← Pablo Torre Finds Out
Pablo Torre Finds Out
Lina Khan (and Zohran Mamdani) on Why Billionaires Never Learn — and the Apolitical Absurdity of $6,000 World Cup Tickets
00:44:30
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- [00:00]
Pablo Torre
Welcome to Pablo Torre Finds Out I am Pablo Toure and today we're going to find out what this sound is.
- [00:07]
Zoran Mamdani
You know, I think sports fans, we are well attuned to continuing to have hope even amidst the most despairing times.
- [00:17]
Pablo Torre
Right after this ad.
- [00:20]
Ad/Promo Announcer
As you've probably heard by now, we've teamed up with BetMGM. This season we'll be using BetMGM lines to make all of our picks and we'll have special offers to for our listeners each week. If you haven't signed up for BetMGM yet, use bonus code TheAthletic and you'll get a one year subscription to the Athletic plus up to a 1500 dollars first bet offer on your first wager with BetMGM. Here's how it works. Download the BetMGM app and sign up using bonus code TheAthletic. Make your first deposit of at least $10. Place your first bet on any game and claim your voucher for a one year subscription to the Athletic. See betmgm.com for terms. U.S. promotional offers not available in D.C. mississippi, New York, Nevada, Ontario or Puerto Rico. Gambling problem call 1-800- gambler available in the U.S. call 877-8-HOPE NY or text hopeny 467-369 In New York, call 1-800- NEXT STEP in Arizona, 1-800-327-5050 In Massachusetts, 1, 800, bets off in Iowa, 1-800-270-7117 for confidential help in Michigan, 1, 800-981-0023 in Puerto Rico. First bet offer for new customers only in partnership with Kansas Crossing Casino and Hotel. Don't forget, if you haven't signed up for BetMGM yet, use bonus code TheAthletic and you'll get a one year subscription to the Athletic plus up to a 1500 dollars first bet offer on your first wager. Hey folks, it's Marc Maron from WTF.
- [01:37]
Pablo Torre
Today.
- [01:37]
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- [02:23]
Lena Khan
A PSA from Instacart. It's Sunday, 5pm you had a non stop weekend. You're running on empty and so is your fridge. You're in the trenches of the Sunday scaries. You don't have it in you to go to the store, but this is your reminder. You don't have to. You can get everything you need delivered through Instacart so that you can get what you really need. More time to do whatever you want. Instacart for. For one less Sunday. Scary. We're here.
- [03:04]
Pablo Torre
I do the thing where I fall asleep on the couch with my contacts in and my wife pokes me away. I have a laptop on my chest and I'm like, this is probably one of the worst things I could do.
- [03:15]
Lena Khan
Yeah, like when you delude yourself about how much more you can keep going in particular night, and then you're just like.
- [03:20]
Pablo Torre
And then it's like, oh, my retina. That's what happened to it. I was trying to. I was trying to read another Mark Cuban tweet and my retina got detached. Thank you for coming back. Are you okay with us starting?
- [03:33]
Lena Khan
Yeah, let's do it.
- [03:34]
Pablo Torre
Okay. Amazing. I love that you're somebody who pays attention to what we do over here, however vaguely. Since you were on the show between a couple months and a couple zillion years ago, it feels like. Have you been radicalized into a sports fan by us?
- [03:49]
Lena Khan
You know, the just incredible reporting that you've been rolling out these last few weeks has really gripped me.
- [03:57]
Pablo Torre
Thank you, Lena. Lena Khan, youngest chair of the FTC in the history of the United States, now professor at Columbia.
- [04:05]
Lena Khan
Yeah, the law school.
- [04:06]
Pablo Torre
The law school handling the youths. It's great to have you back. And also it is. It is funny to me that I feel like I have just the glimmer of what your life might have been like as somebody who was looking into the operations and the schemes, alleged schemes of billionaires hailing from the tech industry.
- [04:30]
Lena Khan
No, I mean, you've really just modeled, you know, rigorous investigative reporting, going through bankruptcy filings. I mean, that's what a lot of corporate investigations are made of.
- [04:39]
Pablo Torre
And I suspect that given what Mark Cuban and I don't want to just do a series of endless episodes about Mark Cuban, minority owner of the Dallas Mavericks, former majority owner shark on Shark Tank. I don't just want to keep doing that. But I suspect, given what he has said about you previously in public, Lena, that you may have also been the recipient of A couple emails from Mark Cuban in your tenure.
- [05:01]
Lena Khan
He is a very active emailer, so I did receive quite a few over my tenure.
- [05:06]
Pablo Torre
Can you describe what, what that inbox might have looked like as you were heading the FTC hearing from him?
- [05:13]
Lena Khan
So, you know, among Mark's many endeavors, he is really interested in this issue of drug pricing and why are drugs in America so expensive. He started this initiative that tries to cut out the middleman in drug pricing, the pharmacy benefit managers. We at the FTC were doing an investigation into those actors. And so, you know, as we were putting out reporting and findings, he would be kind of reaching out, sharing feedback, saying good job. But also look at this. So a lot of his incoming was, it was about the PBMs and drug pricing more generally.
- [05:41]
Pablo Torre
Cordial relationship, it sounds like.
- [05:45]
Lena Khan
You know, I did hear a lot from him. I think he was less pleased with other areas of the FTC's work, including our scrutiny on mergers and acquisitions.
