mother tells us how he is fighting off the competition. >> manchester united gets ready to report results later. we take a look at the family behind the franchise. breaking news for you, gdp day in europe. we have had numbers from germany, france already. italy data is breaking right now. down the number. >> it is a surprise and not a good one. it is -0.1%. that is pretty low. but france, a mess. ande regions all missing delivering really weak growth. the only one that beat is germany. there is no comparison between germany and everyone else. this is not a deal maker or dealbreaker for the ecb but it adds fuel to the fire for them to do something. >> the euro already falling into negative territory. how does this data fit with the ecb's next move? >> on the inflation point, the say be -- the ecb professional forecasters revised their outlook. this is the key, the inflation outlook. we will get one for this month and a couple of weeks. for this year, next year and the year after. mario draghi has told us if the outlook for inflation work ends, we have to act. as you get these kind of that professional forecasters are revising down, it is building up expectations. everybody that is talking from the ecb have given us hints and clues, raising that bar for next month. >> just to put the italian gdp number into his perspective, before the fourth quarter, the economy had contracted for nine consecutive quarters. the only rest bite was the first quarter which was 0.1% growth. we are back in negative territory. >> how many years has this been going on for? five years? the bank of england, the federal reserve, we were talking about qe. >> we will come back to you a little bit later. more data later. that rhymes. we will have more insight on today's gdp figures with pimco's cio andrew balls. >> let's now take a look at the gdp at a slightly different angle. we are going to take a closer look at the german economy. david tweed is that one of the country's most iconic companies, adidas. tell us why adidas is a good reflection of the german economy? adidas isng about that it is a huge exporter and the german economy is really an export-driven company. it is a huge innovator and that is one of the strengths of the german economy. like the german economy, and we did see great numbers in the first quarter, zero point and percent -- 0.8% largely driven because of local construction, but like the german economy there are question marks over what is going to happen in the second quarter and third quarter. a lot of people are worried about what is going to happen in russia, particularly with the situation in ukraine. we were talking about the potential slowdown in the russian economy. adidas is already seeing it. we saw for the first quarter, they had some problems because the ruble has declined against the euro. another question, what is going on in china? this is a question a lot of german companies are looking at. china is not just a manufacturing land these days. it is a potential growing market. finally, what is going to go on in latin america? this is a hughes question for ideas given that the world cup is coming up. >> it looks like a nice space there. you have been to many a headquarters of german juggernauts. give us a sense of what the atmosphere is like at adidas. ofit really has a feeling energy. many german headquarters, it is really informal here. you get the sense that everyone is calling each other by first names. the average age is only 30 years old. it is incredibly international. here we are in this extremely , ill town of 20,000 people have been practicing two weeks to say it. 75s small town has got different nationalities working here. while it is representative of a german company, it is also unique for a german company. terms find interesting in of the whole innovation they are doing here, sporting gear, it is all about young people and that energy that you get from sports. >> david, thank you very much indeed. just a reminder, we will have an exclusive interview with the chief executive of adidas. david will be talking to him later on. >> another day another deal. dixons has agreed to merge with carphone warehouse. the merger brings together companies with a combined revenue of 12 billion pounds. charles allen has all the details. the electronics market in particular is shrinking. you don't need as many gadgets as you used to because they are all in one. even in the mobile phone area, it is not obviously growing. >> i am surprised by that. we all want the latest technology, the latest gadget, the latest washing machine or potentially fridge that is going to be connected to the internet. >> i want to differentiate between appliances which is a much more resilient market. get two fridges, but generally it is a replacement cycle. i met in things like televisions, you used to want to have a cd player, a dvd player and all this. a lot of these things are now, either you have got a tablet or a satellite receiver and that is it. the number of gadgets has gone down and we see fewer retailers around. >> the competition on the internet companies? >> this is an interesting point. one of the reasons the merger can happen is because the service at dixons has improved so dramatically. that was always a point of differentiation. things, the big tv with the curved screen or something, you can only really sell it in a shop. are you going to buy one of those over the internet? i am not so sure. i think the up selling is one of the key points here. they will be hiring more people to make sure this sort of thing happens. >> together they have about 3000 outlets. what about cost cutting? 18 million pounds? >> there are a couple of things. they will be able to consolidate the premises a little bit. carphone can go into some of the biggest dixons stores. they are promising to increase the number of shopfloor employees. bangon't need to headquarters for one company. management, the chairman is the carphone warehouse figurehead. he will the ceo. he is the dixons man and the cfo of dixons remains the cfo of the joint company as well. is it a merger of equals? >> genuine mergers of equals tend not to go anywhere. one culturedo need to the really driving the company. has only justne sort of got that control. it bought its business back in best buy about a year ago. i think dixons is a little bit in the driving seat. on the other hand, carphone has got this niche area of expertise in the smartphones. to come back to connected homes, if that is going to work, the smartphone is a key part of it. >> charles, thanks a lot. nowet's turn our attention to what else is on the radar. russia's foreign minister says ukraine is sliding into a civil war. that will make it impossible to hold legitimate elections on may 25. we spoke to sergei lavrov in an exclusive interview. >> in east and south of ukraine there is a war, a real war with heavy weaponry used. understand something in freedom and fairness? ukrainians,ans kill i believe this is as close to civil war as you can get. >> vivendi earnings exceeded estimates. revenues climbed in its pay-tv business. they have announced more than $30 billion of assets to focus on media. >> japan's economy grew at the fastest pace since 2011 in its first quarter. consumers and companies wrapped up spending ahead of a planned sales tax increase. 