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Quest Means Business
U.K. Slumps Into Deepest Recession Of Any Major Economy; Big Ten, Pac-12 Postpone College Football Season; MLB Struggling With 28-City Plan As Other Leagues Adopt Bubbles; AirAsia CEO Sees V-Shaped Recovery for Airline; Billionaire Media Executive Sumner Redstone Dies. Aired 3-4p ET
Aired August 12, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:30]
RICHARD QUEST, CNN BUSINESS ANCHOR, QUEST MEANS BUSINESS: Strong day on the markets with 60 minutes left to trade. All indices are higher. The Dow
is up one percent. The other ones are doing even better. The triple stack shows, we are two points off all-time highs for the S&P 500 and the NASDAQ
is gaining more than two percent.
Those are the markets and these are the reasons why.
In just a moment, Joe Biden and Kamala Harris will make their first speech together since she was announced as the running mate for the Democratic
vice presidency.
The U.K. is now officially in it is longest and deepest or rather, its sharpest and deepest recession on record.
And Moderna shares are rallying after winning a new vaccine deal with the U.S. government.
Live from New York, middle of the week, it is a Wednesday, it is the 12th of August. I'm Richard Quest. And I mean business, of course.
Good evening. Wall Street can live with Kamala Harris as a vice presidential nominee. That seems to be the reaction from the Street when
you look at the views following the announcement that Kamala Harris will be the Democratic vice presidential nominee for Joe Biden.
In this next hour, you are going to see the two of them together for the first time as running mates. Now, it's a moderate choice in the eyes of
chief executives. She favors higher Wall Street taxes, but doesn't want to break up the banks.
Because of her deep roots in Silicon Valley, she was Attorney General of California and she does of course, represent California, her views on
regulation is to -- her views on tech is regulate it, not break it up. And those views closely align with Joe Biden's.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), PRESUMPTIVE DEMOCRATIC PRESIDENTIAL NOMINEE: You ready to go to work?
SEN. KAMALA HARRIS (D-CA), PRESUMPTIVE DEMOCRATIC VICE PRESIDENTIAL NOMINEE: Oh, my God. I am so ready to go to work.
BIDEN: First of all, is the answer yes?
HARRIS: The answer is absolutely yes, Joe. And I am ready to work. I am ready to do this with you, for you. I'm just -- I'm just deeply honored,
and I am very excited.
(END VIDEO CLIP)
QUEST: Jessica Dean, we are going to see them in the next hour together or at least as close as one can with social distancing. Do we have any idea
how this works today.
JANICE DEAN, CNN CORRESPONDENT: How this works today? Well, Richard, we are going to find out in just about an hour. Look, what we know is that all
the Biden events that I have been going to as a correspondent, that my colleagues have been going to, have all been socially distanced. They have
followed protocols, and they have spaced us six feet apart.
Everyone has had their temperature taken. We suspect that that will be the case today.
What remains to be seen is how close Kamala Harris and Joe Biden will get. What we don't know either is have either of them been tested for COVID-19
before meeting?
I asked Joe Biden about that about two or three week ago. At that point, he had still not been tested is what he told me. So, we will see today just
how close they can get. But there is no question about it. This is so very different than a typical rollout for a vice presidential nominee.
Typically, we would have a big rally with thousands of supporters screaming, signs, all of that. We will certainly not have that today, but
we will see just how close physically they can get.
QUEST: And in terms of campaigning, this is -- I realize I am just asking for rampant speculation here, but I mean, is it -- is it intended that they
get on planes and go places? I guess, they have to do some traveling around the country.
DEAN: Right. No. It is an excellent question, and one that a lot of people are asking. It is one that the Biden campaign has been asking itself a lot
over the last several months.
What I think is important perspective when you're asking that question, what will the campaign trail will look like for Harris and Biden moving
forward is that the Biden campaign has very purposefully developed a stark contrast between the way it and Joe Biden would handle the coronavirus
pandemic and the way that President Trump and his administration have handled the pandemic.
So while President Trump had that rally in Tulsa with thousands of people inside, not abiding my social distancing rules or with the mask mandate.
The Biden campaign really wants to draw that contrast and has made a big effort to make sure that they are seen as very different, that they are
taking all of the precautions.
So if you put all of that together, it would really be surprising to see them jetting around the United States like a typical campaign in the fall
before an election.
