WEBVTT 1 00:00:00.000 --> 00:00:04.367 Sampras' Coach Says Men's Tennis Has Many Good Players 2 00:00:04.367 --> 00:00:11.200 For tennis fans, this has been a great week, and 3 00:00:11.200 --> 00:00:17.234 this weekend promises more of the same. 4 00:00:17.234 --> 00:00:22.033 We have seen the emergence of a new American star, Andy Roddick. 5 00:00:22.033 --> 00:00:26.601 We have seen extraordinary performances by two of the best 6 00:00:26.601 --> 00:00:30.501 players this country's ever produced, Andre 7 00:00:30.501 --> 00:00:34.300 Agassi and Pete Sampras. 8 00:00:34.300 --> 00:00:37.467 One, Agassi, has won all for Grand Slams-- the French, the 9 00:00:37.467 --> 00:00:40.567 U.S., the Australian and Wimbledon. 10 00:00:40.567 --> 00:00:43.167 The other, Sampras, has won more Grand Slams than any other 11 00:00:43.167 --> 00:00:45.834 player in history. 12 00:00:45.834 --> 00:00:48.100 They have been competing against each other 13 00:00:48.100 --> 00:00:50.634 since they were teenagers. 14 00:00:50.634 --> 00:00:53.334 On Wednesday night, they played another memorable match, with 15 00:00:53.334 --> 00:00:55.868 Sampras the victor. 16 00:00:55.868 --> 00:00:58.734 This is an especially sweet victory for Pete Sampras, and 17 00:00:58.734 --> 00:01:01.300 tomorrow he will face Marat Safin, the defending U.S. 18 00:01:01.300 --> 00:01:03.901 Open champion who defeated him last year. 19 00:01:03.901 --> 00:01:06.467 As good as the men's game has been, the women's has been just 20 00:01:06.467 --> 00:01:09.300 as great, if not greater. 21 00:01:09.300 --> 00:01:13.200 The Williams sisters will play each other in the final tomorrow 22 00:01:13.200 --> 00:01:16.400 night in primetime on CBS. 23 00:01:16.400 --> 00:01:19.300 Joining me now for a discussion of this great week of tennis, 24 00:01:19.300 --> 00:01:22.567 Thanks for having 25 00:01:22.567 --> 00:01:25.767 me, Charlie. 26 00:01:25.767 --> 00:01:28.400 Have you seen in your life, whether it's 27 00:01:28.400 --> 00:01:30.634 quarter-finals, semi-finals or finals, a better tennis than 28 00:01:30.634 --> 00:01:32.567 Andre Agassi and Pete Sampras a couple nights ago? 29 00:01:32.567 --> 00:01:34.567 Not many. 30 00:01:34.567 --> 00:01:36.334 Not many. 31 00:01:36.334 --> 00:01:37.934 It was pretty dramatic. 32 00:01:37.934 --> 00:01:39.667 I mean, doesn't it rank among the top five? 33 00:01:39.667 --> 00:01:41.801 Absolutely. 34 00:01:41.801 --> 00:01:44.133 No, absolutely. 35 00:01:44.133 --> 00:01:46.367 You know, I've seen a couple matches where the drama combined 36 00:01:46.367 --> 00:01:48.767 with the tennis level has been, you know, in the same ballpark. 37 00:01:48.767 --> 00:01:51.434 But you know, historically, when those guys lay each other, it's 38 00:01:51.434 --> 00:01:53.834 such a-- it's such a great event. 39 00:01:53.834 --> 00:01:56.367 It's nice to see-- particularly in today's day and age, with 40 00:01:56.367 --> 00:01:58.968 tennis the way it is, it's nice to see things that can transcend 41 00:01:58.968 --> 00:02:01.133 the level of the game. 42 00:02:01.133 --> 00:02:03.067 And what better performers than Pete and Andre, who have such a 43 00:02:03.067 --> 00:02:05.601 great history to do that, like they did on Wednesday night? 44 00:02:05.601 --> 00:02:07.767 So it was pretty special. 45 00:02:07.767 --> 00:02:10.067 Why did Pete win? 46 00:02:10.067 --> 00:02:12.334 I just think he played the big points a little 47 00:02:12.334 --> 00:02:14.501 bit better than Andre. 48 00:02:14.501 --> 00:02:16.634 And you know, it was really-- it's such a cliche. 49 00:02:16.634 --> 00:02:18.734 You know, it's one or two points here or there. 50 00:02:18.734 --> 00:02:21.267 Yeah. 51 00:02:21.267 --> 00:02:23.634 Their-- you know, their-- their style of play 52 00:02:23.634 --> 00:02:25.300 matches up really, really uniquely because it's a great 53 00:02:25.300 --> 00:02:26.934 contrast and-- 54 00:02:26.934 --> 00:02:28.567 Great server, great returner. 55 00:02:28.567 --> 00:02:30.234 Yeah, great servers, great returner. Great 56 00:02:30.234 --> 00:02:31.868 ball-striker, great athlete. 57 00:02:31.868 --> 00:02:33.334 Right. 58 00:02:33.334 --> 00:02:34.767 And-- 59 00:02:34.767 --> 00:02:36.234 Well, who is that? 60 00:02:36.234 --> 00:02:37.701 Andre's probably the best 61 00:02:37.701 --> 00:02:39.133 ball-striker of all time. 62 00:02:39.133 --> 00:02:41.300 Now, what does that mean? 63 00:02:41.300 --> 00:02:43.434 That means that, in terms of making clear-- 64 00:02:43.434 --> 00:02:44.767 I know what it means in golf. 65 00:02:44.767 --> 00:02:46.067 --and clean contact with the ball-- 66 00:02:46.067 --> 00:02:47.367 Yeah. 67 00:02:47.367 --> 00:02:48.701 --and making very pure striking of the ball 68 00:02:48.701 --> 00:02:50.000 time and time again and being able to do that in 69 00:02:50.000 --> 00:02:51.334 what I describe in a 70 00:02:51.334 --> 00:02:53.734 really early fashion. 71 00:02:53.734 --> 00:02:56.400 There's a lot of guys that can hit the ball really well, but if 72 00:02:56.400 --> 00:02:58.968 you notice where Andre plays on the court, there's nobody that 73 00:02:58.968 --> 00:03:01.367 can stand where he stands and hit the ball as cleanly as he 74 00:03:01.367 --> 00:03:03.801 does, as hard as he does, as consistently as he does. 75 00:03:03.801 --> 00:03:06.200 And that just takes, you know, just a God-given talent to be 76 00:03:06.200 --> 00:03:08.434 able to hit the ball like that. 77 00:03:08.434 --> 00:03:10.334 To take that much time away from the opponent and hit it 78 00:03:10.334 --> 00:03:12.534 that hard is something I've never seen. 79 00:03:12.534 --> 00:03:14.667 Jimmy Connors did it. 80 00:03:14.667 --> 00:03:16.767 He could take the ball early. 81 00:03:16.767 --> 00:03:18.834 John McEnroe-- 82 00:03:18.834 --> 00:03:20.033 And he hit it flat, too. 83 00:03:20.033 --> 00:03:21.234 But they hit it flat-- 84 00:03:21.234 --> 00:03:22.434 Yeah. 85 00:03:22.434 --> 00:03:23.634 --and John didn't take big swings at it. Andre 86 00:03:23.634 --> 00:03:24.801 does it with full swings, with balls coming at him, like-- you 87 00:03:24.801 --> 00:03:26.000 know, two nights ago, like Pete, 130 miles an hour. 88 00:03:26.000 --> 00:03:27.767 All right. 89 00:03:27.767 --> 00:03:29.067 I want to come back to that. 90 00:03:29.067 --> 00:03:30.400 But compare Andy Roddick with that. 91 00:03:30.400 --> 00:03:31.701 Andy-- 92 00:03:31.701 --> 00:03:33.000 I mean, is he-- does he have the potential to be 93 00:03:33.000 --> 00:03:34.300 one of the great ball-strikers? 94 00:03:34.300 --> 00:03:36.000 No. 95 00:03:36.000 --> 00:03:37.601 No, I don't think so. 96 00:03:37.601 --> 00:03:39.200 No-- (crosstalk) 97 00:03:39.200 --> 00:03:40.801 --hits it pretty hard! 98 00:03:40.801 --> 00:03:42.434 He hits it hard as heck, you know? But I don't 99 00:03:42.434 --> 00:03:44.033 think he's just a pure, clean ball-striker. 100 00:03:44.033 --> 00:03:45.968 He's a really good athlete with huge weapons, but I wouldn't 101 00:03:45.968 --> 00:03:48.234 categorize him as a ball-striker. 102 00:03:48.234 --> 00:03:50.667 Is he more like Sampras or more-- 103 00:03:50.667 --> 00:03:52.767 Yeah, he's more of an athlete. 104 00:03:52.767 --> 00:03:54.834 He's more of an athlete who does strike the ball real well, but 105 00:03:54.834 --> 00:03:56.868 Andre, you know, is just a pure, pure ball-striker 106 00:03:56.868 --> 00:03:58.901 like no one else. 107 00:03:58.901 --> 00:04:00.701 Well, who's close to Andre? 108 00:04:00.701 --> 00:04:02.534 Yevgeny Kafelnikov hit-- 109 00:04:02.534 --> 00:04:04.167 Who's playing-- 110 00:04:04.167 --> 00:04:05.634 Yeah, who's-- 111 00:04:05.634 --> 00:04:07.234 --in the finals. 112 00:04:07.234 --> 00:04:09.033 --playing the other semi-final-- 113 00:04:09.033 --> 00:04:10.901 Semi-finals. Semi's right. 114 00:04:10.901 --> 00:04:12.801 --hits the ball really, really cleanly. 115 00:04:12.801 --> 00:04:14.534 You know, historically, there's been a number of guys that have 116 00:04:14.534 --> 00:04:16.300 done that-- at that level that create opportunities by 117 00:04:16.300 --> 00:04:17.901 controlling from the first hit of the point. 118 00:04:17.901 --> 00:04:19.567 And that's what Andre does. 119 00:04:19.567 --> 00:04:21.067 And Kafelnikov is as close as it gets right now to 120 00:04:21.067 --> 00:04:22.567 somebody like that. 121 00:04:22.567 --> 00:04:24.067 You know, Kuerten's good like that, as well, but he takes a 122 00:04:24.067 --> 00:04:25.567 little bit of a bigger swing and gives you a 123 00:04:25.567 --> 00:04:27.067 little bit more time 124 00:04:27.067 --> 00:04:28.868 than Andre does. 125 00:04:28.868 --> 00:04:30.667 What did Pete do during that match that you 126 00:04:30.667 --> 00:04:32.434 worked on? 127 00:04:32.434 --> 00:04:34.234 The biggest thing is-- you know, 128 00:04:34.234 --> 00:04:36.033 I had friend of 129 00:04:36.033 --> 00:04:37.868 mine told me the other day, that I grew up playing tennis with, 130 00:04:37.868 --> 00:04:39.701 Jimmy Arias, who-- 131 00:04:39.701 --> 00:04:41.567 Oh, I know Jimmy Arias. 132 00:04:41.567 --> 00:04:43.400 Yeah, we were talking-- (crosstalk) Yeah. We 133 00:04:43.400 --> 00:04:45.234 were talking about the tennis and-- 134 00:04:45.234 --> 00:04:47.400 Nick Bollettieri guy. 135 00:04:47.400 --> 00:04:50.000 That's right. 136 00:04:50.000 --> 00:04:52.434 We were talking about the tennis, and Jimmy said something 137 00:04:52.434 --> 00:04:54.901 that really rung true. 138 00:04:54.901 --> 00:04:57.267 And this is the first thing that I noticed about Pete about five 139 00:04:57.267 --> 00:04:59.200 months after I started working with him. 140 00:04:59.200 --> 00:05:01.167 He's the one guy that I've met, that I've been around at that 141 00:05:01.167 --> 00:05:03.100 level that truly, truly believes in himself. 142 00:05:03.100 --> 00:05:05.033 And no matter what you say or do or what's 143 00:05:05.033 --> 00:05:07.000 read or what's written 144 00:05:07.000 --> 00:05:09.167 or what people think, he ultimately believes. 145 00:05:09.167 --> 00:05:10.667 Yeah. 146 00:05:10.667 --> 00:05:12.167 And-- 147 00:05:12.167 --> 00:05:13.667 It's true! 148 00:05:13.667 --> 00:05:15.167 And that's why through all of this stuff and 149 00:05:15.167 --> 00:05:16.667 through all of his, quote, unquote, ''demise'' and-- 150 00:05:16.667 --> 00:05:18.400 Yeah. 151 00:05:18.400 --> 00:05:19.968 Man, I had a people telling me he was out of shape. 152 00:05:19.968 --> 00:05:21.434 He ought to blame himself. 153 00:05:21.434 --> 00:05:23.000 You know, he wasn't paying attention. 154 00:05:23.000 --> 00:05:24.801 He was distracted. 155 00:05:24.801 --> 00:05:26.734 Yeah. 156 00:05:26.734 --> 00:05:28.767 He would never again be good. 157 00:05:28.767 --> 00:05:30.868 I mean, I heard all of that from serious tennis people. 158 00:05:30.868 --> 00:05:33.100 No, there's a lot-- there's a lot of serious 159 00:05:33.100 --> 00:05:35.501 tennis people, and that's why after traveling with Pete for 160 00:05:35.501 --> 00:05:37.767 seven years, Charlie, I've realized that I will not judge 161 00:05:37.767 --> 00:05:40.067 anyone else because the thing that you see-- I'm happy to give 162 00:05:40.067 --> 00:05:42.300 opinions and ideas, but the thing that you see and what I've 163 00:05:42.300 --> 00:05:44.200 learned is we're making judgments and assessments on 164 00:05:44.200 --> 00:05:46.167 people like Pete and Andre and Michael Jordan and Wayne Gretzky 165 00:05:46.167 --> 00:05:48.100 and, you know, Mario Lemieux-- 166 00:05:48.100 --> 00:05:50.067 Tiger Williams or-- 167 00:05:50.067 --> 00:05:51.801 Yeah. 168 00:05:51.801 --> 00:05:53.067 I mean, Tiger-- 169 00:05:53.067 --> 00:05:54.334 Tiger Woods. People were-- 170 00:05:54.334 --> 00:05:55.601 Tiger Woods, yeah. 171 00:05:55.601 --> 00:05:56.901 --making assessments on people 172 00:05:56.901 --> 00:05:58.167 based on the norm. 173 00:05:58.167 --> 00:05:59.434 Yeah. 174 00:05:59.434 --> 00:06:00.701 Those people aren't 175 00:06:00.701 --> 00:06:02.000 normal. They're aberrations. 176 00:06:02.000 --> 00:06:04.033 They are freaks of nature in the talent level that they have. 177 00:06:04.033 --> 00:06:06.234 So what generally applies, those rules that we go by, do not 178 00:06:06.234 --> 00:06:08.701 apply for them. 179 00:06:08.701 --> 00:06:11.033 So if they truly believe and they know what their talent 180 00:06:11.033 --> 00:06:12.968 level is and they can emotionally handle the things 181 00:06:12.968 --> 00:06:14.901 that evolved through their career, who's to say how good 182 00:06:14.901 --> 00:06:16.868 they can be when they-- (crosstalk) 183 00:06:16.868 --> 00:06:18.801 Now, would you say that about everybody who's in 184 00:06:18.801 --> 00:06:20.734 the top five, 185 00:06:20.734 --> 00:06:22.734 the top five golfers, the top five tennis players, the top 186 00:06:22.734 --> 00:06:24.501 five women on the women's tour? 187 00:06:24.501 --> 00:06:26.300 I would say it about all 188 00:06:26.300 --> 00:06:27.901 elite athletes, period. 189 00:06:27.901 --> 00:06:29.634 Period. 190 00:06:29.634 --> 00:06:31.400 And there's not a ton of people that I'd put in 191 00:06:31.400 --> 00:06:33.000 that category. 192 00:06:33.000 --> 00:06:34.667 I mean, there are-- there are elite superstars that are-- you 193 00:06:34.667 --> 00:06:36.434 know, raise the bar to a level in their own sports, and there's 194 00:06:36.434 --> 00:06:38.267 not a lot of them. 195 00:06:38.267 --> 00:06:39.901 Pete and Andre-- you know, when Andre came back a few years ago 196 00:06:39.901 --> 00:06:41.601 from 145 in the world, you know, people never thought that would 197 00:06:41.601 --> 00:06:43.133 happen, and they thought he was finished, he was done, blah, 198 00:06:43.133 --> 00:06:44.801 blah, blah. 199 00:06:44.801 --> 00:06:46.534 Yeah, that to do with his heart. 200 00:06:46.534 --> 00:06:48.100 Yeah. 201 00:06:48.100 --> 00:06:50.267 Yeah, but still, it's a hard road to go by to all of a sudden 202 00:06:50.267 --> 00:06:52.133 decide you want to do that again. 