>> >> how today's nba stars are learning to score as tech investors. while donald trump is busy in the white house, his sons are running the family business like dad. oliver: that ahead, on bloomberg businessweek. at the

kihestca bash can american -- can american democracy survive? megan: we have always had these attacks from the establishment and in the wake of charlottesville and the racial language used we are seeing explicit attacks and people saying, how parts this damage going to go in what is the experience of other countries. what we are taking a look at is, things may seemad in the sense of traditional establishment edifices are being ripped out. but if you look in the experience of other countries, the philippines, similar establishments, have thrived.

>> we see cycles wave in terms f getting an authoritarian style populace. hungary, many of those are similar. looking at how they map this and where the trajectory and how the citizenship responded is instructive. >> let's switch gear to sports. the golden state warriors and members of that team becoming venture capitalists. megan: i love the story. it is classic. it is nice to cover a corner of the world where things that are surprising are happening and this merger between tech and

sports. this talks about household names, steph curry. venturethis push into funding and talking about how investedtraditionally in car dealerships, restaurant sponsorship deals -- this is looking at how -- steph curry have a slice of interest. what they are doing and how they are being advised. looking at their longevity as investors and entrepreneurs as opposed to just athletes. it is fascinating. >> here is more from ira. >> ecv stores about different athletes investing in startups. i was wondering how do these deals work? i ppened to meet one of the witcharacters, who works h andre iguodala, who has been his fixer. andre has an interest in tech.

>> w did it come to be this relationship? it is not one you would expect to just happen. >> in this case onto iguodala was signed by the warriors in 2013 and was eager to go there. he wanted that proximity. of team is owned by joe lake and silicon valley big shots. techbeen investing in stocks from the outside and wanted to figure out how to get in on the early stage. one of the first connections they made was rudy, his business partner, sent a letter to jeff gordon. jordan hadous, jeff a pickup basketball game. yes to he was. he met him and realized that

entree iguodala -- andre iguodala was serious. from there he started sending witholio companies to meet andre iguodala and rudy to see if there was a connection. a lot of them a did invest in. w unusual is it for athletes to get so involved were they are screening companies and onto printers versus going to venture capitalists and giving a chunk of money? >> there are a few models. andre iguodala is on the far end. a lot of athletes will tell you, step decisions so they are takig part and learning. there are other models where, it is a fund to fund.

an athlete will be a limited partner, gathering the money, bringing the big funds. still allows for introductions to happen between founders and athlete so they can build relationships. >> it is no longer, let me get a star athlete. >> it is not. e and na brand that is a consumer brand. for a while i was told, agents were coming to the valley with that mindset. give us money to represent your company. that is not how it works. especially with an early stage company. they are raising money. they are not necessarily trying to make a consumer product and sell it. they are trying to come up with some innovation that changes the way we do everything it is.

putting businessweek together as a team game and creative director rob vargas led the team that put together this week's nba cover. >>bloomberg conference. e sent the photographer and steph curry spent two minutes. we got good shots and went through them and picked what we felt was the best one. >> can you play around with celebrities? there's a shot, take it? >> we did one move. standingodala was close to the investor. their faces were almost grazing so we had to separate them by a millimeter. that is the extent. >> more people.

>> i like the way it is arrangd because the investors in the middle, it is businessweek. we are used to seeing the guys to the left and right but in this case, taking a backseat. >> he is a very stern, businesslike face. >> up next, is really drugmakers are finding it tough to replace a legendary ceo. >> pop music's sound of the future may be coming from korea with a big boost from youtube. ♪

>> welcome back to bloomberg businessweek. oliver: you can catch us online at bloomberg businessweek.com. >> and the mobile app. korea has always been an influential exporter, think cars and smart phones. you don't think of them as a next order of culture. oliver: that is changing now with the explosion of the $5

korea's rand of pop music. -- brand of pop music. you hope people will tune in to youtube -- that is the premier platform. it is not just music. you have to see the videos. you have to see the acts. is like it is kind of a whole e. line to youtube and watched a couple of videos and when you talk about u2, people are watching these. millions of people are watching. >> some of the biggest artists the more views than than top western pop stars like lady gaga or beyonce. >> i also came across gangnam

