Transcripts For BLOOMBERG Bloomberg BusinessWeek 20161030

Trump. My first takeaway is that donald trump is not the man sending off a lot of the tweets he fires off. Maybe the ones in the middle of the night, but not all the time. Ellen not all the time. Brad, who runs the data operations for the organization, for the trump company, i mean organization, campaign. He is doing some of the tweeting. Mr. Trump does some himself. But while he is on stage, if you have been wondering who mans the twitter buttons, it is brad. We introduce you to him in this story. Carol he is a big deal in the Trump Campaign, how did he get there . It is not the usual route. This is not a political strategist type. Ellen no, he is not a career politician. That is one of the interesting things about the story, it takes you behind the scenes. He works in san antonio, and somehow he was hired to do websites for the Trump Organization david on the street. On the cheap. For the trumprelated parities. Ellen on the cheap. And for some of the trump related charities. When it came to mount the campaign, he was hired to do the Campaign Website for 1500. Carol unbelievable. Ellen it was not expensive. You cannot do that in new york or washington, lets put it that way. Over time, hes worked with Jared Kircher in Stephen Bannon for a data operation. David talk about that operations. Yes, it exists within the Donald Trump Campaign and that the work with the Republican National committee. How well is the working out . What does the apparatus look like . What does the donald trump digital apparatus look like . Ellen it is principally sort of the commander, Jared Kushner his soninlaw, he is married to ivanka. And he comes from a real estate family and owns the new york observer, that everybody reads. The new york little newspaper. He was the one who decided we have to build this up. Once the primaries were over. And so they used some of the rnc data that Reince Priebus built up and worked on after the romney defeat. So they used some of that data. They hired outside providers, and they kind of combined it with their own analytics that they were developing on their own to really be able to target their likely voters. Hence, it is called the alamo project. Carol you said it is not like they were trying to get a lot of broad information out, they really did target their viewers not viewers but supporters, if you will. He built up a really big base that he ultimately owns, donald trump. Ellen he will own this data. It is a huge number of names, it is millions and millions of names. It could be used for any number of things. It could be used if he decided to try to run in 2020, if he wanted to become the maker of a new party or a new movement, or a new network. I know in sums each he said he was not interested in a tv network, but theres so much talk about it. And look, he is doing his own independent media. The campaign has been broadcasting on facebook. Carol it is not like he likes tv or anything. [laughter] ellen no, it is not like he doesnt know anything about it. This data could be used for commercial purposes. It could be a media empire or breitbart empire. It is a little unclear. It has huge commercial potential and huge political potential. David your reporters talk to Stephen Bannon, which is a rare thing because he is not talking. What is your biggest take away . From what he had to say about the way this is structured in the Trump Campaign . Ellen i think there are two. One obvious take away, most people think the campaign is his public thing. Trumps speeches and his tweets, but they are more sophisticated then they lead on an much more professional than they let on. I do not think they are doing anything super cuttingedge, but they are on it. While they know it is unlikely they will win, they still have not completely given up. So that is one thing. The other is they could commercialize it. The other thing they talked about was voter suppression. A and that they are doing research and figuring out what the votes they want to stop. Who did they want to keep from coming to the polls . It is shown women, it is africanamericans among others. And so they are putting out ads and putting out messages like the bill clintonwomen issue to try and suppress those votes. That you do not often see, and that is not maybe the major point of our story, but it jumped out at me. Carol great story. A lot more strategy dan we realized. We talked with creative director rob vargas about how he created the cover. Robert we had a pretty good shoot of the command center and the way people who work for the campaign describes it, a very sophisticated, technologically advanced. We will sort of leave it up to the readers what they see the photos, it is like, guys sitting around laptops, a couple of tv screens david cold coffee. Robert yeah. So maybe we thought it would not necessarily be the way to go on the cover. But we kind of wanted to reference the fact it is, trump is this huge personality but it feels like a bit of a scrappy operation. We went with the conceptual idea, which was an old looking usb drive and post it note and just labeling it trumps plan b. David how hard was it find . A thumb drive that that that image of weight you wanted to do . Robert some some drives are really hard thumb drives are really cool these days. It was harder to get. I had to send an email throughout the whole office. David trumps plan b, how did you come up with the phrase, first of all, and how did it come to be on the cover . Robert we wanted to get the fact that all of this information