carol: welcome to "bloomberg businessweek." i am carol massar. oliver: i am oliver renick. we are coming to you from inside the magazine's headquarters in new york. carol: the uphill battle president trump may face. oliver: we talk about the cyber hackers targeting central banks. carol: the reinvention of espn. oliver: all that ahead on "bloomberg businessweek." ♪ oliver: we are here with megan murphy to talk about some of the stories in this week's issue.

it has to do with politics, it has to do with trump, and potentially tax reform. megan: this story cuts to the heart of the issue. campaign promises and agenda items they thought were going to be easy to get through, tax reform, just the situation they popular onrm is both sides of the aisle. the situation they found themselves in is the coalition they need to stitch together is harder than they thought. oliver: peter always has great analysis. the conversation the past week is since the health-care bill failed, what does it mean for tax reform? what did you like about his take on this? megan: peter always has great insight and analysis, and for trump to think tax reform will be easier than health care reform, we have to put this into context. health care reform was a defining promise of almost every republican for seven years and

collapsed in 17 days. tax reform is something republicans and democrats have had on the agenda for two decades. bringing personal rates down, in particular that corporate rate from already 5% to make us more competitive, is seen as something both parties are aligned by. when you talk about bringing taxes down, you need some way to replace that revenue and getting it to a revenue neutral stage. that is tough indeed. oliver: this is an easy transition, but in the politics section, you look at the balkanization of the republicans. that is what is happening, right? he has an in fight between his party and what each constituent wants. megan: as a former washington bureau chief, we cannot underestimate the ripple effect of what happened with health

care reform. what it reminded people of is journalism, pundits -- it talks about whether the republicans are ready to govern. it talks about how they have been an opposition party for eight years, are they ready to put these agenda items forward they need to get past? they need 60 in the senate. they can only lose 20. this is a real minefield. the trump administration learned some lessons. if that bill had gone to the floor you would see more moderates. oliver: you have great analysis. shifting gears to the cover story, something -- it is about espn. tell us what you found most fascinating. megan: i grew up watching sportscenter. my youth was spent on that. what the story delves into what

has traditionally been viewed as one of the biggest cash cows in entertainment. it is facing threats from something that is facing every other competitor in their space, people are no longer consuming tv and the way they used to consume tv. they are watching on mobile, buying skinny cable bundles, on-demand, on their phones, so espn -- the amount espn has been able to extract is a higher premium price than other cable channels is under threat. oliver: it is fascinating when we see a juggernaut start to rethink its own approach. >> espn is in lots of homes. even with the declines come almost 90 million homes. for each home, they get seven

dollars per month, so that is a business worth around $7 billion a year. that is before advertising and a jason companies. let's talk about espn, because it has been the holy grail for cable for some time. >> cs can is a vertically integrated media company, in the sense that the production and the broadcasting is happening in the same place. you see a zillion satellite dishes on the ridge. it's a media company a little bit apart. it's a good hike from basically where the center of the media you get there and you see this amazing, basically the centerpiece of the espn campus, the studio.

a cathedral.ng in the two sportscenter's together, and there is a glass between them, so it feels like one big room, it is like 10,000 square feet. that is a little bit bigger than the nave, which is the central cathedral at notre dame. it gives you a sense of this business, which is all about the and amazing spectacle of sports. it is one of the few mass cultural phenomenon set exists today. when you go there and see this amazing studio, it was only open two years ago but it feels like a relic of a time when sportscenter and this single , it istion for sports shifting a little bit away from espn. what i think is interesting, you described this extremely cutting edge tech, or at least it was when you built it, hovering displays.

