tv Bloomberg Business Week Bloomberg April 22, 2017 7:00am-8:01am EDT
carol: welcome to "bloomberg businessweek." oliver: we are coming to you from inside the magazine's headquarters in new york. for starw attractions wars and avatar, inside disney's magic kingdom factory. with robert dek niro about how he prepared to play bernie madoff. carol: why the creators of this is spinal tap have been paid next to nothing, and that might be about to change. onver: all that ahead "bloomberg businessweek." ♪ carol: we are here with editor in chief megan murphy.
you look at canada and the legalization of pot. megan: it is a great story about the business impact of this move to legalize marijuana. this construction of this 800,000 square meter facility that will be the largest pot legal growth centered near alberta, canada. just looking at how the as justinof this trudeau pushes forward with this plan to make it legal. to put and taxes to get revenue into the government from the legalization of this industry. several of these companies are listed in terms of the companies that grow and supplying marijuana. it is a big business, and they
think it comes at the expense of criminalize gangs. oliver: the first question i have is how much of it is economically incentivized. they ultimately want money out of this industry. revenue ranges of canadianbillions dollars to hundreds of millions of canadian dollars. the main competitor is the hells , who basically run the distribution of non-legal marijuana. this is a big deal, companies that have high market cap, and the changes will be for people to grow as many as four marijuana plants in their own home, to make it legal to consume and by and provinces will have it within their to put it on liquor store shelves. not everyone is excited about it.
there are places without infrastructure to properly regulated. oliver: let's shift gears and talk about a cool story that involves in the showbiz section about financial ups and downs of the stars, hollywood, music, and so forth. ofan: we interviewed a lot ulrich. lars o it was about their one big was, how people who you don't think have traditional lives, nine to five jobs, manage ofir money, what they think as their biggest purchase or biggest mistake. a lot of times you read about management mistakes.
carol: obviously celebrities have money problems. megan: another big story talks problem, hollywood is rife with the deals gone wrong. you have a feature and look at the walt disney company, a lot of moving parts, but also talks about the increased importance of its theme parks business. megan: this is an integral part of disney's success, how much they are interested in these worlds. attraction, pandora, based on avatar, and what links they go to create these worlds, and it looks at this manhole cover that is printed with the name of the mining company.
just how important they call the engineers they work on these .orlds, imagineers the painstaking detail that goes on in terms of creating best to give a unique user experience, and the competition they face, the immersive character of entertainment, how important it is to get that unique experience . unique it is a big, corporate story. >> the magic kingdoms on both coasts are super successful. they are the most successful theme parks in the world, but there are ancillary parks, and those are the ones that have to do some tweaking from time to time. now they are doing that to
animal kingdom, which is orlando, and they will be doing that with the star wars-themed land in disneyland and disney , so it is anywood ongoing theme park world maintenance program. about how theye are adapting avatar for disney parks. tell us about what they are doing. that is not an easy undertaking. >> know, and they did that right the wizardrsal open inc. world of harry potter in orlando, which blew the roof off the whole business and redefined the creation of themepark attractions. carol: i have been there. you feel like you are walking through a harry potter movie. thinkore that, i don't people thought they would be challenging disney, and when they did that, that changed the game. disney was in the process of
rebooting parks, so they jumped on avatar in 2011, and the acredible thing is that is movie, a world, all and cg, so they have to take that world and replicate it in a physical world, a crazy come along process. it opens on may 27. oliver: i want to talk about the attractions and the people behind it, but overall, there is an important point here, which is they are getting to the point where they are relying on the revenue streams from these parks. is that why it is important? the revenue mix and profit mix is shifting. that is beginning to folder. the parks are stronger than
ever. they have to keep on being stronger than ever, and that is why disney stock has recovered. that is why, investors feel comfortable with the company, but parks have always been imported, but never more important than now. the level of realism at this park is very high. carol: this is real. rob: some of the photos look too much like bizarre rain forests. we were struggling a bit to find a cover shot that felt like a theme park and not just some crazy brain forest. some high place and shot this one where you can see , small person, the walkways
