CNN IN THE MONEY
Bush Introduces 2004 Budget; States Turn to Gambling as Source of Revenue; A Look at News Corp
Aired February 9, 2003 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, HOST: Today on IN THE MONEY, blueprint or red flag? President Bush's new budget comes with perks for investing your money. But the critics say it leaves America much deeper in the hole deeper than ever before.
Plus, you bet, cash-strapped states turning to gambling as a possible money maker in light of huge deficits of their own. Would you rather pay the tax man or the one-armed bandit? We'll look at that story.
Screen idols, find out whether Rupert Murdoch's News Corp can keep pulling in the big money by continuing to push the envelope.
At five inches thick and 13.5 pounds, President Bush's new budget is not exactly light reading, and the plot likely won't make John Grisham lose any sleep either, but there's some exciting news buried in all among the jargon and the numbers. It's the story of how the government wants to spend your money. Lots and lots of your money. The president sent a $2.23 trillion fiscal 2004 budget to Congress this week, and among the highlights are these: A 3 percent boost in funding for NASA, an early phase-in of $670 billion of tax cuts that have already been passed by the Congress, and 8 percent jump in the budget for homeland security, and $400 billion to give Medicare a facelift.
It also contains the biggest deficit numbers this country has ever seen, estimated to run perhaps as high as $300 billion next year.
Joining us to talk about all of this now is the gang of thieves that helps us on the program every weekend, Andy Serwer, editor at large of "Fortune" magazine, Marion Asnes, senior editor at "Money" magazine, and a newcomer to the troop, Patty Sellers, senior writer at "Fortune."
Marion, go ahead and get the plug out of the way so you can respond to Bush and the budget.
MARION ASNES, MONEY MAGAZINE: OK, well, Bush and the budget is the cover story of our next issue. Am I holding this right?
CAFFERTY: Absolutely. That's enough. Put it down.
CAFFERTY: The Democrats are squawking that there's absolutely no discipline in this budget. It's irresponsible. It's reckless. It's yada, yada, yada. Of course, if it had a lot of money for extra social programs, they might not be so critical, but it doesn't, and probably with good reason. There are other items higher up on the agenda.
ANDY SERWER, FORTUNE MAGAZINE: I mean, the whole question is, how are we going to stimulate the economy? One way to stimulate the economy is to try to cut taxes; the other way is to spend money on government programs. The Republicans don't like to do that, so they are looking to cut. Can we afford this, though? I don't know. Can we afford this? No one really knows the answer to that.
ASNES: There's no clue. Because one of the great unknowns that isn't even touched on in this budget is the cost of a possible war with Iraq and not only the cost of the war, the cost of the increased security against terrorism that we would be facing, the cost of a possible occupation, rebuilding a damaged country, what our allies might contribute. All of these are totally up in the air and not counted in an upcoming three-year budget deficit that's $1 trillion.
CAFFERTY: Patty, it's a bit of a cop-out, I suppose, but when they asked about the cost of a war with Iraq, the spokesman for the administration said, well, we don't know how much it is going to cost because the war hasn't started yet.
PATRICIA SELLERS, FORTUNE MAGAZINE: Right. Well, you know, the U.N. is saying $30 billion over the next few years. It's probably going to be at least five, maybe 10 years, and what we're doing in Afghanistan now is peanuts compared to what we're going to have to do in Iraq. But, you know, we can't tax our way to a recovery here, and what we really need to do is spur investment in the stock market, and this tax plan, I think, will help do that, will go a long way.
CAFFERTY: The critics will say, wait a minute, the tax breaks go only to the rich, the people at the upper end of the income scale. The people in support of this kind of thinking say it's those people they create the jobs, and the way they can go about creating jobs is give them some more money to work with, and they'll build their factories, expand their businesses, hire more people. Which, by the way...
SERWER: You know, a lot of times -- listen, wealthy people do tend to save money in these instances. And that's the real problem. Rather than creating new factories or building new companies. So that's a real problem. See, I wonder where's government spending? Look at -- going all the way back to the New Deal, I mean, that certainly helped get us out of a big-time problem then. That is so anathema to this administration. I wonder if they are totally ignoring that, and that's a problem.
ASNES: You know, one of the interesting things about this budget is it's really rethinking the idea of how do you stimulate an economy. It's not looking to stimulate the economy by increasing spending. It is looking really, if you study it carefully, to stimulate the economy by stimulating investment. This budget, this tax plan, all of these things, if you look at the new retirement plans, if you look at them wrapped together, what it's saying is you can pretty much invest for free. Dividends are an afterthought, even capital gains, because of these new retirement accounts, become an afterthought.
