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Quest Means Business

Shares In Regional Banks Fall After First Republic Takeover; Yellen: US Could Default By June 1; Film And TV Writers Go On Strike For First Time Since 2007; AI Pioneer Says Some Regulation Necessary; "Time" To End Paywall; FIFA Threatens Women's World Cup Broadcast Blackout. Aired 3-4p ET

Aired May 02, 2023 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ELENI GIOKOS, CNN INTERNATIONAL HOST: A miserable day for the markets. The Dow falling sharply as investors brace for Wednesday's Fed decision and

more turmoil in the banking sector. As you can see the Dow is down over one percent, that's a loss of 382 points. Well, those are the markers and these

are the main events: Stocks in regional lenders are under pressure as investors worry more banks could be on the brink of collapse.

Late night television goes dark as Hollywood writers go on strike.

And free time, the CEO of the iconic magazine tells me how she plans to draw in new reader by dropping its payroll.

Live from Dubai, it is Tuesday, May 2nd, I'm Eleni Giokos. I'm in for Richard Quest and this is QUEST MEANS BUSINESS.

A very good evening, and tonight investors have fresh doubts about the strength of some US bank. Shares in PAC West and Western Alliance are

sharply lower. Steep losses for other regional lenders as well. As you can see PAC West is down 25 percent, Western Alliance down 16.2 percent.

Now the selloff comes one day after First Republic was taken over by JPMorgan. CEO, Jamie Dimon said on Monday that this part of the banking

crisis was over. His statement hasn't restored broader confidence. The Dow is down around 400 points.

As you can see, it is red across the board. The S&P and NASDAQ also in the red.

We've got Matt Egan joining us. Matt, great to see you.

Let me tell you, putting up one fire doesn't mean the risk is out of the system as Jamie Dimon might have hoped and the numbers speak for themselves

today. The question is what is under the hood?

MATT EGAN, CNN REPORTER: Well, Eleni, the bank crisis clearly is not over. Jamie Dimon, he did say that this part of the crisis is over, but he didn't

say what comes next. And clearly, we're seeing more selloff in the regional bank sector. We've now had three banks collapse in just the last seven

weeks. That's after no bank failures in 2021 or 2022.

I don't know that there is a single catalyst for today's selloff. I do think that in hindsight, yesterday's action was telling because here we had

kind of the best-case scenario, JPMorgan coming to the rescue to buy First Republic, and yet, regional bank stocks they didn't rally, they actually

ended the day, sharply lower.

More selling today. There are some concerns on Wall Street about how these banks are going to make money in this current environment where you have

the cost of deposits going up, and the willingness to lend go down. That is never a good recipe here.

Plus, as you mentioned, we have the Federal Reserve raising interest rates most likely, again. Tomorrow, another rate hike is going to add pressure to

the system.

Former FDIC chair, Sheila Bair, she told me yesterday that she thinks the Fed needs to pause here. She said that Jerome Powell and the Fed have to

stop trying to look so tough on inflation, because it's going to backfire.

Meanwhile, Senator Elizabeth Warren, she is calling for accountability here related to the bank failures. Listen to what she told me today.

(BEGIN VIDEO CLIP)

SEN. ELIZABETH WARREN (D-MA): We cannot be a country that just time after time rolls through another banking failure and nobody gets held

accountable. Not, the CEOs of these giant banks and not the people in government who were responsible overall for how the government supervised

and regulated these banks. It's both places.

(END VIDEO CLIP)

EGAN: Now, Warren is pushing a bipartisan bill that would give the FDIC the ability to claw back executive pay at banks that have failed. That is what

she has in mind for accountability there.

As far as the Fed goes, I asked if she thinks the Fed here is responsible. What does accountability look like? Does she want Jerome Powell to resign

and she said that Jerome Powell should not be the chair of the Fed, but she stopped shy of outright calling for his resignation.

[15:05:10]

GIOKOS: Lots happening in the banking sector, Matt.

Matt Egan, great to have you on.

This drama might be continuing for a little bit longer, that is why we are now joined by CNN economics commentator, Catherine Rampell to break this

down even further.