and data they have is for what they are planning to do, whether or not he wins or loses. It is not clear what it is, but they have a plan. Plan b references in the data is in the usb drive and will implement after the election. David there is an international edition. The cover story is a piece on twitter. How did you decide to illustrate that the way in which you did . A giant firehose on the cover. Robert we took it directly from the story. Twitter refers to all of the information gathered by their users as a firehose. We went literally. It is like the first picture of a firehose we found and just sort of formatted it as a tweet. David you have a firehose, you want to have a firehose. How do you decide to feature it so it is not taking over the whole cover . Say it is there in the middle and there is text that is small. Robert we wanted to make it look like a tweet. David within the character limits . Robert yeah. We kept it very simple. We made sure the photograph was not too professionally shot, it feels like a found photograph. David rob, thank you. Carol massar spoke with a reporter who reported that these, ben elgin. Carol when i think about twitter, i love it. Most people in the media love it it. I feel like it is the place you can have free speech. That has kind of been the nation of it. Fair to say . Ben absolutely. Part of the Mission Statement and we of seeing it play out. Places like the middle east, arab springs where the traditional media was regulated. Twitter allows people to discuss themselves freely, organize, and it has given people more of a voice than they otherwise would have had. Carol we talk about arab springs and probably would not have happened without social media. Twitter, they put out a lot of information and that information, those tweets can be monitored, and they are. Ben absolutely. There is a sort of a Cottage Industry that has sprung up to monitor and tap into social media data. Twitter is the biggest source of this. These companies that do the monitoring, they gather it up, and they sort of slice it and dice it and put on their own technology. Anybody willing to pay for it can tap into this vast knowledge about people. Carol twitter is doing this. Tell us what it is called. The firehose . Ben that is what they call their huge data stream. Every day, you have got 500 million tweets. It is just an immense amount of data from all over the world. Twitter is making a business out of selling that data. It is a fastgrowing part of their business. You have the firehose, which is the full stream of data. And then they sell various levels of it. Ok, some people only want what they call the decahose, which is only one out of 10. End if you dont want to pay, you can still get about one out of every 100 week. Every 100 tweets. There are various levels. Carol it is interesting. You think of twitter as a place you can put things out there and be very transparent. It is a business going on at where they are selling too, if you will. From what ive read, it is a growing business. A profitable business. Ben yeah. It is hard to say profitable, but it is growing. It is growing at twice the pace of the rest of twitters business. Obviously, twitter right now is struggling a bit. They have layoffs coming up. They have not reached profitability. Any glimpse of hope is important. One of those things is this data sales business and analysts and investors are very keen on this. Might this be a way for them to clear hurdles and become a profitable business . David macau steals pages from las vegas playbooks. And how china has calmed global fears of chinese takeovers. David welcome back to Bloomberg Businessweek. I am david gura. Macau takes some inspiration from las vegas. Carol massar spoke with our Bloomberg Business bureau chief, chris palmeri. Chris you remember las vegas in the 1990s, knocking get out of the park with these projects. We are seeing a similar thing in macau. We have a ferris wheel built into the side of a casino. Or a replica of the eiffel tower. Or even a lake with synchronized fountains of a celine dion song. Las vegas is being replicated in macau. David you had a lot of wealthy chinese going to play back play baccarat. Then a corruption breakdown, what happened in macau after that . Chris huge. It was a place for these high rollers to spend incredible amounts of money on baccarat. And as the Chinese Government cracked down, those people disappeared. The last thing they wanted was more conspicuous consumption. The whole city had to adjust to a new type of customer. They are sure to attract a middle crowd. Still a welltodo person. Maybe even bring their family. Instead of the gucci and prada, they have h m. They are planning events for the kids and doing historical tours. It is a different kind of customer. Carol is it working . That is a big change from what it was. Is it drumming up revenue . Is it bringing more families to macau . More gamblers . More tourists . Chris we have to wait and see. In the last two months, gambling has been up after a more than twoyear slump. There seems to be more visitors coming, but it is not a huge, huge increase. And so this may be a slow build. David you mentioned steve wynn. Sheldon adelson is involved in macau as well. They are not new to the place. They have been there before. Are they kind of pioneering this transition . Is this something they thought about doing before the crackdown . Chris i can remember in 2002 when Sheldon Adelson first started talking about macau. And he said, you know, were going to build this strip on land that was