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Quest Means Business
Europe's Stalled Recovery; Wall Street Seesaws; European Markets Up; Bond Yields Sinking; Europe's Unstable Hammock; Spain's Robin Hood; Battle of the Tech Titans; Apple, Facebook Shares Down; US Stocks Struggle; Euro Rising; Striking the Right Note
Aired August 21, 2012 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Don't forget the debt. Moody's says Europe is only halfway there in fixing its debt problem.
It's a lawsuit between Apple and Samsung. It enters closing arguments without a settlement.
And tonight, the Robin Hood of Andalusia. We meet the Spanish mayor who's raiding supermarkets to feed the poor.
I'm Richard Quest, live with a vista worth millions. From New York, I mean business.
Good evening, live from New York on a glorious, glorious summer afternoon. As you can see, Central Park, and the trees are in bloom, the tourists are out and about, and already on the political agenda, the sparks are flying in what promises to be a hard-fought election campaign.
In our program tonight, we're taking the temperature of the nation, and we're finding out and discussing the sort of issues that New Yorkers are caring and voting -- and indeed Americans are about.
Also tonight, we'll find musical inspiration tickling the ivories. Musical inspiration at the century-old New York piano factory.
And discovering the power of social media on the city's social scene, where everything was white.
First, as the summer wanes, so do hopes of a robust economic recovery. The latest numbers show Europe is still struggling to get a handle on its problems. The rating agency Moody's says -- and this is a quote -- "At best, we're halfway through fixing the structural problems which caused the debt crisis in the eurozone."
And Moody's has urged governments to press on with reforms. In the UK, there's an example of the sort of problems. The public accounts show July showed an unexpected deficit of around $880 million. This is because corporate tax receipts fell short. It was surprising, because analysts had looked for a surplus of about $4 billion.
In the last few hours, S&P has downgraded Italy's second most populous region, Campania. The agency says the region faces serious cash flow problems because of the deterioration in Italy's economy.
Now, the air's been let out of Wall Street's balloon. The Dow is lower after it soared to a near four-year high earlier today. So, down 30- odd points, a third of a percent, 13,243. The sort of numbers we are seeing at the moment are on the low side -- it's the middle of summer. But it is the sentiment that is causing concern.
European markets were higher on hopes that a deal for Greece may be announced this week. The Greek prime minister, Antonis Samaras, is set to hold talks with his counterpart in Luxembourg and in Germany and elsewhere in France in the next few days. Hopes on the ECB also may be starting to buy bonds, and that eased bonds across the board.
You're getting a view of what happened and the way in which things moved forward, all of which is all the more remarkable when you consider it is the middle of summer. Mohamed El-Erian says that solving the European crisis is like getting yourself into a hammock. It requires strategic positioning.
The PIMCO chief executive joins me now, live from Newport Beach in California. Mohamed, I -- you have painted a vision of getting in and out of a hammock, which is a painful but an exceptionally realist, and one that we can all relate to. It's fraught with disaster.
MOHAMED EL-ERIAN, CEO, PIMCO: Yes, Richard, the idea came to me -- I was on holiday last week, and I'd been asked a lot about Europe. And I tried on holiday to sit in a hammock. And I'm not good at it, and I sat in a not a good way, and I found it very difficult to adjust.
And I realized, that's Europe's problem. It started with an incomplete design, and they've been trying to fix it on the fly, and it's very difficult. You've got to revamp the whole thing. Just like in a hammock, you've got to try and get up and sit again. But no one wants to do that because they're afraid of falling off.
QUEST: I wish you had taken a bit of video of you getting in and out of that hammock. I'd have paid good money to see that. Listen, as -- we'll take the hammock analogy as far as we can. The reality is, if you turn over, or if you fail, then -- yes, you can try again, but you could also end disastrously.
EL-ERIAN: You can. And if you also depend on people around the hammock -- and remember, Europe needs private creditors -- when they see you unstable on this hammock, they step away.
And that's what's been happening to Europe. Every day, people are stepping away from Europe, pulling money out of the peripheral economies, and that's like sucking oxygen out of a country. So, it makes the recession worse.
That's why it's really critical that the Europeans build on this tranquility that we've had now for three and a half weeks and continue to try to catch up to their realities.
QUEST: OK. Let's -- it's coming towards the end of the summer, and everybody is now really exceptionally nervous about what will happen in September. Read the notes from people like yourself and others, you all say September will be very volatile. Fundamentally, Mohamed, what do you fear is going to happen in September, or could happen?
EL-ERIAN: We have three major challenges to overcome in the next two weeks. The first one, you've mentioned it, Greece must find a way to agree with the troika, otherwise we -- Greece will have to default again. The second is the ECB. They have to detail how they're going to support Spain and Italy. And the third, September 12th, we have a Constitutional Court ruling out of Germany, and that has to go the government's way.
