♪ carol: welcome to "bloomberg businessweek." jason: we are here at bloomberg headquarters in new york. carol: this week, how theresa may survived the worst loss for a british government in more than 100 years but managed to keep her cool and keep working. jason: it is a great inside story. plus, how effective or not have trump tax cuts been for economic growth? carol: and i got another

question for everybody. can at&t's corporate mindset .ransform it if jason: our editor is here with us now. you and i were talking about earlier this morning. this is one that was in the media world and is a big, big deal. is how the at&t merger with time warner has been, months coming. it got delayed because of the u.s. justice department. not being willing to do this, and all of a sudden, it happens. on top of that, he steps down. sudden, head of its popular shows game of thrones. not only is he outcome of the at&t is the new overlord at hbo. the story is all about the tension. carol: and was about everybody

being hbo announces netflix. jason: the night is dark and full of netflix. they know that and this is an attempt to pivot and become much more of a streaming service that the cable one. . carol: we have got more on this story from our reporter your. >> richard, longtime head of hbo. it is the end of an era. we tell everybody we are a media technology and a nether company. seizing control of warner media and assets, is moving forward with this plan. the big plan for the future is that it is they want to roll out this direct to consumer streaming service. it will compete with netflix and

pull in all this programming from order media assets. hbo's going to be a huge part of this. what i wanted to set out to do is like, ok, hbo has been dabbling in this world of direct to consumer and straightening products for almost a decade now. yet, somewhere along the way, they fell way behind netflix. my was that? -- why was that? and was it like to work on the technology side of the business? what i found talking to people who have passed through hbo is that a lot of people have been both enchanted and ultimately frustrated by this challenge over the years, of trying to optimize hbo and the internet. a lot of it has been cultural. a lot of it has been, at key moments, things almost happened were you could almost see hbo

really taking over the internet and owning the internet in the way netflix does. it is this fascinating counter history of what went inside. all of the programming was great and all of the innovations, widened that innovation translates to the consumer? interesting, because we think about some of the players and we were talking about it before we even came on air. i recall one line from curb your uzi is him -- your enthusiasm. the thing is that they really did own tv, but to your point, they mentioned a great -- great quote. he has the famous quote he seven 2000 13 the time that netflix was rolling out house of cards, one of the biggest dramas. said that we need to become

hbo faster than hbo can become netflix. jason: that says it all. carol: but what does that mean? >> what that means is that dataix was this culture of science, engineers, figuring out the signs of television. that is what they were good at. hbo was good at the art of television. that overscinating is the past five or six years, what you have seen is that netflix has mastered the art of television much faster than television -- than hbo has mastered the science. jason: one of the catalysts is the departure of that leader, so what is his legacy? .e was a taste like her final season of inferences is coming up and people will love it and hbo

programming will be remembered fondly. at the same time, part of his legacy was that -- carol: did he miss the mark? >> he did not solve this very challenging problem that is they had solved. it would have been worth a huge amount of value. have a solvent it, hbo would be more in control of its own destiny. jason: we just got the words for the u.s. cover story, now let's talk about the pictures behind it, the actual cover. joel weber and krista sends her are here to talk to us about the. tell us about the hbo story. >> we knew it had cover potential from the moment we started to think about it. the images from game of thrones, its flagship show, are so arresting and powerful. an iconic. so we wanted to lead into that. >> we start with this idea about

the classic hbo title screen. go from mergers cut deeper than swords, we're still not there. >> and that was like, maybe we can do this silly thing. >> where do you end up? all the stuff, we were like, where is the fun energy? it brought us back to something like that would match up the business side and the game of thrones side in a way that is funny. carol: up next, how amazon is winning the influence game. plus a high-stakes antenna battle over one of the most important spots in global financial markets, hint, it's in suburban chicago. carol: later on, we survey recruiters. this is bloomberg businessweek. ♪

carol: welcome back to "bloomberg businessweek." jason: join carol and me every day on the radio from two-5 p.m. wall street time. also catch up on our daily show by listening and subscribing to the podcast. carol: and of course, you can find is online. the politics section takes a special look for amazon's growing footprint and its clout down in washington dc. forl: we have got a chart you, amazon's lobbying efforts are now second only to google. facebook, amazon in second place in terms of spending and lobbying. google takes the first place. jason: you can see them all accelerating genetically. what is also accelerating is

what they are lobbying about. amazon, look at that. these of the policy areas for which amazon has hired lobbyist spy gear all the way down 2018. they are not going to endorse for everything. carol: covering all of the issues. we got more on this story and amazon's growing influence. among the top competitors, amazon out spends almost everyone except for google. last year, it broke a record for its federal funding by spending .ore than 14 million jason: we talk so much about influence in money in washington . as you said, the numbers are pretty high.

