Bring in show music, please. This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, after three decades at Coca-Cola and nine years as the company's CEO, James Quincey is passing the Coke can to his successor. We're not a tech company, but we need to use that technology to take our competitive advantage to another level and he brings that passion and insight and energy.
Then, Congress is coming up on its Easter recess, but funding for Homeland Security could keep lawmakers in Washington. The Pennsylvania senator breaking with his own Democratic Party on the issue, John Fetterman. I want the same kinds of changes for ICE versus other Democrats. It's just I'm one that refuses to punish Americans and the union members.
Plus, CNBC's Dan Murphy updates us on the Iran war. YouTube and Meta were found liable in a social media addiction case and it's opening day for Major League Baseball. CNBC's Alex Sherman is right outside Citi Field. The whole league is potentially in a state of transition here. That's maybe a little bit dissimilar to the other major American sports leagues.
It's Thursday, March 26th, 2026 and Squawk Pod begins right now.
Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the Nasdaq Market Site in Times Square. I'm Becky Quick along with Joe Kernan. Andrew is out this week. President Trump says that a deal to end the war in Iran is close, but Iran dismissing a US ceasefire plan. Our very own Dan Murphy joins us right now. He is live in Dubai and Dan, what's happening there on the ground?
Becky, good morning. Well, markets really caught between two narratives this morning. On the one hand, Iran has formally rejected the US ceasefire proposal and the foreign minister Abbas Araghchi says there are no negotiations, only messages being passed through intermediaries. So, what President Trump is calling talks, Tehran is calling message delivery. And then on the other hand, the Wall Street Journal also reports today that mediators from Turkey, Egypt and Pakistan are pushing for a face-to-face meeting between US and Iranian officials. And the US and have also removed Iran's foreign minister and parliament speaker from their kill list for 4 to 5 days so they can participate if talks go ahead. It is a significant diplomatic gesture, a kind one at least, but also a measure of just how fragile this entire situation is. And of course, the gaps here are enormous. Iran wants compensation for war damages, the closure of all US regional bases and the right to charge international shippers to transit through the Strait of Hormuz. Washington of course wants Iran to surrender its enrichment program, open Hormuz and curb its missile program and proxy network as well. Remember, every single one of those demands was a non-starter before the war. And then, the voice from the Gulf is also growing louder. The UAE ambassador to the US, Yousef Al Otaiba, calling for a conclusive outcome to the conflict, not just a simple ceasefire. He said that building a fence around the problem would simply defer the next crisis. And then you have the CEO of Abu Dhabi's national oil company, Sultan Al Jaber, meeting with Vice President JD Vance at the White House overnight, telling him that restoring free passage through the strait is the only durable solution to stabilizing global markets. And that is also on top of fresh condemnation in a statement of Iran from other major Gulf states today, too. And as we approach this one-month milestone of this conflict, it is also reported that President Trump wants this war over before he sits down with Xi Jinping in Beijing in May. Iran is of course still publicly refusing to negotiate and the US ground troops are deploying to the region as well as a reminder to Iran that diplomacy isn't the only option remaining on the table here. Becky?
Hey Dan, we we have always watched the Iranian regime sort of use negotiations as a way of kind of stopping the clock, slowing things down, giving them time to reassess, to figure out more about what they're doing with their programs. In this case President Trump is using time as the cudgel. Basically, you have these deadlines, come to the table or else. I thought it was very interesting that the White House said yesterday that the President is now rescheduled that trip with Xi Jinping in China for the middle of May. Which he called it off this time around because he didn't think it looked right to be traveling at a time of war. That seems to indicate that he thinks that this will be over by the middle of the month. Is that the feeling that leaders there in the Gulf seem to seem to get as well?
That's the exact feeling, Becky. It appears as if the White House is vying for more time here. It was reported that the President was hopeful that this conflict would be over by the time he could meet President Xi Jinping, but of course the timeline on these negotiations remains really unclear at this point. The Iranians aren't necessarily giving much back to what the White House is offering and while the President is sounding optimistic and very hopeful, the US indeed sounding like it has the leverage here given the military pain that it's been able to inflict on Iran and of course the status of where we stand in the conflict today suggesting that the US of course has the upper hand, but what's left of the Iranian regime appears unwilling to negotiate at this stage. As we've been reporting, the wellness and whereabouts of the new Ayatollah still unknown at this point, and exactly who is leading the negotiations on the Iranian side is still unclear as well.
