BUSINESS-01
Rio Games; Pressure Falls on Tokyo to Pull Off 2020 Games; EU Leaders Map
Post-Brexit Strategy; Trump: "I'm Not Flip Flopping" on Immigration;
Campaign Cash: Clinton has Edge Over Trump; Urjit Patel Named next Indian
Central Bank Chief; Iron Maiden Singer Working with Air Djibouti. Aired 4-
5p ET - Part 1>
Will Ripley, Jessica Schneider, Cristina Alesci >
three major deals after admitting he made up a story about being robbed at
gunpoint in Rio during the Olympics. The Rio games might have been a
magnet for controversy before the Olympic flame was even lit, but in the
end, it finished in blazing form, fireworks. What will the Olympic legacy
be for Rio? The closing ceremony on Sunday and now Brazil has passed the
torch to Japan. Japanese Prime Minister, Shinzo Abe, dressed as Super
Mario may have set the don' tone for Tokyo 2020. EU leaders are mapping
out their strategy to relaunch Europe. They came together off the coast of
Italy, all ahead of next month's EU meetings in Slovakia. Donald Trump and
his immigration plan. What exactly has been said and is there any movement
on his plan to deport up to 13 million illegal immigrants? Hillary Clinton
is beating Donald Trump not only in the polls, but also with the campaign
war chest. The latest tally show Clinton has an edge, a big one, over Mr.
Trump in campaign cash. Raghuram Rajan was called India's rock star
central banker. Urjit Patel is the new man and he's expected to bring a
change in tone but the policies are likely to stay the same. Bruce
Dickenson, singer in the English band, Iron Maiden, is also the chairman of
Cardiff Aviation, an MRO aircraft maintenance company. They are currently
working with a company, Air Djibouti, providing the airline with
operational management.>
Europe; Meetings; Politics; Elections; Banking; India; Music Industry;
Aviation >
[16:00:00] RICHARD QUEST, CNN ANCHOR: The bell ringing in the start of the new week. The Dow down about 22 points. I've got a good feeling. Yes, look at that, I think you call that firm and robust, from the Department of the Interior. The start of a new week. It's Monday, the 22nd of August.
Tonight, Ryan Lochte loses his Speedos. The sponsors are dropping the Olympic swimmer.
Choppy waters for a post-Brexit Europe. EU leaders say the bloc will survive.
And the devil's in the details. Iron Maiden's Bruce Dickenson tell me how to run an airline.
I'm Richard quest. We start the new week together. I mean business.
Good evening. Ryan Lochte is running out of sponsorships. The swimmer has lost three major deals after admitting he made up a story about being robbed at gunpoint in Rio during the Olympics. Now, an extraordinary sort of day, the Speedo deal was the first to go. Just a few hours later, Polo Ralph Lauren said it would not renew its contract with him. And then that was followed by the Gentle Hair Removal which removed its own sponsorship in a not so gentle way.
Lochte can find some comfort with a mattress company called Airweave. For now, it's staying with him. Let's look at the statements we've got so far. First from Speedo. Speedo said, "We cannot condone behavior that is counter to the values this brand has long stood for. We appreciate his many achievements and hope he may move forward, and learns from the experience." Clare Sebastian joins me now and has been following the story. All three went today and Lochte said he respected the judgment of Speedo. Why did they all fire him?
CLARE SEBASTIAN, CNN MONEY REPORTING: Well, Richard, it's interesting. Because, obviously, there are several transgressions here. There's the vandalism, there is the admitted drunkenness, but really what experts are telling me, what the key to this is the element of deceit, the lying. And of course as you saw events unfolding over the last week, it was really only on Friday that Ryan Lochte came out and apologized and really only on Saturday evening that we saw in that interview with NBC's interview with Matt Lauer, that he said that what he called the over exaggeration of that story was what got him and his colleagues into that mess. That over exaggeration, some may call it over exaggeration, some might call it outright lying. But that really, experts telling me, is what's so radioactive for these sponsors. And a very quick reaction from them today. The Olympics has only just finished. Many believe they waited --
QUEST: But why get rid of him now rather than waiting for the USOC and the Swimmers Association, which have said they will be holding their own disciplinary hearings into all of this when everybody is back home?