203 00:06:52.133 --> 00:06:54.033 Yeah. 204 00:06:54.033 --> 00:06:55.701 And you know, when Mario Lemieux-- 205 00:06:55.701 --> 00:06:57.467 Have to start back in the challenges-- 206 00:06:57.467 --> 00:06:59.334 That's right. (crosstalk) 207 00:06:59.334 --> 00:07:00.968 --have to go by and flip the cards every time! 208 00:07:00.968 --> 00:07:02.701 That's right. 209 00:07:02.701 --> 00:07:04.501 And when Mario Lemieux started playing again this year-- 210 00:07:04.501 --> 00:07:06.334 Yeah. 211 00:07:06.334 --> 00:07:07.968 --people weren't sure. 212 00:07:07.968 --> 00:07:09.734 You just can't-- the rules don't apply for those people. 213 00:07:09.734 --> 00:07:11.567 So I really haven't been surprised, and I've been really 214 00:07:11.567 --> 00:07:13.467 happy to see his intensity. 215 00:07:13.467 --> 00:07:15.400 And to Pete, it's mostly, to me, about whether or not he can 216 00:07:15.400 --> 00:07:17.334 handle the emotional sacrifices that are necessary to compete at 217 00:07:17.334 --> 00:07:19.367 the level that he wants to compete. 218 00:07:19.367 --> 00:07:21.634 What's an emotional sacrifice? 219 00:07:21.634 --> 00:07:23.834 Well, it's the ability to focus on what the 220 00:07:23.834 --> 00:07:26.033 ultimate goal is, which for these guys is purely competing. 221 00:07:26.033 --> 00:07:28.334 And ultimately, when they reach a level that Pete and Andre and 222 00:07:28.334 --> 00:07:30.634 the other elite athletes get to, there's so much more that's 223 00:07:30.634 --> 00:07:32.868 involved, whether it be the entertainment aspect of it -- 224 00:07:32.868 --> 00:07:35.100 you know, commitments to sponsors, signing autographs day 225 00:07:35.100 --> 00:07:37.067 in and day out at practice -- that you forget that these guys 226 00:07:37.067 --> 00:07:38.834 have been doing it since they're 16. 227 00:07:38.834 --> 00:07:40.400 You know, Pete's been doing it for 14, 15 years 228 00:07:40.400 --> 00:07:42.067 now on the pro circuit. 229 00:07:42.067 --> 00:07:43.601 And it's great. 230 00:07:43.601 --> 00:07:45.133 Don't get me wrong. 231 00:07:45.133 --> 00:07:46.634 It's a great way to make a living. 232 00:07:46.634 --> 00:07:48.167 But after traveling with him for seven years, I 233 00:07:48.167 --> 00:07:51.968 can see that it's draining. 234 00:07:51.968 --> 00:07:54.100 It's difficult to be able to always be there with generally 235 00:07:54.100 --> 00:07:55.734 no off season and-- 236 00:07:55.734 --> 00:07:57.367 And now you've got-- 237 00:07:57.367 --> 00:07:58.667 --no teammates to help-- 238 00:07:58.667 --> 00:07:59.968 And now he's got something special 239 00:07:59.968 --> 00:08:01.300 to come home to! 240 00:08:01.300 --> 00:08:02.601 Yeah. That's right. He's got a beautiful wife 241 00:08:02.601 --> 00:08:03.901 and a great life to lead. 242 00:08:03.901 --> 00:08:05.701 Yeah. 243 00:08:05.701 --> 00:08:07.267 And you know, they have 244 00:08:07.267 --> 00:08:08.934 a tremendous relationship. 245 00:08:08.934 --> 00:08:10.467 And there's-- things change, but he definitely still lives for 246 00:08:10.467 --> 00:08:12.100 these events. 247 00:08:12.100 --> 00:08:13.801 So he-- you didn't have to get him up for this. 248 00:08:13.801 --> 00:08:15.367 No, no, no. 249 00:08:15.367 --> 00:08:16.767 He was ready to come play in New York. 250 00:08:16.767 --> 00:08:18.334 Yeah, but he didn't do so-- he didn't do so 251 00:08:18.334 --> 00:08:20.000 well in the lead-up to it. 252 00:08:20.000 --> 00:08:21.501 I know. 253 00:08:21.501 --> 00:08:22.868 That's what's-- again, the rules don't apply, you know? 254 00:08:22.868 --> 00:08:24.367 People would say, ''Gee, he hasn't done so well. 255 00:08:24.367 --> 00:08:26.033 He had a bad summer. 256 00:08:26.033 --> 00:08:27.767 He had this. 257 00:08:27.767 --> 00:08:29.834 He had that.'' And I'll tell you, the first time I saw it, 258 00:08:29.834 --> 00:08:31.868 Charlie, was in 1995 in the spring. 259 00:08:31.868 --> 00:08:33.901 He did not win hardly any matches at all on clay, and I 260 00:08:33.901 --> 00:08:35.901 was panicked about him going to Wimbledon. 261 00:08:35.901 --> 00:08:37.934 We got to the warm-up tournament at Wimbledon. 262 00:08:37.934 --> 00:08:39.934 We talked about it, which we do-- and I was all worried about 263 00:08:39.934 --> 00:08:41.968 being this new coach, how to do things. 264 00:08:41.968 --> 00:08:43.968 And he calmly just said, ''Look, I understand what 265 00:08:43.968 --> 00:08:45.968 happened on clay. 266 00:08:45.968 --> 00:08:47.968 I didn't have a good couple of months. 267 00:08:47.968 --> 00:08:49.968 But I'm here. 268 00:08:49.968 --> 00:08:51.968 I'm a Wimbledon. 269 00:08:51.968 --> 00:08:54.000 Everything'll be fine. 270 00:08:54.000 --> 00:08:56.000 I feel OK.'' 271 00:08:56.000 --> 00:08:57.734 D you believe he'll ever win the French Open? 272 00:08:57.734 --> 00:08:59.567 I believe he can. 273 00:08:59.567 --> 00:09:01.400 And if I don't believe he-- if I didn't think he could, then 274 00:09:01.400 --> 00:09:03.300 there's no sense in going. 275 00:09:03.300 --> 00:09:04.534 And I absolutely believe he can do it. 276 00:09:04.534 --> 00:09:05.734 Whether or not he'll do it, I don't know. 277 00:09:05.734 --> 00:09:06.968 He has-- 278 00:09:06.968 --> 00:09:08.167 Yeah, but it takes the maximum sacrifice for him 279 00:09:08.167 --> 00:09:09.400 to do it. 280 00:09:09.400 --> 00:09:12.767 Absolutely. Absolutely. 281 00:09:12.767 --> 00:09:14.567 And he's got to focus on it. 282 00:09:14.567 --> 00:09:16.434 He's got to do a whole lot of stuff. 283 00:09:16.434 --> 00:09:18.300 He's got to do a lot of things, and a lot of 284 00:09:18.300 --> 00:09:20.234 things-- and he was the first one that told me that in order 285 00:09:20.234 --> 00:09:21.934 to win a Grand Slam, you have to be a little bit fortunate. 286 00:09:21.934 --> 00:09:23.434 And he really hasn't been that fortunate there. 287 00:09:23.434 --> 00:09:24.834 And every Grand Slam he's-- 288 00:09:24.834 --> 00:09:26.100 Oh, he's-- (unintelligible) Wimbledon. 289 00:09:26.100 --> 00:09:27.601 Yeah. 290 00:09:27.601 --> 00:09:30.901 Five U.S. Opens! 291 00:09:30.901 --> 00:09:32.400 But I can tell you a lot of different stories 292 00:09:32.400 --> 00:09:33.801 about those-- those titles, where something lucky has 293 00:09:33.801 --> 00:09:35.367 happened at one time or another throughout. 294 00:09:35.367 --> 00:09:37.033 But he could do it. 295 00:09:37.033 --> 00:09:38.501 He could definitely do it. 296 00:09:38.501 --> 00:09:40.133 And I think athletics is all about the challenges. 297 00:09:40.133 --> 00:09:41.834 You know, that's-- that's what should make him want 298 00:09:41.834 --> 00:09:43.634 him to keep playing. 299 00:09:43.634 --> 00:09:45.200 How do you think Andre feels today? 300 00:09:45.200 --> 00:09:46.467 I'm sure he feels really 301 00:09:46.467 --> 00:09:47.734 disappointed and, you know-- 302 00:09:47.734 --> 00:09:49.000 Oh, that's obvious. 303 00:09:49.000 --> 00:09:50.267 Yeah. But I think he feels-- I don't think he 304 00:09:50.267 --> 00:09:51.534 has anything to feel 305 00:09:51.534 --> 00:09:52.901 badly about. 306 00:09:52.901 --> 00:09:54.434 I-- I'm-- that's not my point. 307 00:09:54.434 --> 00:09:56.067 I don't think he has, either. 308 00:09:56.067 --> 00:09:58.634 Yeah. 309 00:09:58.634 --> 00:10:00.801 But I mean, he's an interesting guy, who I like, 310 00:10:00.801 --> 00:10:02.701 as well as I like Pete, in that-- in that when he lost to 311 00:10:02.701 --> 00:10:04.334 Pete in Wimbledon, when Pete just was playing-- 312 00:10:04.334 --> 00:10:05.834 That was-- 313 00:10:05.834 --> 00:10:07.467 That was pretty close to 100 percent. 314 00:10:07.467 --> 00:10:08.634 Yeah. 315 00:10:08.634 --> 00:10:09.834 Yeah. Wasn't he. 316 00:10:09.834 --> 00:10:11.033 Pete said-- 317 00:10:11.033 --> 00:10:12.200 Yeah. No, that was probably the best match I've 318 00:10:12.200 --> 00:10:13.400 ever seen Pete play-- 319 00:10:13.400 --> 00:10:14.634 Yeah. 320 00:10:14.634 --> 00:10:15.801 --in the big time. 321 00:10:15.801 --> 00:10:16.934 Andre said, ''Hey, there's nothing 322 00:10:16.934 --> 00:10:18.033 I could have done. 323 00:10:18.033 --> 00:10:19.100 He was going to-- he was going to win today.'' You know, that 324 00:10:19.100 --> 00:10:20.133 was one of those things. 325 00:10:20.133 --> 00:10:21.200 He may feel that, even though he's 326 00:10:21.200 --> 00:10:22.234 disappointed, about this match. 327 00:10:22.234 --> 00:10:23.234 I mean, Pete played so well. 328 00:10:23.234 --> 00:10:24.267 Andre didn't defeat himself. 329 00:10:24.267 --> 00:10:25.267 No. 330 00:10:25.267 --> 00:10:26.300 Pete (unintelligible) 331 00:10:26.300 --> 00:10:27.300 couple breaks, won. 332 00:10:27.300 --> 00:10:28.300 Right. 333 00:10:28.300 --> 00:10:29.067 Could have gone the other way. 334 00:10:29.067 --> 00:10:30.400 Am I right? 335 00:10:30.400 --> 00:10:33.501 Absolutely. Absolutely. 336 00:10:33.501 --> 00:10:35.434 And it's been kind of like that historically with them. 337 00:10:35.434 --> 00:10:37.400 Usually, one guy or the other gets a little bit of the 338 00:10:37.400 --> 00:10:39.367 momentum and can stretch the lead. 339 00:10:39.367 --> 00:10:41.601 Both of them are capable of it. 340 00:10:41.601 --> 00:10:43.734 But to see those guys play in that arena in that situation, 341 00:10:43.734 --> 00:10:45.868 where neither one loses serve for four sets, and it literally 342 00:10:45.868 --> 00:10:48.033 comes down to one or two points each set-- to me, it's-- it's 343 00:10:48.033 --> 00:10:50.300 hard to judge. 344 00:10:50.300 --> 00:10:52.534 You know, it's, ''Oh, geez, Andre missed an easy forehand to 345 00:10:52.534 --> 00:10:54.934 lose the match, the match point.'' Pete double-faulted the 346 00:10:54.934 --> 00:10:57.267 point before that. 347 00:10:57.267 --> 00:10:59.667 Now, you can pick out one or two points here and there, but if 348 00:10:59.667 --> 00:11:02.033 you look at the sum of all the parts, you just sit there and 349 00:11:02.033 --> 00:11:04.300 go, ''They're both under incredible pressure the whole 350 00:11:04.300 --> 00:11:06.534 time because the level is so good, that if either one drops 351 00:11:06.534 --> 00:11:08.334 just a touch, they know the other guy's going to take 352 00:11:08.334 --> 00:11:10.133 advantage of it.'' 353 00:11:10.133 --> 00:11:11.968 Yeah. 354 00:11:11.968 --> 00:11:13.767 So it's really like playing 355 00:11:13.767 --> 00:11:15.601 their match in a fishbowl. 356 00:11:15.601 --> 00:11:17.868 And sure, I think he's probably really crushed by it, but again, 357 00:11:17.868 --> 00:11:20.067 if I were coaching him, I couldn't sit here and go, 358 00:11:20.067 --> 00:11:22.000 ''Geez, you really should have just done that.'' 359 00:11:22.000 --> 00:11:26.067 Yeah. Exactly. 360 00:11:26.067 --> 00:11:28.234 You know? 361 00:11:28.234 --> 00:11:30.367 So there wasn't anything really tactically wrong. 362 00:11:30.367 --> 00:11:32.200 You just got to look ahead. 363 00:11:32.200 --> 00:11:34.067 Yeah. 364 00:11:34.067 --> 00:11:35.734 You just got to say, 365 00:11:35.734 --> 00:11:37.501 ''Look, that was a great''-- 366 00:11:37.501 --> 00:11:38.834 Yeah. 367 00:11:38.834 --> 00:11:40.200 --''day for tennis.'' 368 00:11:40.200 --> 00:11:41.567 Right. 369 00:11:41.567 --> 00:11:42.934 You know? ''I'm sad because I wanted to win two 370 00:11:42.934 --> 00:11:44.133 Grand Slams this year and''-- 371 00:11:44.133 --> 00:11:45.334 Yeah. But there wasn't-- 372 00:11:45.334 --> 00:11:46.534 (unintelligible) next season. 373 00:11:46.534 --> 00:11:47.767 There wasn't anything tactically 374 00:11:47.767 --> 00:11:48.968 that he should have-- 375 00:11:48.968 --> 00:11:50.400 Let me look ahead. So Pete plays Safin. 376 00:11:50.400 --> 00:11:51.734 Beat his butt in the finals. 377 00:11:51.734 --> 00:11:53.234 I mean, he just cleaned his clock. 378 00:11:53.234 --> 00:11:54.234 Played great. 379 00:11:54.234 --> 00:11:55.267 Yeah, he did. 380 00:11:55.267 --> 00:11:56.267 It overwhelmed-- 381 00:11:56.267 --> 00:11:57.267 Pete didn't have his best day, and Safin had a 382 00:11:57.267 --> 00:11:59.634 great day. Right? 383 00:11:59.634 --> 00:12:02.567 Uh-huh. Uh-huh. 384 00:12:02.567 --> 00:12:04.100 So what are you going to do to change that? 385 00:12:04.100 --> 00:12:05.501 Well, I think Safin's probably the most 386 00:12:05.501 --> 00:12:06.801 talented young guy out there. 387 00:12:06.801 --> 00:12:08.033 Moreso than Roddick? 388 00:12:08.033 --> 00:12:09.467 Yeah. 389 00:12:09.467 --> 00:12:12.000 I think so. And-- 390 00:12:12.000 --> 00:12:13.200 Great kid. Came by here last year after he won. 391 00:12:13.200 --> 00:12:14.334 He's a nice kid. 392 00:12:14.334 --> 00:12:15.434 Yeah. 393 00:12:15.434 --> 00:12:16.501 Funny, really funny. 394 00:12:16.501 --> 00:12:17.801 Yeah. Right. 395 00:12:17.801 --> 00:12:20.901 Right. 396 00:12:20.901 --> 00:12:22.601 Very funny, easygoing guy. 397 00:12:22.601 --> 00:12:24.133 I think it's going to be pretty simple. 398 00:12:24.133 --> 00:12:25.567 Pete has to be very effective returning Safin's second serve 399 00:12:25.567 --> 00:12:26.968 because if he does that, it'll put more pressure 400 00:12:26.968 --> 00:12:28.367 on his first serve. 401 00:12:28.367 --> 00:12:29.767 And Pete has to do a really good job in his 402 00:12:29.767 --> 00:12:31.200 service games, mixing 403 00:12:31.200 --> 00:12:33.067 up locations and not making silly, sloppy volleying errors 404 00:12:33.067 --> 00:12:35.000 so that he can put pressure on Safin's serve by holding easily. 405 00:12:35.000 --> 00:12:36.667 If he does that and he gets off to a good start, I really think 406 00:12:36.667 --> 00:12:38.167 Pete will play a good match. 407 00:12:38.167 --> 00:12:39.834 And if Pete plays a good match, I like his 408 00:12:39.834 --> 00:12:41.300 chances against anybody. 