style, i remember a couple years ago. >> you remember that. >> i do remember that it did that started were brought our attention to it. >> that was when it went global. has been around since the mid-1990's but then that video, it was the first video on youtube to get over one billion views. it was a korean but it had these choruses that went back and forth in english and korean and a distinctive dance that everyone learned. the guy who sang the song, earned himself a spot on ellen degeneres and then, people started to think, what is this? in china, they had already began to tune in to cape up -- two k pop. pop buta they have canto

korean pop has emerged as the dominant one. >> it is taken off. it is been around for a while. youhave music streaming services that are dedicated to it. >> and bloomberg magazine has a driven by musicians or is there a corporate entity driving it? >> there is one corporate entity that stands out, a company which is, it is bigger than mtv. it is an entertainment company that represents some of the biggest acts like big bang. it has two dozen tv channels, one which is the mtv of asia. it puts on asia possible biggest award show every year and it started doing this k-c time, an.

there are others. everyone is riding the coattails of this. samsung features these musicians in their ads. chanel picked the front man of on and at&t are sponsors of k-con. oliver:teva is the world's largest manufacturer of generic drugs. >> on the recent struggles. teva, you probably have some products of theirs in your medicine cabinet but you don't know it because they are generic. >> what is been the problem at the company? that the the things

ceo did was he wanted to make sure the company remained is eali. -- isr that the board members lived in israel. those were baked into the company's i laws when he was there. laws when heies was there. it has become so big. he stepped down in 2002. you need the someone who has the experience of running a global pharmaceutical company to go in there and run it. the world's biggest generic drug manufacturer is not a small operation. finding someone like that is tough. what instead they have done is they've brought in people who did not have any experience in the industry and hoped they be able to learned on the job and that has not worked. the last guy, the last ceo, they

have been without a ceo for six months now, the last guy who resigned in february had worked for a food exporter. they exported hummus and coffee. >> not the jug business? >> he worked for -- >> not the drug business? >> they are trying to find someone now but that person would still have to move to israel under the laws. the company says, we don't think that will be a problem. with thet is, along fact that the company has so many problems now that is a tall order. >> investors have bailed on this company? >> in a big way. that deal was announced in july. 2015. the stock is down three quarters, it peaked at something like $.72 a share. it is now down in the teens.

>> two dollars i think. >> two dollars, i'm sorry. either they are starting to lay people off but more importantly need to sell off assets to pay down debt. one of the things that spooked investors and lead to a selloff earlier this month, the company said, we think we will be able to sell off $2 billion in assets but we don't think that will trip our de. >> why are you even bringing up -- >> the investor sai why are you bringing that up. ? they are not bringing in someone new. that is a problem. things don't seem to be improving, they seem to be getting worse. carol: up next, canat mitinhe t ooi cris mike pence is calm in a

wild west wing. ♪

 oliver: welcome back to bloomberg businessweek. carol: you can also listen to us on radio on serious xm -- sirius xm radio. and on the stations. london, and in asia. section as thegy u.s. opioid crisis deepens there is no federal prescription drug monitoring program to analyze patient behavior. carol: a database developer that has acquired access to records in 40 states. >> it was off the radar. i asked states, how are they

dealing with tracking prescriptions? they mentioned the same company. i looked it up and they are in 40 states now. handling the coronationof prescription information. if you go to the doctor, and you prescribedo get oxycontin, your doctor is going to look that up and make sure you have not already had seven off the radar.ions before this. it is private out of louisville, kentucky that has beenexpertisey data. carol: anyone who goes in can get a prescription in these 40 states, that data will be put into this database? >> anyone who goes into a doctor and gets a prescription for an opioid in 49 states and two territories is having that information entered into a database. whether anyone is looking at it is still a question. and have a class 1- regulated b the

government and prescribed by doctors, that goes into a database. a lot of people are not aware of that. if you get oxycontin in most states except missouri you will be in a database somewhere as having been prescribed that each time. >> a doctor looks it up and the patient, while this patient has had a lot of prescriptions written. what would that do? >> maybe not prescribe it or have a discussion with the patient and try to figure it out. , half the times, the doctor is not even looking because they find the system too complicated. that is what this company's specialty is. jeff, the opioid crisis which has been in the headlines for a couple years now, there are many deaths and incredible costs to the economy and people are

