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tv   BBC Business Live  BBC News  June 20, 2018 8:30am-9:01am BST

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this is business live from bbc news with jamie robertson and sally bundock. the fox, the mouse and the telecoms beast. the board of 21st century fox meets today to weigh up bids from comcast and disney. live from london, that's our top story on wednesday 20th june. 21st century fox is a towering force in entertainment, home to the simpsons, x—men and deadpool, and the multi—billion dollar battle to buy fox will shape the way we consumer our media. we consume our media. also in the programme. turbluence for air india as the government ditches plans to sell off its flag carrier. what now for the loss—making airline? the markets are starting in
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remarkably good heart. you would not have thought that a few hours ago because the asian markets are on the way down but now they are on the way up. the globetrotting business has changed dramatically over the years. today, it's all about personal experiences and social media! we're talking to a firm whose founders went backpacking for fun and ended up founding one of the world's biggest adventure travel firms. and should smartphones be banned from schools? one uk minister warns mobiles could have a real impact on students‘ achievements and social media is linked with bullying. but in generation tech, is this really the right way forward? just use the hashtag bbcbizlive. hello and welcome to business live. welcome to the programme. media mammoth 21st century fox has become the target of a multi—billion dollar bidding war — the largest in the industry's history — between disney and comcast.
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the move could shape the way we consume entertainment. as fox's board meets today to discuss who's the best beast to buy its business, lets just remind you of the key points. 21st century fox is a force in entertainment. its studios control everything from the simpsons to the x—men and deadpool. it owns networks star tv and has stakes in sky, endemol shine and streaming firm hulu. last week, comcast launched a $65 billion cash bid for fox's assets — a bid it says is 19% higher than a rival offer from disney. but disney, home to pixar, star wars and marvel, has already agreed to buy fox's assets for $52.4 billion in stock. it's thought disney may now boost its bid with cash. consumers are giving up on traditional cable operators and going for streaming services, such as netflix, amazon and hulu. so offering movies, tv
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and content on tap is key. disney aims to launch its own streaming service in 2019, one that's cheaper than netflix. this adds even more pressure on the industry to make or buy original content. netflix plans to spend some $8 billion this year on original programming, including 700 original tv shows and movies. a huge amount being spent on all sides. with us is richard broughton, research director at media research firm, ampere analysis. good to see you again. jamie talking us good to see you again. jamie talking us through the story which sounds like a hollywood movie in itself but how will this board meeting go today and what is the board likely to recommend? certainly, the facts you have already illustrated are
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correct, the congost bid is substantially higher than disney's original one so it will seem very likely that the board is likely to recommend that congost‘s bid is at least considered or perhaps accepted. and on the board, you have the murdoch organisation, they are 40% owners 21st 21st—century fox shareholdings, as it were so it is not a given that what they want will happen? not at all and to some extent, that is what has spurred some of the sale talks in the first place, the departures of key shareholders left them slightly more vulnerable. part of the rationale behind this is a re—consolidation of power behind a number of other murdoch assets. can we talk about net neutrality which is slightly complicated? net neutrality which is slightly complicated ? well, net neutrality which is slightly complicated? well, it's not but it's the way in which companies are not allowed to discriminate in the way that they distribute, speed or the access they give people to their content. access they give people to their co nte nt. if access they give people to their content. if you have got always
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controlling huge amount of content, it can say, "ok, we will give our people are dead at a preferential speed but we won't allow it to other distributors at that speed". is that a problem in terms of competition? it certainly is buttin rescinded, particularly the us, regulators have turned a more relaxed i do this so one of the catalyst for comcast submitting its $65 billion bid was commissioned for us telecoms giant at&t to buy time warner which includes warner brothers. so they are being more relaxed about this because the rules have changed?” think partly this is coming from high up in the government, the republicans are generally more relaxed about regulation than the democrats in the us and this has translated through to policy in areas all—around competition and net neutrality and the consequence of this with the at&t bid for time