and this weird lighting, so it has that theme park feel. is an interesting depiction of the story. it is busy, there is a lot going on here. it was glowing plants, weird palm tree looking things, very bizarre stuff, but done in a realistic way which is why we thought the photos would be more confusing than informative. carol: the corporate culture that started in japan is spreading throughout the world. oliver: is puerto rico's new governor just what the doctor ordered to overcome generations of debt? >♪
carol: welcome back to "bloomberg businessweek." among the 4000 public each rate at companies in japan, not a single one filed for bankruptcy last year. carol: and that is not a good thing. >> the reason we decided to do this story is because there was a statistic that came out that in the latest fiscal year that closed in march, japan had zero bankruptcies among the 4000 publicly listed companies. carol: that is because everything is good. >> that is what shinzo abe would like the world to believe. there is no creative destruction happening in economies where you see no companies going under. oliver: let's talk about the other case for those that say we need to see signs of bankruptcies has health and
determining the state of the economy. -- what does he say about what bankruptcies tell us about an economy? >> i don't know that he determined a healthy level per se, but it is a sign, this idea of created distraction that assets are being redeployed, so that could be people, capital. some companies are just stumbling along. the other data point we use for the story is this new oecd report that came out in january where the authors particularly focused on the effects on productivity that some big companies have, that they drag down productivity. less fromroducing that combination of capital and labor, so the idea is if those companies are flushed out, that capital and labor can be redeployed to have greater
output. carol: you need those companies to go away so that there can be entrepreneurs who start up new companies or new startups, and that provides new life come if you will come if you will, lifeblood into the economy. isthere is no question it painful. we expand some of that in this country with the crisis, but ecdt these guys, the o report authors, we are seeing a legacy of the financial crisis because government and vendors are coddling some of these companies because they fear the effects of letting them go under , and also we have had a long low interest rates, so those conditions combined with other factors in other countries. in italy and europe, we see bankruptcy laws are such that it is quite difficult to drive a
company into bankruptcy. in italy, the averages seven years. oliver: that's incredible. it takes weeks and months here. >> by the time that process is over, there are few assets left because the company has been tumbling, stumbling along the whole time, so editors don't tip much of an incentive to a company into bankruptcy because there will not be much left to recover. carol: staying in the global economics section, puerto rico's new governor has some big challenges. oliver: renegotiating $70 billion of debt is just the beginning. >> he took power at the height of this crisis. until may 1 to negotiate an out-of-court agreement with bondholders. board that is the
currently overseeing the island's finances installed by the u.s. congress can trigger a bankruptcy proceeding. is $70 billion in debt. it is conceivable this could end up in a court room restructuring that could go on for many years. carol: in an economy not doing well and not a lot of hope, people leaving puerto rico. i guess what i want to know is you said he was a scientist. -- who a financial guy is this guy and what is his background? the governor'sn mansion. his father was a governor in the 1990's and he told us he was not interested in politics back then. seeingd not necessarily everything his father was doing portrayed positively, so instead he went to nit as an undergrad and studying engineering, went
on to become a biomedical engineer, then was doing research at duke doing a post-doctorate in biomedical engineering and thought he would go into the biotech industry, so instead he said around 2004 that he met someone who had been touched by one of his father's policies, his father pioneered health care reform on the island, and that is when he relies politics does have an impact on people's lives, came back to the island five years or so ago and started in earnest to plan a political career. oliver: can we garner anything about him from his father in his own tenure as governor, or is that an unfair comparison? carol: we hope not, because his father ran up debt. withs father ran of debt infrastructure projects and health care reform which expanded access, but was expensive. most puerto rican governors have
