Merck CEO & Kimmel’s Return 9/24/25

0:00Bring in show music, please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. New guidance on vaccines for children has thrown questions to parents and care providers. Merck is the maker of several key vaccines for early health. CEO Robert Davis joins us exclusively. As we start to bring hesitancy to vaccines, my concern is people are going to not get vaccinated and we're going to face diseases we thought were gone. Plus, his thoughts on funding science innovation when there's new leadership in Washington. On principle, I would say we're aligned with the administration. It's just now figuring out how do we best do it in a way that preserves the innovation of this industry and the value we bring, but gives better pricing for U.S.

0:47patients. And free speech versus the declining fortunes of the legacy media business, the debate we can't stop having about Jimmy Kimmel, politics, and Disney.

1:07We get into it, and we ask Puck's Matt Bellany about the 70 or so ABC affiliates still at odds with their parent company. What does this mean for the future of late-night comedy? It's not just that these shows are lower rated. It's that everything is lower rated on linear television. It's Wednesday, September 24th. Squawk Pod begins right now. Stand Becky by in three, two, one. Cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin. And this morning, we are here for the next time.

1:51Jimmy Kimmel!

1:56Anyway, as I was saying before I was interrupting. Let's talk about Jimmy Kimmel and his late night show. It did return to ABC last night, roughly a week now after the network suspended the comedian for making comments linking the alleged killer of conservative activist Charlie Kirk to President Trump's MAGA movement. It was never my intention to make light of the murder of a young man.

2:25I don't think there's anything funny about it. I posted a message on Instagram on the day he was killed, sending love to his family and asking for compassion. And I meant it. I still do. Nor was it my intention to blame any specific group for the actions of what it was obviously a deeply disturbed individual. That was really the opposite of the point I was trying to make. Now, ABC stations controlled by Nextstar and Sinclair did not air Kimmel's show last night. It's unclear when or if that show will return to the roughly 70 stations the two companies own. Last night, Kimmel accused the Trump administration of trying to force ABC affiliates to take his show off the air, which he called dangerous and un-American.

3:07And an hour before, about an hour before Kimmel's show aired, President Trump posted on Truth Social saying ABC had told the White House Kimmel had been canceled. Trump accused Kimmel of being an arm of the Democratic National Committee, which he said would amount to an illegal campaign contribution. The president said, I think we're going to test ABC out on this. Let's see how we do. Last time I went after them, they gave me$16 million. This one sounds even more lucrative. Talking about Stephanopoulos. And then if you were to watch the show last night, The other piece of that segment was a very, to be honest with you, I thought, funny segment where Robert De Niro was acting as Brendan Carr.

3:55And there's this phone call where Kimmel calls Brendan Carr. And, of course, De Niro is the mafia boss. And they go back and forth, back and forth. back and it's and I thought he actually you know stuck the landing in terms of both apologizing for what he had said and trying to clear things up at the same time that he effectively said and did say by the way during the during the the monologue that Trump wanted him to lose his job and he wanted the 200 people who worked on the show to lose their job and how he thought that was genuinely un-American well wanting something and forcing it I mean neither one of us thought last week that it was going to last for more than a couple of days.

4:39So it was never much of an actual threat to free speech. He's back on. You know, we will never hear any free speech from that other guy that had his head blown off. But, you know, I think Charlie stood for free speech. I'm not sure. Kimmel does. And I, you know, Brendan Carr, that's the gift. That's, no, he don't at all. That's the gift that keeps on giving, that Brendan Carr got involved with this. And I've said that all along. Just let it play out and we'll see what happens. But two things can be true at one time and that is Kimmel has been an arm of the DNC for the past 10 years. And that's fine.

5:21It is on public airwaves which you could take issue with. Don't scrunch your face up. I know I scrunch my face up because then you could, would you say that would you say that a mafia boss could do better than a week suspension don't you think if if a mafia boss was telling someone not to do something this last and we knew it would last less than a week so where was the real you know where the real threat to free speech was what google had to put up with why did you think he was going to come back on if if trump if definitely it was a threat to free speech you got i think you got trump and you got trump and jd vance over in the uk really talking about an assault on free speech?

6:01Why did you think they're going to come back here and fully go full bore like the Biden administration with a ministry of information? When liberals talk about censorship, it's misinformation and it's disinformation and it's the ministry of truth and it's all these nice high-minded things that actually do cause censorship. In this case, we knew in less than a week he'd be back on there's no censorship. And he effectively just said, the President of the United States publicly said that he's going to try to shake down ABC at this point. Or try to get him off the air. Not necessarily a shakedown.