I think what you can much more expect to see is a lot of these socially distanced events like we have seen in the last couple months from Joe
Biden.
[15:05:36]
QUEST: Jessica, thank you. Jessica Dean in Washington.
Jessica was perhaps too diplomatic to point out, so I shall -- regardless, Joe Biden of course is 77 years old. He would be the oldest President to
take office if wins in November, and in itself creates a new importance and relevance of Kamala Harris, being a heartbeat away from the presidency.
It's different if you are just sort of in your 50s or 60s. But when you are 77 or 78, it takes on a new significance.
Now the agenda, therefore, has to be the same as Biden's. Firstly, expanding Medicare, that's the U.S. government program for the elderly --
healthcare for the elderly.
Also some student debt forgiveness, debt-free public college. Monthly tax credits, tax coverage and so on.
When she is on the campaign trail, on the trail looking at her own views and policies, this is how she summed it up.
(BEGIN VIDEO CLIP)
HARRIS: I want to be really clear because I don't want to leave you with any misimpressions. I am not a socialist. I believe in the virtues of
capitalism, if capitalism is actually working.
But one of the points that one must understand is capitalism presupposes that people, if they are on equal footing, can compete and the best will
rise.
Well, that's a fallacy in America today. Because most people are not starting out on the same base, and over the past many decades, the rules
have been written in a way that have not been in support of working people and working families in America.
We have got to deal with that. Part of what I am proposing is that we change the Tax Code.
(END VIDEO CLIP)
QUEST: Patti Solis Doyle is with me, the former Joe Biden Chief of Staff and former Hillary Clinton political campaign manager. So, you know this
territory really well, Patti. Let's just -- what sort of capitalist is she?
I mean, she was against Medicare-for-All when AOC and others brought that up. She seems to be a realistic capitalist?
PATTI SOLIS DOYLE, CNN POLITICAL COMMENTATOR: That's absolutely right, Richard. She seems very realistic. She seems very grounded.
But the bottom line is, she is going to be the kind of capitalist that puts forth Joe Biden's agenda because he is at the top of the ticket.
Joe Biden, when he was Vice President, was the kind of Vice President who was a partner in governing, but prior to that, on the campaign trail, it
was about making sure that he supported Obama's agenda. And I'm sure that that is what Kamala Harris is going to do on the campaign trail for the
next three months.
QUEST: Right. But if we glean -- bearing in mind she will obviously have an influence on that agenda as the vice presidential nominee, what do you
glean from the way she views for example, Big Tech? What does she -- I mean, coming from California where these areas are so significant, gives
one a different perspective, don't you think?
DOYLE: Yes, absolutely. She's a senator from California. You know, the Senator of Silicon Valley, so to speak and she has worked with tech
companies in the past.
But, again, Joe Biden has taken on a pretty aggressive stance in terms of issues like privacy when it comes to tech companies. So while Kamala Harris
will be a voice in the room, and certainly the last voice in Joe Biden's ear as they govern, for the next three months, she is going to have to
really support the current agenda, and Joe Biden's agenda.
When it comes to governing, however, as I said, that last voice in the ear of the President when the tough decisions come to his desk -- that was Joe
Biden's role for Barack Obama, and when he chose Kamala Harris, that's the kind of person he wants.
So for now, you are not going see much daylight between vice presidential nominee Kamala Harris and the top of the ticket, Joe Biden.
[15:10:16]
QUEST: Patti, can I take us into some real deep water, if I may? The last 24 hours since the announcement, you know, I have lost count by the number
of times I have heard this is a historic decision, this is a historic move, for all the reasons that we know. First woman of color to be on the top of
a -- or part of a major ticket.
Which begs the really horrible question, is America ready for that person? Bearing in mind what we have seen and the underbelly of this country during
Black Lives Matter, is America ready, not just for a woman, but a woman of color?
DOYLE: You know, this is such an important question, Richard. But what we've seen over the last several months is a real reckoning in the United
States when it comes to racial inequality and tackling that problem not just when it comes to social issues, but also in the workplace, when it
comes to police reform, across all different sectors.
And I think that the picking of Kamala Harris is not only history making, it could be transformational because you opened up this segment, you know,
Vice President Biden is 77 years old.
I am not saying, you know that he is not fit to serve, he absolutely is. He is more dynamic and engaging than I have ever actually seen him. And I
worked for him.
