In short
The episode is a “Merger Monday” market roundup plus tech and consumer-business updates. Topic 1: Keurig Dr Pepper’s planned acquisition of J.D. Peet’s owner (Peet’s Coffee) for 15.7 billion euros, framed as a two-step deal: combine the U.S. Keurig coffee/K-Cup business with Peet’s U.S. operations, then split Keurig Dr Pepper’s coffee and beverage units into two independent U.S.-listed companies after closing. Ken Shea (Bloomberg Intelligence Senior Consumer Analyst) says Keurig coffee has lagged due to higher green coffee costs, ~50% Brazil coffee-bean tariffs, and slower at-home pod demand. He cites coffee’s Brazil sourcing, poor crops, and sellers holding back ahead of tariffs as drivers of rising coffee prices. Topic 2: Puma sale speculation—Poonam Goyal (Bloomberg Intelligence Senior U.S. Retail Analyst) says Puma faces pressure from Nike’s wholesale return, weak mainstream visibility, and CEO loss; she notes Puma’s niche strengths (cricket, Ferrari racing) and that the “Puma family” owns ~29%. Topic 3: Nexstar’s $6.2B cash bid for Tegna—Jennifer Rhee (Bloomberg Intelligence Senior Litigation Analyst) argues FCC rules are likely to clear (39% household cap and “big four” ownership limits vacated), with DOJ antitrust review still possible.
Notable examples
Ghost Energy purchase by Keurig; airline AI pricing (Delta to Virgin Atlantic) and Apple iPhone “Slim/17” and Gemini AI partnerships are also discussed.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOKeurig Dr Pepper's Strategic Acquisition
0:30 to 1:24
Analyzing Keurig Dr Pepper's acquisition of J.D.E. Peets and its implications.
“When you're running a business, the best days are the ones where priorities stay on track.”
Keurig Dr Pepper's Strategic Acquisition
2:11 to 3:04
Analyzing Keurig Dr Pepper's acquisition of J.D.E. Peets and its implications.
“Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.”
Challenges in the Coffee Market
3:04 to 6:03
Discussing the challenges faced by the coffee division and market trends.
“You know, it's cold beverage business, namely Dr.”
Beverage Industry Insights
6:03 to 7:45
Insights into the cold beverage industry's performance and trends.
“So they've shown a willingness to branch out and tap into anywhere where fast-growing cold beverages are doing well.”
Puma's Challenges and Future Prospects
10:28 to 14:00
Analyzing Puma's struggles in the market and potential strategies moving forward.
“You're listening to the Bloomberg Intelligence Podcast.”
Market Competition and CEO Challenges
14:00 to 15:04
The discussion highlights the competitive landscape of the at-leisure market and the challenges faced by Puma's new CEO in driving a turnaround.
“and market as aggressively as the other two do.”
Apple's Upcoming iPhone Launch
17:15 to 18:25
Discussion about Apple's upcoming iPhone launch and the features expected, including the new iPhone Slim.
“That's paypalopen.com This is Tony Ayo from The Real Report with Tony Ayo and Uncle Murda You ever notice how everything keeps going up?”
Consumer Behavior and Upgrades
18:25 to 23:07
An analysis of consumer behavior regarding smartphone upgrades and the impact of market saturation in the U.S.
“Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.”
AI Strategy at Apple
23:07 to 23:17
Insights into Apple's AI strategy and collaborations with companies like Google and OpenAI.
“I think they if they can't build it themselves, they have the capacity to outsource it to one of these experts.”
Airfare Pricing Updates
24:18 to 25:24
Further discussion on how AI influences airfare pricing and the implications for travelers.
“Put ChatGPT to work on your most ambitious ideas and projects.”
Show all 15 chapters
Airfare Pricing Updates
25:31 to 26:26
Further discussion on how AI influences airfare pricing and the implications for travelers.
“This is Tony Ayo from The Real Report with Tony Ayo and Uncle Murda.”
Nexstar-Tegna Broadcasting Deal
26:26 to 28:00
An analysis of the Nexstar acquisition of Tegna and its implications for broadcasting regulations.
