24/10/2016 BBC Business Live


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This is Business Live from BBC News with Ben Thompson and Sally Bundock.


Regulators examine AT's $85 billion takeover of Time Warner.


Live from London, that's our top story


The deal would bring together millions of TV


Lawmakers and both presidential candidates say that raises serious


Also in the programme: More choppy waters for South Korean


Its shares have plunged after it said it would close


Shares in Europe are looking like this after Japan and China opened


the week slightly higher. We will examine what is moving the numbers.


And why the weak pound means a five-star stay


The boss of London's Ritz will be here a little later


with the inside track on the century old institution.


And as a mum slams Fisher-Price for a toy that reduces mothers


to yoga and smoothies, let us know should toys set


We're starting with a deal that could prove to be the biggest


This weekend telecoms giant AT announced plans to buy media empire


Time Warner but it's already causing a political storm in the US.


Both presidential candidates have made their views known.


Hillary Clinton says it raises a number of concerns


and Donald Trump has already said he would block the merger


But if, and it's still a big if, the merger is approved,


the US telecoms giant will pay $85.4 billion for the


That's close to ?70 billion and critics say it concentrates too


For that much money you could buy Manchester United Football Club 43


times over, Yahoo 18 times over and even Twitter six


AT has 141.8 million mobile customers and 25 million TV


subscribers making it the largest pay TV provider in the US.


The deal will allow AT to combine its formidable


distribution network with Time Warner content including


everything from fan favourite Game Of Thrones to NBA basketball


This is Donald Trump on his plans to block the merger if he wins. As an


example of power structure and infighting, AT is buying time


Warner and thus CNN, the deal we will not approve in my


administration, because it is too much concentration of power in the


hands of too few. We are usually pretty clear where he stands on


these things! That was Donald Trump of course.


Joining me now is Alice Enders, director of research at the media


Thank you for coming in. Just give us a sense of why so many people are


concerned about these two huge companies coming together. Many like


Donald Trump are arguing it is too much power in too few hands. AT is


a telecommunications company. It has a wireless business, a fixed line


business, and Time Warner is a studio. It has many beautiful


channels, and incredible presence, CNN news as well. I think Donald


Trump doesn't like CNN news and its coverage of him. More generally,


outside of the political arena, of course people are always going to be


concerned when they see an $85 billion deal. However there is a


precedent here which is the NBC Universal deal which got through a


few years ago subject to a number of conditions. I think on the


distribution side, the distributors of HBO and Game of Thrones, that


popular show, it would be concerned that the combination prevents them


from showing this content and that is where the justice department will


be very careful. That is what we have got to be clear about. It is a


decision on the part of the US justice department, not the decision


of politicians. Call me old-fashioned, I like to think the


regulator is there to do his job. I don't think politicians should


necessarily intervene in that sort of deal when there is a regulator


there to look at it very closely. What with the two bring together? At


the moment we are looking at them as big media organisations, media in


different respects. What would the combine company bring? What can it


deliver? For AT it is about getting a privileged channel into a


very big media company. AT isn't really a media company. It is a


telecoms company. What do people connected internet to do? To enjoy


content. It is all about premium content nowadays and what AT wants


to do is to simplify its life by having one of the major studios


right there, so it can tap into its content, do innovative things. AT


is very focused on developing mobile broadband, the technology of the


future. If it were to go ahead, let's pretend that whole deal is


signed and sealed and regulators are K with it, will consumers in the US


think that is the place to go? Will Verizon still be a competitor? They


have taken a different track. Of course they are number one in the


US. They have invested in content, they have bought AOL, but it is more


concerned about being a pipe, a distribution network. Our consumers


of course don't want to just watch the content that is produced by


Warner. They want to watch the content produced by Disney,


Paramount, whatever. In general what we see is that every single


distribution network has got to get all of the content to make the


customer happy. Thank you so much were coming in and share your


insight into this story. One that will go on and on, I imagine. Stay


tuned and we will bring you all the twists and turns of that very


interesting debate. Here the other business news this morning.