But it is very possible that Kamala Harris could very well be our next President. And as a -- after Joe Biden. And as a woman, and as a woman of
color, I think it says so much about the United States, about our country and who we are and who we are becoming.
We have shifted in very many great ways in terms of our demographics. But certainly about who we are and what we care about. And as a woman of color
myself, and having worked for Hillary Clinton and spent a great deal of my career trying to get women elected to higher office, this is going to have
great, great impact in how we treat women not only in politics, but in the workplace and across all sectors.
QUEST: Finally though, Wisconsin, Michigan, Pennsylvania. There are certain states that you are not going to try and even get. You are not
going to get some of those deep states. But those three, you need to get.
They are the ones where Donald Trump won in total by aggregate of 100,000 votes. How does Kamala Harris play there?
DOYLE: Kamala Harris does a great deal of -- helps Joe Biden a great deal with cross-sectors, but certainly with women voters, African-American
voters, progressive voters.
She brings energy to the ticket. She brings energy to those particular sectors of voters, and she is proven on the campaign trail. She has an
incredible career. She is qualified. She is experienced. And I think in those states -- and frankly, the rest of the eight battle ground states,
she is really going to energize our base and she's going to get people out to vote and that's really important.
Remember, Donald Trump won by 80,000 votes across three states. I think Kamala Harris can really help to bring all of those voters out in November.
QUEST: We will talk more, I promise you. We will come back to you numerous times between now and Election Day as you will hopefully help us understand
what is happening. Patti, good to see you. I appreciate your time with us. Thank you.
DOYLE: Thank you.
QUEST: Now, we will of course be taking the Kamala Harris and Joe Biden together when we see them in just about an hour from now.
Billions of dollars and billions of lives. The vaccines, and the race, and did the Russians get there first? But never mind. Moderna has got the big
contract from the U.S. government.
(COMMERCIAL BREAK)
[15:17:16]
QUEST: The major indices are all up ask. The S&P is flirting with an all- time high again. Have a look at the numbers and it will show where the markets are.
Each major -- oh look, no 88 if I remember correctly, 88 is number that we are looking for in the S&P to see if it is going to finish at an all-time
high. My producer will tell me if I am wrong on that.
The NASDAQ is up two and a quarter percent. He just told me I am right. There is a first. So, there we are. That's the way the markets are looking.
Tesla is up double digits after announcing a stock split. That's normal after a stock split. But even so, it just shows the enthusiasm for Tesla in
the market.
Moderna shares surged this morning. The U.S. government is ordering 100 million doses of Moderna's vaccine going into Phase 3 trials. It is a $1.5
billion order. Moderna has given back most of the gains by the way. It was up 10 percent.
Russia's vaccine begins Phase 3 trials today. And interestingly, only 2,000 people in their Phase 3 compared to the tens of thousands that are now in
other Phase 3s elsewhere.
Eric Rubin is with me, Dr. Eric Rubin, Infectious Disease Professor at Harvard and the editor-in-chief of "The New England Journal of Medicine."
Doctor, well, I mean, I think this is getting very interesting in terms of where we stand. For example, Moderna selling $1.5 billion worth of
vaccines. And you look at way the E.U. has bought and all the others have bought. But still, no certainty in all of this?
DR. ERIC RUBIN, INFECTIOUS DISEASE PROFESSOR, HARVARD UNIVERSITY: I think that's absolutely true. We don't know which, if any of the vaccine
candidates that are being pursued right now are going to be successful.
We have early indications that are in the right direction, but they are far from showing that the vaccine will actually prevent disease.
QUEST: They are trending in the right direction, but I would have thought that so much money is being spent that, surely, by now they would have an
inkling.
I mean, it might not work very well, but by know they pretty much know that all those in testing aren't going to harm you?
[15:20:06]
RUBIN: That is certainly not true. I would say that the -- each of the vaccine candidates out there, all of them, could be still relatively
dangerous or entirely safe. The small number of patients that have received it so far are not enough of an indication yet to tell us how well they are
going to work, nor how safe they are going to be.
QUEST: Bearing all that in mind, let's just briefly reflect on Russia. Two thousand on a Phase 3 trial sounds low when on this program we have had the
vaccine CEOs talking in the tens of thousands.
RUBIN: Yes. That's correct. I think that's a very small number to test both for safety because we would -- we could well miss one in a thousand,
but very severe reactions that occur relatively uncommonly in a group that size, and for whether or not it works. Because we have to get a certain
number of cases before we can tell -- we can have a statistical sample large enough to tell whether or not it works.
