It is official that comcast is buying Time Warner Cable in an equity deal valued at 45. 2 billion. 45. 2 billion. That values Time Warner Cable at 158. 82 a share. I think we have heard that number somewhere before. Would think we can create tremendous value by running this company on our own. If charter wants to transact 158 is the price. This was the cable love triangle. Charter try to buy Time Warner Cable but twc played hard to get. Now, comcast was going to be in on that deal, potentially buying some of the assets. We were hearing that comcast was going to enter into a friendly agreement with charter to try to acquire Time Warner Cable together, so the news that they have done an end run around charter and done a friendly merger with Time Warner Cable came as a shock to just about everybody last night. Ok, so lets get past a surprised factor. Buying the secondlargest u. S. Cable Company Brings comcast more than 11 million subscribers. It gives comcast access to new york city market and more provider content. So the question is how big does that make the new company . If you include directv, dish, verizon fios, at t uverse, comcast will have about 30 of all paytv subscribers, but if you look at this as just Cable Companies, comcast becomes really dominant, combining number one and number two. Of course, you can also look at the world of tv viewing these days to include youtube and netflix and amazon prime and hulu, etc. , and then you get a figure beyond the early percent, regulators will have to make the choice are they comfortable with comcast owning so many cable subscribers and owning the Nbc Universal content portfolio . That is a lot of power in the industry for one company. Oh, the regulators. If we know anything, washington will be looking for was Stephanie Ruhle likes to call a pound of flesh. Anytime you combine a number one and number two in anything in this country, washington is going to be initially skeptical, but again, this deal will have to be scrutinized because it is not just perhaps cable versus cable here. It involves a whole lot of more players and what it means in terms of programming costs, the flow of information over the internet. The department of justice, the the fcc will have to decide is this in the Public Interest. And when it comes to the Public Interest will our cable bills go up . That is the question at the department of justice is going to look at. This is a very unusual type of merger, though, and that remember Cable Companies do not compete with each other. They have separate geographies, so you get horizontally bigger, but it does not change the Competitive Dynamics one iota in any individual market, so the department of justice and the fcc will not be reviewing this through the traditional lens of hhi, which is the concentration index you would use. You could argue that it could actually lead to lower bills in that the combined entity, if the merger is allowed, will have more leverage to get lower programming costs, so that could flow through to consumers. Ok, so cheaper programming, that is good, but think about the fact that more and more viewers are choosing to stream their video, so is there even a future for Cable Television . In the loop asked former cnn president and ceo jon klein. It is all about size, delivering of content, etc. , whether youre in the former phone company, verizon, at t, all of these guys have to get as big as possible as fast as possible. And so in the cable industry at least, this is pretty close to a monopoly now. I do not know monopoly, but the verizons and at ts our national networks, but a cable programmer is localized, and that might be changing. You suddenly have a company that has almost a national footprint, but theyve got to have that in order to compete against alternatives. Google is developing fiber that delivers 100 times faster speed than your cable or your phone provider does. And that is a good point. They are a national provider, google. How quickly do we think cable provider, who cares, right . Young people think about that. If you talk to 25yearolds our 25yearold producers do not even have cable. No, and they do not need it. One thing that everybody is talking about today is the idea of a monopoly, what is not being talked about today is the fact that comcast investors are going to have a lot tough questions because you pointed out the loser here, john malone. Is he really, because comcast is paying a big price here you go and remember, malone was going into this with a different philosophy on how to use cash. He was going to take advantage of the cheap debt market out there. Comcast is using very expensive stock. Investors are going to have a real issue with this deal today, and that is one thing that they are going to have to get over. Forget about d. C. We will talk wall street here and we will focus on what comcast and how comcast is going to message this deal to investors. So the comcastTime Warner Cable yield could provide the giants more leverage in the negotiating subscriber fees. These are what companies charge for content. This has become a big business, a wonderful business for these media companies, which in the past were largely tied to advertising, but because of the growth of cable over the years, the other businesses basically materialized where the Cable Companies would end up paying those small Cable Networks some money to be carried by the cable company, and that became sort of their business model, and in the broadcast networks, the abcs, nbcs, cbss were saying wait a minute, we can do the same thing, a lot of people are watching our programming and we spent a lot of money in a, and we want to be paid for it, and whenever they go into the court of public opinion, they generally win. You think about cbs and Time Warner Cable having the blackout fight last year, and few people have sympathy for the Cable Companies, so the content players are able to get more and more of this revenue from retransmission fees. Now they have to go back, have the