These are three big challenges, and they're going to determine whether Europe continues to heal slowly, or whether we have another crisis.
QUEST: If you were a betting man, and I don't know whether you are or you're not, so we won't assume one way or the other, but what does your gut feeling -- having seen 18 months of paralysis, Mohamed, what does your gut feeling tell you is going to be the way they're going to handle it? Are they going to fall out of the hammock again?
EL-ERIAN: So, I'm a cautious man, Richard, and I would tell you that I would fasten my seat belt. I think we are, unfortunately, likely to have more turbulence. These are tough things to solve engineering-wise, and they're even tougher to solve politically. So, we've had a nice period of tranquility. I fear now we're going to enter a period of turbulence.
QUEST: Mohamed El-Erian. Whatever is left of the summer -- although I suspect more than most, in California -- we wish you well with it, and we'll talk in September.
Now, Spain's politicians, one particular one says -- this man says he's not criminal. And his supporters are calling him a hero. He's Juan Manuel Sanchez Gordillo. He says with a quarter of Spaniards out of work, desperate times call for desperate measures.
Now, these aren't just desperate, this is a modern-day Robin Hood in the true sense of the word. Al Goodman caught up with the village mayor who has now gained absolute celebrity status.
(BEGIN VIDEOTAPE)
AL GOODMAN, CNN MADRID BUREAU CHIEF (voice-over): He's known as Spain's Robin Hood, and now he has quite a following. Juan Manuel Sanchez Gordillo, a leftist village mayor and regional politician, is leading this march against the Spanish government's austerity cuts.
"In the 19th century, local bandits stole from the rich to give to the poor," he says. "A kind of collective Robin Hood. In this economic crisis, capitalists and governments do just the opposite: rob from the poor and give to the rich."
Sanchez Gordillo gained notoriety earlier this month for leading raids on two supermarkets in nearby towns.
"We did it in an organized way," he says, "taking basic foodstuffs to deliver to an NGO. But we hit the powers right where it hurts the most, and that's why the authorities are nervous."
GOODMAN (on camera): Most of the people taking part in this march are unemployed farm workers, union leaders say, and dozens of them took part in the recent supermarket incidents.
GOODMAN (voice-over): Like Andre Somaro (ph), a jobless farm worker with a wife and daughter.
ANDRE SOMARO, JOBLESS FARM WORKER (through translator): I took part like the others in a symbolic protest against the crisis we are suffering, above all, the working class.
GOODMAN: He and six others were arrested at a supermarket. They're charged with robbery. Sanchez Gordillo has political immunity. The conservative government blasted him for flouting the law, but he says these are desperate times.
The jobless rate in Spain is more than 24 percent, but here in southern Andalusia, it's 33 percent. For months, there have been large protests across Spain against the cutbacks and tax hikes that the government says are needed to reduce the deficit and revive the economy. But Prime Minister Mariano Rajoy has vowed to stay the course.
"Right now, we see now sign he's going to change. All we see," he says, "are police, arrests, repression."
This day, civil guards protect a wealthy farming estate as marchers pass by. The marchers take a break and plot their next move.
Suddenly, they rush onto the estate through a hole in the fence before the civil guards can stop them.
GOODMAN (on camera): The protesters hope to keep the pressure on the authorities with what they say are a series of symbolic actions, like occupying this land.
GOODMAN (voice-over): A standoff ensues, with some protesters deep inside the estate, refusing to leave. For these followers of a man now seen as a modern-day Robin Hood, this is just one of the first stops in a three-week-long march into getting the world's attention.
(END VIDEOTAPE)
QUEST: So, one, that's Al Goodman in Spain where, of course, they have got their own issues, which we will be looking at during the volatile month of September.
Glorious day here in New York, and we -- when we come back after the break, a high-stakes squabble. It's the long legal battle between Apple and Samsung, and it's now coming to a head. Maggie Lake is with me, and Maggie will tell us more after the break.
(COMMERCIAL BREAK)
QUEST: The traffic and Columbus Circle. He's getting a bit of a facelift over the summer. And over, of course, to the Central Park greenery. Welcome back. QUEST MEANS BUSINESS tonight, we're live in Manhattan as we come to the end of the trial of Apple and Samsung.
Lawyers will be making their closing statements today, unless there's a last-minute settlement. Then, the jury, it's over to them to begin their deliberations. It won't be straight forward. Even the judge finds the case exceptionally complex. Not surprising when you look at the issues involved. Maggie Lake, who I believe has the original complaint.
MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: Oh, Richard, pity this jury. Pity this jury. Listen, you're a lawyer, I cover technology, I would not want to have to take a stab at this.
Twenty pages they're going to have to go through. I think we have a closeup for our viewers of some of the hundreds of boxes these men and women are going to have to check off. The instructions alone: 109 pages. And in a live blog, the judge, evidently, said to the jury, "We're going to stand up periodically to make sure we're still alive."