reclaimed from the ocean. They had to fill it all in. I thought, this is crazy. He spent 12 billion building these properties. But he has been way ahead of the curve. He has a Sheraton Hotel and a holiday in. He is trying to appeal to the massmarket customer they think will come from all over asia, not just china. Carol talk about the Chinese Government. Not just their approval, help, or assistance. Chinese growth still enviable by probably most of the world but it is slowing down. I am just curious what role the Chinese Government is playing in all of this. Chris a big role. If you look at what happened to las vegas, it happened over 40 years. It was organic growth because casinos were spreading over the u. S. , and las vegas had to think of a new strategy. In macau, it is opposite. The government said, we want nongambling tourists. You need to create more nongambling of amenities and they have 10 limiting the number of gambling tables quite a bit. The new casinos have 100 baccarat tables. When you asked them how much they wanted, 400 or 500 when they started building these places, so it is a real government mandate. David sticking with china, how some chinese firms are calming fears about the countrys global buying spree. Carol massar and i spoke with matt campbell. Matt we see a big swell in m a. Really all over the the place. China is a obviously it is a very large transaction, which tends to distort agriculture. But we are seeing chinese activity across entertainment, transportation, hospitality, finance, and insurance. This really a broadbased wave, and it is washing up in the u. S. And europe and everywhere else in the world. Carol lets talk about why it is happening. I am thinking, this lowyear old environment and everybody trying to find opportunity. Tell me why we are seeing this slow chinese money into european companies. Matt i think there is a hunt for yields, and that is true across all investors and all countries. In the chinese case, were seeing a very concerted push by companies, large and small, encouraged by the government to go abroad in order to acquire technology, ideas, intellectual property, new markets. This is a really industrial strategy, as much as it is financial, to make Chinese Companies global competitors. There is a financial motivation, it is about building big global businesses as well. David what has the reaction been from shareholders, executives, the governments of the countries which the takeovers are based to the m a activity we are seeing . Matt it is a mix. We are seeing some Chinese Companies, alibabas of the world have a relatively straightforward time of it when they try to make larger deals abroad. They are not encountering large amounts of opposition. Though, of course, there is some. On the other hand, we have situations like in germany with extron where governments are upset about the prospect as they see as Strategic Technology falling into foreign read chinese hands. It is not anywhere near a level Playing Field for Chinese Companies. They will face suspicion in a lot of countries. But there are still a Critical Mass of deals getting done and that is a big change from a couple of years ago. David when a union isnt a union, at least when it comes to uber. One company is emerging as a clear winner. David welcome back to Bloomberg Businessweek. I am david gura. You can listen to us on sirius xm. In new york, boston, washington, d. C. , and the bay area. In the technology section, uber is trying to convince new york regulators the drivers have a union already. Sort of. There is a catch, as reporter Josh Eidelson told carol massar. Josh there is no union in the sense we understand it on the National Labor relations act that wins recognition from the government or from uber to represent is drivers. Uber maintains its drivers are independent contractors who do not have the union right. That the new deal gives to employees. There are however a number of groups around the country that have been trying to organize and mobilize uber drivers. As of the past several months, there is a group that uber and the Machinist Union of claim represents all of the uber drivers in new york despite not having formal collect them collective bargaining or some of the rings we associate with a union traditionally. Carol youre talking about idg, the independent Drivers Guild . Josh right. It is funded in part by uber that does not have collective bargaining. It was not selected in some formal way by uber drivers, but it has a seat at the table where they meet with uber and provide various perks to drivers. They have some opportunity at least for input to persuade or pressure uber to make policy changes. They have a partnership with the company to lobby for changes like more favorable tax treatment for uber rides, which they say will go into a benefits fund for uber drivers. To get this, the idg has made concessions. They agree that will not try for Traditional Union though they could pull out if the legal status of uber drivers was determined to allow that. They have agreed to not to go on strike or challenge ubers practice of treating drivers as contractors rather than employees. Him the so of course, there is still some controversy. David also in the technology section, the space race rivalry between Jeff Bezos Blue Origin and Richard Bransons Virgin Galactic is heating up. Carol massars spoke with editor jeff muskus. Carol bezos has so many things like getting people into space. Talk to us about his blue origin and what they are doing will stop and what they are doing. Jeff they had a