Could a Chipotle-Starbucks Merger Actually Work? & Hollywood Turns on Big Tech

Good morning, BrewDaily Show. I'm Olivia Lake, and I'm Toby Howell. Today, what to make of a potential Chipotle Starbucks merger? Then, the social reckoning arrives today 16 years after the social network with plenty of new material to cover. It's Friday, October 9th. Let's ride! Be Friday, everyone. If you struggle with your sleep, consider inviting your dog into your bed. In a study that sounds like it was written by your pet, researchers tracked the nighttime activity of 25 human volunteers and found that despite self-reporting worse sleep with their pooches in the room, sleep tracking devices showed their dogs were not affecting their slumber. And if anything, the opposite was occurring, humans were moving first and disturbing their dogs, not the other way around. According to the co-author of the study, the finding show we feel safer sleeping with our pets, hitting at a deeper evolutionary history between humans and dogs. Live, you're a dog owner. Does Homer ever sleep in the bed with you? Homer does sleep in the bed with me, and I have to disagree with this article. I mean, I love my dog, but I have an aura ring, and it will actually, when he sleeps in the bed with maybe like, "Did you share a bed last night with a human or an animal because your sleep was disrupted?" And maybe that's just a comment on Homer and how much of a menace he is, 'cause he is nine pounds, but takes up the entire bed. Mentally, I like sleeping in bed with him, 'cause it's so cuddly and cute, so I understand the whole safety cosiness of it, but my aura ring would back to differ. Homer is so tiny, too, which is so funny that he is waking you up. The study does go on to say that the caveat is, if it's a big dog and it's taking up a lot of room, then you're probably not sleeping that well, but nine pounds, I guess his personality is just too big. And our word from our sponsor, Intuit. 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Starbucks CEO Brian Nichols spent more than six years running Chipotle. Nichols has already hired two former Chipotle executives to run marketing and coffee shop development at Starbucks. And he still lives in Newport Beach, California, home to Chipotle's headquarters and where Starbucks recently built a satellite executive office. The timing is what's odd. Starbucks is only in the early stages of its own back to Starbucks turnaround, which includes adding baristas, beating up service, renovating cafes. It's starting to show results, but it's far from finished. Chipotle, meanwhile, has struggled since Nickel left in August 2024 with its shock nearly halfed in value, which makes you wonder if he thinks he can fix it again. Toby, they say never go back to your ex, but Nichols seems to think this one is worth a second look. All right, let's just get the jokes out of the way. Toilets are not ready for a Starbucks Chipotle time. I said it. It's out of my system. I don't need to say it again. But the real intrigue here is not just that Nichol is Chipotle's old CEO. It's that he actually spent a decade at young brands before he came over to Chipotle. Young brands is the parent company of Taco Bell, KFC, Pizza Hut, among other other brands. So he has firsthand experience with this multi brand restaurant model. So the idea wouldn't actually be to merge Starbucks and Chipotle. It wouldn't be to have Starbucks suddenly start slinging burritos. It would look probably more like young brands where they operate multiple chains, but separately. The combination would come in things like the back office functions, other areas where you can have scale and use synergies. You create cost saving measures. That's what like the corporate speakers or something like this. But Nickel understands this world because of his years at Yum and he understands Chipotle because of his years at Chipotle. Yeah, and the big question is, how would Starbucks even pay for this? Chipotle is worth about $41 billion. And the financial times put Starbucks own value at about 103 billion. So the target's roughly 40% of Starbucks size, and that's before any premium. Jonathan May is the editor-in-chief of Restaurant Business Magazine. He points out that Starbucks has only about $3.5 billion in cash, which is less than a tenth of that price. So it would need a mix of cash, debt, and Starbucks stock and then issuing stock dilutes its own shareholders. So that's just a lot for an unnecessary move. And the other problem in WatchPool is so expensive is it's not really a fixer upper. I know I said the stock struggled, but nothing in the reporting shows that the actual business is in trouble. In fact, according to CNBC, second quarter revenue rose $9.3% to $3.35 billion. And that being an analyst expectation. So Starbucks can't really pitch this as a rescue move. It would have to argue that Twolei will be worth even more after it pays this big premium and folds into Starbucks. And that's a much harder sell to its own investors. The big question, too, is, do these synergies even emerge? I mean, that's what you always hear when a big corporate merger is floated. But when it comes to restaurant synergies, there's actually a very bad track record. Jack in the box in Del Taco is this big tie up a few years ago. And they wanted to be this multi brand