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To Recount the Financial Implosion, a Magazine Turns to Film

September 8, 2013 by

We learn that after Mr. Paulson, known as Hank, left office, he found it “painful” that polls showed that the Troubled Asset Relief Program he put together to buy distressed assets was more unpopular than torture. Mr. Paulson also discloses that after the situation had been somewhat stabilized and Citibank suddenly began to wobble, his response was, “Holy moly, although I used a different word than that. How could this be happening?”

The biggest surprise may be who was behind the documentary: Bloomberg Businessweek. Josh Tyrangiel, the magazine’s editor, approached Mr. Paulson and asked him to consider appearing in a film centered on the anniversary of the crisis and his role in trying to contain it. The magazine then approached Joe Berlinger, the Oscar-nominated director of “Brother’s Keeper,” “Crude” and the “Paradise Lost” series, to direct the project. And once those commitments were made, the magazine was able to sell the documentary to Netflix for exclusive distribution.

The documentary will have its premiere on Thursday at an event that will include a panel with Mr. Paulson and Mayor Michael R. Bloomberg of New York — his first appearance at an event for the magazine — and signals a coup for Businessweek.

Using news clips from that time and recollections from Mr. Paulson, the film tries to invoke the suspense and high anxiety of the summer and fall of 2008 when Lehman Brothers went out of business, Bank of America acquired Merrill Lynch in a fire sale and the federal government took over Fannie Mae and Freddie Mac.

Mr. Tyrangiel’s pursuit of Mr. Paulson began a year ago, when he took Mr. Paulson to lunch at BLT Steak. “I told him that the first draft of history closes after five years and this was an opportunity to be clear about why he did what he did and discuss the kind of emotions that he went through,” Mr. Tyrangiel said.

“I think that we have done a good job at the magazine of building up credibility, but we wanted to stretch that credibility into other forms of media,” he added.

Mr. Paulson wrote a book about the crisis in 2010, “On the Brink,” that was recently updated and reissued with a new prologue. He said he was initially doubtful about the film project.

“I had no intention of doing a documentary when Josh approached us and was very hesitant, but he was a good salesman,” he said. “I have been concerned that the passage of time would reduce the sense of urgency around reform.”

Eventually, though, he became convinced that a film might convey the story of that period in new and different ways.

Mr. Paulson said that other than his monotone speaking voice, which he makes fun of in the documentary, he was happy with Mr. Berlinger’s finished product. “I believe it does what it set out to do,” he said.

The film, which includes extensive interviews with Mr. Paulson’s wife, Wendy, will do little to satisfy Mr. Paulson’s critics, who believe that he propped up Wall Street at the expense of Main Street.

He did end up persuading one skeptic, Mr. Berlinger, the director, that the extraordinary measures he took were necessary.

“My last movie was ‘Crude,’ ” which was not exactly a pro-business movie,” said Mr. Berlinger, referring to his 2009 documentary about the battle over industrial pollution in the Amazon jungles. “I was very skeptical, but I came to believe that Hank was a national hero for his handling of the crisis.”

Mr. Berlinger said he was taken by the fact that Mr. Paulson got Congress to act not once, but twice, to save the financial system.

Mr. Tyrangiel said the deal with Netflix for the film was not indicative of a whole new line of business for Businessweek, but “the attention economy is so competitive and an anniversary has a way of focusing the mind.”

“By having Hank, who is an authentic guy, look into the camera and tell his story, we brought something significant to the anniversary,” he added.

The film’s premiere will be accompanied by an issue of the magazine that focuses exclusively on the anniversary. Daniel L. Doctoroff, the chief executive of Bloomberg, said the film “is not going to move the needle on the economics of the magazine, but we had a broader purpose.” He added, “The best way to tell a story is not the way that you have always told it and the film, and the partnership with Netflix, will help broaden our audience with business and financial influencers.”

In the film, Mr. Paulson acknowledges that some of the fixes, including further consolidation in the banking industry and the growth of government as the primary insurer of mortgages, may sow the seeds of the next crisis, which he sees as “unavoidable” in a free market. But the documentary did give Mr. Paulson the opportunity to strike back at the Wall Street banks that took bailout money, failed to make loans, but paid their leaders huge bonuses.

Near the end of the film, he said he was “infuriated” by the bonuses.

“Forgetting about whether they were legally entitled to them,” he said, “it just was such a graceless lack of self-awareness.”

Article source: http://www.nytimes.com/2013/09/09/business/media/to-recount-the-financial-implosion-a-magazine-turns-to-film.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

U.S. Denounces Vietnam’s New Limits on Dissent on Internet

August 6, 2013 by

The decree, announced last Wednesday and scheduled to go into force on Sept. 1, states that personal blogs and social media sites “should be used to provide and exchange information of that individual only.”