successful rocket launch. From west texas and the airfield, they blasted off this rocket to other flight accessible places. And this time they added a new twist, the peak of the aerodynamic stress, the rocket successfully tested its midflight emergency escape system which will be of comfort to the crew next year when they are aboard and hopefully paying passengers a year after that. Carol what is his timeline . Jeff the timeline right now is to man the test craft sometime next year and a year or so after that, they will put paying customers aboard. Carol i grew up with my dad as an aeronautical engineer, involved in the first space race. If you will, in terms of doing guided assistance. I feel like we are going into a second space race with wellknown billionaires. You have the jeff bezos. You have elon musk. And you also have richard branson. Jeff they are operating two parallel trails. Musks spacex is capable of orbital space flights. The rocket has made about nine flights right now to the International Space station. He carol he is the one was gone really far. Jeff thats right. He is able to go twice the speed of sound, which is obviously a lot bigger, which is why it was a big deal in september when the latest spacex launch blowup on the launchpad. Taking a 200 million facebook satellite with it. Carol big disappointment. Big news. Jeff by contrast, the blue origin and Virgin Galactic suborbital space race is trying more quickly than the other to get a reliable system of craft up into sort of the near earth gazing, to get it into 62,000 62 miles above the earths surface. Which means the rocket only needs to be about three times as fast as the speed of sound. But it also means they need to be a lot more delicate. David up next, a gold rush in mexicos most murderous state. The hits and misses of the nfls brad pyatt. The investigation that unraveled his musclepharm business. David welcome to Bloomberg Businessweek. I am david gura. Still a lot ahead. Including the Cyber Security company that did not get credit for spotting a huge data breach. And how Donald Trumps family fortune was actually made. All of that ahead on Bloomberg Businessweek. Carol there are many must reads in this weeks Bloomberg Businessweek. Were here with ellen pollock. In the opening remarks section, you take a look at the bangladeshi garment industry. Go back a few years a tragic collapse in one of the factories. Reminders about what happened. Ellen Something Like 1000 workers died in the collapse of this Building Three years ago. This is the anniversary of the collapse. At the time, all kinds of brands whose you know buy products made in these factories said they would step in and improve safety for these workers. Again, a terrible tragedy. A lot of people. And a lot of awareness that other factories were in bad shape. David you said these Companies Said they would step in and change things. Make sure that the fire doors, for instance, were not bolted shut. How much has changed . Ellen some has changed, but a lot of inspections have turned up a lot of problems. And, in many cases, some of the problems have been addressed, but not all. A lot of it comes down to money. These companies are paying the factories to produce extremely cheaply. It is not like they have huge margins and can invest in all sorts of safety measures, because they do not have the money to. In many cases, they are partly done fixing, but not completely. A lot more money needs to be brought in. For the most part there are some exceptions but for the most part, the brands are not kicking in a ton of money. Sometimes they do, but to get it done, they have to put in more. Carol and the Bangladeshi Government is not putting pressure on them . Because they want the jobs go i am because they want the jobs, i am assuming. Ellen they want the jobs, and they are doing inspections, so it is not like nothing is being done, but they are far from accomplishing the mission of making sure these factories are safe. David and the companys industry section, a coming together of two companies in two industries as well. The deal between at t and time warner opens the door to regulatory questions. What you explore is the reason for doing it. That content and distribution increasingly need to go handinhand. Ellen that is something nbc and comcast came up with. This takes it further. At t has the pipes, time warner has programming. And more and more, as industry and as technology and programming become one industry. You need that. The question is how fast will industries consolidate. It looks like time warner wanted to get in there relatively early. Carol they will have to wait and see, right, because there are a lot of regulatory concerns with this. Ellen a lot. A lot of migratory, a lot of antitrust concerns. Whoever wins the white house will have to figure out how they want to deal with it. Carol speaking of content, who would have thought to run political ads . Apparently there is not enough content to run political ads in some part of the country. Ellen this is mostly a phenomenon in rural areas. You have more advertising this time of year. Lots of candidates want to advertise. But there is not enough content to advertise against. We talked to an entrepreneur who is creating programming that he then sells to newspapers, websites, that is meant just to put ads. It is targeted programming that the right people will want to watch. So, in the south, there is a fair amount of new content around barbecues. Its sort of tours barbecue places. So people and not area who are interested in barbecue, to