is also this world of and government people. other lobbyists who have been working for other companies. is very inside the beltway. >> what amazon has done lately is hired people with connections. either congressmen or folks in beeral agencies that might able to help it achieve its business priorities. for instance, now that the house democrats have taken power in the house, amazon has hired a couple of lobbyists. it is likely to be raising questions about the company's diversity. amazon is also hiring folks in the antitrust space. now, they are increasing questions being raised about whether amazon is too big. poached people with

connections to the justice department who could help it navigate any sort of antitrust inquiries. carol: it is interesting that in its pursuit of doing more , it is not necessarily aligning with some of its tech brethren. a couple of business ventures, one is accessing more of the government to get on to the amazon clad. we cannot let a big contract out, $10 billion. and then we have got what amazon wants to be, a portal for the government to buy all of the things that it needs. >> yes. amazon is trying to dominate lots of sectors across various industries. one of those sectors is the federal market. we see that in two cases. one is the pentagon deal that you alluded to, a $10 billion contract.

not only will the winner get all of that $10 billion pie, they will have a lead in that market to get future business from the department. also, the general services administration is creating a new program to help federal agencies by products like office supplies. amazon has a lead in that contract as well. like oracleitors and ibm have been fighting tooth and nail in washington. that has created conflict, especially in trade groups in which those companies would normally be aligned on policy. have seen is really like a civil war in some of those trade groups, and amazon lately has been winning.

jason: stock traders has spent years and piles of money to try to shape millions of a second off of each trade. carol: that race has led to a battle over communications towers. sketch world's biggest exchange, a giant market cap company. the stock market on the other hand was based on several data if you in new jersey want to be a trader you have to .ave a superfast medication or wrote about this company that laid a fiber-optic line between chicago and new jersey that was faster than other available mean. it was a huge deal and traders fell on money using that service. service became

obsolete because they realize that you can send information much faster. 50% faster in using microwave radio transmission. they haveast decade, been building microwave networks to shoot information really fast. this latest story is about the fact that those networks have gotten really good and people have inched their radio close the data center because it gives them in action. -- an edge. the more it stays in the air, the faster they are the faster they are over competition. carol: put the airspace has to be clear, right? >> yes, so the data center built a new tower that is right next the data center, and the point is that people can put their dishes on there and it will be closer. it'll get rid of all the gamesmanship to drive -- by land. in hishat got thrown

another company announced plans to put their own tower right across the street. cyrus one says that towers going to be in the way and will ruin their plans to level the playing field. carol: we mentioned there were politics involved. tell us about that part of it. is one of the fascinating things about this. with these networks, they go across the country. guess what, there are lots of minutes of pawleys to deal with to get permission to build a tower or certain land. in this case, the city of aurora initially turned down the plan to build their own tower. but they did a little lobbying perhaps withenes, help from the mayor, the city council flipped. actually voted a couple months later to change their mind and approve tower. jason: up next, everything is awesome for private equity until it is not. my take away from the most important annual gathering.

carol: we have got the giants trying to rekindle some ge old magic that repeating the company's mistakes. jason: and how much this tax policy influence corporate investment? carol: this is bloomberg businessweek.

jason: welcome back to "bloomberg businessweek." carol: you can listen to us on the radio. york, washington, dc. jason: in the bay area and london and through the business at. carol: this week, you are the remarks and you were at the davos of private equity. jason: the super return conference in berlin. dutifully goes there, 2500 people descending on the german capital.