In a statement, the American Embassy in Hanoi said that the new rule, called Decree 72, “appears to be inconsistent with Vietnam’s obligations under the International Covenant on Civil and Political Rights, as well as its commitments under the Universal Declaration of Human Rights.”

Vietnam has received some praise over the last year from human rights activists as it has begun drafting a new constitution that addresses civil liberties and religious tolerance.

But like other Asian nations, particularly China, it is grappling with how to handle the widespread adoption of social media by its citizens — and its ability to broadly disseminate articles critical of the government.

It was unclear how the government would enforce the new ruling. In China, articles critical of the government are routinely disseminated on social media but then often swiftly removed, and searches for certain sensitive words or phrases are often blocked, creating a game of cat and mouse in which users try to outsmart the censors.

Hoang Vinh Bao, head of Vietnam’s Department of Radio, TV and Electronic Information, was quoted by the state-run VnExpress news site as saying that under the new decree, individuals would not be allowed to quote general information “from newspapers, press agencies, or other state-owned Web sites.” But he later calibrated the remarks to suggest that the decree would limit only the way that information from other sources was reposted.

Reporters Without Borders, a free-press advocacy group, has assailed Decree 72 as a “gross violation of the right to inform and be informed.”

In its report this year on civil liberties in Vietnam, Human Rights Watch credited Vietnam by noting, “On the surface, private expression, public journalism and even political speech in Vietnam show signs of enhanced freedom.” But the group added that “there continues to be a subcurrent of state-sponsored repression and persecution of individuals whose speech crosses boundaries and addresses sensitive issues such as criticizing the state’s foreign policies in regards to China or questioning the monopoly power of the communist party.”

The American Embassy also raised alarms on Tuesday about new requirements that could force companies like Google and Facebook to comply with Vietnam’s censorship laws, banning them from “providing information that is against Vietnam, undermining national security, social order and national unity.”

The embassy said such a requirement would “limit the development of Vietnam’s budding IT sector by hampering domestic innovation and deterring foreign investment.”

Article source: http://www.nytimes.com/2013/08/07/world/asia/us-assails-new-limits-on-internet-in-vietnam.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

You’re the Boss Blog: The Risks of Expanding Into Australia, Part 2

March 21, 2013 by Leave a Comment
Sustainable Profits

The challenges of a waste-recycling business.

In my last post, I wrote about our plans to open our 22nd foreign office in Australia. We have checked the very important first few boxes in our process to conduct a successful foreign-office opening with limited risk and investment — including finding a general manager, Anna Minns, who will start drawing a salary as soon as we start invoicing. Most important, we have a few partnership deals that are close to closing.

Our partnership deals rely on major brands to finance our ability to take their non-recyclable waste — cigarette butts, chip bags, etc. We have incorporated, and we have our Australian bank accounts set up. In anticipation of the deals closing, we have identified operational partners — a warehouse, manufacturers, etc. — to help us run our recycling operations. Pending commitments from our partners, we plan to introduce TerraCycle Australia this summer from a new office in Sydney.

The big question is not whether we will open but how successful we will be. This will depend primarily on the people we hire and how well we manage and support them. I’ve found that a business model that works in a few countries generally works well in similar markets, and Australia is a similar market to the United States. Australians speak English, and the economy functions under Western principles. Perhaps the country most comparable to Australia is Canada, and Canada is often the first foreign market that an expanding American company will enter, typically followed by Britain.

The role of a general manager evolves dramatically in the first few years; unfortunately, only about half of our G.M.’s survive the transition. In the beginning, Anna will have to manage everything from operations to client relations. We support this by having a team of global leaders, based in our headquarters in Trenton, N.J., who manage each department globally.

That means Anna will get support from Michael, our global head of client management; Kevin, our global head of operations; and 10 other leaders on a department-by-department basis. Doing this gives us global cohesiveness and allows us to have multiple people overseeing our people and operations. There can be instances where a local G.M. may think everything is going well but our department head thinks otherwise. This redundancy is critical, especially when we are asking an individual to take on such a wide range of responsibilities.

In addition, we ask each team to submit detailed monthly reports. The reports are sent to every staff member and reviewed by the senior team on a monthly basis. Those notes are then forwarded to every other employee to make sure everyone knows how we are doing. By maximizing oversight and transparency, we are able to offer the best possible support to our local G.M.’s, and we can also keep track of what is happening in our far-flung markets.