operator. That experiment only lasted about three years. And essentially everything Jack in the box tried to bring to Del Taco. Del Taco ended up unwinding specifically. They try to change things like where they source their ingredients from. And when you start messing with stuff like that, you run the risk of running a foul of your core fan base. So customers hated it. Everything unwinded. Those back office synergies just didn't amount to much. Which is why everyone's kind of scratching their heads here and saying, really Starbucks, fix your own back of house before you start going shopping around. And Chipotle is, as you mentioned, not struggling. I mean, it is struggling, but it's not like a floundering business right now. So is this necessary? Probably not. Is this fun to imagine? Absolutely, though. So it's fun talking about it. Moving on, Hollywood has found their new favorite villain. And instead of wearing a cape and plotting world domination, they wear a quarter zip and still kind of plot world domination. Tech CEOs have become tinseltown's favorite punching bag of late, headlined by the social reckoning, which hits theaters today 16 years after the social network, turn Facebook's origin story into one of the defining movies of the century. Aaron Sorkin is back picking up the story of Mark Zuckerberg as he enters the chapter where whistleblower Francis Hagen played by Mikey Madison pulls back the curtains as to how Facebook's algorithms allegedly prioritize engagement in profits over user safety. Jeremy Strong takes over the mantle of Mark from Jesse Eisenberg while Jeremy Allen White plays the Wall Street Journal reporter who helped expose the company's secrets in the so-called Facebook files. Early reviews are mixed with many saying the movie arrives too late for the moment with Facebook now meta. Having racked up so many scandals in the past decade, it's hard to spin the wheels of outrage anymore. But that hasn't stopped others around Hollywood from taking shot after shot at Big Tech Barrens. There's artificial starring Andrew Garfield as Sam Altman, chronicling the corporate coup that nearly brought down open AI coming out this Christmas. A nearly four hour Elon Musk documentary arrives next week. Elizabeth Holmes is the subject of the highly anticipated documentary from Nathan Fielder. While convicted FTX founder Sam Bakeman Fried is getting his own Netflix miniseries next month. It's the Marvel Cinematic Universe of Tech Billionaires behaving poorly. Live Hollywood is obsessed with these stories right now. Think the MBD team might have to have a movie night soon. Okay, screw the movie night. I want to see a Morningbird daily movie. I already have it cast in my head. I want to know what kind of secrets they would uncover. But the title is social reckoning and a lot of reviews and coverage asks whether there's really a reckoning at all. The Hollywood Reporter points out that Instagram's user base has grown 25% since Francis Hagen's Senate testimony. And Hagen herself said that social media may be worse off today than when she leaked the documents. And the post script notes at the end of the movie, which isn't really a spoiler because it's just facts. But it's millions of Americans still get their news from Facebook. In 2025, Meta ended its fact-checking program. It replaced that approach with crowdsourced context notes from users. So I think the movie is kind of asking you like this big scandal happened and then nothing really happened after that. So the title is interesting. It's social reckoning. That reckoning never really came. And that's kind of why people say this particular movie lacked the teeth of the original one. It wasn't directed by David Fincher. And two, it was very sorken and he tried to cram a lot of information into a relatively short period of time. But it just doesn't have teeth anymore because people just don't get outraged about social media like maybe they would have win the Facebook files were first hitting. And that's, you know, for better or for worse, a 2024 Pew Research Survey found that 78% of Americans believe social media companies had too much power and influence in politics. So it's basically the most commonly held opinion in America. right now, which is maybe why it didn't hit as hard as the first one, but I just want to zoom out to the broader tech backlash moment that is pervading Hollywood right now. Think about all the movies that are coming out in TV shows that are all skewering the same type of character. Apparently the Sam Altman movie is about to be very good. Will Angus too from Instagram, you've probably seen him. He plays Dario Amade, very excited to see him on the big screen, but it's kind of the same archetype that is connecting all of these stories. They're not necessarily looking at is this person an evil person, but they're diving deep on the idea that what happens when someone is so convinced that they're improving the world through whatever tech product that they are putting out there, that they stop questioning whether that version of progress is actually better for the world in general. You can see it falling through every single one of these stories that we mentioned. Yeah, and the tech industry's reaction seems to be okay. One lobbyist called it a collective shrug, and Tom Rothman, Sony Pictures CEO, expects the tech