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warner is that comcast has a supercharged rival on its domestic doorstep. we will keep a close eye on this thread because it is fascinating and has huge implications for how we consume entertainment. richard, thank you for joining entertainment. richard, thank you forjoining us. let's take a look at some of the other stories making the news. the british prime minister theresa may is again facing rebellion from inside her own party in a crucial vote on the uk's brexit rules. lawmakers are due to vote on an amendment to the eu withdrawal bill which would give parliament more of a say if no deal is agreed with brussels. the uk is due to leave the european union on 29 march 2019. commonwealth bank of australia says the federal court had approved a settlement agreement to civil proceedings related to money laundering charges. the company said it will recognise a $518 million expense in its financial statements for the full year to end june. here's a scary story. britain could run out of beer and soft drinks! that's according to the i newspaper. it's all because of a shortage
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of c02 — carbon dioxide — that makes the bubbles in ourdrinks. 0ne brewer said they may have to stop production next week. bad timing with the world cup! that is the story we have got on the home page. it hasjust disappeared, though! we will talk about that more later, britain is running out of phase, which is the worst time of year. we have got while ascot and the world cup. and from a technical point of view, it is to do with a shortage of ammonia. but don't ask me any more! my understanding of it is fairly shallow. as ever, lots of stories on the bbc business live pages which updates constantly with the latest business news. on busy days of corporate earnings, it is really useful. the australian telecommunications company telstra has announced plans to cut 8,000 jobs in order to streamline the business. the firm defended its cost—cutting
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plans, saying it was needed in a challenging market. monica miller is in singapore. good to see you again. so telstra, swinging the axe significantly. villa thin on the why. that is 2596 of their total war faults, villa thin on the why. that is 2596 of theirtotalwarfaults, including one infourof of theirtotalwarfaults, including one in four of its executive and minna managementjobs. one in four of its executive and minna management jobs. —— one in four of its executive and minna managementjobs. —— their total workforce. it saw its shares slide roughly 5% after the news broke of this massive cost—cutting overhaul and it is part of a shake—up that overhaul and it is part of a sha ke—up that they overhaul and it is part of a shake—up that they are trying to squeeze out an additional $750 million over the next four years. the firm's chief executive defended the plan, saying that he is struggling right now with an industry at a tipping point as it faces competition and technological innovation. 0ne analyst impaired this deal to the chief executive not using surgical precision but a
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chainsaw. the cuts come less than a month after telstra warned that this year ‘s earnings were likely to be at the bottom of the guidance range. thank you. and a quick look at the markets. it started off very wobbly first thing this morning injapan and we saw lots of holes in the asian markets, everyone being driven by their thoughts about what will happen in the trade war between china and the us. some reassuring comments coming out from the bank of china which began to turn the markets around about midday. that is yesterday's figure for the dow. the hang seng reacting to the positive news from china. and the european markets in response have moved up and we are thinking the dow is probably, well, the future is at the moment, looking at about 0.5% up. and european markets generally positive. and kim giggleson has the details about what's ahead on wall street today. on wednesday, investor attention
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will be once more focused on what is happening in the us housing market. data released earlier this week showed that new home sales here in the us hit an 11—year high in may. we are expecting another release here before us market open that will let us know whether existing home sales also did as well in the month. the question for investors is whether or not americans can withstand higher mortgage rates. that is because of course interest rates here are rising as the us federal reserve continues its policy of normalisation. earlier this month, the bank suggested it might increase interest rates three times this year instead of four. so far, because of a booming us economy, it seems that americans can withstand these higher interest rates but as jitters continue about the prospect of a global trade war which is weighing on markets this week, the question for investors will be how to balance the good news coming out of the us economy with the prospect of a global trade war weighing on growth. joining us is mike amey,
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managing director and portfolio manager at pimco. nice to see you. thanks for having me. lots going on as ever but we wa nted me. lots going on as ever but we wanted to talk to you about general electric, no longer in the dowjones industrial index? no, it will fall out on the 26th ofjune. it was one of the original members so just under... 1896. and a very innovative company. the aim of the dowjones is supposed to be an indication of how corporate america is doing and general electric for so long was the bellwether of corporate america, by market capital, it was the largest us company even in 1990. it's not just about how corporate america is doing but what it is as well, the changing face of the us economy that isa changing face of the us economy that is a part of this story. width yes,