Lead story in the New York Times, we forget Israel has been intensifying its attacks on key targets regardless of what we do. Um I mean, Israel was is just going straight ahead. Going as with as I said, I don't like the term, but going forward with with with their plan. I think maybe we forget that. So, this is an onslaught against Iran and and they can put up a brave face, I guess, but Dan, can you confirm that the the one of the naval leaders of that instrumental in blocking the strait, I heard he's dead. Um I don't I don't know whether you can confirm whether that's true. And what I'm getting to is when Trump says, 'Yeah, we're talking to people, but we're really not sure who to talk to or how long we're going to be able to talk to this individual person.' And you mentioned maybe taking a couple of people off the kill list just so that they're there, you know, at least until tomorrow to to to negotiate with. It's crazy.
Uh as awful as it sounds, the strategy of the US and the Israelis is to keep the most valuable people alive in order to come forward with the negotiation and the next steps of this conflict. On Israel's position though, I think you make a really interesting point, Joe. Of course, Israel for, you know, many many years has basically done the dirty work of the United States and of the Gulf states inside the Middle East, and it is signaling that that will continue as well. As you say, strikes have continued in the last 12 hours, and at the same time, you have to remember there are three parties in this negotiation. That is the United States, Israel, and Iran. Only one of those parties is expressing optimism about a future off-ramp here, a diplomatic solution, and an easing in those military onslaughts as well. So, look, where Israel stands on this, particularly as we see Netanyahu coming into the election, his own election, is is a big question mark, too.
A jury in California, after the the other case we talked about yesterday, this is new, uh finding Meta and YouTube negligent in a closely watched social media addiction trial. A young woman alleges that she became addicted to apps like Instagram and YouTube when she was as young as six. As a child, the jury worked to determine whether Meta and YouTube included design features in their apps like recommendation algorithms and autoplay features that contributed to her mental distress. The 20-year-old alleged that she suffered from severe body dysmorphia, depression, and suicidal thoughts because of her constant or near constant use of the apps and notifications that made it difficult for her to stop. Compensatory and punitive damages were each assessed at $3 million, a $6 million total.
Could have been much more, although they say if you do you know, if you do the the the initial damages are $3 million, it's hard to go over 10 times that for for punitive. That that gets that doesn't usually fly, but all they did was match it with the punitive. In a statement, a Meta spokesperson said, 'We respectfully disagree with the verdict and are evaluating our legal options.' A Google spokesperson said, 'We disagree with the verdict and plan to appeal this case. This case misunderstands YouTube, which is a responsibly built streaming platform, not a uh media site.' And this opens up all kinds of uh discussions that that that we'll be having in terms of the plaintiff's bar and one one individual said this really is ringing the dinner bell for the tort uh type of lawyer.
>> it to the new big tobacco
>> big tobacco or mesothelioma or Yeah. Uh and there's 3,000 pending cases in uh in California and we're in this age of, you know, used to be kill the lawyers, but now it's kill the billionaires. And you know, these companies are trillion-dollar valuations, some of them, and they have you know, heads of of the companies that are targets, billionaires, and it's we're going to see it. It's going to ramp up. It's It's just hard to prove cause and effect on an individual case. Notwithstanding my my view that this is like a pox on society, a lot of this stuff is Yeah, yeah.
>> Yeah, I I I can understand your arguments on this. I really can. Um I can also understand the other side that, hey, between this and the case that they lost in Arizona, um Yeah. that that this is a situation where they have lots of internal documents and internal messaging that shows all of these concerns about what was happening were flagged, were known by the company, and were ignored by the higher-ups. And that's why they have a leg to stand on with this. Look, I I I get the company's perspective that you can't just blame us. They're right. There are so many more things that fed into this. You can probably say COVID and the closures of schools and a million other things contributed to contributed to anxiety and the you know, depressive thoughts that kids see. I saw that with my own kids. But but I don't go on Facebook. I've never been on Facebook. I don't but
>> The problem is the algorithm. But does this mean you can never someone that, not me, but someone who would look good on a beach? So, you you you never can um post another No. beach That's not what this means.
