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Quest Means Business
Tiger Returns to Golf; U.S. Interest Rates Stay Low
Aired March 16, 2010 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Tiger's Master class, the world's top golfer is coming back to the game next month.
No change, U.S. interest rates stay at rock bottom and there is no hint that the Fed is getting ready to tighten.
And get your house in order, Canada's finance minister tells me governments must stop overspending or face years of economic hardship.
I'm Richard Quest, I mean business.
Good evening.
One of the mostly keenly awaited comebacks in the history of sport, Tiger Woods said just a few hours ago that he's teeing off all over again at the Master's Tournament in Augusta, Georgia next month. Mr. Woods said in a statement: "The Masters is where I won my first major and view this tournament with great respect."
He says that, "After a long and necessary time away from the game, I feel like I'm ready to start my season at Augusta."
Now, Tiger's comeback is surely good news for the business of golf. The question, of course, is what it actually means for Tiger Woods and that business. Put it this way, Tiger Woods so far the major title sponsors that he's lost, he was dropped by Accenture, he was dropped by AT&T, and he was dropped by Gatorade. However, he has maintained the support of Nike, and EA, Electronic Arts.
So, that is the scenario under which he comes back. It is probably not being unkind to talk business before he's even whacked the first golf ball. Damon Hack is with us; senior writer with "Sports Illustrated".
First of all, I suppose-and look, I'm not a golfer, Damon. I think it is a rather ridiculous game, per se. But in the world of golf, this is very big news.
DAMON HACK, SR. WRITER, "SPORTS ILLUSTRATED": It really is Richard, it is huge news. Tiger moves the needle, whether he's doing great things, or having a scandal, there is no bigger name in the sport. So Tiger announcing today that he's coming back to the Masters has really, you know, moved and shaken the sport. Everyone is talking about it, and now we'll begin the countdown for his return.
QUEST: Now, it is not an exaggeration to say that when he does return on that first day the viewing figures will be off the charts.
HACK They really will, they have compared it to, maybe, the Obama Inauguration, or a "Super Bowl". You are going to have huge ratings numbers. You know, traditionally when Tiger plays in a golf tournament, the numbers go up about 50 percent, when he's not there, they are half. Tiger coming back after this kind of a scandal and this kind of a lay off, you will have the most ratings you've ever had for a golf tournament, maybe since he won the Masters by 12 shots in 1997.
QUEST: Now, we are going into deep water, where we are starting to actually talk about individual games. But I do note that when he has played or returned after a period of absence he hasn't actually performed that well. So, are we expecting too much, if we were to believe that Tiger redux is going to be number one?
HACK: I think you'd be right. I mean, we can compare it to when his father passed away in 2006, he returned from a long lay off at the U.S. Open at Wingfoot, and he missed the cut. Tiger hasn't played in a golf tournament since November. He's been going to therapy. He hasn't been practicing as he normally would. He's not playing a tune up event before the Masters. So, by my count, and my estimation, I think he'll actually be rusty when he plays the Masters next month and may even miss the cut. I think he'll more likely miss the cut than win the green jacket.
QUEST: Let us move to-skate to some thicker ice, into my bailiwick and talk business. How long do you think, Damon, it will be before we would see sponsors forgive and forget, and get the checkbook out?
HACK: You know, Richard, the best way Tiger can get those sponsors back is to change the narrative of this story. And the best way he can do that is to start winning golf tournaments again. He's four major championships behind Jack Nicholas. I can see if Tiger starts to win golf tournaments again, you might see some sponsors try to get on that train as it gets some momentum. But at this point there is no doubt he has lost $10s of millions in the short term, and if he struggles he may lose $100s of millions in the long-term.
QUEST: But you see, the fascinating part is, the hypocrisy of sponsors, that will have dropped him when, you know, the scandal is at its height. But the moment he is starting to win golf tournaments again, whoosh, back as fast as you can.
HACK: Well, you could have that, or you may see some new sponsors, maybe somebody who he has had never had before.
QUEST: Right.
HACK: Someone, a company that he has never endorsed, that may want to get on that train. I mean, we saw Luttrell Spreewell, who you know, tried to coach his coach. We saw A-Rod, you know, he took steroids. We have seen, you know-Kobe Bryant was accused of rape. A lot of these athletes have been able to come back and reinvent themselves. Tiger Woods had a pristine image before this scandal. And I think that as he starts to win golf tournaments again, this whole episode, as tawdry as it was, may begin to kind of recede in the background.
QUEST: Damon, please come back after that first game in Augusta. I need you to come back. We'll talk business, we'll talk golf, and you might actually try and help me understand it. Many thanks, Damon joining us from "Sports Illustrated".
Now, there was one other story to bring you tonight. Some major news, it was Tiger Woods, of course, who called it the day and has made the big news. But, the Federal Reserve also made news when the U.S. central bank said a short while ago, it was holding interest rates steady and not even dropping any hints about how soon that will change. Maggie is in New York, as always.