6:37It's to try to... He just said it'd be more lucrative. What do you think that comment is? If the media is at 6 % right now approval because it's so one-sided, and you've had Jimmy Kimmel for 10 years, basically, not even telling jokes. All he did was he would give a plot. He told a lot of jokes that were left... No, they weren't jokes. They were applause getters, trashing Republicans and Donald Trump. That's all he does. And, you know, when... And I thought, if you're a free market guy, if you're a free market guy... That's fine. He can do it. That's why I said Brendan Carr's from today. He's digging his own...

7:09But the Brendan Carr piece is significant. Brendan Carr did get involved. Brendan Carr is allowed to because it's public airwaves. Whether he would actually have done anything in terms of revoking the license is another thing. He probably could make a case in winning court. Look, just as a 30 feet, let's take a step back. All of these things that have happened over the last year. Let's go back five years. Let's go back five years. But we're here. We're today. Okay. And whether you look at the law firm situation, whether you look at the university situation, whether you look at the 60-minute settlement.

7:46Liberals only care about this when it affects them, Andrew. They didn't care when it was the laptop. But therefore, if you believe it's hypocrisy, then you should be standing on the side of saying... I do. I don't think that you're going to shut down. But I think you can shut... I wanted to see him just die on the vine. I've said that all along. Well, they have a bigger problem with Nexstar and Sinclair. Nexstar and Sinclair. 70 of their affiliates. And if you don't believe it... But he's going to say that that's political, too. And maybe some of it is. They want to merge. But some of... They've been complaining for years about their heartland viewers having to put up with this as well.

8:21Sinclair has. All of them. Next Star is not in the same camp. Okay, whether Next Star has or not, I've been, normal people have been complaining. You've been complaining. Yes. Right, because you can watch it on a daily basis, and it's just, it's not funny. Look, everyone's allowed to have their perspective, but that's the point. They should be able to watch you or not. They should be able to watch Jimmy or not. He's back on, isn't he? He's back on, but the reason... I don't think the story's over. The story's not over, and the reason that he was taken off is a confluence of these things. Do I believe that there were genuine business interests in terms of taking him off?

8:58Yes, because they wanted to take the heat down. There's no question. But part of that heat was coming from— The reason he was taken off is because he lied about who shot Charlie Kirk. That's why he was taken off originally and wouldn't apologize. The sad thing for Disney is they pulled a Bud Light. Now both sides are mad. The left is mad because they pulled him off in the first place. Now the right is going to be furious. So here, and now you have the business interest. Now the market's at play. Now the market's at play, but somehow they managed to completely alienate both sides of the country.

9:33So we'll see where we're at. When is Kimmel's contract up? That's what we'll see. I heard January. I think the reporting says at the end of the year. May. May is what I heard. I heard May. I heard May. Okay. So we'll see. I mean, you would probably tie Colbert's. I did not I did not but is it because the new owners of CBS are in bed with Larry Ellison I didn't say any of those things don't even try to because he was losing$50 million a year that's why he's gone my understanding of the Colbert ending was that for the past two years there were discussions that were happening internally about the economics of that program.

10:19Now, I think, again, the optics for some part of the country were not good about how that ended and the way it ended. But at the same time, I do think that that was a genuine business situation. I think the acuteness of what Kimmel said about Charlie Kirk married with what Brendan Carr said about ABC, married with the fact that Nexstar has this transaction in front of the FCC. And that they've been complaining for a while about being an arm of the DNC. Was the reason that we had this situation that took place last week. The Trump administration doesn't want Iranian diplomats in New York for the UN General Assembly shopping at Costco.

11:02In notices that are being published in the Federal Register, a State Department office determined diplomatic memberships in wholesale clubs like Costco. Sam's Club and BJ's constitute a benefit that requires government approval. Purchases of luxury goods are in that same category. Iran, by the way, is the only country specifically targeted. Its diplomats posted to or visiting New York are known to enjoy shopping at stores like Costco, where they can cheaply buy products that aren't available in Iran and send them home. This is part of the United States trying to put some pressure on those diplomats to say you're only here for diplomatic purposes.

11:37Interesting. I was, I'm glad you explained it. I was wondering, I mean, how much toilet paper can you use while you're here for a couple of days? You can take it all back with you. You're sending it home. Yeah. They're sending it home. Yeah. Do you like the rolls, the big oversized rolls? No, too big. You know, the further, do you know how quickly as it goes down, how quickly then, it's almost like life. For you, sure. No, it's almost like life as the roll gets smaller and then it goes away. Things get, that's why I like it. It's philosophical. Cheese will be next. Coming up on Squawk Pod, the return of Jimmy Kimmel to late night doesn't stop the simmering tension between mega company Disney and the local stations that carry ABC programming.

12:22Puck's Matt Bellany joins us. It really is about the relationship contractually between Disney and its affiliates. And if they want to complain, then bring it up in the negotiation.