409 00:12:41.300 --> 00:12:42.667 OK. 410 00:12:42.667 --> 00:12:43.934 Will you have a conversation with him before 411 00:12:43.934 --> 00:12:45.367 the match at all? 412 00:12:45.367 --> 00:12:48.234 Absolutely. Yeah. 413 00:12:48.234 --> 00:12:49.834 And what will you-- what will the conversation 414 00:12:49.834 --> 00:12:51.567 be like? 415 00:12:51.567 --> 00:12:53.100 We'll talk about patterns. 416 00:12:53.100 --> 00:12:54.767 We'll talk about what happened last year. 417 00:12:54.767 --> 00:12:56.267 We'll talk about what's happened the last 418 00:12:56.267 --> 00:12:57.868 couple times he's played. 419 00:12:57.868 --> 00:12:59.334 We'll talk about what Pete does best and how 420 00:12:59.334 --> 00:13:00.934 to-- how to do that. 421 00:13:00.934 --> 00:13:02.400 Now, have you studied Safin? 422 00:13:02.400 --> 00:13:03.734 Sure. 423 00:13:03.734 --> 00:13:05.234 I've seen him play-- 424 00:13:05.234 --> 00:13:06.868 You know what his weaknesses are. 425 00:13:06.868 --> 00:13:08.567 --50 matches. 426 00:13:08.567 --> 00:13:10.100 You've watched him. 427 00:13:10.100 --> 00:13:11.133 You know-- 428 00:13:11.133 --> 00:13:12.167 There aren't a lot-- 429 00:13:12.167 --> 00:13:13.167 --his weaknesses-- 430 00:13:13.167 --> 00:13:14.200 --of them. There aren't a lot of them. I mean, 431 00:13:14.200 --> 00:13:15.200 he's a gifted six-foot, four, six-foot, five athlete who 432 00:13:15.200 --> 00:13:16.334 can do just about anything from both sides of the court. 433 00:13:16.334 --> 00:13:17.434 Yeah. 434 00:13:17.434 --> 00:13:18.501 Won't come in to net that much, but 435 00:13:18.501 --> 00:13:19.567 he can hurt you. 436 00:13:19.567 --> 00:13:20.601 And at this level of the game, when a guy can-- you have a guy 437 00:13:20.601 --> 00:13:21.667 that can hurt you with his serve, his 438 00:13:21.667 --> 00:13:22.767 backhand and his forehand-- 439 00:13:22.767 --> 00:13:23.834 You got trouble! 440 00:13:23.834 --> 00:13:24.901 --you're a little bit of-- (crosstalk) Yeah, 441 00:13:24.901 --> 00:13:25.968 you got to worry a little bit. 442 00:13:25.968 --> 00:13:27.667 So it's going to take a little bit of time. 443 00:13:27.667 --> 00:13:29.234 But you know, I've seen him play enough so 444 00:13:29.234 --> 00:13:30.767 that we can-- (crosstalk) 445 00:13:30.767 --> 00:13:32.334 And how about the other semi-final? 446 00:13:32.334 --> 00:13:33.801 That's going to be a tough one. I mean, 447 00:13:33.801 --> 00:13:35.234 Hewitt's beaten Kafelnikov on a 448 00:13:35.234 --> 00:13:36.501 number of big occasions-- 449 00:13:36.501 --> 00:13:37.801 Boy, Hewitt looked good last 450 00:13:37.801 --> 00:13:39.067 night. God, he looked-- 451 00:13:39.067 --> 00:13:40.334 I give the-- I give the edge to Hewitt, based 452 00:13:40.334 --> 00:13:41.601 on their past history. 453 00:13:41.601 --> 00:13:43.634 But you know, if he's going to-- we'll see how-- how fresh his 454 00:13:43.634 --> 00:13:45.667 young legs are tomorrow, after that brutal match last night 455 00:13:45.667 --> 00:13:47.667 with Roddick. 456 00:13:47.667 --> 00:13:49.701 How old is he? 457 00:13:49.701 --> 00:13:53.701 I think Lleyton's 20? Yeah. 458 00:13:53.701 --> 00:13:55.701 My goodness. 459 00:13:55.701 --> 00:13:57.734 It's amazing. 460 00:13:57.734 --> 00:13:59.734 To play that well at 20. 461 00:13:59.734 --> 00:14:01.734 That's amazing. 462 00:14:01.734 --> 00:14:03.734 It really is. 463 00:14:03.734 --> 00:14:05.734 Yeah. 464 00:14:05.734 --> 00:14:07.734 On Saturday night, the Williams sisters will square off. 465 00:14:07.734 --> 00:14:09.734 Now, is there any doubt in your mind that they both are going to 466 00:14:09.734 --> 00:14:11.734 play at their best? 467 00:14:11.734 --> 00:14:13.734 I wouldn't have any. 468 00:14:13.734 --> 00:14:15.734 I hope not. 469 00:14:15.734 --> 00:14:17.467 Yeah. 470 00:14:17.467 --> 00:14:19.200 I mean, I don't know them-- I 471 00:14:19.200 --> 00:14:20.934 know them-- (crosstalk) 472 00:14:20.934 --> 00:14:22.667 I don't mean-- even psychologically-- not that 473 00:14:22.667 --> 00:14:24.400 they're going to have a-- not 474 00:14:24.400 --> 00:14:26.501 that Father's going to come in-- 475 00:14:26.501 --> 00:14:28.534 No, I don't-- 476 00:14:28.534 --> 00:14:30.601 --and say, ''Venus, it's your time to win.'' 477 00:14:30.601 --> 00:14:32.634 No, I think-- I can't imagine-- 478 00:14:32.634 --> 00:14:34.667 That's not going to happen. 479 00:14:34.667 --> 00:14:36.667 --it Charlie. 480 00:14:36.667 --> 00:14:37.968 Obviously. 481 00:14:37.968 --> 00:14:39.267 I really can't imagine it. 482 00:14:39.267 --> 00:14:40.567 Psychologically, it won't make a difference. 483 00:14:40.567 --> 00:14:41.868 No, it really-- not-- not in an arena like 484 00:14:41.868 --> 00:14:43.167 this. I really can't imagine not going in there 485 00:14:43.167 --> 00:14:44.467 and just-- you know, 486 00:14:44.467 --> 00:14:46.033 they're sisters, but they're out there to see who plays better 487 00:14:46.033 --> 00:14:47.701 that day. 488 00:14:47.701 --> 00:14:49.467 Yeah. 489 00:14:49.467 --> 00:14:52.467 You know? That-- 490 00:14:52.467 --> 00:14:53.667 This will be like-- this will be like a-- 491 00:14:53.667 --> 00:14:54.834 It'll be terrific. 492 00:14:54.834 --> 00:14:56.033 --gut ball in the back yard of the Williams 493 00:14:56.033 --> 00:14:57.200 house, wouldn't it? 494 00:14:57.200 --> 00:14:58.834 Yeah. 495 00:14:58.834 --> 00:15:00.000 It'll-- it'll be terrific. 496 00:15:00.000 --> 00:15:01.200 They could have just stayed home and played a 497 00:15:01.200 --> 00:15:02.367 practice set. (crosstalk) 498 00:15:02.367 --> 00:15:03.534 Women's tennis is now more 499 00:15:03.534 --> 00:15:04.701 popular than men's tennis? 500 00:15:04.701 --> 00:15:06.200 Are you asking me? 501 00:15:06.200 --> 00:15:07.601 Yeah. 502 00:15:07.601 --> 00:15:09.634 I don't know. 503 00:15:09.634 --> 00:15:11.400 I mean, in may respects, there are more diverse 504 00:15:11.400 --> 00:15:13.234 personalities involved-- 505 00:15:13.234 --> 00:15:14.868 Yeah. 506 00:15:14.868 --> 00:15:16.133 --which makes it really popular in-- 507 00:15:16.133 --> 00:15:17.367 Yeah, the personalities are really known, too. 508 00:15:17.367 --> 00:15:18.634 Yeah. 509 00:15:18.634 --> 00:15:19.901 We know about the Williams sisters. We know 510 00:15:19.901 --> 00:15:21.167 about Martina. 511 00:15:21.167 --> 00:15:22.467 Right. 512 00:15:22.467 --> 00:15:23.801 We know about-- 513 00:15:23.801 --> 00:15:25.133 Yeah, and it's tough because-- (crosstalk) 514 00:15:25.133 --> 00:15:26.434 Right. Absolutely. And I think on the men's 515 00:15:26.434 --> 00:15:27.767 side, unfortunately, we've 516 00:15:27.767 --> 00:15:29.267 celebrated-- we've celebrated guys as they start to slide 517 00:15:29.267 --> 00:15:30.868 instead of what they've done. 518 00:15:30.868 --> 00:15:32.601 I think there are some tremendous, 519 00:15:32.601 --> 00:15:34.367 tremendous young talent. 520 00:15:34.367 --> 00:15:36.200 And I actually think, from the men's side, not in comparison to 521 00:15:36.200 --> 00:15:37.834 the women's, but purely from the men's side, there are so many 522 00:15:37.834 --> 00:15:39.567 good players now that you're just not going to see guys 523 00:15:39.567 --> 00:15:41.100 winning two or three Grand Slams a year. 524 00:15:41.100 --> 00:15:42.501 Really? 525 00:15:42.501 --> 00:15:43.467 There are too many good players. 526 00:15:43.467 --> 00:15:44.434 I mean, I've seen, you know, so many guys in the top 75 that I 527 00:15:44.434 --> 00:15:45.400 go-- (crosstalk) 528 00:15:45.400 --> 00:15:46.367 Here's what I hear from you. And I mean, McEnroe 529 00:15:46.367 --> 00:15:47.334 -- John -- is going around saying that 530 00:15:47.334 --> 00:15:48.434 Roddick is the-- is the-- is the real thing. 531 00:15:48.434 --> 00:15:49.534 I hear you being not as enthusiastic as the consensus is 532 00:15:49.534 --> 00:15:50.567 about Roddick. 533 00:15:50.567 --> 00:15:51.634 Am I wrong? 534 00:15:51.634 --> 00:15:52.667 Yeah. 535 00:15:52.667 --> 00:15:53.667 I mean, yeah. 536 00:15:53.667 --> 00:15:54.701 No, he is-- I think he is-- I just think that Safin's the most 537 00:15:54.701 --> 00:15:55.701 talented young guy. 538 00:15:55.701 --> 00:15:57.968 I got you. OK. 539 00:15:57.968 --> 00:15:59.167 But I think-- there's no reason why Andy 540 00:15:59.167 --> 00:16:00.367 shouldn't be a top 5 player. 541 00:16:00.367 --> 00:16:01.501 I've seen how much better he's gotten in 12 months. 542 00:16:01.501 --> 00:16:02.667 Yeah. 543 00:16:02.667 --> 00:16:03.767 And I see he can still get better, which is a 544 00:16:03.767 --> 00:16:04.834 little frightening. 545 00:16:04.834 --> 00:16:05.834 And he has two huge weapons already, a huge 546 00:16:05.834 --> 00:16:07.133 serve and a huge forehand. 547 00:16:07.133 --> 00:16:08.634 Yeah. 548 00:16:08.634 --> 00:16:10.234 Doesn't volley, quote, unquote, ''that well''-- 549 00:16:10.234 --> 00:16:11.968 You can learn to volley? 550 00:16:11.968 --> 00:16:13.734 Yeah, but he's gotten a lot better since last 551 00:16:13.734 --> 00:16:15.601 year, and his backhand is much better than it was last year. 552 00:16:15.601 --> 00:16:17.467 And how old is he? 553 00:16:17.467 --> 00:16:19.367 He's 19. 554 00:16:19.367 --> 00:16:21.300 And he's a good kid with a great work ethic. 555 00:16:21.300 --> 00:16:23.267 So there's no reason why he can't be top 5. 556 00:16:23.267 --> 00:16:25.234 How about number 1? 557 00:16:25.234 --> 00:16:27.200 That you'd be more well-suited to ask somebody 558 00:16:27.200 --> 00:16:29.167 like John or Pete, that knows really what-- (crosstalk) You 559 00:16:29.167 --> 00:16:31.167 can get there. 560 00:16:31.167 --> 00:16:33.133 Whether or not you stay there is different-- 561 00:16:33.133 --> 00:16:34.868 Now, how high did you get? 562 00:16:34.868 --> 00:16:36.434 Twelve. 563 00:16:36.434 --> 00:16:37.834 Pretty good. 564 00:16:37.834 --> 00:16:39.167 Yeah. 565 00:16:39.167 --> 00:16:40.400 It's not bad for a small-town boy from East Hampton. 566 00:16:40.400 --> 00:16:41.567 I'm proud of it. 567 00:16:41.567 --> 00:16:42.701 I'm proud of it. 568 00:16:42.701 --> 00:16:43.801 All right, I'll see you there tomorrow. 569 00:16:43.801 --> 00:16:44.868 Good to have you here. 570 00:16:44.868 --> 00:16:45.934 Thanks, Charlie. 571 00:16:45.934 --> 00:16:46.968 Thanks for having me. 572 00:16:46.968 --> 00:16:48.000 Who wins the Williams sisters' match? 573 00:16:48.000 --> 00:16:49.033 I think Venus will win. 574 00:16:49.033 --> 00:16:49.834 Better-- 575 00:16:49.834 --> 00:16:50.667 I think Venus will win. 576 00:16:50.667 --> 00:16:51.467 Better what, better-- 577 00:16:51.467 --> 00:16:52.267 I just think she's a little bit better of a 578 00:16:52.267 --> 00:16:53.100 tennis player and a little 579 00:16:53.100 --> 00:16:54.100 stronger mentally right now than Serena is. 580 00:16:54.100 --> 00:16:55.033 Great to see you. 581 00:16:55.033 --> 00:16:56.200 Thanks for having me. 582 00:16:56.200 --> 00:16:59.367 PAUL ANNACONE. 583 00:16:59.367 --> 00:17:02.133 Back in a moment. 584 00:17:02.133 --> 00:17:04.634 Stay with us. 585 00:17:04.634 --> 00:17:07.000 Street Exec Argues for Social Security Privatization 586 00:17:07.000 --> 00:17:09.267 Don Marron began his Wall Street career at the 587 00:17:09.267 --> 00:17:11.467 age of 17. 588 00:17:11.467 --> 00:17:13.634 He went on to serve 20 years as the chairman and 589 00:17:13.634 --> 00:17:15.734 CEO of Paine Webber. 590 00:17:15.734 --> 00:17:17.834 Last year, he merged the firm with UBS of Switzerland. 591 00:17:17.834 --> 00:17:19.901 In August, after successfully integrating the two companies, 592 00:17:19.901 --> 00:17:22.000 he stepped aside as the chairman of UBS Paine Webber to pursue 593 00:17:22.000 --> 00:17:24.067 other interests. 594 00:17:24.067 --> 00:17:26.133 I'm pleased to have him back at this table to talk about the 595 00:17:26.133 --> 00:17:28.167 economy, about Social Security and some other 596 00:17:28.167 --> 00:17:32.234 issues on this Friday. Welcome. 597 00:17:32.234 --> 00:17:36.267 Nice to be here, Charlie. 598 00:17:36.267 --> 00:17:38.267 Great to have you here. 599 00:17:38.267 --> 00:17:40.300 Let's talk first about the economy. 600 00:17:40.300 --> 00:17:42.300 Tell me how you see where things are and-- and all the talk of 601 00:17:42.300 --> 00:17:44.300 recession and all the talk of-- of the absence of the surplus 602 00:17:44.300 --> 00:17:46.534 and what's going to happen. 603 00:17:46.534 --> 00:17:48.834 Well, I think first of all, we've had nine 604 00:17:48.834 --> 00:17:51.234 great years, so it's not surprising there's a little bit 605 00:17:51.234 --> 00:17:53.534 of a pullback. 606 00:17:53.534 --> 00:17:55.801 Depression wasn't ''if,'' it was ''when.'' And I think the 607 00:17:55.801 --> 00:17:58.200 economy is bumping along. 608 00:17:58.200 --> 00:18:00.534 It's trying to find a new base. 609 00:18:00.534 --> 00:18:03.000 My issue with the economy is those nine years were driven by 610 00:18:03.000 --> 00:18:05.334 technology gains, the way to make us more productive. 611 00:18:05.334 --> 00:18:08.167 I think we're finding it harder to find ways to be more 612 00:18:08.167 --> 00:18:10.801 productive because we used up a big amount of research base at 613 00:18:10.801 --> 00:18:13.300 that time. 614 00:18:13.300 --> 00:18:15.634 You talk about the R&D cycle-- a lot of R, some D. 615 00:18:15.634 --> 00:18:17.901 Right. Right. 616 00:18:17.901 --> 00:18:20.133 Now we don't have as much of a research base. 617 00:18:20.133 --> 00:18:22.267 We haven't put as much into it in the last couple of years. 618 00:18:22.267 --> 00:18:24.400 We've got to invest more in that side of America. 619 00:18:24.400 --> 00:18:26.467 Do you have a sense of when 620 00:18:26.467 --> 00:18:28.667 it might turn around? 621 00:18:28.667 --> 00:18:31.067 Yeah, I ave the sense. 