Category: Business

How Cities Go Bankrupt

Wondering how a thriving city can go bankrupt? Reuters has a report on San Bernardino’s “decades-long journey from prosperous, middle-class community to bankrupt, crime-ridden, foreclosure-blighted basket case.” Read it and learn all about the incremental steps that inexorably pulled San Bernardino into the financial and experiential depths.

Disney bought “Star Wars,” will make more “Star Wars” movies

I’ve been mildly busy with all things Hurricane Sandy (by which I mean “reporting on Hurricane Sandy,” and also not having power, and so obviously I hope everyone suffering to whatever degree from the storm is doing as well as possible) (I am sure you are now 100 percent okay, now that someone wished you well on a blog), but anyway I had to note this craziness: George Lucas sold Lucasfilm to Disney for $4 billion dollars.

Under the deal, Disney will acquire ownership of Lucasfilm, a leader in entertainment, innovation and technology, including its massively popular and “evergreen” Star Wars franchise and its operating businesses in live action film production, consumer products, animation, visual effects, and audio post production. Disney will also acquire the substantial portfolio of cutting-edge entertainment technologies that have kept audiences enthralled for many years. Lucasfilm, headquartered in San Francisco, operates under the names Lucasfilm Ltd., LucasArts, Industrial Light & Magic, and Skywalker Sound, and the present intent is for Lucasfilm employees to remain in their current locations.

There are three major components to consider here. First, the “Star Wars” angle, which I will return to in a moment, which in hindsight makes it kind of silly that I listed it first but whatever, moving on. Also, there’s the ILM/Skywalker Sound angle, which means Disney just acquired the visual effects goliath responsible for the spectacle you saw in “Jurassic Park,” the “Pirates of the Caribbean” movies and, obviously, the “Star Wars” films.

The “Star Wars” thing is the biggest part of this whole story, because of this: Continue reading

The Bubble

Chrystia Freeland wrote a very interesting story for the New Yorker recently about the bizarre disdain so many of the super-rich feel toward President Obama. (That was the story where a billionaire said he would accept higher tax rates, but only “if he was treated with respect, and the government didn’t squander his money.” Just like how you get to decide what kind of taxes you want to pay, based on your particular feelings w/r/t the government, any imagined victimization and, pivotally, where your money winds up going. You know, it’s much how if you, Average Person, are opposed to wars, you can just say you think spending money on wars is squandering your money, and your tax rates might decrease. Like magic!)

Anyway, Freeland, editor of Thomson Reuters Digital, wrote a new book about the rise of the extraordinarily wealthy (as opposed to the merely rich) called “Plutocrats.” Reuters has an excerpt here.

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Forbes has another list of the highest-paid people in some field or other

Forbes, a biweekly pamphlet dedicated to ranking people in any given field based on their earnings, is back with another one of their wacky lists. Remember last time, when they told us about the highest-paid DJs in the world, and it was such a massively important list that it sparked a front page New York Times story and there were days of conversations about it on cable news networks and you and your family had a whole sit down discussion about how you felt about The List, and the discussion got so heated and angry that you and your sister haven’t even talked since? It’s like that, only with more Dr. Dre.

The most interesting thing about this new list — aside from how blatant it is in whoring for pageviews (and it is, this list is definitely out on the corner at the intersection of Blatant and Whoring) — is how all of our favorite people are on it. There’s Simon Cowell and Tyler Perry and Glenn Beck and there’s even Dr. Phil, too! It’s just a great list of great people who all deserve their money.

I’m more interested in how they define “celebrity.” (Previous lists have at least been more explicitly about “Top-Earning Male Sitcom Stars” or some nonsense.) The list is specifically about “Highest-Paid Celebrities,” right? So how does one define the word? Is Warren Buffet a celebrity? How about Mitt Romney? These are famous people who have lots of money. The list actually seems to be “The Highest-Paid Celebrities (Measuring Only The Last Year),” which is fine if that’s what it is, but maybe just call it that next time? Because otherwise we might start to suspect that Forbes barely cares about these lists, and that they just slap together slideshows with the flimsiest of premises solely in the hopes of drawing in as many eyeballs as possible.