looking at in trying to figure out the government, iluded president trump, how to figure out and end? this company could help. >> as you have more data interconnected, it becomes easier. the first thing they did is connect the states to each other so if you are in one state you can make sure the person hasn't been slipping over the border into another state. sophisticated versions of the software are adding ability to look at a person get a score. rather than eyeball it and say, this person looks ok or this person doesn't, it gives you a score. if you get a 999, you will probably want to check the patient out. if you get a zero you probably want to have a conversation. if this person has never been on an opioid before maybe you should ask a few questions to make sure they know what they are getting themselves into. they are way more addictive than people initially thought. carol: turning now to politics, mike pence radiates calm professionalism. oliver: that is why many say he

was put on the ticket to begin with. but he might be more than a political prop. >> he has been to a dozen countries overseas. professionally, acting the part, reassuring our allies who are nervous about some of the things trump is it saying on trade and north korea. he is taken a big role in afghanistan military strategy reevaluation that we saw the other night. tois a crucial conduit congress for the white house. his staff has relationships and so does he with republicans in congress that no one else in the west wing has. that will be very important as we get into september and start having to talk about budget showdown and debt ceiling. carol: let's break down some of those parts in those was

active in playing that out. where was mike pence in that pecking order? >> he was right in the middle of it. what the reporting indicated was that he was playing an intermediary role and making sure necessarily in the room on some of the room on some of these situations but he played a vital role in the two our meeting at camp david. before the monday announcement of the strategy that trump unveiled. it seems like his role in afghanistan was to be a liaison

to the generals, to collect information, to parse it, and to presented to the president and to almost someone who could mediate back-and-forth between a volatile president who has no e very v -- invested in this. we have been in this war for 15 years. these are options we have seen before. it was pence's job to relate this to the president. mike pencementioned does not have a problem mentioning that this might be a bad idea, expressing his views. is that true in the case of president trump? >> that is a great question. especially after the rally in phoenix which mike pence was present for and he stood up and gave a very polite, benign introduction/ . it gave us the impressione haves

and when us areas, mike pence aires, buenos reporting indicates that day, he was giving policy speeches and meeting with the argentine president and business leaders and acting and looking very presidential and afterwar he watched the president give this unhinged combative press conference. he took it in stride and moved on. that is his style. he is pretty unemotional. he is a professional politician and all the ways donald trump is not. he is very able to take whatever moral or ethical or personal quibbles he has with what the president says and think about the politics of it. think about how he will answer

questions when he is asked about it and move on. carol: costco stores ar thriving but online it is a laggard. why the warehouse giant needs to up its commerce game. this is bloomberg businessweek. ♪

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wall street fell in love with tax cuts. the holiest of holy grail watches going up for auction. oliver: still ahead on bloombeg businessweek. ♪ carol: there are so many more must reads in this edition.

we are cosco started its online presence in 1998 around the time that amazon was getting bigger and exploring new ways of online shopping. we know as aewhere retailer where we like to go in go in for 30 cokes and eight winter and a ted budd mayonnaise. hub of printer and a mayonnaise. their online strategy has a diversified. they offer more products. they are looking into a subscription model. it has noformed a huge component of their strategy. carol: the company might argue, we want to get people in our stores and wander the isles are in by a canoe i don't need.

megan: if it is not broken don't fix it right? this is a market that is reshaping. particularly with whole foods and amazon, there will be disruption in the sector. people into by perishable goods, produce, food. liked have traditionally to go in and feel for those smaller items. costco will have to figure out a way to get in. carol: is it a case for getting them by buying another company? the walmartnk comparison is one that is probably one it would look to as well. i think walmart brought in the know-how in terms of people. we see them ramping up, they know this is the next competitive future. cosco will have to bring in that expertise and the bigger vision of how to mobilize this. carol: let's switch on over to

finance. x reduction. they may call a tax reform but it is reduction. people think their personal levels of taxation are too high but also corporate levels and the way our system works is out of whack with the rest of the world. they are right. we have a complicated system in this country where the rates are high and loopholes are used for different kinds of companies. it is incredibly complicated. we need to make it more competitive. that is by -- there is bipartisan agreement on that. how will they pay for those cuts?