Good evening, Maggie. OK, we knew they weren't going to move on rates, but that statement is what we have been looking at.
MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: That's right. Ben Bernanke and Tiger Woods, what an unlikely duo for your headlines tonight, Richard. Who would have thought. But no surprises coming from the Fed statement. They did upgrade the economy just a little bit in their assessment, saying, "That the labor market is stable now, business spending is actually rising significantly. So, it is a tad better there, but they kept that language about rates intact, that is what everyone was focused on. They are going to keep them "exceptionally low" for an "extended period". They say, hey, there is a lot of slack in the economy and no inflation, so they are not willing to do anything.
QUEST: Right.
LAKE: The one thing to keep in mind, though, when we talk about the rates, no change. They are ending their quantitative easing. Those buying-direct buying of mortgages, those exceptional measures they have put in place, a lot of analysts pointing out that that is in a way, actually tightening. So, if there is any debate here, discussion here, in New York this evening, it is can the housing market stand on its own without that support. Can the economy stand on its own? That is what people are little bit worried about, it is certainly what the Fed is going to e watching.
QUEST: But as long as we see that "extended period, exceptionally low" phrase, for every FOMC statement that has it, it becomes much more critical when we finally see it removed.
LAKE: That's right. Just so you know, the thinking is that it equals about six-months time, that is what, at least, some people benchmark that. We are starting to see some debate within the Fed coming out. We did have a dissent today, Richard, from Honing, the Kansas City Fed, he is worried that keeping them at absolute zero is just going to sow the seeds of another crisis. He'd like to see them move up, just a bit, as a sign that the Fed is conscious of that. He doesn't think it would actually hurt the economy, but he hasn't convinced the rest of his colleagues of that yet.
QUEST: And on the tightening, which you talk about-I mean, there have been numerous, very oblique tightening methods. First of all we have had a couple of exceptional liquidity funding requirements removed by the Treasury. We have also had the normality of-between the discount and the Fed funds being restored.
LAKE: Right.
QUEST: And as you rightly point out, this latest change.
LAKE: That is right. And the other ones were kind of directed at financial markets, which we know were kind of healing, the interbank, they investment banks, the financials. This one, now, stopping those direct purchases of mortgages, a little bit more directed toward housing. I think that is why people are a little more concerned about that. They want to see what happens. Do rates start to ratchet up? Spreads widen out? And the housing market, although stable, it is still very fragile in people's minds. So this is going to be a really important test.
QUEST: Maggie, in New York, many thanks. We'll talk more about exceptional and extendeds in the future. Maggie is in New York.
You need to know how the markets moved and traded. Now, stocks in Europe staged a bounce session, it reversed the previous days' losses. Banks were among the top gainers, ahead of that interest rate decision. Barclay's and Deutsche both 2.5 percent to the good. Royal Dutch Shell rose 1.5 percent. The company said it was cutting 1,000 more jobs this year and next, but predicted a return to growth. You are going to hear from the CEO of Shell later in this very program.
EU finance ministers gave their backing to a plan for the help for Greece-it needs. And we'll talk about that after we have heard from these headlines. And we turn to Fionnuala Sweeney at the CNN News Desk.
(NEWSBREAK)
QUEST: And when we come back in just a second, look, it is Europe and its Greece, but this time the positive news and no one has given Athens a penny, but things are looking better. We'll explain how this is true in a moment.
(COMMERCIAL BREAK)
QUEST: The EU has a game plan for Greece, European finance ministers have agreed to a broad outline of how to help if Athens can't resolve its debt crisis by itself. They stand ready, as a group, to offer emergency loans. It is the first time the Euro Zone has agreed to create a financial lifeline for one of its members. They aren't-and this is crucial-they aren't putting sums or money onto the amounts involved, or indeed, say what might trigger the emergency landing.
The Greek finance minister says he would like to see the aid mechanism set up as soon as possible. He is calling it a loaded gun on the table, one that hopefully he'll not have to use.
The credit rating agency Standard & Poor's says it has now reviewed whether to cut its ratings on bonds issued by Greece. And it won't do so and simply says the austerity measures announced by the authorities in Greece, and have adopted, are now enough for the time being.
It is giving the euro a boost. Jim Boulden has been here.
Jim, I'm starting to get the feeling, small crash, no one hurt.
JIM BOULDEN, CNN INT'L. CORRESPONDENT: Yes, I mean, a lot of the worries in the market were about would Europe step up to the plate? And as of now, as we see, if you look at this euro-graph, you'll see that the euro-it has a positive reaction because people think the European Union is getting closer to-as they say, I love this-technical modalities, in order to make sure that when Greece goes and eventually sells its bonds into the market, that it will have an interest rate that is more palatable.
We haven't seen that yet. The interest rate is still double what it was in November. But there is a lot of talk now that Greece won't go next week to sell its bonds, because it is still too high of an interest rate compared to the German bund. But that if this technicality, if this European decision becomes, you know, something that the markets really like that it would be easier for Greece to sell the bonds.