So, one of the real questions is if by stimulating the market, can we stimulate the economy enough?
CAFFERTY: Even some Republicans are saying that it's not going to happen. They're not going to take the taxes off dividends. He's got members of his own party saying it's just not going to see the light of day.
ASNES: Some of them will come. And even if it comes down to parity with capital gains, you're still talking about less taxes.
SERWER: It is not going to pass, because he had some of these liberal Republicans, if there is such a thing, on board for his first program. He had some Democrats, and they're shying away. They're not touching this baby with a 10-foot pole right now. See, again, I think everything is on hold because of the war, though.
SELLERS: It's on the back burner, and there is the main criticism is that this tax plan rewards the rich. But of course it rewards the rich, because the rich are at this point the biggest investors, but the savings plans...
SERWER: Right. Those are interesting.
SELLERS: The elimination of double taxation on dividends will get more people -- what is it, 54 percent of households now -- this plan will increase the number of people in the stock market. It will reward everyone in some way. And that's what they have got to do.
CAFFERTY: The other idea percolating here is that the stock market, if this is a short war, if they go to war against Iraq and get it over in a couple of weeks, three weeks, a month, get in there, take over the country, maybe don't sustain a lot of casualties, that there is such a bucketful of money waiting to come into the stock market, you could see a very explosive rally in the stock market. All of a sudden, everybody is back to making a few dollars instead of dreading those 401(k) statements coming in the mail, and suddenly his domestic agenda maybe has a little daylight because everybody is not quite so concerned and feeling so gloomy. Maybe they're saying, OK, times not as bad as they were.
SERWER: And very interesting with an election year coming up, too. I mean, this is all going to play out as we head to that big thing for the prez, and if the domestic economy improves, he is a lock for second term.
CAFFERTY: The wild card, of course, is the war, and that will probably determine just about everything in this country over the next year or two, depending on how it goes, or if it goes.
Coming up on IN THE MONEY, as we continue here on a Sunday, a high stakes game. States in need of money, and that's a lot of them, are out trying to hit the jackpot with legalized gambling. We'll take a look at who the real winners in that game are.
Plus, extreme TV. Rupert Murdoch made a media fortune and he didn't do it by showing nature documentaries. Find out whether his News Corp is packing enough shock to stick around for the long haul. We're back after this.
CAFFERTY: The economy is hurting. You knew that. The pain is spreading to the states, and the new budget from the White House and the administration doesn't contain a lot of help for the states in dealing with their own budget problems. Nearly three-quarters of state governments running deficits, and as a result local lawmakers are considering hiking so-called sin taxes on cigarettes and booze, although you've got to wonder how high the price of those things can go.
Others states are rolling the dice on gambling. Annual gaming revenue in this country close to $60 billion a year, and some states are hoping to further tap into that cash flow to help with their budget problems. The question is, is that such a simple answer to a complex problem? For more on that, we turn to Frank Fahrenkopf, who is president and CEO of the American Gaming Association. Mr. Fahrenkopf is also the former chairman of the Republican National Committee under President Reagan. And Frank, we won't hold this against you, he's also a former classmate of mine at Reno high school up there in Nevada. Frank, nice to see you. That was back before the turn of the last century.
Frank joins us from San Francisco. How viable an idea is it in your opinion for state governments to suddenly seize on what looks like a very simple solution to their problems, just bring in gambling?
FRANK FAHRENKOPF, PRESIDENT & CEO, AMERICAN GAMING ASSOCIATION: It really isn't a question of bringing in gambling, Jack, you have got to realize that every state but three in the country today have some form of legalized gambling. It's only Utah, Hawaii and Tennessee that have no form of legalized gambling today. In Tennessee, the voters there last November struck down their constitutional prohibition against the lottery, and most people think there will be a lottery in Tennessee before the year is over.
So what we're talking about here is adding a different mix to the gambling that already exists in those states. And, you know, the last time we really had a recession was in early '90s, and it was during that period of time of that six states in the Midwest and South, Iowa, Illinois, Missouri, Indiana, Mississippi and Louisiana, those legislators and governors were faced with really hard choices -- when you're in a downturn, do you cut government services at a time when people really need those service, or do you raise taxes when you are really trying to promote economic development and capital investment?
