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Dutch Police Catch Tram Shooting Suspect; Mozambique President Says Cyclone May Have Killed About 1,000-Plus People; New Zealand Parliament Agrees to Tighten Gun Laws; Martin Sorrell's New Company See Strong Earnings Debut; Warner Bros CEO Steps Down Amid Investigation; New Zealand Companies Reconsider Social Media Ads; Beto O'Rourke Breaks Fundraising Record Entering 2020 Race; Investors React to Boeing Probe, Await Fed Meeting; Merger Talks Lift Deutsche Bank and Commerzbank Shares. Aired 3-4p ET

Aired March 18, 2019 - 15:00   ET


JULIA CHATTERLEY, ANCHOR, CNN: A warm welcome to the show and a look at U.S. markets at this moment. We are holding in the green, barely. It's

been a session of consolidation. Remember, we have come back off a super strong week. The U.S. market's 3% to 4% gain, so hey, a little pause here

makes sense but this is what is moving markets on Monday, March the 18th.

Scuppered by the Speaker, Theresa May's hopes to push through her Brexit plan hit a road block. The pressure on Boeing turns up a notch further.

Now, it may be facing a Federal investigation and let's make it official, Deutsche Bank and Commerzbank finally admit that they're looking to merge.

I'm Julia Chatterley. This is "Quest Means Business."

Good evening once again, and we begin with that breaking news out of Westminster. The House of Commons, Speaker John Bercow has blocked any

attempt by the U.K. Prime Minister to bring her Brexit deal back to Parliament. Mr. Bercow ruled that the government cannot ask Members of

Parliament to vote for a third time on the same divorce deal they have already rejected not once, but twice. He says any deal brought to the

table must be new and substantially different. Listen to this.


JOHN BERCOW, SPEAKER, BRITISH HOUSE OF COMMONS: If the government wishes to bring forward a new proposition that is neither the same nor

substantially the same as that disposed of by the House on the 12th of March, this would be entirely in order. What the government cannot

legitimately do is to resubmit to the House the same proposition or substantially the same proposition as that of last week which was rejected

by 149 votes.


CHATTERLEY: CNN's Bianca Nobilo joins us now from outside Parliament. Bianca, as game changes go, this is a whopper for me. Talk us through the

implications and can Theresa May pull a fresh rabbit, and a materially different rabbit out of the hat before she heads to Brussels?

BIANCA NOBILO, CORRESPONDENT, CNN: Well, Julia, Brexit is definitely confusing, but if I've noticed one thing, it's a path that typifies the

confusion and it's that things happen that delight both the hard core Brexiteers and the remainers and they can't both be accurate and that's

happened again because with the Speaker's ruling, which has basically said that Theresa May can't bring back her Brexit deal for a third time without

changing it in a material way, it is delighting the Brexiteers because they feel like a no-deal might be more likely because that situation could

be blamed on the Speaker, and not the Prime Minister now that he sort of boxed her into a corner. Not all the Brexiteers, but just some.

Then there are those who are wanting to see a much softer Brexit, a very lengthy extension to the negotiation period and they're also delighted

because they think that the fact that Theresa May doesn't have much time now in order to change her deal sufficiently to be allowed to bring it

back, means that she is going to be going to the E.U. and asking for that much longer extension period and not that short extension to the 30th of


So it has added further confusion to a process which has been plagued by that from the outset, but Julia, you and I spoke about this earlier. Why

this has come at such a painful time for the Prime Minister is the fact she was starting to garner more support for her Brexit deal. It remained to be

seen whether or not it would be anywhere near enough, but she was definitely winning over some very transient in their views Brexiteers,

perhaps some of the DUP, and now, she doesn't have the chance to put that deal back in its current form and test whether or not she's got sufficient


CHATTERLEY: The archaic rules that mean that you now can't bring this deal back without material changes suggest that you can't vote again or you

can't ask Parliament to vote on this deal in one parliamentary period. How soon could they wrap up a Parliamentary period and start a fresh one if

they needed to?

NOBILO: Technically, Parliament can be probed by the government without widespread consent. This is something which is being discussed today as

one of the option that Downing Street could use. Either they could essentially abort this Parliamentary session and begin a new one so then

they could bring the legislation back.


NOBILO: There's also been talk about whether or not the withdrawal agreement in all its 585-page glory could actually be tacked on as an

amendment to something else going through Parliament to deal with Brexit, so that would also materially change the legislation. So there's plenty of

discussion today about how it could happen, what the government could possibly do. But it certainly doesn't clarify matters at this point when

Britain is supposed to be leaving the European Union in 11 days' time according to the statute book.

CHATTERLEY: You're like walking encyclopedia of U.K. Parliamentary knowledge. I love it and I'll refrain from eye rolling. Bianca Nobilo,

thank you so much for that.

A quick reminder of the timeline we're working with here which is critical. The United Kingdom leaves the European Union next week, on March 29th, by

law, just 11 days from now. Mrs. May has a mandate from Parliament to ask for a delay to the Brexit deadline, but there are a number of details to

sort out before she can even do that. Quentin Peel, associate fellow at Chatham House joins me now.