be honest i am very interested in barbecue myself even though i dont live in the south. They are clicking on this candidate on these ads and then the candidate are targeting those people. David in the technology section, in cybersecurity, ben cotton was involved in detecting the breach in the office of public management. Ellen it got a lot of publicity what happened, this breach, because the records of many federal employees, all kinds of personal data, was taken by the hackers. And ben cotton came to opm and showed them what was going on. He realized how bad it was and really showed them what the problem was and how to fix it. And then when publicity came out, he did not get any credit. The people inside opm thought it was embarrassing. And they did not want him out there talking about it. And he was trying not to. But he was getting credit anyway. And so it did not come out he was involved until congressional hearings. David it is a great piece, and we spoke with paul barrett about it. Paul ben cotton is the founder and ceo of cytech services, a small cyber forensics firm. He had the unusual experience of having gone to opm to present his products on a day when they were in the middle of discovering that they were the victim of a massive hack. What was going to be his project demonstration turned out to identify some of the malware already on the servers of opm. Carol did he find it and help find it or was it a confluence of events . Paul that is where the dispute came in. Because he as far as he is concerned, he helped discover that opm was under attack from intruders who were eventually identified as the chinese. Carol right. Paul strangely, the agency went out of its way to say he had nothing to do with the discovery, because the agency was under tremendous pressure from congress over why it had been so vulnerable to this hack. As it got sorted out, more than a year later, a congressional investigation was done. It was discovered that the reality was somewhere in between. He had stumbled into this situation and discovered malware on the computers, but opm had already been looking into this a few days earlier, even with another contractor. The upshot is a haphazard process of discovery, which points to the tremendous vulnerability, not just of opm, but of the federal government. David going back to that moment when he showcases his software and this happens, he thinks this will be a great thing for him and his company. He ends up having to fight for recognition and more that this happened. Paul that is exactly right. I mean, this is a dream come true for a small cyber forensics company. Which is you know, that is a very competitive, growing industry. To be a Company Associated with the discovery of the vulnerability of a major federal agency, that would be a feather in his cap. As it turned out, he realistically came to fear that he was going to get branded as the guy who was falsely taking credit, but he was vindicated or at least partially vindicated. As he describes in a end as some of his rivals describe it, this has ultimately rebounded his credit and has given him some visibility. Carol at one point, the office of Personnel Management was coming out publicly saying he was taking credit, which is kind of a nono. Paul youre supposed to keep your findings quiet. Your clients do not want you to expose to the world their degree of vulnerability. But the situation shifted in this case because this was all being the sort of discussed both in the media and in congressional testimony. Where officials from opm were testifying that we discovered this, and omitting any mention of contractors involved. I think, as i say, the larger theme here, apart from the interesting, intricate story that involves this one guy and his small company, is how his small company, is how haphazard the process it is of discovering an agency is this vulnerable. David and the Global Economic section, how a good oldfashioned gold rush is transforming one of mexicos most murderous states. Carol massar spoke with eric mann. Carol tell us about the guerrero state. Eric guerroro has kind of historically been forgotten. By development and by the mexican government. It is a state long center for heroin and opiate production in mexico. But it also is a dichotomy because it was the home to acapulco, which was a big hotspot for Foreign Tourists the likes of frank sinatra, elizabeth taylor, the clintons, who had their honeymoon there in 1975. So it has kind of this tale of two states in the coastal area, which has been a tradition of luxury and draw for tourists, and the rest of the state, many parts of it have issues with gangs and violence and cartels. And that has really taken over the last decade or so. Carol so you have that going on. That is the dismal, dark side. The more optimistic side has to do with mining deposits. The land in guerrero state is rich when it comes to gold and iron and lead. How rich is it . Eric there is a lot of deposits. It is still being explored, so no one knows how far it goes. A lot of the security problem has discouraged investment previously. But guerrero has gone from being not being on the map in terms of Gold Production in mexico, to being among the top 10 in 2015. And so it has really kind of leapt forward, where Mining Companies are investing. The state is extremely excited. The governor, in april, appeared at an inauguration event for a torex mine along with the mexican social Development Minister and the economy minister. People are extremely excited about this opportunity to bring jobs to guerrero. Thousands