Those are hard choices, but they turned to the gambling industry. It's fundamentally a clean industry environmentally. I mean, we're not going to have big smokestacks sending out pollutants. Tends to be capital intensive and promote economic growth and quality jobs.
And, perhaps more importantly for the governors and state legislators, because it's a privilege to have a gaming license, not a right, they tend to be able to tax those businesses at a level much higher than an ordinary business. So those are the factors, I think, that come into play when governors and state legislators are faced with these hard times.
CAFFERTY: How much bigger, though, is the potential gambling pie? We mentioned that the industry brings in roughly $60 billion a year in revenue. Now, the real serious gamblers with the big money to lose are in places like Las Vegas and Atlantic City. You've got the horse tracks and the slot machines and of course the lotteries -- how much more money is out there for these states if they decide to try to capitalize on this?
FAHRENKOPF: It's hard to say. For example, there's a big debate going on in the state of Maryland now, and the problem that they face is that so much of the people of Maryland who want to gamble go to either West Virginia or to Delaware, where there are tracks and where there are what we call today, the new word in gambling, is race-inos, that's a race track that has slot machines. You know, the gamble I think that the governors and the state legislators face is how much of that money can they keep at home.
SERWER: Frank, let me ask you a question. I'm sure you've heard this a million times. Isn't this the most regressive form of taxation there is? I mean, it's lower income people who go to these casinos; they get taxed the most. Isn't that unfair?
FAHRENKOPF: No, what you've got to do is you've got to look at legalized gambling in United States, and realize that it is not monolithic. You really have five different types of gaming. You have commercial casinos, the people I represent. We only do business in 11 states in the country. And our average gamer, the one who goes to those casinos in Las Vegas or Atlantic City, tends to be college education, above the national average in income, $45,000 to $50,000 a year.
When you go down through then to lotteries, and you go down to some of the other forms of legal gaming, the experts will tell you that there tends to be regressive, and the people who are playing are those in our society perhaps who are least able to play, but, you know, it's not a question of what were they doing before those lotteries were there, it wasn't the question they weren't gambling. Every major city in the United States had illegal gambling going on, and some still do. The numbers racket. So it's not a question of if you don't have a lottery, those poor people aren't going to gamble. They were gambling; they were just doing it with illegal operations.
ASNES: Yes, but we're still looking at the idea of states balancing their budgets on the backs of those little old ladies who take the bus to Atlantic City, and to me, I don't know, that's sleazy. How do you feel about that?
FAHRENKOPF: Well, you're entitled to your own moral view on it -- and -- but you know, the interesting thing is, we do a lot of polling. I poll every year to try to get a sense, because I know there are people who feel like you feel. We use Peter Hart (ph), a Democrat, and Frank Luntz, a Republican -- 85 percent of the American people across the board, whether they're, you know, average Americans or those who even describe themselves as regular church goers find today in this country legalized gambling is an acceptable way to spend their disposable dollar. You have got a hard core 15 percent who are opposed to it on moral grounds, and you know, they're entitled to their view. That's what America is all about.
ASNES: I'm not opposed to gambling. I'm opposed to the idea that states are going to use it as a rescue.
SELLERS: Well, you know, it's interesting...
FAHRENKOPF: Well, but see, it's more than just, you know, balancing the budget. You have got to remember, particularly with the race-ino argument, what we're talking about, in those states that already have existing tracks, there's been a commitment by those states to that industry, to that type of gaming in their state. Those industries are having a difficult time. So, by adding slots, you're already assisting, in fact, an industry that the government of the state made a decision to support years ago. So it's not a question of just balancing the budget. You're also trying to help an industry in the state that's having difficulty, and you are also trying to provide some quality jobs.
SELLERS: Tobacco and gambling, this is what is keeping states alive right now, which is pretty amazing to think about. States are desperate. They're more desperate, aren't they, than they've been since World War II?
FAHRENKOPF: What happens -- there's no question about that. When you're in a recession and those governors and those state legislators face those choices that I talked about earlier, cutting services or raising taxes, those are tough, tough decisions, and if you can find an alternative that will provide jobs and promote capital investment, that's where they're turning, because if there is some other solution, I'm sure they'll be glad for you to call them and talk to them about it.
CAFFERTY: Frank, we have got to leave it there. It's good to talk to you. I'll see you at the next high school reunion.
FAHRENKOPF: You got it.
CAFFERTY: Frank Fahrenkopf, president of the American Gaming Association, joining us from San Francisco.