QUEST: So, who will pay the money?
(LAUGHTER)
Tell me about it.
BOULDEN: You want to know about these?
QUEST: Yes, tell me about it.
BOULDEN: We're talking about a pool of money that would be voluntarily-voluntarily come from each of the governments in the European Union.
(CROSS TALK)
QUEST: Hang on, hang on. The Union or the Euro Zone?
BOULDEN: The Union. Because it is-they have, because it is voluntary, because the treaty doesn't say that they have to. No, you are right, maybe it is just Euro Zone countries. Maybe Britain wouldn't have to do it. I'll think about that again.
But the idea is that they would put this money into the pool in order to make sure that it is available, if Greece needed it and if Greece asks for it.
QUEST: So, we end up with this situation. Who has been talking about it today? What's being said?
BOULDEN: Well, yes.
QUEST: I mean, because there is a lot that, you know, at the end of the day.
BOULDEN: Yes.
QUEST: Germany has not been wanting to contribute, France would like to contribute, or says they'll do something. Everybody says something must be done.
BOULDEN: Yes, and what we had in Brussels is a lot of people meeting for the second day. Yesterday we had the 16 Euro Zone members, then we had everybody today. And also the Greek finance minister. Let's hear from George Papaconstantinou and Olli Rehn, who both were speaking in Brussels after the decisions were made.
(BEGIN VIDEO CLIP)
GEORGE PAPACONSTANTINOU, GREEK FINANCE MINISTER: It is clear that we are not happy to be paying the kinds of mark-up and the spreads that we are paying at the moment. But as we have stated all along, it is a question of rebuilding credibility. And it is very clear now that this credibility is being rebuilt and this is reflected also in the financial markets.
OLLI REHN, EU ECONOMY COMMISSIONER: Today the EU committee (ph) endorsed the commission's assessment on the fiscal situation of Greece. Next to a substantial package of more than ambitious (ph) over fiscal conservation, Greece is now on track to achieve the target of 4 percent deficit reduction this year, in 2010.
(END VIDEO CLIP)
BOULDEN: So, that is important. He is saying-Olli Rehn is saying that Greece is on target to cut its budget deficit enough this year, to meet its goal this year. And that is what Standard & Poor's is saying as well. It is about next year that is worrying a lot of people. Can Greece keep this momentum going?
QUEST: All right. Let's put Greece to one side.
BOULDEN: Yes.
QUEST: Because it sounds as if the Greece issue is worked-just about a done deal, in some shape or form. But the Euro Zone has come away from this crisis with a bloody nose?
BOULDEN: Sure, it is and you can see that in the reflection between the dollar and the euro as well. The euro has been very week for a long time. They also prove, I mean, Greece threatened to go to the IMF, is what seem to have scared everybody here.
QUEST: Effectively, what they have done is create their own IMF, now.
BOULDEN: Yes.
QUEST: Amongst these other countries. I know it's not the EMF.
(LAUGHTER)
QUEST: I mean, that would take--
BOULDEN: Don't want to confuse people with that one.
(CROSS TALK)
QUEST: No, no, no, absolutely not. Let's leave it there.
Jim, hopefully, you won't have to look too much more at Greece. Except to go there for a holiday.
BOULDEN: Well, I've been twice in the last month. Maybe I won't get tear gassed next time I go.
(LAUGHTER)
QUEST: Reporting-all right, Jim Boulden, many thanks indeed.
Now, Greece's misfortune could provide opportunities for other countries to showcase their virtues. Canada's finance minister is in London, promoting his country as a destination for investors to, basically, send their money rather than elsewhere. Now I asked him about the disparity between countries like Greece, which are deep in the red, and his own, which has a solid budget plan.
(BEGIN VIDEOTAPE)
JIM FLAHERTY, CANADIAN FINANCE MINISTER: We all have to deal with our own deficits. And I've dealt with ours. We'll be back. Our deficit will be cut in half in two years, by two thirds in three years. And we'll be balanced in five years, or so. And a lot of that is just by ending the stimulus spending, which is the exit strategy. So that has to end as planned. Two years of stimulus, and then it stops.
QUEST: What would you say to those countries that are still running deficits in excess of 10 percent?
FLAHERTY: I think that is a great challenge for them, and certainly discussions I've had with my colleagues in a couple of those countries, they are very concerned about it. And they want to move back to a more reasonable percentage of GDP.
QUEST: But it is not going to be easy at the same time, without pushing the whole thing over the cliff again, is it?
FLAHERTY: It is not easy. I mean, the idea of restraining spending growth over time is not easy. It is always easier to say yes than to say no. I just did a budget where we said no to almost everybody. It is the smallest new spending budget in more than 10 years, in Canada.
QUEST: The wish to tax and levy the banks and the financial institutions, you could understand why people want to do it. It pays back the taxpayer. But you are very much against this?