The Belgian region of Wallonia has rejected what it calls


an ultimatum from Brussels to back the EU trade deal with Canada.


The EU says a planned summit with Canada on Thursday can only go


ahead if it guarantees by today that it won't stop Belgium


Wallonia says the deal, known as CETA, could allow southern


Belgium to be flooded with products from North American firms.


Japan continues to feel the effects of the global slowdown.


The latest trade figures show exports fell nearly 7 percent last


It's the 12th straight month of decline in overseas demand


The country's imports also fell, down 16 percent.


And one non-business story we're keeping an eye on today:


The French authorities are clearing the notorious migrant camp


Several thousand people have been living there, many of them trying


to smuggle themselves across the Channel into the UK.


France has promised to relocate all of them


and the site is scheduled to be demolished later in the week.


Overnight there were clashes between the police and groups of migrants


with some insisting they'd rather sleep on the streets


There is a lot of coverage on our website and other for that matter


about a story that emerged this weekend with bankers with their hand


quivering over the relocation button. This is bankers based in


London. Financial services are used contributed to UK economic growth


but in the wake of the vote to leave the European Union, what would


happen? Would the staff go elsewhere and would the banks want to


relocate? On the Radio Four programme this morning there was a


statement saying the effect of Brexit would be in the medium-term.


More information on that story online.


Now let's get more information about changing shipping. -- Hanjin


Shipping. Their shares have slumped 14% after they announced they would


close all of their European operations including the regional


headquarters in Germany. The process will start this week once the court


signs off on the bankruptcy. We have been tracking the story for quite a


while. It is South Korea's biggest shipping company but it has been


broken up and will potentially be liquidated after suffering from


years of losses. In August we learned that creditors were refusing


to give it any more financial support, which caused massive


disruption to global supply chains. Many of its ships were stranded at


sea. So Hanjin is putting up some of its biggest assets for sale.


Analysts say exiting Europe will benefit its rivals. Good stuff.


Thank you. And a quick look at what happened on the Asian markets. The


new week I was good after a pretty volatile week. The Japanese earnings


season kicking off, meaning volumes are pretty light until then. Let's


look at Europe. The cut in the UK interest rates will feature in the


earnings for UK banks. Lloyds, RBS and Barclays report this week so we


will get an idea of what that means for their profitability. We have


seen big moves to slash current accounts for users as a result of a


fall in interest rates. In the US, we will get a big week for US


earnings. Google, Apple and Amazon later this week. Lots to look out


for as we explain from New York. It will be a busy week in business news


in the US. Text diet Apple will be reporting on Tuesday and everybody


will be playing close attention to iPhone sales for the last quarter.


Last month they launched the iPhone seven which seems to be winning with


consumers. On Wednesday electric car maker Tesla will be reporting on


earnings. Last week the company announced that all of its cars come


with full self drive hardware but the question by investors will be


the same. When will they start making money? Online retailer Amazon


will be reporting on Thursday and investors will want to hear that the


company's expectations for the holiday season, which believe it or


not is right around the corner. And we will get the strength of the US


economy when the Congress department releases growth numbers for the last


quarter. Some -- and we are on it. Now we have got Richard Hunter. Head


of Wilson King investment management. Things get into full


swing on both sides of the pond, certainly in UK and Europe the


biggest story will be the banks. We are expecting updates from roads,


Barclays and RBS and also Deutsche Bank in Germany. In light of that


current travails. They have had an awful year. They have indeed. They


have still got the $14 billion fine hanging over them which is yet to be


renegotiated. There was some hope that would be done before the


election, the US election, but time is running out. The banking story is


really interesting. On the one hand they are struggling to make money in


this record environment of low interest rates, certainly with the


cut in UK banks earlier in the year. But then Deutsche Bank is facing


fines, regulation, tougher criticism, so it is a difficult


environment. There will not be much sympathy for bankers but it is a


tough environment. Yes, and things keep coming out of the woodwork.