That's how complicated this is and why so many legal experts are surprised that these two companies didn't settle and are taking the gamble of giving this to a layman jury to work out. Now, as complicated as it is, it's going to come down to two things, right?
QUEST: Yes.
LAKE: I know which one you're going to choose.
QUEST: No, I'm not! I'm telling you, I'm going to get rid of my notes.
LAKE: Given his bias -- no. Samsung -- did Samsung rip off Apple in its design? It's going to be much more complicated for them, but that's what it boils down to. A lot riding on this as well. If Apple wins, could face -- could get billions in damages, as well as a ban on Samsung from selling this in the US.
QUEST: All right. Fundamentally, this long, tedious, expensive --
LAKE: Expensive.
QUEST: -- expensive battle is about whether they've copied each other.
LAKE: Whether Samsung's copied Apple.
QUEST: Well, but come on, Maggie. Samsung claims that Apple has copied some of theirs.
LAKE: Right. Right.
QUEST: Page 196, paragraph 3, subsection paragraph 5.
LAKE: You've been sneaking into the trial, haven't you, Richard, with everyone else?
QUEST: Right.
LAKE: But it is. And it means something for us, too. Not only do the companies have a lot at stake, but if Apple wins, then Samsung is going to have to go back to the drawing table and come up with a completely different SmartPhone, right? So, maybe more choices.
If Samsung wins, a lot of industry watchers think a lot of the SmartPhones are going to migrate to the iPhone. So, whether you like it or not, it may be what you're holding if Samsung actually prevails in this. Big if.
QUEST: All right. All right. Why haven't they settled? That's the core question. Why --
LAKE: Ego, money. Listen, a lot of people think this traces back to Steve Jobs, who you know how he felt about Apple's sort of intellectual property. But it's also money. There are billions and billions of dollars. This is where the industry is going.
Some people think it's a mistake, but ultimately they're hoping, I guess, that they sort of find in favor of -- and they can sort out all this stuff.
An interesting twist here, Richard, is the judge. I mentioned her making this comment, "We hope we all stay alive."
QUEST: Right.
LAKE: Forty-three years old, very young, former patent lawyer herself, which is unusual, and she's been making some comments that have really caught people off guard, being so aggressive with some of the high- paid, very high-profile corporate lawyers who really think they know.
At one point -- this is one that everyone really loved -- when Apple lawyer tried to introduce 75 witnesses with like an hour left in the thing, she said, and this is a quote, "Unless you're smoking crack, you know these witnesses are not going to be called."
People are saying, maybe that's being a little outside of judge's bench. Other people say good for her for keeping them in line and showing them who's boss.
QUEST: Yes. And I think the lawyer's retort, as I seem to have read the report, the lawyer's po-faced retort was, "Your Honor, I think you know I'm not that high." Maggie Lake. I would ask her who she thinks is going to win, but you can't tell. And that would be a deeply improper question.
LAKE: No, you know as a lawyer you're not going to dare ask me that.
QUEST: All right. Thank you very much.
LAKE: All right. Good to see you, Richard.
QUEST: Good to see you in New York.
LAKE: Yes, same here.
QUEST: Thank you very much, indeed. Maggie Lake with me.
Apple's shares, now they are down at the moment on the NASDAQ. The company made history yesterday. It was the most valuable company in the world. Facebook shares are also down over 3 percent today.
Now, one of the early backers and a major investor, Peter Thiel, sold 20 million of them. But look at Facebook now. It's under $20 a share, it's down nearly $4 on the day.
To the New York Stock Exchange. Alison Kosik is downtown for us. Alison, good to have you back with us. And I'm looking at Apple's shares. I'm looking at Facebook's shares. It's the middle of the summer, and I'm wondering, does anyone on Wall Street care?
ALISON KOSIK, CNN CORRESPONDENT: Do they care? Is that what you asked? Is that what you asked, Richard?
QUEST: That was the question. That's it, that's it.
KOSIK: I think they do care. You know, it's funny. You look at those two companies, it's a tale of two companies, isn't it? Apple shares are down today a little bit, so you're seeing some profit-taking there.
One company that we are watching here from the New York Stock Exchange, though, Richard? Best Buy. Best Buy is the world's biggest electronics retailer, it reported quarterly profits that fell way short of forecasts.
Now, earlier in the session, shares of Best Buy sold off. This is in addition to another 10 percent that they sold off on Monday. They've come back quite a bit, now. Shares of Best Buy are flat. The company, though, it's in a lot of trouble. It's seen its sales decline in eight of the last nine quarters.
Part of the problem, Richard, with this company is a lot of people see Best Buy not as a store, but as a showroom. They go into these stores and they play around with all of the things to play around with, and then they walk out without buying anything, and they go back home and they go online or they go to Amazon.com and they buy Best Buy's stuff.
