selling beers is often more tied to the brand than the taste. Right-wing news outlets like Fox News devoted extensive coverage to the controversy, prolonging its impact and potentially reaching new consumers. Additionally, as Bud Light sales fell, retailers allocated more shelf space to its competitors.

“You can view this issue from a moral, ethical perspective or a pure business perspective, and those often don’t align,” Reid said.

Doubling down on diversity

While some companies have become more cautious about promoting diversity efforts, others have intensified their inclusion initiatives. E.l.f. Beauty, for example, launched a provocative advertising campaign in mid-May called “So Many Dicks,” highlighting that there are more men named Dick (including Richards, Richs, and Ricks) than entire groups of underrepresented people. The campaign featured video spots with athlete and social rights activist Billie Jean King.

E.l.f. Beauty is one of only four U.S. publicly traded companies with a board comprising two-thirds women and one-third ethnically diverse members.

E.l.f. Beauty CEO Tarang Amin stated that customers, especially its core Generation Z audience, want brands to stand up for causes they support. He noted that corporate leaders have become more hesitant to speak up than before.

“Our values are what really differentiate E.l.f. and what our community expects,” Amin said. “If you don’t stand up for what you believe and only act out of fear of objections, you miss the opportunity to make a real difference.”

Amin added that the company’s stock performance demonstrates that its diverse board and inclusive messaging benefit its bottom line. Shares of E.l.f. are up about 46% this year, outperforming the S&P 500’s approximately 15% gain.

Pride initiatives continue in the business world. Skittles sold a limited-edition Pride pack of its rainbow-colored candies, donating $1 for each pack sold to GLAAD, up to $100,000, and matching donations up to $25,000.

Macy’s highlighted LGBTQ+-owned, founded, and designed brands on the websites of Bloomingdale’s, Bluemercury, and its namesake brand in June. Over the past five years, Macy’s has raised more than $6.2 million for the Trevor Project, a nonprofit supporting suicide prevention for LGBTQ+ youth.

GLAAD’s Ellis expressed optimism about companies’ continued support, stating they “will be on the right side of history.” However, she emphasized the need to support the transgender community, as politicians propose bills restricting gender-affirming care and transgender rights.

Gravity Research’s Hartig noted that companies have shied away from including transgender people in marketing due to conservative targeting during political campaigns and last year’s Pride month.

Not all backlash against corporate diversity, equity, and inclusion efforts has gained the traction activists hoped for. The number of shareholder proposals opposing environmental, social, and governance (ESG) initiatives has surged, according to ISS-Corporate, a data and analytics provider. Anti-ESG proposals at Russell 3000 companies’ meetings from Jan. 1 to June 30 this year rose to 83, up from 55 in the same period in 2023 and 37 in 2022. Yet, voter support has decreased each year, with a median support rate of 1.5% in 2024, down from 1.7% in 2023 and 2.9% in 2022.

 China’s Factory Activity Continues Contraction for Second Month in June

Factory activity in China contracted for the second consecutive month in June, intensifying the challenges for the world’s second-largest economy ahead of next month’s crucial third plenum. The official manufacturing purchasing managers’ index (PMI) remained at 49.5 in June, unchanged from May, according to data from the National Bureau of Statistics (NBS) released on Sunday.

The new manufacturing export order subindex also stayed unchanged at 48.3 in June.

A PMI reading above 50 indicates expansion, while a reading below suggests contraction.

Subindexes for new orders, raw material inventory, and employment all stayed below 50, and the suppliers’ delivery times subindex fell to 49.5 from 50.1 in May.

The production subindex remained above 50 but dropped to 50.6 from 50.8, indicating slower manufacturing growth.

“Overall, China’s economy remains in expansion, but the foundation for sustained and improved recovery still needs consolidation,” said senior NBS statistician Zhao Qinghe.

The new orders subindex fell slightly to 49.5 from 49.6 in May. Zhao attributed the drop to “continued insufficient demand in the manufacturing market,” noting it as the main challenge for enterprises.

Meanwhile, the non-manufacturing PMI, which measures sentiment in the service and construction sectors, fell to 50.5 in June from 51.1 in May, marking the sixth straight month in expansion territory.

Within the non-manufacturing PMI, the construction sector business activity index dropped to 52.3 from 54.4 in May.

“The expansion of the construction sector has slowed due to persistent heavy rainfall in many southern regions affecting construction activities,” Zhao said.

This data comes two weeks before the highly anticipated third plenum, set for July 15-18. Top Communist Party officials will gather in Beijing for this session, traditionally setting the major economic direction for the next five to ten years.

Despite exceeding expectations with 5.3% year-on-year growth in the first quarter, China’s economic recovery remains unstable, facing hurdles like a downturn in the property sector, mounting local government debt, and declining foreign investment.

The third plenum is expected to endorse a wide-ranging communique, deepen reforms, and implement substantial measures to signal markets and restore investor confidence in building a “high-level socialist market economy” by 2035.