FLAHERTY: Yes, first of all, our banks pay a lot of tax. They are very big taxpayers in Canada. So it is not as if they are getting a free ride. And the people that work at those banks all pay income tax, and consumption taxes, as we all do. So, this is not a situation where someone is getting a special deal. But, you know, the Tobin (ph) tax idea, quite frankly the Volcker rule, with respect to proprietary trading, these are not ideas that we find useful in terms of addressing the causes of the crisis.
QUEST: Which you believe is capital adequacy and a strengthening of the balance sheet.
FLAHERTY: And effective regulation, not just regulation, but regulation that is enforced.
QUEST: When you look at the current crisis, within the European Union, and the Euro Zone, I realize of course, again, it is not your bailiwick, but the prospect of contagion, from something like what's happening to Greece and what we learned from this crisis, what we are just getting over, is that nobody can ignore something that seems to be a long way off.
FLAHERTY: Yes, we are inter-related. And that is why it is important that we establish regulatory reform, get the rules right, and make sure we enforce them, and we do it globally.
QUEST: How much more-I mean, everyone keeps saying we are not out of this yet. How much further do we have to go before one of you ministers is prepared to say, we're out of it. We're OK. Let's hoist the main sail.
FLAHERTY: I look forward to that day. We're not there yet. We still have, for example, in Canada, 8.2 percent unemployment. That's a lot of people out of work. We have some resumption of private demand, but we don't see the kind of resumption of private demand that we are going to need to replace the public sector stimulus. We see Greece. We see some other sovereign situations that are of concern. We also know that there is some banks that have not yet, mark to market all their assets. So, there are some bumps on the road yet.
(END VIDEOTAPE)
QUEST: The Canadian finance minister, who-extraordinary, rigor of travel. Flew into London this morning from New York, and by the time this is being transmitted he is already on his way back to Canada.
Now, he made millions, he also lost just as much. Nine months after his death, Michael Jackson is back in business-in a big way. The King of Pop is 100s of millions better off, at least his estate is, as a result of a deal today.
(COMMERCIAL BREAK)
QUEST: There could be more new Michael Jackson albums out in the next few years. More than the King of Pop released in the whole of the last decade. Sony Music has struck a deal with the late singer's estate to release 10 new albums. The first, featuring previously unheard songs, is due out in November.
Now there are reports that say the deal is worth $250 million to the estate. If that is true, it would be the richest recording contract in history. As well as unrelated tracks, Jackson's legacy also included a mountain of debt. It was estimated as half a billion dollars when he died. CNN's Entertainment Correspondent Brooke Anderson is with me now, live, from Los Angeles.
Brooke, first of all, this deal is really quite extraordinary, just for the sheer bravado of the amount of money involved.
BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT: Yes, a quarter of a billion dollars. And the only other recording contracts to ever come close to that, Richard, have been that of Bruce Springsteen for $110 million, seven albums, Robbie Williams, $150 million, five albums. So, this is extraordinary, worth close to, possibly, $250 million for Michael Jackson's catalogue. And John Blanca, one of the executors of the estate says they are choosing from more than 60 unreleased recordings, Richard.
And we are getting word that the catalogue, the vault of Michael Jackson's songs consists of nearly 100 never-before-heard songs. So this is remarkable.
QUEST: Now, let's just talk about those unreleased songs. Is the value in this deal the unreleased stuff, which might frankly, sound a bit passe if it was written some years ago. Or is it in re-releasing all the old favorites, what do you think?
ANDERSON: There is going to be a little bit of both, I think. I think there is going to be some new songs and there will be some revamps of some old tunes. Now, we don't know specifics of descriptions of these songs, or the tone, or the lyrics. We don't know if they are going to be upbeat, a la, "Thriller" or "Beat It", which we are watching right now. Or, "Billy Jean", or if they will be more melancholy, but we do know they have something big planned. And $250 million, that will go pretty far and taking care of that half a billion dollars debt that Michael Jackson left behind.
QUEST: We'll talk debt in one second, but the other statistic I've been learning today is that since the death last year-and you and I were both in Los Angeles, covering that story-since the death last year, the estate has made, getting on for another quarter of a billion dollars, $200 million, plus, just on the movie, from the concert and all sorts of things. So, the cash machine, Brooke, continues.
ANDERSON: Yes, oh, yes, it is a cash cow, Richard. And yes, the movie, "This Is It", has earned $260 million worldwide, at the box office. One of the executors of the estate, John Barka (ph) has said that since his death the catalogue has sold 31 million albums, worldwide, two thirds of those sales coming, internationally. And, Richard, we know that there will be enormous interests in these new discs that will be released coming down the line, because we have seen his fans up close and personal, they are intense. And after his death, they traveled from far and wide to be here in California, when he was on trial. They traveled all over, they lost jobs, they lost income, they spent 1,000s to be here, to support Michael Jackson, so there is tremendous interest and support in anything Michael Jackson related.
QUEST: Finally, briefly, Brooke, let's turn to-we've had a bit of- with Tiger, so let's face it. Have all the allegations, I mean, I know there is a criminal trail that may or may not be starting, with the doctor. I know that there is all the allegations about Jackson, and the family, and the father, and everything. Have all those things sort of subsided now, or is it still the scandal de jour?