So, that is a huge problem for Best Buy. They're trying to stop this showroom-ing going on, so we are watching those shares. We are also watching shares of Barnes & Noble. Shares are falling about 3 percent. Would you believe -- did you read "50 Shades of Grey," Richard?
QUEST: No, I was just going to talk about those Barnes & Noble results and what is happening there. I need from you, though, Alison, finally -- and I know it's noisy -- is there a sense of impending doom or potential optimism on the market?
KOSIK: I think the trend right now is up. You're not really seeing really conviction one way or the other. I think it's really a wait-and-see mode. We've got, what? Another two -- about two weeks left of what's considered summer, and then we head into September, and we head into what the Fed is going to do, what is the ECB going to do? And that is really what is on the radar for Wall Street at this point, Richard.
QUEST: Alison Kosik on the New York Stock Exchange for us tonight.
Now, time for tonight's Currency Conundrum. A short stroll from here, of course, just over my shoulder, is the Central Park Zoo. It was home to one of the models for a five-cent piece that was minted between 1913 and 1938. Where do we find these facts? This is the front.
Which animal features on the back? Is it A, a bison, a buffalo, or a bald eagle? Bison, buffalo, or bald eagle? The answer later in the program.
Now, to the currencies themselves. The euro's racing ahead at a seven-week peak against the dollar on the back of optimism of the ECB steps, and these are the rates.
(RINGS BELL)
QUEST: This is the break.
(BEGIN VIDEO CLIP)
QUEST: Coming up after the break, they are amongst the world's finest pianos: the Steinway. And we show you how they are made.
(PLAYS PIANO)
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: President Obama is trying to lead a renaissance in US manufacturing. He's investing a billion dollars in keeping jobs and skills within the nation's borders. When it comes to making things the old- fashioned way, New York has been the home of the famous Steinway piano since 1853. Have a listen.
(BEGIN VIDEOTAPE)
(PIANO MUSIC)
RON LOSBY, PRESIDENT, STEINWAY & SONS: The first Steinway piano was actually built in Heinrich Engelhard Steinweg's kitchen. It was in 1835, 1836. One of the most unique aspects about a Steinway piano is that each one, because of the handcrafted nature of how it's built, has its own individual musical personality.
ANTHONY GILROY, DIRECTOR OF MARKETING, STEINWAY & SONS: These guys are woodworkers. Even if they're a master craftsman in their own right, they have to become a master Steinway craftsman and learn how to build the best pianos in the world.
It's like building a house. If you start with a bad foundation, you're never going to have a good house. It takes 11 months of rim bending and all the different processes and the amount of time. Everything that they're doing here, it's very complex. There's no margin for error.
We have this rim that was turned into a case. It's been painted and polished. And what's happening here, now, is this case comes up here, and it's going to be married to a plate. Some marriages end up in divorce. These marriages never end up in divorce. And it's fitted specifically to that rim.
And then, once that happens, some of the most talented men in the factory -- they're called belly men, and this is the belly department, and they do a number of different tasks. Most important is that they hand- notch the bridge of the piano. They do it without any patterns, without any technology. And that's why each piano that we create has its own character.
They hand-dry every pin. There's hundreds of pins that are in the bridge. The strings go through them and transmit the vibration into the sound board, which creates your sound. And then, they glue that sound board in here. So, when it leaves this area, it's on its way to becoming a piano.
(PIANO MUSIC)
LOSBY: The central reason why we've been around for nearly 160 years is because we have stuck to what we know, and we try to consistently improve this single product that you see here in this factory every single day that we build it.
GILROY: A Steinway piano, if treated properly, is handed down from generation to generation. So, it will last not decades. It can last well over 100 years.
LOSBY: New York's our home. We grew up here, we started here in 1853. But what New York gives us, which is unique, I think, in the world, is this wonderful pool of labor. It is inextricably linked to Steinway & Sons, and we are to it.
(PIANO MUSIC)
QUEST: You never know where you're going to find a Steinway. This is the River Cafe in Brooklyn. They have a collection, and this is one of the finest, worthy of even my efforts. Coming up after the break, we take the American pulse.
(PLAYS PIANO)
(END VIDEOTAPE)
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. More QUEST MEANS BUSINESS in a moment. But this is CNN and, on this network, the news always comes first.
(BEGIN VIDEO CLIP)
QUEST (voice-over): At least two people have been killed, nearly 40 more wounded as the conflict in Syria spreads to neighboring Lebanon. (Inaudible) back the Syrian regime and Sunnis, who oppose it, are fighting in Tripoli. Government troops are trying to restore calm.
In Syria itself, opposition activists say more than 150 people have been killed today. Video posted online appears to show a government helicopter shelling a town in Daraa province.
And these Internet images seem to show rebels driving through Aleppo. Earlier today Syrian state media said regime forces were cleaning the city of terrorists.
