Themes

Turmoil in the credit markets has put deals on the backburner across the board – including a number of planned sales of broadcasters. 

Television broadcasting group Nexstar Broadcasting Group Inc. said earlier in August it was suspending talks with prospective buyers because of the difficult conditions in the financing markets. Another broadcaster, LIN TV Corp. had been exploring a sale but indicated on a recent earnings call that a sale may be delayed by the weakness in the debt markets, according to a research report by Bear Stearns analyst Victor Miller. A call to LIN was not immediately returned.

Despite the current turmoil, Bear Stearns thinks those two will be sold in 2008, and also thinks Cox Radio Inc.  should “more agressively repurchase shares or lever itself and go private”.

Clear Channel Communications Inc. is another stock that’s been beaten up a bit lately. Shareholders are due to vote on a $39.20 a share buyout in September while the stock is trading at $34.83. ”We believe … a renegotiation of the price seems unlikely given that that has occurred twice already,” wrote Bear Stearns, which has the company as a one of its three top broadcast stock picks.

Bear Stearns points out that while the Nasdaq has fallen 6 percent from recent peak levels, broadcast stocks have fallen 32 percent with leveraged and/or deal-tinged broadcast stocks particularly hurt.

Maybe the picture for TV won’t be in tune until the finance markets stop trembling? 

After taking more than a year to put the finishing touches on its fifth private equity fund, Blackstone Group President and COO Hamilton James said on Monday’s quarterly earnings conference call that the firm is in fund raising mode again. Again? But the fund, known as Blackstone Capital Partners V, just closed on Aug. 8 at $21.7 billion. How is this possible?

Well, for one, Blackstone closed the fund last summer, and reopened it when it wanted to raise more money. In the meantime they did some huge leveraged buyouts, leading James to reveal on Monday that the fund that they just finished raising, is almost fully invested.
     
“In terms of fundraising, we added 1.1 billion to our assets under management and finalized closing BCP V at $21.7 billion; it is the largest fund in history,” James said on the call. “And it’s already 70 percent invested. It’s our typical practice to start raising a new fund when we get to be about three-quarters invested. So that’s something we anticipate doing shortly.”
     
The long history of BCP V’s opening and closing shows how willing institutional investors have been to shell out money to private equity firms, and just how determined Blackstone CEO Stephen Schwarzman was to holding the title of the world’s largest LBO fund.

Blackstone sent a formal press release on July 11, 2006 titled “Blackstone Private Equity Fund Closes on $15.6 billion.” But the firm quickly re-opened the fund, when it became clear that Texas Pacific Group and Kohlberg Kravis Roberts & Co. were raising buyout funds likely to top Blackstone’s. Blackstone was expected to push its fund total up to $20 billion. 
     
Sure, Blackstone recognized LP demand was there, and opened the fund raising door again while the LBO market was red-hot. But it’s no secret that Blackstone’s founder and CEO is extremely competitive, and very much wanted bragging rights to the world’s largest buyout fund. That title was in jeopardy when Goldman Sachs announced it was raising a $20 billion to $21 billion LBO fund in March. Blackstone’s S-1 filing before its June IPO said its private equity fund was up to $19 billion, still shy of Goldman’s target. 
     
Now Blackstone has officially closed its fund and it’s nearly all invested. Blackstone deals that used some of that money include the $17.6 billion deal for Freescale Semiconductor, the $10.9 billion deal for Biomet and the $26 billion deal for Hilton Hotels.

So if KKR’s fund closes at $22 billion, will Blackstone re-open its fund raising?

(Photo: Hamilton James, Reuters file)

It’s funny how words change in meaning. A 1990 fashion headline tells us, Givenchy and Valentino Revel in Luxury. Now, the 2007 photo caption below informs us, Revellers wrestle in chocolate…

I started noticing a couple of months ago that every news photo caption we had from the running of the bulls in Pamplona contained the word revellers, even when folks were about to revel under a bull’s hoofprint stamped on their faces.

I did a caption search and found 200 shots of revellers from the past 90 days, mostly of people wallowing in mud, beer, foam, wine, sweat and worse. I don’t know, but it seems to me revelry was more fun back when you didn’t have to be hosed off afterwards.

Revellers wrestle in chocolate during the one-week, round-the-clock Sziget (’Island’) Music Festival on an island in the Danube river, in Budapest August 13, 2007. REUTERS/Laszlo Balogh

Add Cerberus Capital Management to the list of firms hit by the subrime mortgage meltdown. Its portfolio company Aegis Mortgage Corp. filed for bankruptcy on Monday. And Aegis isn’t Cerberus’ only bet on the mortgage industry. 

Before the subprime mess descended on the U.S. and abroad, H&R Block said in April it will sell its subprime lender Option One Mortgage Corp. to Cerberus for what analysts estimated would be around $700 million to $800 million. On Aug. 9, H&R Block said it might not complete the deal until the end of December. Block said at the time that its subprime mortgage unit planned to cut more jobs this year than the 615 announced in May.

As Reuters points out in a story that day:

    The company, which bought Irvine, California-based Option One in 1997 for $190 million, says the unit generated more than $2 billion in pretax income through the end of 2007 from making loans to home buyers with weaker credit.
    But the lender began bleeding money in the past year as U.S. subprime mortgage markets imploded. Housing prices slumped and loan defaults climbed.

Cerberus outside spokesman Peter Duda at Weber Shandwick didn’t return a call seeking comment or explanation about Aegis. Neither did JJ Rissi, also of Weber Shandwick. A call to the company’s “media line” went unanswered.

Cerberus has prided itself on flying below the radar to the point of secretive, as this recent Portfolio story of founder Stephen Feinberg points out. 