5.9%rew at an annualized from the previous quarter which far exceeded estimates. >> coming up, it is gdp day in europe. find out what is behind the continuing underperformance of france and italy. pimco's andrew balls joins us after the break. ♪ has suffered its worst mining disaster. you're looking at live pictures from the rescue effort to try to save miners still underground. joining us is executive producer of bloomberg turkey. tell us about the number of deaths. i gather they keep on rising. >> so far, 283 people have been -- have died. that number is expected to rise. according to government officials there could be around 150 miners still trapped inside. that is an agonizing wait for the friends and family of those still missing. rescue efforts are ongoing. a few hours ago the energy minister said there are around 500 rescue workers at the scene and no more is needed as it creates chaos. min, what is the reaction in turkey to this disaster? >> this has created angry protest. yesterday as prime minister avalon emerged from his car, he was booed by protesters. he had been criticized for being insensitive at a press conference yesterday. he said explosions like these happen all the time. it is not like these don't happen elsewhere in the world. then he started rattling off a list of global mining disasters since 1862. this has created angry protests in istanbul. elyse used tear gas and water cannons to disperse protesters and today trade unions have called for a national strike. >> simin, thank you. >> let's take it back to europe. the biggest economies are diverging. again in germany has been upset by an unexpected surprise from france and italy. let's get reaction to these gdp figures from andrew balls. andrew, how worried should we be that italy is back in the negative and we are having this divergence between germany, france and italy? >> italy flat again. france flat, not a lot of growth after several quarters. overall, if you look at the eurozone as a whole, it is going to come in close to trend growth , about 1.2% annualized. it is likely we are going to be there for the next few quarters based on the pmi. the country details -- netherlands is weak. the country details are important but overall, i would say you do have an improvement to trend like growth. spain doing ok. some of the smaller economies growing. there is always going to be the divergence. overall, trend growth is a big improvement on where we were the last few years. >> what about the growth in france? there has been none for the best part of two years. the president has said only recently the turning point has arrived. it clearly hasn't because there is no growth. >> i think that is right. in france, italy, countries that have not done much in the way of reforms, pretty flat in terms of activity. if the overall eurozone is improving, trend like growth is better than where we were. you would expect over time some improvement there. the inflation data today, we are going to see the confirmation on inflation. low gives the ecb room to act. anyone who is pointing to stronger gdp data is a reason to hold off. the data is not providing much support for that. >> what are we expecting in terms of mario draghi's next move? will it be rate cuts? will it be more money going to the banks? >> i think it is all a bit tinkering at the edges. i think they will cut rates a little bit. it looks like consensus now that they will go to a slightly negative deposit rate. somethingo, maybe aimed at lending to small companies. i don't think any of this is going to make that much difference. it takes them a long time, the ecb. once they cut rates, once they have finished with the conventional stuff, there is the prospect of qe. continueslation data to be weak, there is the prospect of qe over the next six months. growth data which is ok but not that strong, means that there is strength in the argument for them doing quantitative easing. not that europe is in crisis but aimed at the fact that inflation is very low compared to their own forecast. >> the prospect of qe, is that going to push periphery bond yields continue really -- continually lower? >> the level of yield is low as you say. the spreads, there is still some room for compression. not just government bonds, but more broadly credit assets in the periphery. if the prospects of qe are increasing, you can see more room for compression of credit spreads. , after multiple years of recession, just getting back to trend, not strong growth here. low, that inflation is so i think there is a pretty good case they may get their, better than 50% chance that they do get there. it does take time for the ecb to build consensus. >> as deputy chief investment officer at pimco, what are you doing investment-wise? how do you play out the euro? what mario draghi needs is for the euro to become weaker. >> i think european peripheral assets look pretty attractive. we are overweight italy and spain. , andrticular, slovenia looking for good opportunities across the board including banks and credit. what you want to do is have positions you think will work well in quantitative easing. there is potential for it to work better if the ecb does start to buy assets in large size over the next six months. >> those dynamics aren't exactly improving in the eurozone. do you not worry about that? >> there is a lot of debt. what does this mean? it means that the ecb is keeping rates at a low level for a very long time. qereinforces the idea that can be helpful here in terms of the stability of the eurozone in addition to inflation. if they can have something like nextminal growth over the three to five years, it is not terribly exciting. i think that can lead to stability and some very slow deleveraging in the eurozone. i think there is going to be more restructuring of debt in the eurozone over time. to the public sector, the , incial creditors, portugal a much quieter way than greece, i think we'll see more than that over time in the eurozone. it is something that shouldn't impact private sector holders of debt. >> we have been chatting a lot more about where we can envisage growth and perhaps other exciting levels of growth. do stay with us. we will be back in two minutes to talk all things new neutral. ♪ film festival kicked off with the movie "grace of monaco." the biopic stars nicole kidman as grace kelly. the royal family called the film totally fictional. here was nicole kidman's reaction. >> obviously i feel sad because malink that the film has no ortoward the family grace. i still have respect and i want them to know that the performance was done with love. we will bring you more on the business of cannes with an exclusive tour of the film market. >> do you fancy that film? >> totally panned. give it a miss. >> time for hotshots. it is not a sport for the faint hearted. professional free runners push themselves to the limits, jumping through rooftop gaps. baby form flips -- they perform flips over power blocs. a beekeeper from china smashed his world record by sitting with the top half of his body covered with bees for an hour. he had no protection for his eyes, his mouth or his nose. imagine the itchy nose. he said he has grown immune to the stings over the years. would you do that? >> absolutely not. that looks disgusting. no thanks very much. >> keeping your mouth shut, your eyes shut, your nostrils. let's move to pleasanter pictures. jonathan ferro. >> pleasant or not quite? i won't get excited about the equity markets today. they are doing pretty much nothing. the story today is in the data. italian gdp, negative. france gives us nothing. dutch gdp, negative. germany, 0.8% growth. look what it is doing to the bond markets. the ten-year, 1.36%. we have dipped below 1.4%. the euro, lower. 