I'm just looking at some of the numbers coming through from the banking sector. Look, we don't know what daily market moves actually mean, but here

is the thing, we are really worried about just the kind of contagion within the banking sector that still has not been discovered that might be

bubbling under the surface, and what this could mean for the overall economy.

CATHERINE RAMPELL, CNN ECONOMICS AND POLITICS COMMENTATOR: Yes, look, to be candid when the Silicon Valley Bank failure happened, I guess that was

about a little over a month ago at this point, I thought that maybe we would have a little bit of frenzy for a few days, but it would mostly be

resolved once federal regulators stepped in and agreed to fully make whole, the depositors at both Silicon Valley Bank and Signature Bank.

And they clearly thought that that was going to be the end of things too. And instead, we have seen further contagion throughout the banking system,

throughout primarily regional and smaller banks, that some of which have similarities to those couple of banks that I just mentioned, you know, more

high net worth depositors, more uninsured deposits, but a lot of them look pretty dissimilar, and you're still seeing nervousness about the financial

conditions of those banks.

And I think that's partly a reflection of higher interest rates is going to put more stress on the system in general, you know, that's what's going to

happen, particularly for the smaller banks that hold a lot of commercial real estate on their books. Commercial real estate is in trouble. And if

those interest rates reset sometime in the next year, as many of them will, we don't know how those loans will fare, but also, I think, general anxiety

about the state of the economy and what other shoes are yet to drop.

GIOKOS: Yes, exactly. Look, when I was reading the report about what happened with SVB, it was interesting to see, look, the Fed acknowledge

that they figured out there were issues, did they act quickly enough? No. Were they aggressive enough? Absolutely not.

And that is the issue, it is just what role the regulators should be playing now in terms of conducting more thorough stress tests on banks to

ascertain the depth of the issue.

RAMPELL: Yes, I think that's a large source of fear right now, if the Fed messed up, in this particular scenario, what else might they be missing?

What other vulnerabilities within the financial system might they have missed? And to be clear, you know, I don't know of a bomb about to go off

anywhere else, except for maybe the debt limit, but that's a whole separate issue.

But I think that the fact that the Fed among other regulators seem to be asleep at the switch in that particular case, gives cause for concern about

how these interest rate increases, how other vulnerabilities in the financial system in the economy may be, you know, what may surface I guess,

in the months ahead.

GIOKOS: Yes. absolutely. A couple more things, look, this threshold on what is considered a systemically important bank to change that will take time,

is that going to be something that will be needed in the next few months for regulators to take into serious consideration?

RAMPELL: I think it's likely that they will. Again, there are multiple things that went wrong here, even without these particular banks, Silicon

Valley Bank and Signature Bank being declared systemically important. There probably should have been more oversight from the regulators.

So yes, having that label will subject them to more scrutiny, but even the amount of scrutiny that they had, seems to have had failed, if that makes

sense that that there were again, risks pretty much in plain sight.

If you look at, for example, Silicon Valley Bank, they were pretty open about the fact that they had decided to stop hedging against higher

interest rate risks, which most people could tell you they expected interest rates to keep going up. This was probably not a great move. This

was in their quarterly filing or their annual filing, I believe, at the end of last year.

So even if they weren't designated systemically important, that's the kind of thing regulators should have noticed.

GIOKOS: Yes, look, lifelines like what we saw from JPMorgan with Jamie Dimon coming in and also saying, look, I'm hoping that this is going to put

things to rest. Are we going to have to see more lifelines, do you think for the banking sector in the next few months?

[15:10:12]

RAMPELL: If I knew for sure, I would be a very rich woman.

I think it is reasonable to guess that there will be more surprises ahead. There always are and particularly in the current economy, where we have

lots of different conflicting economic signals and financial signals that means there is even more uncertainty, in which case, there may have to be

some sort of rescues that come.

Whether that means from the private sector or the public sector, I don't know. Again, I'm hopeful that the worst is behind us, but I kind of thought

the worst had been behind us over a month ago, and clearly, there is still turmoil in the banking system.

GIOKOS: Yes. It feels like we have to hold on tight for the next while, it is going to be a roller coaster ride. That is my prediction.

Catherine Rampell, great to have you on. Thank you.