Quentin, what a mess and it just got even messier. What do you think happens now? Because the belief was she could go to the E.U. with a deal

and they would be like okay, we'll give you a short-term extension in order to just nail down the final details. If she goes to Brussels without a

deal, surely they're going to turn around and tell her, go look, we're not giving you a short deal because we're not going to have a repeat of what

we've over the last two years. We'll give you a longer extension or nothing.

QUENTIN PEEL, ASSOCIATE FELLOW, CHATHAM HOUSE: I think that's the only conclusion one can draw. Theresa May said it herself last week. She said,

"Either give me my deal and I'll go for a short extension, or I'll have to go for a much longer extension."

Well, she is not going to have her deal because John Bercow has just thrown a red conk shell into the whole thing, and so she is going to have to go

and say -- either she asks for a long extension or they insist on giving her a long extension. Then she has got to come back to Parliament and say,

"Oops, hey, maybe we've got a year's extension, maybe 20 months extension," and that means we are going to have to hold European elections, which we

weren't expecting to do.

That may be really quite unpopular in Parliament so there is a danger she won't even get a majority for the extension again.

CHATTERLEY: I mean, quite frankly, everything is unpopular with this Parliament. I mean, they've road blocked so many things, other than

actually ruling out a no-deal exit, which I hate to break it to you and by law, it's actually what's going to happen on March 29th if we can't agree

on something else?

Bianca made a great point earlier though, she said, look, does this change things for the E.U.? Because they don't want to see a messy U.K. exit from

the E.U. either on March 29th, so can they give us something at this late stage to try and facilitate either an extension, you're pulling the right

face, do you think not?

PEEL: I don't think they can do anything like overnight. You know, and after all, their meetings just the end of this week, Thursday and Friday,

they have got to actually come up with an answer. They are pretty fed up and they have made it very clear that if Theresa May wants an extension,

she has got to have a plan.

So one word coming out of Brussels today, I've heard is, okay, they might give her a month's extension in order to have a plan to ask for that longer

extension. But what would the plan be? Would it be --

CHATTERLEY: What? An extension in order to ask for a longer extension?

PEEL: Yes, because she has no plan for the longer extension. There are people who have got a plan. One is, hold a second referendum. Another

might be have a general election, or a third which could take an awful long time might be to try to reverse the whole process of negotiations so that

we reach the long-term agreement before we actually leave. That could take five years.

CHATTERLEY: There is another option, you revoke Article 50, take the power back here in the U.K. and decide how we're going to handle this with an

actual plan rather than doing what we've done which was invoke Article 50, start this process without any kind of idea of what it would look like.

What is the probability of that?

PEEL: I think it's pretty low, but you're absolutely right. It's the one quick logical solution that could happen. Just revoke Article 50 and stop

the process. She would split her Party right down the middle. Now, she's - basically that's happened already, the Conservative Party is in bits, but

nonetheless technically she has kept the Party together.

If she went for outright revocation, all those hard-line Brexiteers would literally be out the door, I think.

CHATTERLEY: I mean, it's - watch this space. Quentin, thank you so much for that. Quentin Peel there. All right, the pound dropped against the

U.S. dollar on that news out of Westminster. It quickly dipped below $1.32, but it has recovered some of those losses. We're still sitting

around that $1.3250 level as you can see, down some three-tenths of one percent.


CHATTERLEY: I want to bring in the Simon Freakley, now, he is the CEO of Alixpartners, a business consulting firm, and Simon joins us from New York.

Great to have you on the show. You had already called this entire process a shambles, quite frankly. What do you make of the latest developments,

Simon? I'm sure you were listening to that conversation there.

SIMON FREAKLEY, CEO, ALIXPARTNERS: Well, Julia, it goes from bad to worse, doesn't it? I think that the latest turn of events with Bercow's statement

today wasn't expected. It would have been helpful had he told people earlier his opinion. Clearly, these rules go back hundreds of years, so

this is nothing new.

But I think it's left people in a very difficult spot and I think now we're left with very few choices, but somehow we have to move forward.

CHATTERLEY: And how do we do that?

FREAKLEY: Well, I think that we -- the headline is of course, and I am certain that the prolonged uncertainty is no good for anyone, so we will

either have to withdraw or get an extension during which something meaningful can happen, but I think Mrs. May's deal is clearly dead in the

water and there has to be a way forward.

So I would say either a meaningful extension or a withdrawal is the only way forward. But frankly, I think we now need to seriously look at a

second referendum where the voting public in the U.K. get to decide specifically on what the choices are or we may find ourselves rolling into

a general election, which I don't think helps anybody.

CHATTERLEY: I mean, the timing of that is also critical. What we saw from Parliament last week is actually ruling out a second referendum because

even those that perhaps wanted it now know this is not the time to be discussing that. I mean, you advise businesses, you're a business

consulting firm; how do businesses prepare for this level of uncertainty? Because every business group, lobbying group that we have spoken to just

says it is impossible, particularly for small and medium-sized firms. They're not ready for this. And actually a material extension now is what

they need because they're not ready for a hard exit, never mind anything else?

FREAKLEY: Julia, you're absolutely right. I was in London last week and I spoke to a number of our clients. What they want is certainty now. They

want to know what they're planning for, and frankly that's preference to have certainty even independent of the choice that's made. They just want

to know what's going to happen then they can plan for it.

