You are watching market makers. I feel like a bobblehead. You do have a great tie on today. Moving on, taking into the bulletin because we have so much to cover. The top is no stories of the day. Investors are hammering twitter. Shares down more than 13 in early trading. Slowing user growth. It has fallen for at least a dozen quarters in a row. Increasing the number of users is the number one priority. I think we couldve guessed that. He says he wants to make the audience the worlds largest, even bigger than facebook. Today speaking with him right here on bloomberg television. Madison square garden. Putting the sports team and Cable Network and one company. Of the catalyst was Steve Ballmer who paid a record 2 million for the Los Angeles Clippers according to people familiar. Msg believes a strict trip can help unlock the value of the sports teams. Another way to a mock the value would be the next winning. Shares are rising in europe. Largest bank has set aside 2 billion for Legal Expenses. Ubs trying to settle investigations into legend in afford an exchange rate. We are making progress towards High Resolution of the matters. We are in a position to better underestimate. The Securities Unit did record a loss because of the Legal Expenses but other ubs units posted earnings that met or beat estimates. One. Rd is number according to the firstever global ranking from u. S. News world report. Topping the list of 500 schools and 49 countries followed by m. I. T. And university of california at berkeley. Stanford fourth. Two british schools tied for fifth. Oxford and cambridge of course. People are feeling at ease because ubs paid 2 billion. Maybe it should make people feel concerned that they have to pay that much. Toi will not try secondguess the financial market. People will decide what they are going to decide. Analysts are looking at the glass half full. Some days they do, some days they dont. More on the msg split. It would separate the sports Team Division that would include the next from the next in jets from the entertainment business. Jeff mccracken here to tell us more. Stephanie mentioned earlier that in a way this really is all a extraordinary amount of money Steve Ballmer was willing to pay. The Milwaukee Bucks sold 550 million. That was the top price until Steve Ballmer showed up with his price with his checkbook. How about that be the Winning Strategy for msg . It does not matter. Look at the clippers, right . A Terrible Team for how long . Steve ballmer steps in and pays all of that go. That was an example of a trophy. Right . K also, it would fetch more. How they fared that the activist push. Up anda find that showed i think people suspected they would not get anywhere. That is amazing when you consider the fact that for years and years people consider them of doing everything to disadvantage. Offs andhave to spend one of the spinoffs may spin off again. Msg. They look downright shareholder friendly, right tackle the other interesting part we talk about the sports that you have the real estate piece. How much did they spend renovating the guarded . By 300 million renovating. Not multiple millions. They spend a fair amount renovating the forum. Chicago. Assets in the formally Fabulous Forum in los angeles. There are real good assets in the real estate. There are Tax Advantages that come along with that. Quack we in the tax statement from nelson phelps. We actually of the tax statement. Fax you said msg leadership wants to do what is right for the shareholders. When you put it like that, this is all about unlocking value. He is an interested party. He will end up on the board. This is the first time i can recall him getting on the board where he did not have an investment stake but he will get shares. As the phil view it jackson. He will come in and provide credibility. This will work out and watch to make sure nothing is done. What i dont get is why does he care, right . A family that has a controlling interest in the enterprise. If msg spins off however it is thectured spins off entertainment and real estate business, they will end up controlling shareholders as well. It will not know how play out. There was such a compelling case that even someone you would think would not care what would happen had to give in. Been moving up already. Odds are if they get it done, it will move up even more. There were others. 30 or more. It got to the place where the dolans could not ignore the pressure from outside. How else could it get to be opening for the eagles in his own house. Downank you for breaking the latest. Think you have had a wild month. We will see what all of the volatility has meant for hedge funds. Have one of this companys products in your pocket. You will hear from the chief Financial Officer of the biggest supplier of glass for smartphones, carl corning. It seemed like the sky was falling two weeks ago. Stocks plunged, volatility skyrocketed and a lot of investors were thinking we were hanging heading toward a long anticipated correction but it did not happen. Lets look at what the crazy month has meant for Hedge Fund Managers. Fund investor and now professor at columbia business school. Since inception, opportunistic of around 16 . This year up 18 . October. S about october has been a volatile month for franchise member. They were caught off guard with the volatility. What you have seen this Hedge Fund Managers have been in the same traits. We talked about fannie and freddie. The same trades. To stay away from those names is what our focus is. The way out and date way down can be very painful. How do they end up in the same six trades . Some of those are great trade ideas. When they work out, they do great. Everyone is really running for the exits at the same time. After two weeks of volatility we could see its script and start to pull out rocco i think you are starting to see