of jobs. They even recently began a goldmining cluster, which will allow for companies there to share resources more easily, pool their investment, leverage it in favor of local communities. So it is just a tremendous opportunity that the government sees from these miners and from the companies from abroad. David up next, the trump ancestor who does not get enough credit for building the family fortune. We will tell you why. And why some cities in the u. S. Want noncitizens to vote in the upcoming election. And the booming business of being a mermaid. David welcome back to Bloomberg Businessweek. I am david gura. In politics and policies, the trump business that started the family fortune. Carol massar spoke with editor allison hoffman. Allison friedrich trump came to the u. S. From germany in the 1880s. A lot of germans were coming to the u. S. At that point. He started in new york with a barbershop, and then decided he could make more money going west. It was still the high gold rush period. First he went to seattle and then he went to western washington state. Then the gold rush took him to the klondike in canada. He started a restaurant called the arctic in a town called bennett, which was on the trail a lot of miners were taking. It was a sort of key stopping point on the Overland Route to where people were going to pan for gold. Carol what kind of place was the arctic . What kind of establishment was it, allison . Allison it is what you would expect in a frontier gold rush boomtown. They served oysters, they had a lot of booze, and they had women available for miners who had gold to pay for them. I do not think the arctic was necessarily unique. But our writer pulled archival newspaper clippings from the period. There were some reviews of the arctic that described there were private boxes, where you could pay for services from women using your brandnew gold dust you just acquired. It was exactly what you would expect. There were some warnings in these newspaper clippings that women of good repute should not go there by themselves. [laughter] carol we are not going to even touch that now. But he did really well, though, right . He made a fair amount of money doing this. Allison sure. I mean, gwenda blair, a biographer of the trump family, said he mined miners. The truth was your chances of striking gold were not that high if you went out into the mountains, but your chances of making a lot of money off of these guys, because they wanted to eat, drink, and find women was pretty good. So fred trump and his partner did very well with this restaurant. So well that when bennett got bypassed when the railroad was built through the area and it became a ghost town, they did well enough that they dismantled the restaurant, put it on a barge, and took it up the river to whitehorse, the next big stopping point for miners. So i think they felt they had a pretty Good Business on their hands. David staying in politics, donald trump has fanned rumors about immigrants voting in the president ial election. There has been a Quiet Movement underway to get nonu. S. Residents to vote in local elections. Carol massar spoke with reporter caroline winter. Carol donald trump made a claim about noncitizen voters being allowed to vote. What did he say . And is he right . Caroline he said a lot of Illegal Immigrants would be voting in the election, implying that the election will be rigged. Carol one of his favorite subjects as of late. Caroline true. [laughter] caroline thats very unlikely. But what is interesting is there are some places in the u. S. That do want immigrants to have a vote. And in some cases, those are legal immigrants, who are residents here. In some cases, that is undocumented immigrants. The latest case is in san francisco. On november 8, they will vote on to whether to let immigrants, both legal and undocumented, vote in school board elections. Carol it is interesting and provocative. And there is some historical precedent. Which we will get into in a moment but what is the thinking about letting noncitizen voters having a say in some issues . Caroline they really want parents to have a say. They say schools will be better if parents are involved. In a lot of cases, you have immigrants who have come here legally but are not yet citizens. That process takes a long time. So i spoke with, you know, it and assemblyman and san francisco. He said they have people who have children go through kindergarten through 12th grade without a voice into who is on the school board. David up next, golf tries to make itself cool again. Also how musclepharm went boom to bust in just a few short years. And if children say they want to grow up to be mermaids, they can. Sort of. That is next. David in features, how musclepharm went swole to twig. I am talking about the Wide Receivers Nutritional Supplement company. Carol massar and i spoke with reporter ira boudway. I am talking about former nfl wide receiver brad pyatts Nutritional Supplement company. Introduce us to brad pyatt. Ira he played a few years in the nfl. No one had really heard of him. He was a special teams got him a very fast, a kick returner. While he was in the league, he decided to start a Sports Nutrition brand. His first attempt failed. His second was called musclepharm. It got big fast. You see a lot of former players go into this. It is a pretty low barrier. David it is like a supplement. Ira yeah, it is supplements, mostly protein, stuff like that. Energy stuff. His brand became the fifthlargest in the market. Within a matter of years. They signed guys like