1.3667. the ecb, what are they going to do next month? the market is expecting something. >> adidas products, we take you inside the innovation lab. we will bring you and ask was of interview -- an exclusive interview with the chief executive. ♪ "> welcome back to "the pulse live from bloomberg's european headquarters in london. >> here are bloomberg's top headlines. france's economic recovery stalled in the first quarter. tax increases by president hollande squeeze consumers. italy's economy has also performed worse than expected. more thaneconomy grew forecast, 0.8%. >> the citigroup chief executive fired 11 people for failing to prevent or discover a loan fraud at its mexico unit. that is according to an employee memo. it also said the bank investigation continues and more people will probably be punished. >> we have been speaking with pimco's founder, who popularized the term new normal to describe an era of weak growth following the financial crisis. gross says that we are now entering a new phase. >> in terms of investment markets, we have got a new neutral. that basically refers to the neutral policy rate going forward, that magical number, whatever it is, whatever janet yellen and mr. carney and others decide it should be in order to maintain 2% inflation. the new neutral really is a magical number that will drive markets going forward. >> we are back with andrew balls, pimco's chief investment officer. can you elaborate on what bill gross was saying? how does the new neutral differ from the new normal? >> with the development, evolution, new normal spoke about weak growth in the post-crisis phase. a lot of leverage in the global economy, very weak growth. once upon a time it was a bit controversial and it became ready consensus. the new neutral, given these ongoing conditions and the extent of leverage in the global economy is a key part, but also demographics. given these factors, the federal reserve, the european central bank, the bank of england are going to have to keep rates lower for much longer. toentially, something close zero real rates. adjust for inflation zero. maybe over time we get up to 2% in the u.s. but not significantly higher than that. in the u.k., mark carney has said something similar himself. it is likely they are going to be constrained. europe is going to have rates close to nominal zero for a very long time because the economy is not going to be able to grow if you have significant tightening of financial conditions. tightening ofaw financial conditions last year crisis and the u.s. housing market has pretty much ground to a halt. you are not going to be able to get back to the kinds of policy rates we saw in the previous 20 years. the new neutral is going to be close to zero real rates. >> all those mortgage holders on floating rates should be able to sigh a little bit of relief. give us a sense of where we will outperform. states should potentially out perform. >> the prospects are a little bit better. if you have low policy rates, i think that will help validate current market pricing in the credit markets and equity markets, not just for government bonds. low,licy rates are very the u.s. federal funds rate is arguably the most important rate in the world. it is what feeds into pricing models, discount models. if you have low and stable rates there. over threehis means to five years we can see stability in terms of global markets. returns are going to be a bit 5%er than in the past, 3% to overall. selection is going to be really important. it is a multi speed world. some countries are doing better. we are going to be working really hard in terms of bottom-up security selection, credit selection, to try to add credit -- to try to add value for our clients. maybe as you said a boring environment compared to the big asset gains we have seen in equities last year, the big gains in fixed income in recent years. >> risks to markets are lower, you say. what are the big risks still? >> chief among them would be the u.s. positive and negative risks from the u.s. is going to be the key thing. china is very interesting. china has had a big buildup of leverage in its system. its own shadow banking system has grown to really significant size. china, over three to five years, is going to be trying to reduce the leverage in its own system or at least cap the growth of the shadow banking system. outlook, our outlook would be for broad stability. weak growth, weak inflation, probably an active ecb. if europe does tip back into much weaker growth, concerns about sovereign risk certainly could return. in europe, very low inflation, the prospect of ongoing -- if you have deflation in europe, this just makes the leverage issues for governments more difficult. i think that would be a key source of risk in the eurozone. >> thank you for joining us, pimco's andrew balls. later on we get more reaction to today's gdp numbers. >> we will. we will be joined by david allen's, chief european -- david owens. also, a bloomberg exclusive. we are live with the chief executive of ideas. the german sportswear giant faces intense competition from nike. in a bid to gain an edge over its rival, adidas is constantly innovating. david tweed went inside its innovation lab. >> if the company is going to fend off its biggest rival, adidas's products have to be cutting-edge. this is the room where the products are perfected. this robot leg helps adidas simulate kicking a ball in controlled conditions. and itcold, wet or dry hits the same every time. >> the reason for this machine is repeatability. no player in the world is able to kick the ball 100 times in the same way as we need for our study. a ballteam checks have responds when struck and how it flies through the air using video and radar. then there is the boot. hasach side of the triangle a special target. this one is specially for breaking. football is not only straightforward. it is about change of direction. >> using information taken from the astroturf, the innovation team compare how different foods react to movement and forces. this next test is designed to the -- to keep adidas athletes injury-free. it is not sports science that stands out as inspiration. >> the motion capture system was developed first by the gaming and movie industry. reflective dots are placed on parts of the body. a computer maps the appellee's skeleton, examining the forces applied. >> we are comparing product a to product b. you can say product a is better or product a is better than product b. >> then there is the climate chamber. with temperatures ranging from -35 to plus 50 degrees centigrade, adidas puts its products as well as its interns through the paces. for this summer's football world cup, teams sponsored by eddie does will wear shirts tested in the chamber. >> it is highly light weight without compromising on performance. our athletes will sweat but we are going to provide them a garment that will stay later. das wearing team could prove the science was worth it. >> david joins us now from adidas headquarters. what innovations are you seeing on the campus? >> one of the things i think is interesting about being here on the campus -- i am in this administrative building but it is also a building where they have designers working on top-secret designs. everywhere that you look around here, there seem to be reminders of the innovation that is part of the history of this company. here you can see. corner,e top left-hand he is with the german football team. that is the national team. the idea was he was right