Tag: media

There’s No Escaping Death and Taxes…

Posted onAuthorcahwyguy

… unless you’re Sam Zell.

Most of you have heard by now how our hometown paper, the Los Angeles Times has been sold by the Chicago Tribune to Sam Zell — in fact, all Tribune properties have been sold. You may be thinking to yourself… boy, those Chandlers (former owners of the Times) knew how to avoid taxes, but the Tribune as a whole is probably a good upstanding corporate citizen, and under Zell ownership, will be paying its fair share of taxes.

Think again, oh naive readers.

After the transaction completes, do you know how much tax Sam Zell will pay on Tribune and its income? A big fat Zero. Goose Egg. No taxes.

How, you may ask, is Zell doing this? Both LA Biz Observed and the Washington Post are describing the scheme. Zell is using a provision that was stuck into a minimum-wage-increase bill in 1996 at the behest of the owner of a small Minnesota company who wanted to sell a stake to his workers via an employee stock-ownership plan. The company couldn’t do the ESOP because it was an S corporation (usually small businesses that have income taxed directly to its shareholders) rather than a C corporation (generally large ones). The provision permitted S corporations to do ESOPs.

So what is Zell doing? The $34-a-share, $8.2 billion buyout of Tribune is being run through an ESOP, using borrowed money, for a total transaction cost of $13B. Zell is lending the post-buyout company — which will be an S corporation — $225 million. He’ll pay it an additional $90 million for a warrant that gives him the right to buy 40% of it for prices ranging from $500 million to $600 million. The post-buyout Tribune (call it S-Tribune) will be an S corp, with its only shareholder the employee stock ownership plan, which — like all ESOPs and other employee-benefit plans — is tax-exempt. Had it been a C-Tribune, the post buyout taxes would have had $527 million in pretax profit and a $167 million tax bill, according to a recent filing. Taxes for S-Tribune: $0.

As for Zell himself? Zell and Tribune’s management avoid taxes on their pieces of S-Tribune by having “phantom stock,” not real stock. These are warrants giving the rights to buy the stock, but not actual ownership, and thus no tax liabilitity.

I find this really problematic, for the government will still need the money to finance its activities. So where will it go to get it? You guessed it.

I think we should call this to the attention of our congress-critters, and see if something can be done about it.

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Do You Know What Your Daughter Is Wearing?

Posted onAuthorcahwyguy

Here’s a scary statistic for you: According to Time Magazine, in 2003, tweens (i.e., girls ranging in age from 7 to 12) spent $1.6 million on thong underwear.

Just think about that. What does a 7-12 year old need with thong underwear?

I discovered this statistic in today’s Washington Post, which had an interesting article on the sexualization of young girls. I’m seeing this directly in my daughter, who regularly wears makeup and is concerned about fashion. Luckily, she’s not wearing thongs (I know–I do the laundry!) or dressing provacatively, but I do know the message is there: from the shows she watches (she’s a big Charmed fan) to the magazines that she reads.

I regularly comment that I don’t remember the girls I was with in Jr. High dressing like that. I don’t remember the emphasis on sexuality in our youth. We hear more and more about the creeps and perverts out there, but I wonder how much of it is driven from the other direction, from a media that is pressing young girls and boys into dressing and acting much older than their age.

I’m lucky, I guess, that my daughter hasn’t bought into the media circus hook, line, and sinker. Still, it bothers me…

P.S. When I had my daughter read this before posting, she said “No, don’t use my picture. Use the “pron” picture.” Sigh.

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Media Observations: Anna Nicole Smith and the Fold; The Boundaries of Advertising

Posted onAuthorcahwyguy

Today’s la_observed has an interesting observation:

Anna Nicole Smith was not an important actress, model or American pop icon, but she was big in tabloid celebrity culture. Foul play is not suspected. So where do you play her death? The LAT puts Smith’s story prominently on page one, apparently after some internal discussion. So does the Washington Post. The New York Times gives her a small mention in the front page refer box. The WSJ takes a pass.

I’ll add that the Daily News put the story at the front of their online edition. I find this fascinating, for it shows how media works. For example, driving home last night, our local all-new station (KFWB) was all over the Smith story. NPR? Didn’t even mention it.