Ethiopia is mourning the death of its long-term prime minister. A government spokesman said 57-year-old Meles Zenawi died from unspecified illness. The prime minister was credited with strengthening Ethiopia's economy and for his leadership in African affairs. However, he had been criticized in the past for suppressing political dissent.
The South African mine has backed off its threat to dismiss workers who didn't return to their jobs on Tuesday. In a statement, the Lonmin mine says around a third of the employees are back and the situation is calm. Police shot and killed 34 workers at the mine during a wildcat strike last week.
The embattled Senate candidate, Todd Akin, says he will stay in the race despite mounting opposition. The Missouri Republican congressman caused an uproar when he used the phrase "legitimate rape" in talking about abortion and pregnancy. He described his party's call for him to withdraw as an overreaction.
(MUSIC PLAYING)
QUEST: And a very good day to you, live, QUEST MEANS BUSINESS. We are in New York as we come towards perhaps the end of the summer. New York is one of the most important states in the union, with 29 electoral college votes and traditionally, New York, of course, favors the Democrats. Most projections have it going that way in November.
So New York per se may not be one of those places that people will get hot under the collar. Elsewhere, though, and here, there is one particular issue that voters know will be crucial.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: New jobs, a lot of new jobs, stability. You know, I think a lot of people are concern that the market isn't as strong as it should be. It doesn't stay as level as it could, should. And so I think we need stability overall.
UNIDENTIFIED FEMALE: More jobs. More jobs. (Inaudible) college, (inaudible) and then also (inaudible). (Inaudible).
UNIDENTIFIED MALE: (Inaudible) develops. I really don't think this president is doing that much about it. (Inaudible).
(END VIDEO CLIP)
QUEST: I'm joined now by Joe Klein, author of "In the Arena," column for "Time" magazine. Good to see you.
JOE KLEIN, AUTHOR AND JOURNALIST: Good to see you, Richard.
QUEST: And thank you for joining us. When we look at the core issue that is in this election, what do you believe it's going to be?
KLEIN: It's going to be the economy, but it's also going to be Barack Obama's stewardship and personality and the way he's run the country the last four years.
QUEST: Right. Now within those confines, the issue that people are concerned about -- because if you talk to Americans, they say they're not happy. They say they're -- they want a plague on all their houses. They say Congress and the president, but it's all a bunch of rascals.
KLEIN: First of all, Richard, you have to understand how unbelievably historic this is.
QUEST: Why?
KLEIN: The thing that distinguished Americans from every other country, every other nation, was that when you asked them the polling question, do you think next year will be better, Americans always said yes, until about 30 years ago.
Changed for a while under Reagan, but predominantly over the last 30 years, it's been no, and it's because our position, our unbelievable dominance in the world after World War II has been subsiding.
QUEST: So let me ask you are Americans coming to terms with what my country, the Brits, had to come to terms with? I don't want to use the phrase "loss of an empire" or declining power, but let's say declining power.
KLEIN: Well, here's the way I read it. I go out on these road trips every year for about three or four weeks, some fresh air, get to meet actual human beings, things like that.
When I went out for the first time three years ago, people were scared to death of just that very issue, the fact that they were afraid that China was eating our lunch, that we were going into a period of decline, that their kids wouldn't live as well as they did. Last year, it was more frustration. This year, they are just angry as hell at the politicians in Washington --
QUEST: But they're angry, and they've been angry before, and they never do anything about it, other than change sides.
KLEIN: Well, they've -- you know, that (inaudible).
(CROSSTALK)
QUEST: Look, the real power is over there, isn't it?
KLEIN: Right. No, (inaudible).
QUEST: The real power is over there, Joe.
KLEIN: Yes. I'll tell you what they're really angry about. They're angry about big everything, and big money -- I've been to so many parties in those penthouses over there.
QUEST: Are they good?
KLEIN: They're not bad. Not quite as good as the parties on the north side of Tehran or in Chelsea, but --
(LAUGHTER)
QUEST: So they're angry, the American people are angry. They're going to want change or they may want change and they're frightened, to some extent.
KLEIN: Well, they -- they're especially angry now because they know there isn't going to be any change. When we polled this for "Time" magazine, we asked people do you want to have a congressman who sticks by his or her principles or compromises to get things done? And stick by your principles is the American way, right?
Except for the fact that 89 percent of the people wanted to see things gotten done. And nothing has been getting done.
QUEST: Good to see you. Hopefully, you'll help us understand this election as it goes. Joe, very good of you to come and talk to us. Many thanks indeed.
Now they've got every boy's dream job and they're getting millions of dollars to do it. The Premier League pay slips have never been bigger. I'll look at business behind the beautiful game. Continues after the break.