SEBASTIAN: I think, Richard, the sense is they want to get out in front of this. That that element of deceit is really toxic to their brands. And there's also a school of thought that believes that actually Ryan Lochte is past the peak of his career and it's no longer as lucrative for them to sponsor him as it was before. He only one metal in Rio. He won five in London. Yes, he has 12 overall, but he's always been in the shadow of Michael Phelps his colleague, is the most decorated Olympian of all time.
QUEST: For sponsors overall, though, this is a tricky question, isn't it, the risk versus the reward. What do we know about this?
SEBASTIAN: Absolutely, it's one of the most complex questions that they face. The reward is so high when sponsoring individual athletes, that's what these sports marketing experts have been telling me. But the risk is also extremely high. And the vast majority of contracts that they sign have what are called morality clauses in them. They'll all be worded differently depending how profitable the athlete is. How is performances. But there's definitely a risk associated with it and of course you sign these contracts so far in advance of these events that you do have to calculate that years, possibly, before this happens. You don't actually know how it's going to be unfold. And there's the question of also sponsoring the institutions. Should they sponsor, for example, FIFA or the IOC over an athlete, is that less risky? There was a school of thought that used to think that. Obviously, with the events we've seen around FIFA the last couple of years, we're not sure that's risk-free either. So is a very complex set of calculations, Richard.
QUEST: Clare, thank you. Joining me now is Bruce Turkel, the chief executive of Turkel Brans. And author of "All About Them: Grow Your Business by Focusing on Others." Delighted to have you with us, Bruce. Why do you think they got rid of him? Was it the vandalism? Was it peeing in the corner? Or was it because he told bare faced lies?
BRUCE TURKEL, CEO, TURKEL BRANDS: It's absolutely point three. It's an old saying in our industry, you don't get in trouble for what you do, you get in trouble for how you handle it.
[16:05:00] What they're concerned about is his lack of judgment. Makes them look bad, makes the country look bad, but worse, makes everybody wonder what he's going to do next.
QUEST: Right. But are we seeing an example here of it's not the action, it's the lie? You know, it's a cover-up afterward, it's the Watergate syndrome. It doesn't matter what you did, it's a how you obfuscate it or lie about it afterwards.
TURKEL: That's exactly right, because that's what talks to character. He could have handled it better. He could have apologized sincerely, and as we talked about, he could have put up some money to put a pool in a favela in the city of God and demonstrated how regretfully sorry he was. But as soon as he tried to say, oh, no, not me, I had nothing to do with it. All of a sudden everything changed. Most athletes complain they get robbed by the referees. But Lochte can only complain that he got robbed by himself.
QUEST: Do you think if he would've done that mea culpa with Matt Lauer and said, I'm going to go back there. I'm in a go back there. I'm going to apologize. I'm going to build that pool. They would have stood by him?
TURKEL: Yes, I do. I don't know that he could have gone back, because once he steps back in that country, remember, he's guilty of a crime. He's probably guilty of number of crimes. However, the bigger picture, if he had said to Matt Lauer, I screwed up, I get it, here is what I'm going to do, everything would have different.
QUEST: Now, I just want to put one point to you that I've been getting myself very excited about today.
TURKEL: OK.
QUEST: The companies involved, if we look at Speedo's statement and we can call it up again, you can see what Speedo said, they basically were very weak-willed about it. They sort of wishy-washy said -- I'm just looking for the exact words -- they basically said, "We can't condone behavior that is counter to the values this brand has long stood for... We appreciate..." blah, blah, blah. I mean, wouldn't they have been better to say, we don't condone lying, he lied. Instead of this wishy washy values, brands, whatever?
TURKEL: You would think so. And that's what you would expect from your friends, from your kids, from your family. But the difference is, they don't know what's coming next. They don't know if something is going to happen that's going to all of a sudden make him the sympathetic character. They're already on the wrong side of this because of what he did. They don't want to wind up on the wrong side of it because of what they do. On the other hand, you asked the correspondent earlier, why are they doing this now? And the reason they're doing it now is there trying to make hay while the sun shines. People are paying attention. If the opportunity for them to stand up and say, hey look at us. We don't condone that. But they're not going out on a limb. I could assure you of that.