run up the debt. this is a bipartisan issue. both parties spent more than they brought in. like his father, he wants to pursue statehood. that is very important to him and has been a focus of his administration, and his father also came from a scientific background. he was a doctor, so they are both data people, and a medical. that said, the current governor was to be his own man, taking the helm at a time that is important in puerto rico's history. the crisis is that a fever pitch, so we have to wait and see how he governs. oliver: why the most viable cybersecurity unicorn -- carol: what was once google's biggest moonshot has a new mission, and it made reveal a lot about yourself. ♪
oliver: welcome back to "bloomberg businessweek." i am oliver renick. carol: i am carol massar. you can also listen to us on the radio. in the technology section, a violation of $3.5 billion, it may be the biggest cybersecurity start up could go public this year. carol: here is our reporter. >> my colleague and i began investigating after we noticed what was extreme departures of senior executives, nine senior executives had left within eight months. when the last senior executive brown, he was the cfo, and that seemed unusual to us. this very same month they were
supposed to be preparing for an ipo. not normal,ving is so we began investigating and found out there were a lot of cultural problems going on. carol: you put it really nicely. the head of the company was doing some inappropriate things. >> that's correct. withding to our interviews more than two dozen current and former employees, as well as text messages, and staff documents we reviewed, there seems to have been a pattern of hiring employees right before they were ready to invest in their stock options, the equity they earn for being there and to build the value of the company, then at a certain point were in -- theyto purchase them
were entitled to purchase them, and that never happened. oliver: in a startup, the equity contribution is a significant portion of the salary, if not a main driver itself. to these people feel they were shorthanded by a great degree? >> that's correct. that they were cheated out of compensation they had earned and they were expecting when they accepted the job. legal: what is the grounding here? were their contracts that were able to articulate language such that the ceo was able to end these relationships without breaking rules? how do the former employees feel, and are they bringing anything forward? >> when we talked with the company about this and presented them with what our reporting had uncovered, the company issued a statement saying that these
, thats were for cause they had found inappropriate behavior in the company. now i don't know how many of these firings they are referring to, whether it was everyone on justist or whether it was a few, so we are still uncovering more information. bigl: also, i looked at pharma monitoring gadgets that want to know everything about your body. about one of the holdings under the out fo alphabet holding company. .t was fun out by itself carol: tell us what this study is about and who is involved. tothe baseline study refers
setting a starting point, and they have recruited 10,000 healthy participants because they are trying to answer the question of what does healthy look like. so they will gather all sorts of data from dna, bacteria, a psychological assessment, and throughl run them various tests, cardio tests, stress tests, and have them come back over four years so they can start to see what do healthy people actually look like while logically, then if there are people who have a family history of certain types of cancer or cardiovascular disease, they will be watching those people to see if they turn into having a disease, and how does that so they are asking super fundamental questions, but it is a huge study. carol: you also point out that
some will be sharing data from insurance claims, health records, and then they all go home with a wristband that is tracking a lot of data over the four years. has made their own study watch, which collects data continuously. stuff a fitbit would do, but especially designed for a trial, and it goes further step tracking,n track your sleep, looks at your sweat response, which is when you are anxious or nervous and you sweat more, so it will capture data like that, and this will track participants for four years, so they will pull a massive amount of data. inver: you point out th the story about 10,000 volunteers. from a corporate standpoint, what is the mission here? visit turn into profitability
down the road, or give them greater access to data? what is the ultimate mission here? >> i think the ultimate mission is still very much akin to google's mission come up which is organize all the information in the world, so verily really wants to be the organizer of all health information such that smarter drive better, health decisions, but in the interim, they are doing a good job of making money because what verily has done is partner with biotech and drugmakers like johnson & johnson, glaxosmithkline. these have been around for many years and are considered the stalwarts in the medical industry, and verily instead of coming in as a start up to disrupt the industry, they have taken a tactic of partnering and saying we will work with you, and that has brought them a lot of revenue. oliver: up next, how lucrative is a concert tour?