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there are two challenges, one is the dowjones is there are two challenges, one is the dow jones is only there are two challenges, one is the dowjones is only 30 stocks so to some degree, you struggle a bit to get the full picture and of course you also have the big shift between obviously companies like amazon and facebook becoming ever more dominant and whether the dowjones is the best reflection of that. the ftse used to be 30 many years ago and then went up to 100. why hasn't the dowjones does the —— done the same? they compose it in an odd way, it is not done on market capital. no, it's not, which is odd, you would think if he wanted to reflect the performance of stocks, that is how you would do it so the way the dow jones works is the price of the stock. ironically, general electric is coming out and walgreens is going m, is coming out and walgreens is going in, a retailer, which has half the market capital of general electric but because they do it on stock price basis, so if that is up, you go in and if it is down, you go out and ge's stock price has come under
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so and ge's stock price has come under so much and ge's stock price has come under so much pressure. and ge's stock price has come under so much pressure. it is ruthless. we would tend to look at the s&p 500 is a better indicator of the overall performance. thank you forjoining us. performance. thank you forjoining us. mike is sitting an exam with us this morning. he has to explain ge, how the dowjones works and we've got morejobs for how the dowjones works and we've got more jobs for him later! plans to sell off india's national carrier air india have been thwarted, after the government failed to attract any bids. do you fancy a bit of air india? this is your moment. a big blow for the government — it had hoped to cash in from selling its 76% stake. let's get more now from yogita limaye from mumbai. yogita, there are no takers, a bit ofan yogita, there are no takers, a bit of an embarrassment for the government. that's right, they had set one deadline for bids to come in in the middle of may and it extended the deadline and even used terms and conditions but there were no takers. 0ne conditions but there were no takers. one major reason was that whoever acquired air india would also have
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to ta ke acquired air india would also have to take on a large chunk of the billions of dollars of debt that the carrier has. in june billions of dollars of debt that the carrier has. injune that the government has held a meeting because they've found no takers for the 67% stake they were willing to sell. what they have said is that they are looking at the scenario off they are looking at the scenario off the global aviation sector as well as the fact that oil prices are rising and for now they are putting that sale on hold so things will go on as usual so the government needs to keep the debt, it needs to keep putting in money so that the airline which employs thousands of people in india... things will go on for now as usual at air india but there will be wider repercussions because air india had set itself a target of earning $12 billion from the sale of assets that the government owns and air india was supposed to bring in a large chunk of that money. that sale will not happen in this financial year, it seems unlikely. will india lose on its fiscal targets? that's
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quite to give the government. thank you yogita. still to come. travel today is all about personal experiences — or so we're told. we'll get the inside track on a firm whose globetrotting founders went backpacking for fun — and ended up starting one of the world's biggest adventure travel firms. you're with business live from bbc news. before we take you on an adventure, let's find out what the financial conduct authority has been saying today. the financial conduct authority has released a new report surveying consumer banking habits across the uk. the report found that one in ten people in the uk have no savings at all, and there is a clear north—south divide in financial attitudes. for more on this, we're joined by the fca's chief executive andrew bailey. mr bailey, one of the interesting things about this is the way in which the country is banked. the discord because in many ways we have more banks than we have ever had before, many being online. does that
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mean we are not really catering for a large number of people in the country? what we show is even pro—urban divide. —— a rural — urban divide, in the way people feel about financial services and bank access. people in areas sometimes feel more confident than people in urban areas will have more debt but in terms of direct access to financial services people in rural areas have less of it. that's partly a story of closing bank branches but also internet access. to the extent that people who don't have access to branches rely more on online banking and it's depends on access to the internet. what do you do about it?” depends on access to the internet. what do you do about it? i think a number of things can be done. i think one thing that can be done is promoting the fact that there's an to direct access to bank branches