So I think that is a very small number.
QUEST: Doctor, I know the answer to this question before I ask it, but I am going to ask it anyway. Would you give your family the Russia vaccine?
RUBIN: I am going to give you a slightly longer answer, but it will mean no. There is a balance here.
If this were an Ebola outbreak in this country for example, and my family were threatened, I might take more of a risk with a vaccine. It's all a
matter of risk and benefit, because Ebola is a hundred percent lethal disease.
But given the risks of COVID-19, which are real and severe, but are not -- where we know how to control infection, I would not use this vaccine yet.
QUEST: Doctor, what's the name of the dog? What's your dog's name?
RUBIN: Chester. And I can't shut him up. I'm sorry.
QUEST: No, don't apologize. Please, I suggest you go and take Chester for a walk. Good to see you, sir. Get some fresh air after all of this vaccine
talk. Really good to see you. I appreciate your time, sir. Thank you sir. Next time we would like get to see Chester as well, I promise you. Thank
you.
Now, New Zealand is re-imposing restrictions. Four new cases reported in the first 102 days. That doesn't sound many, but bear in mind, New Zealand
has had a perfect record for the last 102 days.
It happened Auckland, and now, 1.5 million people are on lockdown. Bars, restaurants, and many shops forced to close. It is really simple. They are
not taking any chances.
The entire country facing some level of tighter restrictions. Andy Foster is the Mayor of Wellington. He joins me now from New Zealand.
So I mean, these measures, particularly in Auckland, they sound absolutely extreme and daunting bearing in mind the low number of cases involved.
Is this an overreaction rather than trying to manage the cases?
MAYOR ANDY FOSTER, WELLINGTON, NEW ZEALAND: Good morning, Richard, and good morning to all of your listeners.
No, I don't think so. I think New Zealand's approach has been to go hard, go early, and the fact that we've had up until now, 102 days actually free
of COVID in our community meant we were able to do an extraordinary number of thing which most other parts of the world weren't able to do safely.
So, we had crowds of 30,000 to 40,000 people at rugby matches. We had concerts and those sorts of things, with live audiences, which people were
able to do safely and business being able to get up and going again.
I think the clear message from our perspective is that you can't have -- you can't sacrifice health and hope to have your economy going well.
QUEST: Right. But, Mayor, the -- New Zealand has had several cases over the last 102 days of, if you like, imported COVID where you tested people
at airports on arrival. They have been found to have it and had to go into quarantine.
This is the first case of community transmission. Do you know how this family -- because it is all one family -- and they hadn't travelled. Is it
known how they got it?
FOSTER: No. This is one of the things that the health authorities and the government are looking into at the moment. They've said that they will get
some answers to us within about 72 hours of the announcements which were made, our time 9:00 a day and a half ago.
And is he we should have some clearer answers about that very soon.
QUEST: But for somebody in your position, I mean, at best, you are going to be chasing your tail on this, because if your goal is eradication, then
it only takes one or two cases like this to require total lockdown with the devastating impact -- now, I know -- we discussed this on this program many
times, the balance between -- you know, you don't put economies first, so to speak. It is not a zero sum game.
But I don't know how you balance that.
FOSTER: Well, I think that there are a number of different elements to this. One of the key ones is contact tracing. So good contact tracing. I've
got to say we probably have been a bit slack have been slack when we got to -- we've got a four level system.
So, Level 4 is essentially a complete lookdown except for the very essential going out and getting food and medical supplies and the services
that provide those key thing.
[00:00:50]
FOSTER: Level 1 is basically everything is fine with the exception of the border. And the guide here is in theory, we should have been contact
tracing at that point.
If you do good contact tracing, ultimately, you can check if somebody is diagnosed with COVID, then you can check who they have been in contact with
very, very quickly and you can isolate all of those people rather than isolate the entire economy.
QUEST: Mayor, I am grateful you have given us time. It is an early start for you there, but I am sure you have been up for hours anyway. Thank you,
sir. We will talk more as this goes on.
FOSTER: Absolutely. I wish you well.
QUEST: And certainly, as well, if God forbid Wellington becomes involved, then we'll talk more. Thank you.
The United Kingdom has suffered its worst GDP on record, and in fact, the U.K. is now the worst in terms of GDP loss than all other developed
economies. After the break, we'll talk about that.