“Customers will pay$25 a month as long as they remain active on a Boost Unlimited plan.”
Regulatory Landscape for Broadcast Mergers
28:00 to 30:13
Explores the current state of broadcast regulations and potential litigation affecting mergers.
“They'll probably have this rule, get rid of it, vacate it.”
Impact of the Trump Administration on Mergers
30:13 to 32:25
Discusses how merger approvals have shifted under the Trump administration compared to Biden's.
“How is the Department of Justice looking at mergers and acquisitions generally defined?”
Anticipating Future Deal Activity
32:25 to 34:38
Analyzes expectations for increased deal activity in light of current regulatory support.
“You know, the Google Whiz deal that's pending is a litmus test for sure to see what this administration will do with a big tech platform merger.”
Transcript
Automatic transcript. May contain errors.0:00When your options are limited, so are your opportunities. At SIBO, the global exchange that pioneered options trading, we offer more ways to move with the market. From VIX and SPX options to global market data solutions, SIBO helps investors diversify, manage risk, and stay ahead of whatever the market does next. SIBO. Life is better with options. Your investments could be too. There are risks associated with SIBO Company products. Review the disclosures and disclaimers at SIBO.com slash US underscore disclaimers. When you're running a business, the best days are the ones where priorities stay on track.
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2:01Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Merger Monday, another M &A trade. I like to see it this time. Keurig Dr. Pepper agreed to buy J.D.E. Peets for 15.7 billion euros to bolster its struggling coffee business. They're not done. Then Keurig Dr. Pepper will separate its coffee and beverage units into two independent U.S. listed companies once the deal is completed.
2:46All I hear is the cash register ringing for the bankers and lawyers. Let's see what's going on here. Ken Shea joins us, Senior Consumer Analyst at Bloomberg Intelligence, safely ensconced down there in our Princeton campus. Ken, talk to us about Keurig, Dr. Pepper. What are they trying to do here? Yeah, hi, Paul. So this two-step deal basically addresses a lagging division they've had, the Keurig coffee business. You know, it's cold beverage business, namely Dr. Pepper, Mott's, Canada Dry is doing really well. Whereas the care coffee business really has been a laggard over the last couple of years.
3:25Now that you have higher green coffee costs, you have 50 % tariffs coming in from Brazil, namely coffee beans. slow demand for at-home, you know, pod business, you know, the ubiquitous K-cups. And it really has painted a dismal picture for that division in the second half. So rather than try to sell it, and I don't know if they try to do that, but rather than try to do that at a low multiple, what they're trying to do cleverly is team it up with J.D.E. Peets, which is the number two coffee producer in the world behind only Nestle, but mostly big in Europe. and attach the U.S., essentially U.S.
4:06business, the K-Cup business together, and you have a pretty good entity. You know what struck me when I was reading about this deal, guys? Dr. Pepper was the second most popular soda in the U.S. last year. Is that right? Behind Coke and ahead of Pepsi. I did not know that. I can't remember the last time I drank a Dr. Pepper. Well, if you're in Texas, that's like the state drink. Is it now? Yes. All right. But Ken, the question here is, talk to me about the beverage side, the soda side here, because I know bottled water has sort of been eating their lunch, the overall industry, right, for years now, outpacing the sales of soda.
4:43So what's the health of that side of the business? Oh, it's doing very well, Alexis. The cold beverage side is doing really well, whether it's Coke or Pepsi or Cure Dr. Pepper. Particularly those three companies, because distribution is everything. These three companies have national footprints, so they can reach all the outlets, whether it's fountain drinks or traditional supermarkets, vending, whatever. They can reach it, and they all have powerful brands. As you said, Dr. Pepper has really been coming on strong over the last couple of years, and they have other powerful brands. Unfortunately, their somewhat mini-conglomerate business structure is being dragged down by Keurig, the coffee business.