That’s especially important because the role of the G.M. will change quickly for Anna as her business unit grows. As she brings on more partners, her budget will grow and she will be permitted to hire more employees. When this happens, her role will evolve from doing every function herself to managing a team.

We opened our office in Mexico in 2009, for example, and today it has 14 people. As you can imagine, the role of our G.M. in Mexico has changed dramatically in the past few years as the office has grown. The growth of the office was not a smooth ride — in fact, we changed G.M.’s four times.

Our first Mexican G.M. was terrific when he was working in Trenton but he struggled in Mexico — not everyone is cut out to work remotely. We then hired a young entrepreneur I had met while giving a talk in Hermosillo. He was 20 at the time, but I generally don’t worry too much about age (I started TerraCycle at 21 and am 31 today). But it turned out that getting a business off the ground and running it was too much for him, and we agreed that a transition would be appropriate. We went through one more G.M., who resigned because of the pressure, before we landed our current G.M., Isaac, who has done a fantastic job the past few years.

Hiring can be tricky for any position, but it’s especially tricky for a position that will evolve in a market that you may not fully understand. For me, the biggest lesson I have learned opening offices in 22 other countries is that the success or failure of a foreign office will be determined almost entirely by the abilities of the talent that you deploy there.

Tom Szaky is the chief executive of TerraCycle, which is based in Trenton.

Article source: http://boss.blogs.nytimes.com/2013/03/21/the-risks-of-expanding-into-australia-part-2/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

Europe Gives Greece Two More Years for Budget Cuts

November 13, 2012 by Leave a Comment

But the ministers put off until Nov. 20 any decision to give Greece a long-delayed payment worth $40 billion so international officials and national parliaments could continue to assess the steps that the government in Athens had agreed to make as a condition of two bailout packages totaling 240 billion euros, or $305 billion.

In a sign that fixing the Greek economy and the euro would continue to be a rancorous process even after three years of continuous crisis, Jean-Claude Juncker, the prime minister of Luxembourg, and Christine Lagarde, the managing director of the International Monetary Fund, publicly disagreed on how long to give Greece to make its debts sustainable into the next decade.

Mr. Juncker told reporters at a late-night news conference that Greece should now be given until 2022 to cut its debt to 120 percent of its gross domestic product. But Ms. Lagarde immediately met that assertion with incredulity, saying there was an urgent need to take steps sooner to ensure the country’s high external financing needs would be viable in the future.

“The appropriate timetable is 120 percent by 2020,” said Ms. Lagarde, who shook her head and rolled her eyes at Mr. Juncker’s comments. “We clearly have different views,” she said, adding that keeping to that goal was vital “so that that country can be back on its feet and reaccess the private market in due course.”

Speaking later in the news conference, Mr. Juncker insisted that his comment “was not a joke.”

Ms. Lagarde also was more cautious in her praise of progress made by the Greek authorities than other euro area officials, including Mr. Juncker.

“From the I.M.F.’s point of view, it’s critical that all chapters of the book be not only opened but closed satisfactorily — that means the fiscal commitments, the structural reforms, the financing and the debt sustainability analysis, which we will clearly come back to with additional work to be done in coming days,” Ms. Lagarde said.

Last week, Greece’s shaky coalition won a tight vote on a package of austerity measures and fiscal overhauls totaling 17 billion euros for the next four years.

Then, early on Monday, the Greek government pushed through Parliament a tough budget for 2013 that calls for cuts totaling 9.4 billion euros, or $12 billion, to salaries, pensions and social benefits, and that raised the retirement age to 67 from 65 and imposed higher taxes.

Those steps were a sign that “words have been backed by deeds,” Olli Rehn, the E.U. commissioner for economic and monetary union, told the same news conference.

“It is time to debunk the perception that no progress has been made,” said Mr. Rehn, referring to the structural reforms made by Greece. “This perception is damaging, it is unfair, and it is simply wrong.” Mr. Rehn gave as examples the way Greece had reformed disbursement of medicines and adjusted its pension system.

Failure to disburse the pending loan tranche to Greece could result in a chaotic exit from the euro and threaten the currency.

But obstacles to releasing that money remain. Even when ministers do give the green light for that disbursement, the decision still is subject to approval by a number of national parliaments.

Mr. Juncker said checking that those parliamentary approvals had been made could require finance ministers to hold a teleconference or meet in person at the end of the month in addition to their Nov. 20 meeting.

“Seriously, thoroughness is a must and before we decide, Germany’s Bundestag has to be involved, just like in other countries,” Wolfgang Schäuble, the German finance official, said earlier on Monday.