that. He flows have been positive up about 7 year to date. The money keeps coming in despite the relative disappointment we have seen in the performance. An will see a lot of increasing level of scrutiny, particularly in the equitylong shorts. People are beginning to think how much is liquidity driven . How much do we all convince ourselves fannie mae will not be a part of the government . That takes effort. If enough people do it, it goes 100 plus. Are hedge funds not risk managing well enough . It is clearly a key element of what hedge funds do. I think a key element of what we saw a couple weeks ago is they really stood into the market and were hurting on the shoulders to say you need to derisk. I was thinking more less the dropdown but more the buildup. In other words, if you were or wereinto the trade growing up position in a crowded recognize it for what it is and Risk Management accordingly . Some of those are great ideas and work out beautifully, but when they dont come at the stampede for the exits leaves blood on the floor. I agree. Clearly Hedge Fund Managers will be thinking more about the Downside Risk for these large crowded trades. Larger hedge the Fund Managers have to put larger capital into the deals and it is very difficult for them to find situations that are more often around run that are more middle market. They are just getting bigger and bigger in the past three years while the returns are getting lower and lower. Why are the fat guys getting fatter when they are not improving the performance . In fact, it is worsening. We love doing that. I think it is a strong comment. There are large hedge funds that do a wonderful job on Risk Management. The performance has been quite strong. It really shows you security selection is what is going to of hedge fund. When you are a 9 billion or muchillion fund, how security selection can you do . He is willing to bet it all on a couple dozen names. The risk is that you end up than what we had earlier, the black rock pimco dichotomy. I am thinking 5050. Who cares . I is it who cares because if am a Hedge Fund Investor i am never going to get fired or investing in the biggest most wellknown names. I could get fired for investing in a startup. Its my crush it. It might crush it. You are exactly right. When you have 120 feet of trading the book, it becomes extremely challenging. I wonder whether we can say if there are those that underestimate the real market opportunity. I think as long as the credit he keeps pouring into the markets, youre able to do it. One of the bellwether returns, one of the returns has been awful. This is been one of the worst years on the relative asis. The market was really screaming in 2009 and so on and so forth. This year there is not much reason at all other than we blew it. One of the bellwethers that ought to make people worry is performance of someone like ahl, and ctas. You take a human being out of the equation and they have been crushed when the markets are dominated by qe. Up 14 to 20 . It is tripled or been troubled the active manage fund. I want to get the human back in. Here is a human actively managing. Where do you see the best opportunity . We see a lot of great opportunities. This could be a Large Capital structure. What we are looking for is a Large Capital structure. By being involved in that we can see better protection to the downside and more upside. Thank you so much. Always a pleasure to have you here. University. Fessor and daniel poznan are. Coming up, oil is on the slippery slope. The price keeps lighting. Aat big oil thinks about world of crude of less than 80 per barrel. Attends a big oil ceos are not sweating sliding crude rises. Because of production margins. Bp rivals say they are still looking at more than ample confidence. Scarlet fu has been watching the oil dynamic. Goldman sachs began this week by cutting the price forecast for wti. The new oil order and tab the u. S. Shale is a marginal swing barrel. When you look at what the officials are saying, there is really no panic among big ceos. Halliburton reported earlier this month. Chairman and ceo said post to 80 and 100. That is the Perfect Place for oil two cents. Revenue for this quarter should rise 17 as well. Oil isdental ceo said 75. Lots of the production of economics. What they budgeted for is much lower. We do not know what they actually budgeted for. That at oneuestion point it becomes economical for these Oil Companies to search and drill. After 150 drilling rigs could be shut down in the u. S. Over one third of u. S. Shale formations includes crude oil at 80 per barrel. That u. S. Shale formations lose money when crude is under 80 per bear role. Companies would shift some of the rigs to try to enter production areas. I should mention the last time dippedlooked a low below 80 was june 2012. It did not stay low but just dipped to low the level. If Oil Prices Keep going down, will leave you looking at a new era of Lower Energy Prices across the board . That is the question we will have to consider carefully. All of these Companies Invest for the longterm. They were pretty conservative with the forecast early on. These big integrated Oil Companies like chevron and exxon base this on production. Because they have this other side of the business that will help supported in the short term. What might be affected is the ability to buy back shares. On the whole the 100yearold companies that have survived many price spikes. Rsonti said the break even point for shale is 65 70 for wti. It would have to go down and stay at those levels for couple of months before you see any company shutting off the valves to say we will stop the project. October, at least a couple of the refiners since october, a couple of them have popped. Maybe that is a sign of things to come. The Pricing Power wind up in the hands of the refiners. Cheap oil will drive demand for gasoline. The spread would widen and they can make more money. It is a supplier of last resort when it comes down to it. Eye on saudi arabia. We need to leave it there. All me i am allowed to wear purple today. Flies back with more in two. Back with more in two. Rketwelcome back to makre makers. I am stephanie ruhle. Walmart pledged to put more of its money behind americanmade goods. Here to update us on the companys progress is michelle glockner, Vice President of consumer falls at walmart. Welcome. 