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which is the post office needs to be done more effectively particularly when branches are being closed. secondly, i am afraid it is outside the fca's area of responsibility, but the question of online access is important because that's the future of personal banking. it does need to be available. we have to leave it there our —— we have to leave it there our —— we have to leave it there but thank you, mr bailey. there's a report online about this, it would have been great to speak a bit more with andrew but there are reasons as to why we are not saving. i don't know, but the fact that uk people don't save, the fact that we don't save, it's been around for as long as i've been covering these stories. it's not a new phenomenon. and also in the states it's a similar question. you're watching business
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live — our top story. the fox, the mouse and the telecoms beast...the board of 21st century fox meets today to weigh up multi—billion dollar bids from comcast and disney. i would like to be a fly on the wall in that meeting! a quick look at how markets are faring. a very different picture to this time yesterday, yesterday we saw heavy losses but today the fear factor has gone away for now. summer is pretty much here and lots of us are starting to think about holidays. and for the more adventurous, backpacking is a way to see a lot of places without necessarily spending a lot of cash. altogether, the worldwide adventure tourism industry is worth an estimated $683 billion and is growing rapidly. it normally takes travellers off the beaten track. and it creates morejobs than mass market tourism for local people. 26 for every $1 million spent compared to 15 for more popular types of holidays. but it's only highly profitable
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for the companies that send adventurers on their way. such as intrepid group. the australian firm has an annual turnover ofjust over a quarter of a billion us dollars. joining us now is james thornton, chief executive office for intrepid group — the world's largest provider of adventure travel experiences. we have been talking about the founders, tell us about the people who went backpacking and then created this company. absolutely, went backpacking through africa, met local people, tried localfood, stayed in different types of accommodation, then they went back to melbourne, one of them went to thailand and designed the first to the other marketed that trip. and in oui’ the other marketed that trip. and in our first the other marketed that trip. and in ourfirst operation we the other marketed that trip. and in our first operation we took a massive 47 people to thailand but since then... when was that? 1989. it has grown significantly since
quote
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then. it has changed, hasn't it, the idea of an adventure holiday. in the 19705 idea of an adventure holiday. in the 1970s and and was about having a real adventure. now it's more to do with ecology and sustainability, moving with the times. adventure travel used to be the perception of climbing a mountain or camping potentially. today it is much more about what we call sustainable experience rich trouble. meeting local people, trying their food, trying to understand the way in which different communities work together. it creates a better understanding of the world and hopefully makes people realise that different people from different parts of the world are quite similar. and eliminating some elements of tourism that used to be harmful, like riding elephants, that is something that your company has said no two, no more of that and others have followed. in 2014 we did some research and investigated 140
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research parks in thailand and found that only four met the basic standards of animal welfare. as a company that took 35% of its travellers deserve east asia at the time but was daunting to find, the majority of those travellers doing elephant riding, so we took the bold decision to be the first tour operator to ban elephant rides. we explained that decision to one of oui’ explained that decision to one of ourfounders explained that decision to one of our founders writing a piece of online content which got picked up significantly by sky news and the bbc, to this day it is still our most shared piece of content and since that decision 120 more tour operators have followed suit. critically we have even more people travelling to thailand with us. with package touring you can achieve economies of scale by putting eve ryo ne economies of scale by putting everyone in the same hotel and getting deals. and with yours is ideal have to raise prices or operate on very thin margins. we run
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and then margins! —— on thin margins. asa and then margins! —— on thin margins. as a business we have a purpose beyond profit. we are still profitable but we have a reason for existing beyond just shareholder profits. we want to benefit all stakeholders and communities and the environment. when you operate on a thin margin you can't afford to get it wrong, to lose market share or lose the attraction to these holidays. who is your prime customer? a university educated single educated female who has travelled in the past but now has a job, they have limited free time to experience the world and that would be the number one passenger travelling with intrepid. does it follow the same patterns as the ordinary travel market, is it, they are not going to tunisia, they all going to spain at the moment, where is the place people want to go? it's