tiger woods, michael vick, johnny manziel, arnold schwarzenegger. Big names. He was an interesting character. He seemed like he was succeeding in a way a lot of former athletes, especially those not that famous, do not. He was ceo, he founded it. Carol go back a little. What came first, the success of the product and then the celebrity . Or these celebrities needed to make it successful . Ira he was super aggressive. Initially, he could not afford tiger woods. But he was doing a lot with ultimate fighters. He would pay them 15,000 to put the logo on their shorts while fighting. He got his he did it early with it usc to get his name in the ring. Carol so the company was growing. They are getting celebrity endorsements. But along the way, they issue or they keep issuing stock. Ira right. This was the problem. To make these big deals and keep this region growing, they were always running losses and always having to raise money. They became a Public Company and started issuing shares. But they did a lot of deals where it is debt to equity, where somebody gives you money and exchange for shares and when they sell those shares it tends to drive the price down and they did a lot of these deals. And pyatt says, i had to, because i cannot borrow from banks. I had to take money from whoever i could. So is like a rogue gallery of penny stocks. But this maybe got the sec looking at the stock. It is unclear, but at one point, the sec started investigating them, mainly about unreported perks. This is what ultimately forced pyatt out of the company. They found that he and other executives have been getting things like travel to cabo san lucas, cars, clothes, jewelry all kinds of stuff. Carol all necessary for running the business. [laughter] ira well, they made the case. Actually you can do that, but you have to tell investors. They were not. So they got in trouble and paid a penalty. David sports carries over into this weeks etc. Section. Carol massar spoke with editor brent about how golf is trying to reinvent itself. Bret topgolf is a really interesting phenomenon. It is basically a driving range meets nightclub meets sports bar. Carol that is a lot. Bret the facilities are 65,000 square feet. There is basically three levels to them. They are kind of insane. If you have ever been to a Buffalo Wild Wings or a dave and busters, it is like that but with golf. Carroll i mean, from what i understand you go to these places, there are waiting lines to get in. Bret there are 25 in the country. About half of those have been built since the end of last year. It is one of the Fastest Growing chains of its kind in the country. They are very popular. Basically because what theyve done is sort of taken the hard or ignoring parts about golf out of golf. Carol interesting. It is like a fun experience, kind of a party. Ira boudway actually went to one of these with his dad. There was a mixed group of people that were there. Men, women, old, young. Bret right. He went. There was a bachelorette party. There were a couple of young dates. Parents with children. The game you play at topgolf was like an arcade game. You try to hit a golf ball into something that looks like a meteor craters in the ground. It is not like youre trying to get the ball into the traditional hole, which would frustrate certainly kids and many adults. Right . So, they made into a game where if you get the ball sort of near the hole and it falls in, you get some kind of points for it. So it is fun. David also, an Innovative New Business Model professional mermaiding. I guess that is a made up word. Carol massar spoke with linden wolbert. Linden a professional mermaid has several definitions. Namely, i believe it is somebody who is an ambassador for oceans and brings enchantment to the world. And it is someone who is half fish and half human. Carol that sounds really good, but you are actually making a living portraying being a mermaid. Tell me exactly what you do. Linden what i do is very broad scale, pun intended. I educate children about our oceans, i have all kinds of Different Things as far as performances. I do events for celebrities, for product launches. I also have my own line of childrens swim products and mermaid tails with body glove international. Carol talk about the celebrities. We are talking about some really wellknown celebrities have hired you for events. Jessica alba, kelly osbourne. What have you done for them . Linden usually i do events for either birthday parties like Justin Timberlakes Surprise Birthday Party that i performed at. For other people, i do childrens birthdays or surprises or play dates. I am sometimes hired to swim with children for the afternoon, to bring magic into the day. Carol sounds like fun and sounds like you do things for children. Talk to me about the product line you developed. Linden body glove and i teamed up about four years ago now. We decided to create mermaidinspired swimming products for children. The idea was to not only create magic and mystical experiences for children in the water, but encourage them to get into the ocean, into the water, and learn how we can conserve and be part of our oceans. David Bloomberg Businessweek is available on newsstands now and online. More Bloomberg Television starts right now. Emily i am emily chang and with stories that shapes the week in business around the world. The fan for for another eyepopping merger. Apple, amazon, and ill that report results. Changes in the boardroom. Another dramatic week for your beleaguered banks. A couple good quarters in a row and ceos make predictions