5:25So that business is doing really well. Keurig has shown that it's also flexible and willing to pivot to fast-growing niche cold beverages. You know, it's a business that continually changes with consumer tastes. Over the last year or so, for instance, energy drinks have taken off. So what did they do? They went out and bought Ghost Energy, you know, for even a younger demographic that typically drinks energy beverages. They are bigger into the sports drink category. They talked about on the last call a few weeks ago to get stronger in the protein space. Everybody wants protein. You know, the GLP-1 folks need protein replenishment.
6:03So they've shown a willingness to branch out and tap into anywhere where fast-growing cold beverages are doing well. So I look on my global commodity screen and I see the price of coffee is up like 25 % this year. I mean, what's going on with that? Talk to us about coffee and just the cost of the beans and all that kind of stuff. Well, you know, coffee beans are essentially sourced from Brazil. So to some degree, the roasters are hostage to good crops. And over the last year or so, you really haven't had great crops. I think some of the sellers in Brazil are also holding back knowing that tariffs are coming and they're not going to get what they would like to get.
6:50And that's exacerbating the run up that you've seen over the past six months, a year in coffee beans. If you went back over the last couple of years, two or three years, you would see that the retail price of coffee, whether it's rated drink or hot coffee at your local coffee shop, have increased faster than most other beverages. soft drinks I'm talking about. So you're even seeing some consumers by or switching from, say, like cold brew, cold coffee to move to energy drinks. It's more cost effective. So the energy, so the coffee producers have a conundrum. Do they continue to raise prices and get flatter, lower volumes, or do they eat that margin?
7:35And so what Keurig has decided to do is kind of divest it in a tax-efficient way. Stay with us. More from Bloomberg Intelligence coming up after this. When your options are limited, so are your opportunities. At SIBO, the global exchange that pioneered options trading, we offer more ways to move with the market. From VIX and SPX options to global market data solutions, SIBO helps investors diversify, manage risk, and stay ahead of whatever the market does next. SIBO. Life is better with options. Your investments could be too. There are risks associated with SIBO Company products. Review the disclosures and disclaimers at SIBO.com slash US underscore disclaimers.
8:16This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening, as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seed inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time.
9:03The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode. Available on Plus and Pro Plans.
9:36Every sale comes down to a single second. The one between buy now and maybe later. PayPal is built to help your business win that moment. with a checkout experience that feels certain, reliable, and familiar. With a global two-sided network and hundreds of millions of buyers who already know us. All to keep you in control however buying happens next. New markets, new AI-powered selling services. A whole new agentic era where you decide how your business will show up and stand up. PayPal is built to help your business come out ahead. We're built for payments, built for growth, built for Agendic.
10:20PayPal Open, built for all business. Visit PayPalOpen.com to get started. That's PayPalOpen.com. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts. or watch us live on YouTube. Deals. The Pinot family is said to explore options for selling, perhaps, its sports brand Puma. And I looked at the Puma shares. They trade in Germany. They've lost like half their value. I don't know what's going on over there, but Poonam Goyal does. She's the senior U.S.
11:04retail analyst for Bloomberg Intelligence. Poonam, talk to us about Puma. What's going on with that brand and why the Pinot family and maybe looking to sell here. Yeah, so I think Puma's come under a lot of pressure in the last two years, especially since they lost their CEO to Adidas just about two years ago. What's happened is that Puma was able to thrive when Nike had pulled out of wholesale as they regained a lot of that shelf space. But now with Nike pushing back and really entering wholesale in a more meaningful way, Puma doesn't have that same visibility in wholesale. So their wholesale sales have struggled and they really haven't found a niche for themselves to grow the company from where it is today.
11:50So lots of pain points. I think, you know, with a sale, if there is a sale, that is, it might just give it a bigger lap to fall into, giving it more scale to leverage and maybe allow it to grow a little stronger. You know, I'm curious about endorsements because I just don't feel like I see it with Puma in the way that I do with a Nike, certainly, or Adidas. I mean, I think I saw Dua Lipa out there hawking. I don't know the connection there, but hawking, you know, Pumas. So are they behind the curve when it comes to what can be really vital endorsements? The vital endorsements are critical in the game of sports.