250 billion dollar pledge. Can you put that much money to work . We can. It is really a big urges order but the economics are changing and we are working with our suppliers every day to find the categories that make sense. You are saying existing products, you are making a switch to replace them with the same product made in the u. S. . Yes. Carried y has product has candidate characteristics in common. Energy is a big part of the manufacturing component. Incrediblyes are competitive and dependable. How far are you into this pledge . We have not disclosed what we have spent so far. I can tell you we are on target. We also recognize because of the link of time it takes to build a factory from the ground up or to move equipment, we believe it will ramp up quickly. We have had some really great early whins. Today we have made several announcements, two of which customers care a lot about, things for their pets and baby. Does the Customer Care . When i am in the store i am excited over the fact that serial costs two dollars. I am not necessarily thinking about where it is made. What customer is demanding this from you . Our customers tell us made in america is important to them. First on their mind is price. Second, where the product is made is really important. Our customers have told us theyre willing to pay more for goods in the u. S. , but we do not think they should. We know this right, that some categories are less expensive to produce here. Do you feel you have had to do this because many manufacturing jobs in the u. S. Could have been lost because walmart demand lower prices . The economics are changing and that makes Good Business sense. That is what we do. We buy and sell the highest quality goods at the best price. Right now the economics are making sense for many categories. Does that make good sense to not partner with apple pay . We have not partnered with apple pay but are looking at all different ways that will make life easier for our customers and store. Youre going to make my life easier this christmas. What does everyone want to buy . The top items are anything with frozen on it. Even though the movie is over a year old . The movie has such staying power. Our customers vote every day whether it is bed linens or toys or birthday cakes frozen is on all of them. Figure out what a hot selling item is do you no longer want to partner with disney and mattel . There is a whole licensing aspect. What is the biggest challenge to your business right now . It seems like walmart Sells Everything but in your world, what are you saying this is a headsup or an issue i need to get around . Inwe have a huge footprint stores. Were working with the customers in understanding how they are shopping. Our goal is to be where they want to be. Your place ine at new jersey or shopping on your mobile device or whether you want your groceries delivered to tor door, we are working find out what the customer wants every day. Given how big you are, can walmart be flexible . We can be flexible. The creator and founder is a businessman and entrepreneur. With innovation. When you think about the walmart customer, who is the walmart customer . 140 million different people all over the country every week. That really is everybody. We have such a diverse base of products. Operate andores we walmart catered to everybody. Thank you for joining us. Walmart where you can gain your frozen gear this year. Thank you for joining us. Coming up, what is cooking at corning back is speaking with the ceo who probably made the glass in your smart phone. If you use a smartphone or watch tv on a flat screen, chances are you are looking at corning glass. You would expect it to grow fast. The Third Straight quarter. Earnings per share up 21 . Big plans for new product. Nice to see you again. Tell us about guerrilla class four. Four is the next version. We formally listed the launch date. A product that will have increase performance. We are already shipping the product but the formal launch will occur november 20. We think this will enhance the leading position with cover class on consumer electronic devices. It will be more shatter resistant or crack resistant. Is it going to be lighter and transparent . Re wellliked go through the glass more easily . Light transmission on guerrilla is outstanding, far better than competitors already. It will be much stronger if they maintain the same thickness. All of our Customer First customers have a choice about that. It is much stronger than what guerrilla class three was. How are you going to price it . What they have seen is sales your Specialty Materials unit worker really class resides have been rising but profit falling . Talk more about pricing on november 20. We did have a step down in price on guerrilla class. We are not anticipating that coming up. We think investors will see volume growth, not that much price decline in good profitability. Why does that seem corning is fighting price declines on multiple fronts, not just with guerrilla class but also the lcd business . We are in the technology manyess and participate in industries that have declining prices. What is important for us is to reduce cost. Moderated three quarters in a row but Cost Reduction is greater than Price Reductions this year over the past recorders. In techcipate businesses and customers expect price to come down