The implosion of the Comcast deal says something about the limits of corporate clout in Washington. We’ve never seen anything quite like Comcast’s campaign of recent years. It wasn’t just money – although there was plenty of that. CEO Brian Roberts feted President Obama on Martha’s Vineyard in his first term and golfed with him there in his second. The President attended so many fundraisers at the home of David Cohen, the company’s top political operative, that he joked: “the only thing I haven’t done in this house is Seder dinner.”
That all melted in the face of massive public opposition – to the merger, and to Comcast itself.
That object lesson, however, won’t stop thousands of journalists, celebrities, and business leaders from descending on Washington this weekend for the annual White House Correspondents Dinner. I’ll be hosting Marriott CEO Arne Sorenson and Airbnb CEO Brian Chesky – who may want to have their own conversation about government regulation.
Anyone need a room?
| Alan Murray | |
| @@alansmurray | |
| alan.murray@fortune.com |
Top News
• Comcast-Time Warner Cable deal is dead
Comcast is expected to officially announced this morning that it will walk away from a $45.2 billion proposal to buy Time Warner Cable, quickly conceding defeat after it became clear the deal is facing resistance from U.S. regulators. The deal would have combined the two largest cable operators in the U.S., and with Comcast out of the mix, other suitors like Charter Communications, could surface. The imploding deal, which comes as cable operators face pressure as consumers "cut the cord" in favor of streaming services, also highlights the limits of money and connections in today's Washington. WSJ (subscription required)
• YouTube a star in Google's earnings call
Video service YouTube could be profitable, at least that's what Google says, if it weren't putting so much money into the business to fuel growth and develop new video products. The question of profitability has been a question that has always lingered in the back of observers' minds when it comes to YouTube, and Google could soon be pressed to unveil hard numbers for the business as it faces pressure from Facebook for ad dollars. Google's executives struck a bullish tone, saying because TV ad budgets are moving to digital, companies are excited to advertise on YouTube. Fortune
• Reading the tea leaves in Starbucks' earnings
As much as Starbucks tries to diversify its menu to offer more drink options and breakfast and lunch foods, the company will always be closely associated with coffee-filled white cups with green lettering. But increasingly, those cups are being filled with teas (the world's most widely consumed beverage after water). A Starbucks executive said sales from the company's tea division rose 15% year-over-year, bolstered by tea lattes and also Teavana shaken ice teas. The coffee giant also said the Flat White, which is similar to a latte but silkier and made with more espresso, drove growth in the core espresso business. Fortune
• Mixed results so far in first-quarter earnings cycle
The earnings season is still in its early days but the results that Wall Street investors have seen so far can only be considered a muted success, and even that might be too bullish of a picture. To be sure, of the 169 Standard & Poor’s 500 companies that have reported so far, 71% have reported earnings that exceeded expectations. But much of that was due to stock buybacks and cost cutting, not sales growth. In fact, less than half of those companies posted better-than-expected sales. A strong U.S. dollar is a major factor, and analysts are trimming their expectations for the current quarter. Reuters
• Pepsi says consumers today are confused
“We’ve never seen the consumer as confused as they are today." That was an observation shared by PepsiCo CEO and Chairman Indra Nooyi, after she was asked about Pepsi's approach to sorting its products into three buckets: "fun for you," "better for you" and "good for you." There isn't a lot of fun in the food aisle for the nation's largest food and beverage companies, which are seeing pressure as some well-established brands lose their edge to startups, and as consumers spend more on fruits, vegetables and meats. Nooyi said a few years ago, diet drinks were all the rage but now, consumers view real sugar as better to consume. "They’re willing to go to organics even if they have high sugar, high salt and high fat. It’s a challenge.” Fortune
Around the Water Cooler
• How the dollar store war was won
Earlier this week, we mentioned a merger in the pharmaceutical world that involved three companies duking it out for control (Mylan, Teva and Perrigo). Well, the dust recently settled on another merger battle, this one in the discount aisle. A dollar store war for Family Dollar ended with a sale to Dollar Tree but not before a fight broke out with a competing offer from Dollar General. And of course, activist investor Carl Icahn was involved. Before a deal occurred, as Family Dollar's CEO argued he had his own plans to revive his own company, blaming problems on a recently departed executive, Icahn said: "Stop making excuses! Tell it to your mother." For more on the tale, check out Fortune's story. Fortune
• Nasdaq finally surpasses dot-com peak
The tech-focused Nasdaq composite index achieved a notable achievement on Thursday: it reached a new closing high, the first time that’s happened since March 10, 2000. Back then, the Nasdaq swelled as investors were euphoric about the possibilities of many new tech companies that debuted on the public markets. The Nasdaq of today is very different than back in 2000. The tech firms are more established and better financed in 2015, and are some of the world’s largest firms. Quartz
• Classpass buys a competing startup
If you live in New York City and you are a Millennial, someone has likely already said the following words to you: "You've got to try Classpass." The fitness class marketplace, which offers access to boutique workout classes for a monthly rate, has acquired a competing startup in San Francisco called Fitmob. Classpass charges members $99 per month for unlimited access to fitness studios in their area. The startup now operates in 30 cities and has raised a total of $54 million in venture funding. Fortune
• Some of America's unhealthiest ballpark foods
Who knew baseball stadiums could be a foodie destination for burger lovers? Fortune looks at a dozen of the most unusual concoctions that can be found at the nation's ballparks, including unusual spins on the hot dog and hamburger. Some unusual creations that caught our eye: a deep-fried Krispy Kreme doughnut used as a hamburger bun with an Angus beef patty. There is also a $30 four-pound burger that comes with 32 slices of bacon and at least eight slices of cheese and reportedly, 8,320 calories (without even counting the side of fries). Fortune