Up next on IN THE MONEY, as we continue, sex, lies and videotape. We'll look at the media billionaire who brought us "Joe Millionaire."
Plus, take me out to the giant corporate advertisement. Find out how the trend for sponsoring ballparks changed the name of an American landmark. IN THE MONEY is back in a moment.
CAFFERTY: Welcome back. Our stock of the week is Rupert Murdoch's News Corporation. The 71-year-old Murdoch took a sleepy Australian newspaper he inherited from his father and has turned it into a worldwide media empire that's made him billions of dollars. News Corp is the healthiest of the giant media companies. Its shares lost just about 2 percent last year, while the company we all work for, AOL Time Warner, was going into the porcelain container to the tune of 60 percent.
Murdoch is the subject of a cover story in the latest issue of "Fortune" magazine, which dubbed him "Joe Billionaire." Not bad. I don't know who's writing your headlines over there, so it's pretty good stuff.
Joining us now is the man who wrote the piece for "Fortune," senior writer Mark Gunther. Mark, nice to have you with us. Welcome.
MARK GUNTHER, FORTUNE MAGAZINE: Hi, Jack.
CAFFERTY: What did you set out to learn about this man who's kind of a mystery figure when you set about to do this piece?
GUNTHER: Well, you were just talking about gambling. I don't think I've ever known a bigger gambler in the media business than Rupert Murdoch, and he's had some big winners and some big losers, but at the moment, everything is coming up roses for him. He's got the hot TV shows "American Idol" and "Joe Millionaire." He's on the verge of buying a satellite distribution platform in the U.S., DirecTV, and that has the cable industry very worried. And as you say, his stock has done very well at a time when every other media company really has big problems on their hands.
CAFFERTY: He's got that F-word cable news network that's not doing too bad either.
CAFFERTY: We call it the F-word here.
GUNTHER: I wasn't going to bring it up, but that was one of his gambles. You know, no one thought that would work. No one thought that would work, and now it's the number one news network.
CAFFERTY: He's truly unique, and perhaps the last of his kind, because of his own particular characteristics, but perhaps more so because of the dictates of the marketplace and the fact that maybe there will never be a playing field quite like the one that he's been able to operate on.
Address what sort of characteristics and traits stood out that really do allow him to be something like we haven't maybe ever seen before, and probably won't see again.
GUNTHER: Well, you're right. Rupert really is a throwback to the Hollywood moguls probably of the '20s and '30s, and even though he's running a public company, he only owns about 20 percent of News Corp. He runs it with an iron hand. I mean, he's talking about handing the company over to one of his two sons, James and Lockland (ph). One is 31 and one is 30. The issues of governance and shareholder accountability that have swept Wall Street in the last couple of years don't seem to have affected News Corp, and no one runs any of the other media companies with the kind of single-mindedness and lack of accountability, really, that Rupert has at News Corp.
SELLERS: Mark, one of the points of your story, which I thought was really important, is that he's really the last man standing in terms of these media companies that have been pretty much, you know, have fallen apart over the clash of the egos of the top guys. And, isn't News Corp the only company that has not done a big merger? And, you know, shouldn't there be a commandment against these media titans combining with each other? Because egos are bound to destroy each other.
GUNTHER: You know, maybe instead of the FTC reviewing these mergers, they should hire the American Psychological Association to put the CEOs through the ringer.
But no, Rupert has not done a big deal. That has proven to be smart, although he's done a million, you know, deals over the years, ranging from the NFL to starting the Fox network to starting Fox News to launching satellites in China. I mean, he's taken lots and lots of risks, but he has not done one of the so-called transforming mergers that people now think have not worked well. He's about to do a pretty big deal, though, in buying this DirecTV.
SERWER: Mark, Andy Serwer here.
SERWER: You know, I talk to a lot of CEOs and they respect him a lot, but a lot of people say, this guy, take a look at him. He's really an amoral person. You know, he came to Australia, to the United States. he runs this lowest common denominator entertainment. He's making money off the rest of us. How do you respond to that?
GUNTHER: I think it's a pretty fair criticism. I mean, the guy has really been willing to do almost anything to get to where he is. If you think about it, he renounced his Australian citizenship. He moved from Australia to England to the United States. He has totally got Washington and its regulators under his thumb. He's been treated better than any other media company that I'm aware of. And yes, I don't think he has bad taste. I don't think he has good taste. I think he has no taste, really. And he's willing to put whatever sells to the audience on television.
