‘Take Me out to the Racetrack?’
The bulk of our conversations at the Reuters Global Real Estate and Infrastructure Summit deal with, well, real estate and infrastructure. On Tuesday, however, we got onto the subject of horse racing. Our guest was Gregory Cross, a lawyer at Venable LLP. He is the head of Venable’s bankruptcy practice and represented the state of Maryland, a creditor of Magna Entertainment Corp, which runs the Pimlico Race Course in Baltimore and its famous Preakness Stakes horse race and filed for bankruptcy in 2009.
We asked Cross what could help ailing racetracks improve their financial performance. His answer? A little less Damon Runyon and Dick Francis, and a little more Black Stallion and National Velvet — crossed with Field of Dreams.
“Frankly, I think if you had a track and made it more of an environment where people could go with their kids and sit in the box where it’s like a baseball game and it’s a festive event, I think they could market it,” Cross said.
Now that’s something we can get behind. The kids can learn crucial numbers skills and acquire a more diverse vocabulary, not to mention handy terms like, “boxed bet” and “breakage.” And don’t forget, parents, you can build a whole atmosphere of fun around taking the kids to the track — you can even start at home with fun introductory movies like, “The Long Good Friday” (yes, it’s dog racing, not horse racing, but you get the picture) and “The Grifters.”
(Photo: Reuters)
LeFrak: We’ve been bunting for years
Watch out for Richard LeFrak when he’s at bat and you’re in the outfield. He has a tendency to bunt.
This is a funny baseball technique to use when most executives spend their time trying their best to hit home runs, but LeFrak Organization‘s chairman, president and CEO says it’s worked for his real estate empire, so there’s no need to stop now. When we asked him at our Reuters Global Real Estate Summit why his company didn’t borrow a ton of money during the real estate boom, he said:
We did not want to be seduced by market conditions. My children like to kid me — Every time you get up to the plate, you bunt, and we’ve been bunting successfully for a hundred years. As a result, I’m not interested in changing the methodology that’s worked so successfully.
LeFrak, grandson of Harry LeFrak, who started the company in 1901, took a similarly cautious approach to resort hotels, which he also talked about at his summit appearance on Monday in New York City:
It’s way out on the risk curve. … It sounds glamorous, but boy, you gotta have a strong stomach for that. It depends on a lot of discretionary spending –- corporations willing to step up and do outings and have meetings in places that may or may not be looked favorably on by their shareholders… The whole notion of saying, “I’m going to take my top producers to Hawaii” may not be, let’s say, that robust.
LeFrak talked about meeting people who’d built big luxury resorts on Caribbean islands like Anguilla, including some places that might not always have up-to-date infrastructure, like an airport that can handle moving lots of people onto and off the island.
When you ask, how do people get here, they shrug their shoulders. There’s opportunity in that space, but it would be a departure from the way I would like to think and how our executives like to think about how we would spend our money.
Hungary, Eastern Europe debt fears gnaw at euro
NEW YORK (Reuters) – The possibility of a Hungarian debt crisis pushed the euro to a four-year low against the dollar on Friday and reignited fears more Eastern European nations could reveal financial frailties.
The new Hungarian government spooked investors and knocked more than 2 percent off its currency, the forint, versus the euro, after a prime minister’s spokesman said he supported the view the country had only a slim chance of avoiding the kind of debt crisis that plunged Greece into financial instability.
“In Hungary the previous government falsified data. In Greece, they also falsified data. In Greece the moment of truth has arrived. Hungary is still before that,” said Prime Minister Viktor Orban’s spokesman Peter Szijjarto at a news conference.
The central bank rushed to reassure investors Hungary’s budget was sustainable. It said it had an account surplus and that external financing capacity should remain positive in the next two years.
The bank also said Hungary’s deficit could be 4.5 percent of GDP, while analysts see a deficit of 5 percent . Both are above the target of 3.8 percent.
Worries about Hungary have reignited market concern over the fiscal health of Eastern European nations, though many analysts believe the region’s sound economic fundamentals would prevent a Greek-style debt crisis.
“The market fears another Greece situation … Fear is taking its toll,” said Marc Chandler, analyst at Brown Brothers Harriman.
Washington Post fields several bids for Newsweek
NEW YORK (Reuters) – At least four interested parties appear to have submitted bids for Newsweek, the magazine that The Washington Post Co put up for sale on May 5.