12:37Welcome back to Squawk Pod. Stand by Joe. His mic. Jimmy Kimmel returning to late night TV. If you blink, you wouldn't even know he wasn't on a couple of days. Those stations owned by Nexstar and Sinclair opting not to broadcast Kimmel's show. Kimmel said he wasn't trying to make fun of the shooting death of Charlie Kirk last week when he made comments. wasn't trying to be funny, but he was trying to link Kirk's alleged killer to the MAGA movement of President Trump. Here's what he had to say about Trump himself. The president of the United States made it very clear he wants to see me and the hundreds of people who work here fired from our jobs.

13:20Our leader celebrates Americans losing their livelihoods because he can't take a joke. Join us now, Puck's Matt Bellany. It's been sort of 10 years of uh since that escalator ride kind of been 10 years of i don't really know if i'd call them jokes because it's it's never really funny they're just applause lines uh we usually get but that's neither here nor there what's disney uh look like after this bruised and battered uh i think for a while the right was happy with what they did now the right's going to be mad the left's now going to be happy but they already had the left uh watching didn't they net net I don't know if anyone's happy about Disney.

14:01Well, this is more than just about this show. I mean, I think that last night was a big win for Disney in the sense that it was well-received. The media coverage, which had just absolutely been brutalizing Disney for the past week for the decision, I think that they won that night because Kimmel came across as emotional. He came across as he didn't outright apologize for the comment, But he did clarify that he did not mean to link the shooter, alleged shooter, to the MAGA movement. And he was emotional about it. He cried a little bit. So I think that last night Disney can feel good about it. Now the question is what the fallout is going to be.

14:44Because 66 stations, more than 20 % of the country, was not able to watch that on Linear TV last night. And these two station groups have said that they are going to continue to talk to Disney. So does this lead to some kind of a settlement or a path back for those stations? That's the big question. Doing everything to say that the shooter wasn't one of their own. How can he say that he wasn't trying to link the shooter? We disagree on this. If you actually look at what he said. I can read it for you again. He was talking about people trying to score political points by linking the shooter to the MAGA movement.

15:25By trying to link it to anything other than one of their own. Yes. That's only one way you can take that. Well, listen, I agree it's ambiguous, but there is a legitimate argument that he was making fun of the political dumping. It depends on what the meaning of the word is. We'll have to disagree on that. So the let's talk Nextar and all of the different affiliates. They have some I can tell you that they have some preexisting problems with with late night. A lot of affiliates, not just at ABC, but at CBS and NBC. They have heard from affiliates about their viewers not being served, some of them in the center of the country.

16:08So right now, I think Democrats are going to investigate the proposed merger and how this all plays into whether there's coercion to get a deal done. And that's why they're not airing Kimmel right now, because they're trying to curry favor with with the Trump administration. Who's going to win that? Can they argue that they've had a problem for years with late night? Oh, absolutely. I mean, they can they can make that argument. and Disney was aware of those arguments. I mean, Brendan Carr, the FCC chair, he is certainly saying that he's standing up for those station groups and he wants them to be able to exert their power over this content by saying, we don't want to air it.

16:52But that's kind of not the point. They have contracts with Disney and they agree to air this stuff and they can really only take it off the air for a certain amount of time before they have to go back to Disney and say, OK, this is a negotiation if we want to keep it off the air. So it really is about the relationship contractually between Disney and its affiliates. And if they if they want to complain, then bring it up in the negotiation. Do you think that. Ratings, I mean, they're down, I think it's down 50 percent since the beginning of the year for Kimmel. Do those go up and where they are right now?

17:31Would he get renewed? Do you know, when is he supposed to be renewed? January or May? We've heard about it. He's got a year left, so probably at the end of this season. But first of all, the ratings issue, I don't think he's down 50 % this year. He's down 50 % over many years. But the thing is with Kimmel is that he does a lot of things for ABC. His show does very well on YouTube. It is overall a moneymaker for ABC. It is. I would argue that it is. Do you know that it is? Do you know, is Colbert losing$50 million, or you would argue that's a moneymaker? My reporting suggests that Colbert is losing tens of millions of dollars, but Colbert is a different situation.

18:13He does not have the same relationship with CBS that Kimmel has with ABC. His show does not do as well on digital platforms as Kimmel's does. So if you take all of that into consideration, plus you add in the carriage fees that they get from airing the content, The argument that Disney makes is that Kimmel overall is profitable for them and does bring value to them beyond just being an 1135 host. And honestly, the proof's in the pudding. They keep renewing him. This is not a liberal agenda to keep Kimmel on the air. They keep renewing him because they find value in him being the host of that show.