did they go wrong though? why now is it deemed somewhat archaic? -- guest: there is debate about where it went wrong. -- about whether it went wrong. it is pn like they are doomed at all. sellthink the product they and the cable bundle will continue. they point to a couple of things. one is the new over-the-top bundles. companies like hulu is about to do one. they say sports is a universal thing. so we are going to be the one to sell it to you. they are changing their format. carol: sportscenter is changing. >> sportscenter was like the

nightly news, two funny but largely inoffensive people giving you a broadview of the world and a short amount of time. what they are trying to do is make it personality focus. scott van pelt is their big star and midnight. the idea is to create something that is doesn't have that let's just get every single person and america watching us at the exact same time. espn does not think they are doing anything wrong. they think we have lost a few subscribers. we have some challenges on the digital side, but they are not ripping up their format. carol: turning espn's revolution into a cover image was the job of the art director. >> we had a number of different ideas, as we usually do. the one idea that caught a lot of attention and a few laughs

was this idea of the homemade placard like in the crowd that for some reason does not address the team or player, but the network itself. this is a fun interplay with the art direction and the editors trying to figure out new combinations of espn. oliver: there is a lot of -- espn is flashy, obviously, but you guys chose to make it very simple. eliminate everything outside with a simple explanation here. >> the funny thing is people make these signs to get attention, and covers are also meant to get attention, and i'm sure this guy was not expecting it to be on a magazine cover, but it works. it is something that is very sports related and also works for the story. oliver: up next, competing against major rivals.

carol: vladimir putin's most vocal adversary inside russia. this is "bloomberg businessweek." ♪ carol: welcome back to

"bloomberg businessweek." i am carol massar. oliver: i am oliver renick. carol: the man that president vladimir putin may worry about the most inside russia. oliver: i talked about alexei navalny. >> alexei navalny is perhaps the man vladimir putin fears the most in russia. he is an opposition candidate. he is touring the hinterlands of russia trying to get his name recognition out there. he is barred from going on television. kremlin officials try not to say

his name. less than half the russian population know who he is. oliver: you must be onto to something if you are not allowed on russian tv. tell us what the protest movement entails. >> it is all about corruption. he has just put out a film talking about the, really detailing the eye-popping corruption and the money that putin and his supporters have taken from the state. this protest movement happened in 80 cities across eight time zones. that surprised the kremlin, and that would probably surprise navalny too. about 60,000 people came out across 80 cities. about 1000 people were arrested. there is an election next year.

oliver: what is he doing right now if he does not know he will be able to run? what is he trying to accomplish? >> he's trying to get his name out there and get people fired up about what he sees as historic levels of corruption from putin and the oligarchs and supporters that surround him. oliver: when we think about somebody subverting geopolitics and the status quo, we see this happening around the world. are there any parallels with what he is doing, pushing back on the government, versus other populist movements around the world or general subversion of the norm? >> possibly. the message he is taking to the hinterlands, the provinces, the regions is one of economic populism. putin is trying to get the country out of the deepest

recession they have had since he has been in power because of the oil price. he is spending big on defense and infrastructure around the cities. navalny is going to working-class towns all over russia and saying, how much of this largess are you getting? you are a hard-working russian. we should be less focused on trying to restore the greatness of the russian empire and get some of these people a living wage and get them above the poverty line. carol: remember when president trump said he saved 1100 jobs at that plant in indiana? oliver: it is not that simple. we talked about how government contracts played into carrier's decision. >> the plant makes gas furnaces and an electric cousin called fan coils. they are simple technology, especially in the universe of united technologies, which also makes jet engines.

where can you get the costs down? a lot of costs are defined by the global market and the same for everybody, so they believe they have to look for labor costs and being cheaper, and they can find those in mexico, and that industry broadly has been moving not just to mexico, but elsewhere overseas for many years and the other competitors have been moving down there for the past decade, but united technologies was not making furnaces down there. it got to the point where the board of directors thought it was time to ship that production down there and benefit from three dollar an hour wages when they are paying $25 an hour in indianapolis. carol: to go back to that moment where mr. hayes says he is for

globalization and planning to move the carrier plant, then a month later, he is in the white house with president trump and then at the carrier factory in indianapolis saying we will keep these jobs in america. especially for a company -- carrier in itself had been manufacturing in mexico since 1969 or something, so what happened in that month? was it politics and pressure from the white house? >> in a word, yes, carol. donald trump a week or two after the election, he saw an nbc nightly news broadcast in which a carrier worker said, mr. trump we dare you to do what you said you were going to do and save this plan. trump put in a call for greg

hayes of united technologies come and they spoke for less than 15 minutes. trump said, look, you have to say this plan. hayes pled his case. trump did not care really. so if you are greg hayes, you are thinking i will save $65 million a year on this plant, a tiny portion of $60 billion in revenue, and the federal government, partly in the person of mr. trump, has their fingers on our defense contracts, which are many billions of dollars, so although trump never brought up the defense contracts, he did not have to, so mr. hayes turns to indiana and gives them a nice little deal and says, i'm going to keep the plant open, but that comes with caveats. one of the things they promised to do was spend $16 million in upgrades, including automation, and mr. hayes said then and told us again that automation is likely to lead to fewer jobs.