(MUSIC PLAYING)
(COMMERCIAL BREAK)
(MUSIC PLAYING)
QUEST: There is a stop sign and a one-way sign that you have just been looking at here in New York. Well, there seems to be no stopping the movement in the Premier League and the one-way seems to be more expensive than higher salaries.
George Soros has emerged as a major stakeholder in Manchester United. He now owns almost 8 percent of the team's class A shares. And as a multibillionaire, he's in good company at Man U.
All this week we're looking at how the money behind English football, the beautiful game, is now the beautiful business. As Jim Boulden explains, today's players are getting paid -- forget footballers -- think CEOs.
(BEGIN VIDEO CLIP)
JIM BOULDEN, CNN CORRESPONDENT: A new report from the High Pay Center here in the U.K. shows just how quickly players' salaries have made them multimillionaires. Well, wages in the English Premier League have gone up by more than 1500 percent since the league began in 1992.
Just compare that to normal salaries here in the U.K. They've increased by 186 percent in the same period. Now there are several reasons for this trend. Well, firstly, players can now move freely between E.U. clubs once their contracts expire. And secondly, no surprise, TV revenues have grown and grown, giving clubs more firepower.
Now that's why players like Wayne Rooney of Manchester United can make a reported $20.5 million a year at Manchester United, while Yaya Toure makes around $16.5 million at Man City, as does Carlos Tevez. But if you think football is the team sport that pays the most, you'd be wrong. It's actually baseball.
Alex Rodriguez, who plays third base for the New York Yankees, signed the biggest sports contract back in 2000, worth a quarter of a billion dollars over 10 years. He'll make $25 million this year, 22 percent more than Wayne Rooney.
Now American athletes tend to make more money on average than footballers. The average Premier League players makes $1.8 million a year. That's roughly the same in the NFL. At one point, $9 million.
But Major League baseball players make more than $3 million a year while NBA players in the U make more than $5 million a year, with L.A.'s Kobe Bryant maybe the highest paid member of any sports team in the world at $28.7 million for this upcoming season -- Jim Boulden, CNN, London.
(END VIDEO CLIP)
QUEST: Nick Harris is the editor of sportingintelligence.com, and Nick joins me now from CNN London.
All right. So the Americans get paid more and the Brits, in some cases, or the Premier League is perhaps globally more powerful and more important and therefore they justify their money. But frankly, do the footballers of the Premier League justify the sort of sums that they are getting, Nick?
NICK HARRIS, SPORTINGINTELLIGENCE.COM: Well, can I just make a quick correction, you're right in saying the NBA players and the basketball in America are the highest paid collective group of sportsmen, followed by the baseball stars.
But next on that list is the Premier League players, who now are earning about 1.9 million pounds a year on average each. Those NFL players that you talked about, on average, are actually on relatively poor money. They're earning about 1.3 million pounds a year on average each, which is the same as the NHL hockey players. So the Premier League perhaps is even richer than you think.
QUEST: All right.
HARRIS: Do they deserve it? Well, basically, what they're doing is they're taking the spoils of the pay TV boom.
And what we can't forget here is that the whole Premier League and the boom in wages in the Premier League is based upon pay television, which basically didn't exist in Britain in the early `90s, and Rupert Murdoch famously used the phrase that he wants to use sport as the battering ram to get into people's homes. He used Premier League football to do that. Sky's grown massively.
(CROSSTALK)
QUEST: All right, but hang on, hang on, hang on. Hang on, OK. So they're paid a lot of money and they're ultra-paid even in relation to a larger market, say for example, if the NBA over here. But the core question remains whether it's justified and I know that, of course, is a market -- a market-led question, really, isn't it? If that's what people will pay, that's what they're worth.
HARRIS: Absolutely. It is a market -- it's -- you know, you talk to the team owners. There are no restraints on what you can pay in wages in English football. These are the stars of the game. These are the people who make people buy TV subscriptions, get tickets.
These are the characters who bring the money in and attract the TV revenues, and they take the largest share of the spoils.
Now, I mean, there's a whole different debate about whether that's out of control. UA, for the European governing body of football, are actually bringing in rules to try and, you know, dampen down this inflation. But the question basically is do they deserve it? Well, they earn it, and the owners are prepared to pay it. They would argue they deserve it.
QUEST: Nick, do they earn it? Do they deserve it? That's a question for the market. We thank you for joining us. And I can tell you that, of course, the sort of money that they are paid is nothing compared to the sums that the venture capitalists get and the private equity get and, of course, a lot of the bankers get that live on those massive apartments on the other side of Central Park.
The weather across parts of northwest Europe has been very pleasant over the past couple of days, bordering hot in some parts. Jennifer Delgado is at the World Weather Center.
JENNIFER DELGADO, AMS METEOROLOGIST: Hi, Richard. You know, how's the weather been over the last couple days across parts of New York? I know it's been a fairly quiet. You quizzed me on this on Friday, and you haven't seen any rain. It's nice weather there.