industry to try and ignore all of this, because at the end of the day, if it's not affecting their business, it doesn't really matter that much. Moving on, it's stock of the week, a dog of the week time, the segment where we pick one stock that is proudly rocking a mullet and one stock that is too scared to try a new hairdo. I won the pre-show game of who can perform a pearl stitch better, so I'm at first, and my stock of the week is Duke math majors, because they're absolutely balling. According to The New York Times, Duke math majors top a new federal earnings analysis with a median income of almost $300,000, just four years after graduating, the most lucrative degree in America. The data comes from the federal college scorecard and was analyzed by the H.E.A. group. Carnegie Mellon takes the next two spots with computer science grads, making about 270K, an electrical engineering grads at 250K. Duke's math students don't seem to be doing a victory lap, though. A Duke math professor said he's hesitant to celebrate earnings, as the sole marker of educational success, and one grad said he didn't know a single math major who wasn't double majoring in something else, too, which could contribute to higher earnings. There's also a big asterisk. The Duke number is based on just 17 graduates. The data only covers students who received federal financial aid and graduated in a two-year window starting in 2017, so it's a narrow slice of Duke math majors, but Toby, if you ever needed proof that you'll want to use math in real life, here it is. It is very funny to see the chart of majors in their earnings potential after school, because Duke is literally off the charts. No one's even sniffing the amount of money that they bring in, but this is not just a college ranking exercise, there's actually real consequences behind this data. A new federal law creates an earnings test for programs whose students do receive that federal financial aid. Basically, if graduates of particular program aren't earning more than the median high school graduate four years after finishing, then that program would become ineligible for federal direct student loans, so while we're all kind of celebrating Duke at one end of the spectrum, there's a lot of colleges at the other end of the spectrum, where they are not necessarily guaranteeing the money that you would expect from a program like that. One of the most striking examples is Juilliard, actually, median earnings for Juilliard music graduates are $32,842. That is below median earning for high school graduates, which is $34,000, so it shows that Juilliard is one of America's most prestigious universities, it focuses obviously on the arts, but you are earning less than the median high school graduates, so that program might come under fire and might not be able to receive federal student loans going forward. Yeah, and Duke has the single highest number, they're getting all the praise, but I'd argue Carnegie Mellon is the more impressive story, according to the New York Times, CMU shows up in the top 33 times, that's more than any other school, and it's computer science and electrical engineering majors, they make almost the same as those Duke math majors, and both of those numbers from those majors come from over 100 graduates each, and so that's a lot more solid than Duke's 17 sample size. And CMU also just received a $3 billion donation, which we talked about on the show from Ken Griffin, and that'll help fund a new campus in Miami, so Duke has the headline number, but Carnegie Mellon might be the real earnings machine. And this comes as, you know, the ROI around a college degree is heavily debated, because the sticker price at some colleges are $100,000 per year at some point, so you do actually want to make these calculations, is the major that I am paying all this money for going to lead to me recouping some of those earnings. But as you mentioned, a lot of professors, when they see these numbers, try to push back on earnings, that's the only way to measure a college education, that's not all you get away from college. You want to intellectually develop while you're there, you want to create friendships, you want to create professional networks, you want to basically have a good time and have health and happiness while you're in this for your institution. It's not just about the amount of money that you make coming out of it, but it's hard to ignore, especially when you have this federal law cracking down on programs that aren't giving students the bang for their buck that they're looking for. All right, we're going to take a quick break and come back with my dog the week right after this. Neil, you know how I'm always watching Dock You Series? Yes, and I keep telling you you're watching scripted sitcoms. Well, rising stars is real, it's a Dock You Series that follows small business owners as they create their businesses, face real challenges, and scale their brands with help from Amazon ads, from building awareness to driving sales. They document how Amazon ads helped hydrojug reach relevant audiences and scale from just a few thousand dollars to numbers you won't believe you'll want to see this one. Watch now at advertising.amazon.com/rising-stars, that's advertising.amazon.com/rising-stars. 