I I think what this looks like is
>> makes people get body dysphoria because
>> if you look very specifically at kids and as Jay Clayton who was here yesterday pointed out that that look they know who you are, they target ads to you specifically, that's part of the magic of of these companies from from a business perspective. Right. Why can't you know who kids are and then stop targeting them with some of these things to protect them first of all from predators and second of all to say hey maybe we shouldn't be targeting kids at all or have an algorithm feeding them anything. Right. And and and look there you can blame parents for allowing them to do this but it's really hard to not give your kids a phone or to allow them like I I don't have my but my son on any of these social media apps. He's left behind as a result. He's a bit of a you know, social pariah as a result with some of these things. Right. It's really hard to say no. Do you not give your kid a phone because you want to make sure that you know where they are and make sure that you can pick them up, make sure they're safe on different things. Yeah. Um but I I agree with Meta's perspective that it's really hard and mental health is a very complex issue for youth. Right. It's very hard to say that it's just them but I think it's also hard to say that they haven't played any role in it. I don't think anyone And but to this point they have kind of said it's not on us. And that's why you wind up in a situation like this. Right. You know, they they have pushed back on some of the changes that that even the Arizona Attorney General laid out yesterday to say we want to see changes to your very lucrative algorithm. They've pushed back on that for the longest time and maybe that's where you I mean I don't know what I don't I don't think they should pay for everything.
>> But I don't know what a world without Section 230 really looks like. I don't I mean that that would be a chilling
>> It's been used as a cover all
>> It has but it's been but without it without it it's I I'm leaving and going back in the law school. I'm going to law school. Like back when CompuServe was basically just an online bulletin I'm going back to law school and I'm going to become a plaintiff's attorney. Forget rid of that. Because that's how and and I wish my parents are gone but I wish someone would take Twitter away from me and say you're not allowed to to go
Well, now you're fighting with the AI chatbots, so it's okay.
I do fight with them. They have They are They are as bad as the trolls, some of them.
Probably better for you to fight with the AI chatbots.
>> Maybe I don't like uh these billionaires cuz they're the ones that that that have not changed the bias of all the AI bots, in my opinion. They're It's just as bad as as the social media as Twitter was before Elon Musk bought it. It's just as bad, run by the same people out in California.
It's an interesting thought experiment that we're going to be following for some time. Um because I I I agree. It's They're not to blame for everything, but they're not to blame for nothing, either, and I don't know where you find the middle ground on that.
Well, baseball is back, but opening day does come with some big questions off the field. With a labor fight looming and major media shakeups coming, the league could be on the brink of dramatic change. CNBC's Alex Sherman joins us right now. He's standing outside City Field in Queens. Um and City Field, a home to one of the real haves in Major League Baseball.
Yeah, the Mets are sort of the uh along with the Dodgers are really the two franchises that stand out in this current era of baseball as the big spenders. They're always uh kind of the top two teams that spend the most uh from a salary perspective on players, which should, you would hope, relate to winning. With the Dodgers, that's been the case. The Mets, we're still waiting. Maybe this is finally the year. Uh but Major League Baseball is at a a crossroads right now. Uh at the end of this year, the collective bargaining agreement expires, and it is pretty well known now that the owners want a salary cap. That will probably also come with a salary floor, if in fact they're able to get something done. The players' union for decades has pushed back on this concept of a salary cap. Major League Baseball is the only one of the four major US sports not to have a salary cap, but it has spoken to the strength of the players' association that they've been able to successfully push back against this concept, which allows teams like the Dodgers and the Mets to pay really exorbitant prices for the star players in the league in particular. But, if you take a look at the EBITDA the earnings margins of baseball teams versus the other three sports, they're a lot lower. Uh and you're starting to hear more people from the league standpoint and from ownership standpoint speak out against this. Yes, valuations of teams are rising. Yes, TV ratings are up. Yes, attendance is up. But, because the spending is so high on baseball relative to the other sports, the profit margin is not up. And so, that is sort of the crux of this labor crisis, which could, in fact, almost certainly will come to a head at the end of this season.
Hey, Alex. You look I I I just think of how we look at, let's say, Wall Street banks. You look and find out exactly how much of of the the meat they're feeding to the bankers. And you could do the same thing with any of these leagues. The players received in the Major League Baseball about 47% of revenue in 2024. Now, that was down from 63% back in 2002, but it's not that far off from what you see with the other major leagues. The NBA, they get 49 to 51%. The NFL, they get 48%. The NHL is 50%. Uh that seems like that's going to have to be the way they look at this. What percentage do you get? And then, how does the union decide to divvy that up? Do you want to have these really sky-high contracts, but then have the medium player making a lower, much lower amount of money?