QUEST: All right now, finally, Bruce, I'm putting you on the spot here. Because we've had the Lance Armstrong, where you had decades of doping on an industrial scale. And you've had the Tiger Woods scenario, and you had numerous other examples. But do you honestly believe it was right for the sponsors to bail out on him just over this?
QUEST: Well, once again, there's two very important issues, besides the obvious. Issue number one, as we heard earlier, it's very likely that they weren't getting a return on their investment with him. So this gives them an opportunity to save face and bail. But issue number two, you mentioned Tiger Woods, you mentioned Lance Armstrong, we could have mentioned Oscar Pistorius, guilty of murder, for Pete sakes. Those were guilty of the social media era. This guy is right in the middle of it. Everything has changed. Now each one of us carries a little wafer of silicon in glass, a smartphone. And we are tweeting and are Facebooking. And right now companies realize they no longer control their brands. All of us do. And the world has changed. The world has changed drastically. And you can't put the toothpaste back in the tube. All of us, athletes, actors, but every one of us, men on the street now, have to be aware of this. There's cameras, there's videos, and everything is changed.
QUEST: On that cheerful, happy note, thank you very much. Good to see you, Bruce. Go back to shvitzing Miami.
Now, the newsletter. I've been talking about this in the newsletter. Frankly I take a slight different view. Whether or not it was right -- you'll hear about it in the Profitable Moment at the end of the program -- but this newsletter today talks about Ryan Lochte and what the sponsor did. You need to sign up for it. And it arrives just as the New York market closes, and ahead of the Asia trading day. Go to CNNMoney.com/quest.
The Rio games might have been a magnet for controversy before the Olympic flame was even lit, but in the end, it finished in blazing form, fireworks. Oh, look at this firework display.
[16:10:00] And more on the Olympic legacy, Shasta Darlington is in Rio. Don Riddle joins me now from Copacabana Beach. Because Shasta, you're going to have to wait a moment while I see off Mr. Riddell, who is quite determined to rub salt into the wounds of every one of his colleagues by reminding us that he's on Copacabana Beach while the rest of us are in studio 71. Don Riddell, did the sport live up to its billing?
DON RIDDELL, CNN WORLD SPORT: Yes, I think it did. There was all the distraction of the doping controversy and whether or not the government bodies had taken strict enough action before the tournament began. We did see that cold war in the pool between some of the Americans and some of the Russian swimmers in the first week. Overall, I think that the sport was absolutely fantastic. We saw a new world record set. We saw some dominant performances. We saw some amazing young athletes emerging. We saw events and performances that will live with us forever. I mean Usain Bolt and the triple/triple. Michael Phelps signing off. Katie Ledecky winning by half a pool.
We also saw athletes really rising to another level in terms of their behavior. We saw Abbey D'Agostino and Nikki Hamblin helping each other up when they fell on the track. An incident, by the way, was rewarded with the Pierre de Coubertin awarded, which isn't often handed out. All in all, I think it was really inspiring Olympics.
QUEST: Stay with me, Don. Shasta Darlington, for months, if not a couple of years, you and I had talked on this program as part of our nightly conversation about possible disasters, calamities, and things that could go wrong. Will Rio be happy with the way they've been portrayed?
SHASTA DARLINGTON, CNN CORRESPONDENT: You know, Richard, we've always said all along that you really have to look at this in two different ways. Are the Olympics a success for the athletes who came? And are they a success for the city and the country that are hosting them? And I think that, the big question, once it's all said and done, and Rio is left with the hangover, is was it worthwhile? I don't think there's a clear answer yet.
If you look at the latest poll, you now have more than half of Brazilians who think that the Olympics make Rio look good. But also 62 percent who still think the Olympics did more harm than good for Brazil. And while you may not get some of the white elephants that you had with the World Cup, for example, this just came at a really bad time. Despite the gold medal in men's football and men's volleyball and great performance stories right at the end, I do think Rio is going to be left with a hangover. We're still really trying to gauge just how bad that hangover is going to be, Richard.