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They help you find a therapist for your specific needs with providers specializing in over 90 conditions. To get started, head to rula.com. That's r-u-l-a.com and take the first step. My dog the week is tech companies because they might be losing a potential source of skilled workers after the Trump administration crackdown on a program that allows H1B visa holders to apply for green cards. You've likely heard of an H1B visa that lets American companies employ foreign workers in specialized high-skill positions, a program that is very popular within the tech world. The announcement yesterday takes aim at a lesser-known pathway called Perm, which allows those same workers here on a visa to transform from a temporary stay into a long-term residency via green cards. Perm requires employers to advertise any position to American workers first and demonstrate that an available domestic worker cannot fill the position. But Vice President JD Vance yesterday argued that tech companies, specifically Microsoft, have been dodging those requirements by placing ads and small obscure newspapers just to check a box so they can then utilize the foreign worker program. Our message to Microsoft is, "You're a great American company, but you've got to hire great American workers," Vance said. So it's suspending Adobe, Microsoft, and other tech recruiting companies from the program, which led to some very unfortunate timing, because literally hours after Vance dropped the H1B visa hammer on Microsoft, Trump awarded Microsoft CEO Satya Nadella, the National Medal of Technology and Innovation at the White House, live. Talk about awkward. Yeah. And this crackdown doesn't just stop at tech companies, Vance also went after universities, and there are nine of them now under investigation over alleged misuse of the J1 visa. So that's similar to the H1B visa. It's a program that lets international visitors come to the U.S. for work and study exchange programs. Harvard, Yale, Stanford, they're all among the ones named. And Vance said that these schools used the program in greater proportions to their counterparts. And the Labor Department alleges that some may be using international workers to suppress wages for American employees. So it's kind of the same message as the H1B announcement. It's just aimed at a different group. The administration is going after the people who use these visa programs, not only the people who come in on them. You're absolutely right. And the H1B visa program has been something that Trump has been going after for years. Now he attempted to post a $100,000 fee on them, the federal judge struck that down. Also when it comes to international students, not just universities themselves. On Wednesday, the Department of Homeland Security proposed a $70,000 fee for international students participating in this optional practice training program, which allows them to work in jobs related to their major during or after their study. So you are right that it's this broad sort of crackdown on potentially foreign workers as the Trump administration frames it, taking jobs away from American workers. How big is this actual problem? according to the law. two vans, 6,000 American workers from Microsoft were laid off last year and then he mentioned that 6,300 Microsoft workers obtained H1B visa. So he is kind of framing it as this one-to-one thing, it's not actually one-to-one, it's not like they are kicking out an American worker and bringing in an H1B visa worker instead. But that's basically how they're framing it saying that we need to protect the domestic interest of our American workers. Let's switch to the finish with some final headlines. OpenAI's revenue just got a $20 billion haircut and it does not look good with bangs. According to a Financial Times report, the company's annualized revenue is actually $50 billion, not the $70 billion that I've been widely reported last month. The discrepancy comes from an accounting difference where the company's own investors were trying to use the same principles as anthropic to produce a direct revenue comparison. Both approaches are legal but are the accounting equivalent of comparing apples to oranges. So at the end of the day, it led to openAI's revenue being overstated, which spooked not only their own private investors but investors in the stock market too, shares of chip firms including Nvidia, CoreWeave, and others all sold off on the reports live. There's being slightly off on revenue and then there's being $20 billion off, missed it by a mile. First of all, I'm taking the bangs comment personally as someone with bangs. Yeah, the main issue here is calculating their ARR by taking one month's revenue and multiplying it by 12 because you don't know what happened in that month. That's like my mom sending me $100 for my birthday one month. That doesn't mean she's going to do it every month, which mom, I know you're listening, you absolutely can do that if you want to but just want to put that out there. Yeah, it actually speaks to a much broader issue of calculating AR in that way. You are right, especially when there is super fast growth happening, obviously companies want to make that big number go up so they want to say like, hey, we signed a huge deal with Microsoft this month, it brought in $2 billion, that's going to happen every single month going forward. So