that is where this issue of reducing the deficit comes in. i don't hear so much anymore about reducing the deficit. carol: remember when that was all anyone would talk about? megan: there are different prrities. people believe that giving conference of tax reform will be a spur to american business growth, international business growth, allowing manufacturers and other kinds of companies to invest more in american talent. american job growth. it will get consumers out there spending more and lead to a more robust economy. they're different size to that viewpoint. this issue about whether we are shackling generations of children to this massive deficit is something that people are still talking about, you don't hear as much. carol: we caught up with max, he put on a suit and went over to 21 in new york city. >> as soon as trump was elected talk about the deficit was mostly gone. what you heard it said wall

street was enthusiasm for tax cuts. that means cutting taxes on corporations and the rich people that lead them. as well as middle-class tax cuts. the trump tax planrs aording to estimates. line, wallve this street swerved from poetry. ithat has annoyed people. >> i talked to democrats and republicans, the second half of douglas, hee is worked for george w. bush. said, these bankers can only keep two things in their head at the same time. before fort was deficits and now it is taxes. he is probably being judgmental or glib but it is true that trump's tax plan -- the one that

was unveiled on the campaign trail. when gary cohn and steve mnuchin had that onepage outline. ,t cuts taxes so dramatically not only corporate tax rates but individual tax rates and then gets rid of things like --ernate minimum tax with that is basically how donald trump paid his taxes in 2005. it gets rid of the estate tax which is a tax on multimillionaire estates. it gives things like tax holidays. those changes are so steep that even the tax foundation which is itservative leaning says could increase the deficit by trillions of dollars. that takes into account the growth that might happen. , the pluses,at maybe spending more, that takes

an -- we still have a huge deficit. >> people i talked to were excited about tax cuts, they say look, first of all it will grow the economy so much that that will not h what is happening tes of psychology, is it cyclical swings in terms of what we want to debate? >> probably a couple things. first, five years ago, it was a different time. things were crazier. now the debt is bigger. $2 trillion added to $20

inconsistent, screaming about deficits one day and then screaming about tax cuts the next even if it increased deficit. what unites them is when a democrat is in office, it is not effective to ask for tax cuts. what you want to ask for is less spending because that is what democrats like. when republicans get into office you can ask for tax cuts. what unites them is the idea that the government should not be huge and it is inefficient. that is what bankers mean when thy say, i'm fiscally conservative. oliver:subscription box startups. carol: and find out why puerto rico can be the next tax haven. oliver: this is bloomberg businessweek. ♪

oliver: oliver: welcome back to

bloomberg businessweek, i'm oliver renick. carol: you can also find us online at his newsweek.com. oliver: and on mblue apron is lh lesson. it is expensive to acquire new customers. carol: it is often a challenge to keep them. >> there are 2500 companies in the u.s. that sell subscription boxes through which you sign up , you put your credit card down. >> all kinds of products. common are cosmetics and meal kits. carol: in this story you outline how pricing on blue apron boxes or other subscription models is tricky. netflix, who like seems to have figured it out. why is it tricky for others like blue apron? inherent overhead

cost like server bandwidth. they don't have to deal with ths through the mail. since they split off their separate dvd business. at a certain there is a lot more profitable -- for netflix to turn off their service on and off as opposed to shipping meal kits or clothes. numbers, bluee apron spending, again, you say they are conservatively spending $94 a customer and that person cost continues to about some

subscription-based services that are successful. birch ox. it is beauty products, you get them for months. have they figured out the model? >> tentatively. think they're older than blue apron and finally turned a profit earlier this year. mostly by slashing costs. among other things they renegotiated their shipping costs, with suppliers and made a couple rounds of staff cuts. they came under pressure from investors and decided to talk about profitability in the short term. carol: what is the future of the services? the interview,ff a lot of investor money is going toward them. whether it is food or music or consumer products, what is the

outlook? thatillion has continued to pour in. the big drop from 2015, investors are getting concerned about. section, the finance puerto rico's's goal problems are driving people off the island. 65,000 residents left last year. oliver:what we have seen is a fw private banks are going the other way. they are setting up something called in international financial entity. that has a useful characteristic for clients. if you are a non-us person you cannot be identified to taxmen. carol: what does it allowed

non-us individuals to do? >> effectually, it is a bank that puts everyone apart from puerto ricans. they can do business with ordinary puerto ricans. instead it encourages foreign investment and someone notices, there is a loophole here. a few cracks between the various structures. that is why the private bankers are starting to get interested. carol: initially this was set out to do something good? bring money to puerto rico. is it doing that? >> that is partly the intention and it is attracting operators. the puerto rican economy is in the hole right now. almost bankrupt. you get high-paying individuals peopleou have to have

working there, that is the idea of this trickle down into the wider economy. prices,say, property are stable where is a lot of other things are tanking. that is a wider debate. does it help the wider economy? -- what is this is a lot of ac. for a non-us person, this is be. ofause puerto rico is part the u.s., the u.s. is not under the umbrella of cos. this is the key thing. the reporting through something called factor.

