Latest / Bloomberg Intelligence / Keurig Dr Pepper to Buy Peet’s Coffee Owner for $18 Billion in Revamp

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Keurig Dr Pepper to Buy Peet’s Coffee Owner for $18 Billion in Revamp · Bloomberg Intelligence

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  Speaker 2: Merger Monday, another m and a trade. I'd like to
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  Speaker 2: see it.
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  Speaker 3: This time Currick Doctor Pepper ingreed to buy JD E
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  Speaker 3: Peats for fifteen point seven billion euros to bolster it's
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  Speaker 3: struggling coffee business. They're not done then, CURRK Doctor Pepper
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  Speaker 3: will separate its coffee and beverage units into two independent
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  Speaker 3: US listed companies once the deal is completed. All I
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  Speaker 3: hear is the cash register ringing for the backers and lawyers.
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  Speaker 3: Let's see what's going on here. Ken schae joined to
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  Speaker 3: senior consumer analysts. A Bloomberg Intelligence safely ascons down there
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  Speaker 3: in our Princeton campus. Ken, talk to us about Carrick
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  Speaker 3: Doctor Pepper. What are they trying to do here?
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  Speaker 1: Yeah?
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  Speaker 4: Hi, Paul.
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  Speaker 5: So, this two step deal basically addresses a lagging division
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  Speaker 5: they've had, the carried coffee business. You know, it's it's
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  Speaker 5: cold beverage business, namely Dr Pepper, Mott's Canada Dry is
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  Speaker 5: doing it really well, whereas the Carre coffee business really
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  Speaker 5: has been a laggered over the last couple of years.
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  Speaker 5: Now that you have higher green coffee costs, you have
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  Speaker 5: you know, fifty percent tariffs coming in from Brazil, namely
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  Speaker 5: coffee beans, slow demand for at home you know pod business,
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  Speaker 5: you know, the ubiquitous CA cups, and it really is
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  Speaker 5: painted a dismal picture for that division of the second half.
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  Speaker 5: So rather than try to sell it, and I don't
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  Speaker 5: know if they try to do that, but rather than
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  Speaker 5: try to do that at a low multiple, what they're
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  Speaker 5: trying to do cleverly is team it up with JD. E. Peats,
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  Speaker 5: which is the number two coffee producer in the world,
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  Speaker 5: behind only Nesley, but mostly big in Europe, and you know,
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  Speaker 5: attached the US essentially US business, the CA cup business
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  Speaker 5: together and you have a pretty good, pretty good entity.
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  Speaker 6: You know what struck me when I was reading about
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  Speaker 6: this deal, guys, Doctor Pepper was the second most popular
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  Speaker 6: soda in the US last year. Is that right behind
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  Speaker 6: coke and a head of PEPSI I did not know that.
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  Speaker 6: I can't remember the last time I drank a Doctor Pepper.
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  Speaker 3: Well, if you're in Texas, that's like the stage drink,
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  Speaker 3: then is it now?
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  Speaker 7: Yes?
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  Speaker 6: All right, So but Ken, the questionnaire is, talk to
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  Speaker 6: me about the beverage side, the soda side here, because
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  Speaker 6: I know bottled water has sort of been eating their
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  Speaker 6: lunch the overall industry right for years now, outpacing the
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  Speaker 6: sales of soda. So how what's the health of that
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  Speaker 6: side of the business.
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  Speaker 5: Oh, it's doing very well, le sais the cold everage
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  Speaker 5: side is doing really well, whether it's Coke or Pepsi
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  Speaker 5: or Cure Doctor Pepper, particularly those three companies, because distribution
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  Speaker 5: is everything. These three company have national footprints, so they
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  Speaker 5: can reach all the outlets, you know, whether it's fountain
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  Speaker 5: drinks or traditional supermarkets, you know, vending, whatever, they can
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  Speaker 5: reach it. And they have all had powerful brands. As
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  Speaker 5: you said, Doctor Pepper's really been coming on strong over
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  Speaker 5: the last couple of years, and they have other powerful brands,
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  Speaker 5: and unfortunately they are somewhat mini conglomerate business structure is
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  Speaker 5: being dragged down by you know, Carrig the coffee business.
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  Speaker 5: So that business doing really well. Carrick has shown that
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  Speaker 5: it's also flexible and willing to pivot to fast growing
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  Speaker 5: niche cold beverages. You know, it's a business that continually
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  Speaker 5: changes with consumer tastes. Over the last year or so,
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  Speaker 5: for instance, energy drinks have taken off. So what they do.