622 00:18:31.067 --> 00:18:33.334 I'm not sure my opinion is any better than anybody else's. 623 00:18:33.334 --> 00:18:35.567 I think by the end of this year and going into early next year, 624 00:18:35.567 --> 00:18:37.501 the bottom will have been reached, and the comparisons 625 00:18:37.501 --> 00:18:39.200 will start to look better. 626 00:18:39.200 --> 00:18:40.701 So it's turned around compared to when, last 627 00:18:40.701 --> 00:18:42.100 month or last year? 628 00:18:42.100 --> 00:18:44.334 Yeah. Exactly. 629 00:18:44.334 --> 00:18:45.267 Relative to what? 630 00:18:45.267 --> 00:18:46.200 Yeah. 631 00:18:46.200 --> 00:18:47.133 When-- what should we look for as 632 00:18:47.133 --> 00:18:49.300 evidence of that turnaround? 633 00:18:49.300 --> 00:18:50.567 And what will, in fact, cause it to turn around? 634 00:18:50.567 --> 00:18:52.367 Yeah. 635 00:18:52.367 --> 00:18:54.367 Well, I think what we look for, as I think we do all the time in 636 00:18:54.367 --> 00:18:56.801 all this, is how people react. 637 00:18:56.801 --> 00:18:59.534 A great deal of our economy, two thirds, is based on the 638 00:18:59.534 --> 00:19:02.067 consumer, is about psychology. 639 00:19:02.067 --> 00:19:04.701 If the consumer stays optimistic, stays willing to buy 640 00:19:04.701 --> 00:19:07.567 things, stays out there, then we'll see that turnaround in 641 00:19:07.567 --> 00:19:10.434 that situation. 642 00:19:10.434 --> 00:19:13.067 Second thing that we'll see is when we have used up all our 643 00:19:13.067 --> 00:19:15.534 excess-- our excess inventories, our excess building capacity. 644 00:19:15.534 --> 00:19:18.400 And you'll start to see new elements of that taking place. 645 00:19:18.400 --> 00:19:21.033 And that's probably sometime next year. 646 00:19:21.033 --> 00:19:23.534 So-- and so you use up excess inventory, and 647 00:19:23.534 --> 00:19:25.033 then demand begins to rise, as the need for new-- 648 00:19:25.033 --> 00:19:26.534 That's right. 649 00:19:26.534 --> 00:19:28.033 --growth. 650 00:19:28.033 --> 00:19:29.534 And even if it doesn't rise very much, the 651 00:19:29.534 --> 00:19:31.033 inventories have been resized to go with the 652 00:19:31.033 --> 00:19:32.534 new level of demand. 653 00:19:32.534 --> 00:19:34.834 Yeah. 654 00:19:34.834 --> 00:19:37.400 Someone-- and tell me whether this is-- I mean, help me 655 00:19:37.400 --> 00:19:39.567 understand this. 656 00:19:39.567 --> 00:19:41.467 Someone said to me today that the slowdown has not had a 657 00:19:41.467 --> 00:19:43.167 dramatic impact yet on real estate and housing. 658 00:19:43.167 --> 00:19:44.968 That's right. 659 00:19:44.968 --> 00:19:47.100 It hasn't. 660 00:19:47.100 --> 00:19:49.400 Why is that? 661 00:19:49.400 --> 00:19:51.667 It hasn't at all. 662 00:19:51.667 --> 00:19:54.067 Well, I think one of the big reasons is, from the consumer 663 00:19:54.067 --> 00:19:56.367 point of view, unemployment is still low (unintelligible) And 664 00:19:56.367 --> 00:19:58.601 secondly, resources are strong for the consumer. 665 00:19:58.601 --> 00:20:01.000 An awful lot of their money is in 401(k)s and other areas that 666 00:20:01.000 --> 00:20:03.501 are affected a little bit because they're invested in the 667 00:20:03.501 --> 00:20:05.601 market, but they're not affected as much. 668 00:20:05.601 --> 00:20:07.434 The tax cut is going to help somewhat. 669 00:20:07.434 --> 00:20:09.434 But it's basically, the consumer hasn't 670 00:20:09.434 --> 00:20:11.567 felt the impact yet. 671 00:20:11.567 --> 00:20:13.467 It's coming, I think. 672 00:20:13.467 --> 00:20:15.567 You're now seeing this increase in unemployment numbers. 673 00:20:15.567 --> 00:20:17.868 But they go back to layoff decisions made six or nine 674 00:20:17.868 --> 00:20:20.367 months ago. 675 00:20:20.367 --> 00:20:23.200 The difference today is, from five years ago, then, when 676 00:20:23.200 --> 00:20:26.234 there's a layoff, it would occur in a couple of weeks. 677 00:20:26.234 --> 00:20:28.434 Now most corporations give people three months, six months, 678 00:20:28.434 --> 00:20:30.601 even a year before the layoff is actually impacted on them. 679 00:20:30.601 --> 00:20:32.434 So it's slower-- 680 00:20:32.434 --> 00:20:34.234 The unemployment numbers are a year off, you 681 00:20:34.234 --> 00:20:36.067 think, in terms of-- 682 00:20:36.067 --> 00:20:37.868 Six months, let's say, in terms of the impact-- 683 00:20:37.868 --> 00:20:39.701 and people don't feel 684 00:20:39.701 --> 00:20:42.100 them as much because they've had a much bigger cushion in terms 685 00:20:42.100 --> 00:20:44.534 of time to get used to it. 686 00:20:44.534 --> 00:20:46.868 Does this mean-- I mean, if you were running a 687 00:20:46.868 --> 00:20:49.100 corporation and not necessarily a Wall Street investment firm-- 688 00:20:49.100 --> 00:20:51.033 but if you were running a company, would you be out-- 689 00:20:51.033 --> 00:20:52.968 would you be considering buying back your stock? 690 00:20:52.968 --> 00:20:54.934 Would you be considering acquisitions because everything 691 00:20:54.934 --> 00:20:56.934 is so depressed? 692 00:20:56.934 --> 00:20:59.033 Well, I wouldn't be considering buying back my 693 00:20:59.033 --> 00:21:00.767 stock right now because I think if you have 694 00:21:00.767 --> 00:21:02.534 cash and strong resources-- 695 00:21:02.534 --> 00:21:03.968 Yeah. 696 00:21:03.968 --> 00:21:05.400 --you should be husbanding them to take 697 00:21:05.400 --> 00:21:06.834 advantage of-- 698 00:21:06.834 --> 00:21:08.300 You're not the man-- (crosstalk) You're the last 699 00:21:08.300 --> 00:21:09.734 person (unintelligible) you should delist. 700 00:21:09.734 --> 00:21:13.300 Sorry. 701 00:21:13.300 --> 00:21:15.334 I don't think you should be doing-- 702 00:21:15.334 --> 00:21:17.701 King of retail brokerages. 703 00:21:17.701 --> 00:21:19.968 But what I think you should be clearly doing is 704 00:21:19.968 --> 00:21:21.701 out there recognizing that some time in the next six months, 705 00:21:21.701 --> 00:21:23.434 there's going to be a marvelous opportunity to expand-- 706 00:21:23.434 --> 00:21:25.200 Right. 707 00:21:25.200 --> 00:21:26.934 --or to make tactical acquisitions or maybe, 708 00:21:26.934 --> 00:21:28.667 more important than either, to add really good people. 709 00:21:28.667 --> 00:21:30.501 This is an opportunity for every corporation to be out there 710 00:21:30.501 --> 00:21:32.400 looking for talent because it's much easier to find. 711 00:21:32.400 --> 00:21:34.067 But that's not what they're doing. 712 00:21:34.067 --> 00:21:35.801 They're laying off everywhere. 713 00:21:35.801 --> 00:21:37.367 That is what they're doing right now. 714 00:21:37.367 --> 00:21:39.033 That's absolutely right. 715 00:21:39.033 --> 00:21:40.801 And you have to go through that cycle. 716 00:21:40.801 --> 00:21:42.601 Yeah. 717 00:21:42.601 --> 00:21:44.033 It's only a couple years ago that technology 718 00:21:44.033 --> 00:21:45.501 companies were hoarding talent-- 719 00:21:45.501 --> 00:21:46.934 Yeah. 720 00:21:46.934 --> 00:21:48.367 --because they felt they couldn't get enough. 721 00:21:48.367 --> 00:21:49.801 Now it's going the other way. 722 00:21:49.801 --> 00:21:52.100 Two issues that have impacted in terms of where 723 00:21:52.100 --> 00:21:54.067 we are, some people believe. 724 00:21:54.067 --> 00:21:56.534 One is the Federal Reserve's actions. 725 00:21:56.534 --> 00:21:58.667 Did they-- did they start early enough, in 726 00:21:58.667 --> 00:22:00.534 terms of cutting rates? 727 00:22:00.534 --> 00:22:02.734 You can't make that-- 728 00:22:02.734 --> 00:22:05.000 Timing is not a factor. 729 00:22:05.000 --> 00:22:06.934 --judgment. 730 00:22:06.934 --> 00:22:08.901 Timing's not a factor. 731 00:22:08.901 --> 00:22:10.868 It's how long and how much-- 732 00:22:10.868 --> 00:22:12.868 That you could quibble with, yeah. 733 00:22:12.868 --> 00:22:14.834 --is what's important. 734 00:22:14.834 --> 00:22:16.567 Well, have they gone far enough? 735 00:22:16.567 --> 00:22:18.367 And as they-- each new round of-- of decreases occur, the 736 00:22:18.367 --> 00:22:20.234 reduction in rates recurred, to they reach a point at which they 737 00:22:20.234 --> 00:22:22.200 will have no impact? 738 00:22:22.200 --> 00:22:24.667 Well, I think they're not having much impact 739 00:22:24.667 --> 00:22:26.934 now-- (crosstalk) When you raise rates, you have an immediate 740 00:22:26.934 --> 00:22:28.868 impact on a business or an individual because the cost of 741 00:22:28.868 --> 00:22:30.834 what you're currently doing-- 742 00:22:30.834 --> 00:22:32.334 Going up. 743 00:22:32.334 --> 00:22:33.834 --goes up. 744 00:22:33.834 --> 00:22:35.300 Right. 745 00:22:35.300 --> 00:22:36.801 And you said, ''My God, do I want to 746 00:22:36.801 --> 00:22:38.300 continue''-- when you lower rates, what you're really doing 747 00:22:38.300 --> 00:22:39.901 is making the cost of doing something new lower, if you want 748 00:22:39.901 --> 00:22:41.601 to do it. 749 00:22:41.601 --> 00:22:43.400 But the environment is not such now that somebody says, ''Boy, 750 00:22:43.400 --> 00:22:45.234 rates are lower. 751 00:22:45.234 --> 00:22:46.901 That's going to make me do something important-- expand my 752 00:22:46.901 --> 00:22:48.734 business or even buy something new,'' except in the one area of 753 00:22:48.734 --> 00:22:50.234 housing, where it does have the effect that people will 754 00:22:50.234 --> 00:22:51.734 refinance their mortgages. 755 00:22:51.734 --> 00:22:53.234 That's part of what's keeping the consumer-- 756 00:22:53.234 --> 00:22:54.734 It's the principal interest that most families 757 00:22:54.734 --> 00:22:57.968 are concerned about. 758 00:22:57.968 --> 00:22:59.734 That is the big interest rate, and that's one 759 00:22:59.734 --> 00:23:01.567 where they can see a difference because it changes 760 00:23:01.567 --> 00:23:03.434 the monthly payment. 761 00:23:03.434 --> 00:23:05.334 Why was it that most people expected Europe 762 00:23:05.334 --> 00:23:07.267 somehow to be immune from this and found out that it wasn't? 763 00:23:07.267 --> 00:23:09.200 Was it simply because the American economy is so huge that 764 00:23:09.200 --> 00:23:11.200 when it begins to sputter, everybody else gets a cold? 765 00:23:11.200 --> 00:23:12.934 Yeah, I think that, frankly, people who 766 00:23:12.934 --> 00:23:14.734 thought that were hoping that that would be the case. 767 00:23:14.734 --> 00:23:16.601 The Europeans were certainly hoping-- 768 00:23:16.601 --> 00:23:18.501 That's right. 769 00:23:18.501 --> 00:23:20.000 Reality is the American economy is 54 percent 770 00:23:20.000 --> 00:23:21.501 of the world-- 771 00:23:21.501 --> 00:23:23.000 Yeah. 772 00:23:23.000 --> 00:23:24.501 --and that while you talk about globalization, 773 00:23:24.501 --> 00:23:26.000 what you're really mainly talking about is the United 774 00:23:26.000 --> 00:23:27.567 States wanting to sell more things overseas and, more 775 00:23:27.567 --> 00:23:29.200 importantly, everybody else in the world wanting to sell things 776 00:23:29.200 --> 00:23:30.701 to us. 777 00:23:30.701 --> 00:23:32.467 Right. 778 00:23:32.467 --> 00:23:34.267 So if we slow down, everybody slows down. 779 00:23:34.267 --> 00:23:36.234 And that's the reality. 780 00:23:36.234 --> 00:23:38.000 With respect to next year-- what kind of growth 781 00:23:38.000 --> 00:23:39.968 rate do you think the United States will have? 782 00:23:39.968 --> 00:23:42.000 My guess is a modest growth rate, if looked at 783 00:23:42.000 --> 00:23:43.334 by the long-term trend. 784 00:23:43.334 --> 00:23:44.667 Now, part-- (crosstalk) 785 00:23:44.667 --> 00:23:46.033 --two or three percent or-- 786 00:23:46.033 --> 00:23:47.367 Well, part of the growth rate is how bad this 787 00:23:47.367 --> 00:23:48.734 year was. 788 00:23:48.734 --> 00:23:50.534 Yeah. 789 00:23:50.534 --> 00:23:52.400 The further down this one goes, the easier it 790 00:23:52.400 --> 00:23:54.033 would be to have a good growth rate next year. 791 00:23:54.033 --> 00:23:55.767 But I think 2 or 3 percent is important. 792 00:23:55.767 --> 00:23:57.567 Much more important than the direct growth 793 00:23:57.567 --> 00:23:59.167 rate is the sentiment. 794 00:23:59.167 --> 00:24:00.868 If you go into next year with a sense of optimism, and that 795 00:24:00.868 --> 00:24:02.901 might be reflected in the stock market, then you have a whole 796 00:24:02.901 --> 00:24:04.901 different atmosphere. 797 00:24:04.901 --> 00:24:06.667 Talk about that for a second. 798 00:24:06.667 --> 00:24:08.767 It is this notion-- we know it's part of Wall Street's-- 799 00:24:08.767 --> 00:24:10.801 Right. 800 00:24:10.801 --> 00:24:12.868 The phenomenon of confidence. 801 00:24:12.868 --> 00:24:14.267 Right. 802 00:24:14.267 --> 00:24:15.634 The president inspires confidence-- 803 00:24:15.634 --> 00:24:17.033 Right. 804 00:24:17.033 --> 00:24:18.367 --the Federal Reserve 805 00:24:18.367 --> 00:24:19.701 chairman inspires confidence-- 806 00:24:19.701 --> 00:24:21.033 Right. 807 00:24:21.033 --> 00:24:22.367 --they move markets, in terms of what they say 808 00:24:22.367 --> 00:24:23.701 and do. 809 00:24:23.701 --> 00:24:25.767 Right. 810 00:24:25.767 --> 00:24:27.434 How does this notion of confidence work? 811 00:24:27.434 --> 00:24:29.100 Well-- 812 00:24:29.100 --> 00:24:30.801 And why is it so crucial? 813 00:24:30.801 --> 00:24:32.467 Nobody knows exactly. First of all, the stock 814 00:24:32.467 --> 00:24:34.267 market is a discounting mechanism. It's supposed to be. 815 00:24:34.267 --> 00:24:36.067 It discounts the future as measured by millions of people. 816 00:24:36.067 --> 00:24:37.901 And so no one can exactly-- 817 00:24:37.901 --> 00:24:39.701 It looks ahead and sees what it thinks is going 818 00:24:39.701 --> 00:24:41.534 to be-- 819 00:24:41.534 --> 00:24:44.100 That's right. 820 00:24:44.100 --> 00:24:46.534 --and then it makes a decision today. 821 00:24:46.534 --> 00:24:48.334 It's usually reasonably 822 00:24:48.334 --> 00:24:50.100 good at it, although-- 823 00:24:50.100 --> 00:24:51.868 Right. 