QUEST: Don, quickly back to you, if you're still with me on Copacabana Beach. What was your favorite moment?
RIDDELL: There were several. But I mean, quickly, I was in the stadium when Brazil beat Germany on penalties to win their first ever Olympic title. The atmosphere in that game was something I've never experienced before. I was fortunate enough to see all three of Usain Bolt's sprints. I will definitely be telling my grandkids about those, that was just amazing.
QUEST: Grandkids. Yes, will look forward to that. We'll have pictures of those at some point on the program. If I'm still sitting in this chair. That would be an achievement. Shasta Darlington, not your favorite moment, but as we look forward, you've got a trial to cover next, haven't you? A presidential trial.
DARLINGTON: Exactly, Richard. Talk about hangovers. Basically Brazil is waking up and realizing, while that matter was fun, they've still got an impeachment trial that starts on Thursday. President Dilma Rousseff was suspended a while ago. The whole trial in the Senate is coming to an end. She's going to appear in the Senate for the first time next week to defend herself. All of this while, as you know, the recession drags on. So Brazil is right where we left it before this party started, Richard.
QUEST: Well, allow me to say, Shasta, you've done brilliantly in covering of Brazil up to the Olympics, and throughout. You've held our hand and led us majestically through the various issues. And Don Riddell, you've been a star as always, in your own right you deserve more than a gold medal for the way you've kept us informed and made it so lively for us on QUEST MEANS BUSINESS. We appreciate both of you. Now get on with some work and get off Copacabana Beach. Don Riddell, he'll never let us forget he was on Copacabana Beach.
The closing ceremony on Sunday and now Brazil has passed the torch. It had no idea that would mean that it would give the stage to Super Mario. CNN's Will Ripley explains what that means.
(BEGIN VIDEOTAPE)
[16:15:00] WILL RIPLEY, CNN CORRESPONDENT (voice-over): Japanese Prime Minister, Shinzo Abe, dressed as Super Mario may have set the don' tone for Tokyo 2020. But few Japanese actually sought live. Half a world away and 12 hours ahead of Rio, the Olympic closing ceremony was right in the middle of Tokyo's Monday morning commute, and an approaching typhoon. Outdoor Olympic viewing parties were cancelled. But a few gathered inside.
"We hope to see all of Japan's technology showcased in the next Olympics," says Koichi Suzuki, watching the closing ceremony on a huge HK TV. You can see every tiny detail in HK. HK just a sample of the high tech cool Tokyo 20 organizers are promising. Super high speed Maglev trains, far faster than today's bullet trains. Robots doing everything from giving directions to driving taxis. Ambitious tech projects Japan hopes will impress crowds and boosts the economy.
HIDETOSHI FUJISAWA, EXECUTIVE DIRECTOR, TOKYO 2020: We are going to make this games, as I said most innovative.
RIPLEY: Hidetoshi Fujisawa, is one of the Tokyo 20's executive directors. He says new technology and five new Olympic sports will draw in new fans. Winning the Olympic bid three years ago was supposed to be Japan's badly- needed comeback after years in the economic doldrums and the disasters of March of 2011 that killed thousands and shook Japan to the core. But problems have plagued the Tokyo 2020 ever since. A scrapped Olympic stadium design. Logo plagiarism allegations. Construction delays, even a bribery investigation.
RIPLEY (on camera): Has Tokyo bounced back from that?
FUJISAWA: I think so, yes. People are excited about it, and people are very much looking forward to Tokyo 2020.
RIPLEY (voice-over): Problems do persist. Many are worried about the growing multibillion dollar price tag when Japan already has a huge national debt. The responsibility of cutting costs falls largely on Tokyo's new governor, Yuriko Koike, the first woman to hold the job.
"We don't know if our new governor can do the job yet," says Tomohiro Shimoyama. We need more transparency when it comes to the Olympics.
YURIKO KOIKE, TOKYO GOVERNOR: We know the problem, and we are looking for the solution.