ANDERSON: You know, there are still something, in the works. Joe Jackson is still contesting the executors of the will, who have been named. But that has kind of all died down. And the story, right now, is this deal with Sony, this astronomical deal. And all the profits, all the money, will go to Michael Jackson's mother, Katherine, and his three children, Richard; 20 percent going to charity.
QUEST: Brooke, many thanks, as always. Brooke Anderson, joining us from Los Angeles, for making sense of a very large deal. We appreciate it, Brooke, good to see you as always.
When I come back in just a moment, the most famous floor on Wall Street is getting a make over. We are going be behind the scenes at the New York Stock Exchange. QUEST MEANS BUSINESS, good evening.
(COMMERCIAL BREAK)
QUEST: Good evening, I'm Richard, QUEST MEANS BUSINESS, this is CNN.
The oil company, Shell, says it is getting ready to ramp up production this year and it is also cutting back on staff. The energy giant says oil and gas production will rise by 11 percent by 2012, when it hopes to be pumping 3.5 million barrels a day. Now it follows the company's best year for discovering new deposits, in a decade. Shell has 35 projects in the pipeline. But they other side of that coin, cutbacks, 2,000 jobs will go by the end of next year. The cost-cutting plan will save $1 billion a year, at least that is the idea.
CNN's Max Foster sat down with Peter Voser, the chief executive of Royal Dutch Shell, and wanted to know particularly about that increase in production.
(BEGIN VIDEOTAPE)
PETER VOSER, CEO, ROYAL DUTCH SHELL: Yes. We have got a -- a large number of projects coming on-stream. Two are already on-stream and there's quite a high number to come in 2010, ramping up in '11. So what we have is actually 11 percent growth between 2009 and 2012. So that's the first growth wave.
The second one, which we announced today, is actually 35 projects which will deliver the growth post-2012, up to 2020.
MAX FOSTER, CNN CORRESPONDENT: And so what sort of finances are behind that?
VOSER: What we have said is actually up to 2014, so '11 to '14. And we'll spend on a net CAPEX basis, which is after divestments, we will spend $25 billion to $27 billion.
On a growth CAPEX basis, so before divestment, we have set the ranges between $25 billion and $30 billion.
FOSTER: So that's a huge investment and a -- a bit of a change of direction?
VOSER: Yes, it's a huge investment. But it's a continuation, actually, of what we have done in the last few years, because we have taken a view that for long-term growth, we do have to invest and we should invest at a steady pace. So despite the fact of the recessionary environment, the sluggish demand, the lower margins, we have to keep spending.
FOSTER: You have to keep pushing.
VOSER: You have to keep pushing, because otherwise, in a few year's time, you could actually start to sink, because you have a natural decline every year of some 5 percent. So if you just stand still, your production will just lose 5 percent a year.
FOSTER: So where is this output going to come from?
What particular countries are you focusing on?
VOSER: The -- the major focus at the moment going forward, apart from those projects which we are delivering now, will be Australia and North America, with big LNG plays, liquefied natural gas plays, in Australia; tie (ph) gas in the United States; and in the Gulf of Mexico, oil.
What we are delivering now on to 2012 is we'll be the Qatar, two gas projects. One is a gas to liquids, one is an LNG project. And there will be, also, a Canada project, which will deliver quite significant barrels to our production.
FOSTER: Tough times, as you say. We were talking about the recession. You're talking about cost savings and something like a billion dollars, which seems enormous.
How are you achieving that?
VOSER: Yes, we have done $2 billion last year. We do $1 billion in 2010. This is all about, actually, simplifying the processes; stopping activities; offshoring into offshore centers; stop activities; take options away; streamlining 7,000 people; so 5,000 last year, 2,000 jobs savings the next two years. That all contributes, actually, to cost savings.
(END VIDEO TAPE)
QUEST: Now, one postscript on oil. It actually rose today, $2, to now over $81 an ounce for the U.S. blend.
After Toyota's nightmare, car problems are now emerging at another Japanese automaker. Honda will recall 400,000 cars in America -- in the U.S. A number of drivers have complained of brake pedals feeling soft. Honda says it's traced the problem to air getting trapped in the brake mechanism. The vehicles affected are 2007 and '08 models of the Odyssey, the Minivan and the Elema -- the Element -- the Element crossover vehicle.
All right. It shows you how much I know about vehicles at the moment.
The markets that are open in New York, let me show you what happened with the Dow and what's happening at the moment -- up 41.10689 for it. The Federal Reserve has, in the U.S., left the key interest rates between naught and a 1/4 of a percent. And, crucially, they said rates should say -- stay low for the foreseeable future.
They also, of course, as the market was affected by S&P confirming its ratings on Greece and the E.U. deciding that it will provide financial support if necessary.
So that's the way the New York market -- it's just slipped a tad in the last few moments, but it's really quite a small trading session.