all u.s. territories are excluded from, factor. for people bringing money and they don't have to disclose who they are? want to invest through offshore corporations but then that will be effectively concealed from crs and irs won't necessarily know who it is. oliver:boys are running the business. vintage collectors around the world buzzing. oliver: this is bloomberg businessweek. ♪

carol: welcome back to bloomberg

businessweek. oliver: you can also catch us on the radio at serious xm, channel 119. , in boston. uxol: and in london on dab three and in asia on the bloomberg radio plus app. president trump has handed off the family business to his sons and may have been busy. iver: we talked to daniel ferrara about the new generation. >> we set out to understand what the trump organization is doing well our attention is focused elsewhere. on the trump presidency in the tweetsthaning and this business is running. we want to know how that happens. carol: we forget there is a huge trump empire. we don't know how big because we

don't know the numbers. specifically we looked at the two sons. and eric. what have they been up to? >> most visibly they are extending the brands in the hotel business. specifically, they said they two downmarket brands. if the trump market is the five-star hotel, they have announced a four star product called psin. and a three star hotel chain called american idea. extensivelytalked with a pair of brothers in mississippi who are at this the two brothers in

mississippi seem to be pretty happy. >> very happy. they are delighted. they've gone from -- they own 17 hotels. hampton end, comfort in, things of that size. respectful operations. this alliance with the trump family has made them local c say they are ato them it is excitin. they feel it is a big cornerstone of future success. >> which makes sense. they are building in a place done,rump support being strong they are extending the brand,

doing licensing deals. this is what donald was doing before he became president. it was often about lending the name or selling the name and doing licensing deals. money upfront, less risk. >> little or no money upfront front and less risk. for example, with his psion hotel, it is a big risk for the brothers. million onnding $20 a hotel in rural mississippi. administration is providing his wisdom, intelligence about what might appeal. the brothers report that donald senior told them, think grand. they took a project that was originally budgeted at $8 million and is now $20 million. it is ext into a frenzy

and bidding into the millions. carol: the holiest of holies is set for auction. >> the paul newman daytona rolex is coming up for auction in october -- this is a huge story for vintage watch collectors. this is known as a holy grail watch. there will be a huge bidding war for because everyone wants to own it. carol: including my husband, mentioned it, i went online and checked it out. it's not going to happen. paul newman made this rolex famous in the 1970's. it was called the rolex daytona, specifically for racecar drivers, it has a dial for going around the track. carol: i trust you. >> he got one from his wife and engraved on the back it says,

drive carefully, me. he was a real racecar driver and he wore it when he won races. he made it famous. as group of watches became -- they became known as paul newman, daytonas. 's pauls paul newman newman. someone and ito is now coming up at auction because james cox who received the money to to nell nce to give newman. carol: i've no idea what the watch went for originally but i assume it will go for a lot. >> you never know but it will go as high as it can. at least a million dollars.

we talked to a number of vintage collectors who said it would go for way more, maybe $10 million. carol: who is likely to buy it? >> there is a group of young 30's, 40's, they are very global. they have been going around from auction to auction, flying there, taking watches with them in faith -- in safe boxes. making millions of dollars. they are taking the watch on the road. carol: its own roadshow? >> and the story is so cool. events with a -- aprilt dealership are a dealership in seattle. .orking with banks

they are trying to market it and hype it. carol: bloomberg businessweek is available on newsstands. oliver: also through our mobile app. carol: i love the story by jeff green. it is aboutabou collecting information onprcriptions. i love it. a private sector company really tackling a big national problem. i thought it was fascinating. oliver: i like the story about steph curry money. you hearortant because these athletes about having great wealth and not preserving it. these guys are so popular, so influential, people look up to them, this is important. i think it is a great story. carol: they are actively involved in businesses. oliver: more bloomberg

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♪ julie: coming up on "bloomberg best," the stories that shaped the week in business around the world. president trump gives investors plenty to think about. president trump: our support is not a blank check. >> i don't think this is going to have a big effect on financial markets. julie: and perhaps to worry about. president trump: believe me. if we have to close down our government, we are building that wall. >> plenty of investors are concerned president trump has turned the way things are going. julie: a big deal rocked the energy sector. warren buffett sees a big deal fall apart. samsung gets a good deal of