I think extended uncertainty for U.K. corporates, European corporates, or even frankly global businesses whose investment decisions and recruitment

decisions are on hold at the moment until they know which way it's going.

CHATTERLEY: You know, even if we see a one-year extension here, surely their investment plans -- businesses make investment plans for a longer

horizon than even a year, so for all the turbulence that we've seen and the suspension of those decisions, it doesn't change anything. It's just

another lost year potentially for U.K. businesses that are wrestling with how to plan for the future.

FREAKLEY: Completely, Julia, in fact of course people are now having to plan for multiple scenarios, which takes up a huge amount of resource. It

means that very few, very deliberate decisions are taken, or they plan for a worst case scenario because frankly, they have to make a decision.

And so I think a long extension is actually not in anybody's interest. I think the shorter the extension, but one in which a deliberate action can

be taken is in everybody's interest.

CHATTERLEY: Yes, it's tough, isn't it? Simon, thank you so much for joining us on the show this afternoon.

FREAKLEY: Thank you very much.

CHATTERLEY: Right, let's take a turn and look at the markets now. It's been a choppy day on Wall Street. The major indices clinging to small

gains. A fall in Boeing shares also weighing on the Dow more broadly. Investigators are looking into how regulators approved the company's

planes, also driving markets this week. Of course, a two-day Fed meeting, policymakers are expected to leave rates unchanged. The critical question

will be what do their forecast for rate rises look like throughout the year? Particularly given markets have priced nothing in for 2019. We will

wait and see on that.

To Europe though now where Deutsche Bank and Commerzbank have confirmed what investors and analysts have long suspected, they're discussing a tie

up. A merger would create a behemoth combined assets of $2.2 trillion. German politicians seem to want the deal. Investors also seem to be

encouraged. Something better than nothing here. Shares of both banks rose sharply in Frankfurt, but regulators are skeptical, and labor unions worry

the merger could cost 30,000 jobs potentially more and that could be enough to kill the deal entirely.

CNN's Matt Egan is following all the developments from New York. Matt, I've laid out some of the challenges here, but as economic growth slows,

the challenge of course for both of these banks is that they simply have not been able to restructure soon enough. Talk us through the details of

what a potential tie-up here could look like.

MATT EGAN, LEAD WRITER, CNN BUSINESS: So Julia is one struggling bank better than two? That's the central question here. Deutsche Bank

announced over the weekend, it confirmed that it's held merger talks with smaller rival, Commerzbank, which is 15% owned by the German government as

a result of a 2009 bailout.


EGAN: Now, the goal here would be to give both German banks greater scale, so that they could compete against the likes of Wall Street.

But you know, it's no secret that Deutsche Bank in particular has been mired in a deep slump, and so by joining forces, you wonder whether or not

there's a risk of spreading that pain across the German and the European banking systems.

Consider that Deutsche Bank has posted just one annual profit over the last four years. S&P downgraded Deutsche Bank's credit rating late last year.

The stock, as you can see from that chart, the stock is down an incredible 92% since May of 2007. It actually hit a record low late last year.

Compare that with America's largest bank, JPMorgan Chase is trading at twice the level it was at its pre-crisis high and it is actually trading

near its record highs right now.

And so the other big concern as you mentioned is the impact on jobs because by teaming up, Deutsche Bank and Commerzbank obviously want to cut costs.

That could result in the loss of 30,000 jobs according to the powerful unions there, labor unions there and so that creates the risk of a

political backlash.

Obviously, investors seem to like the idea, Deutsche Bank up about 4%, Commerzbank up around 7% today, but again, you know, I do think at the end

of the day, the real question is whether or not this will create a stronger bank or just a bigger one?

CHATTERLEY: Yes, I think you're asking exactly the right question and I think we know the answer to. Matt Egan, thank you so much for that, all


EGAN: Thank you, Julia.

CHATTERLEY: We're going to take a quick break here on "Quest Means Business." More scrutiny is coming from Washington for Boeing and the FAA

in the wake of two deadly crashes. We'll speak to the former chief inspector at the U.S. Department of Transportation to get her take next,

and later, companies in New Zealand debate whether to pull their adverts from social sites. This after those same sites struggled to take down

video of Friday's terror attack. We'll have all the details on that, too. Stay. Stay with CNN. You're watching "Quest Means Business."


CHATTERLEY: Welcome back to the show, the U.S. Federal Aviation Administration, the FAA, is under investigation, that's according to the

"Wall Street Journal" over how it approved the Boeing 737 MAX planes that have now suffered two deadly crashes.


CHATTERLEY: The 737 MAX has been grounded around the world. This investigation will focus on the first crash from October, when a Lion Air

flight from Indonesia plunged into the Java Sea and killed 189 people. Boeing shares are down more than 1% Monday. They're down more than 12%

though since the more recent Ethiopian Airlines crash that killed 157 people.

Tom Foreman is following this story from Washington and Mary Schiavo is in South Carolina. Mary was Inspector General at the U.S. Transportation

Department. She now represents families of airline crash victims in this current investigation or litigation pending against Boeing.