Newsmax Media and Thane Ritchie, chief executive of Ritchie Capital Management, said they submitted bids. Private equity firm OpenGate Capital and Sidney Harman, the founder of audio equipment company Harman International Industries Inc, have expressed interest in the weekly news magazine, according to the New York Times.
Thomson Reuters Corp, which runs the Reuters news service and was reportedly interested, did not submit a formal bid this week, according to a company spokeswoman.
The Washington Post declined to comment. It put Newsweek on the block, citing several years of losses it expects will continue through this year. The first round of nonbinding bids were due on Wednesday.
Christopher Ruddy, the founder and CEO of the conservative Newsmax magazine and website, said he is attracted to Newsweek’s “incredibly powerful brand” and its media personalities.
“I wouldn’t bother with it if I didn’t think it was valuable,” he said.
Ruddy declined to give the financial specifics of the bid.
Tribune gets creditor agreement on bankruptcy exit
NEW YORK, April 8 (Reuters) – U.S. newspaper publisher Tribune Co said on Thursday it has agreed with creditors on a plan that would help it exit bankruptcy protection later this year.
The publisher of the Chicago Tribune and Los Angeles Times, which filed for bankruptcy protection in December 2008, said it reached a deal with major creditors and lenders including JPMorgan Chase & Co <JPM.N>, Angelo Gordon, Centerbridge Partners and its Official Committee of Unsecured Creditors.
“Under the plan, the company would emerge from bankruptcy, significantly deleveraged, with its business units intact and with adequate liquidity for operating and capital needs,” Tribune said in a statement.
The company’s senior credit facility lenders would control 91 percent of the stock of the reorganized company and senior noteholders would receive a combination of cash, debt and stock to repay their claims.
The agreement also settles all potential claims stemming from the $8.2 billion Tribune leveraged buyout led by real estate developer Sam Zell in 2007, Tribune said in a statement.
The settlement does not have the support of a group of junior bondholders, according to their attorney Robert Stark of the law firm Brown Rudnick.
Represented by Wilmington Trust Co, the holders of $1.2 billion in Tribune debt have warned for months that the company would strike a deal like Thursday’s that would release Zell and lenders from any liability for the company’s collapse and the losses suffered by bond investors.
New York Times poaches Wall Street Journal spokesman Christie
Professional New York Times haters often fixate on the company’s seeming haplessness and its namesake newspaper’s flat-footed, delayed and defensive strategies for dealing with bad news, bad press and bad times for newspapers. Today the Times said it has hired Wall Street Journal spokesman Robert Christie, a move that could change this perception.
Christie, 40, has been the public voice of The Wall Street Journal through some of its most difficult moments in recent years. The most notable of those was when News Corp Chairman Rupert Murdoch decided that it and parent company Dow Jones would look good in his media menagerie and pried it from the hands of the Bancroft family with lots and lots of money as his WD-40. Christie, who joined Dow Jones in 2003, has been a staunch defender of the Journal’s reputation not only for the Bancroft family regime, but the Murdoch one too.
That’s what makes the Times’s move not just interesting, but cheeky. The Times has seen itself in media headlines in recent years more than it would like. Much of the recent ones herald stories about how Murdoch wants to destroy the Times in many of its big coverage areas, most recently by saying it will launch a New York City edition of the Journal. The Times under previous PR chief Catherine Mathis did its share of fighting off the dogs, but without her, the paper and its parent company under the Ochs-Sulzberger clan has looked at times like it’s quietly quaking before the Murdoch onslaught while publicly ignoring the barbarians at the gate. Christie has been part of that assault, thanks to his role at the Journal, and now that the Times has had a chance to appreciate what he has to offer, they’ve decided to buy.
Unlike the way things operate at the Times, Christie often jumps in front of a story rather than hiding. Part of why I worked well with him when I covered media full time is because he also didn’t try to pretend that bad news didn’t exist. It would have been interesting to see him handle the case of Zachery Kouwe, the New York Times reporter who reportedly plagiarized stories from the Journal, Reuters, Dealbreaker and other news outlets. I suspect that Christie would not have refused to comment on Kouwe, even to the point of refusing to say whether he was leaving the paper. The Times at the time said it did not discuss personnel issues, something that obviously is not true. If you go by the official record, Kouwe must still work there, something we also know is obviously not true.