in there talking to them about what their needs are. that is why we, adidas, this is written there, to remind all these employees about the history of the company. that is why we must make sure we are on the bench. somewhat ironic when you consider it. but he does as reminding -- adidas is reminding their staff, we need to be right there on the bench with the athletes. can't eventhletes tell them what they need. they need to observe. >> what is the atmosphere like a ahead of the world cup? be there is this sort of sense of a build up. they have just launched the new battle pack, the world cup football boots which are going to be used. this one is similar to the one that nessi is going to be wearing. it is designed for a really fast player. it is so light, i give it to the cameraman and he said, mama mia! it shows you the sort of innovation which is taking place in the world of football boots. of really do get a sense quite a bit of excitement as adidas is building up to this major launch of its world cup marketing initiative. i will be talking to herbert hainer about that in about half an hour. >> we look forward to it. no need for me to promote it. herbert hainer and david will chat in about half an hour. we will see you later. >> up next, survival of the fittest. tells usf tough mudder how he is fighting off competition. the family behind the franchise. as manchester united gets ready to report results we take an in-depth look at the family behind the team. ♪ mileugh mudder is a 10 military style obstacle course. when it launched in 2010, it was a bit of a novelty. today there are dozens of mud runs. the ceo tells us how it is fighting off the competition. >> what is tough mudder? >> it is a challenge that you do with your friends. it is about teamwork. it is about having fun. you have to climb walls, crawl under barb wire, run through a field of electric wire. anyone that tells you starting a business isn't a very scary thing to do is lying to you. professors were very clear with me, this is a bad idea. people are not going to pay to run in flames and crawl in the mud. we launched in 2010. we had three events with 20,000 people. year over 280,000 people participated. one of the things we saw two years ago was we weren't getting the repeat rate we wanted. we did some market research. we had to have new obstacles. that meant we had to take out some of the old obstacles. i had real fear when i did that. the new obstacles were very exciting. flying through a wall of flames that is six feet tall. we are starting to get this loyal tribal following. that number is growing even quicker. i used to tell my wife when we were getting going, ask months from now i think things will calm down. i stopped saying that to her now. >> the only bit of that that appealed to me was the beer at the end. i could see you doing that. tempted.aguely a lot of my friends have started doing it. they love it. my only issue is i might want to go abroad. it might get a little cold in england. >> this ubs, you come down a slide and you are greeted by a flame. is that really what you want to do? >> and imagine my eyelashes singed. i can imagine the upside. >> 20 pints of beer. >> and the camaraderie. >> we should do it as a bonding process. >> ok, i dare you. >> let's take a look at a slightly less fierce sport. manchester united releases its results later. tois a good opportunity spotlight the man who owns the franchise. bloombergned by our billionaires reporter and jon ferro is here. tom, let's start with you. for those who don't know, who are the glazers? >> it is an american family headed up by malcolm glazer and he has kids taking over the operation. they are the public face, the guys who turn up the traffic. >> very rarely. >> there is bitterness in your heart, mark. what about the holdings? how much of the stock do they own? >> they now own 58% of the company. that is a stake worth about $1.7 billion. it is a big chunk of their fortune, around $45 billion for the whole family. >> mark barton is a manchester united fan and the first thing he said, very rarely seen. that is the problem, they are not like. you talk to a manchester united fan and they will tell you that. >> look at the figures. is $366 million. they paid out interest and other financing costs. that money, as a fan, you would have wanted to go to biting new players. is why they fans are in the problems they are in. they have taken a lot of money out of this club. >> that is sort of the problem. they are not necessarily manchester united fans. money spentt want on players, wages and keeping ticket prices down. >> as an italian, there are some millionaires -- berlusconi is one of them. is he better liked by italian football fans? >> maybe not now but over the last 20 years absolutely. tom is talking about manchester united being run as a business. for silvio berlusconi it wasn't about making money. it was about dominating european football. things have changed to some extent with financial fair play. a lot of these billionaires have no choice but to change their approach. maybe the future is not the kind of guys that are worshiped by fans. maybe we have to get used to the likes of the glazers. >> are the figures holding up? today we get third-quarter sales. the damage from last season hasn't yet been factored into the figures has it? will the damage filter through? 50you're going to lose million straight off the hat. it is kind of this -- perhaps it is just a blip. perhaps this is the start of a more terminal thing. >> what about the prospects of the glazers selling off? it has been talked about, hasn't it? does there come a point when the glazers would selloff? >> i think it more depends when it makes sense financially. at the moment, man united is a fantastic brand. they aree know is going to lose the champions league money. we also know there is going to be less tv revenue this year. they are not going to get as much as they would. that is mid-table. the other unknown is what happens with the sponsorship deals. they signed a big one with chevrolet. another one hasn't been signed yet. nikeat being put off or is starting to say, maybe we don't need to pay that much? >> a lot of the sponsorship deals all multi-year. they will last for a number of years. last year, still 127 million. that is 30% more than chelsea. -- they are the third most valuable sports franchise in the world according to forbes. they have a fan base of 650 million worldwide. the structure is in place but it is quaking. >> you are holding on, aren't you? only team in europe that probably had a worse season -- >> a lot more successful than manchester united. >> we are not going to go there. and our billionaires reporter as well. ♪ >> [indiscernible] solar farm could be in space. an agency is planning to build an orbital solar farm. space-based solar collectors could generate power 24 hours a day. the project is planned to begin around 2020. >> india may recommend utes on solar imports. more than 20 overseas suppliers sold equipment in india for as little as half the cost in their home market. india is asia's heard biggest solar market and if it imposes duties it may escalate a growing global trade dispute in the market. >> washington state in the u.s. may be experiencing a modern day gold rush. hydroelectric power. the northwest state is attracting bitcoin minors. need powerful computers to solve math problems that create the currency. washington has some of the lowest electricity rates in the u.s. it once cost less than two percent -- less than two