NBC up and refuses to save $26 million a year

Scott Collins of the L.A. Times has more on the struggles faced by “The Tonight Show” and, of course, NBC. You’ll recall that “The Tonight Show” recently laid off at least 20 staff members, with Jay Leno nobly taking a relatively minor pay cut to save some jobs.

Collins’s story is about “The Tonight Show’s” ratings slide, the ever-increasing competition in late night and NBC’s various NBC-ish missteps. There’s also this nugget about Leno’s pay cut, and how he wanted to do even more:

Leno even offered to work for free to save more jobs, according to people familiar with the matter, who said the offer was rejected because executives believed it would set a bad precedent. These people said “Tonight” was now barely breaking even.

Bull. Shit. I do not know all of the facts, nor do I know the thought process at work here, nor do I know any particular details about NBC’s current financial situation. But I feel 100 percent confident in saying that there is zero chance (none, no chance) that a television network had the option of a star working for free, saving them tens of millions of dollars a year, and they turned it down. Continue reading

Forbes has today’s big news (?) about the highest-paid DJs in the world

I really want to know what has become of Forbes. Not Steve Forbes, the guy, nor Forbes, the magazine. (I don’t really care about the status of either of those entities.) I want to know what happened to Forbes, the Web concern that should, ideally, devote itself to covering the various minutiae of the financial world (or, at the very least, giving out terrible investment advice). Does it do some of this? Sure, maybe, I don’t know. Like most people, I only ever hear about Forbes.com when they publish some slideshow-bait list that somehow garners gobs of attention.

It feels like every few days, we hear ALL about someone being named the highest-paid something or other. And every single time, this BIG NEWS is reported all over the place, because “Sofia Vergara is the highest-paid actress on TV” is just the kind of important information that everyone simply has to hear (even if that list should really be called “Sofia Vergara is the highest-paid female television actor if you also account for endorsements and clothing lines and other revenue, and also Kim Kardashian is on this list because the phrase ‘actress on television’ has no meaning,” or maybe something pithier).

Does Forbes.com do anything other than crunch the numbers about who is the highest paid this or that? I do not believe that it does. But that’s okay, because that is how we get BREAKING IMPORTANT NEWS about the highest-paid DJs in the world. Do you want to know how high Skillrex ranks? You do not want to know, because it would make you want to drink bleach. All you need to know is that Pauly D, star of acclaimed PBS docuseries “Jersey Shore,” is on the list. Now you know. But who are the highest-paid television actors with freckles? Keep an eye on Forbes.com for the shocking list/photo gallery!

Offshore Bank Accounts and Companies

For some reason that I can’t figure out (jkjk, politcs), there is a lot of chatter right now about offshore companies and bank accounts. The Planet Money folks explored this by setting up a company and finding the easiest place to register the business anonymously. And you should also read about Adam Davidson’s attempt to set up an offshore bank account (establishing it is easy, while managing the account is considerably more complex and costly, he finds). These are just things you need to know for when you eventually set up your own offshore bank account, unless you have already established yours, in which case you probably didn’t even need to read this post.

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News Corp. might split its publishing and entertainment businesses

This could be very interesting: News Corp. is considering splitting its publishing and entertainment divisions into two separate businesses, according to the Wall Street Journal (a News Corp. publication). The split would create an entertainment company including 20th Century Fox, the Fox and Fox News stations and its other film and television endeavors, while also creating a smaller publishing business built around HarperCollins and News Corp.’s various newspapers.

The logic behind such a move is obvious. News Corp. is a phenomenally successful entertainment company, with lots of success in film and on television (financial successes, at least); it is also a company that happens to publish newspapers, which are a relative financial drag. Rupert Murdoch famously loves newspapers and loves publishing them, and the Journal reports that he is finally pondering a split after opposing such a move for years.

One has to wonder (I’m wondering, specifically, I am the one who is wondering) if his sudden interest in this stems from the phone-hacking scandal, which centered on News Corp.’s publications and its management of the same. I’m also very curious if this story is being leaked just to gauge how investors feel about the idea now that the dust has settled somewhat on the phone-hacking. If so, I wonder how they will react and what will happen next.