With Christie at the PR helm, the Times might try to tell its own story in a more active way. That’s a big deal when there is so much news that the Times could produce: What will happen to the Boston Red Sox stake that they own? How will its relationship with Mexican billionaire and big Times investor Carlos Slim shake out? On a deeper level, how is the Times going to survive the slow death of the business that its been in since 1851? My educated guess is that Christie knows how to get Chairman Arthur Sulzberger Jr and Chief Executive Janet Robinson to make their case in honest, yet polished ways.
Thomson Reuters sees 2010 revenue flat to slightly down
NEW YORK (Reuters) – Thomson Reuters Corp <TRI.TO> <TRI.N> reported a lower quarterly profit and signaled that cutbacks by financial customers last year would continue to hurt revenue in 2010, sending its shares down 2 percent.
But the company also said net sales were positive in the fourth quarter, and it forecast a return to revenue growth in the second half of 2010. The impact of net sales on revenue is delayed because of the company’s subscription model.
“We’ve already seen the net sales picture improve significantly through the last quarter and into the first quarter of this year,” Chief Executive Thomas Glocer said in an interview.
The company forecast 2010 revenue to be flat or slightly lower, and underlying free cash flow to be slightly down from 2009 as it continues to invest in new products and platforms.
Fourth-quarter underlying profit fell 16 percent to $661 million. Adjusted earnings per share slipped to 44 cents from 50 cents a year earlier, but this was a cent above the average Wall Street estimate, according to Thomson Reuters I/B/E/S.
Revenue from ongoing businesses, rose 1 percent to $3.35 billion, versus the average analyst forecast of $3.32 billion.
Excluding the impact of foreign exchange rates, revenue fell 3 percent.
Learned that News Corp’s departing flack chief Gary Ginsberg’s list of reporters he’d deal with “definitely does NOT” include Reuters.
Editor & Publisher to get new owner
NEW YORK (Reuters) – Editor & Publisher, chronicler of the U.S. newspaper business for more than a century, will live again after being shut down two weeks ago.
E&P, as journalists often call it, will resume publication after being sold to boating magazine publisher Duncan McIntosh, it confirmed on its website after Reuters reported the news.
The announcement came two weeks after Nielsen Co shut down the “bible of the newspaper industry” — as it called itself on its website — because of financial difficulties.
Current owner Nielsen Co closed the magazine and related website two weeks ago after agreeing to sell its Nielsen Business Media unit to a new company called e5 Global Media, formed by private equity company Pluribus Capital Management and Guggenheim Partners.
Editor & Publisher’s own publisher, Charles McKeown, will keep his job, the website reported. Twenty-six-year veteran Mark Fitzgerald will be the new editor, the site said. He replaces Greg Mitchell.
Editor & Publisher closed after suffering the same financial difficulties as the U.S. newspapers it covered. Ad revenue and a drift of readers to the Internet have hurt nearly every U.S. newspaper publisher.
Duncan McIntosh Co Inc publishes magazines such as Boating World and FishRap. The company did not disclose terms of the transaction.
Gannett, NY Times rise on analyst holiday gift
NEW YORK (Reuters) – Dear newspapers: Happy holidays. Love, Wall Street.
The stocks of Gannett Co Inc and New York Times Co, two of the best-known U.S. newspaper publishers, rose on Wednesday after an influential media analyst raised his ratings and profit forecasts on the companies.
“After years of downward revenue estimate revisions, it appears as though the newspaper ad market is improving more quickly than we previously anticipated,” Wells Fargo analyst John Janedis wrote in a research note for his clients.
Gannett shares rose 78 cents, or 5.4 percent, to $15.19 in early trading on the New York Stock Exchange. New York Times shares rose 68 cents, or 6.2 percent, to $11.71 on the NYSE.
The gains cap a year that made even some of the most stalwart newspaper investors queasy. Gannett traded as low as $1.86 in March, while the Times skidded to $3.44.
Those lows would have been rays of light for peers like McClatchy Co, whose shares hit a low of 35 cents last March and rose 2.0 percent to $3.62 on Wednesday. Many publishers saw their stock values vaporize because of the recession, frozen debt markets and an increasing sense that newspapers are a dying business.
At the same time, many media experts, debt analysts and bloggers who write about how much they hate dying, biased newspapers wrote that the Times and Gannett both were wobbling on their debt and potentially faced default or insolvency.
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