Well, President Biden will meet with House Speaker, Kevin McCarthy to discuss the debt ceiling next week. The two have not met since February.

The President and House Republicans have been in a standoff over the issue for months.

Mr. Biden said he wants to pass a clean bill to raise the debt ceiling. The House passed a package last week that would have cut spending, and included

other measures Democrats would not accept. It comes as the Treasury secretary warns the US could default as soon as June 1st.

Janet Yellen wrote in the letter: It is imperative that Congress act as it has done in the past. Lawmakers have raised the debt limit 78 times since

1960. Secretary Yellen urged Congress not to wait until the last minute.

CNN chief White House correspondent, Phil Mattingly is at the White House for us. I'm looking at this debt limit graph. It is extraordinary. But

here's the thing, Janet Yellen warning that the deadline is far closer than initially thought. It means politicians need to come together and act very

quickly.

PHIL MATTINGLY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Yes, and I am going to go ahead and co-opt what you just said related to the banking industry

and apply it to the next month ahead, hold on tight, it's going to be a roller coaster ride.

And the reason why is, despite the sheer scale of the US debt, and at this moment, there's no question about the $31 trillion and the way that it has

jumped over the course of the last couple of decades in particular, is a potentially major problem in the future.

The major problem for now is the fact that the US is a liquid nation, the US has made good on its debt since it has existed. And the US is facing the

very real possibility of default, default that would have a catastrophic impact across markets, across the US economy, across the global economy to

some degree, and it is entirely preventable, if lawmakers passed a bill raising the statutory debt ceiling.

The problem at this point in time, we've seen these fights in the past, usually they reach a resolution at this point in time with about 30 days

left based on the early case deadline laid out by the Treasury secretary, there is no clear path forward, there is no clear off ramp, there is no

alternative or potential compromise that is sitting out there.

This meeting that will occur next week between President Biden and the top four congressional leaders, including Speaker Kevin McCarthy, is really the

first movement we've seen after months of staring one another down. And even in that meeting, both sides have reiterated their very firm positions

of which there is no way to thread the needle in between them.

So, the question right now has largely been, what is going to give? President Biden and his team have made clear over and over again, they will

not negotiate on this, they will not add spending cuts to a debt ceiling increase. They want it to be clean, they want nothing attached to it at

all. And in part, that's because they want to avoid having these types of fights again.

If you want to threaten government shutdowns. If you want to threaten issues related to budgets and spending, they're more than happy to have

that battle, but when it comes to the nation's credit, they don't want that to be considered a viable point of leverage.

Republicans have made clear they will not pass anything to raise the debt ceiling or suspend it without spending cuts. So, at some point in the next

three or four weeks, they are going to have to figure out a way out of this. Right now, at this point and I know this sounds dramatic, but it

should be understood as just that, there is no pathway out of this despite the fact we seem to have these fights every other year or so.

GIOKOS: Yes, we do and we seem to also get 11th hour you know, deals coming through getting the markets and people very jittery, at least, we have a

day to work towards, according to Janet Yellen.

Phil Mattingly, great to have you on. Thank you.

Well, coming up, no fresh jokes for late night comedy. The Writers Guild of America calls its first strike since 2007. We'll look at how show business

has changed over the last 15 years and why writers say, they are the ones getting squeezed by streaming.

(COMMERCIAL BREAK)

[15:17:29]

GIOKOS: Welcome back.

And a serious case of writer's block is hitting Hollywood. The Writers Guild of America has called its first strike since 2007 after contract

talks broke down with major studios.

The move is already affecting late night TV shows like "Jimmy Kimmel Live" and "The Late Show with Stephen Colbert" are set to air repeats for the

first time being.

Now, the labor dispute could soon halt production on scripted TV shows as well as movies. We've got Vanessa Yurkevich at the picket line with

striking writers.

Great to have you on.

You're talking to writers on the ground. Strike is on the go. What are they telling you?

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, we are here in New York City on one of the picket lines outside of Peacock

Studios. These are the WGA members who are on strike for the first time this afternoon.

This is after contract talks broke down between the Writers Guild and the studios. The key sticking points really are the number of writers in the

writers' room, the length of employment of writers on specific shows and films and movies and also regulating artificial intelligence, as well as

residuals from streaming services.