Tom, I am going to come to you first. What do we know exactly about this investigation? What are the details?

TOM FOREMAN, CORRESPONDENT, CNN: Not a tremendous amount right now. The "Wall Street Journal" here is reporting that the Department of

Transportation which is the umbrella group for the Federal Aviation Administration is looking into the question of whether or not the FAA

basically allowed Boeing to oversee too much of the approval process, gave it too much leeway in saying, yes, we conducted these tests. They were

fine. Yes, we checked this system, it worked fine. And that this was used to sort of rush along the development of the MAX line of planes out there.

Boeing is not really saying anything about this. The FAA is saying, look, we've always been about safety. We followed our normal procedures, but the

"Wall Street Journal" is suggesting that somehow this led to a short circuiting of the safety process, Julia.

CHATTERLEY: Mary, come in here please, because you point out very importantly that when we are looking at these kinds of investigations, you

can have civil and you can also have criminal. What is your take?

MARY SCHIAVO, FORMER INSPECTOR GENERAL, U.S. TRANSPORTATION DEPARTMENT: I think they are probably doing exactly both of those things. You know, the

Office of Inspector General back in 2015 issued a report on this very program on the FAA officially designating most of their inspections to

manufacturers and to airlines and in that report, they said -- and they wouldn't know until at least 2016 exactly how much oversight personnel they

needed over at Boeing and that Boeing did about 90% of its own inspection and the Inspector General already reported that in a prior report.

So announcing this investigation or I guess it's been leaked, it hasn't been officially announced, I mean, indicates that they have taken it to

another level because they already reported to Congress the great lapses and the really shirking of responsibilities to Congress and that that

didn't get anybody excited until now.

So when they issue a subpoena and they take it to the Justice Department -- that usually means it's a criminal investigation. A subpoena would mean

they are looking at for example, false statements to the government in the approval process whether they didn't do all the testing, but said they did.

Anything that is not accurate or would be fraudulent, the reporting there, certification process to the Federal Aviation Administration, and then the

civil side of their investigation, they will be going one step further. They will be looking at the FAA process, which they reported on many times,

sounding the alarm bell saying it's not adequate.

But what needs to be changed again? And I would assume that Congress will hold hearings. So that's usually what happens after a major investigation

by the Office of Inspector General.

CHATTERLEY: So there's two critical things for me here. One, has the FAA lost its bite here particularly when you're telling me that actually Boeing

actually approves its own and appoints its own inspectors here. Congress signed off on that. So, there's one question here of whether on what role

the FAA can actually play in this investigation, particularly when last week, we were saying why hasn't the FAA grounded these flight when other

regulators around the world have. I mean, it's quite shocking actually.

SCHIAVO: Exactly.


SCHIAVO: Yes, it is, and you make an excellent point. I mean, you see what -- that is so obvious to so many people except the FAA. When the FAA

was making those statements before the grounding of the planes, and they were saying we don't have any evidence to ground the planes, what they were

saying is we don't have evidence because they were not on top of the inspection process.

According to Office of Inspector General reports that even predate the Ethiopia crash and that the Office of Inspector General had already started

this investigation apparently after Lion Air, so the FAA in some ways is just being honest and there's one telltale giveaway here.

The FAA after the Ethiopia crash issued a statement saying, "We're going to make Boeing do these changes by April." That letter was issued March 11th.

The date of the subpoenas according to the "Wall Street Journal," March 11th.


FOREMAN: And Julia, let me point one other thing about this. This process politically has been going on in Washington for a long time now. This

sense of the business community saying we should be calling our own shots, we look after our own interests. We don't need so much government


And certainly, under President Trump, one of his pledges was I am going to push regulation further away from you and let business decide. So in this

case, we're talking about the FAA. But it comes at a big climate here of business pushing to say we can regulate ourselves. We don't really need

your fingers messing around in our pie.

CHATTERLEY: I mean, that's quite astonishing to me that in this kind of situation, where customer safety potentially is at risk, businesses are

more powerful than the regulators. Perhaps we shouldn't be surprised here given the lobby power that they have.

FOREMAN: Well, yes, Julia, but the other thing that the businesses will do, particularly in aviation as I am sure, Mary will agree, they'll point

to the extraordinary safety record of aviation and they will say, look how well we're doing. We don't need you messing around in this. We're doing a

great job. And we have these catastrophic accidents, but the overall safety record has been better so that I think confuses the debate about how

much safety is involved here and who would be responsible for it.

CHATTERLEY: Mary, I want to get your take on the other point here, which is safety. The former President of the French Aviation Safety Agency spoke

to CNN on Monday in Paris and he believes there is a flaw in the Boeing design, and a second accident should have been avoidable.

Just listen in to what he had to say.


JEAN-PAUL TROADEC, FORMER PRESIDENT, BEA: I think that the design of this system is not satisfactory as it relies only on one sensor, in case this

sensor fails, of course the system doesn't rock. And in this case, it could be difficult for the pilot to overreact to the system.

The fact is that the pilot should be -- should have been informed of the information from Boeing saying that in this case you have to do such

maneuver. Most probably, the pilot was not aware of what to do in this case. So there could be a problem with the training of the pilot, maybe a

problem with the maintenance of the system. And what happens, in fact, is that the measures taken by Boeing after the first accident were not enough

to avoid the second accident.