it gave us a good chance, i was talking with joel weber, to really remind people how think an influential it is. check out this chart that breaks it down. these are firms you have heard of. these are their assets under management. there, that is how many people work for companies that they own. also, $1.2 trillion a day they're looking to put to work. jason: definitely top of mind for everyone. what is so interesting is that moments after this went to press, as it was going to press, a good escape from bloomberg reporters about have blackstone has already got $20 billion lined up. carol: and got more money to put to work. jason: upbeat. . not a lot on the horizon carol: great story.

speaking of private equity, titans and the finance section with a story about apollo global. right, potentially re-creating what used to happen at general electric without the taxpayer bailout. carol: our reporter has that story. >> apollo is one of the biggest private equity firms and is known for buyout prowess aired it is not known for what it is much bigger in, credit. now they have multiple insurance companies, they have a stake in directly in a mortgage lender. they have commercial real estate lending, they actually lend to deals for other buyout firms that are much falling -- smaller. they have a huge conglomerate that operates in lending markets that are unregulated. becauseof this happened the financial crisis, big banks got out of these businesses and in the step some much more lightly regulated firms like apollo.

why has apollo been so especially successful? >> are the because of his leadership. they came from the junk-bond tighten. they know these markets, but on top of that, even on assets led from the banks, talent also left, so the person who runs the business was formerly at citigroup. andnows these markets well has brought on city talent as well. even the banking talent has moved over to these firms. >> your point is that this guy once stood created the capital of tomorrow. former looking at ge capital assets. >> something interesting about this is that they would tell you that this is a metaphor. , hed have said citigroup could've said anything else. they said that after adding 500

billion, they are selling the assets. maybe one of the small group of players that can take these assets on. it about seltzer and apollo that they would make their level work? >> the insurance is no small peace of the spirit is something they're trying to replicate. carlisle is trying to get into the business as well. they are able to invest in credit assets more heavily. this is a huge part of the shadow tree. now they are expanding globally and that headstart is helping them catapult above everybody else. carol: in the economic section, we have a scorecard for president trump's tax policies. they havewing that done little to boost growth and

tax rates may not be that important when it comes to corporate investment. this is a very hard thing to measure. people are taking a stab at it and the range of investment and impact is quite broad. that said, i put a lot of time to looking at promises from the white house. we have heard about consumer spending will give her about investment. but are we actually going to see this second peace from investment? the takeaway is yes, it's just not very big. this plays into the supply-side argument a little bit that you will see something from tax cuts, but also puts a cap on it. even if you get something, we are only talk about .1 percentage point of growth. carol was and economies are, i was an english major. take a where it would step back and you remind us of the supply and demand side, is a definition.

-- basic definition. >> they believe that if you deregulate and give tax cuts it will incentivize businesses to invest. their view is that what is keeping businesses from investing is the government demand-side will tell you that that matters, but what matters more is where we are in the economic cycle. startedthe framework we with and we put together a model that looks at both things. out, demand-side wins in this case because the demand-side capacity complaints output gap, those things matter much more than tax cuts. to havet is important this discussion because, as you say, the white house has come up with estimates saying hey, we did this, businesses are spending and look what it did. said, there are lots of different estimates out there, so we kind of have to be smart. absolutely, and it is hard

because there are so many estimates. the things are so easy to fudge and the models are all different. i think the important thing to note is that, the results came out, i would not say to my expectations. we did standard scientific theory, testing a hypothesis. ofn you get these kind things that support these hypotheses and supports your result, it's like you are trying to build a house out of bricks. tose results are similar results others have found which makes me think that, ok, there's something going on. maybe puting them to bigger numbers around their tax cuts then maybe they deserve. is an important thing to understand as we enter into a phase with the deficit is increased, widening substantially. did we get what we pay for? carol: later in our program, the rockettes field and inauguration

president trump dreamed about. jason: and theresa may pushing pass a historic brexit defeat. carol: this is bloomberg businessweek. ♪ you.

all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. this jason: welcome back to