12:31And you're absolutely right when it comes to mainstream sports that we're used to, like basketball and soccer and football. Puma doesn't have as big of a play there as Nike and Adidas. But Puma has crafted itself into the smaller sports like cricket, for example. It endorses one of the largest cricket players in India for cricket. It has the Ferrari sponsorship for racing cars, right? So it does participate more meaningfully in the smaller sports, you might want to call it, versus basketball. You know, it has Lomelo, but it doesn't have really that much more in terms of in the other mainstream sports like football or others.
13:11Who do you think should, if this company is put up for sale, who do you think should buy Puma? That's a tough question. I mean, it's probably going to be right now it's speculated as anti-sports and leaning. And I think those are all possibilities because they have the room to take in a brand that wouldn't have as much overlap, right? It's the predominant brand. It could help them scale their own visibility. I don't think a Puma makes sense for a Nike or an Adidas, for example. I don't think that's where it belongs, but I think anywhere else is fair game. If they don't sell, what are the other options on the table here?
13:52I think it's just going back to the basics, right? I think it's going to be harder for them to compete on with Nike and Adidas because they don't have the dollars or the deep pockets to advertise and market as aggressively as the other two do. But they have to stay true to their niche markets and really craft their way up from there. It's going to be tough. Look, the at-leisure market is getting more competitive. Everyone is trying to sell at-leisure, right? whether it's the specialty apparel retailers or the mainstream retailers, whoever it is, they're all going after that market share because the market is growing.
14:26It's not going to be an easy ride, and they have a new CEO in place to help them drive the turnaround. But we haven't heard a strategy yet, so we're not sure what their intentions are and what the roadmap is to really drive this turnaround, at least yet. 30 seconds, Poonam. Who's the Pinot family? Who are they? They own about 29 % of Puma shares. So I think they're an investor that's largely invested there. But I would say there's a push to get the sale going because of the underperformance that they've had. Stay with us. More from Bloomberg Intelligence coming up after this. This is the Bloomberg Tech Minute brought to you by ChatGPT.
15:08Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening. as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Wan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seat inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time.
15:52The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode. Available on Plus and Pro Plans.
16:45all to keep you in control however buying happens next new markets new ai powered selling services a whole new agentic era where you decide how your business will show up and stand up paypal is built to help your business come out ahead we're built for payments built for growth Built for Agendic PayPal Open Built for all business Visit paypalopen.com to get started That's paypalopen.com This is Tony Ayo from The Real Report with Tony Ayo and Uncle Murda You ever notice how everything keeps going up? Rent's going up, streaming services are going up Even your favorite burrito spot suddenly thinks salsa should cost extra But with Boost Mobile, you and your phone bill don't have to play the will it go up soon game because Boost Mobile has an unlimited talk, text, and data plan at a price that'll never go up.
17:41It's the same price you'll pay for life, meaning you're set to never worry about your bill increasing again for as long as you're on the plan. While the world keeps finding new ways to nickel and dime you, Boost Mobile gives you unlimited wireless at one set price for life. Imagine something in your budget actually staying the same. You'll pay the same for unlimited wireless when you're posting mirror selfies in your 20s and when you're posting mirror selfies in retirement. Some things never change. Switch now for unlimited wireless at a price that'll never go up, only at Boost Mobile. After 30 gigabytes, customers may experience slower speeds.
18:13Customers will pay$25 a month as long as they remain active on the Boost Unlimited plan. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Believe it or not, Apple is just weeks away from its biggest product launch or one of its biggest product launches ever. They're calling it a once in a generation iPhone overhaul. What does that really mean? What can we expect? Anurag Rana, Bloomberg Intelligence Technology Analyst, coming to us live from our Chicago bureau.
18:55Anurag, thanks so much for being with us. look, I'm the kind of person who holds on to her iPhone, okay? I don't have to run out and buy the latest, greatest. I will have it for years. Why? Because there's not really a compelling reason, oftentimes, to upgrade unless I'm looking for a better camera. So tell me, what's going to get me to go out and buy these new iPhones? You know, frankly speaking, most of the Western world, that is still the story is you will go and change when your battery's not working properly or there is some issue with the screen. However, you know, every time there is a new model that shapes up, comes out, you know, there is some excitement.