- [05:56]
Pablo Torre
Well now Mark Cuban, who has really emerged as a major Kamala surrogate, let's put this up there on the screen, has come out in a recent semaphore event to say, quote, if it were me, I wouldn't asked if she should keep Lina Khan as FTC chair, quote, by trying to break up the biggest tech companies who risk our ability to be the best in artificial intelligence, this fits.
- [06:21]
Lena Khan
And you know, as a general matter, we were very vigilant at the ftc. We were reviving laws that hadn't been enforced for many years. And so I think there had been this culture of impunity that had set in in many corners of, you know, corporate America and especially among elites. And so having the government enforce the law, I think didn't go so well with, with some people.
- [06:42]
Pablo Torre
Bernie Sanders weighed in saying that you were the best FTC chair in modern history. By taking on corporate greed and legal monopolies, Lena is doing an exceptional job preventing large corporations from ripping off consumers and exploiting workers. How do you explain that for people who aren't quite familiar and what that even entails and means?
- [07:00]
Lena Khan
So, you know, we have had in the United States a set of anti monopoly laws that are about keeping markets open and fair and competitive. And partly what that has meant is that when you have firms that are really dominant, there are certain restrictions on what they can do in terms of who else they can buy, whether they could muscle out their rivals in illegal ways. Those laws stopped being enforced very vigorously starting in the 80s. And so we saw decades of waves of consolidation, mergers and acquisitions, monopolies kind of just dominating their market, crushing the competition. And I think that led to a lot of harm for people, for innovation, for entrepreneurs. One thing we started to do in the last administration was revive that area of the law. And you know, I think for, for a lot of companies, dominant companies, including the tech companies that had interestingly initially benefited from antitrust. When the government sued Microsoft in the late 90s, Microsoft was really chastened and it was, you know, prevented, I think, from really crushing firms like Google and Facebook and Amazon in the crib and was, you know, created just more oxygen and room in the market. But then those firms themselves eventually became dominant in part through illegal acquisitions and behavior that now judges have ruled was illegal. And so as we started enforcing the law against them, you know, I think there was just a lot of pushback, a lot of surprise arguments like, oh, well, if you, you know, punish success or kind of hold even large companies accountable, what's that going to mean for our ability to compete with China? And so, you know, there was a very active debate these last few years on, on the right way to enforce the law.
- [08:40]
Pablo Torre
Yeah, and I want to just jump on what you just mentioned as I think one of the most famous case studies in anti competitiveness and monopolies, which I don't know if the sports audience necessarily appreciates the way that I have been recently appreciating it, because Microsoft is very much a company that Steve Ballmer has been familiar with. Today we are taking another step to keep our marketplace competitive. The Justice Department has charged Microsoft with engaging an anti competitive and exclusionary practices.
- [09:19]
Lena Khan
Designed to maintain its monopoly in personal.
- [09:21]
Pablo Torre
Computer operating systems and attempting to extend that monopoly to Internet browser software. This was, of course, May 1998 is when it started. Steve Ballmer was the executive vice president of Microsoft, about to become president, and eventually, by the time this was over, the CEO of Microsoft. You're the antitrust scholar here, literal professor of this stuff. What can you remind us about United States versus Microsoft Corporation?
- [09:50]
Lena Khan
So this was a landmark antitrust case, really a blockbuster. And the government sued Microsoft for what it claimed was a set of tactics designed to eliminate these rivals that were emerging like Netscape, like the set of middleware companies. And just to zoom out, what was happening was that Microsoft had been dominant in the operating systems market. And now with the emergence of firms like Netscape and these middleware firms, there was a risk that Microsoft's dominance would be disintermediated because you could use a Netscape to basically visit the rest of the web and so it didn't matter whether you had Microsoft's operating system. And so they were worried, even though Netscape was not a direct competitor, they weren't in the business of operating systems. They were worried that if Netscape and these other firms became more relevant, Microsoft itself would not be as relevant. And so they ended up engaging in all these tactics to cut them off. There were really colorful quotes, including from Bill Gates himself, about wanting to cut off the oxygen of these other firms. And so they deliberately went out of their way to basically try and crush the competition. And so the United States sued. They won. The court declared that Microsoft had illegally monopolized these markets. And then they were initially ordered broken up. Then we saw the Bush administration come in. They ended up kind of weakening that remedy. But I think it's widely understood, and we've heard from former Microsoft executives themselves, that this action really chastened them. It really made them focus much more on complying with the law. Because this had been such an ordeal. It had been really embarrassing. I mean, some of those Bill Gates depositions were pretty bad for him.
- [11:36]
Ad/Promo Announcer
Is the term competition a term that.
- [11:39]
Pablo Torre
You'Re familiar with, Mr. Gates?
- [11:42]
Zoran Mamdani
Yes.
- [11:43]
Ad/Promo Announcer
And does it have a meaning in the English language that you're familiar with?
- [11:48]
Zoran Mamdani
Yeah, I hadn't any lack of understanding.
- [11:52]
Pablo Torre
Your questions doesn't stem from the use of that word. Okay.
- [11:57]
Ad/Promo Announcer
And you understand what is meant by.
- [12:01]
Lena Khan
Non Microsoft browsers, do you not, sir?
- [12:04]
Pablo Torre
No, you don't?
- [12:06]
Ad/Promo Announcer
Is that what you're telling me? You don't understand what that means?