So, look, I I think one of There's a bit of a tension here in baseball today, which is that you don't want to interrupt positive momentum. I just talked about how the ratings are up, attendance is up. There's a reason that the players have been able to successfully push back on the salary cap year after year after year. And it's partially because of the argument you just made, where they say, 'Look, it's not all that much different than the other sports. Yeah, we don't have a salary cap, but frankly, we don't even buy the argument that if you put a salary cap in here, it would improve the things that the owners are complaining about, such as profit margin and also competitive balance.' Which there's a major argument on if there's actually an issue of competitive balance in Major League Baseball. It all depends on how you look at it. I mean, many different teams have won World Series over the past 25 years. A lot of teams do make the playoffs. The playoffs is quite random. Then again, if you just take a look at the bottom eight teams, there's definitely a correlation, as you might suspect, between spending and competing. So, there's these kind of things that are rubbing up against each other in Major League Baseball, which makes I think what happens at the end of this year very much an unknown.
I think you're burying the lead, Alex, and I'm going to tell you I'm going to give you an example. So, when when you're either let's say you're betting or let's say you're just a real homer for for the Reds or something like that. I have seen umpires make calls that have killed rallies. The strike calls, ball and strike calls. Like it'll be, I don't know, 0 and 0 and 1 and and you need to and and they'll call a strike and it's now it's 0 and 2. The batter's in a different position. It's way out of the strike zone. It's just it's unbelievable how bad
They're changing that. Are they not this year? This is
I need this. And I think the sport needs it.
Yeah, well, I mean, they're not going all the way to robot umps, which is what I think you're describing.
>> I know that there's a challenge. There's a challenge that it can be that can be made by who? The the catcher, the batter, and and the manager? Who who gets the challenge?
>> we we saw we saw it for the first time actually yesterday in the Netflix Yankees game where where your your each team has a certain amount of challenges that again it doesn't go all the way however to what you're describing there Joe which there is a group of people out there that want it to get that way because you figure what is the point of having a a human call balls and strikes if they're just going to get it wrong. So like why not like why not just go all the way? Everything that about if it means getting the call right who cares at this point. I mean let me just throw one more thing at you what just quickly which is that not all not only are we on the verge of a potential CBA breakdown but also Major League Baseball media rights are up at the end of 2028 that's in flux. There may be expansion in 2029 at least putting two teams in place to expand the league. That may come with complete realignment that could even eliminate the American League and the National League institutions that have been around for more than a hundred years. So the whole league is potentially in a state of transition here that's maybe a little bit dissimilar to the other major American sports leagues.
All right. Thank you. Jeez will be next. Coming up on Squawk Pod Coca-Cola CEO James Quincey. He's leaving the CEO position at the end of the month after leading the stock up 75% during his tenure.
It was time to put someone else on the field for the next wave of growth the next three years the next three years after that.
You're listening to Squawk Pod. At the end of this month Coca-Cola will welcome Enrique Braun as its new CEO after nine years at the helm. James Quincey has overseen the evolution beyond just soda to total to a total beverage company. We've talked about lots of new additions that are coming in, milk, Tikko, coffee, lots of other things. He's also shaking up Coca-Cola's corporate culture and has led the stock along a 75% gain. That compares to a a much smaller gain for Pepsi. I think it was up about 33% over that same time.
Joining us right now is James Quincey. He is the chairman and CEO of Coca-Cola and James, thank you for coming in today.
Great to be here. Great to be here.
You know, I I still marvel at the idea that you are stepping down. You you're only 60 years old. You've done a phenomenal job. I spoke with Warren Buffett about it yesterday. He said not only have you done a great job as an operator there, but you're just a wonderful person to boot. Why are you leaving at 60 years old?
>> thank you to Warren for the generous words. Look, you know, it's one of those things and the CEO's job sometimes is to take decisions that not being thought that no one wants you to make. Um and you know, as you go through the business cycle, you know, where there's kind of these three plus year cycles. You kind of have you you set out on a course, you get things done, some work, some done. And there's kind of waves of the organizational momentum. And we were coming up to another one. And of course, my job is also to think who's the best team to put on the field to get the next wave done. And I concluded that actually it was time to put someone else on the field for the next wave of growth, the next three years, the next three years after that. And work with the board to say, 'Look, let's put someone else on the field, you know, with the wisdom and the experience, but the energy around some of the newer areas that need to be pursued and that'll be the best thing for the company.' And that's part of the responsibility you shoulder.
That that is the same thing that Doug McMillon told us. He's also very young man who's stepping down after a time there. And he basically said, 'Look, I know the energy it's going to take to put us through the AI evolution.' He's done it several times and that he's ready to have somebody else do it. What So, what's the evolution that's taking place at Coca-Cola? What's the next three years?