824 00:24:51.868 --> 00:24:53.667 --there's that famous quote that the stock 825 00:24:53.667 --> 00:24:55.267 market has predicted nine of the last five recessions. 826 00:24:55.267 --> 00:24:58.501 Right! (laughter) 827 00:24:58.501 --> 00:25:00.100 Paul Samuelson, I think, is the 828 00:25:00.100 --> 00:25:01.734 one who did that. 829 00:25:01.734 --> 00:25:03.801 But I think that's the first thing. 830 00:25:03.801 --> 00:25:05.868 It is a discounting mechanism. 831 00:25:05.868 --> 00:25:07.901 I think the second thing for us in this country now, compared to 832 00:25:07.901 --> 00:25:09.934 a few years ago, is we've shifted people's futures away 833 00:25:09.934 --> 00:25:11.968 from pensions and the government to pools of money in their own 834 00:25:11.968 --> 00:25:13.968 hands-- 401(k)s, IRAs and Keoghs. 835 00:25:13.968 --> 00:25:16.000 So they feel the stock market change much more directly. 836 00:25:16.000 --> 00:25:18.000 If what you had was a pension, you wouldn't feel it because you 837 00:25:18.000 --> 00:25:20.267 knew you were going to get a certain amount of money. 838 00:25:20.267 --> 00:25:22.434 Now you look at your 401(k), and it's down whatever it's down-- 839 00:25:22.434 --> 00:25:24.767 10, 15, 20 percent. 840 00:25:24.767 --> 00:25:27.267 And you feel it, so that the rest of it is how close people 841 00:25:27.267 --> 00:25:29.467 are to the impact of the market. 842 00:25:29.467 --> 00:25:31.634 The American public now is much closer to the impact of the 843 00:25:31.634 --> 00:25:34.100 market, in terms of number of people, than it was five years 844 00:25:34.100 --> 00:25:36.667 ago or ten years ago. 845 00:25:36.667 --> 00:25:39.501 The other factor, in addition to action by the 846 00:25:39.501 --> 00:25:42.367 Federal Reserve, is the administration and congressional 847 00:25:42.367 --> 00:25:44.834 action in a tax cut, a significant and huge tax cut. 848 00:25:44.834 --> 00:25:47.200 There is some talk that the Democrats in Congress may ask 849 00:25:47.200 --> 00:25:49.801 the president to-- you know, to change some of the tax cut, to 850 00:25:49.801 --> 00:25:52.000 take some of it back. 851 00:25:52.000 --> 00:25:54.300 Do you think the tax cut was a good idea? 852 00:25:54.300 --> 00:25:56.601 And do you still believe it is, at the level that it was passed? 853 00:25:56.601 --> 00:25:58.567 Yeah. 854 00:25:58.567 --> 00:26:00.534 I think the president got that exactly right, and I must say, 855 00:26:00.534 --> 00:26:02.534 many of us said, ''Why were you talking about a 856 00:26:02.534 --> 00:26:04.200 tax cut last year?'' 857 00:26:04.200 --> 00:26:05.901 He got it-- 858 00:26:05.901 --> 00:26:07.567 During the campaign. 859 00:26:07.567 --> 00:26:09.267 Yes, during the campaign. But he got it right 860 00:26:09.267 --> 00:26:10.934 in the sense the tax cut came as it got 861 00:26:10.934 --> 00:26:13.100 clearer and clearer that the economy was turning down. 862 00:26:13.100 --> 00:26:14.968 From my point of view, you can separate it into two things. 863 00:26:14.968 --> 00:26:16.901 The $300 rebate I do not think is a significant issue, except 864 00:26:16.901 --> 00:26:18.901 as a show of good faith. 865 00:26:18.901 --> 00:26:20.934 Yeah. 866 00:26:20.934 --> 00:26:22.701 What is important is we're changing people's 867 00:26:22.701 --> 00:26:24.501 actual rates and their withholding. 868 00:26:24.501 --> 00:26:26.367 We're changing a number so they'll have more in their 869 00:26:26.367 --> 00:26:28.267 paycheck every month. 870 00:26:28.267 --> 00:26:30.501 The first change came July 1st of this year. 871 00:26:30.501 --> 00:26:32.701 The second change comes in January 1st of next year. 872 00:26:32.701 --> 00:26:34.901 Every American will feel it every month. 873 00:26:34.901 --> 00:26:37.133 That should have a reasonable impact. 874 00:26:37.133 --> 00:26:39.334 Now, the question that also comes 875 00:26:39.334 --> 00:26:41.534 up for me, as I 876 00:26:41.534 --> 00:26:44.400 was listening to the radio this morning and-- and on CBS, and 877 00:26:44.400 --> 00:26:47.534 they were saying that there's some numbers out now that 878 00:26:47.534 --> 00:26:50.367 suggest that most Americans are taking the tax rebate money, the 879 00:26:50.367 --> 00:26:52.734 tax money that's coming-- the tax cut coming back, and they're 880 00:26:52.734 --> 00:26:54.767 using it to pay off their consumer debt. 881 00:26:54.767 --> 00:26:56.801 They're using it to pay off credit cards and all that kind 882 00:26:56.801 --> 00:26:58.801 of stuff. 883 00:26:58.801 --> 00:27:00.567 Is that good for the economy? 884 00:27:00.567 --> 00:27:02.133 That's-- rather than, say, spending it? 885 00:27:02.133 --> 00:27:03.801 Well, it's good long term and not 886 00:27:03.801 --> 00:27:05.567 so good short term. 887 00:27:05.567 --> 00:27:07.133 Right. 888 00:27:07.133 --> 00:27:08.567 Short term, you need a stimulus. 889 00:27:08.567 --> 00:27:10.133 But that's one of the reasons why I don't think 890 00:27:10.133 --> 00:27:11.801 it's that important. 891 00:27:11.801 --> 00:27:13.701 Right. 892 00:27:13.701 --> 00:27:15.701 It's a one-time thing, significant for many I 893 00:27:15.701 --> 00:27:17.467 mean the population, but not for all. 894 00:27:17.467 --> 00:27:19.300 And you know how it works when you get an amount of money. 895 00:27:19.300 --> 00:27:21.167 You remember it for a little while, and then it's just out of 896 00:27:21.167 --> 00:27:22.801 your thinking. 897 00:27:22.801 --> 00:27:24.267 Then you're on to something else. 898 00:27:24.267 --> 00:27:25.901 What you want to know is what you're going 899 00:27:25.901 --> 00:27:27.601 to have every month-- 900 00:27:27.601 --> 00:27:29.200 Yeah. Right. 901 00:27:29.200 --> 00:27:30.934 --and how you can plan. 902 00:27:30.934 --> 00:27:32.734 Do you-- do you think that the tax cut has been 903 00:27:32.734 --> 00:27:34.501 a significant factor in the decline in the surplus? 904 00:27:34.501 --> 00:27:36.300 And is that such a good idea? 905 00:27:36.300 --> 00:27:38.100 Well, I think the question of 906 00:27:38.100 --> 00:27:39.868 the surplus is the 907 00:27:39.868 --> 00:27:42.000 tax cut was there for two reasons. 908 00:27:42.000 --> 00:27:44.100 One because it is the people's money. 909 00:27:44.100 --> 00:27:46.234 Right. 910 00:27:46.234 --> 00:27:47.968 And they were paying more into the government 911 00:27:47.968 --> 00:27:49.734 than the government was spending. 912 00:27:49.734 --> 00:27:51.467 And the second reason was to limit government spending. 913 00:27:51.467 --> 00:27:53.234 So in other words, if you hadn't 914 00:27:53.234 --> 00:27:54.968 had tax cut, the 915 00:27:54.968 --> 00:27:56.701 government would have spent it. 916 00:27:56.701 --> 00:27:58.434 Probably, because if you look 917 00:27:58.434 --> 00:28:00.033 back over the last 918 00:28:00.033 --> 00:28:01.601 five or six years, the cuts in spending are what 919 00:28:01.601 --> 00:28:03.200 created the surplus. 920 00:28:03.200 --> 00:28:04.767 And right after we had a surplus and it started 921 00:28:04.767 --> 00:28:06.367 to look that way, 922 00:28:06.367 --> 00:28:08.100 spending started to move up. 923 00:28:08.100 --> 00:28:09.868 Yeah. 924 00:28:09.868 --> 00:28:11.601 It's human nature. 925 00:28:11.601 --> 00:28:13.367 You don't think-- the Clinton 926 00:28:13.367 --> 00:28:15.100 administration we're 927 00:28:15.100 --> 00:28:17.200 talking about-- it would be better and-- at the end of the 928 00:28:17.200 --> 00:28:19.000 Clinton administration both Larry Summers and others and the 929 00:28:19.000 --> 00:28:21.100 president were saying it might have been better at least to 930 00:28:21.100 --> 00:28:23.200 further reduce the debt, the national debt-- 931 00:28:23.200 --> 00:28:24.701 Yeah. 932 00:28:24.701 --> 00:28:26.234 --maybe even down approaching zero-- 933 00:28:26.234 --> 00:28:27.734 Right. 934 00:28:27.734 --> 00:28:29.267 --before you went about cutting taxes and that 935 00:28:29.267 --> 00:28:30.567 that was a better use, not spending but reducing the debt. 936 00:28:30.567 --> 00:28:31.868 Right. 937 00:28:31.868 --> 00:28:33.167 Yeah, I-- 938 00:28:33.167 --> 00:28:34.434 If you could have had a promise that they would 939 00:28:34.434 --> 00:28:35.734 use it that way, would that have been better than 940 00:28:35.734 --> 00:28:37.167 a tax cut? 941 00:28:37.167 --> 00:28:38.734 Well, I think (unintelligible) It's the 942 00:28:38.734 --> 00:28:40.167 people's money. 943 00:28:40.167 --> 00:28:41.467 Yeah. 944 00:28:41.467 --> 00:28:42.968 And did they pay into the government to reduce 945 00:28:42.968 --> 00:28:44.601 the debt? 946 00:28:44.601 --> 00:28:46.033 I don't think so. 947 00:28:46.033 --> 00:28:47.467 They paid into the government to run the government. 948 00:28:47.467 --> 00:28:48.734 I think the answer-- 949 00:28:48.734 --> 00:28:49.968 To pay for the military, to pay for Social 950 00:28:49.968 --> 00:28:51.234 Security, to pay for-- 951 00:28:51.234 --> 00:28:52.467 From my point of view, cutting 952 00:28:52.467 --> 00:28:53.701 the debt is significant. 953 00:28:53.701 --> 00:28:55.634 On the other hand, every business in America well run -- 954 00:28:55.634 --> 00:28:57.601 almost every -- runs with a certain amount of debt. 955 00:28:57.601 --> 00:28:59.534 So debt is not a bad word. 956 00:28:59.534 --> 00:29:01.501 It's not a bad word in proportion-- proportion 957 00:29:01.501 --> 00:29:03.234 to your assets, in proportion to your income. 958 00:29:03.234 --> 00:29:04.734 This country got its debt too high relative to those things. 959 00:29:04.734 --> 00:29:06.234 And in fact, if you let the debt go down slowly-- 960 00:29:06.234 --> 00:29:07.701 Yeah. 961 00:29:07.701 --> 00:29:09.200 --but you had the economy grow, 962 00:29:09.200 --> 00:29:10.701 you'd look at it 963 00:29:10.701 --> 00:29:12.634 in four or five years and say, ''Gee, the debt isn't material 964 00:29:12.634 --> 00:29:14.167 to what's happening.'' 965 00:29:14.167 --> 00:29:15.667 Yeah. 966 00:29:15.667 --> 00:29:17.200 So there's a balance there. 967 00:29:17.200 --> 00:29:18.734 Yeah, but the other side of that, for people who 968 00:29:18.734 --> 00:29:20.267 believe that, in fact-- some of Keynesian economics is that 969 00:29:20.267 --> 00:29:22.067 spending is a good stimulus to the economy, too, and even 970 00:29:22.067 --> 00:29:23.634 government spending is a stimulus to the economy. 971 00:29:23.634 --> 00:29:25.334 Absolutely. 972 00:29:25.334 --> 00:29:26.868 And if you looked at textbooks not too long ago-- 973 00:29:26.868 --> 00:29:28.501 Yeah! 974 00:29:28.501 --> 00:29:29.801 --you would see a surplus was 975 00:29:29.801 --> 00:29:31.100 bad for the economy-- 976 00:29:31.100 --> 00:29:32.400 Right. 977 00:29:32.400 --> 00:29:33.767 --and deficit spending was 978 00:29:33.767 --> 00:29:35.133 good for the economy. 979 00:29:35.133 --> 00:29:36.467 Right. 980 00:29:36.467 --> 00:29:37.834 And the answer is we're not 981 00:29:37.834 --> 00:29:39.200 sure about all these 982 00:29:39.200 --> 00:29:41.000 things in the way we were-- 983 00:29:41.000 --> 00:29:42.167 I mean-- 984 00:29:42.167 --> 00:29:43.334 --because the economy's different. 985 00:29:43.334 --> 00:29:44.534 The answer is I no longer know what I believe. 986 00:29:44.534 --> 00:29:45.701 Well, it's also not a manufacturing economy, 987 00:29:45.701 --> 00:29:46.868 it's a service economy. It's not a domestic economy, it's a 988 00:29:46.868 --> 00:29:48.033 global economy. 989 00:29:48.033 --> 00:29:49.901 The rules have changed. 990 00:29:49.901 --> 00:29:51.767 Here's something you know as much about as you 991 00:29:51.767 --> 00:29:53.701 know about the economy, Social Security. 992 00:29:53.701 --> 00:29:55.367 Tom Daschle went to see the president. 993 00:29:55.367 --> 00:29:57.133 The president said, ''I promise you''-- 994 00:29:57.133 --> 00:29:58.634 Yeah. 995 00:29:58.634 --> 00:30:00.167 ''I promise you I'm not going to dip into''-- 996 00:30:00.167 --> 00:30:01.667 Right. 997 00:30:01.667 --> 00:30:03.167 --''Social Security.'' Is there a danger of that 998 00:30:03.167 --> 00:30:04.667 from the fact that the tax cut has reduced the surplus and 999 00:30:04.667 --> 00:30:06.334 that the president, in order-- he's talking about war and 1000 00:30:06.334 --> 00:30:08.000 recession, I guess-- that-- national emergency-- they may 1001 00:30:08.000 --> 00:30:09.634 have to, if the economy gets worse, dip into 1002 00:30:09.634 --> 00:30:11.267 Social Security surplus? 1003 00:30:11.267 --> 00:30:12.901 Well, I think-- the answer to 1004 00:30:12.901 --> 00:30:14.534 that is there is-- 1005 00:30:14.534 --> 00:30:16.634 there's only one budget surplus. 1006 00:30:16.634 --> 00:30:18.901 A lot of it's allocated to a commitment to Social Security. 1007 00:30:18.901 --> 00:30:21.100 The government has made an absolute commitment to 1008 00:30:21.100 --> 00:30:22.934 individuals to pay their Social Security. 1009 00:30:22.934 --> 00:30:24.767 There's no one out there working today under the current laws 1010 00:30:24.767 --> 00:30:26.634 that will not get their Social Security. 1011 00:30:26.634 --> 00:30:28.467 The only question is how it gets financed 1012 00:30:28.467 --> 00:30:30.300 (unintelligible) cannot 1013 00:30:30.300 --> 00:30:32.634 be done in the current structure. 1014 00:30:32.634 --> 00:30:35.501 So what you have now is you have a situation in which the 1015 00:30:35.501 --> 00:30:38.400 amount of money being earned as a surplus-- most of it will be 1016 00:30:38.400 --> 00:30:41.100 necessary for Social Security in 10 or 15 years. 1017 00:30:41.100 --> 00:30:43.834 But year by year, you could have a little bit of a deficit or a 1018 00:30:43.834 --> 00:30:46.367 lot of a surplus, as you do in business or in individuals, and 1019 00:30:46.367 --> 00:30:48.968 be fine in that regard. 1020 00:30:48.968 --> 00:30:51.501 So you shouldn't look at it as one big unit for one year. 1021 00:30:51.501 --> 00:30:54.100 Take it over four or five years. 