- [12:09]
Pablo Torre
It was remarkable. Again, Bill Gates used to be the truly the face of technology. And Bill Gates, by the way, of course, college classmate of Steve Ballmer at Harvard.
- [12:22]
Zoran Mamdani
The key to.net, the key to industry transformation, the key to success is Developers. Developers. Developers. Developers. Developers. Developers. Developers. Developers. Developers. Developers. Developers. Developers. Developers.
- [12:41]
Lena Khan
Developers.
- [12:44]
Pablo Torre
Yes. In this capacity, you get to see inside of how these men are functioning behind closed doors. Foreign.
- [13:10]
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- [14:03]
Zoran Mamdani
My name is Kayla. My husband and I use his email.
- [14:06]
Pablo Torre
Address to access the New York Times.
- [14:09]
Lena Khan
Each day we compete for who gets to do connections. Sometimes I log into the app and.
- [14:16]
Zoran Mamdani
I discover that he's already finished connections that day.
- [14:20]
Lena Khan
And I'm like, jonah, it was my day. And he's like, I know, I just couldn't resist. You would do us a huge favor.
- [14:26]
Pablo Torre
If we got to log in as a family with separate emails.
- [14:31]
Zoran Mamdani
I really think our well being as.
- [14:33]
Pablo Torre
A couple depends on it. Thanks for looking into this, Kayla. We heard you introducing the New York Times family subscription.
- [14:41]
Ad/Promo Announcer
One subscription, up to four separate logins for anyone in your life. Find out more@nytimes.com family.
- [14:59]
Pablo Torre
It does seem like somehow American politics has been tilted for various reasons that you can identify, I'm sure, immediately in favor of money. If you were to give like the, the quick summary of how we got there such that this is happening as a result, what else should people appreciate about how and why we're in the state that we are?
- [15:22]
Lena Khan
I think basically since, you know, the Reagan administration, in some ways, even starting in the Carter administration, we started to see deregulation, we started to see erosion of workers rights. We saw, you know, during the Bush administration, during the Clinton administration, a real effort to structure the American economy in a way that really gave primacy to Wall street and really allowed them to grow and really allowed them to take all sorts of reckless risks which ended up basically crashing the economy. And at that moment, we had an opportunity to hold the executives accountable for really doing untold damage to millions of Americans, resulting in people losing their homes. And unfortunately, we didn't go far enough. We didn't hold those executives accountable. Their power over our democracy and economy only grew. I think that had led to a lot of disillusionment. We saw the first Trump administration, we had the last administration where we really did try to do a pivot from that and actually make clear that we're going to enforce the law without fear or favor. And, and if we find that even powerful companies are breaking the law, that's resulting in, you know, people having to pay more for rent, people not being able to afford their medicines, we're going to take action. And we're not going to think, oh, is this company a powerful donor or A powerful CEO that we should instead try to keep happy. I think what we're seeing right now is just flagrant elite impunity, right. Executives from all over the country make a pilgrimage to the White House offering either direct payments to the President or his family through, you know, settling cases that are just totally frivolous, offering pro bono hours if you're a law firm, even giving documentary deals to the president's wife. And I think we're just seeing that the rules don't matter. If you're an elite, if you have a lot of money, you can basically pay off the cops. And that's just on such spectacular display right now that I think there is a big opportunity to seize on that.
- [17:15]
Pablo Torre
Well, this is where sports comes back, right? And so why do I find myself talking about antitrust and anti competitive behavior in sports? It's because, of course, Steve Ballmer is the owner of the Los Angeles Clippers. We've been investigating him for salary cap circumvention, which is a very funny thing to talk to the former FTC chair about. But here we are. And after, of course, the judge ruled in that case, United States v. Microsoft Corporation, we're now looking at April of 2000. The judge concludes Microsoft was in fact monopolizing. And into the set of Charlie Rose enters Steve Ballmer. And I want to play this video back to back with the video of said same Steve Ballmer on Tuesday of this week as NBA commissioner Adam Silver had yet to rule as the judge in that court on his investigation into my reporting.
- [18:10]
Zoran Mamdani
You know, I love the United States.
- [18:12]
Pablo Torre
It's a great country.
- [18:14]
Zoran Mamdani
This is part of our process. I don't like it, I don't enjoy it. We have an appellate process in front of us. And I'm grateful to the founders, so to speak, of this country for being part of architecting the right kind of a system.
- [18:30]
Pablo Torre
And I know and I trust that.
- [18:33]
Zoran Mamdani
We will prevail through this lawsuit. I welcome the investigation that the NBA is doing. It's a great way to, from our perspective, to get the facts out there. And as I say, there's nothing fun about being highlighted in this way. It's a whole lot more fun to be highlighted for building a great arena. But this too shall pass.
- [18:58]
Pablo Torre
When you see that video, having listened to enough of what I've done, what goes through your mind?
- [19:04]
Lena Khan
I mean, it's just so striking and remarkable, right? I mean, even if you just think about why do we have a salary cap, right? I mean, it's, it's kind of a Rule of fair competition, right? It's saying that there's a cap on how much wealth can just buy the best players. And that's going to help engineer and allow for a game where you actually have real competition, as opposed to a system where the wealthiest owners and the wealthiest teams can just buy all the best talent. And so it's really interesting to think about what that rule is designed to do and then what it means to have, you know, one of the wealthiest people in the world think, okay, well, I can't abide by that.
- [19:40]
Pablo Torre
Allegedly.