>> Like, if you look at the what I said at Cagney in 2017, one of the four things was digitizing the enterprise, which we did, but in a pre-AI, pre-GenAI mode. We We made a lot of progress, but now there's a huge new shift coming along. And And like I love the thing. I mean, I'm an electronic engineer. I kind of geek out on it, but it needs someone with the energy to pursue a completely new transformation of the enterprise, which is not a 1-year, 2-year problem. It's a multi-year problem. So, you've got to think not just who's the right person for 2026, but who can take us on the next stage of the journey and see this through. And that was the important decision. One of the most important decisions any CEO makes is who is going to succeed him.
Why Why Enrique Braun? What What does he bring to the table? What What made you say, 'Here's Here's the person who can do it?'
Well, obviously it's a process we do with the board, and we started looking at the, you know, the pipeline of talent from the day I started, and I'm sure we'll start again from the day Enrique starts. What he brings to the table is 30 years of experience. So, he understands where all the buttons and levers are in the system, and he has experience on four continents. So, he comes with an ability to understand where we've come from and what needs to be kept going forward, and the changes we made over the last 10 years being on the leadership team. But, he also brings the energy around the things that need to evolve and the things that need to transform, AI being one of them, the changing nature of the consumers' demands and the geopolitics and the the way the world needs to be changed and pushing uh the organization to do that. And And that's where he's got the energy. And so, that yin and yang uh the focus on preserving what's good, yet using digital to do better what we do best. We're not a tech company, but we need to use that technology to take our competitive advantage to another level, and he brings that passion and insight and energy.
You spent 30 years at Coca-Cola, too. Um worked all through the system in Europe, in Latin America, all over the place. Does it take somebody who has spent decades at an organization, at a large organization, to be able to lead it?
Not always, but you certainly have an advantage if you've got the right mindset. Because it's a vast enterprise. It's in almost every country. Between us and the bottling system, there's 700,000
employees. And the world is not flat. It's not the same everywhere. The Coca-Cola business is not the same everywhere. I have different brands and different portfolios. So being able to understand how the business is different around the world, to understand all the key players in the system. It's not a ones and zeros business. It's a relationship business. It's a physical business in the physical world. There are over a thousand factories in the Coke system around the world. Understanding that landscape is a tremendous advantage when you think about what needs to be done. Of course, you can't be trapped by it. But having that knowledge is a super advantage.
You've been a... I was just trying to remember everybody since Goizueta. And some of the names that I came up with that I had forgotten. It was a very hard thing to replace Goizueta. And he died, I think, kind of suddenly. So you went to Ivester, and then some guy named Daft at one point. And then Muhtar Kent. Isdell, Muhtar. So you worked for some of those gentlemen.
Was it hard to replace Goizueta? Who... I was thinking... Were you the next like preeminent Coke CEO? Muhtar Kent was well thought of, wasn't he?
Yeah, but he kind of got the... it had destabilized itself when Roberto died suddenly, and it was a mess. It was a mess internally. It was a mess externally in the strategy. And it took a long time, including with Muhtar, trying to restabilize the ship. But yeah, so now this is the first time we spent 10 years growing since the '90s.
That's the thing because I remember how difficult it was. What did he die? I remember it was tragic.
Lung cancer. He was a big smoker.
Right, and he was young. He was in his late 60s.
Oh, was he late 60s? But it was unusual because he was so well thought of. Yeah, and actually when you look at it, we kind of went into a trough in the 70s with the stagflation. We had, interestingly, Roberto Goizueta and Don Keough was another one. They kind of thought, being extrapolation, doing an extrapolation in the 70s, they thought, well, let's diversify. We bought Columbia Pictures. We did a whole lot of crazy stuff and then they went, this is all wrong. We need to get back to the Coke business. This is the gold mine. And from the 80s through the 90s it was an extraordinary period.
And then I remember New Coke and at the time that was like thought of as kind of... and it's still used in I think college courses as a mistake, but the way they handled it that year wasn't seen as the...
It opened up the path to Coke Zero and everything else. Then you didn't need to be only Coke and then suddenly Coke became Coke Classic and that became a new...
Yeah, and also they had the humility to go, we've made a massive mistake.
Okay, that was Don Keough. Anybody that doesn't know, it's New Coke. I mean, it's amazing that that's still...
But they could have kept trying for ages. But they didn't. They said, no. Never mind, we hear you.
Sure, right. Dead. We've moved on. Well, you've changed... Kansas, that was his name. Oh. The books in the world of Coke you can go and read it. Yeah.
You have changed the company in a lot of ways though by wanting to be a total beverage company and not just stick to sodas. That had to be pretty hard to come into Atlanta and say we're going to change things up because people do remember New Coke so well. It was the time they got burned.