CHATTERLEY: Okay, so clearly we only have preliminary results. We have to wait for the full investigation, and the details from the black box. But

Mary, what do you think here in light of that?

SCHIAVO: Well, he zeroed right in on the key point. He zeroed in on something called the single point of failure. In aviation, it's all about

redundancy. It's redundancy that has helped to bring this aviation statistics so much better at aviation safety statistics.

But here we had a situation where one sensor could set off this chain of events and that's typically not allowed in aircraft certification. And

also, they're going to be looking at what were the risks? Now, when you do a system like this and you seek certification for this system to -- it was

kind of a stop gap measure to keep the airplane's nose pushed down, but Boeing would have had to figure out the risk of something going wrong, and

what was that risk? Was it one in 30,000 hours of flight? Or one in 10 million?

And you can readily see that if it is one in say 50,000 hours of flight, these events would be happening every other month, if it's one in 10

million, not so and I think the investigators need to find out, was that risk quantified and what was it?

FOREMAN: And Julia, I want to point out that these sensors on the front of the plane, this is just a matter of software. Both sensors could be

feeding into the system, they're simply not at this point, and behind the scenes, Boeing's explanation had been, we want to simplify the system,

that's why they are only using one, but certainly, two would have made a difference or could have.

CHATTERLEY: Yes, and they are pushing to updates to more investigative work here clearly needed. Mary, Tom, thank you so much both for your

insights there.

All right, we're going to take a quick break here. But when we return, the CEO and Chairman of our sister company, Warner Brothers, is stepping down

amid an ongoing investigation. We'll have all the details. Stay with us.


[15:30:00] JULIA CHATTERLEY, HOST, QUEST MEANS BUSINESS: Hello, and welcome back to the show, I'm Julia Chatterley. Coming up on the next half

hour of QUEST MEANS BUSINESS, I will be joined by Sir Martin Sorrell as his new company impresses the market with its first annual earnings.

And there's a new king of the fundraisers in the Democratic race to beat Donald Trump in 2020. First, the headlines though on CNN at this hour.

Dutch police have apprehended the man accused of opening fire on a tram this morning. Three people were killed and five were wounded.

The suspect is described as a 37-year-old and from Turkey. The motive behind the attack isn't yet clear. Mozambique's president says the death

toll could rise dramatically from a powerful cyclone that hit last week. It flew over affected areas to survey the devastation and said entire

villages have been wiped out, and more than 1,000 people may have died. The official death toll stands at 84.

New Zealand's Prime Minister says her cabinet has unanimously agreed to tighten gun laws. This after the massacre at two mosques in Christchurch

last week. She says details are still being finalized, but the new measures could include a ban on some semi-automatic weapons. Fifty people

were killed in New Zealand's worst ever mass shooting.

All right, at its first ever annual earnings, Martin Sorrell's new marketing firm has posted a strong set of numbers, shares in S4 Capital

closed around 2 percent higher in London, it says revenue rose more than 50 percent last year, it spent much of the year hoovering up other agencies

and production companies who broke up. Sir Martin Sorrell; the executive chairman of S4 Capital joins me now.


CHATTERLEY: No, great to have --

SORRELL: A hoover --

CHATTERLEY: You here. I mean, it is quite an exciting time when you see revenues jump, profits have jumped two --

SORRELL: Yes, 50 percent on revenues and a 100 percent on profits.

CHATTERLEY: That's great.

SORRELL: So a strong start. But from what? Acorns, oak trees grow, or --


[15:35:00] SORRELL: We move from peanuts to coconut or coco de mer is a double-chambered coconuts. So, no, the company had a good year last year.

A good start. But we're at the very beginning, hopefully of what will be a much longer incursion into digital. And we're in the sweet spot of the

industry --


SORRELL: Driving first party data, that data owned by clients, driving the development of digital content and programmatic or media planning and

buying that's algorithmic media planning, right, so we watch what you -- what you -- what your media have inside you there, and we try and serve you

ads that you'd be interested in.

CHATTERLEY: Yes, data-driven content, but data --

SORRELL: Right --

CHATTERLEY: Driven ad spending decisions --

SORRELL: Right --

CHATTERLEY: As well --

SORRELL: That's right --

CHATTERLEY: I mean, digital is where all the growth is. I mean 20 percent --

SORRELL: Well, it's growing at 20 percent, yes, so the industry as a whole, the 1 trillion in the industry and which 500 billion is an old stuff



SORRELL: Including digital and 500 billion is in stuff-like market research and PR and other. Basically, 20 percent of the total 200 billion

is in digital, and of the advertising revenues that I've described is all set at -- it's 40 percent. So, it's a very big sector and it's growing

very rapidly.

Overall, the whole lot is growing at about 2 percent or 3 percent or 4 percent. So the traditional holding companies have had problems in

migrating from the analog model that they had to digital models. So this is exactly the same as you see in every industry with the analog companies,

not of course CNN.

But the analog companies are trying to morph into digital companies. But where we are is in the sweet spot in the digital areas.