In Greece, promised reforms and budget cuts went off track in recent months, partly as a result of holding two elections in three months earlier this year. That left the government in Athens seeking more time to make reforms.

Yet relaxing the terms of agreement with Greece will cost more money for lenders and put leaders of big creditors like Germany in an awkward position with voters who have grown tired of bailing out others.

A draft copy of a report by the troika — the European Commission, the European Central Bank and the International Monetary Fund — that was circulating at the meeting said the bill for allowing Greece the additional time would be 32.6 billion euros.

Addressing lawmakers before the vote on the Greek budget, Prime Minister Antonis Samaras said the new cuts would be the last and he appealed to the troika to support his country.

“Greece has done its part,” Mr. Samaras said. “Now it’s the turn of the lenders.”

Article source: http://www.nytimes.com/2012/11/13/business/global/europe-gives-greece-two-more-years-for-budget-cuts.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

DealBook: J.C. Penney to Buy Stake in Martha Stewart Living

December 7, 2011 by Leave a Comment

Martha Stewart and Johnny Knoxville in a 2010 broadcast of “The Martha Stewart Show.”David M. Russell/The Martha Stewart ShowMartha Stewart and Johnny Knoxville in a 2010 broadcast of “The Martha Stewart Show.”

First J.C. Penney brought in the man behind Apple’s stores to lead a turnaround. Now, the retailer is looking to a symbol of homemaking to provide a further jolt to lagging sales.

J.C. Penney plans to announce on Wednesday that it will buy a 16.6 percent stake in Martha Stewart Living Omnimedia for about $38.5 million, according to people briefed on the matter. The company will also receive two seats on the Martha Stewart board.

J.C. Penney, as part of a 10-year partnership, plans to introduce ministores and a revamped online presence dedicated to the Martha Stewart brand beginning in February 2013, these people said. The in-store areas will be stocked with Martha Stewart products, and will have trained employees who will provide advice and tips not dissimilar to Apple’s Genius Bar concept, these people added.

The deal will bring together two famous brands that are trying to rebuild themselves amid tough times. J.C. Penney brought in Ron Johnson, a former Target executive who became the architect of Apple’s wildly successful push into retailing, as its new chief executive earlier this year as sales declined. And Martha Stewart, a media and brand licensing company, has grappled with losses in eight out of its 10 recent quarters, hurt by an advertising slump.

Martha Stewart expects to reap more than $200 million from the arrangement, including royalty payments, design fees and advertising commitments. The company will continue its existing partnerships with other retailers, like Macy’s and Home Depot. Ms. Stewart will remain her company’s biggest shareholder, controlling most of the voting B shares. J.C. Penney will be the biggest holder of the Class A shares, these people said. She rejoined the company’s board in August after a five-year ban imposed by regulators after her conviction for lying to federal investigators about a stock sale.

J.C. Penney will pay $3.50 a share for its stake, a 12 percent premium to Martha Stewart’s closing price on Tuesday.

Representatives for J.C. Penney and Martha Stewart declined to comment.

In May, Martha Stewart hired the Blackstone Group to review the company’s strategic options after investors had expressed interest in taking a piece of the business. The announcement Wednesday is expected to draw that process to a close.

Talks between Martha Stewart and Penney began several months ago, with Mr. Johnson flying to New York to meet with Ms. Stewart, the people briefed on the matter said. Among the main moments that solidified the partnership was a trip to Martha Stewart’s headquarters, where Mr. Johnson grew excited by an array of merchandise and retail concepts ensconced in the company’s 150,000-square-foot showroom.

The two executives continued to refine the details of the partnership over additional meetings, including at her favorite coffee shop on the Upper East Side of Manhattan — where Ms. Stewart discovered that Mr. Johnson doesn’t drink coffee.

For J.C. Penney, a partnership would bring in not only a recognizable brand, but also an opportunity to draw on retail practices that Mr. Johnson first developed at Target and Apple.

And for Martha Stewart, an alliance with J.C. Penney would bring in an eager partner promising prominent space and an additional new source of revenue.

Aligning with Martha Stewart in some ways continues what J.C. Penney has already done with the likes of Sephora, having created ministores for those brands within its stores.

Such exclusive lines were a cornerstone of J.C. Penney’s strategy under Mr. Johnson’s predecessor, Myron E. Ullman III, who focused on brands like Call It Spring, MNG by Mangostyle and Modern Bride.

So far, the company’s biggest exclusive bet has been Liz Claiborne, which had been widely sold until August 2010, when J.C. Penney bought exclusive distribution rights for the brand. In October, J.C. Penney sped up a plan to buy the brand outright, spending $267.5 million.