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  Speaker 5: They went out and bought Ghost Energy. You know, for
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  Speaker 5: even a younger demographic that typically drinks beverage energy beverages.
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  Speaker 5: They are bigger into the sports the sports drink category
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  Speaker 5: they talked about on the last call a few weeks ago,
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  Speaker 5: to get strong longer. In the protein space, everybody wants protein,
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  Speaker 5: you know, the golp one folks need protein replenishment. So
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  Speaker 5: they've shown a willingness to branch out and tap into anywhere.
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  Speaker 5: We're fast growing col beverages are you know, doing well.
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  Speaker 3: So I look on my global commodity screen and I
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  Speaker 3: see the price of coffee. It's up like twenty five
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  Speaker 3: percent this year. I mean, what's going on with that?
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  Speaker 3: Talk to us about coffee and just the cost of
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  Speaker 3: the beans and all that kind of stuff.
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  Speaker 5: Well, you know, coffee beans are essentially sourced from Brazil,
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  Speaker 5: so to some degree the roasters are hostage to good crops.
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  Speaker 5: And over the last year or so, you really haven't
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  Speaker 5: had great crops. I think some of the sellers in
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  Speaker 5: Brazil are also holding back knowing that towers are coming
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  Speaker 5: uh and you're not going to get what you know
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  Speaker 5: they would like to get. And that's exacerbating the run
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  Speaker 5: up that you've seen over the past six months a
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  Speaker 5: year in coffee beans. If you went back over the
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  Speaker 5: last couple of years, thirty two or three years, you
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  Speaker 5: would see that the retail price of coffee, whether it's
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  Speaker 5: rate to drink or hot coffee at your local coffee shop,
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  Speaker 5: have increased faster than most other beverages soft drinks I'm
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  Speaker 5: talking about. So you've even seeing some consumers bypower or
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  Speaker 5: switching from say like cold brew cold coffee to move
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  Speaker 5: to energy drinks. It's more cost effective, so the energy.
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  Speaker 5: So the coffee producers have a condundrum. Do they continue
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  Speaker 5: to raise prices and get flatter lower volumes or do
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  Speaker 5: they eat that margin. And so what Cure has decided
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  Speaker 5: to do is kind of divest in a tax efficient way.
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  Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 3: The Pinaut family is said to explore options for selling
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  Speaker 3: perhaps it's sports brand Puma, and I looked at the
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  Speaker 3: Puma shares as they trade in Germany.
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  Speaker 2: They've almost like half their value.
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  Speaker 3: I don't know what's going on over there, but Punham
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  Speaker 3: Coyle does. She's the senior US retail and also Bloomberg Intelligence.
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  Speaker 3: Punham talk to us about Puma. What's going on with
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  Speaker 3: that brand and why the Pinot family and maybe we're
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  Speaker 3: going to sell here.
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  Speaker 7: Yes. I think Puma has come under a lot of
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  Speaker 7: pressure in the last two years, especially since they lost
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  Speaker 7: their CEO to Aditas just about two years ago. What's
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  Speaker 7: happened is that Huma was able to thrive when Nike
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  Speaker 7: had pulled out of wholesale, as they regained a lot
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  Speaker 7: of that shelf space. But now with Nike pushing back
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  Speaker 7: and really entering wholesale in a more meaningful way, Huma
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  Speaker 7: doesn't have that same visibility in wholesale, So their wholesale
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  Speaker 7: sales have struggled and they really haven't found a niche
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  Speaker 7: for themselves to grow the company from where it is today,
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  Speaker 7: so lots of pain points. I think, you know, with
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  Speaker 7: a sale, if there is a sale that is it
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  Speaker 7: might just give it a bigger lap to fall into,
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  Speaker 7: giving it more scale to leverage, and maybe allow it
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  Speaker 7: to grow a little stronger.
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  Speaker 6: You know, I'm curious about endorsements because I just don't
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  Speaker 6: feel like I see it with Puma in the way
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  Speaker 6: that I do with a Nike certainly, or or Adidas.
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  Speaker 6: I mean, I think I saw Duaalipa out there hawking.
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  Speaker 6: I don't know the connection there, but hawking you know
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  Speaker 6: Puma's So are they behind the curve when it comes
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  Speaker 6: to what can be really vital endorsements.
