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Apple Buys Beats for $3 Billion; Pacers Stave Off Elimination; Pings Weren't From Flight 370

Aired May 29, 2014 - 06:30   ET



MICHAELA PEREIRA, CNN ANCHOR: All right. Here's a look at your headlines at half past the hour on this Thursday.

A White House official telling CNN V.A. Secretary Shinseki is on thin ice after a preliminary report revealed 1,700 veterans wait for care in Phoenix were never scheduled to see a doctor, even put on waiting lists. Scheduling abuses, cover-ups in Phoenix were first reported by CNN. Forty-two V.A. medical centers across the nation are under investigation. Officials were grilled about the delays at a hearing rather on Capitol Hill late last night.

Egypt chose a new president. Former military chief Abdel Fattah al- Sisi capturing well over 90 percent of the vote. But the landslide victory was marked by low voter turnout. Last year, al-Sisi toppled Egypt's first freely elected leader Mohamed Morsi. The Muslim Brotherhood and other Morsi supporters boycotted that vote. Al-Sisi had called on the voters to turn out in force to, quote, "show the world the extent of his backing."

Four European security monitors are missing after disappears near Donetsk Monday. A pro-Russian separatist group has confirmed they detained those monitors but says they would release them. In the meantime, fresh violence in the country's hostile eastern region, one of Ukraine's national guard bases was attacked Wednesday by pro- Russian separatists. Officials say there were losses on both sides.

Those are your headlines right now. Let's get over to you, Kate.

KATE BOLDUAN, CNN ANCHOR: All right. Here's another headline for you -- Dr. Dre may soon become the first hip-hop billionaire.


TYRESE: The first billionaire in hip-hop right here from the (EXPLETIVE DELETED) West Coast. Believe me.



(END VIDEO CLIP) BOLDUAN: I would be -- I would be just as excited. That, of course, is Dr. Dre.

PEREIRA: That's the money dance right there.

BOLDUAN: That's the money dance. I don't know how to do the dance. Is that why I'm not a billionaire, is that what it is?

OK. Dr. Dre.

CHRIS CUOMO, CNN ANCHOR: Tyrese, by the way.

BOLDUAN: And Tyrese, exactly, celebrating after news of the deal first leaked.

Well, now, it is official. Apple has agreed to purchase his company Beats Electronics. The tech giant shelling out a cool $3 billion for the headphone maker and music stream service. Its Apple's biggest buy ever.

Chief business correspondent Christine Romans is here with more of the details.

Three billion dollars in terms of Apple money is not a lot but it is its biggest purchase.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Its biggest purchase yet, and look, a lot of people when this first leaked, Facebook thing from Tyrese first leaked, they're like, what? This is such a big deal. When are we going to hear about it for sure?

Now, Apple is confirming the deal. Less than we thought, it'd be about $3 billion, we thought it would be $3.2 billion, $3.4 billion.

BOLDUAN: When you're up there, who cares?

ROMANS: What does Apple want, right?

BOLDUAN: What does Beats bring to Apple?

ROMANS: Two guys, it brings Dr. Dre and it brings Jimmy Iovine, who is a very famous music producer in Los Angeles. There's Tim Cook. This is the announcement yesterday. It brings talent into the fold. Both those guys are going to be working for Apple now. It brings maybe wearable technology. They got the headphones, of course, which are famous.

But they've also got a streaming music business which is something that could be helpful to Apple. A lot of analysts have been questioning like these companies are kind of alike. Why would Apple buy another brand and bring it into the fold. But now more and more people are saying it just makes sense.

BOLDUAN: It just makes sense. Well, then, what does -- one obvious things that Beats gets out of it is a whole lot of cash and maybe Dre becoming a billionaire. What does Beats get out of it?

CUOMO: Well, Beats gets a whole lot of cash, quite frankly, and you've got these two music producers who are going to be part of the Apple family and a whole new venture for them. If you look at what it means for the hip-hop billionaire, is he really going to be a billionaire? Dr. Dre is worth pre-deal, $550 million, by most estimates. He owns up to a quarter of Beats. We don't know exactly for sure. With Apple paying $3 billion for beats he might get there. He might just get close.