cents per kilowatt hour compared to the national rate of 12. >> for those listening on bloomberg radio, the first word is up next. for our viewers, a second hour of "the pulse" is coming. we have an exclusive interview with patty dost -- with adidas chief executive herbert hainer. we will be discussing all things economic growth area >> we have the chief economic economist at jefferies. gdp numbers are set to cross bloomberg any minute now. ♪ >> game plan. our elusive interview with the ceo of adidas. >> two speed europe. france unexpectedly stalls. eurozone data. --rescue workers better fire battle fire and gas to save those still underground in turkey. we are live from the symbol. stanbul. good morning to our viewers in europe. welcome to those just waking up in the united states. >> this is "the pulse." live from london. let's get to the breaking news. it is a mess for the eurozone. >> we have gdp data. the eurozone grew by 0.2% in the first quarter. it is below estimates. it is growth. .ermany beat france disappointed, italy disappointed, the netherlands disappointed. >> looking at inflation, that all-important number to mario draghi and the markets, coming in as expected. the euro was little changed. >> we saw the netherlands in negative territory. number.cted a weaker , it confirms what they have already seen. outlook.eing the , whether from now their base case scenario plays out. those gdp numbers today are not the dealmaker or dealbreaker. it certainly adds to the debate. >> the debate is leading us where? where is it leading the ecb in june? >> down a road it probably did not want to go. unconventional tools. on the bit controversial side of buying government bonds. week islearned this that the german central bank has given a conditional nod to using the unconventional tools if the outlook on inflation does worsen. that next set of economic projections from the ecb could be the game changer for what they do next. they could be trying to fuel lending, by asset-backed securities. the deposit rate could go negative, right? >> yes. ecb action is not a done deal right now. but which tools do you reach for first? you could still cut the refinance rate to rid you could take that upon that -- deposit rate negative. >> thank you very much indeed. staying on gdp and japan's economy -- it grew at the fastest pace since 2011 in the first quarter. consumers and companies ramped up spending head of a planned sales tax increase. from theat 5.9% previous quarter, which far exceeded economic estimates of 4.2%. >> and a couple of minutes, we have a bloomberg exclusive. david tweed is that the adidas headquarters. we are looking forward to this interview. gdp,so, particularly on because i have been drawing the comparisons between adidas and the german economy, there are so many comparisons to make. the german economy is a next or lead economy. that is one of the reasons -- export led economy. the is one of the reasons comparison works. export aroundes the world. adidas is a big innovator, along with german companies. that is one of the reasons they have been able to succeed so much. i'm very happy to be here at adidas. it feels look a pretty typical german company, except for a couple of things. >> just elaborate on that point. what is it like they're compared to the other german companies that you have been to? one of the things about being here is that it is very casual. that is not typical of german companies. here at the headquarters, the average age of the people is only 30 years old. there are 75 different nationalities working here. you get that sense of energy when you are in here. particularly with the world cup coming up. footballof the new boots that have been launched this week. i will be asking mr. hainer about clues about the marketing campaign they have coming up. let me just touch on something else. there are other similarities. the question as to what is happening in the second quarter, what is happening with the russian economy? what will happen with the ruble? this is something all german businesses are worried about. what is going on with china? this is an area for adidas. there is a lot to discuss. i will be back in a few minutes. david willeminder, be live with the chief executive of adidas with an exclusive interview any second now. do not miss that. >> do not. here is what else is on our radar. dixons has agreed to merge. the deal brings together two big british companies. the new company will be called dixons car phone. >> the russian foreign minister slidingt the ukraine is into civil war. we spoke to him in an exclusive interview. >> there is a war, a real war. conducive something to elections, i don't understand something. ukrainians,ans kill i believe that is as close to a civil war as you can get. >> citigroup chief executive fired 11 people for failing to prevent or discover a $400 million loan fraud at its mexico unit. that is according to an employee memo. the investigation continues and more people will probably be punished. >> let's turn to turkey. i have suffered their worst mining disaster -- they have suffered their worst mining disaster. joining us now is the executive producer of bloomberg turkey. the number of deaths keeps on rising. >> it is an absolute tragedy. lost --282 minors have miners have lost their lives. government officials say the could be 150 miners still trapped inside the mine. the rescue efforts are ongoing. the energy minister said there were 500 rescue workers on the ground and no more were needed because the just created chaos. >> what is the reaction in turkey to this disaster? this disaster has sparked angry protests. yesterday, the prime minister visited the site. he was booed as he emerged from his car. he has been criticized for being extremely insensitive. yesterday, he said explosions like these in these mines happen all the time, it is not like they have not happened elsewhere in the world. then he started reeling off a list of global mining accidents since 1862. this created protesters to come onto the streets. they were dispersed by police using tear gas and water cannons. said, trade unions have that they were going on national strike for one day. >> thank you. the executive producer of bloomberg turkey. >> still ahead, a bloomberg exclusive. we are live with adidas gq --chief executive herbert hainer . >> the battle between nike and adidas. you can read the story online at bloomberg businessweek or businessweek.com. it is on newsstands tomorrow. ♪ >> welcome back to "the pulse." .ive from london let's check on the currency markets. series of low pieces of gdp data from countries within the euro zone. most have come in below estimates. france missing, italy missing. comments from vice president of the ecb also pushing the euro lower today, as he said policymakers are prepared to add further monetary stimulus if needed. ecb leads to next month's meeting, when they are expected to add additional stimulus to the economy. what types of stimulus? the euro down to its lowest level in 11 weeks against the dollar. >> let's get to david tweed. he joins us live from the adidas headquarters in bavaria. you have a special guest forest -- for us. >> i do. i have the chief executive officer of adidas, herbert hainer. we have the world cup just beginning on june 12. what i am interested in is the last line you had in one of your press releases for the first quarter results, get ready because we are about to unleash the most exciting campaign in adidas' history. give us a few hints. what are we going to see? the