1022 00:30:54.100 --> 00:30:56.701 Over four or five years, we will have a bigger surplus than we 1023 00:30:56.701 --> 00:30:59.200 need to fund Social Security in total. 1024 00:30:59.200 --> 00:31:01.567 A bigger surplus in terms of the federal budget 1025 00:31:01.567 --> 00:31:04.267 or bigger surplus in terms of the amount of revenue coming in 1026 00:31:04.267 --> 00:31:06.801 from Social Security taxes? 1027 00:31:06.801 --> 00:31:09.334 Both. 1028 00:31:09.334 --> 00:31:11.267 Social Security taxes are producing more revenues now than 1029 00:31:11.267 --> 00:31:13.167 are needed. 1030 00:31:13.167 --> 00:31:15.100 But will they-- 1031 00:31:15.100 --> 00:31:17.033 They won't at some time in the future, which is 1032 00:31:17.033 --> 00:31:21.133 the reason it has to be reformed. 1033 00:31:21.133 --> 00:31:23.267 And how would you reform it? 1034 00:31:23.267 --> 00:31:25.400 Well, I think, clearly, you have to ask 1035 00:31:25.400 --> 00:31:27.467 yourself the question of Social Security-- is it a tax we're all 1036 00:31:27.467 --> 00:31:29.267 paying, or is it a savings plan? 1037 00:31:29.267 --> 00:31:31.133 If it's a tax, it's a regressive tax. 1038 00:31:31.133 --> 00:31:32.901 And like every other tax, it's going to have 1039 00:31:32.901 --> 00:31:35.033 to go up over time. 1040 00:31:35.033 --> 00:31:37.133 If it's a savings plan, all our studies show you're getting a 1041 00:31:37.133 --> 00:31:39.167 return of about 2 percent. 1042 00:31:39.167 --> 00:31:40.934 Which is not good compared-- 1043 00:31:40.934 --> 00:31:42.767 Which is-- 1044 00:31:42.767 --> 00:31:44.334 --to what else you could do. 1045 00:31:44.334 --> 00:31:45.901 --not very good. 1046 00:31:45.901 --> 00:31:47.467 Right. 1047 00:31:47.467 --> 00:31:49.033 That's one piece. The other piece is who's 1048 00:31:49.033 --> 00:31:50.634 impacted by it? 1049 00:31:50.634 --> 00:31:52.467 Well, clearly, anybody over 50 or so should not have their 1050 00:31:52.467 --> 00:31:54.367 benefits changed at all because even if you thought about 1051 00:31:54.367 --> 00:31:56.033 privatizing part of it, there isn't enough time to be sure it 1052 00:31:56.033 --> 00:31:57.801 would work. 1053 00:31:57.801 --> 00:31:59.601 Secondly, you shouldn't change people at the 1054 00:31:59.601 --> 00:32:01.467 lower income levels. 1055 00:32:01.467 --> 00:32:03.534 So what you could do is guarantee everybody at 50 that 1056 00:32:03.534 --> 00:32:05.934 their Social Security will be there. 1057 00:32:05.934 --> 00:32:08.334 And you could put a floor on the people who are the low-income 1058 00:32:08.334 --> 00:32:10.834 people and deal with everybody in the middle, meaning those 1059 00:32:10.834 --> 00:32:13.734 people who have at least 20 years before they're going to 1060 00:32:13.734 --> 00:32:16.801 need to collect it, and who have reasonable incomes. 1061 00:32:16.801 --> 00:32:19.601 And it's for those people that you would take part of their 1062 00:32:19.601 --> 00:32:22.200 Social Security payments and privatize, or, that is, have 1063 00:32:22.200 --> 00:32:24.634 some of it invested in markets that they would then own. 1064 00:32:24.634 --> 00:32:26.734 That, to me, is the best combination. 1065 00:32:26.734 --> 00:32:28.801 Is it politically viable? 1066 00:32:28.801 --> 00:32:30.868 Well, depends where the market is, more than 1067 00:32:30.868 --> 00:32:32.634 anything else, I think. 1068 00:32:32.634 --> 00:32:34.234 I think a year ago, when you could go in and say the market's 1069 00:32:34.234 --> 00:32:35.667 been going up for the last seven or eight years-- 1070 00:32:35.667 --> 00:32:38.801 Yeah. Right. 1071 00:32:38.801 --> 00:32:40.100 --it'd be easy. 1072 00:32:40.100 --> 00:32:41.367 If you went in now and said the market's been-- 1073 00:32:41.367 --> 00:32:42.634 Even more scary. 1074 00:32:42.634 --> 00:32:43.901 --going down for the 10 or 12 1075 00:32:43.901 --> 00:32:45.200 months, people are 1076 00:32:45.200 --> 00:32:46.968 going to be scared. 1077 00:32:46.968 --> 00:32:48.801 There's absolutely no doubt about it, and they should be 1078 00:32:48.801 --> 00:32:50.667 scared just because of the optics. 1079 00:32:50.667 --> 00:32:52.334 The reality is, stocks are cheaper now. 1080 00:32:52.334 --> 00:32:54.067 So over 20 years, it's probably an even better time to do it. 1081 00:32:54.067 --> 00:32:55.601 But it's going to be a complicated thing to change in 1082 00:32:55.601 --> 00:32:57.267 this context right now. 1083 00:32:57.267 --> 00:32:59.033 What's going to be the 1084 00:32:59.033 --> 00:33:00.767 transaction cost of privatization? 1085 00:33:00.767 --> 00:33:02.501 Well, there is a transaction cost. 1086 00:33:02.501 --> 00:33:04.267 It's a cost of $50 billion or $60 billion a year for a while. 1087 00:33:04.267 --> 00:33:06.000 But it doesn't really impact the system until 1088 00:33:06.000 --> 00:33:07.767 out 10 or 15 years, 1089 00:33:07.767 --> 00:33:09.834 by which time the amount of money that you privatize in any 1090 00:33:09.834 --> 00:33:12.400 normal, rational environment should have done well enough to 1091 00:33:12.400 --> 00:33:14.167 offset it. 1092 00:33:14.167 --> 00:33:15.901 Are you strongly supportive of missile defense? 1093 00:33:15.901 --> 00:33:17.634 You've been asked this before this-- (crosstalk) 1094 00:33:17.634 --> 00:33:19.400 Yeah, I've been asked before. I try to avoid 1095 00:33:19.400 --> 00:33:20.801 the answer, given that-- I think I share the view 1096 00:33:20.801 --> 00:33:22.200 of other people. 1097 00:33:22.200 --> 00:33:23.634 I'd like to see how it works before I-- 1098 00:33:23.634 --> 00:33:25.033 You'd like to be-- (crosstalk) Before you spend 1099 00:33:25.033 --> 00:33:26.467 that much money, you'd 1100 00:33:26.467 --> 00:33:28.200 like to know that it works. 1101 00:33:28.200 --> 00:33:29.734 Yeah. 1102 00:33:29.734 --> 00:33:31.467 Except in one sense. 1103 00:33:31.467 --> 00:33:33.334 When we talk about-- (crosstalk) 1104 00:33:33.334 --> 00:33:35.200 --friend Rumsfeld about that? 1105 00:33:35.200 --> 00:33:36.901 When we talk about the slowdown in research 1106 00:33:36.901 --> 00:33:38.634 and R&D-- 1107 00:33:38.634 --> 00:33:40.334 Yeah. 1108 00:33:40.334 --> 00:33:42.033 --the other side of it is 50 percent of all the 1109 00:33:42.033 --> 00:33:43.734 gains in technology in the last five or six years came from 1110 00:33:43.734 --> 00:33:46.000 ideas developed during the cold war, many of which came out of 1111 00:33:46.000 --> 00:33:48.434 military concepts. 1112 00:33:48.434 --> 00:33:51.000 And the Internet came from the Pentagon. 1113 00:33:51.000 --> 00:33:53.501 That's right, so that if you think of missile 1114 00:33:53.501 --> 00:33:55.901 defense as the seed for developing new ideas and new 1115 00:33:55.901 --> 00:33:57.934 research and new basic, and not just protecting yourself against 1116 00:33:57.934 --> 00:33:59.701 a missile, then you can see something very good about it. 1117 00:33:59.701 --> 00:34:01.200 Thank you (unintelligible) A pleasure to 1118 00:34:01.200 --> 00:34:02.534 have you here. 1119 00:34:02.534 --> 00:34:04.234 Thank you, Charlie. 1120 00:34:04.234 --> 00:34:07.701 Don Marron. 1121 00:34:07.701 --> 00:34:10.834 We'll be right back. 1122 00:34:10.834 --> 00:34:14.367 Stay with us. 1123 00:34:14.367 --> 00:34:17.734 Analyst Says Comcast Will Leverage Cable's Advantages 1124 00:34:17.734 --> 00:34:20.801 Fortune magazine has called JESSICA REIF COHEN 1125 00:34:20.801 --> 00:34:23.901 the queen of all media, saying that words can instantly add or 1126 00:34:23.901 --> 00:34:26.701 subtract billions in market value of companies. 1127 00:34:26.701 --> 00:34:29.501 As the senior media and entertainment analyst at Merrill 1128 00:34:29.501 --> 00:34:32.334 Lynch, she covers such companies as AOL Time 1129 00:34:32.334 --> 00:34:35.133 Warner, Viacom and Newscorp. 1130 00:34:35.133 --> 00:34:38.033 After almost 20 years covering the sector, last year she was 1131 00:34:38.033 --> 00:34:41.234 named to the Wall Street Journal's Analyst Hall of Fame. 1132 00:34:41.234 --> 00:34:44.133 I am pleased to have her here at this table to talk about 1133 00:34:44.133 --> 00:34:47.167 where things are headed and how she sees the world after the 1134 00:34:47.167 --> 00:34:50.234 dot.com implosion and the sense of where the American economy is 1135 00:34:50.234 --> 00:34:53.067 and what kind of impact it will have. 1136 00:34:53.067 --> 00:34:55.667 We all know from lots of conversations that ad revenues 1137 00:34:55.667 --> 00:34:58.634 are down because so many companies are not buying as much 1138 00:34:58.634 --> 00:35:01.367 advertising as they have in the past. 1139 00:35:01.367 --> 00:35:03.901 So it's a great pleasure to have you here. 1140 00:35:03.901 --> 00:35:06.300 Thank you. 1141 00:35:06.300 --> 00:35:08.667 Well, you've got the best sector you could 1142 00:35:08.667 --> 00:35:10.934 possibly have. 1143 00:35:10.934 --> 00:35:13.133 No question. 1144 00:35:13.133 --> 00:35:15.434 I have a great job and a great sector. 1145 00:35:15.434 --> 00:35:17.634 What do you love about it? 1146 00:35:17.634 --> 00:35:19.868 The people that I meet, the people that I 1147 00:35:19.868 --> 00:35:22.100 deal with on a daily basis are the most interesting 1148 00:35:22.100 --> 00:35:24.634 personalities, I think, in the world. 1149 00:35:24.634 --> 00:35:27.267 They're just larger than life. 1150 00:35:27.267 --> 00:35:29.834 Looking at the future, there are certain things 1151 00:35:29.834 --> 00:35:32.267 that seem clear to me and you, in a sense, enlarge on this, 1152 00:35:32.267 --> 00:35:34.601 that cable because of its new potential with respect to the 1153 00:35:34.601 --> 00:35:39.701 Internet is a huge business to be in. Yes? 1154 00:35:39.701 --> 00:35:42.334 I totally agree. 1155 00:35:42.334 --> 00:35:45.100 Cable-- well, there are a couple of points of view here. 1156 00:35:45.100 --> 00:35:47.667 One, distribution is as important as content. 1157 00:35:47.667 --> 00:35:50.501 Getting control to the end customer and getting paid for 1158 00:35:50.501 --> 00:35:53.167 that relationship is critical and there are a lot of ways that 1159 00:35:53.167 --> 00:35:55.801 cable companies can leverage that. 1160 00:35:55.801 --> 00:35:58.734 We also have believed for a very long time that cable companies 1161 00:35:58.734 --> 00:36:01.534 will be the dominant distribution in the U.S. 1162 00:36:01.534 --> 00:36:04.267 versus satellite. 1163 00:36:04.267 --> 00:36:06.767 And, in fact, that seems to be-- in our view, what's happening? 1164 00:36:06.767 --> 00:36:09.167 Newscorp would be a worthy competitor if they are 1165 00:36:09.167 --> 00:36:11.801 successful in getting DirecTV. 1166 00:36:11.801 --> 00:36:14.567 They are great operators. 1167 00:36:14.567 --> 00:36:16.901 They've done a great job with B-Sky-B in the U.K. 1168 00:36:16.901 --> 00:36:19.234 and they will probably give cable a very-- you know, much-- 1169 00:36:19.234 --> 00:36:21.767 they'll be much better marketers than we've seen so 1170 00:36:21.767 --> 00:36:24.267 far in this country. 1171 00:36:24.267 --> 00:36:26.667 Having said that, cable's unique advantage is that they 1172 00:36:26.667 --> 00:36:28.834 cannot only offer video services, but data and voice 1173 00:36:28.834 --> 00:36:30.968 services through one big fat pipe. 1174 00:36:30.968 --> 00:36:33.133 And they can leverage that over and over. 1175 00:36:33.133 --> 00:36:35.267 And actually as we speak, 1176 00:36:35.267 --> 00:36:37.434 throughout this country 1177 00:36:37.434 --> 00:36:40.367 cable fiber optic lines are being laid that will give them 1178 00:36:40.367 --> 00:36:43.100 that potential? 1179 00:36:43.100 --> 00:36:46.167 The plant is basically built. 1180 00:36:46.167 --> 00:36:49.133 Eighty-five percent or so of homes are now passed for data. 1181 00:36:49.133 --> 00:36:51.601 So the plant is built, the service is rolling out. 1182 00:36:51.601 --> 00:36:53.734 Penetration has been way beyond expectations. 1183 00:36:53.734 --> 00:36:55.968 And I think in the next year or so, really the 1184 00:36:55.968 --> 00:36:57.901 upgrades will be done. 1185 00:36:57.901 --> 00:36:59.868 The big spending is behind. 1186 00:36:59.868 --> 00:37:02.067 What-- who is positioned best 1187 00:37:02.067 --> 00:37:04.200 for the future then? 1188 00:37:04.200 --> 00:37:06.534 I think cable companies will play a key 1189 00:37:06.534 --> 00:37:08.567 role in the future of media and entertainment. 1190 00:37:08.567 --> 00:37:10.868 Many of the companies will get bigger than they are now. 1191 00:37:10.868 --> 00:37:13.334 Consolidation is a fact of life in cable and 1192 00:37:13.334 --> 00:37:15.801 broadcasting and entertainment. 1193 00:37:15.801 --> 00:37:18.100 So if Comcast is successful in buying AT&T, they, over time, 1194 00:37:18.100 --> 00:37:20.067 may become a much bigger company in other industries as well, 1195 00:37:20.067 --> 00:37:22.067 more in the programming area. 1196 00:37:22.067 --> 00:37:24.033 They certainly will have a great balance sheet. 1197 00:37:24.033 --> 00:37:25.801 They'll use their potential, as 1198 00:37:25.801 --> 00:37:29.400 John Malone did at Liberty. 1199 00:37:29.400 --> 00:37:31.167 They'll use their potential as a 1200 00:37:31.167 --> 00:37:32.968 gatekeeper to have an investment 1201 00:37:32.968 --> 00:37:35.300 in the content side. 1202 00:37:35.300 --> 00:37:37.801 It's very logical that that happens. 1203 00:37:37.801 --> 00:37:39.634 It's hard to say with any certainty but, you know, it 1204 00:37:39.634 --> 00:37:41.467 depends on certain things happening. 1205 00:37:41.467 --> 00:37:43.334 But I think Brian Roberts-- 1206 00:37:43.334 --> 00:37:45.167 Not to do that would be a-- you know, you can't 1207 00:37:45.167 --> 00:37:47.000 imagine them not doing that. 1208 00:37:47.000 --> 00:37:49.601 Well, Brian Roberts, who runs the company, 1209 00:37:49.601 --> 00:37:52.300 is one of the smartest guys I've ever met and he's very young. 