19:33And it seems that this time Mark Gurman's done such a good job reporting again that they'll be launching called the iPhone Slim or the 17, which is like an iPhone, you know, just like a Mac Air, Airbook. You know, it's a slimmer phone. It's going to be replacing the iPhone 16 Plus. So still the base end model. But I think that is the one area where we are seeing something new come out of Apple iPhone, which has not been the case, I think, for the last several years. So, I mean, again, what can they really do here? I mean, is there something I kind of think that phone's fine. What are they looking to do?
20:07What are they looking to achieve? Are they looking to address some shortfall? It typically targets more the emerging markets, more the Western world. When you look at some market like the U.S., and it's pretty saturated in terms of unit growth. What can happen in the U.S. mostly is people may decide to upgrade to a larger SKU with more memory or a better camera, and that just leads to higher average selling price. But in emerging markets where the cost basis or the entry-level point, you're giving them something new, something cooler, perhaps in a new color, that's what brings in more people to the ecosystem.
20:42And then over time, they can go from the base model to the pro model or the pro plus model. What about this foldable iPhone? iPhone. I know that Samsung did it with the Galaxy, but that was like five or six years ago. So Apple's a little late to the game. That happens sometimes. Apple's not always the first to market, but it sort of takes over the market once it enters it. So what can we expect from this foldable phone? Yeah, but that's not going to happen till next year. I mean, Mark Gurman said that that's the base or the slim model is the base of the foldable phone, which is going to come out next year.
21:13So Apple's still behind on that. But Apple has an argument that they will not go unless they are absolutely sure. They don't want to give the users a bad experience. And their big issue has been when you fold that phone, there's a slight crease in the middle, and they really don't want that level of technology. Another thing they've done is using their own modem in this case, rather than the one that using from Qualcomm, apparently that helps them to slim the design or the size of the phone. And that, again, puts the base for next year's foldable phone. You know, there was a time when people would get excited about new product launches from Apple.
21:48That feels like 10, 15 years ago. All people want to know about is AI. What's the AI strategy? What's the nuance from recent discussions with Apple about kind of their AI strategy? Will Siri get any better, please? Please. I think this is, you know, it's people, if there's one tech company that's made so much fun around AI, that's Apple in the last, you know, one and a half to two years. But I still go back to say that this is probably one of the most important distribution systems out there in the world to get mass adoption of consumer AI applications. So Mark's done an amazing job, again, to talk about what they're doing in that case.
22:28On Friday, he reported they are working now with Google to get their Gemini models. And frankly, that has been our hope that down the road, if there is an agreement between Google and Apple to get their Gemini models in the ecosystem, I think it's going to help Apple defend that, you know, hefty fee that they generate from Google, which is, you know, under scrutiny right now. But it seems to me that based on what Mark has said, that they're going to be working with OpenAI, Anthropic and Google. And these are the three companies with the top models right now. So whether they use it in, you know, one particular area, whether it's, you know, whether that's the headphones or whether it's on device, whether it's sending stuff to the cloud.
23:07I think they if they can't build it themselves, they have the capacity to outsource it to one of these experts. Stay with us. More from Bloomberg Intelligence coming up after this. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares.
23:50Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seed inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time. The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at chatgpt.com today by selecting Work Mode, available on Plus and Pro plans.
24:37Every sale comes down to a single second. The one between buy now and maybe later. PayPal is built to help your business win that moment. With a checkout experience that feels certain, reliable, and familiar. With a global two-sided network and hundreds of millions of buyers who already know us. All to keep you in control however buying happens next. new markets new ai powered selling services a whole new agentic era where you decide how your business will show up and stand up paypal is built to help your business come out ahead we're built for payments built for growth built for agentic paypal open built for all business visit paypalopen.com to get started that's paypalopen.com This is Tony Ayo from The Real Report with Tony Ayo and Uncle Murda.