Boeing announced on Monday that it has agreed to purchase Spirit AeroSystems, a key supplier, marking the end of nearly two decades of outsourcing major components for its commercial planes, such as the 737 Max fuselage and parts for the 767, 777, and 787 models.

By acquiring Spirit, Boeing aims to address recent quality issues that have plagued the supplier. While Boeing already holds significant sway over Spirit, outright ownership will allow for better monitoring and adjustments in production practices. This move follows Boeing’s internal efforts to enhance quality after an incident in January where a panel detached from one of its planes mid-flight.

“Reintegrating Spirit will allow us to fully align our production and safety systems with our workforce,” said Boeing CEO Dave Calhoun in a statement.

READ ALSO: China’s Factory Activity Contracts for Second Consecutive Month

The deal, anticipated by many, is valued at $4.7 billion in stock, or $8.3 billion including Spirit’s debt. Completion of the acquisition is subject to regulatory and shareholder approval. Additionally, Boeing will divest portions of Spirit to its European competitor, Airbus, as part of the agreement. The acquisition is expected to close by mid-next year.

This purchase signals a strategic shift for Boeing, which had increased its reliance on independent suppliers in the 2000s to reduce costs and boost profits. Spirit AeroSystems was established in 2005 during this outsourcing phase when Boeing sold off a division in Wichita, Kansas, and operations in Oklahoma.

Spirit, besides its work for Boeing, also supplies components to other aerospace companies like Airbus, Bombardier, Lockheed Martin, Northrop Grumman, and Rolls-Royce. Last year, Boeing accounted for 64 percent of Spirit’s net revenue, while Airbus contributed 19 percent. Boeing’s offer to buy Spirit was at $37.25 per share, a 30 percent premium over Spirit’s stock price at the end of February when their talks were announced.

READ ALSO: Companies Quiet Down During Pride, but LGBTQ+ Causes Still See Financial

Spirit’s quality issues led to a leadership change last fall, appointing Patrick Shanahan, a former Boeing executive and senior Defense Department official, as CEO. Shanahan, known for his ability to turn around troubled programs at Boeing, is now a leading candidate to succeed Calhoun, who plans to step down by the end of this year.

However, Boeing has its own quality challenges. The company has faced intense scrutiny since January 5th, when a panel on a 737 Max 9 detached during an Alaska Airlines flight shortly after takeoff. This panel, a door plug, covers an unnecessary emergency exit gap.

The Spirit agreement news came just hours after a report that federal officials planned to offer Boeing a plea deal in a fraud case related to two fatal crashes over five years ago that killed 346 people.

While no serious injuries occurred in the January incident, the consequences could have been severe if the panel had blown out at a higher altitude with passengers moving around. The National Transportation Safety Board (NTSB) indicated that the plane appeared to have left Boeing’s factory without the bolts securing the plug, and Boeing has been unable to find documentation of the work. The plug had been removed for Spirit workers to perform nearby repairs.

In response, Boeing has implemented several changes recently, expanding training, simplifying plans and processes, and increasing inspections at its 737 factory in Renton, Washington, and at Spirit. Since March, Boeing has also stopped accepting 737 fuselages from Spirit that do not fully meet its standards, previously tolerating some flaws to maintain production flow.

These changes have led to significant improvements, according to Elizabeth Lund, a top Boeing quality executive. She reported fewer major defects needing correction by Boeing, allowing for faster assembly of the Max once fuselages arrive in Renton.

Boeing also aims to reduce out-of-sequence manufacturing tasks, known as traveled work. While some traveled work is necessary, excessive amounts can disrupt the intricate process of airplane manufacturing, potentially causing defects and poor workmanship.

During a briefing with reporters, Lund explained how the plane involved in the January incident left the plant without the door plug fully secured. After the plug was removed for repairs, a crew prepared the plane to be moved outside, reinstalling the plug without its bolts, which was not that team’s responsibility.

Lund’s disclosure of new information prompted a sharp rebuke from the NTSB for violating rules about discussing an ongoing investigation. Boeing apologized to the safety board, acknowledging that it “overstepped the NTSB’s role as the source of investigative information.”

A strike by plane mechanics has forced WestJet, Canada’s second-largest airline, to cancel hundreds more flights on Sunday, disrupting the travel plans of approximately 110,000 passengers during the Canada Day long weekend. The airline has called for intervention from the federal government.

Around 680 mechanics, essential for daily inspections and repairs, walked off the job on Friday evening despite a directive for binding arbitration from the labor minister.

As the systems outage at software provider CDK Global enters its second week, car dealerships are facing millions of dollars in losses, according to a new estimate.

Automotive industry workers across the U.S. told CNN that the software blackout, which CDK Global attributed to a cyberattack, has made it difficult for dealers to track customer interactions, orders, and sales, impacting their ability to earn a living.

“This is going to affect payroll here,” said Bernard Irvin, a salesperson at a Ford dealership in Greenville, South Carolina. “Why wouldn’t I receive my normal pay? I don’t really understand what this is all about.”

The workers’ concerns highlight how a cyberattack on crucial systems like record-keeping and scheduling software can cripple an entire industry.