strategy talks, talk about how this affects them, cannot play Time Warner Cable off of contest anymore. I do not know that it can make a huge difference for the biggest players like fox and others who already get paid pretty big content and already have a lot of leverage, but it is a pretty important story to keep watching. David bank, now that we have Time Warner Cable and comcast as an entity, that is a different kind of beast entirely. Comcast has always been different from the different Cable Operators because it has got the content to go along with the pipes. Why have we not seen more deals like that . Of vertical integration between content and distribution, well, look, i think we came through almost a decade of exactly the opposite. You had media conglomerates and simplifying their corporate structures, simplifying their business lines and returning capital to shareholders. Coming up in nation, treasury secretary jack lew, what he has to say but the debt ceiling extension and unemployment in america. Plus, jobs are fizzling out of pepsi. We will look at how much the company is saving from those jobs. And talk about a close call. Syracuses perfect record was saved by this buzzer beater. The 19yearold moved up the court and led a threepointer fly. Nothing but net. Syracuse tops pittsburgh 5856, staying undefeated, 240. Look at that thing, oh, yeah. Oh this is lunch money, on Bloomberg Television, and we are also streaming live on bloomberg. Com, your tablet, and your smartphone. I am adam johnson. In company today, it is about health and wellness, even losing a little weight. Consider pepsi. Americas largest food and Beverage Company beat earnings estimates and forecasts 7 growth, but there is a catch. It will be labor savings, and it will come from a variety of ways. It will come from making be Distribution Center more efficient, it will come from doing shared services with some of the work we have been doing, but i would expect about 40 to come from labor savings. That said, we historically have been very effective in helping people who are displaced find opportunities elsewhere. Ok, now to nestle, even bigger than pepsi, it is the Worlds Largest food and Beverage Company. Slowest sales growth in four years and it too wants to slim down. Heres the ceo. Looking into our portfolio, whatever is not fitting strategically, not really the enjoyment of business, and we will divest, we are going to do that much more forcefully. So these are the things we are doing. We have also another way of saying it, we have also quite a lot of skus that we have, so we are really going for as soon as possible. We are a company that has a portfolio, we are a company that has a worldwide presence, but we have to bring strength for growth for the future. And whole foods stumbling today. Profits trailing in the stock is down. The problem . Everyone lives in an amazon world. Even highend markets face competition. This is especially true in the smaller cities where whole foods will try to expand. Will they succeed longterm . We asked a blogger, one of the 50 most influential women in food. They do a great job of getting people to buy great ingredients, but there is another step to getting people you have to know what to do with it. Are the customers in the kitchen . In 2014, most grocery stores, milk is the farthest away from the front door because they want you to go back to the milk. In the whole foods, it is kale, and they run out of it. What is it about kale . Please explain to me kale. It is a superfood. And quinoa. They are the most searched ingredients on our site, quinoa and kale. Are you kidding me . The most important search for me is pizza. Speaking of pizza, our single best chart takes us up nicely. Thank you, tom. We eat pizza a lot in america. About one in eight americans consume pizza a day. This is from the u. S. Agricultural report called what we eat in america and it turns out boys between the ages of six and 19 lead the way. One in four of them eat pizza on any given day. Are you leading research on this and your house . We experienced this daily. Where are we on junkfood . Pizza is not junkfood. It contains milk and cheese. It is a lowest common denominator food. It sounds bad, but it is like one of the universally loved foods, so when people get together, people serve pizza because they know it is safe. You and others have revolutionized the food business. Where will we be in five years . I think sort of more i think people will be eating better. I mean people are eating kale. Five years ago, people would not have been considering it. Are you growing kale in your backyard . Enough about health foods. Do you like cinnamon buns . Yeah, i like them, and they like them in libya as well. This was the first u. S. Company to open there after the government collapsed and the key to the whole thing was logistics. Setting up the supply chain is number one. If you cannot get the product there, there is nothing to sell. Chobani. They got stuck in new jersey. Setting of the supply structure month and years in advance is key. And then to find a supply structure that understands the market, the governments, the regulations, and really has the ability to invest in the infrastructure. We opened almost 100 cinnabon locations in under three years in russia. That is no fluke. That is a testament, and they are all profitable. Have you borrowed anything from what mcdonalds does . They have pioneered so many other countries to figure out where they have failed, where they have been important, and how do they tweak the concept to be relevant in those markets . Franchise partners are one thing, but if you cannot set your Pricing Strategy in such a way that the economy cant afford it, you wont have a sustainable retail model. What do they change, what do they tweak . I want to get straight to some breaking news, prime another big number, 2. 