and we have to overcome that with product of a. Prices are greatest in the lecture consumer electronics. Quarter. An outstanding actually, we make more money in Environmental Technologies than we do in guerrilla class on less sales. A great is this and growing nicely. A great business and growing nicely. At what point does this become material to the industry and material to the business . We think next year the sales with ultra high death will probably be 25 Million Units out of 225 worldwide. The price points are falling. Were looking forward to seeing the price points during black friday sales the sheer. We think 2015 is when you start to see an Inflection Point in 2016 will be much bigger. We think consumers will really like it. The two things that consumer attributes is comes thinness and quality of television. You get far more pixels. Volume. By area, not by that actually works in our favor. I think next year will be the Inflection Point for high death televisions. Highdef televisions. There are questions about whether corning is to expose to apple. One customer in samsung by far. Why do people say that you dont i am curious to know why is it that people obsess over whether it is going to be sapphire glass or guerrilla class in the apple watch or iphone 6 if what you are saying, is i am sure it is true, it your dominic customer is samsung . When you look at the Specialty Materials group, sales that are about a billion, it is a small part of corning. And embedded in that samsung is the largest customer. It is the largest customer for guerrilla class. We think we have a balance customer portfolio. A balanced set of businesses. We clearly understand the fascination with the latest new device by each manufacturer. For example, sapphire versus guerrilla, we think guerrilla is a much better product, about a 10th of the cost. Transmits more light, heavy. It does much better on damage resistance. So sometimes we have to suffer with people focus on that. We think were doing well and are Quarter Results demonstrate that. Thank you for spending time with me. Coming up here, throughout the textbook. Ist of what you need to know marketing. Welcome back to market make rs. Marketing students, see where. By written sharp, professor of marketing science at the university of south west australia. Byron sharp. What dont marketers know . Quite a lot. I have anything goes rule. What is the problem with that, that it amounts to wasted money . Lower growth. It is a bit like a dock or who does not understand how the body works. Counties me sometimes believe the brand unwittingly. How should we look at the world cap complex we should learn a lot from the 20th were the great brands were built because mass media rolled out, and really wasnt time to get physical availability of the brands. Physical availability is determines whether it is big or small. Not a niche targeting as it is trying to engage loyalty from customers. How much does loyalty of the product have to do with the brand . Absolutely quality manner matters but in most markets pretty similar. Does not haveand an incredible quality about it. It is largely it has managed to get into the minds of elegance and stay there like apple. It really moved to sophisticated massmarketing. Stop trying to target apple loyalist. It went from losing money to being the giant that it is today. We know apple is doing this. Who else . I would say mars. The candy maker . If you sell me chocolate, i will buy it. They are getting sustained doubledigit growth on 80 off brands like stickers like they never thought would grow again because of the switch from anything goes marketing to sciencebased, evidencebased marketing. What do they do specifically . A lot of things. Snickers sells two teenage boys with boys on skateboards. Are we not going back to an era where niche Marketing Matters given the proliferation of media, particularly social media and the fragmentation of audiences . Certainly fragmentation. We have more media than can fit into peoples lives. It is the golden age of television. You did not believe that . The pathidence shows of high tv viewing is highly robust. Everyone seems tv ratings are higher than they have ever been. Is there a medium most impactful right now . Advertisement dollars are getting more competitive . . S it facebook, tv where is the place most attractive . Video is more attractive. Video, tv. It is online or broadcast, whatever still a very attractive proposition. Compared to rich others. That theakes it sound fundamentals of marketing and advertising have not really changed. We have a lot more tools to play with. The way it always was. How about measurements . Television is the path to experience. Passive experience. Hard to tell whether they worked . Are you getting a better sense of that on digital platforms . Yes. We know they work. Of single sales results. Isnto isnt who getting it right . Give us an idea. Give us an idea of a strategy that simply does not work in todays marketplace . Hypertargeting. Group not talking to the sports franchises. Breakfast cereals. Brought targeting. Interesting advertisements that appeal to a broad audience. Year after year the category declines. Burger king was a good example. Great advertising. Mcdonalds when ron and law shares. Burger king lost its crown. Thank you for joining us. Byron sharp. It looks like burger king has recovered the crown. Approaching 56 minutes past the hour. That means it is time for bloomberg on the market. Speaking of burger king, lets talk amgen driving higher. Increasing the buyback and will return 60 of earnings to shareholders over the next four years. Amgen has been under pressure from downloads. You were saying allergan. Under pressure from third point to break itself up. In the says today is not best interests of shareholders. An investor day coming up. Aggressive she met with the