MARIA-01
Exclusive Streaming Deal with Apple; Amazon Pulls Hoverboards from Their
Store Due to Safety Concerns; Wall Street Investment Firm Third Avenue
Parts Ways with CEO David Barse - Part 2>
Ling Kent; Sandra Smith>
immigration; CATO Institute; social media; security issue; Julian Assange
and Wikileaks; ISIS and al-Qaeda; fake Syrian passports; Pentagon; Fox
Poll; Marco Rubio; "Wall Street Journal"; Hillary Clinton; Donald Trump;
Ted Cruz; Marco Rubio; Dr. Ben Carson; Rubio/Kasich; President Clinton;
Martin Sorrell; Fox Business Network; Russia's defense ministry;
Guggenheim; Globo; European Football Championships; Andrew Liverest; Dan
Loeb; illiquid securities; MLP funds; junk bond fund; Federal Reserve; GDP;
inflation; Layman; Airbnb; crude oil; Mario Draghi>
And I think the real downside of this M&A activity is it the ripples and, you know, you think about three ABI, now has market cap of $200 billion, the Brazilians. And -- sort of little twin sister, smaller sister about 89, $90 billion, they can do anything in the package of the sector.
So I think that makes company the very focus on cost rather than thinking about expansion. So all the companies are looking at zero based budget.
Now zero based budget and nothing new. I went to business school 50 years ago close to it. I'm ashamed to admit.
You know, how Geneen in IT&T, I remember he used to sit in a bunker 24/7 with the CEO, his operating divisions going through cost side of business.
BARTIROMO: Do you see a freeze on spending from large corporations?
SORRELL: Not freeze, but clients, a procurement rules. I'm not saying there's a bad thing you have to have efficiency as well as effectiveness. In our case you have to have better work and you have to have better efficiency.
But there is, it's overbalanced, the power of finance and procurement numbers. And I think there's more than 50 percent of the FTSE 100 CEO's. And I'm the next CFO -- ex-CFO.
So the financial function has become the primary function, I'm not saying that's a bad thing but it has to be better balanced.
KEITH MCCULLOUGH, HEDGEYE CIO: And it has a lower multiple overtime. Financial engineering as suppose to organic growth that's why you're seeing, this separate the S&P 500 into core tile.
The top core tile of the S&P 500 growers versus bottom, the spread on performances like 2,000 bases points this year and again that's why people are doing what you're doing.
The most threatening thing that you can have is, you know, to your top line is deflation. If you have no pricing power, the next thing that's going to come is firing people and after that you're going to cut people's wages.
SORRELL: What's interesting about ABI SABMiller is, you know, big power in Africa. If they can increase beer consumption by I think its 1 liter per head. And at least per head in Africa is, (inaudible) proportion of liters per head here in United States, by just one, there's $200 million to extra operating cost.
So the revenue percentages or the opportunities they're absolutely key. But of course in the low growth market that's difficult to sell.
BARTIROMO: Yeah, and it's a low growth market for sure. We've got a federal reverse meeting on Wednesday, widely expected to reinstate. And just try to reiterate, the top story right now, oil prices breaking below $35 a barrel. And that is rippling of through markets as we speak.
Meanwhile it looks like Apple and Taylor Swift apparently kiss and makeup.
Nicole, big developments here, over to you.
NICOLE PETALLIDES, FOX BUSINESS ANCHOR: That's definitely right. Good morning Maria. Good morning everyone.
While Taylor Swift and Apple putting their summer showdown on ice, when Swift threatened to boycott Apple for planning to not pay royalties, to right holders, well Swift and music giants now joining forces with Apple Music getting rights to exclusively stream the singer's 1989 world tour live concert film.
Swift, performed that show on November 28th, at the AMZ stadium in Sydney and there's some great bonus footage as well, in addition to actual concert you'll get a glimpse at backstage scene the tour workers though. Plus you'll see many of the superstars who joined along with Swift tour, Mick Jagger, Selena Gomez, Justin Timberlake just a name of few.
So Apple averse course on paying those royalties after Swift used her blog to call out the company.
Maria.
BARTIROMO: She was quite effective on that one.
PETALLIDES: Indeed.
BARTIROMO: Talent wins, I like that.
Nicole, thank you. Don't forget to start your day everyday with Nicole on FBN:AM, catch it right here on the Fox Business Network, right before Mornings with Maria at 5:00 a.m.
Coming up a new round of polls presenting a new challenge to Trump's dominance in the Republican field, a whole new war of words that has begun, that's next, back in a moment.
(COMMERCIAL BREAK)
BARTIROMO: Welcome back, Donald Trump taking aim at Ted Cruz as the Texas senator arises to top of the new poll in Iowa.
Cheryl Casone, with that story, with our headlines right now, Cheryl
CHERYL CASONE, FOX BUSINESS: That's right Maria. I can't expect anything less from Donald Trump when he referred to Senator Cruz as a maniac in an interview on Fox News Sunday, yeah.
Cruz, responding within hours with this tweet, look at this, he says "In honor of my friend @realDonaldTrump and good-hearted it maniacs everywhere, the tweet links to a YouTube video was maniac sequence from the movie Flashdance, remember that. Well, they have a sense of humor by the way.