This is the key thing that we've been hearing from folks on the line. They want to make sure that they are fairly compensated as the industry is

moving from broadcast to studios.

You'll see a lot of the signs really talk about this very issue. One sign here says, "I stream, you stream for a fair contract." Also, we're hearing

from the studios themselves, they are saying that they have offered additional compensation. They have offered more in residuals around

streaming and they are actually willing to go higher on their offer, but the writers saying that it's simply not enough.

And the last writers' strike we saw was in 2007. It lasted about 100 days, and at that time, the economic impact was $2 billion. If you adjust that

for inflation, that's $3 billion. But all of these writers here also supported by their SAAG members, they are saying that they are willing to

stick it out here on the picket line as long as needed to get a fair contract that they believe they deserve.

GIOKOS: Yes, Vanessa Yurkevich, thank you so much.

[15:20:03]

Well, the last time writers walked off the job, show business ground to a halt. The 2007 strike lasted 100 days and for some shows, off the air

entirely. Those who stayed on the air like Conan O'Brien were forced to write their own jokes.

([VIDEO CLIP PLAYS])

In this clip, O'Brien filled air time by spinning his wedding ring on his desk. Take a look at that.

Well, movies also had to adjust their productions. Daniel Craig said he was required to come up with some of his own lines with the James Bond film,

"Quantum of Solace."

This new strike is taking place at a pivotal moment for Hollywood. Major questions about streaming and AI remain unresolved.

Adam Conover is the creator and star of "Adam Ruins Everything." He's also on the union's negotiating committee and spoke to CNN earlier.

(BEGIN VIDEO CLIP)

ADAM CONOVER, CREATOR AND STAR OF "ADAM RUINS EVERYTHING.": We want to make sure that writers are paid the same in streaming as they are on television.

My first show was for TruTV. My second show was for Netflix. The show had the exact same format. But on Netflix, we had no minimums. We had no

protections. We were paid less. The residuals are literally one percent of what they were under broadcast, and that's true for everybody in late

night. That's true for screenwriters. It's true across all of our work areas.

(END VIDEO CLIP)

GIOKOS: All right, TV writer David Slack joins me now. He most recently wrote for "Magnum PI," and has worked on many other shows, including "Law

and Order" and "Person of Interest."

Great to have you on. It is such an honor to meet you. It's great to see someone behind the scenes of the shows that I absolutely adore.

Look, here's the thing. You know, these negotiations happen behind closed doors and it is absolutely vital in understanding the dynamics when you go

to the studios and say what your needs are, why did the negotiation and the talks break down to the point where you had to go on strike?

DAVID SLACK, TELEVISION WRITER AND PRODUCER: Well, we put out -- the Writers Guild of America put out last night a side-by-side comparison of

our asks versus the studio's proposals and on many of our major issues, they failed to counter to our offers at all, or our demands at all. So,

when they're not negotiating on the major points that are important to writers, there's not much to talk about, which I guess is why they chose to

disengage and force us to go on strike.

GIOKOS: Look, the streaming issue is quite an important one. We heard from our reporter there that this has actually changed the way that contracts

are formulated. It's changed the timeframe of contracts. Have the streaming services been a negative for the experience of writers?

SLACK: I mean, it's a mixed bag because there has obviously been an explosion in content. There are a lot of people who have got their first

job in streaming, have only worked in streaming.

As far as compensation goes, the industry as a whole is grinding us down. Writer's pay has fallen to four percent over the incredibly prosperous

decade of peak TV and when you adjust for inflation, that's down 23 percent.

Ten years ago, a third of TV series writers were working at minimums. Now that number is up to half.

So, we're not -- we're a middle-class union. There is a sort of an image of Hollywood writers as you know, living a sort of glamorous lifestyle. We are

people who are worried about paying our rent, paying our bills, raising our kids, having a family, buying a home, and having something leftover for

retirement.

And that's true, not just of us. That's true of actors and directors and crew members. This is a middle-class industry.

And the way that things are unfolding on a compensation front, as we move into an increasingly streaming driven industry, that's not working out for

writers, I don't think it's working for any of us except for possibly the CEOs of these corporations.