- [19:41]
Lena Khan
Allegedly.
- [19:43]
Pablo Torre
So the point being, like, if laws are just suggestions, what do we have if billionaires just believe that, like, you know, we can just rewrite this if we really need to. If you really care about it so much, we'll just rewrite the laws themselves.
- [19:56]
Lena Khan
Right. And in instances where you have rules like the NBA cap, you know, perhaps go through elaborate means to try to sidestep it.
- [20:03]
Pablo Torre
Right. There's another aspect of this when it comes to I want to just also shout out some reporting by ProPublica, a fantastic journalistic enterprise, 2021. They have this big investigative series and it's about what sports ownership allows billionaires to get away with, actually how this is not merely two parallel tracks, but a perpendicular set of fact patterns. And ProPublica reported, in fact, the tax code is structured such that there is a loophole, a tax loophole which allowed specifically Steve Ballmer quote to perform a kind of financial magic trick. And what ProPublica did was get IRS records that showed that Steve Ballmer was reporting $700 million in losses from his ownership of the Los Angeles Clippers for tax purposes. And this was from 2014 to 2018. And this is the quote. Not only does Ballmer not have to pay tax on any real world Clippers profits, he can use the tax write off to offset his other income, end quote. So at the risk of being a podcast that is also talking about the tax code, how do you explain just that arrangement that is available to the richest people who also happen to own sports teams?
- [21:22]
Lena Khan
The American tax code is notoriously rigged, effectively to allow very, very, very wealthy people to pay less than oftentimes working people in terms of, you know, are you paying a tax on income versus a tax on wealth? There are all sorts of, you know, engineering tricks available for how you categorize certain pots of money that will unlock certain loopholes or certain benefits. And, you know, given how much money is at stake, they're also just tax advisors and a huge booming business to provide those types of financial advisory services to people like Ballmer to kind of be able to fully exploit them. And I'll say, you know, when there have been even mild efforts to create more parity in the tax code, we have seen enormous lobbying efforts to push back against that. And, you know, the last administration tried to grow the IRS and make sure that the IRS was fully staffed to go after, you know, not just low level offenders who may have checked the wrong box, but are making, you know, $80,000 a year, but actually some of the biggest tax cheats in our economy. And, you know, we saw enormous pushback against that and now an effort to really defund the irs.
- [22:34]
Pablo Torre
But just the idea that losses, losing money is a thing you often hear billionaires cry poor about. Honestly, look at the sacrifice we are making running this team. We are losing money on it. And I guess just the very basic thing I'd like you to help explain is losing money can be good. In fact, it can help make you money elsewhere.
- [22:57]
Lena Khan
That's right. So, yeah, I mean, if you're able to report a loss to the IRS, that could basically, you know, allow you to save and not have to pay taxes elsewhere. And so if you do the math in the aggregate, you could be making money even if in one little place, you're losing money. And that's, you know, effectively what seems to be happening.
- [23:18]
Pablo Torre
So the whole premise of, like just in the theory of how you might benefit from spending as much as you possibly can on your basketball team, the point is that this is not merely just pure fan passion. Although I do not question for a second Steve Ballmer's pure fan passion, it is also something that is incentivized by the tax code insofar as there are other ways for that to help him make more money.
- [23:45]
Lena Khan
That's right. I mean, we see all sorts of ways that acts that can be characterized as, you know, charity or generosity or altruism actually end up having enormous tax benefits. And so that's why we see large corporations or enormously wealthy people engage in some of these endeavors.
- [24:04]
Pablo Torre
So just to put us in the present tense, you have made this suite of topics, these subjects, these issues, the thing that you have clearly cared about and continue to care about and teach, as those same topics are being repudiated, rolled back in these extreme ways by the current administration, what keeps you motivated?
- [24:29]
Lena Khan
I think American history is just replete with all sorts of moments that felt really bad, where it felt like, you know, the oligarchs and just the elites were winning at the expense of everybody else. And then we had amazing comeback stories. Right? I mean, think about the New Deal and just everything that that represented, all the ways that that created the conditions for a strong middle class for people to get ahead, even if they weren't born into wealth. And I do think that we're now reaching a key inflection point. I mean, this administration, even against the backdrop of the existing extreme inequality we have, they're engineering just a massive upwards wealth transfer, right? Even through passing signature legislation that's designed to keep people off their health care so that the already richest can get a big tax break. I think we're just going to reach a tipping point and there's going to be, I hope, a big opportunity to govern again and to really make sure that we're able to put in place a system that is fair, a system where people can get ahead if they're, you know, trying hard and, and have the talent and I think, you know, letting the bad guys win and just saying, okay, we give up, it wouldn't be satisfying.
- [25:34]
Pablo Torre
I think you just gave us a locker room speech. They're up 3:1. But the series ain't over yet. That's where we are in the plot of American history.
- [25:42]
Lena Khan
I think we're discovering a lot of parallels between sports and like the rules of the game and, you know, the rules we're supposed to have for our, our economy.
- [25:49]
Zoran Mamdani
Yes, yes.