CAFFERTY: Which at the end of the day is maybe the most honest thing we could say. You know, we're all in this business to make money. None of these companies is out here trying to do their business in the moral interests of the United States. They're doing it in the interest of the shareholders.
The thing that Rupert Murdoch was able to do is come to this country and beat a lot of these guys at their own game. There were rules against owning newspapers and television stations in the same city. He's owned "The New York Post" and Channel 5 for years. Now he has the Fox News network down the street, plus he owns Channel 9 across the river. I mean, he came in and taught some of the local guys in the broadcasting business in the United States a whole new set of rules on how to play the game.
GUNTHER: Yes, there is no question about it. He runs a very adventurous, buccaneering company, and to be fair, the fact that they're willing to break the rules is what allowed them to put something like "The Simpsons" on, put "The X-Files," a tremendous show on, put "24" on. So it's not only that they've kind of cheapened television; they have also made it a whole lot more interesting. But in a way, he's just changed the game in every game he's gotten into.
ASNES: Let's talk succession plan for a moment. Murdoch is 71, and, you know, God knows, there are people who have gone, you know, decades after that in business, but what happens to the company when he goes?
GUNTHER: Well, Rupert says he's going to live to be 100, and his wife, Wendy, who is 35, is expecting a child this summer. So he's not going anywhere. He lifts weights every day.
I think when the company goes, you have got some very interesting questions. He would like to give it to one of the sons. I don't think the shareholders are going to allow that. John Malone (ph) actually owns more stock in News Corp than Rupert does, and I believe there will be somewhat of a struggle between Peter Chernin (ph), who is the number two guy behind Rupert now and a very well respected media executive and the sons who, after all, do control a big stake in the company.
CAFFERTY: It's a fascinating piece called Murdoch's prime time. Mark Gunther of "Fortune" magazine, thank you very much. Appreciate it.
GUNTHER: Thank you, Jack.
CAFFERTY: All right, talk to you soon.
Coming up next on IN THE MONEY, as we head for the home stretch on a Sunday, off the clock. Find out why Credit Suisse First Boston told a key investment banker to take a time out.
Does the phrase "allegations of wrongdoing" do anything for you? Gee, we haven't heard that in a while.
Plus, make that an extra, extra large. High school basketball phenom LeBron James back in the game after that flap over a couple of shirts. We'll look back at the player, the payback, the shirts, the Hummer and the future. Next.
CAFFERTY: Today's scandal watch, we're looking at the latest on the Tyco case. Scandal watch: So many stories, so little time. Former CEO Dennis Kozlowski, former Tyco lawyer Mark Bellnick (ph) were in court Friday for a scheduled hearing on the $600 million larceny case against them. Earlier this week, New York prosecutors filed new charges against Bellnick (ph). He is now accused of stealing $12 million of the company's money, while he was helping Tyco cover up its accounting fraud from the feds. These are nice guys here. State prosecutors may try to prove Kozlowski helped him take the money.
Under new rules adopted by the SEC, stock analysts are going to have to promise that they actually believe the stock information they're handing out before they make those stock picks. Potentially this could put them all out of business. You know what I mean?
And Credit Suisse First Boston putting investment banker Frank Quattrone on leave while investigators look into charges he tried to destroy evidence of a practice called "spinning IPOs." And in the interest of not doing anything too complicated, Andy, what is spinning IPOs about?
SERWER: Well, spinning an IPO is when you get executives who are clients of the firm and give them pieces of the IPO. It entails that. It also entails other practices, as well. And Quattrone is a guy they're looking to nail. You know, we need bad guys. In the '80s, we had Michael Milken, we had Ivan Bosky, and they are trying to maybe pin this on Quattrone.
SELLERS: But, you know, they've been trying to figure out how to pin something on Quattrone ever since (UNINTELLIGIBLE) got there a year and a half or so ago. But the -- the difficult thing at CSFB was that the rules allowed Quattrone to do things that he shouldn't have been able to do, and you know who got him this past week? Gary Lynch (ph), the head of enforcement -- the former head of enforcement at the SEC, who is now at CSFC, and said, you broke the rules and now you're really in trouble.
ASNES: But just to play devil's advocate for a moment here, who are you supposed to give your IPO shares to, your potentially most lucrative pieces of money? You're supposed to give them to your worst customers? I mean, not that I think he did something right, but in the end, that's business.
