Is Conan O’Brien a $40 million bailout recipient?

January 20, 2010

By Rolfe Winkler

Conan O’Brien is expected to receive some $40 million for leaving NBC, the media unit of General Electric, itself among the largest recipients of taxpayer help. While it would be a stretch to compare the late-night talk show host to a Goldman Sachs or Citigroup banker, he’s arguably only a few steps removed.

Though conglomerate wasn’t a recipient of direct equity aid from the Troubled Asset Relief Program, GE availed itself of perhaps an equally important bailout facility, the Temporary Liquidity Guarantee Program overseen by the Federal Deposit Insurance Corp.

Participants in this scheme were able to issue debt with a government guarantee, receiving explicit taxpayer backing in the event of default. Though GE was just one of 88 firms with outstanding Uncle Sam backed debt as of October 31, its $60 billion of issuance accounted for nearly a fifth of the total.

Unlike some of the banks that received direct equity injections from the government, GE can argue it does not deserve the same scrutiny over compensation that has bedeviled financial companies including Citigroup, Goldman and American International Group.

But without the FDIC’s largess, the group’s troubled financial arm, GE Capital, would have struggled to fund its $650 billion balance sheet. That, in turn, could have forced its parent to liquidate assets, starting with NBC. In a truly worst-case scenario, GE might have even had to seek protection from its creditors.

Had GE been forced to dump NBC in a fire-sale, new owners could have demanded changes to contracts like Mr. O’Brien’s. True, that’s not the same as, say, a Citi banker fighting for a bonus after the government clearly bailed out the bank. But it’s only a few steps removed. So a bit of thanks to taxpayers from Mr. O’Brien may be in order.


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This wasn’t one of your best articles, Rolfe – almost as fact-free, lowbrow and unfunny as a Jay Leno monologue.

Posted by HBC | Report as abusive

HBC, you are reading too much into this. Rolfe, today on ‘Upcoming on Reuters\':

Bank of America earnings; Starbucks earnings; American Express earnings; Goldman Sachs earnings; Google earnings; McDonald’s earnings; General Electric earnings; Apple earnings; Johnson & Johnson earnings.

Phew ! ‘bedeviled’ combinations ! 2 to the power of 9 at least. Do I need to go into figures of speech, except the last one – I hope they still sell nappies, because the $#!+ is going to hit the respective fans this week. Crimson Friday, 22nd January 2010.

Posted by Ghandiolfini | Report as abusive

What I find remarkable about all these 30-something journalists, aside from their arrogance and know-it-all attitude is the way in which they pick up on concepts, like ‘bubbles’ or ‘bailouts’, and use those concepts to explain EVERYTHING. Like it’s the first time these things ever happened. Older readers like myself realize it isn’t that black-and-white out there. Perhaps when these recently-graduated pundits get a few decades behind them they can speak with a bit of the knowledge and authority they now so obviously lack.

Posted by Gotthardbahn | Report as abusive

Americans today are unwilling to look at cause and affect in nearly every aspect of their lives, it doesn’t surprise me that they cannot connect the dots on this one.

Felix has a valid point. Of course this logic is ridiculed and under appreciated because investors are closely acquainted with the US Govt acting as their nanny who is willing to change their diaper whenever they begin to realize the financial system is near breaching the edge of the financial abyss due after a few decades of deregulation.

This fact is of course under appreciated by nearly every American who owns stock. After all US dollars are practically free and who places a value on something that is essentially free. Certainly not the crowd who believes the US Government will support their foolish investments allowing them to push their debt payments onto future generations, below 0 interest rate loans, integrity.

Felix, the biggest bailout was not the various ill conceived financial institutions but the US taxpayer. When you take responsibility of a child, beyond providing them with food shelter and clothing is that you must teach them to walk upright. The US investor is far from being independent enough to walk upright.

Posted by csodak | Report as abusive

Sorry Wolfe to confuse you with Felix. Although I enjoy reading each of your posts.

Posted by csodak | Report as abusive

Poorly written article. Conan owes the tax payers a thank you because NBC owes him money??? You were in over your head on this one kid.

Posted by Phantus | Report as abusive

[…] — Conan O’Brien, federal bailout beneficiary: Rolfe Winkler makes the case. […]

Posted by Morning Money Links: FHA tightens loan rules; Buffett hates Obama’s bank tax; sovereign bond default jitters rise – Automotive Magazine | Report as abusive

Wow this article is really bad. It totally ignores legal realities. Any buyer of NBC would be forced to assume Conan’s contract as-is, unless NBC itself was in bankruptcy instead of its parent company. This is just populist drivel really.

Posted by thebclaw | Report as abusive