- [26:01]
Ad/Promo Announcer
As you've probably heard by now, we've teamed up with BetMGM. This season we'll be using BetMGM lines to make all of our picks and we'll have special offers for our listeners each week. If you haven't signed up for BETMGM yet, use bonus code the Athletic and you'll get a one year subscription to the Athletic plus up to a fifteen hundred dollar first bet offer on your first wager with BetMGM. Here's how it works. Download the BetMGM app and sign up using bonus code TheAthletic. Make your first deposit of at least $10. Place your first bet on any game and claim your voucher for a one year subscription to the Athletic. See betmgm.com for terms. U.S. promotional offers not available in D.C. mississippi, New York, Nevada, Ontario or Puerto Rico. Gambling problem. Call 1-800- gambler available in the U.S. call 8778-HOPE NY or text HOPE NY 467-369 In New York, call 1-800- NEXT STEP in Arizona, 1-800-327-5050 In Massachusetts, 1-800-bets off in Iowa, 1-800-2707117 for confidential help in Michigan 1-800-981-0023 In Puerto Rico. First bet offer for new customers only in partnership with Kansas Crossing Casino and Hotel. Don't forget, if you haven't signed up for BetMGM yet, use bonus code the Athletic and you'll get a a one year subscription to the Athletic plus up to a $1,500 first bet offer on your first wager.
- [27:15]
Pablo Torre
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- [29:14]
Zoran Mamdani
The World Cup's coming to New York next year and as a lifelong foot sorry soccer fan, I couldn't be more excited. But are any working class New Yorkers actually going to be able to watch the matches? Presale starts tomorrow and for the first time, FIFA is using dynamic pricing where they're going to figure out in real time how much they can get away with for charging a ticket. The tickets can be resold on an official FIFA platform with no price count. That means you could buy a ticket for 60 bucks and sell it for $6,000. And unlike the last three World Cups, there's nothing set aside for residents. What this all means is the biggest sporting event in the world is happening in your backyard and you'll be priced out of it. Let's call this price gouging. What it is.
- [29:57]
Pablo Torre
You call it surveillance pricing. So for people who are not familiar with this as a concept, please explain.
- [30:05]
Lena Khan
For many decades, what has been the kind of dream for a lot of corporations has been to be able to charge every single person the maximum they're willing to pay. If you go all the way back to when we had the barter system and just markets where you didn't have stable prices, you would see merchants try to get away with, you know, charging you more based on, you know, how you were dressed, what you thought your maximum willingness to pay would be. And then we had a revolution in pricing. This idea that, you know, we're going to have stable pricing, we're going to have transparent pricing. You go to the store and you want to buy, you know, a carton of milk and I want to buy the same carton of milk, we're both going to pay the same amount. And we're now in a economy where there's so much data being collected about each of us that companies actually have greater ability to try to approximate how much are you maximally willing to pay, Right. What they might call your pain point price and price just below that, but up to that. And those that could quickly be just transforming what the economy looks like in terms of pricing. I think several years ago, almost a decade ago, we started to see companies destabilize consumers sense of stable pricing through this idea of dynamic pricing, which is defined as pricing changing based on current supply and demand. And so ride sharing companies we've all become used to, if you open the app, the price may look different for the same route depending on how many drivers are on the road versus how many people are trying to get a ride. And so in theory that pricing is set by supply and demand, but I think that can be used as cover for actually charging, not based on supply and demand, but actually what they think you will pay the maximum amount you will pay.
- [31:47]
Pablo Torre
I was going to ask from the pure, just how do you regulate that perspective? What is required to get visibility into the actual Pricing dynamics, the code that would determine what you get offered as a consumer?
- [32:03]
Lena Khan
Yeah, it's a great question. There's so much opacity around this. And at the ftc, we had started a market inquiry to get from some of these pricing middlemen the data that would let us look into this. The first time I actually came across this was in 2013 when I was doing kind of just business reporting. And I went to a conference hosted by the National Retail Federation, and they had a whole portion of their conference where they just had all of these pricing middlemen that we're basically trying to tell retailers, if you hire us, we will be able to do surveillance pricing. We will allow you to price based on how much each customer is willing to bear.
- [32:39]
Pablo Torre
And was that a service that actually did provide that insight, or was that also merely a membrane, a plausible deniability detachment?
- [32:49]
Lena Khan
I think it's fair to say it was much more crude then than it is now, just in how much greater data there is now about each individual person.
- [32:58]
Pablo Torre
I mean, these apps know exactly what I am watching, reading, how long I'm spending on it, what I have paid previously, how frequently I'm googling.
- [33:07]
Lena Khan
Yeah. And I think what's changed is that, you know, even back then, we were seeing investigative reporters uncover how pricing could vary based on various factors. So these Wall Street Journal Reporters found that staples.com, the website, would change its price based on your zip code. And if you were in a zip code that actually had brick and mortar competition to Staples, they would show you a lower price. And if you were in a neighborhood that didn't have any competitors, they would charge you a higher price. Interestingly, practically, what this meant was that people living in wealthier neighborhoods were paying less than people in poorer neighborhoods. Which really flips.
- [33:46]
Pablo Torre
That is the opposite from what that logic so far has suggested in your outlining of it.
- [33:51]
Lena Khan
Exactly. And one argument that economists sometimes make for price discrimination is that this will basically allow, you know, poor people to pay less and rich people to pay more. And at the end of the day, that means that more people can get more stuff. People argue that it's. It's, you know, better for pharma companies to be able to charge rich countries more and poor countries less. It means more people have access to vaccines. But in practice, what was so interesting about this study is that it showed that rather than this kind of pricing having a progressive effect, it actually had a regressive effect. And that's been replicated across other, you know, journalistic studies that have found that, you know, ISP providers have been found effectively charging more for slower speeds in low income neighborhoods than for faster speeds in high income neighborhoods. One report found that this SAT Prep company was found charging more effectively in Asian neighborhoods than in non Asian. So you know, there can be all sorts of dimensions on which discrimination is done. I think what has changed is that whereas a decade ago some of this was being done on bulk demographic data like your neighborhood, now it can instead be done on your precise location and not just where you are right now, but where you've been over the last 24 hours.