1210 00:37:52.300 --> 00:37:54.834 Comcast has the youngest, most entrepreneurial management team 1211 00:37:54.834 --> 00:37:57.267 in the cable industry, and probably among most companies. 1212 00:37:57.267 --> 00:37:59.767 They're all in their early 40's and they're going to be around 1213 00:37:59.767 --> 00:38:02.133 for a long time. 1214 00:38:02.133 --> 00:38:05.834 And you can't say this but I can, I mean, what 1215 00:38:05.834 --> 00:38:09.133 they're using as one of their selling points to the AT&T 1216 00:38:09.133 --> 00:38:12.100 stockholders is the fact that their track record is as good as 1217 00:38:12.100 --> 00:38:14.167 any cable company track record, and especially compared to 1218 00:38:14.167 --> 00:38:16.267 >>AT&T: Their track record is the best in the industry. 1219 00:38:16.267 --> 00:38:18.367 And that's a huge selling point for them. 1220 00:38:18.367 --> 00:38:20.434 It's-- well, put another 1221 00:38:20.434 --> 00:38:22.534 way, investors have 1222 00:38:22.534 --> 00:38:24.634 made a lot of money with Comcast over the last two decades. 1223 00:38:24.634 --> 00:38:26.934 Yeah, and it started with one little system 1224 00:38:26.934 --> 00:38:29.300 in Mississippi. 1225 00:38:29.300 --> 00:38:31.834 Right. 1226 00:38:31.834 --> 00:38:34.200 The-- what's the reason to believe that cable 1227 00:38:34.200 --> 00:38:36.501 will win out in direct-- in competition with direct 1228 00:38:36.501 --> 00:38:38.901 satellite, that sort of wireless and direct satellite might not 1229 00:38:38.901 --> 00:38:41.567 be as powerful as some anticipate. 1230 00:38:41.567 --> 00:38:44.367 Well, because-- right. 1231 00:38:44.367 --> 00:38:46.968 Cable has-- because cable has a pipe that can deliver multiple 1232 00:38:46.968 --> 00:38:49.734 services -- video, voice and data -- they will not have to 1233 00:38:49.734 --> 00:38:52.701 pay third parties some kind of fee to deliver the services 1234 00:38:52.701 --> 00:38:55.601 that-- you know, in a bundled package. 1235 00:38:55.601 --> 00:38:58.033 So, for example, for satellite to offer high-speed data at this 1236 00:38:58.033 --> 00:39:00.467 point in time, technology such as-- they will have to get a 1237 00:39:00.467 --> 00:39:02.868 third party to do that and pay something for that. 1238 00:39:02.868 --> 00:39:05.601 The same thing for voice. 1239 00:39:05.601 --> 00:39:07.934 Cable can provide it all through their own pipe. 1240 00:39:07.934 --> 00:39:10.167 And you can't underestimate inertia. 1241 00:39:10.167 --> 00:39:12.133 Cable has 65 percent of U.S.-- the U.S. 1242 00:39:12.133 --> 00:39:15.634 population now. 1243 00:39:15.634 --> 00:39:18.000 And it's very hard to make people get up and go to a store 1244 00:39:18.000 --> 00:39:20.367 and change. 1245 00:39:20.367 --> 00:39:22.701 Assess for me the 1246 00:39:22.701 --> 00:39:25.067 >>AT-- the AOL Time merger: This is a unique company. I think 1247 00:39:25.067 --> 00:39:27.434 AOL's timing was brilliant. They used a currency-- a 1248 00:39:27.434 --> 00:39:29.801 highly-valued currency. 1249 00:39:29.801 --> 00:39:32.534 Maxed at the very top. 1250 00:39:32.534 --> 00:39:35.567 At the very top. They had amazing timing. 1251 00:39:35.567 --> 00:39:38.601 They are bringing together very disparate divisions. 1252 00:39:38.601 --> 00:39:41.701 And it is coming together. 1253 00:39:41.701 --> 00:39:44.767 We think that this will be a great stock in 2002 and beyond 1254 00:39:44.767 --> 00:39:47.334 because, one, the barriers have been broken down between the 1255 00:39:47.334 --> 00:39:49.801 divisions, but many of the potential new businesses that 1256 00:39:49.801 --> 00:39:52.601 they can create we'll start to see next year. 1257 00:39:52.601 --> 00:39:55.634 Like what? 1258 00:39:55.634 --> 00:39:58.167 Like AOL and Time Warner cable. 1259 00:39:58.167 --> 00:40:00.534 Like music subscription services and music downloading. 1260 00:40:00.534 --> 00:40:03.033 There are things that they can do like 1261 00:40:03.033 --> 00:40:05.501 cross-platform promotion. 1262 00:40:05.501 --> 00:40:07.501 So there are things that they can do. 1263 00:40:07.501 --> 00:40:09.467 And the one thing that I've come to 1264 00:40:09.467 --> 00:40:11.467 appreciate as a media analyst 1265 00:40:11.467 --> 00:40:13.167 about AOL is their ability to absolutely influence consumers to 1266 00:40:13.167 --> 00:40:14.834 the point of driving them to a transaction. 1267 00:40:14.834 --> 00:40:16.501 Yeah. 1268 00:40:16.501 --> 00:40:18.200 It's very, very powerful 1269 00:40:18.200 --> 00:40:19.868 in terms of marketing. 1270 00:40:19.868 --> 00:40:21.934 Explain that to me. 1271 00:40:21.934 --> 00:40:24.467 They're-- they have-- it's just a great 1272 00:40:24.467 --> 00:40:26.968 marketing machine. 1273 00:40:26.968 --> 00:40:29.567 And they're ability to influence consumers to the point of doing 1274 00:40:29.567 --> 00:40:32.267 something, whether it's buying books or buying movies, to 1275 00:40:32.267 --> 00:40:34.801 actually get up and go and do something to complete a 1276 00:40:34.801 --> 00:40:37.501 transaction is amazing. 1277 00:40:37.501 --> 00:40:40.667 So they generate $8-plus per sub-- in advertising and 1278 00:40:40.667 --> 00:40:43.901 commerce already. 1279 00:40:43.901 --> 00:40:47.033 And the other interesting thing, as you know 1280 00:40:47.033 --> 00:40:49.901 better than I do, is that they have-- they are more immune to 1281 00:40:49.901 --> 00:40:52.534 the ebb and flow of advertising demand than others because 1282 00:40:52.534 --> 00:40:55.300 they're so uniquely subscription based. 1283 00:40:55.300 --> 00:40:58.234 That's right. 1284 00:40:58.234 --> 00:41:01.100 Less than 25 percent of revenue comes from advertising. 1285 00:41:01.100 --> 00:41:03.767 So in a market like this, in an environment where advertising is 1286 00:41:03.767 --> 00:41:06.234 down double digits at least in the television, the broadcasting 1287 00:41:06.234 --> 00:41:09.000 and cable worlds, it is a great position to be in. 1288 00:41:09.000 --> 00:41:14.634 Right. Newscorp. 1289 00:41:14.634 --> 00:41:17.801 Rupert Murdoch has done an amazing job. 1290 00:41:17.801 --> 00:41:20.667 He is a visionary and he's known for that. 1291 00:41:20.667 --> 00:41:23.434 I think if there's a negative take on Rupert it's that he's 1292 00:41:23.434 --> 00:41:26.033 always had a long term point of view to the point where he 1293 00:41:26.033 --> 00:41:28.534 doesn't care about quarterly earnings. 1294 00:41:28.534 --> 00:41:31.167 Having said that, I think the company-- well, from an 1295 00:41:31.167 --> 00:41:33.868 investment standpoint, investors want to be there at the point 1296 00:41:33.868 --> 00:41:36.434 that earnings are up. 1297 00:41:36.434 --> 00:41:38.934 Having said that, the company is so well positioned today. 1298 00:41:38.934 --> 00:41:41.334 It is by far the cheapest stock of anything I've followed. 1299 00:41:41.334 --> 00:41:43.601 They're an 85 percent owned subsidiary. 1300 00:41:43.601 --> 00:41:45.934 Fox Entertainment is by far the cheapest short play 1301 00:41:45.934 --> 00:41:48.501 entertainment company. 1302 00:41:48.501 --> 00:41:50.501 And they're such obvious growth drivers. 1303 00:41:50.501 --> 00:41:52.534 So even though they get 50 percent of their revenue from 1304 00:41:52.534 --> 00:41:54.534 advertising, they have a huge backlog of television 1305 00:41:54.534 --> 00:41:56.534 syndication, meaning reruns like The Practice and 1306 00:41:56.534 --> 00:41:58.567 Ally McBeal and 1307 00:41:58.567 --> 00:42:00.467 King of the Hill. 1308 00:42:00.467 --> 00:42:02.167 They just bought Chriscraft, which is a, you know, beachfront 1309 00:42:02.167 --> 00:42:03.934 real estate. 1310 00:42:03.934 --> 00:42:05.767 More stations. 1311 00:42:05.767 --> 00:42:07.367 Beachfront real estate. 1312 00:42:07.367 --> 00:42:08.834 And their cable networks are on fire. 1313 00:42:08.834 --> 00:42:10.701 And they are best situated in terms of any other 1314 00:42:10.701 --> 00:42:12.367 company globally. 1315 00:42:12.367 --> 00:42:13.834 Globally. 1316 00:42:13.834 --> 00:42:15.501 They are the only multinational media company. 1317 00:42:15.501 --> 00:42:17.734 The only one. 1318 00:42:17.734 --> 00:42:19.934 Yeah. 1319 00:42:19.934 --> 00:42:21.868 And plus they've got a-- I assume you could argue that they 1320 00:42:21.868 --> 00:42:24.234 also have, you know, the advantage of-- they are more-- I 1321 00:42:24.234 --> 00:42:26.267 guess this would be a vertically integrated company that there 1322 00:42:26.267 --> 00:42:28.267 is, period. 1323 00:42:28.267 --> 00:42:30.367 Rupert created vertical integration. 1324 00:42:30.367 --> 00:42:32.567 I really believe that. 1325 00:42:32.567 --> 00:42:34.667 They created Fox Broadcasting when nobody had any faith in it. 1326 00:42:34.667 --> 00:42:36.767 They were able-- they bought the Metromedia TV station from the 1327 00:42:36.767 --> 00:42:38.901 New World TV stations, now the Chriscraft TV stations. 1328 00:42:38.901 --> 00:42:41.100 They are great buyers. 1329 00:42:41.100 --> 00:42:43.267 But more importantly, they're great operators. 1330 00:42:43.267 --> 00:42:45.167 They're entrepreneurial and they think differently. 1331 00:42:45.167 --> 00:42:46.834 And they're years ahead of their competitors. 1332 00:42:46.834 --> 00:42:48.801 John Malone has always been an intriguing 1333 00:42:48.801 --> 00:42:50.501 character in your world. 1334 00:42:50.501 --> 00:42:52.801 Absolutely. 1335 00:42:52.801 --> 00:42:55.300 He seems to be busy in Europe. 1336 00:42:55.300 --> 00:42:57.767 What's he doing? 1337 00:42:57.767 --> 00:43:00.200 Well, they are about to buy German cable 1338 00:43:00.200 --> 00:43:02.868 and be the dominant operator of cable there. 1339 00:43:02.868 --> 00:43:05.567 They have an investment in United Globalcom, which has a 1340 00:43:05.567 --> 00:43:08.367 presence as well, and-- which has a presence throughout 1341 00:43:08.367 --> 00:43:11.033 Europe, parts of Latin America and a little bit of Asia. 1342 00:43:11.033 --> 00:43:13.901 And that is-- I mean, there's-- if there's one area that's 1343 00:43:13.901 --> 00:43:16.601 undervalued, it's Europe at the moment. 1344 00:43:16.601 --> 00:43:19.167 And so this is an investment. 1345 00:43:19.167 --> 00:43:21.567 These two investments -- United Globalcom and German Cable -- 1346 00:43:21.567 --> 00:43:23.868 that can really move the dial for Liberty. 1347 00:43:23.868 --> 00:43:26.100 Liberty has so many investments. 1348 00:43:26.100 --> 00:43:28.267 They own 18 percent of Newscorp. 1349 00:43:28.267 --> 00:43:30.400 They own 4.5 percent of AOL Time Warner. 1350 00:43:30.400 --> 00:43:32.634 It's hard to make something that can really-- to invest in 1351 00:43:32.634 --> 00:43:34.801 something that could really make a difference. 1352 00:43:34.801 --> 00:43:37.434 These investments can. 1353 00:43:37.434 --> 00:43:39.934 They're getting in at a very, very low price. 1354 00:43:39.934 --> 00:43:42.467 And they have other assets. 1355 00:43:42.467 --> 00:43:45.033 They are the largest shareholder of Telemundo, which is one of 1356 00:43:45.033 --> 00:43:47.801 two Spanish language television networks. 1357 00:43:47.801 --> 00:43:50.367 Telemundo will be up dramatically this year. 1358 00:43:50.367 --> 00:43:52.834 If you were to ask him, because he'd probably 1359 00:43:52.834 --> 00:43:54.934 respond to you -- if you were to say, ''John, 1360 00:43:54.934 --> 00:43:57.000 what is your ambition? 1361 00:43:57.000 --> 00:43:59.334 What is it you want?'' 1362 00:43:59.334 --> 00:44:01.300 what would he say? 1363 00:44:01.300 --> 00:44:03.501 Well, there's only one thing that 1364 00:44:03.501 --> 00:44:05.534 drives this company and that is per-share value -- 1365 00:44:05.534 --> 00:44:08.067 the value per share. 1366 00:44:08.067 --> 00:44:10.501 Everything they do is to maximize shareholder value on a 1367 00:44:10.501 --> 00:44:12.534 tax efficient basis. 1368 00:44:12.534 --> 00:44:14.567 And John, like Rupert -- and they're two peas in a pod -- are 1369 00:44:14.567 --> 00:44:16.367 traveling the world together right now. 1370 00:44:16.367 --> 00:44:18.200 They are? 1371 00:44:18.200 --> 00:44:20.067 In the sense that they 1372 00:44:20.067 --> 00:44:21.734 have a very big picture. 1373 00:44:21.734 --> 00:44:23.234 They're out looking for properties and 1374 00:44:23.234 --> 00:44:24.868 they're out looking for pieces that will fit into the puzzle. 1375 00:44:24.868 --> 00:44:26.767 Right. 1376 00:44:26.767 --> 00:44:28.434 And they're very complimentary. 1377 00:44:28.434 --> 00:44:30.300 But is Rupert the same way? 1378 00:44:30.300 --> 00:44:32.200 I mean, my sense would be that John cares more 1379 00:44:32.200 --> 00:44:34.133 about per share value. 1380 00:44:34.133 --> 00:44:36.067 I don't know them that well, but I mean, would care more about 1381 00:44:36.067 --> 00:44:37.868 per share value than John would. 1382 00:44:37.868 --> 00:44:39.701 John is more of a financial engineer. 1383 00:44:39.701 --> 00:44:41.601 Rupert is much more of an entrepreneur. 1384 00:44:41.601 --> 00:44:43.234 Exactly right. 1385 00:44:43.234 --> 00:44:45.000 He cares, I mean, much more about building some great 1386 00:44:45.000 --> 00:44:47.067 enterprise because it's newspapers and it's everything 1387 00:44:47.067 --> 00:44:49.667 else and magazines. 1388 00:44:49.667 --> 00:44:51.901 Well, Liberty's investments, in 1389 00:44:51.901 --> 00:44:54.033 general, is to take interest in companies, have a dominant 1390 00:44:54.033 --> 00:44:56.300 position, have control or essentially control, but not 1391 00:44:56.300 --> 00:44:58.634 necessarily be the operator. 1392 00:44:58.634 --> 00:45:00.634 Disney? 1393 00:45:00.634 --> 00:45:03.100 Yeah. 1394 00:45:03.100 --> 00:45:05.200 Can you talk about Disney? 1395 00:45:05.200 --> 00:45:07.501 Sure. 1396 00:45:07.501 --> 00:45:09.534 Are they being left behind? 