RIPLEY: Now she carries an Olympic-size burden. And with Tokyo tower decked out in full Olympic colors, the countdown is officially on. Will Ripley, CNN, Tokyo.
(END VIDEOTAPE)
QUEST: As we continue tonight, the future of the EU is looking shaky, or some believe that. European leaders have gone on a pilgrimage to the spiritual home of European capitalism.
(COMMERCIAL BREAK)
QUEST: EU leaders are mapping out their strategy to relaunch Europe, as they put it. The leaders of Germany, France, and Italy -- and that of course include Angela Merkel, Francois Hollande and Matteo Renzi.
[16:20:00] They came together off the coast of Italy, all ahead of next month's EU meetings in Slovakia. And the message is that the shock of Brexit mustn't be allowed to shake the EU apart.
(BEGIN VIDEO CLIP)
FRANCOIS HOLLANDE, FRENCH PRESIDENT (through translator): It's true that Brexit creates uncertainty, and it's true that in the second trimester, growth has slowed down. And we must as much as possible eliminate all of this uncertainty and provide a supplementary boost.
ANGELA MERKEL, GERMAN CHANCELLOR (through translator): Carefully put to the test we decided on the steps on the way to the conference. Because while we respect Great Britain's decision, we of course want to reassure the other 27 countries that they can count on a safe and prosperous Europe.
(END VIDEO CLIP)
Angel Merkel, talking now. The meeting was in the spiritual home of the federal European idea. It was just off the coast of Italy. It was where two Italian intellectuals were imprisoned on Ventotene, during World War II. One is buried there, and wrote the manifesto calling for political unification. There have been many opportunities and chances to have the European constitution and they of course have all failed or floundered.
Now the British vote to leave the EU has been dealt a blow to the Federalist vision. The fear is that without action, other countries are likely or will do the same. Or at least even if they don't move as far as a Brexit vote, it will certainly embolden those separatists' entities within their country to follow on through. For example, the Netherlands, where leaders fear it could be the next country to hold such a vote. Alex Stubb is the former finance minister and former prime minister of Finland - - up at the north. As he joined us on the line via Skype.
The malaise in Europe, he says, goes beyond Brexit.
(BEGIN VIDEOTAPE)
ALEXANDER STUBB, FORMER FINNISH FINANCE MINISTER: In many ways, people are lost right now in Europe and elsewhere in Western democracies. I mean, one could say Trump is the cousin of Brexit and all politicians in the Western World are trying to come to terms with this.
QUEST: There are two issues, one, how they're going to be negotiate with the United Kingdom once article 50 is invoked. And the second is what sort of European Union they want themselves for the future? How dependent are those two issues on each other?
STUBB: Well, I think they're very dependent on each other. To be quite honest, I don't think that anyone has the correct answer. You will probably see the French and Italians pushing for a very early invocation of Article 50, and in early and quick Brexit. Whereas the Germans, especially led by Chancellor Merkel, want to take it more easy. I belong to the category of patient people. I don't think we should rush Brexit. The other issue is the future of Europe. And here, to be quite honest, I don't think that France, Italy, and Germany have a similar vision about the future of Europe. So in that sense there's probably going to be discussion but no major agreements.
QUEST: What do you mean about the future of a Europe? You have a whole raft of ways to make the union work more efficiently and effectively. So what does come next?
STUBB: I think we should actually use the momentum of Brexit for what I would call an EU 2.0, something new. Let's try to rethink what Europe is all about. I think the institutions are good and they're very strong. But I think the message that you will hear from Renzi, Hollande, and Merkel, is that we need to focus on a few specific issues. They'll be nothing new. They'll be talking about the internal market. They'll be talking about defense. They'll be talking about energy. They'll be talking about competition. They'll be talking about asylum issues. These are all super national problems to which there are only super national decisions and solutions. So in that sense I see this just as a part of a longer process. And it will be interesting to see whether there is any major suggestion coming out. Ok, let's organize a constitutional convention, let's see how --
QUEST: Oh, please, please, Alex, not a constitutional convention. Surely the reality of this flacker is that until Brexit is out of the way, they dare not look at an EU 2.0, because the whole thing may unravel like a ball of string on a nail.