Money-laundering, foreign exchange, PPI, the additional cost of


regulation and compliance anyway, and then as you say there are these


low interest rates which all things considered make it very difficult


for the banks. The share prices have tended to reflect that since the


referendum vote in June. Even the likes of Lloyds, which has had a


pretty strong turnaround at the moment, could be affected by any


weakness in the UK economy as we go forward. Thank you. Richard will be


back in five minutes to talk about all sorts of things including


smoothies, yoga and toys. A combination you don't want to Miss!


But also still to come: Luxury for less. Why the weak pound could mean


a 5-star state could cost you less. The boss of London's Ritz will be


here with the inside track You're with Business


Live from BBC News. Microsoft has announced big price


rises for its business Business software and cloud services


priced in pounds will go Perhaps no surprise that Microsoft


is one of the first to make it quite so clear. Yes, indeed. This is


really about what has happened to the value of the sterling in the


aftermath of the referendum, and the relevant exchange rate here is


against the Euro. If we look at the graft, Stirling before the


referendum was at 130 and quickly went down to 120 and has drifted


down towards the current figure of 112, cumulative decline of about


14%. The Microsoft statement is very striking. It does not mention the


referendum, the result, Brexit, or the decline in sterling but that is


clearly what it is about. They are talking about realigning pricing


across the European Union and neighbouring countries. They made a


similar move in response to movements in Norwegian and Swiss


currencies earlier in the year. So we are getting an increase of 13% in


enterprise software services, for new businesses that is, and 22%


increase in enterprise cloud services. When we say enterprise, it


is not just business. It is also other organisations including the


British government, which will see a significant increase in its computer


software bills, and I guess the BBC, because we do use a certain amount


of products. This doesn't apply to consumer software. What you and I


buy for our computers at home will not be affected by this latest


Microsoft announcement. Andrew Walker, thank you.


A story that's on the Business Live page. News that one of the UK's best


aerospace firms, their shares are down 13% after issuing a second


profit warning this year. You've got shares in Petra Diamonds which


jumped. Releasing a trading update for the quarter which was


impressive. Production up 30%. It said it has got two new caves


starting up with a meaningful contribution to production. Diamonds


are forever especially if you're Petra!


Our top story, US lawmakers and both presidential candidates have


questioned AT's deal to buy Time Warner.


The US telecoms giant, already the country's third


largest cable provider, is paying $85.4 billion


for the company, which owns CNN and HBO.


A quick look at how markets are faring.


We have been keeping a close eye on the pound-dollar exchange rate. We


have got three regional Federal Reserve chiefs talking this week.


Any hint with what is happening US interest rates will be on their


radar. For many hotels in London the lower


pound has been a blessing - driving up occupancy rates over


the summer - and The Ritz Established 110 years ago in 1906,


it's at the very top end Owned by the Barclay family it has


136 rooms and suites But being pampered isn't cheap,


the most expensive, the Prince of Wales Suite will set you back


almost $13,000 a night! Andrew Love, Chairman of The Ritz


Hotel joins us in the studio. Good morning. Nice to see you. Awe


drew, let's just clarify something we've said many times in this


programme already is the fact that the pound is falling in value.


That's great for The Ritz. But your hotel is not really affected by


movements in currencies so much, is that true? In terms of the room


reservations, no. But in terms of overseas people coming for renowned


afternoon tea, of course, overseas visitors would benefit from the


cheeper pound and so, from that point of view, we do benefit in some


way. But in terms of the people that tend to stay at the hotel, they


would probably be able to afford to stay in the hotel in any event.


Speaking of affordability, I want to pick up on the $13,000 a night. Who


stays there? Well, very many successful people that like luxury.


But ?13,000 a night. Dollars. People with their boats and yachts which


are even more expensive to hire. How many afternoon teas do you serve?


Between 400 and 500. It is afternoon tea for everybody. It is a treat for


grandmothers. It is a treat for children on birthday parties and it


is a lovely atmosphere because you get lots of people coming through


the hotel. The joy of the hotel in that sense is that people make for a


nice atmosphere. There is a lot of happiness and it is very important


that we manage to achieve some sense of happiness in this day and age.