ceo over the summer and having a constructive activist area. It is proof that sometimes these days as an activist all you have to do is show up. Auteur. We will be back in just a moment. Live from bloomberg headquarters in new york, this is market makers, with Erik Schatzker and stephanie ruhle. Nothing to tweet home about. Investors are hammering twitter today. They want to know why its growth rate is stuck in slow gear. Hiidden treasure. Madison square garden might split up to online value in its basketball and hockey teams. To realize value and its basketball and hockey teams. Welcome to the second hour of market makers. Today, a guest anchor all over locket oliver luckett. Consumers have not been this confident in seven years. Dence board is that the highest level since before the recession. Reasons. A number of consumers continue to go to tmobile. They increase their fullyear forecast. One point 4 net million customers 1. 4 million customers. A sign that investors may have turned bearish on banks. The biggest one straw last week since 2009. Withdrawal last week since 2009. There is a concern that low Interest Rates and market swings will hurt investors. Another ebola patient is getting out of hospital. Vinson does not have the virus any longer. The federal government is at odds with new york and new jersey over policy. They have put into place new rules that anyone exposed to the disease be examined by local health officials. New york and new jersey are making quarantineds mandatory. They have an incrementalist on this. The newest guidance as incredibly confusing. Publicnot want them on transportation, you want them to work from home. That sounds like quarantine. Urging christie to halt that. A former Corporate Executive and former talkshow host has been elected mayor of toronto. He is replacing rob ford who is accused of all sorts of nefarious acts unbecoming of a mayor. He was quite famous for a while. Rob ford was elected to city council, replacing his brother. We covered the governor of new jersey, and the mayor of toronto the former mayor. I love that you put in their allegedly drunk in public. Im going to go out on a limb and say i think he was. As far as i recall, he admitted to drinking and driving, and was accused he admitted to smoking crack cocaine. Not a model citizen. Certainly not a model mayor. But there are a few others in that camp. As i mentioned before, we have a special guest host for the hour, oliver luckett. He helps brands and companies and in social media connect and social media. I want to talk about what is going on with the audience, but we have to talk about twitter. Something you know very well. Shares are following after yesterdays disappointing earnings report. Lasthad 284 million users quarter, and the ceo says that growth is his top priority. He still maintains that they could have more users than facebook, a tough task. I want to bring in a Senior Research analyst. He upgraded from cell to hold on twitter. Do you feel fundamentally better about the company, or do you just like that the shares have dropped so you see a value play . Both. Overreact on this name regularly. Ll lastraded to se quarter, after they popped 30 because they beat guidance. Guidance was incredibly low. The community did not have a figure much above that. Mine was well above that, and they met it. Do you think twitter could become bigger than facebook . It is interesting. A 140r is based on character system, and it works across mobile phones and a tech bae systems on a global basis, yes. Techbased system. So on a global basis, yes. Celebrities many and microcelebrities that direct link connect with an audience. That is their forte. Vine, you look at artist like jack and jack who just went to number two on andes by posting a vine connecting with their fans inside of these platforms. Are big celebrities two 1324 right now. These celebrities are becoming massively popular and twitter, but twitter is not getting any of the benefits. I would disagree with that. They are doing ok from advertising perspective. Ofy will do well in excess 2 billion next year. The celebrity element is not unimportant. It is only part of it. The day, it is a very unique marketing vehicle. It is probably the single most important realtime Marketing Tool that marketers might have. If you happen to have a celebrity focused angle and what what you are doing, and a celebrity has a large is revenue tore be generated for the celebrities and for twitter itself. How long before twitter starts to make money . It depends on your definition. On an even to basis, adjusted, it is profitable but the goal hisot about cash flow, and scale of potential. There will be a few beers before it starts to matter years before it starts to matter. Market place is really looking for is a Media Distribution vehicle inside of social. Wasso twitter, when i working with espn, they invited invented a product called amplify. Ofse were the bright spots an emerging ecosystem, where withs alongside artists, the distribution platforms, all work in harmony. Youtube is a great example of that with the partner program. Individual artists can upload content, ads can played in front of it, and they can share the revenue. Other platforms need to catch up with this, because there are lot of murmurs about those inside of facebook who have so much of the market share and mind share of the consumer, but are they being compensated for the ads that are alongside their content . They are the content creator. An emergenceo see of these platforms that start to reward the creator for being a part of them, not just a parasitic. What if the investor fears are born out, and twitter is on the declaiming user growth path, and eventually, it will probably never run out so that it shrinks, but that it does not grow in a meaningful way quarter after quarter, year after year . You