GIOKOS: And you know, I was looking at the freelance landscape as well, which clearly has gained massive momentum. Look, the gig economy is an

interesting one. It gives people opportunities, but it also opens the door for major exploitation. How has this trend affected you?

SLACK: I think that we're in a moment where we have companies like Netflix and Amazon and Apple coming in with a tech mindset, where there is

a desire, perhaps on their part, to push us into a more freelance gig-based model.

We are the people who make a product that is incredibly, incredibly lucrative. The studios made -- industry revenues topped $220 billion last

year. They've made $30 billion in pure profit every year since 2017. They've got plenty of money that they make off of a product that we are the

people who know how to make.

So, we're not necessarily in a situation where you can just plug one of us in or swap in, you know workers from anywhere. This is a very specialized

trade and it takes a long time to learn and it's really rare to be talented at it.

So, that has value and all we're asking is the value that our work is worth to participate in the booming industry that we are all a part of, and that

we all love.

[15:25:16]

GIOKOS: Look, the AI revolution is, I think, becoming a lot more intense and aggressive. It's making everyone think very deeply about their role.

How are you thinking about this? How is the guild, thinking about what AI could mean for your future?

SLACK: AI is a complicated issue. Our contract for generations has said that the writer of a script has to be a person, so we hold to that.

Artificial intelligence as it presently exists is a massive copyright problem and that is something that the studio's would have to sort out,

those AIs if they train them off of our scripts, who gets credit for that?

So, it is a thorny problem. It's a complicated one and I think the evidence is there that the technology's not there right now. I think, AI, will

probably, you know, replace high up executives at companies long before it replaces Hollywood writers. I don't think there is an AI yet that knows how

to make your heart soar and knows how to make you cry, knows how to draw you into an unfolding story, that takes you places nowhere you ever thought

you'd go before.

GIOKOS: Thank you for reminding us of this, right? Only people like you can make us feel that way.

Look, 2007, we had a hundred days of strike action. I think the industry felted very intensely. What is your prognosis of how long this is going to

take to find some kind of middle ground?

SLACK: I wouldn't want to speculate about that. It is going to take as long as it takes to get a fair deal with the studios. They could have made

a fair deal with us last night. That would have been the smart thing for them to do.

Instead, they've chosen, of course, it is going to cost them billions, and they're still going to wind up making a deal with us.

We were out for a hundred days in 2007 and we stopped when we got what we wanted, which was coverage over streaming. Had we not gone on strike then,

all of those streaming shows would be non-union, not just for writers, but for directors, actors, and crew.

So, we'll do this for as long as it takes to get what we want and what we need in order for writing to be a sustainable profession rather than just

an elaborate hobby.

GIOKOS: David Slack, GREAT to have you on. Thank you so much for your time.

SLACK: Thank you. Take care.

GIOKOS: Well, "Time" Magazine turned 100 this year. Now the digital side of the business is preparing for a major shift. I'll have the CEO of "Time" up

next.

(COMMERCIAL BREAK)

[15:30:00]

GIOKOS (voice-over): Hello, I'm Eleni Giokos and there is more QUEST MEANS BUSINESS in a moment, when we will be speaking to the CEO of "Time" about

the company's decision to drop its paywall.

And FIFA is threatening not to broadcast the Women's World Cup in some countries. It wants broadcasters to pay more for the rights.

Before that, this is CNN and, on this network, the news always comes first.

(MUSIC PLAYING)

GIOKOS (voice-over): Palestinians in Gaza and the West Bank are on strike, protesting the death of a prominent prisoner in Israeli custody. Khader

Adnan had been on a hunger strike for nearly three months.

The Islamic Jihad member was a symbol of resistance to Israel's policy of detaining some Palestinian suspects indefinitely without charge.

South Sudan says the leaders of rival factions in Sudan have agreed in principle to another cease-fire starting Thursday. It would last a week and

the generals would send envoys to peace talks. Neither faction has made an official statement. Several earlier cease-fires collapsed.

The Kremlin is disputing White House claims about Russian losses this winter in Ukraine. The U.S. estimates more than 80,000 Russians have been

wounded and 20,000 killed since December. The Kremlin says Washington has absolutely no way to give accurate numbers.