6 billion. That is how much a retired hedge fund minister is worth. Plus, jaguar is out with its first port car in a long time. We got all the details. It is coming up in motors. This is lunch money on Bloomberg Television. We are also streaming live on bloomberg. Com. In motors, if you are in the market for a 2 million car, you are in luck. Bugatti once your business. The company has a unique sales pitch to win you over. I have never seen anybody get out of this car and sigh, that wasnt what i expected. It is a very positive experience. Bugattiduced the Dynamic Drive experience in north america last year. These events have been very successful in attracting new people to the brand. Were going to host four of these events around the country this year. We will bring in 20 to 25 per weekend. They will experience the car on the open road and then we will close down a public road for highspeed drives or perhaps have a closed runway. Ay, we have the beyond the bugatti grand sport come of the fastest open top car in the world. Important imported to north america, it costs about 2. 5 billion. I have seen them range anywhere from 2. 4 billion to 3 billion. Goal with this drive experience program is to attract individuals who perhaps never had a chance to experience the brand before. Typically these are individuals who are very serious about cars. They want to experience it first. We do have previous owners who come and want to get back into the brand. Cars that ween top are ever going to build, only about 40 remain available worldwide. We anticipate this will be sold out within 12 months and there will be another model coming but we wont introduce anything within the next few years. Awesome. On to jaguar. We have been waiting a long time for a new sports car. Finally, it is here. Can say that jaguar has always been known as a sports car brand. The ftype represents the return of the jaguar sports type after years off the market. Having that back in our lineup really casts an amazing mind overall brand. It is one of the key reasons our sales are up 40 for 2013. When you talk to our design director and the way he approached this, it was to take the sports car onward into the future, but respecting all the heritage we have had. This is the first time we have r version of the ftype . The fastest ever time for a jaguar production car. It starts at 99,000. It is a great value if you think about the performance it offers relative to the usual suspects in the sports car space. We are very different from the german big players. We offer something more exclusive and a little different from a performance perspective. I think that is what will drive our momentum. Jag was originally called the swallow car company. Need to make a lot more than 10. 10 if you want to buy one of those cars. We will take a look at the proposed minimum wage increase. That is coming up in nation. Plus, we look at why whiskey is winning. This is lunch money, on Bloomberg Television, and we are also streaming live on bloomberg. Com, your tablet, and your smartphone. I am adam johnson. Todays moving picture where the video is the story. Clashes between rival parties in johannesburg are the latest sign of tension. South africa heads stored a general election in may. Partyters say the ruling hasnt done enough to create jobs. The converted u. S. Cargo ship docked in spain on its way to destroy syria ostomy weapons. The next port call will be in italy. There are two large machines on board which will neutralize agents to render those weapons unusable. And snow kidding. Another winter storm hitting the northeast here in new york. Getting anywhere from eight inches to 12 inches in new york before he moves in new york before he moves into new england. It has already coated parts of the southeast and dump series no on washington, d. C. In nation, president obama signed an executive order yesterday raising the minimum wage to 10 10 cents an hour for government contracted workers. His larger goal expanding that rate across america. The minimum wage is the cover of the latest edition of bloomberg businessweek. Though truth be told, we created six different covers for this issue. That is how complex this issue is. We spoke with economics editor peter coy. This is not an easy issue. It has so many different moving parts to it. The strained economics, about which there is more russian than there used to be, and then there is kind of the whole moral issue, like what is right, and then there is the engineering issue, given the fact that you have different answers from the economic than the social justice, what ultimately should you do . Peter, 10. 10 is about half the median wage in this country. How does that compare a story to historically to what we have seen . That goes back to the way it was may 1960s and 1970s, but it had declined. The 7. 25, which had been the minimum wage and since 2009, is well below half of the median wage, and it has lost buying power. Bringing it up to 10. 10, which is the president s proposal, not just for this executive order but for the federal minimum wage in general, would put us back into historical line. It would be by a narrow margin the highest ever in terms of buying power. I looked, peter, at the minimum wage, and i look at the research that you have done. What is the republican state, those against raising the minimum wage, what is their most cogent point . Well, philosophically, they argue that the minimum wage is interfering with private contracting between consensual adults, and there is no reason the government should get involved in that. If somebody wants to work for a certain amount of money, somebody is willing to pay it, why should the government get involved . But if you dont buy that, if you dont buy into the libertarian philosophy, you might still think that the people against the minimum wage have a good point, which is simply that it could destroy jobs. The idea is of course he might be worth five dollars an hour to an employer, but you are not worth 7. 25 or 10. 10, so you will lose and be out of work. You can read peters. Or a you can read peters full story in the latest issue of bloomberg busi