oliver: welcome back to "bloomberg businessweek." why it has taken 33 years for the creators of this is spinal tap to fight hollywood for the roadies they say they are owed. oliver: we go on the road with bon jovi to find out how much it cost to put on a concert to her. carol: and we catch up with the millennial whisper. oliver: all that ahead on "bloomberg businessweek." ♪ we are back with editor in chief megan murphy to talk about more must reads in the magazine. you are looking at some
expansion and the idea of benign neglect. >> benign neglect in terms of billion acquisition and its move into shale. its upstream and downstream has these massive plans for extraction, discovery of oil products. this is talking about how they use a different model when it comes to shale. xto to do these massive projects, projecting a 20% increase in shale production. with how different an unpredictable to shale market is, how quickly you need to move, there is a lot that says difference andis
the shale game is key. the other major oil companies seem to be doing the same thing. we have seen what a fault market that can be come especially when we saw the drop off in the oil price, what role opec has to play. talents boom-bust, springing up and collapsing, so a difficult market to be in for oil majors. tap.: from exxon to spinal you look at the movie this is spinal tap. everybody knows about this movie. you would assume everybody made a lot of money from the movie, but that is not the case. this story.e it is one of the classic called movies of all time.
it has informed the doc --drama and forms the building block for a comedic style. it also sheds light on these of skier hollywood accounting , talking about how hollywood finds a way to steal the money and make the money. ,his focuses on harry shearer who sued for 125 million dollars, and has now been joined by other members, sewing they 20 years $98 in the since the movies release, and their attempt to account for the revenue that came out of an iconic movie. oliver: for more, we talked to our reporter. shearer.rviewed harry he seemed to suggest he is not alone among artists and creators in hollywood, that they
internalize a certain inferiority when they are dealing with major studios. the studio say it is just a cold movie. it would not make a lot of money. you should not expect money from this. you should love what you are doing, right? shoulde saying maybe i not expect money from it, but then the 30th anniversary reissue comes along and there are strangers quoting lines, saying this one goes to 11 and these other famous lines. casablancais like for comedy nerds. i have been getting a lot of this. a light bulb goes off according to harry shearer, let's investigate and see what is going on. are they hiding something? it is an accusation that has not
been proven in court, but they are contesting the suit, saying there is barely any revenue to be made from this movie. vivendi is the company that inherited ownership of the movie. line was a long circuitous from embassy pictures, which is out of business. it is carol: all over the place. there are a couple of terms you put in your article to do talk about cross-collateral izing. what is it? >> in the day of the studio there was no reason to say one movie did greater one did poorly come because they owned everything. perhaps it is that tradition that allows for hollywood to bundled together movie libraries and sell them. who ever the movie library does not feel compelled to break out what movies are doing well and
what aren't, and spinal tap was bundled. at this point in the litigation, harry shearer and the plaintiffs don't know what spinal tap was bundled together with. it is possible it was bundled together with 12 complete turkeys, and the owner of the bundle that went from entity to entity never bothered raking it out. is there any dollar amount on it, or is this an investigation into how much they made. is harry shearer asking for a certain amount at this point? for 120ed last october five main dollars just for him, and there was an amended complaint where others joined him, and now it is $400 million. vivendi says -- oliver: they are shooting high and perhaps getting that big number out there. carol: bloomberg businessweek
tourwed bon jovi's concert to see how much it cost to go on the road. >> let's break out the numbers. they make 212 million in an annual tour. that,6 million for all of the light and sound equipment, and that tells you it is an elaborate production, but also number an unimaginable for something that feels like a secondary piece of the process. the total is $10.4 million, less than half. 200 25,000 pre-programmed video and lighting cues, so you are getting your money's worth. >> a whole crew of people are up
there. things are meticulously laid out to get that level of performance. is 700 thousand dollars. there is a cost for the venue. of, therethe detail are a lot of fun things. the keyboardist place for different keyboards, and they gave great detail about the little pieces of their process. teachers name is scratched into the surface of the guitar. oliver: that is pretty cool. it feels like there are two tears, the first is the infrastructure, the stage, the lights come and that seems to be a big part of the overhead, but then literally in the case of