CHATTERLEY: So if I look at some of the more traditional companies in the space and of course WPP is still the first one --

SORRELL: Well, I'm still the largest individual shareholder.

CHATTERLEY: I know and your shareholding --


CHATTERLEY: Increased in the last week --


CHATTERLEY: As well --

SORRELL: In fact, it did increase. And in fact, you know --

CHATTERLEY: Congratulations.

SORRELL: Well, that was from one of the board finally for full sense and decided to go along with the award of the incentive plan, which they had

put in. And that will continue for a few years too.

CHATTERLEY: And there had been some suggestions that they might not --


CHATTERLEY: Give you those.

SORRELL: I think it was described as a big climb-down.

CHATTERLEY: Yes, OK, and we'll move on from that.

SORRELL: That --


SORRELL: I'm willing to grow on it --

CHATTERLEY: But congratulations --

SORRELL: Don't worry --

CHATTERLEY: I'm sure you are. But there are some obvious challenges. I mean, and as you've pointed out, you consider yourself now in the sweet

spot with going purely digital in your --


CHATTERLEY: Faith, whether that's --


CHATTERLEY: Whether that's advertising or the data --


CHATTERLEY: Focused that you've got right now. I mean, they still have huge businesses. They employ thousands of people in --

SORRELL: Hundreds of those.

CHATTERLEY: So buying part of the business. Now, I think one of the businesses that comes to mind is Group M. If we're talking about more and

more digital ad-spending being programmatic, I mean if the business --

SORRELL: Well, I mean, to be fair, Group M, you know, is a very strong business.


SORRELL: It's probably the strongest -- I would say, it's the strongest part of the WPP. There are digital parts, fairly like essence and access.

I mean, we took Michelle DeRite(ph) to run our Asia Pacific operation S4 Capital a few months ago, a few weeks ago.

And he run the programmatic part, the performance part of Group M in Asia and built it into a very significant operation. So they do have digital

parts. So I would say Group M is still the strongest part as I said, and that's a strong and still growing business.

Don't write off even the traditional media planning and buying part of the business.


SORRELL: Although what you say about essence and access in terms of programmatic and digitally based media planning and buying is still very

strong and growing faster than the traditional business. But I would say, overall it's the strongest part of their business.

The weakest part of their business is the old traditional creative part of the business, and custom research which is a part of cantor, which has

being put on the blocks --

CHATTERLEY: Which just takes time to turn around. I want to move on now and get your views on Brexit.

SORRELL: Girl, what views can I give you? I mean --


SORRELL: I did say on one of your competitor's networks this morning that we should have more time. That I found it very difficult to accept that we

should have sort of rammed down our throats the one plan. The Prime Minister's --

CHATTERLEY: The one deal?

SORRELL: Plan -- the one deal.

CHATTERLEY: That's now effectively off the table.

SORRELL: Why weren't there -- why weren't there alternatives? And you know, it's almost in parliament, you know, it seems to me very undemocratic

that you keep having a vote until you get the right solution. I mean, if you play the same for the referendum, we should --

CHATTERLEY: We should be having it all --

SORRELL: We should have a referendum all the time until we get the right solution. So it's a bit messy, but we've been living with this mess

probably for two and a half years.

And what I think I've noticed is that plans have been put in place by businesses to make alternative arrangements. For example, we have a very

significant business in Amsterdam in Holland. We have three sites there that we're consolidating to one.

The real estate operation there or the real estate market is very strong. So you're seeing in Frankfurt, you're seeing a bit in Paris, you're seeing

a bit in Amsterdam and in Dublin. The real estate market is reacting as companies make their alternative plans, notwithstanding the fiasco that we

have seen in parliament.

[15:40:00] CHATTERLEY: Do you think whether the U.K. ultimately remains in the EU, however that comes about, or in fact leaves -- I mean,

businesses have had to make decisions like leaving the U.K. We've seen that in the finance -- for financial --

SORRELL: Right --

CHATTERLEY: Sector in particular. Do you think it comes back? Do you think the U.K. can rebuild and get back --

SORRELL: Well --

CHATTERLEY: Investment --

SORRELL: In the long-term, yes. But I think there's going to be a process, if we come out. There's going to be a very significant process of

re-adjustment. That's why I remain a remainer in that sense. Because I think the process of adjustment will be very significant over a long period

of time.

It's going to take five, six, seven years, maybe even longer to renegotiate all these trade agreements, and move the U.K. from a trading pattern, which

is based on the big four markets. You know, Germany, France, Italy and Spain, and the rest of the EU to a model that's based on bricks and next


You know, Brazil, even Russia, India and China, and markets like Vietnam, the Philippines, Indonesia, Colombia, Mexico, Argentina, only market in

Africa and the Middle East. We have to redirect our trading pattern to these new areas. So it needs a fundamental re-assessment of our export

patterns. It has to be strengthened.

We have to behave more like Germany in terms of exports and export patterns. And I think high quality, high level manufacturing obviously has

to come to the fore. Service businesses will have to re-district there --

CHATTERLEY: All this takes toll --

SORRELL: So this is going to take a long period of time --


SORRELL: And what we're seeing at the moment. I mean, it was interesting hearing the analysis because both the Brexiteers and the remainers I think

seem delighted by the speaker's decision to kick this into the longer grass.