Protesters in Paraguay are disputing Sunday's election results. The right wing candidate Paraguayo Cubas finished third with 23 percent of the vote.

His supporters blocked roads, burned tires and destroyed his opponents' billboards. President-elect Santiago Pena was declared the winner with 43

percent of the vote.

Ugandan lawmakers have amended a draconian anti LGBTQ bill. It now no longer outlaws identifying as gay. It still has long jail sentences and

even the death penalty for what the bill calls aggravated homosexuality. The president had asked for some of the changes.

(MUSIC PLAYING)

GIOKOS: The man referred to as the godfather of AI quit his job at Google to sound the alarm about the technology he helped develop. Geoffrey

Hinton's decision comes as more experts and policymakers highlight the potential for AI to spread misinformation and destroy jobs.

In March, a host of key figures in tech signed a letter, calling for a pause in AI development for at least six months. Among people who signed

was Apple cofounder Steve Wozniak. Here is what he told CNN's Kaitlan Collins earlier.

(BEGIN VIDEO CLIP)

STEVE WOZNIAK, APPLE CO-FOUNDER: Technology brings some good things to us and some bad things. And we should be responsible and we should study these

things and kind of prepare people for what is coming and take steps, maybe, to keep it from being too horrible and bad.

For example, you know, look at how many bad people out there are just hitting us with spam and trying to get our passwords and take over our

accounts and mess up our lives. And now AI is another more powerful tool and it's going to be used by those people for basically evil purposes.

(END VIDEO CLIP)

GIOKOS: Anna Stewart is in London for us.

With the godfather of AI as well as Steve Wozniak, among others, warning about what AI could mean for humanity, the question is, are companies and

regulators listening?

ANNA STEWART, CNN CORRESPONDENT: I think it depends which companies. I've spoken to some of the big ones like Deep Mind. They are very focused on

trying to create some ethical rules around all of this. But of, course how do you limit?

It how do you police it?

And what regulations could governments put in place as well?

It's a huge fear that, frankly, AI is moving at such a rapid clip. There's so much competition on the stage right now, almost an arms race really of

all these Big Tech companies rolling out their own platforms. It's really being sped. up.

[15:35:00]

I think that is what has concerned Dr. Hinton as much as anything else. He gets into some of his concerns and more details. He's left his job at

Google just so he can voice his concerns.

As you, say he's something of a pioneer of the technology. He laid lots of the foundation work for many of the applications you see today. And his

concerns include, firstly, this is very sort of immediate, frankly, the issue of do people know what's real and what's not.

This has become really difficult. You and I have spoken about this before. This is music video, text, photos. What has been AI generated and

manipulated or hasn't, sometimes it's done in good fun and it's jovial and it's clear. Sometimes it's not.

And I think that picture of the pope wearing a puffer jacket was an example where lots of people fell for that and thought it was real and it wasn't.

What could be done around that?

And what could it mean actually if that is applied by bad actors?

Secondly, he thinks about job disruption and that is something lots of people are talking about today.

Thirdly, Eleni, this was more sci-fi fears.

But what happens if and when AI becomes smarter than people?

This is something that Geoffrey Hinton is really concerned about. He thought it would take 30 to 50 years. He is now revising that back. He

think it's going to happen much sooner and he sees this as genuinely a real threat to society.

GIOKOS: If he helped create it, we should perhaps be listening. The question now becomes how they are going to regulate this. Anna Stewart,

thank you so much. I'm sure we'll be talking about this a lot more in the months and years probably to come. Anna Stewart for us in London.

The media group, Vice, is preparing to file for bankruptcy, according to "The New York Times." The company, which was once valued at $5 billion, ran

into difficulties in recent years and was aiming to survive by slashing costs. It has also been looking for a buyer. Last week it said its flagship

news show would be axed.

It comes as a tough economy and weak advertising income weigh on media businesses. One of Vice's major competitors, BuzzFeed, just shuttered its

entire news division.

Time, the company behind "Time" magazine, it's also making big changes. It is getting rid of its paywall on June 1st. It says it wants to pull in a

younger, more diverse audience.