But through parts of Europe, the weather's been beautiful. We're talking in some locations, temperatures have been borderline hot. As I show you on the radar, we're dealing with some rain right now. You can see a lot of that moving through northern parts of England. We're also seeing some of that coming for areas, really through parts of Scotland the heaviest.
Now as we go through the next 24-48 hours, now the heat that we've been talking about, in parts of northern as well as central Europe, that's going to retreating down towards the south. Now the rain is going to be spreading over towards the east, for areas including Latvia, Lithuania, for areas also talking about Poland.
That's where the rain is going to be. It's going to stay there through Thursday, but more about this heat. Look at the temperatures out there. We're talking in some areas just really scorching for Budapest, 37 degrees. They typically see about 26. And then for Vienna, 33 degrees.
But let me show you how residents are dealing with the heat through parts of Poland. They're heading out and cooling off and kids are playing in the water. They said, hey, when the temperatures start to hit the upper 30s, we've got to have some relief. Now will you see some relief as we go through the next couple days?
Well, I want to show you the summer temperature trend, as we go through Wednesday as well as into Thursday as well as into Friday, as I take you back over, for Vienna, I noticed those temperatures will be in the lower 30s. We're talking 34 on Friday. And then for Prague, 28 on Friday.
And look at Budapest. You're going to be a little bit warmer on Friday with the afternoon high of 36 degrees on a wider view, overall, elsewhere across parts of Europe, it's going to be cooler through Russia, 28 in Bucharest.
And then for London, 22 degrees. But for New York, where Richard is departing -- and, Richard, you had bad timing, because the weather's going to be nice over the next couple days. We're talking sunshine out there, no chance of rain, high temperatures in the upper 20s and very comfortable.
This is going to stick around through Friday. When you get back to London, it's going to be cooler, cloudy, 23 for the afternoon high. They saw the warmest temperatures over the weekend in some parts. But now that you're back, yes.
QUEST: Yes.
DELGADO: Oh, I get the head bob.
QUEST: Yes.
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DELGADO: Have a safe flight.
QUEST: Jennifer Delgado, Jennifer at the World Weather Center, I'm flying back tonight. As long as it's not too bumpy across the Atlantic, I'll see you in London tomorrow.
Coming up in a moment, we'll show you just what power a worldwide flash mob (inaudible) in a moment. It's QUEST MEANS BUSINESS. We are live for you tonight in New York. Good evening.
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QUEST (voice-over): The "Currency Conundrum" answer, which Central Park Zoo resident was on the 1913 5-cent piece, it was a trick question, the answer is both A and B.
The animal commonly called a buffalo is actually a bison, and that's on the Buffalo Nickel, which is called the Black Diamond. He lived at Central Park around the turn of the 20th century. Poor Black Diamond had an unfortunate end. He was sold to a meatpacking plant that did brisk trade in Black Diamond steaks.
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QUEST: You can't live and not die by the market economy. For that, now forget a black-and-white tie dinner or ball. In New York on Monday night, the most chic place to be seen was a secret flash feast resplendent in white. And by dressing en blanc, the revelers can find one another in the urban crowds.
CNN's Felicia Taylor dons the prerequisite clothes.
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UNIDENTIFIED FEMALE: I think it's going to be awesome, just seeing everybody in white, seeing everybody out with the same purpose.
UNIDENTIFIED MALE: We signed up. Right away, I said, that sounds like something fun to do.
UNIDENTIFIED FEMALE: We have no idea where we're going tonight. And it's exciting.
FELICIA TAYLOR, CNN CORRESPONDENT: And the mystery is about to unfold, along with hundreds of commuters in New York's rush hour traffic is a sea of people dressed in white who are going to that as of now unknown destination. All they know right now is they're heading to 72nd Street. They have no idea yet where they're having dinner en blanc.
TAYLOR (voice-over): Juggling tables, chairs, china, glassware, beverages, flowers and food, guests make their way via subway for the next leg of the journey.
TAYLOR: And the mystery is solved. Here we are at Lincoln Center in New York's Upper West Side for what's being called the first viral feast, a sort of flash mob, if you will, where literally thousands of people have come together at this very moment on this night for what is a mass picnic.
Up until now, it's been held for the last 20 years or so in Paris, but on this year, it's now in 20 cities on five different continents, from New York to Singapore to Montreal to Sydney and Pigalle. Bon appetite!
SANDI SAFI, HEAD OF INTERNATIONAL DEVELOPMENT, DINER IN BLANC: It brings together a lot of various elements, you know, the element of sharing, the element of spontaneity, doing something different, being part of a group that has the same passion and pleasure for the foodie environment and culture.
AYMERICK PASQUIER, ORGANIZER AND SON OF FOUNDER: Oh, it does it very small with 200 people and from years to years, the party, the gathering went bigger because friends were inviting other friends. Now with social network, of course, it has to get bigger.