J.C. Penney said in its earnings call last month said that Claiborne had been a “standout performer” in the quarter, and that more than a quarter-million shoppers new to J.C. Penney had bought Claiborne merchandise there.

Still, the reliance on exclusives has not turned around J.C. Penney’s sales. In the third quarter, its sales at stores open at least a year dropped 1.6 percent, while its competitors Macy’s and Kohl’s rose 4 percent and 2.1 percent, respectively.

The deal will tie J.C. Penney closely to Ms. Stewart, who remains the company’s chief saleswoman, with a broad presence across the retail world. She stars in commercials for Macy’s and promotes cookware, furniture and bedding — in patterns like “Holiday Scottie” and “Penguin Choir” — for the retailer. Home Depot produces Martha Stewart-brand paint, cabinets and faucets. And PetSmart features a Martha Stewart Pet line of grooming tools, leashes and clothes.

As recently as September, Staples announced an agreement to sell office supplies designed by Ms. Stewart.

Article source: http://feeds.nytimes.com/click.phdo?i=d7be268c345d0f58be32c0d870461611

Filed Under: Business News Tagged With: , ,

Ad Money Reliably Goes to Television

August 8, 2011 by Leave a Comment

Last week, companies like Viacom, CBS and Time Warner reported windfalls in television revenue, much of it from growing ad spending.

Every company was asked the same question by worried investors — will the weakening economy claim television advertising — and every company answered the same way.

“We have not seen any deterioration in our current market conditions,” said Brad Singer, the chief financial officer of Discovery Communications.

“We don’t see any signs of a deceleration right now,” said Stephen B. Burke, the chief executive of NBCUniversal.

“We’re not at all afraid, and frankly we’re looking forward to the fall,” said Leslie Moonves, the chief executive of the CBS Corporation, referring to the start of the fall season.

Despite worries of a possible double-dip recession, so far companies are not pulling back from their television ad spending plans, demonstrating the resiliency of the medium even when faced with a downturn and the persistent threat of the Internet to steal viewers.

Television networks are coming off a robust upfront advertising period, when companies make commitments for spending in the season ahead.

While they can back away from some of those commitments a few weeks ahead of time, “we have seen absolutely none of that,” Mr. Moonves told analysts last week. On the contrary, he said, what CBS has seen is “increased demand for our shows.”

That demand also has been reflected in the so-called scatter market for advertising, when companies buy commercial time during the season. The Viacom chief executive Philippe Dauman said Friday that scatter pricing was up more than 10 percent in the quarter that ended in June, driving a 12 percent gain in domestic ad sales in the spring — and a prediction for double-digit growth this summer, too.

Media executives said in interviews that the optimism reflected the fact that television is a tried and true medium for advertisers, remaining at or near historical highs in the United States.

“In essence, it’s all about sticking with something that you know is proven,” said Chris Geraci, the president of national broadcast at OMD, a unit of the Omnicom Media Group, echoing sentiments heard during the recession in 2008.

Some companies put down more money in the upfront market this spring to guard against high scatter prices later. “Companies are making more long-term commitments,” he said. “You want to just buy more efficiently.”

Other corners of the media industry — like publishing — may have fewer reasons to be confident about their prospects. The Washington Post on Friday said that print advertising revenues had slid by 12 percent in the second quarter, while revenue from display ads on its Web sites slid by 16 percent.

The New York Times had a 6.4 percent decline in print advertising revenues at its properties in the quarter, but a 2.6 percent increase in online advertising. The publishing arm of Time Warner managed a 1 percent uptick in ad revenue, but warned of current weakness in both advertising and newsstand sales.

Broadly speaking, forecasters have been anticipating a slight pullback in ad spending growth this year. ZenithOptimedia, part of the Publicis Groupe, said in mid-July that it thought worldwide ad spending would grow by 4.1 percent this year, down slightly from its previous forecast of 4.2 percent growth. A week earlier, the GroupM unit of WPP said it expected 4.8 percent growth this year, down from a previous forecast of 5.8 percent growth.

“There is no doubt we’re seeing a slowdown in growth as we get into the second half of this year,” Rino Scanzoni, the chief investment officer at GroupM, said in an interview last week.

Mr. Scanzoni called television one “area of resilience” — driven mostly not by broadcast, but by cable — and said that television is “probably more favored in the media mix” at this time. It is a medium that advertisers know, understand and can measure, he said.

Article source: http://www.nytimes.com/2011/08/08/business/media/tv-advertising-still-a-reliable-engine-in-media.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,