BARTIROMO: That is funny.
CASONE: Pretty good. All right we're also -- yeah, exactly right.
Well, there's also some other big news. I want to bring to you this morning. Drones are, you know, they're unmanned aircraft. But air force wants to drastically increase number of personnel that it takes to run behind the scenes, the air force hoping to increase its drone force by as many as 3,000 personnel.
And finally this for you guys, the aliens are back. The first trailer for Independence Day Resurgence has been released.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We will not vanish without a fight.
UNIDENTIFIED MALE: Go back.
UNIDENTIFIED MALE: We're going to live on. We're going to survive.
(END VIDEO CLIP)
CASONE: Well, I tell you what the sequel to the 96 summer blockbuster picks up 20 years later with the first film Blast Off, Liam Hemsworth joins almost all of the project original cast. The sequel though has to explain the death of Captain Steven Hiller whom Will Smith will not be appearing in this film Maria, Independence Day Resurgence is from 21st Century Fox. And it's hitting theaters June 24th, 2016. And it's the most popular video on YouTube this morning.
BARTIROMO: . this is going to be big, thank you Cheryl.
Dagen McDowell is here. Dagen, another big release.
DAGEN MCDOWELL, BUSINESS CORRESPONDENT: It is, and it's been a long time coming. It's taking them a long time to get this out because this movie came out and it will have come out 10 years ago. It came out in 2006, I believe or was it 20 years ago.
Anyway, I want us to point out about Jeff Goldblum. Jeff Goldblum is aging in reverse. So can you -- he looks any hotter than he was even in the Big Chill.
He needs to start doing infomercial and marketing his secrets, right. Health and longevity -- I think he's actually a new dad or maybe has been married to quite a bit a much younger woman.
But I don't want to poo-poo this movie because it's 21 Century Fox film. But what if -- come on, it's Star Wars, it's all a about Star Wars this week and it's going to be about Star Wars for the next six months.
MCCULLOUGH: My son's birthday party was on Saturday. I'd say there, I don't know, if it was 80 or 90 percent of the stuff was Star Wars.
We got tickets, we got with LEGO's, we got all the stuff, and it was like.
SORRELL: I was shopping in Macy's, covered.
MCCULLOUGH: Yeah.
BARTIROMO: Big merchandizing, absolutely right?
SORRELL: Amazing.
MCDOWELL: Did you buy anything?
SORRELL: Yes, I might bought as well was a t-shirt.
MCCULLOUGH: Yeah, see everybody gets something.
SORRELL: . a lot of Star Wars stuff.
BARTIROMO: Wow.
MCDOWELL: Yeah, who wants the BB8, the Sphero BB8 droid that you operated by your app. But I think my husband waited too long, it was the one thing I wanted and they sold out. They're completely sold out. But you can find them now because they ramped up manufacturing. But I don't think I'm getting that.
MCCULLOUGH: Are those expensive those things?
MCDOWELL: They're over $100.
MCCULLOUGH: Oh, they are?
MCDOWELL: Yes, so that's -- and that's so expensive for a toy.
SANDRA SMITH, FOX BUSINESS NETWORK: Huge pressure on this movie though, I mean what they actually have to bring in to call it a success. Do you think they'll do it?
MCDOWELL: Expectations. Number one, the number one U.S. movie is Avatar $760 million box office there. That would be wiped away, it could make double that here in the United States.
MCCULLOUGH: Does the parents want to see it as much as their kids do?
MCDOWELL: Yeah.
BARTIROMO: Speak for yourself. And.
MCCULLOUGH: I mean that's look perfect.
BARTIROMO: . got a masterful job in terms of synergies, you know, I mean he's got the trailers coming out on ESPN during Monday night football. I mean he's doing.
SORRELL: He manages talent extremely well. I mean Star Wars is a great example of him managing talent. He does it across the board. Buying these franchises is developing in many sophisticated ways.
BARTIROMO: All of his acquisitions, I mean have been so smart, in terms of.
SORRELL: In the context of Disney not being potential...
MCDOWELL: He separated George Lucas. George Lucas, is the one -- the actually a person who ruined the last three films, he brought in J.J. Abrams and said "Let's get back to live action, that was, he had enough guts to do that.
SMITH: But as far as the forecasting how it can do didn't we just see a tweet or a comment on Twitter by Steven Spielberg saying that J.J. is terrified that they won't actually meet expectations?
MCDOWELL: That's right.
SMITH: I'm just saying.
MCDOWELL: That's right.
SORRELL: . high expectations.
SMITH: Exactly.
BARTIROMO: Yeah, well we'll see if it makes it and blows it away. Dagen, we'll see you next hour. Thank you so much.
A short break, then cruising to the holidays, Christmas right around corner, one major cruise ship operator has a mega plan to get all those holiday travelers onboard.
Crystal Cruises CEO will joins us, next, back in a moment.
(COMMERCIAL BREAK)
BARTIROMO: 11 days until Christmas. And one major cruise line launching a multi-billion dollar plant to reinvent the cruise industry to get travelers onboard for the holidays and beyond.