So what did your local paper do with the story?

***

The New York Times, while not giving prominance to the Smith story, does have another interesting story online. This relates to how advertisments are getting racier and racier. I’m old enough to remember when feminine hygene products weren’t advertised on TV, there were no condom ads, no ads for “personal lubricants” (although I do have vague recollections for products related to smells — I seem to recall some advertising for a personal deoderant spray). Nowadays, you have ads for almost everything; I wince everytime I see the one for a “warming personal lubricant”. The article does, however, discuss one of my favorite racy ads: the one for the Norelco Bodygroomer (warning: contains audit NSFW innuendo, not language), which is absolutely hilarious (do go watch it, if you’ve never seen it before). Evidently, this online-only ad tripled sales for the product from the original forecast.

Of course, there are the miswritten ads on TV. Last night, during Survivor: Fiji, there was an ad for Bud Light that showed the family picking up hitchhikers with axes or chainsaws, simply because they had the right beer. I think it should have been captioned “Bud Light: It kills your brain cells”, but it wasn’t. There was also the ad for the Carl’s Jr. $6,000 Value Meal, which was hilarious.

Again, your opinion: Are there products that shouldn’t be advertised on TV. Are there particularly great ads?

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Observations on the Los Angeles Times

Posted onAuthorcahwyguy

Folks may have realized by now that I’m a true news junkie. For me, reading the news online is the slice of pickled ginger between bites of sushi: it clears my mind as I read these mind-numbing documents I read. I monitor lots of papers, from the small (Moorpark Acorn) to the local (Daily News, Daily Breeze), to the big Nationals (LA Times, NY Times, Washington Post). I mention this because today’s Los Angeles Times has a very interesting article on a new “web” strategy they are embracing.

Consider, for a minute, the print newspaper industry. The companies have to pay for paper, ink, printing, delivery…. and their network of reporters and news services. The money for this comes to a small extent from subscriptions, but even more so from advertising: especially those big splashy full page ads the car dealers and department stores place.

Today, print newspaper readership is declining. More and more folks are turning to the web for their news. The industry is recognizing this and enhancing their web product. The LA Times web product has lagged behind. There have been many reasons for this:

  • Lack of assertive leadership and adequate focus on the website, both inside The Times and at the paper’s parent, Tribune Co.
  • Understaffing. Latimes.com employs about 18 editorial employees, only a fraction of the 200 employees at the Washington Post’s website and the 50 employed by the New York Times.
  • “Technology that has made it impossible for latimes.com to host live chats between readers and journalists and to let readers customize stock tables or weather reports.
  • Failure to integrate the newspaper’s large news staff into operations at the web, contributing to delays in posting breaking news.The result is that the paper’s reports often are listed below those of other news organizations when users perform topic searches.
  • Clashes of direction between the web pages top editors.
  • Fights between the local management of the website and its overseers at Tribune Interactive in Chicago–even small technological improvements required long waits for Web technicians in Chicago to build the technology.

So how is the Times addressing this? In mid-February, the paper plans to roll out a new Travel website that will focus on Southern California and allow users to book trips. A “Calendarlive” site, an extension of the Times Thursday Calendar Weekend print edition, will be designed as a destination for personal entertainment choices such as restaurants, movies, theater, concerts and clubs. An enhanced foreign page that could feature video, photo galleries, graphics and chats with The Times roughly two dozen overseas reporters. They also plan to experiment with pilot projects on “hyper local” coverage in a few, as yet unnamed, communities that would rely heavily on content such as community calendars, crime statistics, school test scores and neighborhood discussion groups. They believe that such content will be attractive to readers and available at little or no cost. They want these reforms to be made without additional funding.

They also plan on enhancing the print edition. Specifically, the paper plans in the fall to go to a smaller, 48-inch-wide format. An attendant “phased” redesign will be rolled out through 2007 and will “question and challenge every section of the newspaper.”

So what do I think of this?

First and foremost, they have to get over this inferiority complex they have with the New York Times. Everytime they revamp, they move closer to the NY Times… and they lose more readers. They forget that if folks wanted the NY Times, they would subscribe to the NY Times.