18:49It's down 43 % to 45 % in total viewership since January. 43 % to 45 % since January this year. Okay. Well, I'd love to see. So you would bet your life that it's profitable. You say it's profitable. I'm not betting my life on a TV show. But I am saying that the messaging from Disney is that this show brings our network value. And honestly, I agree that the affiliates would have had a tougher argument if this was 15 years ago and these shows were generating 8 million viewers a night. Different situation now. But I'm betting if we see the numbers, Kimmel rates higher than Celebrity Family Feud reruns, which is what they were airing.

19:34Hey, Matt, so here's the question. What do we know about the contracts that Disney has with the various affiliates? How long can they go without broadcasting certain things that are on the network? What would constitute a renegotiation? There are obviously rights that ABC has paid for, including the Super Bowl, which I imagine these affiliates will want to air next year. Right. And so how does this work? Just walk us through the sort of business permutations of this. Take the politics out of it for a second. Sure. I will say that I don't know the details of the exact contract. I only know what is typical in these situations.

20:13And what is typical is that these affiliates do have the right to opt out of certain content. But once they opt out for a certain amount of time, they have to go back to Disney, to the content provider, and have a conversation about what that means for both of their business. And it becomes a negotiation. So while not knowing the specifics, this cannot go on indefinitely without some kind of a negotiation between the two. They also have these deals coming up. We don't know exactly when, but they have these affiliate arrangements come up and then it becomes a negotiation. And the speculation is Disney will try to stick it to these affiliate groups because they're giving them a hard time.

20:57that'll be an interesting negotiation because the argument would be, well, this is not 15 years ago when these shows were rating like they were. This is an issue ratings wise and business wise, as well as content wise. On that, with the negotiations with the affiliates, Brendan Carr has already weighed in on that, on some of the negotiations that ABC in particular was already doing with its affiliates. That was back in January or February, looking at some of the hardball tactics where affiliates could in some terms even lose money with this. So even if they come back to that, that could be something where the FCC has already laid down kind of where they see the ground for this.

21:35Yeah. Brandon Carr has been clear that he wants these affiliates to be more aggressive. He sees them as ideologically aligned with the Trump administration and able to push back on these big media companies. But the tensions between between Disney and the other content owners and their affiliates has been rising in recent years because of the economics of linear television. It's not just that these shows are lower rated, it's that everything is lower rated on linear television and it's causing tensions with these affiliates who are not used to making this lower amount of money because of the audience.

22:10So it's already very tense. And in some cases no money, I would just say. It's a much smaller pot to go around. Absolutely. And when you have a much smaller pot, you're going to have testier negotiations. And then you throw in these ideological differences between these very conservative station owners and these content providers in New York and L.A., that's where you get this conflict. Right. Matt, we want to thank you. By the way, just just to explain one thing that I think is oftentimes misunderstood about the economics of both linear TV and cable television and the difference between how CBS might think about Colbert or ABC might think about Kimmel.

22:48You're talking about the economics of this. This is an important piece of it. Some networks like ABC, and by the way, and CNBC, just to put this on the table, think about the carriage fees that they collect and they apportion some piece of the carriage fee to the programming on the show. And they include that in the economics. Now, technically, because there is carriage fees that are already pre-negotiated, you could run a test pattern on TV and you would still collect the carriage fee. Until they contract in. Until the contract in. And so you could decide to apportion the carriage fee to Squawk Box or not apportion the carriage fee to Squawk Box.

23:29And at CBS, for whatever reason, they just... Or no, at CBS, when they were thinking about the economics, they were actually not apportioning, from my understanding of it... To Colbert. To Colbert. ABC, in terms of how they actually think about the economics, is apportioning carriage fees to the various programs. So that's how this all works. Why one show would be millions of dollars in the hole and the other wouldn't. Well, I also think, by the way, there's the YouTube piece, which is very true on Kimmel. If you can do the test pattern and get the same numbers, which you probably could. See, I prefer Celebrity Family Feud, but that's just me.

24:04Well, that is just you. I will say a lot of this is economics and not necessarily politics, not in this case in particular. This has been building for years and you can point to. Time will tell. We'll see. The ABC affiliate in Miami just switched over. They're not doing it anymore because that negotiation was so fierce. Time will tell with Jimmy. He's back on it. Things are right in the world. Up next on Squawk Pod, pharmaceutical company Merck's biggest seller by billions of dollars is a cancer therapy called Keytruda. It now has a new injectable version that has just been approved by the FDA.

24:39Merck's CEO, Robert Davis, joins us. The ability to bring the power of Keytruda to even more patients, especially in the earlier stages of disease, where you can hopefully start to think of cancer more as a chronic disease than as a life sentence. This allows you not to have to focus on your disease every moment. Plus, his belief in vaccines, his plan for drug pricing, and much more right after this break.