lighting rigs and whatnot, but ds around the periphery, food come all these things that come together that feature a hefty price tag. >> my favorite one was the approximate number of dollars spent on black clothing is zero. oliver: still ahead, robert de niro talked to "bloomberg businessweek" about how hollywood is digesting donald trump. north and predicting korea's next move crude how worried should seoul, korea and los angeles be? "bloomberg businessweek." ♪
oliver: welcome back to "bloomberg businessweek." i am oliver renick. carol: i am carol massar. oliver: a look at north korea. carol: we spoke with contributor mark thompson. >> for 25 years, the united states has in very concerned that north korea has a nuclear weapon. 1994, they said we can't let them get a significant nuclear capability. at that time, they had 1-2. today, they believe they have around 20 comes so however you want to look at the u.s. fight against north korean nuclear weapons, it does not seem to be working. carol: why did we let it get to the situation? we knew we could not let it get to the point where we are today come yet here we are. how did it happen? to realizeportant
that north koreans are pretty crafty. when we shut down one way, they started another one secretly. they moved from liquid-fueled missiles, which are vulnerable targets on the ground to solid feel rockets that they can hide in caves. from the u.s. perspective, you have to say that a family regime , which is what north korea is, has the consistency of purpose that u.s. administrations have not had from clinton to bush to now to trump appeared the fact of the matter is that in the middle of this whole thing, 9/11 happened, and that forced us to take our eyes off the ball for close to a decade. you point out in our conversation, a lot of tension to whichthe degree north korea has a significant array of missiles. tell us what significant means and what we know about the
capabilities at this point. >> basically they can hold with nuclear weapons ready much everything in south korea and japan at risk. it is doubtful they can go any further. let's be clear, the key thing is this is an immensely challenging thing to do technologically. we have noticed that the last several tests by the north koreans have failed. some folks say this is because the u.s. is engaged to, shall we say, in anti-rocket science through cyber, a lecturer magnetic or other means, they are crippling these missiles as they take off, but they have about 1000 missiles total, all can reach south korea, and a third can reach japan, where there are 50,000 u.s. troops. carol: where does this leave the united states? where does this leave south korea, japan, china? flywheelis plainly the
on this infernal combustion engine. trump has ratcheted up, perhaps he has to. he believes a cannot continue. south korea and japan are really nervous. they might go nuclear if they believe they are threatened by north korean nukes more than they are now, so it is up to china to be the big brother of north korea and say, this has got to stop. you saw president trump strike a deal with chinese leadership in florida a couple of weeks ago where basically he would back away from his claim that china was manipulating currency if china would help more to bring north korea to heal, and that is where the breakthrough or the lack of a problem is going to manifest itself. oliver: up next, the venture capitalists and new tech gurus
native, and he moved to a lay a number of years ago and has been working with madonna's manager and ashton kutcher, the actor who is a partner in a-grade , a venture capital firm. the three have been working together since 2010, and abe is one of the key people trying to figure out what tech startups they should invest and come in developing new technology for madonna, coldplay, amy schumer. carol: how did he get there? he is 33 years old. tell us how he got there. he is playing around with some big names. >> he was always into playing music and listening to music, punk rock, as a kid, and he went to nyu and quickly decided that
he wanted to start working in the music business, sometimes more than he wanted to concentrate on college, so he got a job in sony marketing, and as a college freshman was running around with a big backpack of promotional materials promoting various artists that sony was eager to get out there in the early 2000's, so he invented himself at a young age and impressed a , so thate higher ups when he graduated from college, sony asked him, where do you want to work within our organization. he started out at epic records, and at the time, facebook was new and he was asking his bosses why aren't we promoting our artists on facebook. we can't get on it. we don't have.edu addresses. he happened to be in the right place at a right time, a hard worker, and clairvoyant and how
big digital marketing would be for the music industry. oliver: back in the good old days. has his seems like he hands and a lot of different things. he is on the investment side with ashton kutcher, where he is doing private equity type stuffs, but dealing with social media, managing some of the content. are they that different? how did they blend together? >> they often intersect. , he spearheaded the announcement of their upcoming ur on instagram stories. in working with these bands in terms of their social media and have a presence, they conversation about what is new, what startups are hot to invest in. u2's guitars, was