SERWER: I like -- you know, getting back to this whole point of trying to find villains here. I mean, they are having a tough time, because, you know, they tried to pin this all on Henry Blodget, they tried to pin it on Mary Meeker, and nothing really seems to be sticking, because there was this giant bubble, and everyone participated, including us, the investors, and the media, the investors, we were all part of it. We were pumping people up. We were making money hand over fist. And no one complained about anything until the bubble burst and they took all the chairs away and we had nowhere to sit down. So now we are looking around desperately trying to point fingers as our 401(k)s are going to nothing. And it's a tough situation.
ASNES: That's right. The party is over, and all the kids are sitting around going, that's not fair! You know?
SELLERS: And they are really getting Quattrone on the technicality now, though, which is, you know, he told his bosses at CSFB that he didn't know there was an SEC inquiry going on when he ordered the e-mails destroyed, when, and they found out this week, that sure enough, he got the notice shortly before he ordered the e- mails destroyed.
CAFFERTY: What about some of these other stories that seem much more simplistic to me, for example, the Tyco stuff, when somebody takes a $12 million loan out the back doors? Things are coming unraveling. I mean, to me, I'm no lawyer, but that seems -- I mean, anybody can look at something like that, and say, you know, that's not really copacetic what you're doing there. You can't just take $12 million. I mean, how come these guys are still walking around?
SERWER: It's hard to nail these guys, first of all. You know, what happens in these white collar crime cases, the lawyers always tell the clients what they should do: Shut up, shut up, shut up, don't do anything and we'll settle. And that historically is what happened in all these cases.
Now the prosecutors are trying to take it a step further and they are saying we don't want you guy to settle. We want to put him in jail. So that makes the burden of proof that much more difficult, that's why I think it's taking so much time.
ASNES: Not only that, these guys aren't stupid. They are not leaving around big memos that say, here's how I plan to steal $12 million. They're very good at doing what they do, including stealing.
CAFFERTY: But there is no confidence in the stock market. The public is demanding -- they want some heads on some plates. They want some of these guys in prison, and they want some sense that the government agencies charged with protecting the individual investors are out there earning their money by locking some of these guys up if they're guilty. You are not going to get money pouring back into Wall Street until some sort of confidence returns there, and there is none right now.
ASNES: No. It's true. Somebody has got to go to club fed.
SERWER: We may have this new head of the SEC, Bill Donaldson, and you know, he's saying he's the man to clean it up. We'll have to see. You know? He's -- we'll have to see what his charge...
CAFFERTY: Scandal watch. I like this segment of the program. (UNINTELLIGIBLE).
Still ahead on IN THE MONEY, as we continue, on to other things, find out why one more company is bucking a jinx and is going to go forward with putting its name on a baseball stadium. I don't know if that's such a great idea.
Plus, the good, the bad and the worst. Visit a satire Web site where countries that didn't make the cut in George Bush's axis of evil speech. They are forming their own organizations. We'll explain. Stay with us.
CAFFERTY: Time now for the panel to roll out the crystal ball, tell you what you need to know for the week ahead. I don't know where to start this, except we have got this geopolitical cloud of Iraq hanging over everything. If, in fact, this war happens, maybe a prediction on what happens with the economy and the stock market. Maybe good things are hiding in the wings, depending on how that works.
SERWER: Your political cloud sounds terrifying, Jack. I don't like it when you talk like that. You know what I mean? Listen, I'll do a stock market one. That's pretty easy. I think the market -- remember January? Go up and then you go down. It's going to be ground hog day all year. The market is going to keep doing that, fits and starts. We're going to up, be up either 5 percent or down 5 percent for the year, but 2004's going to be a good year. It's going way up.
CAFFERTY: Hold you to that.
ASNES: OK, my prediction, you're going to see, the minute this war starts, you are going to see all the domestic airlines going back to Washington for more bailouts.
CAFFERTY: Why would they wait until the war starts? I mean, they're in big trouble now.
ASNES: Because then they will have a better excuse. People are not traveling right now, but once the war breaks out, it's going to be even tougher. People will really be afraid.
CAFFERTY: All right. Patty, stick your neck out a little bit.
SELLERS: I'll make a shorter term market prediction. Next week, the terror alerts are going to be higher, the market -- it's going to rattle the markets a lot, and it's not going to be a good week next week.
We have hit the moment in the program now when we say good-bye to a couple of our guests for this day. Thank you to Patty Sellers, "Fortune" magazine, and Marion Asnes of "Money" magazine. See you both down the road.