- [35:05]
Pablo Torre
Guess what, America, you're all now our Asian parents obsessed with paying for SAT Prep. Everybody gets charged with that level of ostensible desperation.
- [35:17]
Lena Khan
Yeah, I mean they just have this like hyper granular profile on you as an individual. And you know, at the ftc we weren't able to, to finish the, the full study, but we did put out some interim results and found that there was just an enormous amount of personal information. Your browsing history, your geolocation, where you hover the mouse, how long your mouse stays on, what product that could basically inform what personal price is going to be set free.
- [35:42]
Pablo Torre
Are you suggesting that when I go on incognito mode, I am not actually secure in my, in my personal consumption?
- [35:50]
Lena Khan
There are lawsuits about this, showing that incognito does not actually mean what a lot of people think incognito means.
- [35:57]
Pablo Torre
As always, this remains a problem for me personally, but I now move on as quickly as possible. Look, this also has touched people in terms of like, hey, remember when Wendy's, you know, did that thing where like suddenly on the digital menus they had surge pricing on Frosty's because it was hot out. Where does it end?
- [36:16]
Lena Khan
Yeah, it's a great question. And I think what's so interesting is that there is this slippery slope between companies saying, oh well, we're just changing the price based on the current market conditions of supply and demand. It's like a science versus it creeping into being much more personal to you based on what they know they can exploit because of your specific conditions. If you're a family that has a nut allergy, maybe you're going to be charged more for the nut free cereal than a family that doesn't. If you know a company knows that you've had a death in the family, maybe you could be charged more for a flight ticket because they know you have to get to a funeral more quickly. So I think it's those types of situations that can feel exploitative for People where this pricing is just not fair and is just allowing companies to take advantage of how much information they have about you.
- [37:06]
Pablo Torre
Dynamic pricing is familiar to literally any sports fan who's bought a ticket to anything. I suspect that sound I think I just heard in my ear might be the sound of our next guest. Right on cue. As I try to segue into why it is that Zoran Mamdani might be joining us. Lita Khan here today. Is he there? Can he hear me?
- [37:27]
Zoran Mamdani
Hello. I am here and I can hear you.
- [37:32]
Pablo Torre
The thing about. The thing about this gentleman is that I've been accused of smiling while talking and that people can hear that on my podcast. I don't think I've seen this man frown. Lena. Have you?
- [37:43]
Lena Khan
I can't say I have.
- [37:47]
Zoran Mamdani
Lena told me that to frown is to side with monopolists.
- [37:51]
Pablo Torre
That's right. That's right. The demand curve in a different way. Yes. Hey, thanks for joining us. This is an insane time for us to gather here. Not just because I think a lot of people are very confused. If you were to ask them, as of one year ago, who are any of these people? But now maybe there's a larger argument. I dare say so. Look, dynamic pricing, this, Zoran, has been something that you have taken up in the context of something that is local to where we are in New York. Can you explain why it is that you have been talking about this very subject?
- [38:25]
Zoran Mamdani
You know, I am a lifelong soccer fan and someone who has been looking forward to next year's World cup for many, many years. And I know that's the case for so many New Yorkers. And we're proud to be one of the host cities for the final, as well as a number of other games. And yet what we're seeing is that FIFA's approach to the ticket process of this World cup is both without precedent in their own administration of previous World Cups, and is also an approach that will price out so many New Yorkers from actually being able to be in the stands. And we see it with their attempt to institute dynamic pricing for the first time in World cup history that will be manually set, not even algorithmically so.
- [39:04]
Pablo Torre
And.
- [39:04]
Zoran Mamdani
And the refusal to set aside tickets for local residents at the kind of discounts that we've seen in the past, and their desire to set up a resale market where there will be no cap on resale prices. All of this will lead to FIFA making a potentially up to close to 400% increase in profits from what they made in Qatar just four years ago.
- [39:26]
Pablo Torre
So the Statistics on this so far. FIFA set ticket prices for 2026. That World cup will start at $60 for the cheapest group stage seats range to 6730 dol for the most expensive tickets to the final. All of that subject to change of course, once sales begin in October and the system is implemented. But it does feel perfect that FIFA is of course going to enter this story. Look, I don't want to belabor what might be obvious, which is that FIFA is notorious among all of the global organizations for favoring literal oligarchs, but in this case, Daran, you're, you're. I have been informed credibly that you are an actual soccer fan. Can you give us the download on your credibility in this way?
- [40:12]
Zoran Mamdani
My credibility is as an Arsenal fan, a long suffering Arsenal fan who first became a fan in the days of the Invincibles a few years prior to that and since then has grown accustomed to believing that every year is the year. Having the hopes fade as we get closer to the end. And I think also for me, the World cup has been one of my favorite memories as someone who loves the game. You know, I was born in Uganda in East Africa. We are not a fixture in the World cup, never have been. And so I grew up rooting for so many of the countries across the African diaspora as well as the American national team. And you know, I went to the World cup in South Africa in 2010 and was actually there in person crying as Luis Suarez slapped away a gold bound shot that would have taken Ghana to the furthest point at that time of an African team. And I want New Yorkers to have these kinds of experiences of joy of pain, but all they're connected to the game as opposed to having to look at all of this through a screen.