(COMMERCIAL BREAK)
QUEST: Hello. I'm Richard Quest. A lot more QUEST MEANS BUSINESS still the come.
The U.K. economy fell off a cliff. GDP in the second quarter was just frighteningly low, Isa Soares will be with us in just a moment to discuss
that.
And the CEO of the Boston Red Sox, the major league baseball's struggle at holding its season during a pandemic and playing without a crowd.
[15:30:00]
And we'll discuss the reality of that in terms of the profitability of the game. But all of that comes after we've heard the news because this is CNN,
and on this network, the news always comes first.
The full Democratic ticket challenging Donald Trump for the White House will soon appear in public together for the first time. In other words, Joe
Biden and Kamala Harris are scheduled to address supporters in Biden's home state of Delaware. We'll obviously carry that live here for you on CNN.
Three people including the driver have been killed when a train derailed in eastern Scotland on Wednesday morning. The train left the tracks in a
narrow valley, leaving several carriages overturned. Six people were taken to hospital and the authorities are investigating the cause.
The billionaire media tycoon Sumner Redstone is passed away. Redstone started out joining movie theaters, eventually controlling multiple studios
and T.V. networks like Viacom, CBS and Paramount Pictures. His later years were marred by scandal and questions about his mental competency. Sumner
Redstone was 97.
The U.K. economy shrank by 20 percent in the second quarter. It's the deepest recession of any major global economy. Now, some are blaming the
government's slow response to the coronavirus both in terms of when the lockdown was introduced, then also how it was withdrawn. Look at those
numbers, the U.K. GDP from the previous quarter down 20.4. Isa Soares is with me from London. And, Isa, I mean, this doesn't mean that the U.K.
economy is, you know, 20 percent smaller than it was. This was a contraction. And the numbers are frightening then.
ISA SOARES, CNN INTERNATIONAL CORRESPONDENT: They are. There's a -- these are colossal numbers, Richard, if we look just the second quarter, 20.4
percent contraction, the steepest we have seen since the ONS began taking records in the 1950s. And this is, like you said, a contraction due to the
lockdown. And the reason for this is why the contraction is so severe, specifically, as you pointed out, in light of the other G7 countries, if we
can bring that graphic up, it is incredibly steep when compared to other countries. And the reason for that, Richard, is because the U.K. went into
lockdown later, and it lasted longer. And it lasted during the second quarter which you compare with the likes of Italy, much of their lockdown
happened in the first quarter, Richard, and they came out in the second quarter. That's the one of the first reasons.
The second is because the U.K. industry is so reliant on -- the U.K. economy is reliant on emphasis on services and retail, that's the dynamics
of it. According to the ONS, Richard, I was looking through their file today for that report, they said that the pandemic has erased 17 years of
economic growth in two quarters. And when you look at the U.K. in comparison with the likes of France, Italy, Canada, Germany right there on
your screen, you can see why it's such a colossal decline, but like you clearly pointed out, Richard, this is second quarter.
If we look at month by month, as I was looking today, you saw in the month of June, we've seen a sharp rise of a little -- I don't mean to sharp, I
take it back -- an eight percent rise, still below the levels of February but pretty significant nevertheless. When we look at the sectors, Richard,
the sectors that have been most exposed on lockdown are the ones that have been the hardest hit. Let's show you the graph. Services down almost 20
percent. We've got production also down 16.9 percent, and construction down 35 percent. The question now is, what does that recovery look like? How can
-- how does the U.K. recover?
Now, the BoE said today, the economic fallout is less severe than expected. The question now is, Richard, you know, the recovery, the bouncing back,
how long is that going to take? And how long is that going to look like? Or, what's that going to look like? Because I know you've been speaking
about a V-shaped recovery. One (INAUDIBLE) I spoke to said, perhaps it would be a slanted V, depending on the risks we're facing. And those risks
will be fully felt come autumn when we know the furlough scheme is pulled from under our rugs here in the U.K., Richard.
QUEST: So, I mean, that's the -- that's the debating point now, isn't it? I mean, no, sorry. Not debating point, but that is the issue that's being
debated in the U.K., whether or not or to stop the job retention scheme as planned, or replace it with something and/or continue it.