BOLDUAN: He might get there. Quick, does it change -- do you think it will change anything for the Apple consumer or the Beats consumer?

ROMANS: I don't think so near term but I think that these -- the music industry is change so quickly that I think what you will see is more wearable technology. You're going see -- Apple has this former Burberry CEO is the --

BOLDUAN: (INAUDIBLE) is executive, too.

ROMANS: There's new wearable technology, I think is going to be key and I think apple wants to make a play for that space.

BOLDUAN: I guess we can say, is getting to change anything for the customer, it keeps changing for the customer every day when it comes to the music industry.

ROMANS: You're absolutely right, Kate.

BOLDUAN: Thanks, Christine.

ROMANS: You're welcome.

CUOMO: Three billion dollars, but all they make is headphones?

BOLDUAN: And streaming music.

ROMANS: Spotify is valued at $5 billion.

BOLDUAN: Pandora --

CUOMO: It's not just the equipment and the hardware.

BOLDUAN: Future of what Beats can do.

ROMANS: And talent. Apple has been known to buy companies because they want the engineers, the founders, because they want the brains behind it. I think that's a big play here - for Dre and Jimmy Iovine, too.

CUOMO: This is what you mean when you talk about buying next, buying the next thing. All right.

Coming up on NEW DAY, the first public statements from the family of a killer. Inside look at their desperate struggle to help and then stop their son. We have not heard this side yet. We're going to talk to a close friend about their personal hell.

And did you hear about this? Brad Pitt, beautiful face marred by a punch at a movie premier. Cops say it's not the first time the suspect went haywire at a red carpet event. What's going on here? How did he get to this handsome man? We'll tell you.


CUOMO: Indiana Pacers could have been eliminated --


CUOMO: -- last night by the Miami Heat, but it was the best player on the court that made the difference in the game. LeBron James, right? Wrong. Paul George from Fresno state.

Let's bring in Joe Carter with this morning's "Bleacher Report".

Testify, my friend. Paul George is said to be a superstar in the waiting, showed it last night.

JOE CARTER, BLEACHER REPORT: He certainly did. Obviously he throughout the series it's been whether or not we're going to see a red hot Paul George or not. Obviously, last night, he was red hot.

LeBron James, as you said, was not. He only scored four points. Playoff career low for him, and that's because he got hit with too many fouls in the game. He had to sit more than he played. When he was in the game, Indiana's Lance Stephenson tried his best to get inside LeBron by blowing into his ear. Things got weird at one point last night.

Paul George as you said, Chris, red hot last night, 37 points, 21 of which were in the fourth quarter when he dropped several big three- pointers. Now, Miami did fight back in this game and had a chance to win at the end. Chris Bosh's three-pointer though just misses.

Pacers go on to win game five. Now, Miami could still advance in this series to the finals with the win at home Friday night. Pacers got a challenge ahead of them by winning two more.

Playoff hockey is churning this morning on Chicago and Los Angeles went into double overtime last night. The Blackhawks are on the brink of elimination but Michael saved their season. They're still alive. They won 5-4 last night in double O.T. L.A., though, just like Miami can still close out the series with one more win tomorrow night in Los Angeles.

Well, Tiger Woods says he will not be playing in this year's U.S. Open. He made the announcement yesterday on his Web site. Tiger had back surgery a few weeks before the masters. He says he's still not healthy enough to compete. He says that he regrets missing the first two majors of the year but he is optimistic about his health and his future.

Guys, NBC who is broadcasting the U.S. Open has to be concerned about this because, well, the Master, TV ratings were down 25 percent. It was the lowest TV rating in ten years without a tiger woods in the field. So obviously the U.S. Open doesn't have quite the same cache with tiger in it but hopefully we'll get another battle like the masters between Jordan and Bubba Watson, or something like that, guys, because they certainly have to make up for it without a Tiger Woods there.

BOLDUAN: We need another Tiger Woods. That's what everyone needs to be search for now.

CARTER: We're waiting, yes.

CUOMO: Good luck with that.