"bloomberg businessweek." carol: still ahead, the business school's recruiters pay the most attention to. jason: and in our podcast, the ceo of fitbit tells about the company's future plan. carol: and the international cover story about the persistently meticulous and coolheaded theresa may. jason: months after her deal

suffered a historic defeat, the prime minister is preparing a second attempt to persuade parliament to back her deal. carol: the reporter is joining us from london. the story keeps on giving and the feeling we move from date to date. behind it all, theresa may staying cool and collected. >> she still there, even though two months ago she suffered perhaps the worst defeat in history for any government. and on the one peace of clinical decision-making that she really, really needed to win on, her brexit deal. have a deales not that has gotten through. she's going to try again on march 12. the uk's due to leave just a couple of weeks after that. with or without a deal, we don't know. jason: what i love about this story is that you really take us inside downing street and into the mind of theresa may. so much of what has happened reflects essentially who she is

at her core. tell us what you learned. through talking to ministers in the cabinet and officials who have worked with her the past and now is that, really, it is difficult to get inside her head. to understand exactly what she is going to do, she's a very private person. she met her husband that university and has been with him ever since. he perhaps is the one man on the planet to can claim to know what she might do next. but they are a very tight couple. don't have kids and rely on each other. she certainly relies on him as one of her chief advisers. -- to colleagues that her her qualities that her colleagues identified are her perseverance and fortitude. she has come through all kinds of political pain over the last couple of years since being the prime minister. ahead.lowing on

carol: we do wonder if, ultimately, she will be able to carry brexit through. what are you hearing in terms of how it plays out? is not impossible, wherever negotiations are, there are two sets of negotiations going on. andis the uk's talks whether they could get a different sort of deal out of brussels. the other is theresa may's negotiations with her own conservative party in a sense, that is the key. there's the hardline purist brexit conservators. then, she has got a chance. without them, her plan is completely dead. we'll find out a few days time. help us understand, and you do a nice job of this, the key issue between the u.k. and

the negotiators in brussels. is this irish backs up. i feel like we read about all the time. remind us what that is? >> you have to look at ireland. there is northern ireland, part of the u.k., and the republic of ireland, and independent country and a member of the eu. when the u.k. leaves, northern ireland leaves. then you have a real issue at the border. what happens to the border? currently, it is completely open, goods into heaven go, no need for customs checks. but the peculiar history of northern irish politics is very violent, as we know, and the concern is that if that border becomes policed with border officials and customs officials, it will revive memories of the kind of checkpoints that were there in the past. sectariany start more unrest. that is what people want to avoid.

the backstop was the agreed compromise to do just that, and essentially what it means is that the u.k., as a whole, stays inside the european unions customs union for as long as it takes until a new answer can be found with a trade deal. need for aere is no threat of that hard border infrastructure, barriers, custom checks. becauseeally quickly, we keep moving around, what are the dates that investors need to be focused on? >> crucially, next tuesday is the big date when we are all expecting theresa may to put a revised brexit deal of some kind that before the house of commons. vote that, have another with the commons will again be asked to decide if they had just rejected her deal and if they want to take britain out with no deal at all to that point, they will decide about your the next day, there will be another vote in the week next week.

will be whether to extend the negotiations and push back the deadline. next, while -- why federal prosecutors are scrutinizing trump. carol: the central american economy developing a booming business. jason: this is "bloomberg businessweek."

jason: welcome black -- back to "bloomberg businessweek." week. join us every

you can catch up on our daily show, just check out our podcast. jason: and find us online at businessweek.com and on our mobile app. in el features section, salvador, an era of gang violence has given rise to a thriving cough and is. -- coffin business. carol: one city is getting a reputation. >> for pretty grim reasons, el one of the worst sites of homicide per capita, it is supposedly the highest rate in the world. violencees to gang that has been exacerbated between principally ms 13 and barrio 18. 18.ario

the previous administration blew up a brief truce fairly short-lived one a few years ago. it was brokered by the roman catholic church, of all people. jason: to bring us very vivid details about this. who is to the story believe were in a very different business. >> that's right. they were running a bakery in what is now their funeral parlor. two of the three brothers have take the money that they have made first by selling coffins on their own and by coffins from other sources and running the funeral parlor. they're trying to make the parlor next to what was once their bread oven, to make the principal facility. carol: forgive me for getting