have a defined audience. That audience may talk amongst itself, but does not have any conversations with anyone else. That is ok. Because they are part of a bigger system. Snapchat is remarkably young. It is abouttwitter, realtime news, journalism, breaking events. Facebook, it is starting to skew older and female. Already. Isnt an issue when dick costolo says that increasing user growth is my number one priority . They have millions of users. Do they have to grow in order to be a success . This is the ironic and unfortunate thing. A problem in the communication of what they are and what they are trying to become. They are doing a bit of a reset with a new cfo in the last couple of months. They seem to be steering away from the audience story. It sounds like based on the fabric launch last week, theyre going to focus on the platform. They have an investor meeting in a couple of weeks will or label where they will refine this message further. Those selft meeting stated goals, but if you step aside and look at a media market platform, they are doing incredibly well. They are. We put these unattainable metrics against the social Media Companies because we expected that they would have billions of users. If you look in a cable company, they are only 100 million cable households in america. So if you look at the time shares beds, twitter could be theluable than a timeshare spent, twitter could be more valuable than them. Unbundle. Ting to it is really important to note in an unbundled world, we need new content discovery platform spirit we need social content and discovery. And that is what twitter, especially with these new products it really becomes important. We will continue this conversation. Thank you for joining us. When it comes to twitter,. Coming up, on bloomberg tv, our own emily chang will be sitting down with the twitter ceo did hostil. Coming up, blame it on Steve Ballmer. Madison square garden wants to unlock the value of the n teams. Another spinoff may be in the works. This time it is Madison Square garden. The majority owners are considering a plan to split it into two companies. Andwould be a concert entertainment company, the other would be the sports teams. Of rmgome the founder sports ventures. We ask this question, does it make sense, knowing these businesses the way you do, and seeing the world evolve the way not be part should of a single enterprise, it should be broken into things that reflect Intrinsic Value . In light of what the clippers for, and what you think you can rangers. He it is no a public company, and trying to get stock older value, altogether the capitalization, you could get 4 billion for the cks. If it was put up on the market and had that kind of money, would they spend that . It is possible. Why havent they done this sooner . Asn they want to maximize much money as they could, or is controlled or number one priority . Does not move very quickly, it is somewhat glacial. I think they sent up a joint venture. Listen to theto public part of this that has the concert business and make him run it. There is some pressure to do this because you are 5 million valued, stockholders are unhappy. I would love to hear your ideas about another facet of this, all of the big media deals being done on the back of this. You look at the dodgers, and how they did a regional network. Is that really the impetus of this, or is it something as simple as they valued at 2 billion, and now it is part of the value . We to get from paid to basic, and everybody thought we were killing the base all business. We did not kill it, we put it on a new. Path. Steve ballmer and the clippers has changed a lot of thinking. The of these assets have gone through the roof. Lets pull it out, lets get better shareholder value, and lets separate the nongrowing as quickly assets. Is it possible that the clippers are worth more to a guy otherteve ballmer then teams are for minority shareholders . Ballmer is prepared to step up and pay a lot of dough, and he dough for of something to truly covet. The potential value cannot simply be realized. The stock market is also based on hope, anticipation, what could happen if this happens . We try to look at the economic value of what is being placed on these franchises. Big history teams, what could that be worth . Not being housed correctly in the Public Market the way it is now. Lets split it up, get higher growth companies, higher valuation, and therefore the stockholders will benefit. It took over three years renovating the gardens. Why they are spinning it off into another entity. And the city said you have that facility and that for another nine years, still are has to be concerned, stockholder concern for that. It,nybody comes in and buy they can make it in house deal with another facility and keep the asset era but separated so that any real risk is put into another company. Rationalization for this vertical, owning the arena, owning the team, what was that initially . There, youhen i was won it to control every single dollar that came through that building 365 days a year. So you take a look at the guys who but the islanders, they are only controlling the revenue that comes in for 40 or 50 days of the 365. There is greater value there. As far as the networks are concerned, it is a proprietary product. You cannot go anywhere and get baseball teambal unless you have the product. Two are breaking it into companies, and come doing all of the relationships. Comingling all of the relationships. The control how much runs teams will pay to the building teams will pay to the building. You are also seeing the importance of lives towards because it is the only thing that is not time shifted or unbundled now. You start to see all of these other products. So advertisers, youre seeing an increase in the revenue of these networks. Way, this is a quasipublic company. If you are