he is still a fervent believer in globalization. he has no regrets about the initial decision to close the plant, and i don't think he has any regrets about this. they hope to move forward from here. carol: up next, berlin's epic struggle to build a new airport. oliver: the central bank's bondable to cyber attacks. carol: this is "bloomberg businessweek." ♪ oliver: welcome back to

"bloomberg businessweek." i am oliver renick. carol: i am carol massar. you can also listen to us on the radio. in the technology section, hackers are beginning to target

regional central banks across europe. >> the hackers target and attacked the weakest link and a network. it is not hard to imagine that smaller banks in smaller countries, poland, but other banks in india, bangladesh, are weaker compared to the u.k. or the u.s., so hackers see those banks as access points for the network. oliver: what is interesting, when you think of hacking into a bank, there are varying degrees of protection. what is it about central banks that has been becoming a target? is there anything ideological behind it? >> this is a good question. there is certainly an ideological attack as well which

pairs with the money central banks represent. when we mentioned some attacks for example by an anonymous, a group of hackers who claimed some attacks against those institutions, it is targeting governments that restricts the freedom of the internet, or they see central banks as a vulnerable financial spot for government they don't like as well. carol: i feel like we are all living in this world where we understand there are going to be hacks on all kinds of institutions, including global central banks, but the point is it has already been happening and is expected to happen even more in terms of cyberattacks to global central banks. >> yes, it is expected to happen more and become more public. if the central banks have been able to hide somewhere or divert

attention when they have been subject to attacks, this will not be the case in the future. oliver: staying in europe and the global economic section, berlin is having a tough time finishing a world-class airport. >> berlin brandenburg airport was supposed to be a fancy, new airport to serve berlin and its growing tourism industry. it was supposed to go online in 2012. four weeks before the plan launch date, they said, well, we can't open. it will not open, and that caught everyone by surprise and it has not open since. oliver: what happened to german engineering? how is it breaking down? >> that is a good question. i could make a lot of money if i knew what is going on there. not a lot of people actually know the ins and outs, but what

we know is this, lots of planning faults, lots of technical faults appeared shortly before the launch dates and in the years after. they have worked for almost five years trying to fix 150,ooo planning faults and mistakes, and they have come a long way, but there is no set opening date, so that it's a big problem for the region. carol: 150,000 planning mistakes, engineering projects, delays, and problems, but this seems extreme. any idea, the people overseeing the project? what seems to be the problem? >> when the airport was starting to be planned there was supposed to be one big construction company basically building the entire project.

the government decided, well, that will be too expensive. we will do it ourselves, and that created a whole set of problems and intertwining issues that weren't coordinated correctly, so in the end, one problem led to another, and now we have this big mess that everyone is trying to fix, so basically the experts are saying the planning company doing this project is lacking the oversight the deep insight into what is going on and that some of the mistakes are so bad that people have said you should actually tear this airport down and build a new one, but of course that's not going to happen. oliver: wow. this is costing roughly $14 million a month. what was the original plan?

were they going to shift all the airline travel to this one airport in germany? what are the main hubs holding up and how well are they holding up? >> good question. this new, shiny airport was supposed to be the one main hub for berlin. berlin now has to bank existing airports. it used to happen three. one was close. now they have one in the western part of the city, and one in the eastern part of the city. in 2006, they used to serve 18 million passengers. today, they are serving 33 million passengers, so air travel has grown massively in berlin. the airport operating company has extended both airports, but the plan was to shutter both once this new airport opened. carol: up next, apple attempts to win over frustrated after they'll of her's. oliver: the struggle to get

lithium out of the ground and into your electric cars. carol: this is "bloomberg businessweek." ♪ oliver: welcome back to