25:35You ever notice how everything keeps going up? Rent's going up? Streaming services are going up? Even your favorite burrito spot suddenly thinks salsa should cost extra. But with Boost Mobile, you and your phone bill don't have to play the will it go up soon game because Boost Mobile has an unlimited talk, text, and data plan at a price that'll never go up. It's the same price you'll pay for life, meaning you're set to never worry about your bill increasing again for as long as you're on the plan. While the world keeps finding new ways to nickel and dime you, Boost Mobile gives you unlimited wireless at one set price for life.
26:07Imagine something in your budget actually staying the same. You'll pay the same for unlimited wireless when you're posting mirror selfies in your 20s and when you're posting mirror selfies in retirement. Some things never change. Switch now for unlimited wireless at a price that'll never go up, only at Boost Mobile. After 30 gigabytes, customers may experience slower speeds. Customers will pay$25 a month as long as they remain active on a Boost Unlimited plan. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App.
26:43Listen on demand wherever you get your podcasts or watch us live on YouTube. We want to dive into a broadcasting deal that was announced not long ago. Nexstar, buying its rival Tegna, it's a$6.2 billion cash transaction, works out to about$22 a share. I think that was about a 30 % premium when it was first announced. Shareholders seem to like the idea, but will the government? So we've got Jennifer Rhee here, Bloomberg Intelligence Senior Litigation Analyst, to break it all down for us. So Jen, And once upon a time, there were rules about how many stations one company could own. Will this FCC approve this deal?
Read the full transcript
27:24You know, I think in the end, yes, because the timing was right. You know, this isn't a deal, I think, that these companies could have gotten through a few years ago during the Biden administration. But both of the rules that the FCC has that would get in the way are in the process of being changed as we speak. And Republican commissioners have for a long time wanted to change these rules. So the first one is the 39 % ownership cap, that one company can't own or operate TV stations that reach more than 39 % of U.S. households. These companies say they'll reach 80%. So it's just clear on its face that there's a problem there.
27:57But the FCC is in a rulemaking process. They'll probably have this rule, get rid of it, vacate it. We think by the end of the year, my colleague Matt Schettenhelm is an expert on the FCC, and we've talked about this quite a bit. That's probably going to clear out of their way. There could be litigation, of course, but we do think the rule will move out of the way. The other issue is owning more than one of what's called the big four broadcast stations, ABC, CBS, NBC, Fox. That rule would also get in the way here, probably in a number of local areas, called designated market areas by Nielsen. That rule has also been vacated by the Eighth Circuit Court of Appeals.
28:37It will also probably be in litigation, but it seems like the road is clearing for the FCC there. It's a whole new world. Yes, it's a whole new world. But we have Department of Justice also. And so we can't forget that. Right. And we always think about the FCC. The Department of Justice is going to be looking at this too. But I do think they can probably get it cleared through that agency as well. All we really care about is President Trump. Has he voiced any opinion one way or the other about this type of deal or these types of deals? You know, I haven't heard anything from him. You know, it would be reported in the news.
29:09I haven't heard him say anything about these deals. We are beginning to see a trend, though, in the merger world, Paul, where if the companies do and say the right things for the Trump administration, they're getting assistance in getting their deal through. And they're all pretty well aware of that. So as long as they do and say the right things, hey, we won't block political ads, we'll be neutral in our censorship of content, things like that that resonate with Trump, that's going to help them. Sinclair did come in here with an 11th hour deal, did they not? Yeah, I think so. But they rebuffed.
29:43It seemed like on a per share basis, it was better than the next star deal for Tegna. So why rebuff it? I can't speak to that. You know, that's much more Tegna and Tegna's strategy. Maybe they think from an antitrust perspective, there's less overlap here. I mean, it is 35 of 51 of their DMAs. That's what Tegna says. But in those 35, depending on what stations they own, that overlap may not be problematic. It may only be problematic in a few. They may still have to divest some stations in order to get Department of Justice approval. I haven't done that comparison analysis, but it may be that they have to divest fewer stations for this deal, perhaps, than a different one.