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  Speaker 7: The vital endorsements are critical in the game of sports,
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  Speaker 7: and you're absolutely right. When it comes to mainstream sports
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  Speaker 7: that we're used to, like basketball and soccer and football,
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  Speaker 7: Puma doesn't have as big of a play there as
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  Speaker 7: Nike and Adidas. But Puma has crafted itself into the
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  Speaker 7: smaller sports like cricket. For example, it endorses the one
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  Speaker 7: of the largest cricket players in India. For cricket. It
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  Speaker 7: has the Ferrari sponsorship for racing cars right, so it
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  Speaker 7: does participate more meaningfully in the smaller sports. You might
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  Speaker 7: want to call it versus basketball. You know, it has LaMelo,
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  Speaker 7: but it doesn't have really that much more in terms
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  Speaker 7: of in the other mainstream sports like football or others.
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  Speaker 3: Who do you think should if this company is put
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  Speaker 3: up for sale, who do you think should buy Puma?
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  Speaker 7: That's a tough question. I mean it's probably going to
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  Speaker 7: be right now, it's speculated as anti sports and leaving,
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  Speaker 7: and I think those are all possibilities because they have
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  Speaker 7: the room to take in a brand that wouldn't have
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  Speaker 7: as much overlap. Right it's the predominant brand. It could
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  Speaker 7: help them scale their own visibility. I don't think of
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  Speaker 7: Huma makes sense for a Nike or Adidas, for example.
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  Speaker 7: I don't think that's where alongs, but I think anywhere
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  Speaker 7: else is fair game.
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  Speaker 6: If they don't sell, what are the other options on
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  Speaker 6: the table here?
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  Speaker 7: I think it's just going back to the basics, right.
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  Speaker 7: I think it's going to be harder for them to
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  Speaker 7: compete on with Nike and Adidas because they don't have
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  Speaker 7: the dollars or the deep pockets to advertise and market
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  Speaker 7: as aggressively as the other two do. But they have
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  Speaker 7: to stay true to their niche markets and really craft
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  Speaker 7: their way up from there. It's going to be tough. Look,
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  Speaker 7: the at leisure market is getting more competitive. Everyone is
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  Speaker 7: trying to sell at leisure right. Whether it's a specialty
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  Speaker 7: apparel retailers or the mainstream retailers, whoever it is, they're
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  Speaker 7: all going after that market share because the market is growing.
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  Speaker 7: It's not going to be an easy ride. And they
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  Speaker 7: have a new CEO in place to help them drive
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  Speaker 7: the turnaround, but we haven't heard a strategy yet, so
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  Speaker 7: we're not sure what their intentions are and what the
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  Speaker 7: roadmap is to really drive this turnaround.
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  Speaker 3: At least yet thirty seconds put them who's the Pino family?
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  Speaker 7: Who are they? About twenty nine percent of plum I share,
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  Speaker 7: so I think they're an investor that's largely invested there.
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  Speaker 7: But I would say there's a push to get the
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  Speaker 7: sale going because of the underperformance that they've had.
• 10:15
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  Speaker 6: Believe it or not, Apple is just weeks away from
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  Speaker 6: its biggest product launcher, one of its biggest product launch ever.
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  Speaker 6: You're calling it a once in a generation iPhone overhaul.
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  Speaker 6: What does that really mean? What can we expect? Anirag Rana,
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  Speaker 6: Chicago bureau. An Rag thanks so much for being with us. Look,
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  Speaker 6: I'm the kind of person who holds on to her iPhone. Okay,
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  Speaker 6: I don't have to run out and buy the latest, greatest,
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  Speaker 6: I will have it four years. Why because there's not
• 11:06
  Speaker 6: really a compelling reason oftentimes to upgrade, unless I'm looking
• 11:10
  Speaker 6: for a better camera. So tell me what's going to
• 11:12
  Speaker 6: get me to go out and buy these new iPhones?