- [41:11]
Pablo Torre
Look, it's just hard to avoid the follow up question, which is does all of this make Andrew Cuomo the Arsenal of New York? Second? Second, I believe in the primary. Second in November, you know, is that what you're suggesting now given that disclosure?
- [41:26]
Zoran Mamdani
You know, I think Andrew Cuomo's conduct is more befitting of a team that has points docked in years past. I don't think Arsenal has ever reached that point.
- [41:35]
Pablo Torre
Lena, the question of sports as a thing that you too for today at least can coalesce around dynamic pricing in the context of not just by the way, certainly these games, these matches, but also just like concert tickets, you know, like Taylor Swift is in this story now, by the way, if we can reference just the fact that she seems to Acknowledge that dynamic pricing might not be the best way forward for her fan base as well as she plays. Arenas, sports arenas.
- [42:04]
Lena Khan
There have been so many pain points around just buying tickets for all sorts of live events for fans for so many years now. I think dynamic pricing is a big part of that. Another big thing we saw was the proliferation of these junk fees where you would see a ticket, you know, advertised for $60, but then by the time you get to checkout, it's somehow $110, and you're paying a service fee, a convenience fee, delivery fee, even though you're literally just going to print the ticket out or just show it on your phone.
- [42:32]
Ad/Promo Announcer
Right.
- [42:33]
Lena Khan
And so one change we made at the FTC was actually to ban that and say you have to actually be honest and upfront about what the price is. And we've seen that go into effect. The other big worry for me is we see these bot armies that will just swarm ticketing platforms and oftentimes gobble up a lot of what's available. And so the fact that you have a resale platform for FIFA that has no cap really worries me and makes me think it's going to be ripe for abuse here.
- [43:00]
Pablo Torre
Right. I mean, look, Zaran, these numbers, 3 billion in ticket sales is the expectation from the 2026 World Cup. I just, I. I was the recipient of socialism recently when my friend gave me a ticket to Oasis at MetLife, shared his wealth with me less than seven miles from here, the site of eight World cup matches next summer. $6,000 is too much. $6,000 is Too Much. I just feel like that seems like a. That feels.
- [43:36]
Zoran Mamdani
It's absurd.
- [43:37]
Pablo Torre
It feels apolitically. It feels apolitically and bipartisan in its absurdity, actually.
- [43:44]
Zoran Mamdani
And, And I think what's. We've just normalized this, right? Like when, when, when the World cup was last in the United States, a ticket to the final cost less than $200 in today's dollars. And that we are now at face value, selling tickets for more than $6,000, it is absurd. And, you know, at this moment in time, when we are being told that so much of what is enraging New Yorkers is simply the way things have to be. You look at one of the three host nations, Mexico, FIFA will be having a resale market in Mexico with a cap on resale prices. And then they are telling us that it simply can't be done here in the United States or in Canada. And we don't want this to be an experience that is out of reach of those who are the most passionate about this game. And I know that New York City transforms during the World Cup. I mean, come to Astoria when the Moroccan national team getting to the semifinals. And yet the dream should be that New Yorkers can actually also go to the games. It shouldn't just be this kind of corporate sponsorship and fans coming last. And I'm glad to see that, you know, in a response to our set of demands and the thousands of people who have added their names, that FIFA is now saying that there will be set aside tickets for fans at fixed prices, but that is still insufficient. And we are going to continue pushing to go back to FIFA's own past practices to bring this World cup into reach for working class New Yorkers.
- [45:09]
Pablo Torre
Yeah. From the pure local news perspective, I remember watching the 06 World Cup Final in Little Italy and watching a dude with an Italian flag smash a window after Zidane had headbutted Marco Matarazzi, which was, you know. Yes, that's what New York is about, too, watching like that happen. Look, the whole thing here of the billionaire, right? So we're coalescing around a through line in this episode, which you've joined, and you have been as clear as anybody in modern politics about how, quote, I don't think we should have billionaires. So for those who are unfamiliar nationally with that proposition, how does one even begin to accomplish that? Why should that be accomplished?
- [45:56]
Zoran Mamdani
It's a statement on the nature of inequality across the city and across this country. I mean, we are in a conversation now where we're also actively discussing the potential of a trillionaire in Elon Musk. And all of this while one in four New Yorkers are living in poverty. All of this while 500,000 kids are going to sleep hungry every night. You know, we recently had Bernie Sanders come to New York City, and at a town hall, he was saying that we cannot grow numb to the enormity of these statistics and the fact that this is wealth at a time of starvation. And what we are simply talking about is it's going back even to the words of Dr. King decades ago about a better distribution of wealth for all of God's children in this country. And the focus here is to ensure that everyone can flourish in this city, that it does not continue as a place where only a select few can actually have a life of dignity, as many just struggle. And we glamorize that struggle in a sense of New York City hustle. And yet we are effectively tolerating the fact that we're pricing out our neighbors from the very basic facts of day to day life.
- [47:04]
Pablo Torre
Yeah, Lena, I want to soft launch something. What if the slogan was just it's cool to be a 999 millionaire? Like what? Like what if that was, that was proposed?