world cup campaign will be the biggest world cup campaign which we have ever met. it will be young, it will be fresh, it will be different, it will be fun. and it will be come a to a certain extent, provocative. the bestefinitely be we have ever done. i'm quite excited about it. adidas' salesor because some are disappointed with the first quarter sales. themuch does one depend on success of this campaign for the success of your whole year and the targets you are looking for? was not ast quarter good as the first quarter in 2013. this was already expected. we guided it to the financial community. price in the next few days moved up. this had to do with the currency valuation. , the second,ainly the third, the fourth quarter will all be better. these will be influenced by the world cup. >> we have been having a look at the battle pack ad. it is setting up this whole idea of the battle that is going on. battles also a corporate with nike that is going on. tell me about it t. you are the sponsor of the fee for world cup. -- fifa world cup. what extra advantage does that give you? >> first and foremost, we have to say that we have this strategy. players, teams, and events. with this strategy, we are also very present on every big event info all, be a champions league, be it world cup, be it european champions. you never know how many teams you have in the game. it all depends on the qualification. prognosiscan exactly it. the advantage to introduce the official match ball. we will sell more this year. we have all the referees, the ball boys. whatever number of teams we have , we will be extremely present. in addition with the teams and individual players, we have key players. you name them. you definitely will see adidas everywhere. fromwe have said already, a commercial aspect, 2014 will be the most successful year in the history of our football business. >> let me ask you something else. i am interested as to how you since 1994 when nike entered the football arena. they have turnover in the last financial year -- $2 billion. you are still ahead. when you look at the success that they have had, do you go back and think to yourself, what did we do wrong, how did this happen? >> i don't think we have done anything wrong. we are still the market leader and we will keep our market leadership. when you just look to the last big tournaments, spain became world champion, european champion. the last champions league winner is by munich. >> but you might be still ahead, but think about it. here is a company that was not present in football in 1994 and now it has more than 45% of the market. you have to give it to them. >> this is a time period of 20 years. they are heavily investing. because they have to get in on the biggest sport in the world. this is a head-to-head race. this makes both companies better. >> let me ask you -- you mentioned the heavy investment -- i am interested in why does adidas have an eight percent share in munich. how does that fit with your core strategy and business? stake, thebought the main reason was because there is no other team where we are so close. there is a history of over 50 years with all of the key players. this has continued. they had an opportunity at that time and we said, yes. we also said from the very beginning, this will be the only time we buy stakes in a football club. so far, it has been quite successful. they had developed extremely well. it is one of the best performing teams in the world and one of the best financial driven. unusuales seem to be an deployment of capital, given that your head-to-head with a company that is spending a lot of money on marketing. >> yes, but you also have to look first and foremost at the other stakes have been bought by other companies and they have pretty much higher price. news for you coming up, i believe it is your birthday coming up, 60 years old. where will you be celebrating? in brazil? >> no. back in germany. i will celebrate with my family. >> you have extended your contract until 2017. that will be 16 years at the helm of adidas. give me a clue about your philosophy of being a chief executive. is it something that you need that stability or do you think that sometimes you need to have more change going on with the leadership of the company? thinkst and foremost, i we have really developed into a global international powerhouse in the last 10 years. is to bringy jobs the next generation of leaders into the company for the future. we have started already in october of last year. announcedhis year, we a new board member as well. we are bringing step-by-step international talents into key leadership roles. this will continue over the next few years as we make sure that the company also performs well after may. >> herbert hainer, thank you very much indeed. what is the date you are starting this campaign? >> you are welcome. you will see you next saturday on the champions league final. >> that is the one i will be watching for. i'm sure you will be watching as well. back to you in the studio. great interview. i'm amazed. 60 years old. he looks amazing. >> he does not look a day over 50. >> doesn't he? >> it has been a big day today. gdp day in europe. the supporting data. how will it interview mario draghi? we will ask the chief european economists. ♪ >> let's get to one of our top corporate stories. dixons has agreed to merge with carphone warehouse. this brings together two companies with a combined revenue of 12 billion pounds. the company is going to be called dixons carphone. dixons is the bigger company. its sales.doubled car phone is half of that. the expertise they have and growth opportunities. this is why they're going to combined together and have a huge presence on the high street. the u.k., greece, scandinavia as well. consumer-electronics, the space, the tablet space, the mobile phone space is shrinking -- we're not buying a cd player, dvd player, all of these things separately. we are buying one item. that is why it is shrinking. more competitive. .com.en you have ao you can buy are washing machine online. you are not walking into a dixons as much as he used to be. you do need to actually visualize these products. when you have products like the coming ontoision the market, you need to see this, touch, feel. >> do you touch, do you feel the curved television? >> i like a bit of spatial awareness. i like a bit of salesmanship. i want some adjourn may, to win me over. >> i like the whole concept of merger of equals. will ownsaying they 50% each. the it comes to personnel, cfo.s ones are the ceo and they say they will run it together. can you have the deputy ceo and the ceo running a company together? >> many investors are hoping. dixons is turning negative on a share price. coming up, mario draghi's next move. we will take a closer look to rid -- most of look. ♪ . >> welcome back to "the pulse." >> here are the top headlines. citigroup chief executive michael corbett fired 11 people for failing to prevent or discover a $400 million loan fraud at its mexico unit. employeeccording to an memo. it also said the bank's investigation continues and more people will probably be punished. >> russia's foreign minister says ukraine is sliding into civil war but will make it impossible to hold elections may 27 -- the 25th. >> there is a real war with heavy weaponry used. if this is something conducive to free and fair elections, then i don't understand something in freedom and fairness. when ukrainians killed ukrainians, it is the lowest civil war you can get. russia is. said