[15:35:09]
SOARES: Indeed, whether it's tax cuts, and -- but we have already heard from the Chancellor. He said that -- the furlough scheme has lasted long
enough, and they won't be expanding it. So, now, it's looking at other -- what other fiscal policy does the government have up their sleeve? But in
many ways, Richard, the damage has already been done. I'm not talking just about quarterly contractions in GDP, but also about the job losses, 730,000
jobs lost in the quarter. And that's not obviously not taking consideration people in furlough.
And then you have the risks. And while the sun may be shining out today record heat that we're seeing here in the U.K., you know, we beg -- we
wonder whether there's going to be local lockdowns and what that impact might have. On top of that, you have the Brexit negotiations, which also
are not going anywhere. So, so much uncertainty at this moment, and that is the concern. When you're looking at the U.K. economy and a potential
recovery, you've got risks and stumbling blocks all along the way, Richard.
QUEST: Isa Soares. Isa Soares is in London. Thank you. The American -- the various American sports leagues are finding different ways to ensure that
they can recover something from the 2020 season. But as they plan, as well, of course, for the next season and beyond, in an era of COVID, how do you
have large scale sports events with or without crowds? We'll talk about it after the break.
(COMMERCIAL BREAK)
QUEST: Welcome back. Now, the vexed question of how to run major sport -- the major league sports at the time of coronavirus, and the different ways?
Well, now two of college football's power five conferences are pushing their seasons into the spring. That gets added the Big Ten and the Pac-12
are out. Both cited that the inability to operate in a bubble with students, apparently, it's simply not possible to run, they believe, these
events with students in a bubble. Many programs bring in more than $100 million a year. U.S. sports trying a variety of ways in which to keep
things going. And so far, so good for Basketball.
[15:40:00]
The NBA is operating entirely in a bubble. All those involved remaining in a bubble in Orlando in Florida. Hockey has started back up in Canada, one
bubble in Edmonton, another in Toronto. Again, all the players remain basically onsite in a small defined area. Baseball, Major League Baseball
is not doing so. It's joining 28 cities and it is traveling between them all. Even though there have been outbreaks in St. Louis, Miami, Canada are
so skeptical, it wouldn't even allow the Blue Jays to play in Toronto. So, Sam Kennedy is with me, Chief Executive of the Boston Red Sox. Good to have
you, Sam. Nice, as always, to talk. How is it going? This idea of traveling to play? Is it workable?
SAM KENNEDY, CEO, BOSTON RED SOX (via Skype): Well, so far, it's going well. We've had a few hiccups as you know, you mentioned Miami and St.
Louis, and it could happen to anyone, given the contagious nature of this disease. But so far, we've had less than half of one percent positivity
rates since July 1st in terms of testing. So, as long as we all follow the protocols in terms of health and safety, we should be able to get through
our regular season and onto a postseason. And it's been fantastic to have baseball back during the summer months here, as we all grapple with this
terrible pandemic that is affecting so many of us around the globe.
QUEST: And now, on the commercial front, I mean, no playing in front of crowds. I was surprised to learn that 50 percent of revenue does come from
ticket sales. I thought it would be a lot less. I thought it's mainly with sponsorship, but I was surprised that the crowd actually is a significant
part of the revenue. So, if you haven't got that revenue, how -- you can't make -- you can't make ends meet. Therefore, what does that do to the
finances of the company and the club?
KENNEDY: Well, it's a great question. It's been -- it's very, very difficult, as you point out. We're about a $10-billion industry at Major
League Baseball. And as you said, more than 50 percent of our revenues come from our fans and supporters coming through the gates each and every year.
Obviously, we play every day from April through the end of September. And then, postseason play. And so, we have so much of our revenue tied up in
our fan support. Our revenues have been decimated. Each Major League Baseball club owner will be suffering losses, well over $100 million each
club. So, there's been a lot of debt capacity that's been -- that's been drawn upon, and we're financing our way, hopefully, to the other side.
Of course, our ownership group is involved with Liverpool Football Club, and we've had to play behind closed doors over there. So, it is devastating
on a short-term basis. But we're all in this for the long haul. We see light at the end of the tunnel, and we hope to welcome fans and supporters
back into our venues when the elected officials tell us that it's safe to do so.
QUEST: You know, we're a business program and much as we like the sport on the field, we need to know the hard lines, the hard-buffed lines, so to
speak. When you talk about Liverpool at Anfield and you talk about yourselves, the Boston Red Sox, how long do you think you can keep it going
without fans?