"bloomberg businessweek. i am oliver renick. carol: i am carol massar. trading donkeys in china will soon be as easy as swiping a smart phone. oliver: you will hear about amazon's supersize ambitions for supermarkets. carol: a new gold rush, this time for lithium. oliver: all that ahead on "bloomberg businessweek." ♪ oliver: we are back with megan murphy to talk about some more must reads. this is a bizarre story in the market section, a donkey exchange. megan: it is how and china, the latest in all markets and odd exchanges.

wrong keys is something where the price has gone up dramatically. there is a shortage now, a shortage of donkeys being born. and china, donkey skin is used in medicine. they have become a rare commodity and people are scrambling to exchange them. oliver: it is not a great outcome for the donkeys themselves, but at least it points to the proliferation of markets. another big story that is a conversation about retail, amazon keeps getting its tentacles into everything. you look into their insistence to be in the grocery business. megan: it goes to the heart of stuff people don't know about amazon. we always think about it dominating the exchange of

everything, one click away, right? their insistence on being a bigger member of this grocery market is difficult because you have perishables and that supply chain. what is interesting is they are trying to go backwards and setting up brick-and-mortar stores. they will have live amazon stores. they think there could be as many as 2000 of them, which is a shift, and incredibly sophisticated strategy where everything you buy is through your mobile. they have been able to own sections, and that's what amazon is. if they can become a top five presents in this $25 billion market, that could of been the way we buy our food.

oliver: now that they have beaten this brick-and-mortar stores through online methods -- megan: remember where they started, books. amazon is now so ubiquitous, but they started with books. oliver: a cool story and the features section, the material that powers the world we live in, lithium. you track how they get it and who gets lithium. megan: it is a great story about guys who looked at electric cars and the electrification of the transportation sector and new lithium would be the next material. there's one place in colorado and the only place were you can mine lithium in the u.s., and also the triangle in south america, and now they are poised to benefit. oliver: it is such a cool story.

>> lithium is the key ingredient in rechargeable batteries that power hundreds of millions of devices from hearing aids to electric buses. although it is plentiful, there are 400 years of reserves, it is only found in a few spots around the world. lithium can be mined from hard rock, but it is most efficiently mine from a saltwater solution. so right now, the four companies that have supplied 90% of the

worlds lithium are sold out, so are a lot of startups are rushing into this space in argentina, chile, and bolivia, and also 200 miles from teslas giga factory in nevada, three hours northwest of las vegas. there is a valley called clayton valley containing this brine, and a bunch of startups are staking claims on land right around the area that has been mined for about 50 years. oliver: we basically have a lithium rush come very cool. i want to understand why the rush is happening. you have four companies that could have been on the forefront and had a monopoly on this huge enterprise. what prohibited them? the mining, the technology, a surge in demand? tell us about what happened there. >> it was mainly a big surge in demand, and when they ran out, there was a huge price spike, so that is what has driven these other companies into it. it is not that easy to get out

of the ground. the four companies that have been doing it for a while obviously know how, but the other companies have to figure this out, so it has been hard for everybody to supply the uptick in demand. it has been slow and steady from consumer electronics over the last decade or so, but it is expected to explode as batteries and energy storage come online, because the price of data reason is going down, and the price of lithium is not a factor in it. the price of the lithium in a tesla costs about as much as the roof rack. it is more the price of batteries coming down due to other factors that is making this available to other companies. oliver: with this lithium rush, you profile a couple of commodity chasers. this is an interesting guy. tell us about who he is and how he got involved in lithium. >> he is a real character. he is a geologist. he has been chasing commodities as around north america for 50

years, silver, copper, uranium, a years, silver, copper, uranium, gold. he told me about how he was mining silver and led in arizona when the hunts were cornering the silver market and he thought he would never have to work a day again in his life because loads he was selling for five dollars went up to $25, but they failed in that effort and the price went back down, so he had been mining uranium in utah 7-8 years ago, and the price of uranium went down, so he started looking around for what might be next. he was one of the earliest people to recognize the coming demand from electric cars and battery storage, and so he looked for lithium and clayton valley is the only place in north america where it is being produced. he lay down 24,000 acres of claims under the general mining act and sat around and waited