"Time" has been around for 100 years and has had a paywall for more than a decade. In the future, you'll still have to pay for a physical copy of the

magazine. But when it comes to digital, there will be greater emphasis on ad-supported content.

Jessica Sibley is the CEO of Time and she joins me from New York.

Great to have you on, thanks for joining us. I was looking at the numbers; paywall started in 2011. Right now, you have about 1.3 million subscribers

of your print magazine, 250,000 digital subscribers.

Looking back on the past decade, what do you say the paywall did not get you to achieve the numbers that you are hoping for?

JESSICA SIBLEY, CEO, TIME: Thank you so much for having, me it's great to be here. As you said, I'm so excited to talk about our change and our

business and the elimination of our paywall. I announced this at the "Time 100" gala last week, that was our celebration of our "Time 100" list.

But also a moment in our history, being a 100-year company and our centennial. And we believe that getting access to time.com is critical.

We believe that being able to reach audiences that are diverse, that are global, that are younger, to have our content available to everyone

everywhere globally for free is really important, not only for the next decade but the next 100 years.

This was not a hard decision for me, as the CEO of Time. This is important in terms of the new cycle that we're in and making our trusted journalism

available.

GIOKOS: Clearly a confluence of issues, here but one of the things you obviously had to take into consideration is added revenue.

Where would that come from?

What kind of numbers you're predicting and anticipating in addition to democratizing your content.

SIBLEY: In the media industry, change has been the only constant. I've been doing this my entire career. Being able to scale and reach global

audiences, diverse audiences, younger audiences is really important.

It's important, number one, for our courageous journalists to get their stories out there. More globally, it is important for our consumers to be

able to access this content easily, to make it more accessible, to have less friction getting on our site.

It's also important for our business and our business models. We're excited about the next step that we're taking in our future.

[15:40:00]

We're looking at all kinds of modern-day new business models.

How do we calibrate?

How do we diversify our revenues?

At Time, we're really excited over the last several years of building new businesses. We built Time Studios, which is our Emmy award TV and film

documentary business.

We built Time CO2, which is our climate action portfolio and sustainability platform.

We built a thriving event business, which we showcased last week at our "Time 100" and our Earth Awards. And we are going to continue to take risks

and look for new models to stay a vibrant, trusted brand and business like the last 100 years.

GIOKOS: Exactly. Here's the thing, you are diversifying quite extensively. I'm looking at Time Studio. Great revenue numbers coming through. There are

global live events as well.

How important is the journalism part, the news segment of "Time" going to be for the future of "Time" in terms of profitability, sustainability?

Or do you think other revenue models from other departments are going to be a lot more important?

SIBLEY: All revenue models are important. But the core is our trusted journalism. It starts and ends there. That has been our focus. That will be

our focus. And when we look at the opportunity with our paywall, it's all about inclusivity, helping with our purpose and our mission to be more

inclusive with news literacy for kids.

When we talk about "Time for Kids" and the opportunity to expand. I was really inspired, I was here as CEO day two. I had an opportunity to meet

Hans Vestberg, the chairman and CEO of Verizon. He's been doing so much work in the space with The Edison Alliance, the World Economic Forum.

To really make an impact on the digital divide, to get the marginalized billions of people that, by 2025, to be able to access trusted, important

information is just critical to what we do at Time. It's what we've done and will continue to do.

GIOKOS: Look, to your point, disinformation is running rampant right now. There's so many changes on the social media landscape. We just saw what

happened with Vice and BuzzFeed as well. We are worried about what the digital news landscape is going to look like.

People are considering the impact of AI.

How are you viewing all these externalities right now?

SIBLEY: Again, in media, change is the only constant. We are constantly looking for new media models, new audiences. Consumer behaviors are

shifting. This is not new for us.

We started with printed and then we went to digital, mobile, social and so many new platforms, new products and new ways to reach consumers. Trust is

the most important thing for us at Time. We will continue to lean in on our journalists and our trusted journalism.

GIOKOS: As you say, you're a 100-year-old company, so you've seen many cycles. You've survived so much. So I wish you all the best, Jessica. Much

appreciated.

SIBLEY: Thank you for having me, appreciate it.