a stockholder, you really have no say. I think the government should look at Something Like that. Thank you. Congratulations, new grandfather for the second time. Former president of Madison Square garden. We will be back in just a few. Coming up, we are changing the face of the music industry. Factor. Fear halloween into a multibilliondollar business. Live from bloomberg headquarters in new york, this is market makers, with Erik Schatzker and stephanie ruhle. Welcome back to market makers. Is here withkett us. Here is something he knows about edm. Not just about spending records anymore. The hottest guys and gals can pull in millions through and appearances. Twins join us now. How do you go from playing from small clubs in australia to becoming International Superstars . I think there are a few things. We love what we do. We work really hard. We released a lot of music. Steppingstones. Brick byhave brick we have laid at bigger venues. What unlocked your value . Thehey records helped bring internet has helped. Streaming our sets has helped. Especially when festivals go viral. Without a lot of love from south america when we laid a big festival called tomorrowland. Streamed the set, on the main stage, and an overnight in overnight we had a whole lot of love and south africa. It is annline, because honest gauge on where we are giving love, and what we are doing right, and also what our fans do not like and do like. They have told us wishes singles we should release next. We have had casting calls from music videos through our facebook. You. Gauge. Great honest talk to people online, directly. Their manager is really a genius in this space. What this moment in time is is that there is a model in the music business of the major labels that was all about restriction. It was all about time, distance, controlling it, and a tuesday release. Mentioning, they are releasing a constant stream of music. It is not the album release anymore. They are connecting directly with their fans. They are taking advantage of social media to even understand where to go on tour, where to route. That is not as popular as it used to be, but with social media it is a very important thing. That is a very good point. We have laid some key festivals around the world. And what we will purposely do is hold off three or four records we are planning to release for the next six or seven months. We will know if thats the set will be streamed live. And then we will give an honest gauge on which record we should go with first. What is more valuable to you . Selling records, or modeling contracts . The music is the most important thing for us. Anything that comes our way, organic and we can relate to it, we will combine forces. Whatever the challenges and the music is misdemeanor seem to have overcome them quite well. What would you say, from your perspective are the Biggest Challenges to being in that industry right now. . A doubleedged sword. To wait ago they used and have a big released plan for a record. Now you have a lot more going on, more content, more prolific. When youre not releasing singles, your fans want to see tour, behind the scenes. You do not have a lot of downtime. How important is it for you to get brand sponsorship . We can singlehandedly say that if it were not for some of the brands that we have done , ifs with, like cover girl it was not for them, we would not have the music videos that you see now. They paid for them. It is really a breaking point because of ally, of the old restrictions of copyright law and all of these things, and territory restrictions, the record industry has pushed itself and held itself to selling recorded music. Theyre going out and building relationships with brands that are very meaningful. I am working with an artist right now where the record label said i will give you 10,000 for your music video. We have to go to brands to create better art. Theow cover girl and headphone makers have been so instrumental. Why dont the Record Companies want to spend more dollars on you when you have tens of thousands of evil and shows of people at shows . We do not the record label see this value why dont the record labels see this value . It is because they do not have as much revenue. The brands get more visibility. See beats headphones. Do you think you are an artist, or a salesman . Thatu can tell the artists combine with the brand. Extensions. Natural cover girl is a natural extension to them. Kardashians is selling tires on twitter, that would not be natural. But you worry about them relying on over at sponsors, and find possiblys als prisoner to the whims and demands of corporations as opposed to what you want to do. Smart brands are allowing artist to be artist. They need to understand to sponsor them in a way that makes them artists. Usit is very important to that we connect with the brand, and we are not really selling. We are using it because we love it, and then if people caught on that we are applying it backstage at a gig, that is great. You should be selling hairspray. It definitely works, my secret. But we have had brands that have approached us that say we will give you money if you put us in your next video, and we have said no. As long as we do not become a slave to the brand and what they want from us, then i think it is going to work in harmony. It is fair to say, in the tists, they are not slaves to the label. If a brand is bringing you an artist that you love, and funding that, that is an amazing thing and a motion to have with them and a motion to have with them. Emotion to have with them. Call into the business of boo. And a ghostrides ship. Of a hauntedink house, and i think of a yearold kids. Tell is about your business and your customer. Haunted houses are definitely not for eightyearold kids. Haunted attractions as an industry are huge. We actually serve more teens and adults than we do children. We have haunted hayrides, a flagship attraction. Out,unched a horror camp which is an interactive horror camping adventure. And then goes to ship is also an adult halloween attraction that we launched in 2011. Tons of opportunity to scare her in the industry of blood and adults in the industry of blood and guts. Do you wish you had not given away that much . I actually am really happy with the deal. I do not think i would have done anything differently. 