30:20Yeah. How is the Department of Justice looking at mergers and acquisitions generally defined? Has it materially changed under the Trump administration versus the Biden administration? You know, it's so interesting. The rhetoric at the beginning was that it wouldn't change, that there would be this read through and that there was more commonality with the Biden administrators than differences. But it has changed. You know, they have gone back to settling problematic deals with, you know, structural, even one behavioral remedy. That was Omnicom Interpublic with divestitures. This is something that wasn't happening during the Biden administration.
30:51They just said, if a deal's problematic, we're going to sue. This DOJ and this FTC has said, no, we're going to work it out. If we have problems, we'll work out the problems with a fix. We'll have a settlement and we'll allow the broader deal to close. And that's a big difference. What does this deal tell you, though, just about the larger landscape of television, especially local TV, which we know has been losing revenue share? They're struggling just because there are too many places the eyeballs can go, right? And they're competing with streaming and with the big guys. So is this really a merger of necessity for these local TV stations?
31:23You know, I would think it is. And I think we're going to see more. You know, that kind of consolidation has slowly. There's been quite a bit of consolidation, actually, over the years. It kind of slowed down during the Biden administration. But, you know, I think it's going to pick back up again because they are so challenged by cord cutters, by people who never, you know, younger people who never watch TV at all. What's that? What is cable? Exactly. Exactly. So looking broader here, I mean, over the next year or two, do you expect to see more deal activity just because companies and boards and private and all the forces out in the marketplace feel like this is the time to do it?
32:00This is an administration that will support deals? I think so. And I think it would have already picked up if we didn't have so much tariff uncertainty. I think that has slowed things down. But as those things sort of work themselves out, I think we're going to see a lot more deal activity because you can see a path to getting these deals done without having to go to court and without dragging it out for two years. So this is sort of a litmus test then, isn't it? This Nextar-Tegna deal for the rest of the industry, really? Yeah, I think we have a few litmus tests out there. You know, the Google Whiz deal that's pending is a litmus test for sure to see what this administration will do with a big tech platform merger.
32:33I think this Nextar-Tegna deal is a litmus test because they're breaking all these old rules that were the orthodoxy for years. We're going to see where that goes. And then, And, you know, you have Dick's Foot Locker and you've got Charter Cox. And there are a lot of big deals pending right now. And I think they all are deals that would have had trouble during the Biden administration, but I think can get cleared now. Here's a deal that Charlie Pellett actually mentioned to me just recently. What was it? The Spirit Airlines and was it JetBlue? I mean, some of those deals that did not get approved in the Biden administration.
33:07Do they bring them back thinking that maybe they can get a more favorable ruling this time? Is there expectation? We might see some of that. You know, I think it's possible that that was blocked by a judge. So the department did win a lawsuit in that case to, you know, basically block that deal. You know, it's possible that they try again because you have a very different Department of Transportation, which would have to approve that. You have a very different Department of Justice. And again, you have an opportunity to divest and get a deal cleared. And maybe at this point, there would be structurally different deal because they could divest certain routes or something like that.
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Bloomberg Intelligence hosted by Paul Sweeney and Alexis Christoforous
-Kenneth Shea, Bloomberg Intelligence Senior Consumer Products Analyst, discusses Keurig Dr Pepper agreeing to buy JDE Peet’s NV for €15.7 billion to bolster its struggling coffee business. The company plans to separate its coffee and soft drinks units into two independent, US-listed companies next year once the deal is completed, according to a statement.
-Poonam Goyal, Senior U.S. E-Commerce and Retail Analyst at Bloomberg Intelligence, discusses the Pinault family reaching out to potential buyers of Puma SE after the company lost about half of its market value in the past year, according to people familiar with the matter.
-Anurag Rana, Bloomberg Intelligence Technology Analyst, discusses Apple kicking off a bold three year plan for its’ iPhone redesign push.
-Jennifer Rie, Bloomberg Intelligence Senior Litigation Analyst, discusses a potential acquisition of Tegna by Nextar Media Group for $6.2 billion. The merger awaits approval by the FCC and will require navigating antitrust regulations.
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