BOLDUAN: Yes, exactly. You go find him, Joe. You'll let us know. Thanks, Joe.

Now, in Hollywood, a red carpet crasher is at it again. It appears this time smacking -- smacking Brad Pitt in the face as he signed autographs during the "Maleficent" premier, his fiance, Angelina Jolie's movie.

The suspect, though, has a history of confronting A-listers, raising questions now about security at the star-studded event and how this guy honestly manages to keep getting so close.

Entertainment correspondent Nischelle Turner is here. What is the deal?

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: Well, yes, you know, yesterday, we were talking about why Emma Roberts has security. It's because of situations like this.

Now, this man has been at it for a while. He calls himself a prankster. He's been banned from red carpets all over the country but somehow he keeps showing up and getting close, way too close to Hollywood's A-list.


TURNER (voice-over): It was like any red carpet event, Brad Pitt signing autographs for fans when suddenly a man swings at the superstar. Police say striking him in the face. It happened at the premier of partner Angelina Jolie's new film "Maleficent", when the man lunged, security moved in, quickly taking him down. He was cuffed. Police identified him as a 25-year-old who is notorious in Hollywood for his red carpet crashing antics.

Two weeks ago, Sediuk was dragged off the red carpet at Cannes when he tried to crawl under actress's America Ferrera's dress, said he is best known for this.

UNIDENTIFIED MALE: What's your problem, man?

TURNER: Getting slammed himself. Will Smith took a swipe at the prankster back in May 2012 after Sediuk tried to kiss Smith on the mouth. The troublemaker Sediuk was also making headlines earlier this year forgetting too close for to Leonardo DiCaprio at separate red carpet events.


TURNER: Now, in this incident, he apparently was in the crowd of fans where Brad Pitt was signing autographs. He jumped over the barrier and that's when he did whatever he did to Brad Pitt. Now, Sediuk was arrested for suspicion of battery.

Here's the thing. The video we show of Brad Pitt last night was after the incident so it was almost like he was unfazed. He and Angelina just continued to walk the red carpet after all of this.

BOLDUAN: Probably in shock. I'm just trying to get into this darn movie.

TURNER: You know, he probably was in shock. This guy has done this over and over again. He calls himself a prankster. He says he means no harm.

But, we've seen incidents, remember Monica Seles, where crazy fans have done things.

BOLDUAN: That's why it becomes dangerous.

TURNER: Exactly. That's why, you know, there should be concern.

BOLDUAN: Maybe encourages somebody's got darker institutions.

TURNER: Exactly.

CUOMO: That they can get in there, so they have to punish him.

TURNER: And get him close.

CUOMO: Send the right message.

TURNER: Oh yeah, I think so. Maybe they will this time.

BOLDUAN: Thanks Nischelle.

CUOMO: Let it be a lesson to you. You can't just hit somebody and get away with it.

BOLDUAN: Oh, really?

CUOMO: Coming up on NEW DAY --

BOLDUAN: Oh really?

CUOMO: That's right. I never flinch. Never.

Stunning development in the search for Flight 370. Those pings, this ain't funny. They weren't from the plane. So are we back to square one really after all this searching? We're going to talk with the partner of an American on board about where they go from here.

Plus, for the first time we're hearing from the family of the Santa Barbara gunman. Why is this important? Well, it's all about what did they know, what did they try to do to help this kid and where did it all go wrong? We're going to hear about their personal hell straight ahead.

BOLDUAN: And tonight is the premier of CNN's new original series "The '60s" from executive producers Tom Hanks and Gary Goetzman. It's the decade that changed the world. Be sure to watch or set your DVR for the premier tonight, 9:00 Eastern and Pacific on CNN. First, here is your 60s minute.



UNIDENTIFIED MALE: So many things happened in the '60s.

UNIDENTIFIED MALE: You wouldn't have recognized what the decade had become.

UNIDENTIFIED MALE: There's been an attempt on the life of the President Kennedy.

UNIDENTIFIED MALE: The president has been hit.

UNIDENTIFIED FEMALE: And everyone was (inaudible) dropping out and doing God knows what else. And I wasn't.