that is why you see the pushback on this, but it was fascinating though how one report from a private company absolutely rippled through the entire broader stock market because again, open AI is so intertwined with the entire AI ecosystem. If they are faltering a little bit, it can bring everything from Nvidia and others down with it. Moving on, Spotify reupped their deal with the host of the Joe Rogan experience that gives them the ad sales right to the biggest podcast in America. Financial terms weren't discussed, but it's reported that it's similar to Joe's last deal, which was worth an estimated $250 million. Spotify is willing to fork up a quarterbillion because Treasury might Rogan's audience is still gigantic. His podcast has been the number one show in America since tracking began in 2019 and has grown from reaching 6.6 million US listeners a week in 2020 to over 28 million this year. In that same time, Spotify has reached over 300 million premium subscribers, so it's growing right alongside Joe. How many of a massive deal for a massive audience have any Rogan episodes have you listened to? Oh, I don't miss a single one. Just getting, I can't say I'm part of the listener base, but I will say that listen, Spotify, we're open to the same deal if you want it for Morning Brew Daily. That's the producer out there. That's the producer in me. I'm just putting that out there. Always be closing. I think the craziest part is that Spotify doesn't even own the exclusive rights to the Joe Rogan experience anymore. That was how the deal was initially structured. The only place that you could listen to Rogan was on Spotify. Now you can listen to him everywhere. His deal became non-exclusive back in 2024. So now he's on YouTube where he's got 21 million subscribers. He's on Spotify. He's on Apple. But Spotify makes their money back by selling ads to that big audience. So clearly, they think the ROI is there. Finally, people often call on billionaires to give back to the community, but I'm not sure that this is what they had in mind. Lincoln Park Billionaire Barr's side is at the center of a rat problem in Chicago, according to Axios. Reports say people hired by side have spread nuts, seeds, and other food around his home and throughout the park for more than three years. Parkgoers claim that this has attracted flocks of pigeons, whose droppings then drew a significant rat infestation. The city is now weighing legal action and local government officials are pushing the park district to sue for damage to the park. Despite his paid every fine without contesting the violations, hasn't responded to the final warning letter and didn't answer when Axios rang his doorbell. Neighbor Caroline Novak told Axios that when neighbors and park staff asked why the nuts were being spread, side's workers responded with hostile language, but no reason. Toby, I guess when you live to 94 and have all the money you need, you get into some pretty obscure hobbies. This was blowing our minds as we read this story. We could not wrap our heads around why he's doing this. Some people say that he just wants the wildlife around him, but the wildlife is rats. You are attracting rats to a public park, so everyone's like, "Dude, please stop doing this." And he's like, "I will eat the fines. I will pay whatever. I just get, I don't know, joy or shot in for it. I don't know what the emotion that he's trying to evoke here is, but he loves spreading these nuts around hiring people to spread the nuts for him, so that is crazy. There is some good to come of this though because a local politician is using the rat situation as a springboard for a campaign. He's calling feed our neighbors not the rats. He's trying to go and support a local hunger nonprofit called Dignity Diner. So hopefully, some good comes from this rat infestation. I will also keep an eye out for any large rodents as I'm running through Chicago. Did I just use this story about feeding rats to transition to Chicago Marathon talk? You bet I did, but it's partly because we do have some logistics to go over. One day is Marathon, and I know some listeners are running, so hit me up on Instagram if you are there. Monday is Indigenous People's Day, which means we have a special holiday episode prepared for you all. And Tuesday, Neil is back and we'll be back to our regular scheduled programming live. Incredible, Neil impersonation. Great work. Your bangs look better than Neil's bangs too. Let's put that on air as well. Let's roll these credits. Emily Million is our supervising producer. Raymond Lou is our senior producer, Olivia Graham is our producer, Olivia Lake is our host and associate producer, technical goal direction by Nina Miller. Heron makeup is feeding the rats a guacamole frappuccino from star potlay. And our show is brought to you by Morning Brew. Great show day, Toby. Have a great weekend. Contentful in partnership with the Atlantic released their latest report that maps out the 5 questions marketing leaders need to answer to succeed in the agentic web era. The report helps marketing leaders figure out what they need to decide when it comes to defining AI's role within their team, the risk of deferral if no one makes a call, what success looks like, and the review cadence needed to stay on top. To see all the findings, go to contentful.com/morningbrew.