behind the unrest in the eastern part of ukraine. a russian separatist groups there were excluded from unity talks that started in the capital yesterday. iseurope's economy underperforming. eurozone gdp data has fallen short of forecast coming geeking out slight growth -- just eeking out slight growth. >> take a look at european markets in trading. the ftse 100 just dipping into the red. twode highs on the ftse all-time highs in the u.s. today is not about equity markets, today the bond market is doing the talking and the story is in the eurozone data. germany delivers robust growth, we know that. italy and france miss. the netherlands mrs.. portugal mrs.. contracting economies five years after the crisis. what does that tell you? there's were to do. many expect the ecb will do something. look at the bond markets. record lows in spain and italy. what is the ecb going to do? high.ations are very look at the eurodollar, three-month lows. not a done deal. the bond market expects something, as does the euro. wait for is got to cpi and the outlook for inflation. mario draghi has done the talking instead of the outlook for inflation worsens, the action will follow. june 5, that is when the big one is. >> they do. in just 25 minutes time, it is "surveillance" with tom keene. he joins us with a preview. you some great guests lined up. >> we're going to look at the new book by steven levitt who will join us. at thinking like a child. "think like a freak" is the new we will lookp across all of economics, the slowdown with europe and the new low yields. we will look at gold. edward maureen will join us. the big news overnight is a article on income equality. >> and looking at the memorial using them. it has been a long time coming. >> it has been along time coming. that is as likely right. this is hugely emotional in new york city. the president will visit downtown manhattan today. michael bloomberg, of course, a gentleman we work for the former mayor of new york, will introduce the president. city newspaper in new york is trying to get through the emotion of this day. i can't begin to convey the deep emotions is this museum opens, part memorial and part almost learning tool of a horrific day in 2001. >> the memories come flooding back. tom keene, we look for to joining you in 25 minutes time. >> let's get back to the foreign gdp. growing at a rate of 0.2%. looksesident mario draghi set to push ahead with measures that could range from rate cuts to quantitative easing. for more, we're joined by david owen. >> hello. >> there was growth it eurozone. some economies did not grow -- france and the netherlands saying. what is your early read through to the numbers we witnessed today? >> we haven't seen the macro level that we've seen in the u.k. or the u.s., so the building blocks to build a sort of sustained recovery or strong base recovery simply were not there. it seemed encouraging that the eurozone has recovered at all. it's not a surprise to get one to supporting quarter. or eurozone probably grew will have grown in the second quarter, but not a strong recovery. to beion in may is likely .5 or below. put more pressure on mario draghi to do something at the next meeting. >> .5%, way off the target. what is mario draghi going to do? is he going to use traditional tools or go -- he is under pressure. done should've quantitative easing when he took over the ecb in 2011. we have already seen asset markets, spreads, conditions improving. quantitative easing is probably not on the agenda now. taking the overnight deposit rate negative almost seemed like a done deal. the other thing they're looking at is the -- particularly, -- this is also really important. what they can tell the markets in a sense is, banks can lend from us basically zero four, let's say, for years. messageanother strong to the market. we're not going to be in a position to raise rates -- guidance.ut forward >> a keynote speech he made in the netherlands, they're moving or perhaps thinking about less meetings a year, less press conferences. that would be a really good thing. and publishing the minutes. maybe the overall vote. -backed about asset securities? >> is a great idea, but who owns -- that won't directly deal with that problem. with abs does make sense. --this point it looks more the point is, the rates and eurozone are on the floor and they're not going to get up for a very long time in order to try to get the currency down. that matters hugely to france and italy. gdp posted disappointing figures this morning. they're more impacted by the currency. they will be pushing for this, let's say, more than the germans. andrew balls on from pimco and he seemed optimistic about the future saying we're going to get growth. europeaning away from investment right now. there are opportunities to be buying. are you positive on european history and assets? >> the financial markets, on the stocksand italy -- the are not going anywhere at the moment. the outlook is not particularly encouraging. in terms of financial markets, let's say they cut the rate and come up with some target scheme and further angered of expectations along the curve. the christie starts falling. -- the currency starts falling. people would be targeting even lower -- you can see that playing out. that view is -- the other thing that is key for the ecb is the asset quality review. what they also need is the banks, need to raise the capital before they publish the results. >> and fix with what they can't publish these results -- -- >> they can't publish these results. there's got to keep everything sweet between now and the end of the year. hopefully, the currency goes down. >> a balancing act. david owen, thank you very much. >> coming up, robots, radar, and 3-d simulators. we will take you inside the innovation putting the world cup products through their paces. ♪ >> the world cup campaign will be young, fresh, different. it will be fun and to a certain extent, provocative, but it will definitely be, in my opinion, the best. i am quite excited. hainer was herbert speaking to us, unfairly, about to turn 60. he looks pretty good for. stating with adidas, the german sportswear giant faces intense opposition from nike. in a bid to gain an edge over its rival, adidas is innovating. david tweed when inside its innovation. >> famous for three strokes going to send off its biggest rival, the one with the tick, adidas products have to be cutting-edge. this is the room with the products are perfected. this robot leg helps adidas simulate kicking the ball in controlled conditions. hot or cold, wet or dry, and it hits the same every time. >> the reason for this machine is repeatability. how they can kick the ball 10 times, 100 times in the same way as we needed for a study of ball flight. >> they check how it flies through the air with radio and radar. and then there is the boot. of the single site trundle has a special target. this one is especially for breaking. about change of direction. >> using information taken from plates but need the astroturf, the innovation team compare how different foods react to movement and forces. this next test is partially designed to keep adidas athletes injury-free. but it is not sport science that stands out of inspiration. >> it was developed first by the .aming and moving industry >> reflective dots are placed on parts of the body, computer maps the athletes skeleton, examining the forces applied. >> we are comparing product a and product b and then you can say, ok, product a is better to perform or product a is