• 11:16
  Speaker 4: You know, frankly speaking most of the Western world that
• 11:18
  Speaker 4: is still the story is you will go and change
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  Speaker 4: when you're you know, your battery is not working properly,
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  Speaker 4: or there is some issue with the screen. However, you know,
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  Speaker 4: every time there is a new model that shapes up
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  Speaker 4: comes out, you know, there is some excitement, and it
• 11:32
  Speaker 4: seems that this time bar Guman's done such a good
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  Speaker 4: job reporting again that they'll be launching called the iPhone
• 11:38
  Speaker 4: Slim or the seventeen, which is like an iPhone, you know,
• 11:42
  Speaker 4: just like a Macair airbook, you you know, it's a
• 11:46
  Speaker 4: slimmer phone. It's going to be replacing the iPhone sixteen plus,
• 11:50
  Speaker 4: so still the base end model. But I think that
• 11:52
  Speaker 4: is the one area where we are seeing something new
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  Speaker 4: come out of Apple iPhone, which has not been the case,
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  Speaker 4: I thing for the last several years.
• 11:59
  Speaker 3: So, I mean, again, what can they really do here?
• 12:02
  Speaker 3: I mean, is there something I kind of think that
• 12:04
  Speaker 3: phone's fine? What are they looking to do? What are
• 12:06
  Speaker 3: they looking to achieve? Are they looking to address some shortfall?
• 12:10
  Speaker 4: It typically targets more the emerging markets, more the Western world.
• 12:14
  Speaker 4: When you look at some market like the US and
• 12:16
  Speaker 4: it's pretty saturated in terms of unit growth. What can
• 12:20
  Speaker 4: happen in the US mostly is people may decide to
• 12:23
  Speaker 4: upgrade to a larger skew with more memory or a
• 12:26
  Speaker 4: better camera, and that just leads to higher average selling price.
• 12:30
  Speaker 4: But in emerging markets, where the cost bass or the
• 12:33
  Speaker 4: entry level point, you're giving them something new, something cooler,
• 12:37
  Speaker 4: perhaps in a new color. You know, that's what brings
• 12:39
  Speaker 4: in more people to the ecosystem. And then over time
• 12:42
  Speaker 4: they can go from the base model to the pro
• 12:44
  Speaker 4: model or the ProPlus model.
• 12:46
  Speaker 6: What about this foldable iPhone. I know that Samsung did
• 12:51
  Speaker 6: it with the Galaxy, but that was like five or
• 12:53
  Speaker 6: six years ago, so Apple's a little late to the game.
• 12:56
  Speaker 6: That happens sometimes Apple's not always the first to market,
• 12:58
  Speaker 6: but it sort of takes over the market once that
• 13:00
  Speaker 6: enters it. So what can we expect from this foldable phone?
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  Speaker 4: Yeah, but that's not going to happen till next year.
• 13:06
  Speaker 4: I mean Markomann said that that's the base or the
• 13:08
  Speaker 4: slim model is the base of the foldable phone, which
• 13:11
  Speaker 4: is going to come out next year. So Apple's still
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  Speaker 4: behind on that. But Apple has an argument that they
• 13:16
  Speaker 4: will not go unless they are absolutely sure. They don't
• 13:19
  Speaker 4: want to give the users a bad experience, and their
• 13:21
  Speaker 4: big issue has been, you know, when you fold that phone,
• 13:24
  Speaker 4: there's a slight crease in the middle, and they really
• 13:26
  Speaker 4: don't want that level of technology. Another thing they've done
• 13:29
  Speaker 4: is using their own mortem in this case rather than
• 13:31
  Speaker 4: the one that using from Qualcom. Apparently that helps them
• 13:34
  Speaker 4: to slim the design or the size of the phone.
• 13:38
  Speaker 4: And you know that again, what's the base for next
• 13:41
  Speaker 4: year's foldable phone.
• 13:43
  Speaker 3: You know, there was a time when people would get
• 13:45
  Speaker 3: excited about new product launchers. Ma Apple, that feels like
• 13:49
  Speaker 3: ten fifteen years ago.
• 13:51
  Speaker 2: All people want to know about is AI. What's the
• 13:53
  Speaker 2: AI strategy?
• 13:54
  Speaker 3: What's the nuance from recent discussions with Apple about kind
• 13:59
  Speaker 3: of their AI strates?
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  Speaker 6: Well, Siri get any better?
• 14:01
  Speaker 5: Please? Please?
• 14:04
  Speaker 4: I think this is a you know, it's people. If
• 14:06
  Speaker 4: there's one peg company that's made so much fun around AI,
• 14:09
  Speaker 4: that's Apple in the last you know, one and a
• 14:11
  Speaker 4: half to two years. But I still go back to
• 14:13
  Speaker 4: say that this is probably one of the most important
• 14:16
  Speaker 4: distribution systems out there in the world to get mask
• 14:20
  Speaker 4: adoption of consumer AI applications. So Mark's done an amazing job.