Now, staying with New York, and technology has transformed stock trading over the years. It significantly cut the number of traders on the New York Stock Exchange floor. That much has been known for a long time.
So the Exchange has had to use the same technology to return to its roots. The object has been to bring people back to the trading floor -- back to the future, with Carter Evans.
(BEGIN VIDEOTAPE)
CARTER EVANS, CNN CORRESPONDENT (voice-over): The new face of the New York Stock Exchange is a work in progress, transforming the trading floor into a 21st century powerhouse of technology.
KEITH BLISS, CEO, CUTTONE & COMPANY, INC.: Four panels, four screens that they're looking at.
EVANS: Keith Bliss is with Cuttone, one of the first firms to settle into the new state-of-the-art work stations. These guys used to be in a different building, taking orders from clients, then sending them electronically to traders on the floor. Now they do it all right here, face-to-face.
(on camera): What is it about having that human contact that can enhance a deal?
BLISS: Well, it's just like you interviewing me. You could read my face. You can -- you can gauge the inflection in my voice. If you and I were talking on the phone and having the same interview, it wouldn't have the same effect.
EVANS: The current Stock Exchange was built back in 1903. Gone are the days of flying paper and screaming brokers. Now, about 85 percent of the trading here is electronic.
UNIDENTIFIED MALE: But for very large orders that need to be done and need to have the touch of a human being with decision-making capabilities, this is the place to do it.
EVANS: This is the New York Stock Exchange you're familiar with -- the flashy look. But here's the part you don't see on TV -- the trading stations packed with brokers. They're standing all day long and it's been like this for decades.
UNIDENTIFIED MALE: They're so old. These things have been here since almost around 1910.
EVANS: Dave Henderson (ph) has been working on the trading floor for 22 years. He's watched the Exchange evolve and electrify, but he's still standing in the same spot, so he's looking forward to his new desk job. But as far as improving communication...
UNIDENTIFIED MALE: I definitely do think, in a way, it's going to enhance. But, you know, the jury is still out. It's going to take some time to find out if, indeed, it does do that.
EVANS: In the meantime, the next generation of the trading floor should be complete by the end of 2010, with easier access, more possibilities and hopes of even better collaboration.
UNIDENTIFIED MALE: I'd analogize this thing to a -- a luxury box, if you will, with the opportunity to actually put the uniform on and go right out onto the field.
EVANS: And the new space is already pretty popular with traders. In terms of supply and demand, the New York Stock Exchange says there is a huge demand right now and not enough supply -- at least until construction is complete.
From the floor of the New York Stock Exchange, I'm Carter Evans.
(COMMERCIAL BREAK)
QUEST: Interesting stuff.
When we come back, upping their game for world class business opportunity -- as South Africa's World Cup rushes closer, we'll take a look at brands that are emerging as the biggest winners, in a moment.
(COMMERCIAL BREAK)
QUEST: Well, a loud noise -- oh, excuse me.
As we count down to the World Cup -- the football World Cup, we can leave it to Pedro Pinto and his colleague to talk about what will be happening on the pitch. You and I here are interested in the tournament as a business proposition, as well, of course, as a sporting game. But we need to get to grips with the money aspect.
In recent weeks, we've looked at companies who paid to link their brands to the event, Adidas and South African bank, First National. We found out how Nike, a company with no official link to FIFA, is unofficially piggybacking the World Cup.
Today, Coca-Cola, one of FIFA's official marketing partners, with an investment that runs into millions of dollars.
(BEGIN VIDEOTAPE)
EMMANUEL SEUGE, HEAD OF SPORTS MAKING, COCA-COLA: This year's World Cup coming up in 2010 is the largest marketing initiative that we've ever had as a global company. We'll have about 180 countries that are going to activate this for about a period of about six months. So it is a very important investment for the company.
UNIDENTIFIED MALE: Back in Italia in '90, an African named Roger Miller celebrated a goal in a way no one had ever seen before -- by dancing. And goal celebrations went mad.
SEUGE: Our campaign on this year's World Cup is all about celebration. The context of Africa hosting this year's World Cup is an amazing opportunity to bring that idea to life in a very compelling way.
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QUEST: Now, Coca-Cola began advertising at the World Cup in 1950. In '74, Coke entered into a formal partnership with FIFA, football's world governing body. But you know that.
So we visited the Coca-Cola Archives in Atlanta.
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TED RYAN, COCA-COLA ARCHIVES: There was a great 1962 film that was done by our German business unit, where they sent a film crew to Chile to cover the 1962 games. At the time, that would have been a huge expense and it was a great endeavor and it shows you the passion of the German fans for football.
But for me, as the Coke archivist, the thing I love is that it gives you four or five different instances where you see how Coke activated their marketing programs.
The eat, sleep, drink campaign was a -- was a great campaign that was done in '92 and 2002.
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RYAN: In the commercials, you see fans in the stands and they're cheering madly or they're crying. Or -- or my favorite is there's -- there's one that a Japanese woman, you just see tears streaming down her face. And you have no idea whether she's cheering or crying because her team won or if she's crying because her team lost.