CHATTERLEY: Yes, and they do that when the deal fails as well. The problem is everyone won't be cheering forever.

SORRELL: That's right.

CHATTERLEY: Sir Martin Sorrell --

SORRELL: Thank you very much to you --

CHATTERLEY: Thank you so much for joining us.

SORRELL: I'm not sure whether this is the QUEST program or the Chatterley program.


SORRELL: OK, fine --

CHATTERLEY: I'll be back --

SORRELL: Come back, Richard, all is forgiven.

CHATTERLEY: We'll be back with more QUEST MEANS BUSINESS in just a moment, stay with us.


CHATTERLEY: Welcome back to the show. The chairman and CEO of Warner Brothers is stepping down after a 25-year tenure with the studio. Warner

Media announced Monday Kevin Tsujihara is currently under investigation over allegations that he offered to promote the career of an actress with

whom he was having a sexual relationship.

[15:45:00] The allegations were first reported by the "Hollywood Reporter". Warner Brothers and CNN are both owned by Warner Media. Brian

Stelter joins me now. Brian, what else do we know about this and the investigation and what next? Because clearly he had been around for a few

years now and actually have been pretty pivotal in terms of shaping the business, particularly as far as Warner Media's focus on things like "Harry

Potter" a concern.

BRIAN STELTER, CNN CHIEF MEDIA CORRESPONDENT: Right, this is a dramatic change for Warner Media and also in Hollywood writ at large. Because he is

the head of one of the largest movie and TV studios in the industry in the world and he's abruptly stepping down.

Now, Tsujihara had just been promoted actually, earlier this month he's promoted not just be running the head of the studio as he's been doing for

years, but also he was gaining oversight as some other parts of Warner Media's business. Then a few days later, that "Hollywood Reporter" story

came out, the one you mentioned that described an allegation that he was having a relationship with an actress and then offering to help get her get


Through a lawyer, Tsujihara said he never directly was getting her auditions, but he did admit to mistakes, he apologized to his staff for

mistakes in his personal life. And then in recent days, it was becoming increasingly clear that he couldn't remain as the head of the studio.

Still, this does come as a surprise to some staffers today. It is a blow for Warner Brothers because Warner Media, the whole media company including

CNN's parent has been going through this turmoil, this period of change as AT&T takes over.

So now, John Stankey; the head of Warner Media says he'll be announcing a new interim structure for the studio sometime on Tuesday, he'll be

figuring out a plan going forward now to run the studio. It's also a time of change in Hollywood because Disney and "Fox" are coming together this

week. Those two studios are merging, so a lot of turbulence right now in Hollywood on multiple fronts.

CHATTERLEY: Absolutely, Brian Stelter, thank you so much for that update - -

STELTER: Thank you.

CHATTERLEY: There. Right, companies in New Zealand are considering pulling adverts from social media sites on the advice of advertising

industry groups, it comes after Facebook, YouTube and others were blind- sided by the live streaming of the mass shooting in Christchurch mosque on Friday.

In a joint statement to the group, said Anza and Comms Council encourage all advertisers to recognize they have a choice where their advertising

dollars are spent and carefully considered with the agency partners where their ads appear.

Meanwhile, New Zealand's Prime Minister says social media sites have to do more to curb the spread of the video. CNN's Donie O'Sullivan joins us now

from New York. Donie, how did Facebook do here? Because the suggestion was that they did manage to stop many source of this video appearing, but there

were around 300,000 situations where they didn't manage to contain this video. And that's simply not enough.

DONIE O'SULLIVAN, CNN BUSINESS REPORTER: That's right too. I mean, the scale of the amount of people, the amount of videos that were re-uploaded

of this incident is staggering, 1.5million versions, copies of the live stream that the suspect streamed during Friday's attack were uploaded in

the first 24 hours to Facebook.

Facebook said that they caught all, but 300,000 of those, and they haven't told us how many people have -- had seen those videos or how many people

had interacted with them in any way. But I mean, that really just does give you a sense of why, you know, terrorists and suspects and crimes like

this use these platforms.

They can have an enormous reach. Now, Facebook did not catch the original video while it was streaming live, it streamed for about 17 minutes, it was

streamed by the suspect. There's actually police in New Zealand that had to tell Facebook about that, what was going on in their own platform.

Now, Facebook says they have teams working around the clock all weekend trying to remove copies of the videos as have other platforms.

CHATTERLEY: So there's so many angles here, Donie, that are important. The first one being that this terrorist attack was live-streamed for 17

minutes, and Facebook simply didn't catch it. The other thing is we know that they've been beefing up moderators, algorithms, artificial

intelligence to try and crack down on these kinds of issues with content, and they're simply failing.

They're not doing it fast enough. We also have the aspect that the more people viewed it, the algorithms bumped it up in importance. So the

situation was kind of out of control. How does Facebook tackle this, and what are they saying about their handling of it?

O'SULLIVAN: Yes, I mean, it really is sort of the perfect storm. And as you mentioned, over the past two years, Facebook has commanded,

increasing scrutiny for a troll and disinformation particularly in the lead up to the 2016 election, and obviously how it, you know, controls user

privacy after the Cambridge Analytica scandal.