Edie Rodriguez, is with us, she is the CEO and president of Crystal Cruisers, she joins us right now. Good to see you Edie.
EDIE RODRIGUEZ, CRYSTAL CRUISERS CEO & PRESIDENT: Great to see you. Thank you.
BARTIROMO: Thank you so much for joining us.
So tell us about this new launch?
RODRIGUEZ: Well we've got several new launches. So Crystal Cruises as the world's most awarded luxury line has two vessels today. And we sail the world from five nights to 128 nights. But we're launching our yacht brand extension on Sunday in the Seychelles.
Next July our river brand extension with five river boats and then we're also building three polar class vessels with 48 residents each. And then in July of 2017, we bought a dream line liner and triple 7 and launching cruising in the sky with Crystal Luxury air for 28 nights and 14 nights respectively all inclusive.
BARTIROMO: Wow beautiful. How's business right now?
RODRIGUEZ: It's phenomenal, it really is. We're very bullish on our brand. And reason for all of the growth is that we're able to catapult because business is so good.
BARTIROMO: Do you see the impact of the terrorism worries that we're all talking about every day?
RODRIGUEZ: You know, believe it or not we really don't thank goodness, because, and in fact, one of our vessels was in Paris or near Paris the following day from the sad stories that occurred a few weeks. But our travelers are perhaps a little bit more sophisticated, well traveled, and love wonder last and want to see the world
And as top 2 percent of the worlds wealthiest typically, they are more seasoned and know that they're just gong to not let terrorism affect their travel schedule.
MCCULLOUGH: How about just people, you know, again, it's really expensive to have your yacht and fleet of airplanes. I think most people know that. But isn't that part of this, is that people don't want to incur that co- structure, but they still want to incur the air or at least have that kind of experience?
RODRIGUEZ: Sure. It's all about options. So first of all, we have many guests that own their own yacht, that own their own airplane. But yet they still choose to cruise on us or purchase or to charter on us.
So it's very nice because then they have the option if you will. But we just have aspirational travelers as well that perhaps aren't in that bucket. But aspire to experience the world in a luxurious manner.
SORRELL: But on the security issue probably it helps actually in way, I mean in a perverse way, maybe it was sounds robust because it makes you, you know, it's more secure, it's more private, it's more focused and less - - maybe less susceptible to the risk.
RODRIGUEZ: Well at all things Crystal, we have a mantra as does the cruise industry, and is always safety first, safety for the life of our crew, our guest, our vessels.
So we take really, really stringent measures. We go beyond what we are required to do by law. And as well we do a myriad of things that we do not disclose publicly for obvious security reasons.
So it's just a sad reality of today's living. It's the normal. And as a business, and for a profit business we always want to ensure that we provide best possible.
SORRELL: Which businesses you got -- it's going to be able to get the.
RODRIGUEZ: Well, not an initially. But with our river brand experience we're starting with the mind reign in Danube initially.
MCCULLOUGH: OK, so we're right for the Europe.
RODRIGUEZ: Yes.
SMITH: By the way what's the -- it sounds like you have a high end demographic as far as your customer. There's any idea of a price for a trip, for example, a river cruise?
RODRIGUEZ: A river cruise would start out about $7,000 which is not exorbitantly expensive as would our yacht, of course the airfare and how you choose to get there is on top of that. But then we go right up to as an example an 89 night world cruise would be half million dollars per couple. And that's just what they spend to get on. And then they spend a lot more while they're on.
MCCULLOUGH: Food is extra?
SMITH: Food is not extra.
(CROSSTALK)
RODRIGUEZ: . all included the grand experience.
BARTIROMO: . 24 million people will sail in 2016.
RODRIGUEZ: That's correct.
SORRELL: That's what we're going to do when we retire Maria.
BARTIROMO: Exactly.
RODRIGUEZ: . the holiday so people should call their travel agent and book all things.
SORRELL: When we live to a 120.
BARTIROMO: Martin Sorrell final comments for you this morning?
SORRELL: Well next year is going to be, I think we had a record year last four years after a really tough nine, ten recovery in ten.
But I think it's the new normal Maria. GDP growth 3.5 to 4, our revenues grow by a little bit more than 3 plus or revenues by about 4 to 5 and net sell by 3 plus. It will be tough. But I think we'll have another good year next year ago.
BARTIROMO: Martin, it's been great having you.
SORRELL: Thank you very much.
BARTIROMO: Thank you so much Martin Sorrell. Edie, good to see you.
RODRIGUEZ: Thank you.
BARTIROMO: We'll be watching the business in 2016. Edie Rodriguez, running us there. Martin Sorrell for the hour as well.
We'll be right back. We're watching market this morning as oil goes 35.
(COMMERCIAL BREAK)
BARTIROMO: Good Monday morning everybody. Welcome to back. I'm Maria Bartiromo. It is Monday December 14th.
With me this morning, Fox Business Network Sandra Smith and Hedeye CEO Keith McCullough.
END
(Copy: Content and Programming Copyright 2015 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2015 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.)