KENNEDY: Great question. Our hope, obviously, the virus will determine that, the answer to that question. The good news for supporters of
Liverpool and fans of the Red Sox, John Henry and Tom Werner and the Fenway Sports Group partnership are well-capitalized and have the ability to keep
going. So, as I said, we're in this for the long haul. But realistically, we're hopeful to have fans and supporters back at Anfield and at Fenway
Park as soon as humanly possible. We're talking over here in Boston to our elected officials now about the possibility, and I stress the possibility
of having fans return in September, if at all possible.
We've had good positive data with the trends here in Massachusetts. But in other parts of the country, that's not the case. We are part of a larger
ecosystem. So, the truth is, we just don't know. We're going to have to be very smart and shrewd with our resources to make sure we get through to a
day when there is therapeutics and vaccine readily and widely available. And I know the world is working on that scientific problem. But we hope
it's no more than a one-season impact as opposed to two or three seasons. It's very difficult to go (AUDIO GAP)
[15:45:00]
QUEST: Sam, good to have you on the program. And so, let's talk again as the season sort of does wind its unhappy way through all of this, and to
catch up again and find out how things do progress. I'm grateful you've given me time tonight. Thank you.
Now, in all of this, let's have a little bit of cheer and not only from Sam, of course, that they are actually playing. But let's have a little bit
of cheer from the airline industry which has been so badly affected. The CEO of AirAsia, Tony Fernandes, told me things are bad but getting better
and even suggested a V-shaped recovery might be possible, in a moment.
(COMMERCIAL BREAK)
QUEST: It's not all in gloom in the airline industry, says Tony Fernandes, the chief executive of AirAsia. He even used the phrase, green shoots of
recovery. And he spoke to me from Malaysia headquarters earlier this week.
(BEGIN VIDEOTAPE)
TONY FERNANDES, CEO, AIRASIA GROUP: I'm still smiling, still standing. Our planes are flying in all our countries. We have about seven percent load
factors. So, you know, it could be worse, of course it could be a lot better. But there's light at the end of the tunnel.
QUEST: The future in a sense, you're quoted a couple of weeks ago saying you know, you can see a path to profitability. Do you still see that?
FERNANDES: Absolutely. I think the only, you know, question mark is How quick international borders open. They're going open. Our first one is
Singapore, which I estimate will be sometime this month. And that's a big step forward for us. And then I think you'll be able to see other Southeast
Asian countries opening. China has opened up a little bit to us as well. So, you know, that it's just the speed of the opening of borders, the
demand is there. Most definitely the demand is there. And it's pretty v- shaped, it's pretty v-shaped.
QUEST: Really?
FERNANDES: Yes. I mean, if you look at our domestic traffic, we keep adding capacity. The number of people who probably didn't know Malaysia or
Thailand as well as they do now, because they're flying to different destinations today, wherever we can for all the (INAUDIBLE) and you know,
in some of our routes, we're almost back to pre-COVID frequency.
QUEST: The possibility of your selves and Malaysia coming together.
[15:50:06]
QUEST: You know, it's a marriage whose invitation I have been hearing about for as long as both being around. And is it going to happen? Do you see any
realistic possibility of yourselves of Malaysia coming together?
FERNANDES: Yes, I mean, firstly, we're Southeast Asian, we're (INAUDIBLE) we're in Thailand, we're in Indonesia. As local carriers, well, the
Philippines is the local carrier. Obviously, our biggest airline is in Malaysia. I've always said that, you know, we're two different airlines.
There are people such as yourself, highly-paid executives, who like to fly in business class and have a bit of champagne. And there are those in my
market who, you know, are happier without the champagne.
I think we serve two different markets. And I think these two airlines should exist. It's like saying, should Mercedes Benz merge with a very low-
cost car company. So, I think the two of us play a vital role in Southeast Asia, in Malaysia. And it's like a five-star hotel and a three-star hotel,
very different products. So, I've skirted around the question that for 18 years, we've --
QUEST: Yes, very impressive. Very impressive, Tony. You've managed to --
FERNANDES: For 18 years, we have searched. You know, you can never say never. But I would -- I don't think it's a necessity.
QUEST: Finally, you're the first sort of CEO of an airline I've spoken to who, I wouldn't say you're optimistic, you're realistic, but you're
certainly more positive than the rest of them that I've spoken to, which makes me wonder whether you're being a little rose-tinted spectacles, been
through this crisis now, but as you come out the other, as well as things seem to be getting better. Are you being too optimistic?