• 14:25
  Speaker 4: Again to talk about what they're doing in that case
• 14:27
  Speaker 4: is on Friday he reported they are working now with
• 14:29
  Speaker 4: Google to get to their Gemini models, and frankly that
• 14:33
  Speaker 4: has been our hope that down the road, if there
• 14:35
  Speaker 4: is an agreement between Google and and and Apple to
• 14:39
  Speaker 4: get their Gemini models in the ecosystem, I think it's
• 14:42
  Speaker 4: going to help Apple defend that you know, Hefty feed
• 14:44
  Speaker 4: that they generate from Google, which is you know, under
• 14:47
  Speaker 4: scrutiny right now. But it seems to me that based
• 14:50
  Speaker 4: on Oldmark has said that they're going to be working
• 14:53
  Speaker 4: with open Ei and Tropic and Google, and these are
• 14:55
  Speaker 4: the three companies with the top models right now. So
• 14:57
  Speaker 4: whether they use it in you know, one particular area,
• 15:00
  Speaker 4: whether it's you know, whether that's the headphones, or whether
• 15:03
  Speaker 4: it's on device, whether it's sending stuff to the cloud,
• 15:06
  Speaker 4: I think they if they can't build it themselves, they
• 15:09
  Speaker 4: have the capacity to outsource it to one of these experts.
• 15:12
  Speaker 2: Say with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 6: We want to dive into a broadcasting deal that was
• 15:35
  Speaker 6: announced not long ago, Next Star A buying its rival Tegna.
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  Speaker 6: It's a six point two billion dollar cash transaction works
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  Speaker 6: out to about twenty two dollars a share. I think
• 15:46
  Speaker 6: that was about a thirty percent premium when it was
• 15:49
  Speaker 6: first announced. Shareholders seem to like the idea, but well,
• 15:52
  Speaker 6: the government so We've got Jennifer Ee here, Bloomberg Intelligence
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  Speaker 6: senior litigation analyst, to break it all down for us. So, Jen,
• 15:59
  Speaker 6: once upon time there were rules about how many stations.
• 16:02
  Speaker 6: Once upon that time one company could could own. Will
• 16:05
  Speaker 6: this FCC approved this deal?
• 16:07
  Speaker 8: You know, I think in the end yes, because the
• 16:10
  Speaker 8: timing was right. You know, this isn't a deal. I
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  Speaker 8: think that these companies could have gotten through a few
• 16:15
  Speaker 8: years ago during the Biden administration. So both of the
• 16:17
  Speaker 8: rules that the FCC has that would get in the
• 16:19
  Speaker 8: way are in the process of being changed as we speak,
• 16:23
  Speaker 8: and Republican commissioners have for a long time wanted to
• 16:25
  Speaker 8: change these rules. So the first one is the thirty
• 16:28
  Speaker 8: nine percent ownership cap. You know that one company can't
• 16:31
  Speaker 8: own or operate TV stations that reach more than thirty
• 16:34
  Speaker 8: nine percent of US households. These companies say they'll reach
• 16:37
  Speaker 8: eighty percent. So it's just clear on its face that
• 16:39
  Speaker 8: there's a problem there. But the FCC is in a
• 16:42
  Speaker 8: rule making process. They'll probably have this rule, get rid
• 16:45
  Speaker 8: of it, vacate it. We think by the end of
• 16:47
  Speaker 8: the year. You know, my colleague Matt Chattenhelm is an
• 16:50
  Speaker 8: expert on the FCC and we've talked about this quite
• 16:52
  Speaker 8: a bit. That's probably going to clear out of their way.
• 16:55
  Speaker 8: There could be litigation, of course, but we do think
• 16:57
  Speaker 8: the rule will move out of the way. The other
• 17:00
  Speaker 8: issue is owning more than one of what's called the
• 17:02
  Speaker 8: Big four broadcast stations ABC, CBS, NBC, Fox. That rule
• 17:08
  Speaker 8: would also get in the way here, probably in a
• 17:11
  Speaker 8: number of local areas. Does it called designated market areas
• 17:15
  Speaker 8: by Nielsen. That rule has also been vacated by the
• 17:18
  Speaker 8: Eighth Circuit Court of Appeals. It will also probably be
• 17:21
  Speaker 8: in litigation, but it seems like the road is clearing
• 17:24
  Speaker 8: for the FCC.