into the financials. or the a country or area average family does not make an awful lot of money. some curious about what this is as a business. >> -- the two brothers running the funeral parlor have gone off in different businesses. they're making somewhere between 2000 $4000 in a single month. while does not some like a ton, it is a decent paid only by el salvador in standards. successful byg selling coffins, they insulate themselves to some extent by the violence around them, because these gangs often prey upon the economically disadvantaged. >> true but also keeps them from standing out in a certain way. as some we talked to say, because there are so many factories running all the time, he keeps margins, particularly

on the bare-bones models, down enough. you are standing out as a particularly viable target. carol: what really struck the individual who was there on the ground? what struck him as he was doing the story? yeah, by and large, the thing that was most shocking was just the sheer goreto and grisly nature of the job the brothers seemed. and their ease and relative comfort with death, sort of up until you get to the last scene of the story, or one of the brothers is at a funeral for one of his childhood friends. , the white house denies president trump played a role in his inauguration planning. carol: but simply put, he was involved, very involved, down to the table cloths and rockets. jason: now the event is being looked at by federal prosecutors. this is about planning a

party, huge party, a part of that cost $100 million around the inauguration of that president-elect trump. effortse, that inaugural is now under a bunch of investigations. the latest is the letter from the house judiciary committee asking questions. federale are also prosecutors in new york and a d.c. and new jersey who are looking at a very broad-based way at how this committee for the inaugural party raised the money, deploy the money, its relationships with donors. carol: $107 million, a record. twice as much as obama's, which have been a record before. house -- white house has recently said trump had nothing to do with the planning. we knew from sources around the campaign, the transition, and

the inaugural, that was not quite true. so we set out to tell the story of how trump help plan his own party. has beenybody who following trump as president, as a candidate, a businessman over the last 20 or 30 years probably could ascertain, i think just instinctively, that he will be involved. he is a showman, and he understands the power of visuals. he got how exactly above, he went to the. -- went deep. >> very deep. as they were planning this, he would call his good friend who was chairman of the inaugural, in real-time as they were having meetings, so he could weigh in. for ao was very curious while in the idea of selling exclusive right to either some or all of the inaugural to

broadcast companies, and his favorite for a while was fox. carol: to be fair, president obama did that. >> obama sold certain parts to hbo and i believe abc. beenwould not have unprecedented. he had calls to jeff zucker where they discussed it might be cnn and fox. everclusive rights deals came to fruition but a lot of the discussions were taken care of by trump himself. carol: that alone is not a problem. where does the problem arise? people listening are probably saying, so what? jason: he likes to party. carol: make the connection for us. >> totally read -- reasonable. it only becomes weird when trump's spokesperson has denied several times that he has anything to do with this, other than going to the balls, raising his hand of the bible -- over

the bible. that is just a weird, relatively easy disapproval thing to say. that,u have to wonder if in turn, exposes him in any of these broad-based investigations that are going on. carol: and that's where the problem is. in terms of how the money was raised or used. investigators questions are so broad, it hard to figure what they are after. we do know they're asking about how the money was raised, how it was spent. interactions with donors, it all seems to be on the table. carol: up next, choosing a business school the gives you the best career advantage. jason: we talked to fitbits ceo. carol: and a new restaurant trend where chefs offer rooms to stay the night. jason: this is "bloomberg businessweek."

carol: welcome back to "bloomberg businessweek." jason: you can listen to us on the radio on sirius xm and on a.m. 11 in new york. 91 fm in washington dc. in the bay area, in london, and of course, on the bloomberg business app. insights from job recruiters on the best business schools. jason: our editor walked us through the latest look. >> it is really all about the jobs, ultimately. unit you are an aspiring to start your own business, most of the time, you will go down a route where you want to get a job first, get some experience, and apply that. so what recruiters are looking for is really important. this is the same data pool that we built the global ranking on, that we released the u.s. ranking and that the global ranking in december.

this is a deeper dive by the data team into several key questions about what recruiters are looking for. they are assessing the quality of the candidates in which schools are coming from, leading to the sort of many rankings. i candidly looked at this before i go into it and thought its is going to be the same names. it's actually not. well we pick six questions without really important. these are by no means every single question and category. but yes, there are differences and you will see many schools pop up that are not in the top five or 10 of the global rankings. they are in the top 30, because that is the selection that we made. we apply these questions across the board to each of them and then came up with these results. carol: what i find interesting

is the trends we have been talking about a lot here. that is innovation, entrepreneurship, diversity. >> very important, sure. creativity and innovation, absolutely, which goes hand in hand. ways in which schools are more enabling to go beyond the basics and standard curriculum? herto really break up that they would be adding solutions to things that coming up with. tell us about stanford, obviously, even though i did not go to the business school, i was proud to see well in a number of these categories you mentioned the international names, what , what were you a label --elicit trend was customer elicit trend wise?