So the point of that entire campaign was fans have a passion for the game and Coca-Cola wants to be part of that passion.
SEUGE: It's a win-win partnership. Obviously, the -- the FIFA organization and the FIFA World Cup event is of huge value for us in our ability to connect with our consumers. And so we measure the type of relationship in terms of brand preference and we see how it evolves over time now.
And the experience from previous event, whether in previous World Cup or other football events that we're involved in, have shown that when we do a good job in terms of our program, it drives brand preference.
RYAN: This was very popular when it was introduced a couple of years ago. It still is popular. It's a packaging in the shape of a soccer ball. So it lets the fans have a -- a tactile feel of the soccer ball. This particular piece is from Mexico, but that soccer ball idea was used in several of the different markets.
And then -- and another example of packaging, you have this German packaging from the most recent World Cup, the 2006 Cup Games, where you can collect an entire set that has your famous -- your favorite players on it.
The rival spot (ph) originated in Argentina and then was adopted and used throughout the world. And it's a great animated spot that has a number of characters that you wouldn't expect to get together. And they're all celebrating with each other after their team scores a goal. And this ad captures that spirit of exuberance.
With all of them, the -- the main thing is that Coke is producing materials that's letting you connect your passion to your team.
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QUEST: Fascinating, absolutely.
And remember, hundreds of millions of dollars -- billions of dollars - - rest on this sponsorship. Coke may be the official sponsor, but Pepsi, its rival, is scoring top marks in the online market. This video, "Oh, Africa," is the first World Cup ad to make a barrel chart (ph).
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QUEST: It's a good sign for Pepsi, which has dedicated up to a third of its marketing budget this year to social media. The ad itself is no low budget affair. Just look at it. Among the stars are people, World Cup player of the year, Lionel Messi and Thierry Henry. And I assure you, getting that number of people in that place at that one time with those cameras, well, you can work out what the cost must have been.
CNN -- this is the place to be, as we count down to the start of South Africa 2010.
Later this week, Pedro Pinto will host a special program from London's Wembley Stadium, with an exclusive interview with England coach, Fabio Capello.
We'll also have more from South Africa and, of course, bring you the developments as teams prepare, the news, the gossip, the rumor. South Africa 2010, Friday, 17:00 in London, 21:00 in Abu Dhabi.
Now, there are two very unpleasant pieces of weather system out there -- two cyclones.
And Jenny Harrison is at the World Weather Center watching them.
JENNY HARRISON, CNN METEOROLOGIST: Yes, Richard, indeed, you're right. The first one is -- in fact they're both -- they're both in the South Pacific. One is Tomas, the other is Ului. I'm going to start out with Tomas. This is the one that has just been pounding Fiji for the last couple of days.
This is a satellite, so you're looking at what has been happening over the last few hours. And what you can see quite clearly now is this storm is actually working quite quickly away from the islands. But have a look at some of these images -- not before, of course, huge amount of damage was done. Reports of at least one person being killed due to the weather conditions. And Fiji has now declared a state of emergency, certainly on Tuesday, because of the widespread destruction.
Obviously, they've got the troops are out there to the country as soon as possible to provide relief -- food, water, the usual basic supplies.
New Zealand also is going to be sending in aid for the relief effort.
Many buildings damaged -- homes, hospitals, also, businesses. And the seas, of course, were up to about seven meters. And it could take another 36 hours before those seas really come back down. And so far, it's thought that about 17,000 people in over 200 shelters.
So how much rain did it produce?
Well, this is just in the last 48 hours. And, of course, there is more rain to come, as well. Now the winds are still pretty strong with this storm system. It is, as I say, moving away from Fiji. But the seas, you saw them there in those pictures, just how rough they were. And that, remember, that was in the wake of the storm system.
But it's moving much, much quicker now, out toward the southeast. But you'll notice that it's a distance away from New Zealand. But it could still be close enough and strong enough to actually cause some high swells there along coastal areas.
But the winds certainly the first to die away from Fiji. And then, as I say, the heavy rain pulling away, as well. But you'll notice it's a line of very heavy rain, all part and parcel of the outer feed bands of this storm system and, of course, the accumulation also beginning to ease off as the storm moves further away. But still some more showers across into Fiji.
So there's Tomas.
And then here is Ului. Now, this storm system has been virtually stationary for the last couple of days. That's never good news. Winds very strong again with this storm system, over 200 kilometers an hour, moving to the southwest then taking a turn, as you can see, further to the west-southwest.
And then also, at the moment, heading toward the coast of Queensland. But already this -- it is making an impact. Again, some very, very high seas; very, very high surf. But the latest I heard, of course, all the surfers are really enjoying that weather.
We'll keep you well posted on the progress of both of those powerful storms.
Then in Europe, things were looking a little bit quieter, feeling a little bit better, as well. High pressure, of course, out toward the west. But it's still producing or allowing, I should say, those snow showers to come across into more central and eastern areas.