for the phone to ring, and it has been ringing off the hook. carol: apple wants to make its app store more developer friendly. oliver: we talked to alex webb. >> last year was the first year apple revenue declined. that means it has to convince investors it is more than an iphone company. you they have hundreds of millions of devices around the world and they are realizing they can sell things through this. the app store is the biggest kind and they are doing more to please developers so they keep building apps. oliver: apple made developers conform and a lot of developers did not like that. it is hard to work through some of their requirements, so is it about having to create a new revenue stream and bring people in, or is the pressure from google and android keep the good developers? >> there are two sides. on one hand, they are getting more revenue from the app store.

if you subscribe for 12 months, the cut apple gets his cut in half. the other side is making it sticky, a word people throw around a lot could what makes it hard for you to trade in your iphone for and android? the more they are you pump in, the harder it is to trade for a competing device. one of the things that came up is black box. they are increasingly giving more data to developers to inform their business decisions. oliver: they were keeping the data pretty close to their chest. what does it look like in terms of what they are changing to make it more amenable to developers?

>> the huge complaint was the amount of time it takes to turn around an app. it can take one week to 10 days to approve that app or update an existing one. there is a huge turnover, a long cycle to do that. they cut that down to less than two days. heavier automation, but that allows developers to be more innovative and try out new things on a faster basis. oliver: are they worried that there will be a dilution of the quality of apps compared to being able to go on the android store? >> they seem to have been able to maintain quality levels. apple managed to accelerate the pace with which they approve an update new apps without making compromises on the quality.

oliver: up next, mexico's plan to revive its oil industry is met with protests and pistols. carol: this is "bloomberg businessweek." ♪ oliver: welcome back to

"bloomberg businessweek." i am oliver renick. carol: i am carol massar. mexico's oil minister once through five the industry. >> in 2013, the mexican oil industry open to allow for private entrance, so exxon, chevron, bp, statoil winning blocks to explore for oil here,

so this story in particular is about some onshore blocks. mexico has a large population of indigenous communities throughout the country, so now some of these blocks are starting to be slated to be explored in the indigenous regions, and that is creating an interesting dynamic, which is private oil companies coming to do work in these communities where the government has to get approval to proceed with the projects. oliver: let's talk about how that is impacting these regions. has the introduction of these new companies, are they now bringing jobs, a certain degree of industry to areas? what is the push back here? >> this is the first conflict of

its type where there is a community that actually is now starting to rise up against the idea of a private company coming in and exploring for oil and or drilling for oil in their land, but in these rural areas, particularly in the south where protests are constant and historically there has been resistance to government backed projects, i think in those areas in particular we might see some more cases similar to this story coming out. oliver: you mentioned how some of these confrontations have gotten pretty intense. you talk about buildings being burnt down, big groups of people protesting.

what is their solution that they offer? who is the person that is pushing back and perhaps could be the champion for these people? >> in the southern region, particular one state which over 20 years ago had this large movement, antigovernment movement, which coincidentally was against nafta, so it has almost come full circle as nafta again is this hot topic in mexico. so historically that state and some other states in the south as well are opposed to large government overhauls such as nafta and such as this energy reform. in principle, because they feel they don't receive any sort of benefit from these projects that are heralded as these shifts that will bring large economic

benefits to them, so they don't feel like they receive any benefit from it, so i think this is the case, again, in the state where they say you will invite these private drillers into our land where we farm and produce coffee. we have small industries that sustain us, and they don't feel like they are getting a say in it. the energy ministry comes, talks to particular people in the local government, doesn't really inform the local communities, then months later, there is a private oil company operating there. carol: up next, a micro amusement park. we will explain. oliver: the high-tech helicopter that uses augmented reality to fly in the real world. carol: this is "bloomberg businessweek." ♪ carol: welcome back to

"bloomberg businessweek." i am carol massar. oliver: i am oliver renick. you can also catch us on the radio. in the technology section, helicopters at the forefront of hybrid engine and augmented reality. tell us about scott. >> the director of innovation at bell helicopter, a division of textron, they have built a concept helicopter they showed off at an industry show in march designed after the futuristic designs rolled out at auto shows, a concept car approach.