1397 00:45:09.534 --> 00:45:11.801 They don't have a cable play. 1398 00:45:11.801 --> 00:45:13.801 Well, they have 1399 00:45:13.801 --> 00:45:16.501 They have cable networks. 1400 00:45:16.501 --> 00:45:18.801 They're in the process of buying Fox Family for 1401 00:45:18.801 --> 00:45:20.801 a very rich price. 1402 00:45:20.801 --> 00:45:22.801 Disney is-- 1403 00:45:22.801 --> 00:45:24.334 They have 1404 00:45:24.334 --> 00:45:25.868 They have ESPN. They have the Disney channel. And Fox 1405 00:45:25.868 --> 00:45:27.400 Family will be renamed ABC Family. 1406 00:45:27.400 --> 00:45:28.934 But that's content. They have no systems is what 1407 00:45:28.934 --> 00:45:30.501 I'm saying. 1408 00:45:30.501 --> 00:45:32.334 No distribution. 1409 00:45:32.334 --> 00:45:34.267 Right. 1410 00:45:34.267 --> 00:45:36.834 They have TV stations. 1411 00:45:36.834 --> 00:45:39.300 Disney is a great, great content company. 1412 00:45:39.300 --> 00:45:41.934 It's-- their ability to control children-- you know, to get 1413 00:45:41.934 --> 00:45:44.501 consumers very early on and, you know, it's amazing. 1414 00:45:44.501 --> 00:45:47.067 I mean it really is amazing when you go visit the parks and see 1415 00:45:47.067 --> 00:45:49.400 kids' faces, even adults, or go to see their plays. 1416 00:45:49.400 --> 00:45:51.467 So Disney is great in certain things. 1417 00:45:51.467 --> 00:45:53.334 They have become smaller because the world has changed. 1418 00:45:53.334 --> 00:45:55.300 Viacom has become bigger. 1419 00:45:55.300 --> 00:45:57.667 Newscorp has become bigger. 1420 00:45:57.667 --> 00:45:59.801 All of a sudden, Time Inc. 1421 00:45:59.801 --> 00:46:02.067 and Warner Communications are now part of AOL. 1422 00:46:02.067 --> 00:46:04.133 And so they are making acquisitions. 1423 00:46:04.133 --> 00:46:06.634 They will have to make more. 1424 00:46:06.634 --> 00:46:08.767 They are still at the old limit, television station limit, of 1425 00:46:08.767 --> 00:46:10.868 under 25 percent coverage. 1426 00:46:10.868 --> 00:46:12.934 So they are a little bit late in terms of 1427 00:46:12.934 --> 00:46:14.968 making these acquisitions. 1428 00:46:14.968 --> 00:46:16.767 They do have a strong balance sheet. 1429 00:46:16.767 --> 00:46:18.634 I think they will be more aggressive. 1430 00:46:18.634 --> 00:46:20.267 The issue with Disney currently is their 1431 00:46:20.267 --> 00:46:22.133 exposure to the economy. 1432 00:46:22.133 --> 00:46:23.901 Because they're so dependent on 1433 00:46:23.901 --> 00:46:26.133 advertising revenues. 1434 00:46:26.133 --> 00:46:28.133 ABC TV network, the TV stations, the 1435 00:46:28.133 --> 00:46:30.200 radio-- the radio stations. 1436 00:46:30.200 --> 00:46:32.234 But then, the theme parks are totally exposed to the economy. 1437 00:46:32.234 --> 00:46:34.267 And they're a lagging division. 1438 00:46:34.267 --> 00:46:36.300 In other words, advertising will turn up two 1439 00:46:36.300 --> 00:46:38.334 quarter or so before 1440 00:46:38.334 --> 00:46:40.367 we see any impact on the theme parks. 1441 00:46:40.367 --> 00:46:42.434 So this is, given our views of advertising and the economy, 1442 00:46:42.434 --> 00:46:44.501 this could be a very difficult next four quarters. 1443 00:46:44.501 --> 00:46:46.534 Is this, because it's such a-- 1444 00:46:46.534 --> 00:46:48.601 because the stocks 1445 00:46:48.601 --> 00:46:51.300 are undervalued, a good time to be buying 1446 00:46:51.300 --> 00:46:54.200 media stocks in anticipation? 1447 00:46:54.200 --> 00:46:56.801 Or is it too far off to make that kind of investment; in 1448 00:46:56.801 --> 00:46:59.267 anticipation that these companies are well-structured 1449 00:46:59.267 --> 00:47:01.767 for the future and when the ad revenue thing turns around, it 1450 00:47:01.767 --> 00:47:04.667 will be good sailing? 1451 00:47:04.667 --> 00:47:07.334 It's not too early. 1452 00:47:07.334 --> 00:47:09.934 These stocks are at really low valuations. 1453 00:47:09.934 --> 00:47:12.567 We've done a number of reports analyses on, you know, what 1454 00:47:12.567 --> 00:47:14.801 happened in previous recessions. 1455 00:47:14.801 --> 00:47:17.267 And typically the advertising-dependent stocks 1456 00:47:17.267 --> 00:47:19.968 will turn up two to three quarters before we see a turn in 1457 00:47:19.968 --> 00:47:22.901 the numbers. 1458 00:47:22.901 --> 00:47:25.601 We expect advertising to pick up in the second half of '02. 1459 00:47:25.601 --> 00:47:28.167 Sometime in the fourth quarter, in the fall, we would expect 1460 00:47:28.167 --> 00:47:30.367 companies like Viacom, Newscorp, Fox to really start to tick up. 1461 00:47:30.367 --> 00:47:32.601 And this is a great entry point. 1462 00:47:32.601 --> 00:47:34.801 These stocks have gotten crushed in the last few weeks. 1463 00:47:34.801 --> 00:47:37.000 How about USA? 1464 00:47:37.000 --> 00:47:39.234 USA is a very different kind of company. 1465 00:47:39.234 --> 00:47:41.000 It is controlled. There's a path to control for 1466 00:47:41.000 --> 00:47:42.801 Vivendi. So it's-- 1467 00:47:42.801 --> 00:47:44.601 Because it bought Seagram's share. 1468 00:47:44.601 --> 00:47:46.367 They bought Seagram's-- they inherited-- 1469 00:47:46.367 --> 00:47:48.167 that's right. 1470 00:47:48.167 --> 00:47:50.701 They bought Seagram; they inherited that agreement. 1471 00:47:50.701 --> 00:47:53.400 So? 1472 00:47:53.400 --> 00:47:56.200 So there is a path to control. 1473 00:47:56.200 --> 00:47:57.934 Ultimately that will be a good part of Vivendi's distribution 1474 00:47:57.934 --> 00:47:59.701 play in the U.S. 1475 00:47:59.701 --> 00:48:01.434 So what does that mean for Barry Diller? 1476 00:48:01.434 --> 00:48:03.200 I think he's free to grow the company with 1477 00:48:03.200 --> 00:48:04.934 Vivendi's support until he-- you know, either 1478 00:48:04.934 --> 00:48:06.667 until he retires or 1479 00:48:06.667 --> 00:48:09.567 decides to sell. 1480 00:48:09.567 --> 00:48:11.968 What's the essence of that company? 1481 00:48:11.968 --> 00:48:14.701 I don't cover it directly. 1482 00:48:14.701 --> 00:48:17.267 It is a-- they have many assets in multiple industries. 1483 00:48:17.267 --> 00:48:19.701 Yeah. 1484 00:48:19.701 --> 00:48:22.000 And a lot of interactivity and all that kind of stuff. 1485 00:48:22.000 --> 00:48:24.000 That's right. 1486 00:48:24.000 --> 00:48:26.000 I mean, it's a very different kind of company. 1487 00:48:26.000 --> 00:48:27.734 The largest interactive company, probably -- 1488 00:48:27.734 --> 00:48:29.534 or second largest. 1489 00:48:29.534 --> 00:48:31.133 Well, I mean, they're-- QVC, actually, 1490 00:48:31.133 --> 00:48:32.434 which is larger. 1491 00:48:32.434 --> 00:48:33.701 It's owned by Comcast and Liberty Media 1492 00:48:33.701 --> 00:48:34.968 is actually bigger. 1493 00:48:34.968 --> 00:48:36.234 But I'm thinking about tickets 1494 00:48:36.234 --> 00:48:39.133 and all that other stuff. 1495 00:48:39.133 --> 00:48:40.834 Hotel reservations and all that kind of stuff. 1496 00:48:40.834 --> 00:48:42.634 Right. 1497 00:48:42.634 --> 00:48:44.501 I mean, it's-- you could consider it a media company, but 1498 00:48:44.501 --> 00:48:47.067 it has become also somewhat of an electronic retailer. 1499 00:48:47.067 --> 00:48:49.300 The future-- I mean, what's going on out there 1500 00:48:49.300 --> 00:48:51.601 that you think deserves our attention? 1501 00:48:51.601 --> 00:48:53.801 What's happening now that makes your sector offer great promise 1502 00:48:53.801 --> 00:48:55.968 in terms of the future? 1503 00:48:55.968 --> 00:48:57.834 They great thing about the three sectors 1504 00:48:57.834 --> 00:48:59.868 that I cover -- cable, broadcasting and entertainment 1505 00:48:59.868 --> 00:49:01.667 -- is that they touch consumers' lives every single day. 1506 00:49:01.667 --> 00:49:05.200 And the big are getting bigger. 1507 00:49:05.200 --> 00:49:08.334 They are just a handful of companies 1508 00:49:08.334 --> 00:49:10.934 that will be important. 1509 00:49:10.934 --> 00:49:13.133 Newscorp, Viacom, Disney, AOL Time Warner. 1510 00:49:13.133 --> 00:49:15.300 AOL Time Warner. Comcast. 1511 00:49:15.300 --> 00:49:16.634 Vivendi. 1512 00:49:16.634 --> 00:49:17.968 Vivendi, absolutely. 1513 00:49:17.968 --> 00:49:19.334 Comcast. 1514 00:49:19.334 --> 00:49:20.667 Comcast. I think to a lesser extent, Cox 1515 00:49:20.667 --> 00:49:22.000 and Charter. But there are just a handful of 1516 00:49:22.000 --> 00:49:23.367 companies that will absolutely 1517 00:49:23.367 --> 00:49:25.200 be dominant for the next couple of decades. 1518 00:49:25.200 --> 00:49:27.100 Can you imagine any of those merging? 1519 00:49:27.100 --> 00:49:29.000 Absolutely. 1520 00:49:29.000 --> 00:49:30.934 Do you want to give me an example? 1521 00:49:30.934 --> 00:49:32.901 I think Disney will get bigger. 1522 00:49:32.901 --> 00:49:34.300 I think the-- 1523 00:49:34.300 --> 00:49:35.734 B merger? 1524 00:49:35.734 --> 00:49:37.133 Through mergers or acquisitions. 1525 00:49:37.133 --> 00:49:38.534 Well, they're not going to-- well, what might 1526 00:49:38.534 --> 00:49:39.968 Disney buy? 1527 00:49:39.968 --> 00:49:41.534 Or who might buy Disney? 1528 00:49:41.534 --> 00:49:43.100 Or who might-- ooh. 1529 00:49:43.100 --> 00:49:44.667 Well, who might buy Disney? 1530 00:49:44.667 --> 00:49:46.234 Well, it's-- the rules 1531 00:49:46.234 --> 00:49:47.801 would have to change. 1532 00:49:47.801 --> 00:49:49.534 OK. 1533 00:49:49.534 --> 00:49:51.334 Are there rumors that somebody might-- that Disney might be 1534 00:49:51.334 --> 00:49:53.200 taken over by someone? 1535 00:49:53.200 --> 00:49:55.100 No. 1536 00:49:55.100 --> 00:49:57.000 I don't want to start a rumor, especially on television. 1537 00:49:57.000 --> 00:49:58.767 I don't think that Disney is for sale. 1538 00:49:58.767 --> 00:50:00.367 Talk about moving markets. 1539 00:50:00.367 --> 00:50:02.067 I don't think it's for sale. 1540 00:50:02.067 --> 00:50:03.567 I don't want to start a rumor. 1541 00:50:03.567 --> 00:50:05.200 I think it's possible. 1542 00:50:05.200 --> 00:50:06.501 It's possible that it could go either way. 1543 00:50:06.501 --> 00:50:07.801 Disney could make acquisitions. 1544 00:50:07.801 --> 00:50:09.067 Along the term, somebody could buy them if-- 1545 00:50:09.067 --> 00:50:10.234 Michael Eisner is watching this right now 1546 00:50:10.234 --> 00:50:11.367 saying, ''Over my dead 1547 00:50:11.367 --> 00:50:12.534 body,'' Jessica. 1548 00:50:12.534 --> 00:50:13.701 I don't want to be sitting 1549 00:50:13.701 --> 00:50:14.868 next to him when 1550 00:50:14.868 --> 00:50:16.501 he sees this. 1551 00:50:16.501 --> 00:50:17.968 I just think it's possible that someday 1552 00:50:17.968 --> 00:50:19.334 somebody could buy Disney. 1553 00:50:19.334 --> 00:50:21.801 Disney will be bought. Wow. 1554 00:50:21.801 --> 00:50:22.968 OK, what else? 1555 00:50:22.968 --> 00:50:24.067 I mean, give me something. 1556 00:50:24.067 --> 00:50:25.400 Give me something. 1557 00:50:25.400 --> 00:50:26.901 Who else might be bought? 1558 00:50:26.901 --> 00:50:28.534 Give me a possibility. 1559 00:50:28.534 --> 00:50:30.734 I think in cable, at the end of the day, 1560 00:50:30.734 --> 00:50:32.100 there will be three to five players. 1561 00:50:32.100 --> 00:50:33.434 Right now there are probably seven big ones. 1562 00:50:33.434 --> 00:50:34.801 So there will-- I absolutely believe there will be-- 1563 00:50:34.801 --> 00:50:36.133 OK, Cox and Charter might be sold, might buy, 1564 00:50:36.133 --> 00:50:37.501 might merge, might something? 1565 00:50:37.501 --> 00:50:38.968 Right. 1566 00:50:38.968 --> 00:50:40.334 Cablevision might be bought. 1567 00:50:40.334 --> 00:50:41.601 I just think-- 1568 00:50:41.601 --> 00:50:43.033 Dolan would allow his company to be sold? 1569 00:50:43.033 --> 00:50:45.634 Possibly. Possibly. 1570 00:50:45.634 --> 00:50:47.067 I mean, they have a great position. 1571 00:50:47.067 --> 00:50:48.667 They dominate New York. 1572 00:50:48.667 --> 00:50:50.801 But it's absolutely possible. 1573 00:50:50.801 --> 00:50:52.934 If you looked at the personalities of all these 1574 00:50:52.934 --> 00:50:54.934 people we've been name-dropping -- or I've been name-dropping -- 1575 00:50:54.934 --> 00:50:56.534 about, do they share-- do most of them 1576 00:50:56.534 --> 00:50:58.300 share similar characteristics? 1577 00:50:58.300 --> 00:51:00.033 Obviously they're driven. 1578 00:51:00.033 --> 00:51:01.567 Absolutely. 1579 00:51:01.567 --> 00:51:03.234 There's not a Type B among the group. 1580 00:51:03.234 --> 00:51:04.968 Not at all. 1581 00:51:04.968 --> 00:51:06.801 Not at all. 1582 00:51:06.801 --> 00:51:08.767 I think that every one of them, they're workaholics. 1583 00:51:08.767 --> 00:51:10.767 They're completely devoted to what they do. 1584 00:51:10.767 --> 00:51:12.767 They believe their company is the best that exists. 1585 00:51:12.767 --> 00:51:14.367 And they're absolutely confident. 1586 00:51:14.367 --> 00:51:15.968 Oh, Summer Redstone thinks Viacom is the 1587 00:51:15.968 --> 00:51:17.567 best thing that ever happened to content. 1588 00:51:17.567 --> 00:51:19.133 I think that Summer thinks 1589 00:51:19.133 --> 00:51:20.734 that Viacom is the 1590 00:51:20.734 --> 00:51:22.501 best company that happened to the world. 1591 00:51:22.501 --> 00:51:24.067 And to a certain extent, I agree with him. 1592 00:51:24.067 --> 00:51:25.467 But, yes, I think that Michael Eisner would say the same thing 1593 00:51:25.467 --> 00:51:26.801 about Disney. 1594 00:51:26.801 --> 00:51:28.033 Yeah. 1595 00:51:28.033 --> 00:51:29.267 And so would Rupert. 1596 00:51:29.267 --> 00:51:30.400 And so would John Malone. 1597 00:51:30.400 --> 00:51:31.501 And so would Dan Laurent (sp). 1598 00:51:31.501 --> 00:51:32.801 Thank you for coming. 1599 00:51:32.801 --> 00:51:34.067 Thank you for having me. 1600 00:51:34.067 --> 00:51:35.501 It's a pleasure to have you here. 1601 00:51:35.501 --> 00:51:36.934 Thank you. 1602 00:51:36.934 --> 00:51:38.367 Thank you for joining us. 1603 00:51:38.367 --> See you next time.