There should be a subgenre of documentaries solely defined by their capacity to incite righteous anger in the audience. Titles would include “Blackfish,” “Inside Job,” “The Act of Killing” and anything in Michael Moore’s filmography (as long as you agree with Moore). Side effects from viewing include frustrated sighs and shaking fists. With its assertion that Herbalife is a pyramid scheme, Ted Braun’s “Betting on Zero” fits neatly in this category, causing the viewers’ blood pressure to rise ever higher as it makes its case in less than 100 minutes.
The film begins in July 2014 as Bill Ackman is about to share another presentation about why he shorted Herbalife $1 billion almost two years before. As the CEO of the Pershing Square Capital hedge fund, Ackman didn’t just think that the nutrition and supplement business was going to fail. He argues that it would fail because he thinks its entire way of doing business is illegal and that a government crackdown will make its stock worthless. According to Ackman and author Christine Richard, Herbalife relies almost entirely on the investment of new sellers (aka distributors) in buying $3,000 or more of product to sell, rather than end consumers buying the company’s shakes, powders and other products. A portion of what each recruit sells travels up the chain to the person who recruited them, as well as the person who recruited them, etc. Do not create a drinking game around how many times the pyramid diagram is shown to hammer home the inequality of this arrangement; you will pass out.
Rather than focusing solely on Ackman, “Betting on Zero” smartly shares the stories of those who are victims of the Herbalife model. As a hedge fund head, Ackman may be an easy target for criticism, given the greed often associated with his profession. It’s harder to find fault with a group of Latino men and women in Chicago who join a class action suit against the multi-billion-dollar company. They lost their investments when they tried to become distributors, with some losing upwards of $20,000 each. In addition to highlighting the generally shady business practices, “Betting on Zero” argues that Herbalife specifically targets Latino communities in America. They make ideal recruits for their desire to achieve the American dream and the presence of undocumented immigrants who would be unlikely to pursue legal action out of fear of deportation. All of Herbalife’s internal communications and events promote the idea that selling its products will bring you wealth with promises of sports cars and oceanside mansions. While that may happen for a small percentage of distributors, these people in Chicago are out thousands of dollars that they couldn’t afford to be without, leading to dashed hopes and heartbreaking stories of feeling misled by supposed friends. Led by activist Julie Contreras, the small community tries to fight against the large company with little success until they join forces with Ackman.
If you missed “The Big Short” or don’t regularly read The Wall Street Journal, “Betting on Zero” does a thorough and largely entertaining job of explaining what it means to short a stock. Sadly, it does this without Margot Robbie, but it still communicates effectively. This isn’t a flashy film; it is lucky to have a charming underdog in Ackman, its heart in the Chicago group, and its villain in Herbalife CEO Michael O. Johnson. The Herbalife executive only appears in TV interviews and Herbalife videos — never directly to Braun or his team — but he still looks like a snake oil salesman who spends his free time at a CrossFit box.
With “Darfur Now” director Braun at its helm, “Betting on Zero” couldn’t be more conventional in its presentation of its argument. It feels like the best version of a documentary you’d catch on CNBC in primetime. There’s little deviation from the formula, but it does check every box as it ably presents its case against the nutritional company. The movie relies on genre standards like narration, fly-on-the-wall observation, interviews, and clips from CNN Money, CNBC, "Nightline" and Herbalife’s own promotional videos. Those promos and excerpts from interviews that its executives have done elsewhere are its only voice in the film, given that they wouldn’t appear in “Betting on Zero” to defend themselves against Ackman and the movie.
“Betting on Zero” takes a matter-of-fact approach to its material, but it makes a convincing and sometimes emotional argument against Herbalife. The documentary uses traditional techniques because they’ve been proven to work, and it’s difficult to finish it without wanting to join Contreras and the Chicagoans in their fight. [B]