If your name isn't Patty or Marion, don't even get out of the chair, because your presence will be required as we move forward. Andy and I will be back after we make the ad sales department happy trying to earn a couple of bucks for AOL Time Warner. They need the money. Stay with us. (UNINTELLIGIBLE).
CAFFERTY: Well, another historic American sports stadium is selling out for the bucks. Comiskey Park in Chicago is now U.S. Cellular Park. How awful is that? The price tag, $68 million. But if you do the numbers, that means you should start selling your U.S. Cellular stock right now, because most of the companies who have decided to put their names on stadia, which is the plural for stadium, from the Latin, right -- have had an awful time over the last two years. Since 2001, they have lost a total, these companies, of $221 billion. Half of them suffered share price losses of at least 20 percent; 14 percent of them have gone bankrupt, like Enron, Adelphia, WorldCom.
Comiskey park. Plus, it only when you...
SERWER: There's nothing sacred, right?
CAFFERTY: ... do the -- it's only like $3 million a year, which doesn't even buy hot dog wrappers in one of those parks.
SERWER: CMGI, PCI, United Center. You know, someone said, well, it's just a coincidence. But see, I'm not really buying that, because it takes an egomaniac CEO to want to stick his name of his company on the thing. So you know, what kind of mind-set is that? I don't think it's a coincidence they guys who stick their names on the stadiums end up going belly up down the road.
CAFFERTY: It's an interesting theory. And if you go to Comiskey Park to see the White Sox play, you're not going to run out and buy whatever the hell cell phone that's hanging on the name on the -- I mean you go there to see the White Sox play.
SERWER: I got an idea for the White Sox. Why don't they get some better players? Isn't that the real problem?
CAFFERTY: There you go. Yes, spend the money on players, get into the World Series.
CAFFERTY: Fill up the seats.
CAFFERTY: LeBron James, the high school basketball phenom in Akron, Ohio got himself in a whole lot of trouble because somebody handed him a couple of shirts, but now it's OK. They threatened to suspend him. He wasn't going to play. I mean, this kid is a phenomenal athlete. He is going to skip college, go right into the NBA. His mother supposedly handed him the keys to a $60,000 Hummer.
SERWER: Listen, Jack, the only thing this kid has done wrong, the only thing he's done wrong is play basketball really well. That's what I say. When he started to become known, the jackals descended upon him. And I'm talking about ESPN, I'm talking about the high school coach that had him playing him all over the country, charging tickets, they are selling LeBron T-shirts outside of the thing, ESPN broadcast two of the games.
He doesn't get a dime. He doesn't get a single penny at all. And the other jackals who descended upon him were the people who make the rules. See, the people, are those really your shoes? No, those aren't your shoes. Where did you get the shoes? Where did you get that jersey?
Will you just leave this guy alone? I mean, it's so obvious to me that all these rules that govern the college athletes in particular are wrong. The NCAA -- it's like prohibition.
CAFFERTY: This kid is in high school, and apparently the high school governing body out there in Ohio has some of the same kind of nebulous ideas about what's right and wrong, but if the kid doesn't take the keys to this car, I mean, couldn't he wait until he graduated high school to park this thing in his driveway and call attention?
SERWER: People are trying to give you stuff 24 hours a day and you can't take anything. You can't do anything at all. At all. I mean, in my mind, it's not the people who are wrong here. There is so many people who are breaking the rules. It's the rules are wrong. It's like prohibition. I mean, eventually we realized that we have got to change the rules here.
And you know, it's true with college athletes. I mean, this gets into college a little bit. Look, they are the minor leagues of football and basketball. Let's have the leagues pay for all these people to go to school, give them jobs. I mean, the system is broke.
And poor LeBron -- actually, I don't feel so bad for LeBron, because LeBron is going to skip having to deal with the NCAA. He's never going to have to deal with them. Maybe he won't get to play his last couple of games, although it looks like he will now, thank goodness, and then he's going to go right onto the NBA. And I wish him luck, because not everyone, you know, succeeds. It's a tough transition, even though he looks like a great player.
CAFFERTY: You know what he is going to need three or four months from now is a good agent and a wheelbarrow to carry the money to the bank, because he's a blue chip player and he's going to sign obviously a huge contract.
CAFFERTY: ... on down the road. But you're right. There's a tremendous amount of hypocrisy.