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GIOKOS: Moving on, the head of FIFA has a message for broadcasters bidding to show the Women's World Cup, get serious. Don Riddell talks it over with

me in just a few moments.

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[15:45:00]

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GIOKOS: The president of FIFA is threatening to pull TV coverage of the Women's World Cup in Europe. Gianni Infantino called on broadcasters to

increase their offers, particularly from the "Big 5" European countries.

He says FIFA is putting its own money where its mouth is. Prize money for this Women's World Cup was increased 300 percent and for good reason.

Women's soccer has been growing in popularity. More than 365 million people watched the European championships last year.

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[15:50:00]

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GIOKOS: Still to come, scorching heat and no rainfall. The devastating combination that could lead to an environmental disaster in Spain. That's

coming up, stay with us.

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GIOKOS: Drought stricken Spain is running dry. The nation is asking the European Union for emergency funds to help to combat a severe drought that

is threatening crops as well as livelihoods.

A Spanish farmers union says 60 percent of the country's farmland is suffocating from lack of rainfall. Fred Pleitgen takes us through how some

of the reservoirs are drying up.

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FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): From afar, even a natural disaster can look majestic. But up close, the

full impact of the global climate emergency is clear to see.

This is the Sau Reservoir near Barcelona, normally one of the largest bodies of fresh water in this part of Spain. But months of drought and the

water levels are so low, an entire medieval village, usually underwater, has come to light.

PLEITGEN: The folks here say normally, he barely be able to see even the tip of the medieval church, because it would be almost fully submerged.

[15:55:00]

But now, as you can see, the church is very much on land and the authorities here fear things will get much worse once the summer's heat

really sets in.

(voice-over): The Sau Reservoir is already at less than 10 percent capacity. And that's causing hundreds of thousands of acres of farmland to

dry up. All of this wheat is probably lost. Farmer Santi Kaldidiwa (ph) shows me why.

"The grain should be milky," he says. "We're in a critical moment. If it doesn't rain, this will end up empty. We should be seeing the grain come up

to here. But it's only like this. If it doesn't rain in the coming week, the crop will be zero."

But there is no rain in sight and temperatures in Spain have skyrocketed.

Scientists at the Institute of Agrifood Research and Technology are trying to find ways to make very little water go a longer way.

Chief scientist Joan Girona says efficiency needs to be maximized.

JOAN GIRONA GOMIS, RESEARCHER, IRTA: It's our goal. Making the most of every drop of water.

PLEITGEN (voice-over): Just like the crops, the people in this area are also in survival moaned. Dozens of towns are without water and need to get

it trucked in. The village Castasilla (ph) hasn't had any for about a year and residents say they can't even remember the last time it rained.

"I don't recall," Juan (ph) tells me. "It's been a long time, a year more, without proper rain. Nothing."

This region of Spain is a bread basket for all of Europe. And while the authorities say they're building desalination plants to combat the water

crisis, the head of the region's water authority says life here might change dramatically soon.

SAMUEL REYES, DIRECTOR, CATALAN WATER AGENCY: Sometimes, I think about the capacity of the territory. I mean, is this a country where we can handle

the increase of citizens, tourists, industry, farmers, agriculture?

Or we should stop?

PLEITGEN (voice-over): That point might be closer than some believe.

Back at the Sau Reservoir, authorities are actually draining most of the remaining water to prevent this precious and every scarcer resource from

getting contaminated by the sludge of the bottom of this once-mighty lake - - Fred Pleitgen, CNN, Barcelona, Spain.

(END VIDEOTAPE)

GIOKOS: There are just moments left to trade on Wall Street. The final numbers as well as the closing bell right after this.

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GIOKOS: Concerns about regional banks are weighing on Wall Street investors. They are worried about more turmoil in the financial system and

bracing for tomorrow's Fed interest rate decision. Let's take a look to see how the Dow is faring.

It is down around 350 points. That is 1 percent lower off session lows. We were doing worse throughout the day. I want to take a look at how the Dow

components are faring. Chevron over 4 percent lower, 3M is down 2.5 percent. It is cutting over 1,000 jobs at its headquarters.

JPMorgan is up almost 2 percent a day after its First Republic buyout. That's it for QUEST MEANS BUSINESS.

END