According to an estimate by Anderson Economic Group, CDK’s system collapse could result in approximately $944 million in direct losses for affected car dealers if the outage lasts a full three weeks.

Piecemeal Progress

The outage began last Wednesday after two cyber incidents disrupted CDK’s systems, which provide software to nearly 15,000 car dealerships across North America.

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In a statement on Friday, the company said it was making progress in bringing some dealerships back online. Previously, the company indicated the issue might not be fully resolved until July.

“We have successfully brought two small groups of dealers and one large publicly traded dealer group live on the Dealer Management System (DMS). We are also actively working to bring live additional applications – including our Customer Relationship Management (CRM) and Service solutions – and our Customer Care channels,” according to a CDK spokesperson. “We understand and share the urgency for our customers to get back to business as usual, and we will continue providing updates as more information is available.”

READ ALSO: How Far Can Nvidia Stock Rise?

Dozens of automotive retail workers have expressed concern about how the outage affected their livelihoods.

“I work at a major body shop, and it has really hurt us,” one worker wrote to CNN about the outage. “I don’t know how we’re going to get paid.”

**’It’s Going to Affect Payroll’**

At 71, Norm Phillips has worked as a car parts delivery driver at both a Mercedes-Benz dealership and a Honda dealership in New Jersey for over 21 years. Since CDK’s malfunction, he hadn’t been able to work at all, as the dealerships were unable to see which parts needed to be delivered.

“When I asked my boss if we were still going to be paid, he didn’t answer the question,” Phillips told CNN on Thursday. “I’ve been home for a week looking for another job.”

Even if CDK resolves the issue, Phillips fears the possibility of another cyberattack.

“I feel like the writing is on the wall. If hackers can get into a system and take my job away, I feel like it’s probably not the right job to do right now,” he said. “There’s no security.”

Phillips wasn’t alone in expressing his frustration.

“15,000 dealerships is an awful lot to have control over when you do the math,” Irvin said of CDK. “It is ridiculous.”

Irvin realized something was amiss with the CDK software he relied on to assist prospective clients when a couple interested in purchasing a new Ford Bronco Sport visited his dealership early last week.

“I couldn’t do anything I normally can do,” Irvin said. “I was at a complete standstill and was only able to do really basic things.”

Without CDK’s record-keeping system, Irvin believes his dealership cannot track accurate commission payments.

“You have to make sales,” said Irvin. “Otherwise, you go home and you don’t eat.”

Even without access to the software, the business has continued, albeit slowly.

In the end, Irvin said it took a week to get the couple who bought their Ford Bronco Sport the bill of sale, which proves ownership of their new car. All of the documents had to be written out by hand.

After more than a week at home, Phillips’ boss texted him to return to work on Friday. They planned to track some parts deliveries and check collections manually.

“I’m surprised they didn’t come up with this method sooner!” Phillips wrote in an email. “It will be a new adventure.”

 On Friday, Nike (NYSE:NKE) faced a challenging day as its shares plummeted. The company’s iconic swoosh might as well have been replaced with an “ooof” as the stock experienced its largest-ever one-day drop, falling 20% after disappointing fiscal fourth-quarter (May quarter) results.

While the revenue and profit figures were mixed, the main disappointment came from the company’s outlook. Macro headwinds and ongoing weakness in China led to a reduced sales forecast for FY25. The sportswear giant now expects a high-single-digit revenue decline for the first half of fiscal 2025, compared to the previously anticipated low-single-digit drop. Wall Street had predicted a 2.3% decline. Additionally, Nike’s guidance for the first quarter of fiscal 2025 (ending in August) forecasts a revenue decline of around 10%, significantly below analysts’ expectations of a 2.8% decrease.

Not long ago, Oppenheimer’s Brian Nagel, a top-ranked analyst on Wall Street, upgraded his rating on NKE. He cited a “historically discounted share valuation,” pessimistic investor sentiment, and the intermediate to long-term prospects for a fundamental recovery, based on management’s substantial “strategic repositioning efforts,” as reasons for his optimism.

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Has the latest readout changed the 5-star analyst’s view? Not really. While Nagel concedes the results and updated FY25 guidance proved “even weaker than our downbeat and below Street forecasts,” he still sees the readout and commentary as “likely a ‘last bad’ quarter and ‘healthy clearing event for NKE.’”

“NKE is working to aggressively reposition the company’s global enterprise amid an increasingly soft demand backdrop in the US and in markets across the globe,” Nagel continued. “We continue to very much expect NKE efforts to help fuel an even stronger recovery at the company, as cyclical pressures ease.”

All told, Nagel rates Nike shares as an Outperform (i.e., Buy), with a $120 price target, suggesting the shares will rebound 59% over the coming year.

Most of Nagel’s colleagues are almost evenly split between bulls and skeptics. With 13 additional Buy recommendations, 15 Holds, and 2 Sells, the stock has a Moderate Buy consensus rating. At $96, the average price target suggests one-year returns of ~27%.