20 of the company was a small price to pay for having someone like mark is a partner. Has been an incredible mentor to us and a great coach. To be honest, that deal is what has enabled us to expedite this expansion that we just executed in the summer of 2013. Need 2 Million Dollars to build out the Haunted House franchise . Oh yes. That money was gone a week after we got it. Haunted houses are one thing, these are fullblown attractions. The haunted campout went on last year withur that money. Haunted fullblown attractions, and that money did not last long. To ask you, i have been seeing a lot of very interesting performances lately. More,runk doing sleep no these otherworldly experiences. Move beyond o are you planning on moving into more yearround attractions, things that will happen outside of the halloween season . We are not going to do yearround attractions. That is not something that is a goal for us. What were going to do is absolutely move into other parts of the year outside of holloween. Ur for 12 weeks this summer. We will create brands that can operate outside of one month a year. Talk about howle being on the internet and social media all day long is just trying our culture to some destroying our culture to some extent. We have never seen more of life performances more live then than now. When you go to these amazing live events, how disappointing it is when you in the moment, and everyone is holding their phone. Yes. I hate it. All i want is for people to put their phones away when they are on the hayride. I absolutelypoint, think that the live attraction space is in an incredible time. This 12 hours to completely submerge a camper into a really extreme horror experience. Philosophy,ng a that everything will be something unique that has not been done before in that space. Dollarse have limited to spend on entertainment. Who is coming to your events . Where are your customers coming from . What are they not going to see . They are not disney on ice. Halloween, it is a 7. 4 billion industry. Is there. People who love halloween do not go to one attraction. Maybe they are missing a couple of movies if they have to choose. But it is a completely different experience. These are the comiccon fans, the mountain hikers, extreme sports. Thank you. I bet you did not know that the guy goes on the haunted campout. I love halloween. There are three days left in the countdown. We will be back. We have had a great show. Profile,new york times bonior. Why move . Big celebrities were digital immigrants into the platforms. They connect better with fans in a more direct way. When brands are getting involved with these people, there is an authentic connection. It is very interesting. Your favorite artist right now . Nervo. Nice one. Thank you for being here. Thank you for watching. That will do it for market makers. Just a couple of months ago, als, canoney to fight the same thing happen for ebola . Bloomberg tv is taking on the markets. You on the off, stocks. They are green across the board. The dow takes aim at a fourth consecutive day of gains. Consumer confidence giving the market a boost as investors await news from the two day meetings of the fed. One stock we are keeping an eye on today is twitter. Yesterday came out with earnings after the bell. The earnings were not as disappointing as the user numbers. Is interesting about these companies is that all of the investors want these magical unicorns to come out of thin air , user growth is going well. They are operating efficiently, but it is all about the next step. Volatility is still 50 for the stock. This ist staying the first day of gains after staying the same. Once Interest Rates starts to take up, you will see volatility come in. Which Interest Rates . Exactly. The 10 year needs to go above 2. 5 to get to three, and when they move fast, they showed that last spring. Tohe expects Interest Rates stay near zero for 40 years. Other people have made similar outlandish statements. But the idea that the rates will not be raised anytime soon is becoming more and more centrist. What do you think . What youre going to see is that Interest Rates will not be extravagant. And not going to go back to where they were at 20 . People need to be compensated for risk, and that could happen in 2018 when they start to see 55 trillion of debt, onto the balance sheet. Where the s p right now is that, Interest Rate should be around 6 . 55 trillion in unfunded liabilities heading the fed balance sheet. The play you about are making today. We were talking during the commercial break about micron, a company ive been covering for a decade and a half. What is going on . They are doing a billion dollars Share Buyback that they announced yesterday. They are trading about nine times earnings. They actually made it acquisition last year that is growing really well for them. They just beat earnings, and improved guidance and upped margins. You are seeing a great value play here. You can buy the stock, go out to december where there is not a lot of volatility and bring in that premium. G the 34end sellin you can make ad 9 return on your capital. Next. Ney clip is welcome to money could. Two money clip. In oil, Goldman Sachs dethrones opec. Heading to oil wars 3. 0. Switzerlands largest lender posts numbers that missed estimates. In tech, twitter awaiting another quarter of slowing user growth. The ceo joins emily