- [47:16]
Zoran Mamdani
We just didn't move forward on that one.
- [47:18]
Pablo Torre
Yeah, you put it in the maybe pile. That's still the maybe pile though, right? The question is just like it's okay to want to be successful, but there is something about needing to draw a bright line somewhere.
- [47:28]
Lena Khan
Lena, you know, the way I think about it is that this extreme grotesque inequality is not an inevitability. It's actually directly the results of our laws and policies. Right. If you go back, you know, 50, 60 years, we had an economy that looked very different. You actually had a big, stable, growing middle class. You know, you could, you could work 40 hours and still comfortably make rent. And all of the things that have led our economy to change where now, I mean, I saw this striking statistics the other day. The 10% most wealthiest Americans are now responsible for 50% of all spending, which I think just shows how lopsided and kind of grotesquely uneven our economy has been. And that just creates an economy that's not stable. And I think extreme inequality like this is just not inevitable. It kind of tends to snowball. But we can just, you know, have laws and rules that make things more fair from the tax code to how we enforce our anti monopoly laws to banking laws. And so I think we just need a top to bottom revamp.
- [48:32]
Pablo Torre
Zaran, we'll get you out on this because I heard earlier in this episode Lina Khan accidentally give a locker room pep talk to America on the premise of, look, the score might be out of whack right now, but the game isn't over yet. I want to acknowledge that not only are you a sad Arsenal supporter, you also seem to be a sad Met fan. You're familiar with needing to delude yourself, to motivate yourself. What in terms of the sports of this provides the opportunity for maybe America to listen when it comes to what exactly is at stake here.
- [49:07]
Zoran Mamdani
You know, I think sports fans, we are well attuned to continuing to have hope even amidst the most despairing times and looking for that hope in any new development and never letting one season impact the way in which we view the potential of the next season. And it is also part of what makes success so special that you continue to have that belief. And I'll tell you, especially as an Arsenal fan, it is something that has been part of what has steeled me for the difficulties of politics, of the many, many journeys, many hurdles, many false dawns, and yet always believing in that potential. And I think that that's how many New Yorkers feel and many Americans feel is none of what we see as our reality today diminishes our hope or our belief in what we deserve. And it just strengthens our resolve of everything it'll take to actually get there. And, you know, we don't have the luxury of having Mikel Arteta to come into New York City and deliver us that Premier League title that I know is there. It is.
- [50:09]
Pablo Torre
Oh, God.
- [50:11]
Zoran Mamdani
You know, we can do our best impressions.
- [50:13]
Pablo Torre
All right, get him out of here. I think that's enough from the Arsenal delusion side of the aisle. Zoran Mamdani, Lina Khan, thank you for providing a conversation that is a sports conversation that I just think isn't happening enough. So thank you for having it on this strange show that I host.
- [50:32]
Zoran Mamdani
Thank you so much for having me, Lina. It's lovely to see you, but I'll see you both soon.
- [50:45]
Pablo Torre
Pablo Torre finds Out is produced by Walter Averoma, Maxwell Carney, Ryan Cortez, Juan Galindo, Patrick Kim, neely Loman, Rob McRae, Matt Sullivan, Claire Taylor and Chris Tuminello RStudio Engineering by RG Systems Sound Design by Andrew Bersick and NGW Post Theme Song as always, by John Bravo and we will talk to you next time.
- [51:19]
Lena Khan
What do you think makes the perfect snack?
- [51:22]
Pablo Torre
It's gotta be when I'm really craving it and it's convenient.
- [51:25]
Lena Khan
Could you be more specific?
- [51:26]
Pablo Torre
When it's cravinient. Okay. Like a freshly baked cookie made with real butter, available right down the street at am, pm. Or a savory breakfast sandwich I can.
- [51:33]
Lena Khan
Grab in just a second at am, pm. I'm seeing a pattern here.
- [51:37]
Pablo Torre
Well, yeah, we're talking about what I.
- [51:38]
Lena Khan
Crave, which is anything from am, pm.
- [51:40]
Pablo Torre
What more more could you want? Stop by AMPM, where the snacks and drinks are perfectly craveable and convenient. That's Cravingience ampm. Too much good stuff. Sometimes an identity threat is a ring of professional hackers. And sometimes it's an overworked accountant who forgot to encrypt their connection while sending bank details. I need a coffee. And you need lifelock because your info is in endless places. It only takes one mistake to expose you to identity theft. LifeLock monitors hundreds of millions of data points a second. If your identity is stolen, we'll fix it, guaranteed. Or your money back. Save up to 40% your first year at lifelock.com specialoffer terms apply.
- [52:21]
Lena Khan
Acast powers the world's best podcasts.
- [52:25]
Pablo Torre
Here's a show that we recommend.
- [52:30]
Ad/Promo Announcer
I'm Eden Share and I'm Brock Ciarlelli.
- [52:32]
Lena Khan
We played best friends on the Middle.
- [52:34]
Ad/Promo Announcer
And became best friends in real life.
- [52:35]
Lena Khan
We're here to rewatch the Middle with all of you.
- [52:38]
Ad/Promo Announcer
Each week we'll recap an episode with behind the scenes stories, guest interviews, and what we think now, many years later.
- [52:43]
Lena Khan
There'S a lot to dive into. So let's get to middling. ACAST helps creators launch, grow and monetize their podcasts everywhere.
- [53:00]
Pablo Torre
Acast.com.