March 25, 2023

DealBook: Credit Suisse Posts Higher Profit

The Credit Suisse building in Zurich, Switzerland.Alessandro Della Bella/European Pressphoto AgencyThe Credit Suisse building in Zurich, Switzerland.

LONDON – Credit Suisse reported on Wednesday that profit rose sharply in the first quarter from the period a year earlier, when the bank booked large charges on its own debt.

Profit rose to 1.3 billion Swiss francs ($1.4 billion) from 44 million francs in the first quarter of 2012, when the bank booked a loss of 1.6 billion francs on the value of its own outstanding debt. Net revenue rose to 7.2 billion francs from 6 billion francs a year earlier.

The results “show the positive momentum of our new business model,” the bank’s chief executive, Brady W. Dougan, and its chairman, Urs Rohner, wrote in a letter to shareholders in the earnings report released on Wednesday. “In an industry that still faces substantial restructuring, we have effectively completed our transformation.”

Mr. Dougan has started to cut back on businesses that could be more costly for the bank because of tighter regulations while seeking to expand its wealth management operations. The bank also said its employee roles fell 4 percent in the quarter, to 46,900 people. But Mr. Dougan did not go as far as his main Swiss rival, UBS, in scaling back investment banking operations.

Credit Suisse agreed on Monday to sell its private equity business, Strategic Partners, to the Blackstone Group for an undisclosed sum in an effort to reduce its presence in so-called alternative investments. Last month, the bank agreed to buy Morgan Stanley’s wealth management unit in Europe, the Middle East and Africa, which has $13 billion in assets under management.

In February, Credit Suisse increased its target for cost cuts by $440 million, and plans to have reduced costs by $4.83 billion by the end of 2015. The bank said on Wednesday that it was on track to achieve the goal, partly by bringing its wealth management and asset management operations closer together.

Credit Suisse said pretax profit in its private banking and wealth management business fell 7 percent, to 881 million francs, stating that relatively low interest rates failed to offset an increase in commissions and fees. Net new assets for the period totaled 12 billion francs.

Pretax profit in the investment banking operation rose to 1.3 billion francs from 907 million francs in the first quarter of 2012, partly as a result of cost cuts but also driven by the performance of its fixed-income sales and trading business.

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DealBook: Dick Clark Productions Sold to Guggenheim Partners

Before his death in April, Dick Clark, right, appeared at the most recent New Year's Eve celebration with Ryan Seacrest.Ida Mae Astute/ABCBefore his death in April, Dick Clark, right, appeared at the most recent New Year’s Eve celebration with Ryan Seacrest.

Dick Clark Productions, the company that produces the Golden Globe Awards show and the New Year’s Eve broadcast hosted for nearly 40 years by its late founder, was sold to Guggenheim Partners and a group of investors on Tuesday.

Guggenheim, a private Wall Street firm, teamed up with a pair of multimedia investors to buy the production company for an undisclosed sum. A person briefed on the matter said the deal was worth about $370 million, more than double it sale price in 2007.

That year, RedZone Capital Management bought Dick Clark Productions from another investment group for $175 million. RedZone is a private equity firm run by the Washington Redskins owner, Daniel M. Snyder.

Mr. Clark, the legendary broadcaster who died in April at the age of 82, had no ownership role in the company.

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“We’re thrilled about the transaction with Guggenheim Partners,” Mark Shapiro, chief executive of Dick Clark Productions, said in a statement, adding that “Dick Clark and his legacy will surely be in good hands.”

The deal also involved Mandalay Entertainment and Mosaic Media Investment Partners, a collection of investment partners that has ties to Dick Clark Productions. Mosaic is led by Allen Shapiro, former chief executive of Dick Clark Productions and current chairman of TV Guide Network and The chief executive of Mandalay, Peter Guber, was the largest shareholder in Dick Clark Productions before its 2007 sale to RedZone Capital Management.

The latest deal was in the works for months. Dick Clark Productions, a 55-year-old company that also produces several other TV shows including “So You Think You Can Dance” and the American Music Awards, put itself on the market in June.

In response to an expression of interest from a Chinese media company, it hired the Raine Group, a boutique investment bank, to run the sales process. At the time, likely bidders also included several private equity firms. Ryan Seacrest, who co-hosted recent “New Year’s Rockin’ Eve” shows with Mr. Clark, was among the private-equity backed bidders.

But after weeks of negotiation, Guggenheim Partners emerged as the likely winner. It was the second major deal for the firm this year, after it become majority owner of the Los Angeles Dodgers in March.

“We look forward to continuing D.C.P.’s production of branded entertainment that has become a part of the American lexicon,” Todd Boehly, president of Guggenheim Partners, said in a statement.

The deal comes after a significant court victory, in which a federal judge ruled the company could keep the Golden Globes show airing on NBC through 2018. The company had clashed with the sponsor of the awards, the Hollywood Foreign Press Association, which claimed that Dick Clark Productions should have consulted with it before reaching the NBC deal.

In the statement, Mr. Boehly promised to “work closely with the Hollywood Foreign Press Association, the Academy of Country Music and all of the network partners and sponsors to ensure” the company’s “long-term growth and success.”

The deal, which the new owners expect to complete “expeditiously,” must still receive regulatory approval.

Guggenheim Securities was the sole financial adviser to the investors, while legal counsel was provided by Weil, Gotshal Manges.

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