The Ritz is iconic. When people think of London and staying in a


thol, Run is a name that most heard of around the world, it has been


around for 110 years. A big birthday this year, but you got a Michelin


star this year which is a big deal, isn't it? Well, it is an amazing


deal. It is a great compliment to the staff and in particular John


Williams and Simon Gurling who are the service and food side because it


is very difficult for a hotel per se to get a Michelin star simply


because we have so many facets of catering whereas a chef that has a


restaurant only has to serve lunch and dinner and that's it, we have to


serve, breakfast, room, dinner, room services, tea and everything. You


talked about there has not been affect of the financial downturn or


Brexit. I'm interested who is your typical civil servantor? Can the


hotel industry it diversified you get niche hotels and boutique


hotels, can The Ritz compete? We have been given a Royal Warrant. A


lot of people want to come and see the warrant because there are


amazing amount of people abroad that are really interested quite properly


in our Royal Family. We get a reservance people. We are a modern


hotel, we maybe 1 to years old, but we're up-to-date in terms of


broadband and all the other things that go with it. I know you meet the


rich and the famous, the great and the good, all sorts of different


individuals that come and go as you've explained, it is for those


who want to take their granny for a special event, but you've got the


very well known who want a private experience at The Ritz. What's been


the biggest moment for you in your time at The Ritz? Well, I suppose


the biggest moment was when Baroness Thatcher passed away. She had been


staying at the hotel for three months. The last three months of her


life she was in The Ritz? She stayed in The Ritz and it was a compliment


to the staff. It is only the staff that make every business and in


particular, in the hospitality business. It never came out in the


newspaper. And the other thing, whatever political persuasion one


happens to be, she was an amazing lady because she organised that, the


lady that did her hair in the hotel, the maid that made her bed, the man


that brought her room service were invited to her state funeral and


they went and it was an honour for the hotel to have those people


invited. Andrew, thank you for that insight. Andrew Love, from The Ritz.


Thank you. These are the moments when our viewers complain we haven't


got enough time. Time for the latest in our ongoing


CEO Secrets series. Today it is the turn of Hollywood


tattoo parlour boss and cosmetics entrepreneur Kat Von D -


who is one of the world's most high She has something of a cult status,


and has tattooed the great and the good of Hollywood including


Miley Cyrus, Lady Gaga, Tattoos aside, what advice did Kat


wish she'd had when she started out? I think why did I become a tattoo


artist? Was it to be the best version of myself that I could be?


Was it to like help other people have a better experience on this


planet while we're still alive or to make a bunch of money?


I think when you live your life solely identified by like


materialistic things you're bound to suffer and really to struggle. I


look at my make-up line or my tattooing career or anything I do


and does it bring me joy? You remember like the initial intention


and I think that's really hard for a lot of people to do, especially in a


day and age when you get side tracked by how many followers do you


have, what house or car do you drive? All that stuff is distracting


or it can be if you're careful. Art has been my best friend. That best


friend that tags along with you everywhere you go makes life a much


more amazing place. Fisher Price's latest doll shouts,


"I need a smoothie, I'm going to rumba." Boys and girls... Is that a


stereotype? Boys and girls, unless things have changed tend to have


different interests growing up and indeed in adult life. But she may


have have a point. Not so much around the gender side maybe, but I


think she is likely to upset a pum of people with the yoga and


smoothies. We got Jess saying children's toys only set a bad


example if children are taught to use them violently. They have got to


come up with new inside. Is it really that bad? Being of a certain


generation, it is nice to see physical toys which keeps kids off


the screens for 23 hours a day. The fact that toys are around is a


positive. I like that. Ken now, he is often seen with ironing in the


back of the car! Really? What, the modern man? Ken as in the doll with


Barbie, they're mixed up in terms of their roles. In terms of what


they're doing and not doing. You see, Ben should know these things!


Don't say you don't get all the news from us here on Business Live. Have


a really good day. Bye-bye. Hi there. We have got a quiet week


of weather coming up. There will be a little bit of rain to come, but


generally there will be cold starts to the morning especially during the


early part of the week.


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