[15:50:00] As a result of that, Zuckerberg and other executives at the company have been telling us pretty much every week that they're hiring

tens of thousands, in fact 30,000 moderators, human moderators that are supposed to find these things on the platform, and investing in software --

CHATTERLEY: Terrible --

O'SULLIVAN: And artificial intelligence to find this content as it's going up in real-time. Obviously, that was a failure on Friday, they didn't

catch it. A lot of folks are saying, you know, these platforms were able to tackle the threat of ISIS, how ISIS was using social media to radicalize

people online very effectively.

And why can't they do that with white supremacy? That might be something they will, you know, look more at doing, but it is a lot more nuanced than

I guess the ISIS issue. In that, a lot of the sort of content that, you know, stirs people, it's more dog whistles, sometimes it's even elected

officials that are tweeting and posting this sort of thing.

CHATTERLEY: Yes, you make a good point about the sources and the type of content here, but more broadly, they have a huge problem they're simply not

on top of here. Donie, great to have you with us. Donie O'Sullivan reporting there.

Beto O'Rourke is running for office literally. He's one of the U.S. presidential hopefuls shattering fundraising records and setting up a fight

for the money to take on Donald Trump. Stay with us for the latest on that.


CHATTERLEY: Huge numbers from the race among Democrats to take on Donald Trump in 2020 show how the next presidential election will see

unprecedented amounts of money. Beto O'Rourke; a former Texas congressman, he was relatively unknown until he ran for Senate last year, says he raised

$6.1 million in the first 24 hours of his campaign.

That breaks the record Bernie Sanders set just last month. It's impressive for O'Rourke because Sanders ran for president in 2016, so he already had a

massive base ready to donate. The rest of the Democratic field doesn't come close, Kamala Harris; senator from California also chose to disclose

her first 24 hours of fundraising.

Harris brought in just $1.5 million. Harry Enten is in New York, he's the data guru over on CNN's politics team among other things. Harry, what do

you think of this? Just in terms of the record amounts of money raised, but I know it's a new unique way of doing it and a unique field here.

[15:55:00] But how good an indication is this for performance later on?

HARRY ENTEN, CNN SENIOR WRITER & ANALYSTS: Well, what we do know is that both Sanders and Harris who were previously one and two are obviously now

two and three saw a large polling boost after they disclosed raising this amount of money over $1 million in the first 24 hours.

So the fact that O'Rourke has beaten them, to me is a sign that he may instead see a larger polling boost in either one of them or at least in the

same level they saw polling boost of say five to ten points after they jumped in the race.

CHATTERLEY: But it's not just about the money, it's about where he's pulling it from or not pulling it from. No PACs, no corporations, no

lobbyists, no special interests, surely this will make him really powerful if he did manage to get into power because he doesn't have the right people

to please.

ENTEN: I mean, that's exactly right. I mean, this is one of the things we've seen on the Democratic side this year as we've seen these pledges not

to take money from Super PACs, not to take money from these large dollar donors because Democratic voters want to ensure that their politicians are

not tied to special interests, and O'Rourke is just the latest one of those.

CHATTERLEY: And what will that mean ultimately, Harry, as we get closer?

ENTEN: I think, you know, in terms of the money, just what it means in getting closer, as I will say this. If you're able to raise this amount of

money from small dollar donors, that means you can keep going back to them over and over and over again.

And in --


ENTEN: Such a large field, the ability to keep going back and raising money means you can continue on with your candidacy when other candidates

have to drop out because they simply don't have enough money.

CHATTERLEY: And then we made the point that Bernie Sanders was the record holder until we got these numbers. Similar story with him, so much more

powerful this time around.

ENTEN: Yes, absolutely, I mean, the fact is this is going to be a record year for money being raised by all of these different candidates. And for

me, to be able to go up against Donald Trump come the Fall, they're going to need a lot of money.

And it seems to me that the Democratic candidates, there's a lot of enthusiasm from their voters and it's being translated into these dollars.

CHATTERLEY: Quite fascinating to see. Harry Enten, a data guru, thank you so much for all that --

ENTEN: Thanks so much.

CHATTERLEY: Right, the trading day is coming to an end, we'll have the closing bell right after this.


CHATTERLEY: So markets are about to close on Wall Street. The three major indices are up slightly, the Dow has moved higher in the past hour or so.

But it's been a choppy day of trading, investors clearly in wait and see mode ahead of this week's Fed meeting in particular.

You can take a look at the Dow 30 stocks. Boeing right now at the bottom as you can see, down some 1.8 percent. Investigators are looking into how

regulators approved the company's planes as we were talking about throughout the show. To Europe now, most indices closed higher.

We did see the Dax falling one quarter of 1 percent in Frankfurt. That despite a sharp rise of shares in the likes of Commerzbank and Deutsche

Bank. The two banks have confirmed they're discussing a merger. The deal though faces stiff opposition from labor unions. And that is QUEST MEANS

BUSINESS, that's the closing bell as you can see behind, lots of clapping - -


I'm Julia Chatterley, "THE LEAD" with Dana Bash starts right now, thank you for watching.