carol: bell, no stranger to helicopters. tell us about this concept. >> the idea was to next priorities for the helicopter industry, greater fuel efficiency, lower noise, more passengers in less space, and trying to automate to some extent the hand controls in the cockpit. oliver: this is removing some of the actual physical effort that goes into driving a helicopter. how much is automated here? hasn't there always been an autopilot switch? >> there are still switches and buttons, but they tried to put as many controls as possible onto a heads-up display and augmented reality system inside the pilots helmet so you can use for his commands or gesture controls.

oliver: i thought that was a nice combination of tech coverage. you mentioned augmented reality. what is the implementation of augmented reality for the helicopter? >> it is a heads-up display mounted on the helmet the pilot is wearing, so they get drop-down menus of commands they can choose from with gesture controls to pick from menus. oliver: sounds like a videogame. carol: we have alexa at home and we can say order me a box of cheerios, but now you can say go right, go left, go land. >> something like that. carol: in terms of technology, you talk about the rotor blades and how they adjust their shape in flight to cut down on friction. they are trying to make it as technologically advanced as possible. >> that is one of the wish list

items on the menu that bell has been developing. they have been able to eliminate the tail rotor why setting up an electrically powered motor in the tail that can generate its own thrust and stabilize the effects. they are working on these carbon fiber alloys that they say will strengthen the pieces of the main rotor such that you can adjust them midflight to cut down on noise, make it quieter and increase fuel efficiency. oliver: who are they doing this for? what is the end user of these high-tech helicopters? >> bell says they don't expect this to make its way into the factory anytime soon. oliver: it is a concept.

>> exactly. they say some of the things they are working on will wind up in production models. carol: they will make their way into retail. >> that is the hope. carol: calling all nerds. oliver: two former clowns are pitching high-tech game parlors. >> it is a unique concept they have going, these two former clowns met up in east los angeles and started tinkering with their inventions and they both love games and decided to put on what they are calling the next generation circus, a high-tech arcade is the closest thing i can compare it to. they are going to open up this space with arcade games that are interactive but have this new tech component. there is a lot of virtual

reality involved. the games have motion sensors. it is a neat concept. oliver: they started as clowns in the most literal sense and now they are being taken more seriously with this business idea. how did they get their background and become this business that people know? you go into some detail about how they did parties and stuff for companies. >> right, that is where the name came from. they were clowns initially and started off as consultants. they would get together and build these interactive games and inventions and bring them to corporate events, conventions, meetings, parties, and they would set up their attraction. people would interact with it and they would take it down. they got frustrated with the temporary nature of this and spend all this time on a game or project, then they would have nothing to show for it because they had no where to put it. it did not have any value beyond

what they used it for in that moment, so they got hooked up with a few companies. among them was intel, and they set them up with their venture arm to set up their business. oliver: this reminds me of the stuff we have been talking about, gaming, augmented reality. i think about nintendo's push into physical games. do people want to be more when they are doing fun stuff? >> that is the idea. social interaction is something these guys are banking on. none of the games -- very few of the games are something players would do on their own. there is a social aspect, a place where people come together. they have robot bartenders who

serve drinks, so there will be drinking, food. this is an industry that has been doing very well. if you look at something like dave and busters, something that is getting more attraction, and their primary audience will be millennials. this been so much talk about that being an experiential generation, so that is one thing they're banking on. carol: "bloomberg businessweek" is available on newsstands now. oliver: also on bloomberg.com. carol: i enjoyed the cover story taking a look at espn. it takes a deep dive into what is going on at espn to address those issues. it is still making billions of dollars. how about you? oliver: i like the story about russian elections and alexei navalny. it is fascinating and offers an interesting look inside geopolitical trends around the

world. carol: good story. oliver: more bloomberg television starts right now. ♪ >> the following is a paid

program. >> thanks, guys. of course. have a good show, everybody. >> the following is a paid program. >> scientific proof that you can transform your skin. >> this is the first day. this is today. >> my god.