STUBB: Well, I don't think it's going to unravel. But remember that the symbolism of this meeting is that Altiero Spinelli and Ernesto Rossi, they actually suggested a European federalist movement from bottom up. Basically saying we should surpass the nation state. The reality is that's probably not going to happen.
[16:25:00] But reality is also, Richard, and I know that you're a Brit, that we have the first pro-European movement in the United Kingdom since the United Kingdom actually joined the European Union. We'll see if we start getting a movement from below instead of trying to trickle down European integration on everyone top down.
(END VIDEOTAPE)
QUEST: Alex Stubb joining me on the line from Finland.
European stocks ended mostly lower. The only one that was up was the Zurich SMI, just eked out a small gain. A fall in oil prices hurt the energy shares. And the shares of the Swiss pesticide maker, Syngenta were up 10.6 percent after the U.S. government cleared the bid from ChemChina.
Now Wall Street had a very strange sort of day. I mean just look at where the movements were, pretty to look at but not exactly conducive to investors. When all was said and done, there was a loss of 23 points. We're in the last days of summer before a long holiday weekend coming up in a couple of weeks. So trading might be expected to be a little bit slower as people are luxuriating in the Hamptons. Pfizer closed down 0.63 percent, after they announce a $14 billion deal for the cancer drug maker Medivation. Now Medivation's stock, that soared 20 percent on the news overnight. The Dow was down. Europe was mixed. We shall now enjoy some business on the move.
Steve Wynn is rolling the dice in Macau, as many high rollers are shying away from China amid a corruption crackdown and a slowing economy. The U.S. billionaire has opened a $4 billion mega resort and is hoping for a royal flush.
Volkswagen is facing a roadblock in Germany. The automaker is in dispute with a parts supplier and is being forced to cut production. More than 27,000 workers are going to be reduced for the rest of the month.
And airline passengers on British Airways and EasyJet may need to grab their wallets if they wish to complain. You're going to have to come up with 25 pounds' charge, around $32. Airlines are turning to arbitration as regulations change instead. That is business on the move.
As we continue tonight, Donald Trump and his immigration plan. What exactly has been said and is there any movement on his plan to deport up to 13 million illegal immigrants? We'll talk about it after the break. QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[16:30:10] QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment. When India find a placement for its rock star central bank chief. We'll get some analysis. And Air Djibouti finds a real rock star to run the airline. My interview with Iron Maiden's Bruce Dickenson, who is talking more aviation than rock. Before that, this is CNN, and on this network, the news always comes first.
The Turkish prime minister says authorities don't know if the attacker who killed 54 people at a wedding celebration on Saturday night was a child or an adult. He says there are rumors that the suicide bomber was a child. Authorities say 22 of the victims were under 14 years old.
The leaders of France, Germany, and Italy met to discuss the future of the European Union almost two months after Britain voted to leave the EU. Angela Merkel, Francois Hollande, and Matteo Renzi met in Italy I had of an EU summit to be held in Slovakia. Prime Minister Renzi said Europe had defied predictions that it would collapse after Brexit.
(BEGIN VIDEO CLIP)
MATTEO RENZI, ITALIAN PRIME MINISTER (through translator): Many thought that after Brexit, Europe was finished, but that is not the case. We respect the choice of British citizens, but we must also write a page for the future. And that is why internal security, external security, the fight for a common defense and cooperation between intelligence services, better integration for the national defense industries, and the European communities' security project are an absolute priority.
(END VIDEO CLIP)
QUEST: The former French president, Nicholas Sarkozy says he will run for the office again in 2017. Sarkozy made the announcement as he released portions of his new book. He says he wants to lead France and what he calls, this troubled time of our history.
Hillary Clinton says she'll visit the U.S. state of Louisiana, which has been hit by historic flooding. Her Republican rival has accused her and President Obama of ignoring the disaster after Donald Trump visited the area last week. Mr. Obama will visit on Tuesday after the state's governor said a presidential visit would be a distraction from rescue efforts.