• 17:25
  Speaker 3: There.
• 17:26
  Speaker 2: It's a whole new world.
• 17:27
  Speaker 8: Yes, it's a whole new world. But we have Department
• 17:29
  Speaker 8: of Justice also, so we can't forget that, right, and
• 17:32
  Speaker 8: we always think about the FCC. The Department of Justice
• 17:35
  Speaker 8: is going to be looking at this too, but I
• 17:37
  Speaker 8: do think they can probably get it cleared through that
• 17:40
  Speaker 8: agency as well.
• 17:41
  Speaker 3: All we really care about is President Trump, that he
• 17:44
  Speaker 3: have voiced any opinion one way or the other about
• 17:46
  Speaker 3: this type of deal or these types of deals.
• 17:48
  Speaker 8: You know, I haven't heard anything from him. You know,
• 17:50
  Speaker 8: it would be reported in the news. I haven't heard
• 17:52
  Speaker 8: him say anything about these deals. We are beginning to
• 17:55
  Speaker 8: see a trend though in the merger world, Paul, where
• 17:59
  Speaker 8: if the companies do and say the right things for
• 18:01
  Speaker 8: the Trump administration, they're getting assistants and getting their deal through.
• 18:05
  Speaker 8: And they're all pretty well aware of that. So as
• 18:09
  Speaker 8: long as they do and say the right things, hey,
• 18:10
  Speaker 8: we won't block political ads, will be neutral in you know,
• 18:14
  Speaker 8: our censorship of content things like that that resonate with Trump.
• 18:18
  Speaker 8: That's going to help them.
• 18:20
  Speaker 6: Sinclair did come in here with an eleventh hour deal,
• 18:22
  Speaker 6: did they not?
• 18:24
  Speaker 2: Yeah?
• 18:24
  Speaker 6: I think so, but you know they rebuff what it
• 18:26
  Speaker 6: seemed like on a per share basis, it was better
• 18:29
  Speaker 6: than the next Star deal for Tegna, So why rebuffet?
• 18:32
  Speaker 8: You know, I can't speak to that. You know, that's
• 18:34
  Speaker 8: much more Tegna and Tegna's strategy. Maybe they think from
• 18:38
  Speaker 8: an anti trust perspective, there's.
• 18:40
  Speaker 2: Less overlap here.
• 18:41
  Speaker 8: I mean, it is thirty five of fifty one of
• 18:43
  Speaker 8: their DMAs, That's what Techna says. But in those thirty five,
• 18:46
  Speaker 8: depending on what stations they own, that overlap may not
• 18:48
  Speaker 8: be problematic. It may only be problematic into few they
• 18:52
  Speaker 8: may still have to divest some stations in order to
• 18:54
  Speaker 8: get Department of Justice approval. I haven't done that comparison analysis,
• 18:57
  Speaker 8: but it may be that they have to divest your
• 19:00
  Speaker 8: stations for this deal, perhaps done a different one.
• 19:02
  Speaker 3: Yeah, how is the Department of Justice when looking at
• 19:06
  Speaker 3: mergers and equisisms generally defined? Has it maturely changed under
• 19:09
  Speaker 3: the Trump administration versus the Biden administration?
• 19:12
  Speaker 8: You know, it's so interesting. The rhetoric at the beginning
• 19:14
  Speaker 8: was that it wouldn't change, that there would be this
• 19:16
  Speaker 8: read through, and that there was more commonality with the
• 19:19
  Speaker 8: Biden administrators than differences.
• 19:20
  Speaker 2: But it has changed.
• 19:22
  Speaker 8: You know, they have gone back to settling problematic deals
• 19:25
  Speaker 8: with you know, structural even one behavioral remedy that was
• 19:28
  Speaker 8: Omnicom interpublic with divestitures. This is something that wasn't happening
• 19:32
  Speaker 8: during the Biden administration. They just said, if a deal's problematic,
• 19:36
  Speaker 8: we're going to sue this. DOJ in this FTC said no,
• 19:39
  Speaker 8: we're going to work it out. If we have problems,
• 19:41
  Speaker 8: we'll work out the problems with a fix. We'll have
• 19:43
  Speaker 8: a settlement and will allow the broader deal to close.
• 19:45
  Speaker 8: And that's a big difference.