TAYLOR (voice-over): So big this second event in New York has had a waiting list of about 30,000 people. It is a non-profit, non-sponsored event that costs $25 per person to cover expenses and production costs. The lucky 3,000 who made the cut on that first come, first served basis, officially kicked off the night with a wave of their white napkins.
TAYLOR: So what's for dinner?
UNIDENTIFIED MALE: Filet mignon and salmon.
TAYLOR: I bet he's having the filet mignon.
UNIDENTIFIED MALE: Yes, I am.
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UNIDENTIFIED FEMALE: It's fun because we can be with all of our friends, and we all enjoy feasting and spending time together.
UNIDENTIFIED FEMALE: I'm loving it. It's the best (inaudible) of my life.
TAYLOR: Why?
UNIDENTIFIED FEMALE: Because it was unexpected and it's amazing. The turnout is great. It's just -- it's just a wonderful evening.
TAYLOR (voice-over): Guests don their finest to make a fashion statement as well, with aviators, suspenders, hats, flowing dresses and, yes, even dogs.
UNIDENTIFIED FEMALE: This is Olivia. She's our maltipoo.
TAYLOR: And she's how old?
UNIDENTIFIED FEMALE: She's three years old.
TAYLOR: Did you need special permission?
UNIDENTIFIED FEMALE: No, actually. They said that as long as she's white and small, we could bring her. So.
TAYLOR (voice-over): Rules are rules. But as revelers party into the night, there was one universal sentiment.
UNIDENTIFIED MALE: People are sharing. People are taking pictures for each other. You know, everyone's complimenting each other's outfits. They're all just having a good time.
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QUEST: Felicia what was the point of it?
TAYLOR: The fun of it, Richard. It's simply about people coming together, having a good time. It's a not-for-profit event. This is simply a gathering of people spontaneously.
QUEST: Why? Why?
TAYLOR: Because people like to have a good time together. It's not for anything other than possibly some networking, something different, unique, crazy and kind of independent of anything else. It's not for any other reason but the joy.
QUEST: All right. The joy, the joy. Does it rely on social media, networking and all these things to bring it all together?
TAYLOR: It does now. I mean, this is the important part about this. You have to sign up online. It's done by word-of-mouth, it's not anything exclusive, other than the event, you have to know somebody that's already been invited. So --
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TAYLOR: It's not.
QUEST: It's elites.
TAYLOR: There are no celebrities. There's no gawking. There's --
QUEST: Yes, you've got to be on the inside.
TAYLOR: You don't. You know me now.
QUEST: All right.
Ooh, I say. You've got the real ones.
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QUEST: Nice (inaudible) quality when we're in New York.
Felicia, thank you very much indeed. I mustn't steal the silverware. We (inaudible) -- we'll have our ""Profitable Moment" after the break.
It's elite.
TAYLOR: It's not.
QUEST: It is.
TAYLOR: It's not. It's not. (Inaudible).
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QUEST: It's "Profitable Moment," Mohamed El-Erian told us tonight why fixing the Eurozone crisis is a lot like getting into a hammock. It's tricky, it's embarrassing and it takes a lot of work to get it right. Mohamed always has good, entertaining analogies.
But if there's one thing Europe leaders don't need at the moment, it's encouragement to do and chill. Here we are in the middle of August, and many of them have spent plenty of time on their holidays. They may even have spent the month dozing away in real hammocks and having more success getting in and out than they are in the crisis.
Well, they're back to work this week, all the while the deficits' alarm bells keep ringing, and we've only just stopped hitting the snooze button. Europe's tried to sleepwalk through this crisis. And the bleary- eyed late-night meetings in Brussels have done very little to fix it.
We must work harder now and Europe needs to find a way, quite simply it could be more difficult than getting into and out of the proverbial hammock.
And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable. Back in London tomorrow.
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QUEST: The news headlines: at least two people have been killed and nearly 40 more wounded as the conflict in Syria spreads to neighboring Lebanon. Alawites, who back the Syrian regime and Sunnis, who oppose it, are fighting in Tripoli. Government troops are trying to restore calm.
In Syria itself, opposition activists say more than 150 people have been killed today. Video posted online appears to show a government helicopter shelling a town in Daraa province.
And these Internet images seem to show rebels driving through Aleppo. Earlier today Syrian state media said regime forces were, in their words, cleaning the terrorists -- city of terrorists.
Ethiopia is mourning the death of its long-time prime minister. A government spokesman says 57-year-old Meles Zenawi died from an unspecified illness. The prime minister was credited with strengthening Ethiopia's economy and for his leadership in African affairs. He was criticized for suppressing political dissent.
And the embattled Senate candidate, Todd Akin, says he will stay in the race despite mounting opposition.
Those are the news headlines at the top of the hour. More in an hour's time. Now, again, from New York, it's "AMANPOUR."
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