But if more of its portfolio companies keep hitting the skids, it will be tough for Feinberg to remain in the dark. That “secretive” has already been lifted by Cerberus’ agreement to buy Chrysler, another deal under pressure. Hence the title of the Portfolio article:     “The Most Dangerous Deal in America.”

(Image credit. Alison Smith, http://www.amosink.com/)

Blog Guy, recently you told about some people who go jousting for sport, but their concept was disappointing.

Have you found anyplace else were real armor enthusiasts can go to use their lance a lot?

You bet. Try Ukraine, where this time of year you’d swear it’s still the 14th century. We have a video report on the action, and you can see they mean business - one knight even takes off his helmet to show us the dents.

Um, he takes off his helmet?

D’oh! Paul Chapman reports:

Dear WSJ:

I have reached the end of my rope. My old bosses handed me over to an owner feared by many people in my industry. My new boss has ever greater demands that I cannot fathom or satisfy. Dare I walk out the door?

–Fed-up downtown

A hypothetical scenario of course. But when we read today’s well-written and persuasively argued “Cubicle Culture” column in today’s Wall Street Journal, we couldn’t help but wonder what inspired the discussion of when is the right time to quit one’s job with drama and flourish. Maybe it was Karl Rove’s resignation interview with WSJ editorial page arbiter Paul Gigot? Or something else? Below we cite a few favorite anecdotes from the story:

Anne Marie McClaran “had thought about quitting before, but fear had held her back. Still, after 10 years on the job, she had migraines and neck aches and was frequently irritable. ‘It doesn’t do me any good to have a secure future if I don’t have any future,’ she says. So even though she had no savings-account cushion, she walked into her boss’s office and quit.”

“Tim Orr, an ad executive who spent six years in a job he couldn’t stand before ultimately becoming self-employed. ‘I know full well I could always have tried just a little bit harder.’ …  He even read books on psychological disorders in an effort to decode his boss.”

“One of John Westropp’s former managers demanded that he accomplish many tasks under an unrealistic deadline, setting him up for failure. Effectively, he says, he was asked ‘to sequence a DNA sample from my left arm within 24 hours.’”

There is no doubt that some of our best conflict photojournalists are locals who have had the story thrust upon them. They are often highly sophisticated individuals who in happier times would be pursuing careers in business, teaching, law or whatever. They have the language, local knowledge and contacts, experience and street smarts to enable them to operate and survive. Anybody coming in from outside has to be able to at least match this with an equivalent contribution. In a conflict zone or a disaster area anyone who is not effectively reporting the story is in the way, an unnecessary drain on scarce resources and a potential threat to themselves and their colleagues.

No picture is worth a human life. The challenge is judging just how far to push the limits and still be able to go back and do it again the next day and the next. Even those operating in “embeds” should undertake basic hazardous environment and first aid training. Languages too are very, very useful. Even so too many clever, well prepared photojournalists without a reckless bone in their bodies have already died just doing their jobs.

Physical location is also important. Unless you have a local story which can provide you with a living there is no point in kidding yourself that you can live in the Scottish Highlands and commute to London for work. If the story and the market are in Tokyo, go to Tokyo.

In practical terms experience generally wins out over qualifications. Photographic qualifications may equip the wannabe with a structure on which to build a career but  equipment alone does not make a top flight professional news photographer. Qualifications are a guide but they are by no means a guarantee and it is the pictures that count.

The maintenance of high professional standards does not mean you have to sacrifice yourself on the altar of technology. Adapt. Embrace new technology, master it, exploit it. If you get bored, reinvent yourself and the rules by which you operate. Don’t be a one trick pony. If you have a style develop it and when there is nowhere else to go with it do something else, don’t stand still. Experiment, take risks with your pictures.
 
Don’t be a victim, be a consumer - consumers have rights, if you see media which use pictures badly then complain, threaten to withdraw your readership, better still offer to do better.

“Citizen journalism” isn’t a threat to professional news photography, it is just another potential source of images in an ever more image hungry world. I have no doubt that the business will continue to rationalise as stills from video becomes the norm for routine press conferences and the like but video does not tend to produce the same kind of interpretive images that still photographers do and as long as we have something unique to offer there will be a market for it.

Despite the doom and gloom this is a real and thriving business. Come on in, the water’s lovely!

Imperious Woods seals 13th major title

Have your headline writer look up the word imperious in the dictionary Obviously he/she did not know the meaning of the word.

Mr. S.

Several readers objected to this headline. One definition of imperious is befitting or characteristic of one of eminent rank or attainments: commanding, dominant. The idea was to convey the image of Woods as the commanding or superior golfer of his generation. However, considering that another definition is domineering in a haughty manner; dictatorial, and that synonyms include words such as arrogant, autocratic, despotic, dictatorial, oppressive, overbearing, tyrannical… we probably could have chosen a better word: GBU Editor

REUTERS photo by Eric Miller

The photo taken by a Reuters photographer of maintenence on Big Ben would make a wonderful jigsaw puzzle!!! Let me know when it happens.

Debbie M.

Okay: GBU Editor

REUTERS photo by Stephen Hird

Should you define your own death?

By Tom Heneghan

WASHINGTON (Reuters) - Robert Veatch weighs his words carefully when he talks about how people pass away. Most simply die. Some “become dead”. Others are “made dead”.

Tom Heneghan’s article on the morals and ethics of when to let a terminally ill patient die was very well written. My father just died of Alzheimer’s at the age of 62, and every member of my family struggled with that unnatural decision. We watched him slowly lose brain function until he ultimately forgot how to swallow and then breathe. Hollywood generally paints a very false view of death as people just “pass away.” Death is unfortunately a very real and too often a very drawn out process.

Thank you for writing about a problem too much of America doesn’t think about until it is too late.

Reif B.