talking about the farm to table space and how he was interested in learning more about new companies that were getting farm-based produce to consumers, so he did some research and they ended up investing in grub produce boxof these to consumer models, so a love of the conversation he has with they end up crossing over into the investment work he does. basically if one of his big clients is interested in something, he will look into it if this sector is worth us investing income and and some cases, the clients themselves will invest as well. oliver: bloomberg editor in chief megan murphy also set down to interview robert de niro. carol: and his producing partner
jay rosenthal. >> tribeca one of the leading film festivals to bring creative forces to new york city, a real barometer for pushing the boundaries of the entertainment , looking video, films at diversity and what tribeca has done on that front, but robert de niro has been outspoken about the trump administration, as well as jane rosenthal, his longtime producing partner, is a democratic donor and activist, so it was an interesting time to catch up with them as well. carol: was it cool? cool. it was really the thing that was the coolest about it was how humble robert de niro was good there was a point where i ask him, when did you know will you were good? and his immediate answer was, i still don't think i am good. the other thing that was interesting that we talked a lot
about was how much the industry has shifted. he is getting the band back together with martin scorsese and al pacino for a look at another gangland film called the distributed by netflix. they paid over $100 million, a distribution you never would've thought for a film like that. areot him to admit they still trying to get joe pesci in, so what i found was interesting is that over there decades of the relationship, the changes within the industry and how different movies are getting produced and finance. seem to get did he most excited about? megan: exploring different characters. when you talk to him, it is like talking to a method actor. i asked him how you get inside a off,acter like bernie made
and what was interesting about that project they said that if they had made this movie quickly, it would have been a different story, but over the years is looking at the fallout on the family, and he doesn't think anyone knew, that his wife knew, or his sons near about what he was doing and this is the story of a family falling apart as much as it was a business falling apart, and there is still so much history as to why he did what he did. carol: robert de niro was also a cover model this week. i like this one. he looks happy and jovial. rob: for this shot in particular, we had a couple of portraits in the magazine and wanted to shoot him in a positive way. when you see a promo for a tv show, you see an actor in this brightly lit background, so that's what we were going for.
how many photos did you guys take? rob: a lot. oliver: is it an excuse to hang out with robert to near a little bit longer. ? chemistry,ture their and that is reflected in macon's interview. rob: also, the portrait inside was great. carol: this is a special week for "bloomberg businessweek." the third cover had to do with wrestlemania. there is a lot going on. rob: this is something i am particularly proud of growing up on wrestling. wrestlemania,3rd a massive success for them, kind of bizarre in the entertainment industry. it is still massively popular and we got a bunch of energetic shots. i'm not familiar with who this wrestler is, but he seems to
have won the belt. oliver: at the end of the game, he does embody the wrestling five come so i think the mission is accomplished. we should mention that guy on the cover is a wrestlemania legend. carol: we had no idea. i'm so sorry. oliver: please don't beat us up. carol: "bloomberg businessweek" is available on newsstands now. oliver: what is your favorite story? to markoyed talking thompson about north korea. he understands what is going on and reminded us that years ago that we never wanted north korea to get nuclear weaponry, and here we are today, reminding us china will be crucial and how the story plays out. how about you? oliver: spinal tap. it digs into a dynamic that notle know exists but does get a lot of publicity, actors not getting paid. it will be interesting to find out what happens. bloomberg television starts right now. ♪
♪ nejra: coming up on "bloomberg best." the stories that shaped the week in business around the world. a new election looms in the uk and the results of a referendum reverberate in turkey. >> the biggest change to the constitution since the formation of the republic 93 years ago. nejra: investors wondering what is next for the central banks. our interviews this week offers some insight. >> i think the inflation mandate we we'll have to watch closely. >> the strategy of going gradual is one i have supported. >> the basic trend is towards 2% in a gradual manner. nejra: danger lurking ahead for markets.