better than product b is to reduce the risk of injuries. >> and then there is the climate chamber. with temperatures ranging from -35 to plus 50 degrees centigrade, adidas puts its products as well as its interns through their paces. football worlds cup, team sponsored by adidas will wear shirts tested in the chamber. >> it is highly lightweight without compromising on performance. our athletes will sweat, but we are going to provide them a garment that will stay later thanks to the evaporation of sweat. >> adidas wearing teams winning football's greatest prize could prove the science was worth it. >> let's take a closer look at adidas biggest competitor nike with the world cup at brazil only a month away from kicking off, the two companies are fighting for their place on the field. the rivalry is the cover story ago week's "business week at the issue will be on the newsstands tomorrow. brendan greeley wrote the story and joins us now from new york. good morning to you. the competition is heating up between nike and adidas, isn't it? >> it has been for about 20 years now. nike now sells more collegial thanadidas -- cleats adidas. nike says they are the world's biggest football boot brand. if you don't listen carefully, you might actually think they're the world's biggest football brand, which is not true. >> but it was late to the game, nike. i suppose somewhat of an embarrassment to adidas it has come so far in such a short space of time. >> it has done a couple of things. nike got into the game in 1994 when the world cup came to the u.s. heavily invested very in a couple of national teams. brazil is sort of the biggest aero it has in its quiver. it is been driving up the cost of sponsoring a team. france,two years ago, the national team, was up for renewal. adidas paid an ungodly amount for that. it was more than anybody has ever paid for national team sponsorship. france did not do very well in the 2010 world cup. what that says it, there aren't that many contracts up for renewal and the ones that are are very expensive. if adidas holds onto its edge, which it looks like it will for the time being, nike has made it much more expensive for renewals. >> and it is not just about national teams, is it? it is about national leagues as well. they are becoming very competitive. >> i thought it was interesting in the interview that david tweed is conducted, hainer said there's a three-tiered strategy. your players, teams, and events. the world cup and european cup are the two most important events for adidas. it has title sponsorship and has for decades. the problem for adidas, used to be the world cup was the only global events. if you were a german, you watched the world cup. that is no longer true. the national leagues, and particularly barclays premier are muchut also -- more important and they used to be. the premier league championship is a global event. perhaps not on the scale with the world cup, but it is increasingly more important. barclays premier league 825% more money this season than it did last season. made 25% more this season than it did last season. say,ed to be adidas could we're the world cup sponsor and that will never change. and we own the only global event. that is not true. there are a lot of global football events. >> what is the successful world cup for both these companies? they are sponsoring teams, one of them is sponsoring the event, one of them has the world cup all. how do you deem what is a successful world cup bernanke and for adidas -- ruled cut for nike and adidas? >> adidas has always had a line on selling the ball. last time they sold 10 million of them i think. the way both companies talk, and i've spoken to both in the last month, they really have everything writing on -- riding on teams and players. the two companies have each picked a champion. adidas has the argentinian. nike has portugal. sort ofthose players rest on top of all of the other marketing they're doing. it is entirely possible if lionel mess he has a very good cup at argentina doesn't win, adidas could count that as a win. when i asked the head of soccer for adidas -- i said, what would be your absolute best outcome for this summer? he said, i would see a german win. that was partially a business response and parcel of -- an emotional one. >> thank you for joining us. "business week" will be on newsstands tomorrow. >> coming up, more football. ready to report results. what can you expect on the red devil scorecard? that is next. ♪ >> let's get a check on the currency markets. president,e policymakers or prepared to add further stimulus is needed. growth in euro area fell short of estimates. mario draghi saying policymakers would be comfortable adding stimulus. it seems to be in the cards following his comments. today's growth data, today's inflation data once again casting the spotlight on the ecb meeting. a look at what we're watching for the rest of the day. >> we want to get personal. >> we want a little personality in this. i will try to get in the way of you boys fighting. sales set to continue to increase, even though they have had a falling season. >> terrible season, color what you want, you aren't going to see that in the numbers for another few quarters. the position they finish at the table and the tv revenue that comes with that, that is going to be a lot less from the year before. back of that and also what happens with those big sponsorship deals if the team continues to underperform, today, the big news might well be who the next manager is. barcelona and manages netherlands, he is prepared for the world cup right now. i have read stories that he .ould be paid 7 million pounds the speculation is the manager who was just sacked after nearly a year in charge was probably paid three or 4 billion. a tope to be fair, he is guy. he is a serial winner. >> if you want a manager that big players are going to respect, that is the guy. >> and worried you're doomed to fail after ferguson. >> they always said, it is not with the guy who follows ferguson that will do well, it is the guy that follows the guy that does artisan. anyone that follows ferguson who is 126 trophies -- he has 130 in the championships. it is the guy who follows them. following a guy that does terribly. his season was an absolute disaster. >> we have the 9/11 memorial museum. toif you ever get a chance listen to janet yellen, she gives you some fantastic insights the way she sees the world. listen if you get the time. if not, read the story off the back of it. the memorial is one of those events we all know where we were the day it happened. it is about time we have a memorial. >> watching the 9/11 memorial museum dedication ceremony in new york. our u.s. colleagues will continue to focus on this. stay with us. ♪ >> bonds are a bit higher, yields plummet. italy and france show we growth. the united states has key inflation data this morning. it is america's worst nightmare, shopping for new or used car. nike, they may take away the ball from adidas. the world cup is upon us. good morning, this is "bloomberg surveillance." thursday, may 15, i am tom keene with scarlet fu and adam johnson. along morning brief. get a started. >> next data in europe. , however, rises france stalled, italy stalled, the netherlands stalled. ,> the whole thing was tepid tepid, tepid. atin japan, the economy grew its fastest pace since 2011 in the first quarter because ahead -- are spending in other words, there's a new sales tax that kicked in in april so people went out and bought ahead of the sales tx.