UNIDENTIFIED MALE: They were legends in their own time.

NEIL ARMSTRONG, FIRST MAN ON THE MOON: That's one small step for man, one giant leap for man kind.

UNIDENTIFIED MALE: Tremendous anxiety and fear.

JOHN F. KENNEDY, FORMER U.S. PRESIDENTN: Whatever must be done --

UNIDENTIFIED MALE: Whatever the president does, he risks nuclear war.

UNIDENTIFIED MALE: 330 Americans were killed in combat last week in Vietnam.



UNIDENTIFIED MALE: The entire culture changed.

ANNOUNCER: "The Sixties" series premier tonight at nine on CNN.



PEREIRA: Welcome back to NEW DAY.

Once a promising lead in the search for Flight 370, those pings picked up in the Indian Ocean are not believed to be from the missing plane's black boxes according to a U.S. Navy official. Search crews are now saying the plane is not in the area they've been looking. This seems to be another dead end for families still waiting for answers.

Joining us now is Sarah Bajc; her partner Philip Wood was an American passenger on board that flight.

Sarah, good to have you with us. And I'm curious how you're feeling about this statement from the U.S. Navy. First of all, one of the -- one of the leaders in the search, Michael Dean, telling us that, nope, those aren't -- they aren't likely from the plane. Yet then the spokesman comes out and says that Michael Dean's statement to CNN is speculative and premature. What do you think about the back and forth?

SARAH BAJC, PARTNER OF PASSENGER ON FLIGHT 370: Well, the back and forth is just managing PR. You've got somebody telling the truth, as they believe it, and then you've got somebody else who is trying to manage what the media hears.

But, you know, dead end, the term that you used, implies that this is an accident, right, that it was a genuinely that just hasn't panned out. And I think the general perception of the families and the many, many experts that we have consulting with us on a regular basis is that this is intentional misdirection.

Going back to the very beginning, it was so coincidental that they jumped directly to the southern Indian Ocean, which is the most remote place in the world where nobody could ever go and check, right, and that just magically as they're there and right as black boxes are going to expire their batteries and they have these magical pings come forward, you know, which don't even have the right frequencies on them.

So, I mean, the sequence of events is just a blatant cover-up, as far as I'm concerned, right? The emperor has had no clothes for a very long period of time, but the -- but the general media, no offense intended, but the general media and the general public have been following the parade all, you know, marveling at the beautiful clothes. And, you know, now maybe people are opening their eyes up. We need an independent search.

PERERIA: So if not that, then what? And when I say that, I mean, so if not those pings, if not the southern Indian Ocean -- and I understand you've been calling. You've been vocal about that here on our broadcast, calling for this independent review. Where do you want them to look? What do you want them to be doing?

BAJC: I want them to treat this as a proper investigation, so I've been having a lot of conversations with private investigation firms, including those that specialize in what's called cold cases. You know, cases that everybody else has thrown up their hands on, but yet they've taken the time to go back and look for clues and talk to people and gather human intelligence.

It is absolutely impossible that a crime like this could have been committed without somebody knowing about it. Now, whether the crime is covering up some honest I mistakes -- well, not honest mistakes, but mistakes around incompetence or sleeping on the job, or whether the crime is having done something bad, I don't have -- I mean, I don't know. But, you know, for sure, there's no way that the sequence of events could have happened without some orchestration.

PEREIRA: So, Sarah, these experts and the information you have and the -- have you taken this concern straight to anybody, to the Malaysians, the Australians? Do you get anywhere with them when you say to them this isn't the direction we believe and we want you to look at what we have found? What do they say to that?

BAJC: Of course we've brought it to them. We've been attempting to engage in a dialogue with the Malaysian officials, the Australian officials, as well as just the media and the general public since the very beginning.

But they don't listen, and they don't respond. We have had more promising change of direction and forthcoming admittance of mistakes because of media coverage than any direct communication. You know, it's almost like we're treated as the enemy, as if we have some different goals than they do.

But, you know, I think maybe we do because our goal is to find the plane. My personal goal is to find Philip and bring him home. But I don't believe that the investigators in charge of this case have the same goal.