>> it is not surprising that stanford did come out on top in several categories in a way, that global ranking, you see the connection. also, stanford is very tech driven. on the innovation front, on the entrepreneurial front. what we actually see in the students? go in deepy week, we with a guess and put out as the podcast. this week, we're joined by the fitbit ceo. , we cannot with a few price points and goals and aim to keep ahead of an increasingly crowded field. >> we just announced a few new products. newire and inspire hr, affordable trackers.

we've also announced a low-cost, affordable version of our versus smart watch, along with ace two, a successor to an amazing kids product we launched. carol: talk to us about your strategy and where you see fit that going. >> a large focus for fitbit is growing our active users. last year, we grew 10% to almost 28 million active users. that is one of the largest active online health and fitness communities in the world and our strategy is to lower asp's, increase the number of active users, and later this year, launch and monetize a user base with the prayed -- paid premium offering. carol: once you get a user, how sticky is it? >> health and fitness is a challenging thing for people to stick with. but we have been incredibly happy with retention of our users, testament to the innovation we are bringing. our active users are increasing

every year. rate? was the retention >> we don't bring that out. carol: has improved? >> it improves every time. talk about the software side. you mentioned this paid premium product coming out later this year i do use the app fairly frequently to just check in, being a dated you get all that. what needs to come for that. how do you get people even more addicted to that? a lot of what we have delivered historically has just been data. numbers etc.. what we feel will bring a lot of value to our users is something beyond that. what do i do with the data? coaching,all be about guidance, and premium content around sleep, nutrition, and exercise. bringing together holistic solutions that tells people what

i should do next, what i should improve. chat, for more of our tell us about your extra podcast. this week, pursuits takes a special focus on upscale food trends. carol: including how chefs are building hotels to complement their food. >> you have seen chefs have restaurants and hotels. it is getting increasingly hard to be in the restaurant business. margins are shrinking, minimum wage is going up. one of them is just to make the hotel, cut out the many men -- middleman. carol: and it is working. >> some of them have new models. one of the most famous chefs in the world sort of this in the mid-90's.

there was at least more property and has not worked out too well for gordon ramsay who opened the place in london and had to close. presumably, he yells at himself. carol: one can only imagine. really cool, is you're seeing more and more chefs decide that they want to be the property owner. carol: it is smaller properties, often. >> smaller properties, in fact who is a is a chef always near the top of the world's 50 best list, he has a restaurant in mexico city. he opens up this tiny place, basically like an airbnb, an apartment above his original restaurant. it is light and airy, plainfield. -- plant filled. they make you breakfast and then a chef will make you dinner. it is a great way to immerse yourself in mexico city. carol: as you mentioned, the margins are much better. restaurantsns on

are generally less than 50%, around 4%. but if you have-- than 15%. around 12%. but if you have the ability to combine them, the margins go up higher. carol: "bloomberg businessweek." is available on newsstands now. jason: and online and our mobile app. what is your must-read? carol: jason's remarks. equity industry just continues to grow and its influence on our whole investment environment is not to be missed. jason: credit to joel weber, he assigned that story to me. my favorite story, nick baker in chicago talking about that little spot outside of chicago where so much is happening. also, you get a wayne's world in ferris bueller reference, i'm happy. carol: you can find more stories over the weekend.

daily and check out our podcast. check that and subscribe on itunes and soundcloud. carol: more bloomberg television starts now. ♪ want more from your entertainment experience?

just say teach me more. into your xfinity voice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. ♪

emily: i'm emily chang and this is "best of bloomberg: technology." the social network is becoming less social. mark zuckerberg says he thinks the future is a more private platform. plus, the promise of the green new deal. congresswoman alexandria ocasio-cortez is making waves in washington and beyond. we speak to her chief of staff they