As for the web changes: they are clueless (as are most papers). For the most part, people will not pay for news content, especially if they can get that content elsewhere. Notice how little on the NY Times site is “Times Select”. A content subscription model doesn’t work well when CNN.com is out there. So, you have to depend on advertising. Yes, you can get more eyeballs, but you can’t make the ads obtrusive. This limits who advertises. You won’t have the big spreads from the local supermarkets, the department stores, and the car dealers… and those are what bring in the cash. I don’t think their web initiative will bring them more income. But they’re not alone in trying to milk the web. la_observed is reporting that the Sacramento Bee is establishing a premium service (read $499/year, yes, no decimal point) that gives subscribers early access to Bee stories, plus some email alerts and exclusive columns and blogs. They predict it won’t succeed, and I agree.

So what is the right model? I just don’t know.

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CNN and Fact Checking

Posted onAuthorcahwyguy

Previously, I wrote how Time, Inc. had given up on fact checking. Apparently CNN has as well.

In their article on today’s death of Denny Doherty of The Mamas and the Papas, they write:

all hope for a reunion ended in 1974 when the 30-year-old Elliot choked and suffered a fatal heart attack while eating a sandwich in London.

According to Snopes.Com, as well as numerous other sources:

The first reports of Cass Elliot’s death said that her physician had stated she “probably choked to death on a sandwich”, and the next day’s post-mortem reportedly “showed that she died as a result of choking on a sandwich while in bed and from inhaling her own vomit”. However, Dr. Keith Simpson, the pathologist who performed the autopsy on Elliot, found no traces of food blocking her trachea. Dr. Simpson and Gavin Thurston, a London coroner, then determined that Elliot had in fact succumbed to a heart attack brought about by the effects of long-term obesity. Elliot had long been overweight (she stood 5’5″ and weighed 238 lbs., about twice the proper weight for a woman of her height and build), and the prolonged effects of obesity and several crash diets had weakened her heart to the point of failure.

The Official Cass Elliot website further noted that the forensic autopsy showed (1) there was a heart problem leading to heart failure; (2) there was no evidence of a sandwich or any other item in her throat or trachea; and in fact, (3) she had had very little to eat the day before she died. The official cause of death was “heart failure due to fatty myocardial degeneration due to obesity.”

Sigh. CNN should not be propagating such urban legends, especially about such a wonderful performer.

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Just the Facts, Ma’am

Posted onAuthorcahwyguy

Those of us who watched the original Dragnet will remember Joe Friday telling people he wanted “Just the facts.” This stresses the importance of facts, and the importance of accuracy of facts, in the processing of information. Why do I mention this? The New York Times had an interesting article today about the changes at Time, Inc. due to the changing media market in the world. Buried in this article was the following paragraph:

People has one of the last vestiges of the classic newsmagazine reporting structure, in which several correspondents send files to a writer in New York, where stories are fact-checked by yet another department. The new model, which is standard at most news organizations, will be for one person to report, write and fact-check the article — much as Simon Perry, the London bureau chief, did with People’s take this week on Kate Middleton, Prince William’s girlfriend.

Now I have no problem with having a single reporter report and write the article: that’s much more efficient. My concern is having the same reporter that reports/writes the article being the one responsible for fact checking it. After all, those of us in the software world know all-too-well the risks of having the software developer be the one that reads the code to find bugs or errors. They are too close to story; they will overlook things that are “obvious”.

If I want reporting that is not fact checked, I’ll turn to the blogosphere. Those of us who write journals (for the most part) do cursory fact checking (perhaps as we build our links), and then fix the article as readers might point out mistakes.* Some of us make more mistakes than others. But when I read the reporting of a newsmagazine, I want it to be above the level of assurance I get from People: I want independent fact checking.

Those of us know from working with NASA that “better, faster, cheaper” is, at best, a two-out-of-three proposition. I fear that Time, Inc., for all their reporting on NASA, never picked up on that lesson.

* And yes, there is a mistake in the post, that might have been not caught had I not added links and done fact checking. Specifically, Jack Webb as Joe Friday never says “Just the facts” in any episode of the original Dragnet series. What he actually said in an early episode was “All we want are the facts”. Ed O’Neill, in the horrible Dragnet remake in 2003, did utter the line. Little good it did him!

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