PERERIA: Sarah, you believe there's a chance he could still be alive?

BAJC: I do. I absolutely believe that. And you know, the people who have been giving their heart and soul to this search, you know, all the people on the ships, for the average person involved in the search, in the airplanes, in the search, you know, they -- they have done their very best. But they've been fed a while of crap.

And so, they've been searching in the wrong place. I think many of them know that, and they should be very, very angry. And all the people who are paying for the tax dollars to fund that, especially the Australians, should be furious, and they should be absolutely trying to hold the people accountable accountable.

Now, you know, is the Australian search team guilty in this case? I don't know. They could have been fed bad information from someone else. So I wouldn't want to cast the finger there. But there is ample evidence that the Malaysian government is at the root of the problem here, either because of incompetence or because of obfuscation. So we need to get them out of the way. The world needs to stand up and require independent review.

PEREIRA: Sarah Bajc from Beijing, thanks for joining us once again. Thanks for the passionate comments. We appreciate it.


CUOMO: All right, Mick.

A couple of big stories we're following as you start your new day. Shinseki shocker; 1700 veterans straight up ignored by the V.A.. Wait until you hear how many hospitals are involved. Is it time for the secretary to stand down?

And for the first time, we're hearing from the family of the California gunman. Hear what they say about how they tried to help their son about how difficult it all was and what they feel for the victims. It will tell us something about battling mental illness in America, so let's get after it.


UNIDENTIFIED MALE: Until V.A. understands that we're deadly serious, you can expect us to be over your shoulder every single day.

UNIDENTIFIED MALE: They are not (ph) mourning their son. They live with the weight of what he did.

UNIDENTIFIED FEMALE: The U.S. Navy tells CNN it has concluded the underwater signals were not from the missing plane's black boxes.



UNIDENTIFIED FEMALE: Prosecutors call it a chance encounter among strangers that ended in a double murder over a spilled drink.

UNIDENTIFIED FEMALE: A man swings at Brad Pitt, striking him in the face.


BOLDUAN: Good morning and welcome back to NEW DAY. It is Thursday, May 29th, 7:00 in the east.

Things are not looking good for V.A. Secretary Eric Shinseki, as a new report reveals 1700 veterans in need of treatment at the V.A. medical center in Phoenix alone were never schedule or even put on waiting lists.

CNN was the first to report on the abuses in the Phoenix system. Now 42 V.A. facilities across the country are being investigated for possible cover-ups and even deadly treatment delays. And according to an administration official, President Obama says Secretary Shinseki is now on thin ice.

Let's get the very latest from the White House and from our White House correspondent Michelle Kosinski. Michelle?


Watching this hearing last night it was just, whoa. Four hours of members of the House V.A. Committee absolutely ripping into these V.A. guys. And these were Democrats and Republicans, asking good questions, and for some reason the V.A. just shouldn't answer.

In part, it was concerning this new official report about the Phoenix V.A. where the scandal broke detailing a systemic manipulation of scheduling to cover up long wait times. Just at the Phoenix V.A. there were 1700 vets who were waiting for appointments but not even entered into the computer system. And 1100 of them saw an average wait times of 200 days.

One of the committee members talked about a vet who was waiting two years for a hearing aid. So as you can imagine, reactions to this report now are explosive. One White House official says the president is deeply troubled by it. Another said that V.A. Secretary Eric Shinseki is now on thin ice, as more and more calls come in for him to resign, Kate.

BOLDUAN: (inaudible) just the tip of the iceberg he believes. Michelle, thanks so much.

An important note, Eric Shinseki kind of answering the question of why haven't there been any firings. Why hasn't -- why hasn't anyone been held to account for the problems in the V.A. system?

In an opinion piece in "USA Today", today Eric Shinseki says that other than placing some of the leadership in the Phoenix facility on administrative leave, it was the inspector general of the department that requested that the V.A. take no additional personal action until this independent review that's due later this summer wraps up.


PEREIRA: All right, let's take a look at more of your headlines right now, and we start with breaking news. Rebels have shot down a Ukrainian military helicopter.