And then as we go through the week, this is what's going to be happening is that spring thaw beginning. We've got some much milder air in place. In fact, toward the southwest, temperatures are likely to be above average.
And you can see here, we have got more snow generally across the east and delays travel wise, not too many of them and not for too long -- Richard, back to you.
QUEST: Many thanks, indeed.
A good wrap-up of the -- the nasty conditions out there.
Jenny Harrison.
Now, when we come back, the airline industry has changed quite a bit. We've seen new planes, new routes and new classes of seats. But one of the most important aspects is giving the crews a make-over, too. We'll be talking to the designer who's changing the look at United Airlines in just a moment.
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QUEST: You don't need me to remind you the last couple of years have been torrid and terrible in the airline industry -- bankruptcies, airlines going out of business. Things are getting better. And now, of course, the airlines are starting to invest in their product. Working in the confined space of an airliner is no picnic. You're trying to keep a couple of hundred passengers happy. You're on public show and you want to look your best.
As the airline starts to become more profitable, United Airlines is aiming to bring a little more style to the aisle.
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QUEST (voice-over): This is the look that said it all -- the 1960s flight attendant featured here in Spielberg's "Catch Me if You Can" -- white gloves, fitted skirt, dainty hats -- guaranteed to capture attention and adoration all around.
And this is the reality -- the decade-old United Airlines uniform. The designer, Cynthia Rowley, has been hired to transform.
CYNTHIA ROWLEY, DESIGNER: I've been flying all over the world talking to people.
QUEST: Employees are telling her what they want.
UNIDENTIFIED FEMALE: I want a business suit cut for a woman.
ROWLEY: Yes?
UNIDENTIFIED FEMALE: I want to look like a professional.
UNIDENTIFIED MALE: I want to look the part. I mean, we are professionals and we have a tremendous amount of responsibility and I want that confidence to be reflected through our uniform.
UNIDENTIFIED FEMALE: And I want someone, when they see me walking through the airport, to say, "What airline does she work for?"
ROWLEY: It's a huge challenge, a huge challenge. I mean it's trying to -- you know, I have to make a lot of people -- try to make a lot of people happy.
QUEST: Cynthia is more used to cutting couture for the catwalk than attire for airlines. But by next year, Cynthia will have designed 10 different uniforms that will have been made into 96,000 items.
The challenge is to be fashionable but always functional.
ROWLEY: I've been thinking about like when the flight attendants reach up, you see the linings in their jackets. So I want to encourage that so I have like really beautiful print linings that will show.
QUEST: Pioneering and practical.
ROWLEY: They have a very tiny little space to work in. So things -- you know, I've been thinking about things like the skirts are narrow, so maybe they have a zipper that can unzip so that they can bend down.
I want it to be something that's never been done before. I want it to be sportswear, dresses and things that will give United a cohesive look.
QUEST: For United, image is paramount.
UNIDENTIFIED MALE: If you put new uniforms on folks and help them look and feel better, they're set up for success, which leads to better customer service, which leads to more customer loyalty.
ROWLEY: The dress that they're wearing now is basically like a bathrobe. Things like that I've been thinking about are elastic waists.
UNIDENTIFIED FEMALE: That's wonderful.
ROWLEY: Right?
So it gives you a shape but it grows.
UNIDENTIFIED FEMALE: Yes.
ROWLEY: Now, here's another thing that people might not know, that women -- well, I guess men, too -- you grow in the air, like you're five...
(CROSSTALK)
ROWLEY: -- you can expand like a whole size.
I want the -- the uniforms to be something that these people will -- will -- would want to wear anyway.
It's like why should they have to wear things they wouldn't be caught dead in in real life?
QUEST: New uniforms don't come around very often for good reason. It's the sheer size and scope of the operation. From maintenance to flight attendants, the customer service and cabin crew, Cynthia has her work cut out.
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QUEST: And this month's Business Traveler, join us as we take the air with those professionals, Wednesday, 21:30 in Abu Dhabi, 18:30 in Central Europe, right here on CNN.
And see who wins the Business Traveler challenge between Ayesha Durgahee and myself, to be a flight attendant.
When I come back, a Profitable Moment.
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QUEST: Tonight's Profitable Moment.
The power of a brand has been all over tonight's program. The deal to release Michael Jackson's back catalog is worth a whopping $250 million, along with the new stuff. It's an extraordinary amount of money. And it shows the power of his brand.
The return of Tiger Woods to golf, another story we brought you tonight, showing the power of that brand. Viewing figures for the Masters when he plays, they'll be off the chart.
And who can doubt that it won't be long before sponsors decide they're willing to be associated with him again?
A brand survives all sorts of catastrophes if there's something worth preserving. Jackson's songs will sell, people will watch Woods, because they were and they are good at what they do.
That is the power of the brand.
And that is QUEST MEANS BUSINESS.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I do hope it's profitable.
"AMANPOUR" is next.
But first, of course, your news headlines.
I'll see you tomorrow.
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