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definitely influenced by geopolitical events that intrepid travellers seem to have a strong mindset in the sense of getting out... myanmar for example must be sensitive. it has dropped off in the last 12 months but sri lanka, a destination that would have had previous challenges is not hot and colombia would be the same. james, we could talk for hours, alas we haven't got the time, but thank you for coming in. very interesting. in a moment we'll take a look through the business pages but first here's a quick reminder of how to get in touch with us. stay up to date with all today's business news on the bbc‘s business live page. insight and analysis from oui’ live page. insight and analysis from our team of editors around the globe. and we want to hear from you as well. get involved and the bbc‘s business live web page. 0n as well. get involved and the bbc‘s business live web page. on twitter we are at bbc business. and find us on facebook. business live on a tv
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and online. what you need to know, when you need to know it. your comments have been coming in thick and fast. mike amey from pimco joins us again to discuss. 0n on this question of uk children having smartphones in schools, the culture secretary is appealing to headteachers, confiscate them and ban them. your thoughts? the challenge that you've got is, do stu d e nts challenge that you've got is, do students need their smartphones at school? i have three kids and i quite like the fact that they have a firm because they get public transport and that kind of thing. so then there is a question of whether you confiscate them or not. if you do that they could get lost... they have to be switched off, they cannot use them during the school day but i'm sure kids have them on and at the table. 0ne
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i'm sure kids have them on and at the table. one person on twitter says no need for a phone especially when exams are in progress! the name of the person who has treated that is athlete's dad. 0ne of the person who has treated that is athlete's dad. one wonders what kind of charity would have preferred... schools have emergency contact details if needed, says one viewers. lauren says, ifeel we are struggling to figure out the best way to deal with technology and how it works of day—to—day living. that's very true. someone says u nless that's very true. someone says unless a child is actively disrupting class work with a phone i think you're overstepping the mark to ta ke think you're overstepping the mark to take their property from them. doesn't a child have a right to a phone? 0h doesn't a child have a right to a phone? oh dear. is and a basic human right? we'll see you very soon. take care. goodbye. hello there, another one and muggy
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start to the day across much of england and wales. —— warm and muggy. england and wales. —— warm and muggy- a england and wales. —— warm and muggy. a lot of cloud, particularly further north across scotland and northern ireland where we've had rain overnight, very wet night in parts of scotland, as we go through the day the rain will ease as it pushes the south. a lot of clout as i mentioned but it will get brighter for many of us into this afternoon, particularly the south—east of england but around the coasts of wales and south—west england will stay misty and murky. here's the rain moving down to scotland and pushing further south across england and wales, breaking up as it does so. behind that every of cloud a fresh appeal to conditions,
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towards the south—east noticed the dark orange colour, warm and muggy, temperatures reaching 26 degrees. elsewhere with sunshine temperatures 17-21. we'll elsewhere with sunshine temperatures 17—21. we'll continue to mad with some showers feeding into scotland, some showers feeding into scotland, some are drifting into northern england as well before mostly clearing away, with clear skies overnight are more comfortable night for sleeping, temperatures in single figures across the north and the south, 10—13d. but fresh appeal will extend to all of us during the day on thursday. look at the blue areas with the north—westerly wind pushing away the warm and muggy air. thursday starts dry and sunny for most of us, quite a breeze coming in through the northwest, particularly from the northern isles further outbreaks of rain, dryer for most of us on outbreaks of rain, dryer for most of us on thursday, notice that the oranges are not quite as dog or pronounced as they were on wednesday. those temperatures down bya wednesday. those temperatures down by a few degrees. 21 celsius in the capital. into friday and the weekend. this big area of high pressure will move from west to east, one and two friends coming to
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the north which will bring rain across northern scotland, for most of us no appreciable rain for a good while now, a high in—place into next week and it will turn warmer as well. those temperatures over the weekend, getting up to 22 but you'll notice by tuesday there's temperatures widely into the low to mid 20s, some areas across southern parts we could see temperatures approaching 30 celsius. hello, it's wednesday, it's 9am. i'm victoria derbyshire, welcome to the programme. is it time to legalise cannabis? the government's announced an inquiry into its medicinal use, and has ruled out further relaxation, but is full legalisation inevitable? we've had such a huge repsonse from you about this subject that today we've brought together people on all sides of the debate in the next hour. my son started smoking cannabis at 14. that was 15 years ago. it has had a
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devastating effect on his eye. magdeburg on george freeman, conservative mp and former minister for medical regulation under the bonnet about. i think we quickly need to license all medicinal use cannabis and we should have a debate
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