• 19:47
  Speaker 6: What does this deal tell you though, just about the
• 19:49
  Speaker 6: larger landscape of television, especially local TV, which we know
• 19:53
  Speaker 6: has been losing revenue share. They're struggling just because there
• 19:58
  Speaker 6: are too many places the eyeballs can go, right. They're
• 20:00
  Speaker 6: competing with streaming and with the big guys. So is
• 20:03
  Speaker 6: this really a merger of necessity for these local TV stations?
• 20:06
  Speaker 8: You know, I would think it is, and I think
• 20:08
  Speaker 8: we're going to see more, you know, that kind of
• 20:09
  Speaker 8: consolidation has slowly There's been quite a bit of consolidation
• 20:13
  Speaker 8: actually has over the years. It kind of slowed down
• 20:16
  Speaker 8: during the Biden administration, but you know, I think it's
• 20:18
  Speaker 8: going to pick back up again because they are so
• 20:20
  Speaker 8: challenged by cord cutters, by people who never you know,
• 20:24
  Speaker 8: younger people who never watch TV at all.
• 20:26
  Speaker 2: You know, what's that? What is cable exactly? So broad
• 20:30
  Speaker 2: looking broader here?
• 20:31
  Speaker 3: I mean, over the next year or two, do you
• 20:33
  Speaker 3: expect to see more deal activity just because companies and
• 20:37
  Speaker 3: boards and private and all the forces in out in
• 20:40
  Speaker 3: the marketplace.
• 20:41
  Speaker 2: I feel like this is the time to do it.
• 20:42
  Speaker 3: This is an administration that will support deals.
• 20:45
  Speaker 8: I think so, and I think it would have already
• 20:46
  Speaker 8: picked up if we didn't have so much teriff uncertainty.
• 20:49
  Speaker 8: I think that has slowed things down. But as those
• 20:51
  Speaker 8: things sort of work themselves out, I think we're going
• 20:53
  Speaker 8: to see a lot more deal activity because you can
• 20:56
  Speaker 8: see a path to getting these deals done without having
• 20:58
  Speaker 8: to go to court and without dragging it out for
• 21:00
  Speaker 8: two years.
• 21:01
  Speaker 6: So this is sort of a litmus test, then, isn't it.
• 21:03
  Speaker 6: This next Star Techna deal. I think it's for the
• 21:06
  Speaker 6: rest of the industry. Really yeah, I think we have
• 21:08
  Speaker 6: a few litmus tests out there.
• 21:09
  Speaker 8: You know, the Google Whiz deal that's pending is a
• 21:11
  Speaker 8: litmus test for sure, to see what this administration will
• 21:14
  Speaker 8: do with a big tech platform merger. I think this
• 21:17
  Speaker 8: next Star Techna deal is a litmus test because they're
• 21:19
  Speaker 8: breaking all these old rules that were the orthodoxy for years.
• 21:22
  Speaker 8: We're going to see where that goes. And then you know,
• 21:25
  Speaker 8: you have Dick's footlocker and you've got Charter Cocks.
• 21:28
  Speaker 2: There are a lot of big deals.
• 21:29
  Speaker 8: Pending right now, and I think they all are deals
• 21:32
  Speaker 8: that would have had trouble during the Biden administration, but
• 21:35
  Speaker 8: I think can get cleared now.
• 21:36
  Speaker 3: Here's the deal that Charlie Pellott actually mentioned to me
• 21:39
  Speaker 3: just recently, what was it the Spirit Airlines and was
• 21:43
  Speaker 3: it jet I mean, sim of those deals that did
• 21:46
  Speaker 3: not get approved in the Biden administration. Do they bring
• 21:50
  Speaker 3: them back thinking that maybe they can get more fable
• 21:52
  Speaker 3: ruling this time. Is there an expectation we might see
• 21:54
  Speaker 3: some of that?
• 21:55
  Speaker 8: You know, I think it's possible that was blocked by
• 21:58
  Speaker 8: a judge. So the Apartment did win a lawsuit in
• 22:01
  Speaker 8: that case to you know, basically block that deal. You know,
• 22:06
  Speaker 8: it's possible that they try again because you have a
• 22:08
  Speaker 8: very different Department of Transportation which would have to approve that.
• 22:11
  Speaker 8: You have a very different Department of Justice, and again
• 22:15
  Speaker 8: you have an opportunity to divest and get a deal cleared.
• 22:18
  Speaker 8: And maybe at this point there would be structurally different
• 22:21
  Speaker 8: deal because they could divest certain routes or something like that.
• 22:24
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