FERNANDES: Well, that's -- we need optimism now, OK? If we put our heads in the sand and try and die, then we might as well close down now. Flying is
important. Flying is an important part of the economy. And I can only tell you that and why I, you know, delay the interview a few times is I wanted
to make sure that I had a story to tell you. And right now, we have a story. We are flying in all our countries.
We are filling up planes to 70 to 75 percent. We have capacity of about 50 percent of pre-COVID. That's real. That's real. We are cashflow of positive
minus a couple of creditors that we have to deal with. So, by no means are we out of the woods, but there is light. It isn't all doom and gloom.
(END VIDEOTAPE)
QUEST: Tony Fernandes with a bit of cheer or at least, not all doom and gloom on the airline industry. The billionaire media executive Sumner
Redstone has died at the age of 97. He built a sprawling empire, including movie studios, of course distribution television, CBS, Viacom, and so on.
But it was a life that was also marred by controversy both in his personal life and of course in the corporations in which he owned. CNN's Brian
Stelter looks back at the life of one of the industry's most colorful characters.
(BEGIN VIDEOTAPE)
BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: A media titan, whose turbulent personal life drew almost as many headlines as his deal-making,
Sumner Redstone built a multi-billion-dollar business over several decades, a sprawling empire that includes Viacom and CBS with marquee brands, like
MTV, Comedy Central, Showtime, and Nickelodeon. Redstone foresaw the primacy of T.V. programming, hit movies, or in a word, content.
SUMNER REDSTONE, CHAIRMAN OF THE BOARD OF THE NATIONAL AMUSEMENTS THEATER CHAIN: I coined the phrase, content is key. Now, the phrase is ubiquitous,
echoed wherever you turn.
STELTER: Born in Boston in 1923, Redstone went to Harvard Law and worked as an army codebreaker during World War II. In 1954, he left a lucrative law
career to work for his dad's movie theater chain.
REDSTONE: Money, and I mean it sincerely, has never motivated me. The passion to win has motivated me.
STELTER: He built a handful of drive-ins into a conglomerate, then used his movie theater fortune to buy Viacom, Paramount and CBS. But Redstone's life
was almost cut short in 1979. He survived a Boston hotel fire by hanging off the window ledge suffering third degree burns over 40 percent of his
body. His personal life was stormy too, marked by legal battles with his family. When he was 92, a former girlfriend challenged his mental
competency after he cut her from his will.
[15:55:09]
STELTER: A judge ultimately ruled in Redstone's favor. He also reconciled with his previously estranged daughter, Sherry. Now, she controls the media
empire, that Redstone leaves behind.
(END VIDEOTAPE)
QUEST: Brian Stelter. If we're going to look at the markets before we take a short break, and you'll see that now -- let me just tell you, the S&P did
go through, its all-time high and then retreated. The Dow is up one percent, it's coming off the top. This is sort of a -- the air is coming
out of the balloon. We did hit an all-time high on the S&P and then it sort of couldn't really finish the deal. Look at the Dow 30 and you will see
that Boeing trails the pack as it -- but Apple is the best of the day, apps Apple and Microsoft.
And Tesla has to be the star. It's announced the stock split 541. And the shares still rise, double digits, which arguably mean -- I mean, the stock
or obviously, the -- that price, the split has not taken effect yet. So, but obviously, it's an indication of what the market is thinking. We'll
take a PROFITABLE MOMENT after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's PROFITABLE MOMENT, two views on the economic effects of the coronavirus, the U.K. where GDP fell by 20 percent in Q2, arguably much
worse than it could have needed to have been because of the way in which the country locked down late. And New Zealand, the first whiff of any local
transmission and shutting down the larger city, Auckland, in the most draconian of measures, because they don't want to let it get out of the
gate. Major League Baseball is quickly becoming a cautionary tale with players and staff on at least three teams testing positive since the season
resumed last month.
The New Zealand view is the one that says it's not a zero-sum game between full lockdown and economic opening up because if you get the ability to do
both. If you don't lock down or you don't deal with the cases when they come up, then you end up in some very serious trouble indeed, further down
the road. And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. The closing bell coming up any seconds now. Whatever you're up
to in the hours ahead, I hope it's profitable. I'll see you tomorrow.
END
END