SERWER: I think the ESPN thing, to me, is really questionable. What do they do with that money? Shouldn't they put some of that money aside for his family? They are showing a high school kid's game. CAFFERTY: Still ahead on IN THE MONEY, we're not through yet. The lighter side of geopolitical conflict, and we promise you there is one, and we'll show you the Web site where you can go and amuse yourself if you're so inclined. Here's your chance to play TV producer. Write us and tell us what you think we're doing right or wrong. The e-mail address, inthemoney, that is one word, thanks to the ruminations of one of the great minds here at CNN, one word, email@example.com. Check our mailbox after the break. Stay with us.
CAFFERTY: The Web site of the week on this here little program, IN THE MONEY, is a treasure chest of satirical takeoffs on current news items, to wit. Angered by snubbing, Libya, China, Syria has formed the axis of justice evil. After being snubbed, they announced they had formed "the axis of just as evil." "Bitter after being snubbed for membership in the axis of evil, Libya, China and Syria today announced they formed the axis of just as evil, which they said would be way eviler than that stupid Iran-Iraq-North Korea axis that President Bush warned of in his State of the Union address."
Next, come Cuba, Sudan and Serbia, who have formed the axis of somewhat evil. That forced Somalia to join with Myanmar in the axis of occasionally evil, and Bulgaria, Indonesia and Russia established the axis of not so much evil, really, as just generally disagreeable. Sierra Leone, El Salvador and Rwanda applied to be called the axis of countries that aren't the worst, but certainly won't be asked to host the Olympic games. Canada, Mexico and Australia formed the axis of nations that are actually quite nice, but secretly have nasty thoughts about America, while Spain, Scotland and New Zealand established the axis of countries that sometimes ask sheep to wear lipstick. It's not a threat; it's just something we really like to do, according to the Scottish executive first minister, Jack McConnell (ph).
We have other little items on that Web site. It's the Web of the week. It's called SatireWire, and the address is there on your screen. If by the way, you have ideas for little Web sites that other viewers of this program might enjoy, send them along to us at firstname.lastname@example.org.
Here's the e-mail selection for this week. "Please don't sic the Rules Committee on us. We promise to keep watching." This from Ian and Audrey at Beaconsfield, Quebec. The Rules Committee is the picture of nice-looking gentlemen you see on the screen.
"I was pleasantly surprised to see a financial program with a little edge," writes Kim, from Charlesville, Virginia. "You can send those three good-looking men over, though, any time you like." Trust me, Kim, you don't want these guys at your house, or anywhere near your neighborhood. You just don't.
I am -- here's the third one. "I am a stunningly gorgeous former investment banking marketing professional looking for a job. Do you need a co-host, or a roving reporter?"
SERWER: Yes! CAFFERTY: I'm understanding that you can go to work for Andy Serwer, right? He's looking for a personal assistant. Long hours. Some overseas travel. But a very good expense account. Your wife wouldn't care, would she?
SERWER: Yes, she would. But you know, she can work here. She can work -- we have stuff to do.
CAFFERTY: We do?
SERWER: We have stories to track down. Absolutely.
CAFFERTY: That's right, research.
SERWER: Web sites to find.
CAFFERTY: Bad guys to corner. Absolutely.
SERWER: Rough dudes.
CAFFERTY: Yes. The answer is, no, we don't have a job for you. But you wrote a great letter.
You can get in on the e-mail correspondence for the program if you write to us at inthemoney, all one word, I'm told by Andy that you cannot put spaces in an Internet address. So my apologies.
SERWER: No, you were all hot and bothered by that. But you can't do that. You have to do the underscore, and then people never get that right. So you just squeeze it all together.
CAFFERTY: I'm a very simple, some would say backward, not up-to- date human being, who if were going to correspond with someone would do it by using the words "in the money," which in conversation have spaces in them. I don't understand.
SERWER: You don't have your Blackberry or anything going here.
CAFFERTY: I don't have a PalmPilot, I don't have a Blackberry...
SERWER: Cell phone?
CAFFERTY: I don't have a cell phone, I don't have a car phone.
SERWER: How do we get in touch with you?
CAFFERTY: You don't. That's part of the idea. This's it for this edition of IN THE MONEY. My thanks to my pal Andy Serwer of "Fortune" magazine for joining us on this program. He also joins us on "AMERICAN MORNING WITH PAULA ZAHN," seen weekdays mornings, from 7:00 to 10:00 Eastern time all over this great land of ours.
I'm Jack Cafferty. Thank you. Enjoy the rest of your weekend. We'll see you Saturday on IN THE MONEY, Monday morning on "AMERICAN MORNING WITH PAULA ZAHN." And if Connie gets sick, I'm trying to get that gig, too. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
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