The standard start time for Chicago White Sox home games next season is going to be — you guessed it — 7:11 pm
The price for that accomodation: $500,000.
I generally prefer earlier start times for evening games (most of the Stros’ games begin at 7:05 pm, which is fine). But KTRH 740 is the Stros flagship radio station . . .
Tory Gattis over at Houston Strategies has the lowdown on this year’s Fortune Global 500 corporate rankings and, as usual, Houston fares quite well, ranking 10th globally with over $326 billion in Global 500 revenues.
Interestingly, the top four cities — Tokyo, Paris, London, and New York — have over a trillion dollars in Global 500 revenues. Houston ranks third in the U.S. with six Global 500 companies headquartered here. A quick glance at the list indicates that the DFW metroplex has five, although both Ft. Worth and Irving have more Global 500 companies (two) than Dallas (one).
Update: Tory follows his first post up with this one about Houston leading the list of cities with the fastest-growing companies.
This Wall Street Journal article reports on the decision of Continental Airlines and several other local companies to lease as an emergency control center one of the most bizarre sites in the Houston area — a 38,000 square foot, 70-foot deep bomb shelter designed to house 1,500 people for 90 days in the case of a nuclear attack.
The shelter — which has been a topic of conversation for years in these parts — is located adjacent to a four-story office building just up the road on Highway 105 in Montgomery near Conroe on Houston’s far north side. The office building and bomb shelter were built during the early 1980s by a Ling-Chieh “Louis” Kung, the nephew of Madame Chiang Kai-Shek, the former first lady of Taiwan and the wife of Mao Tse Tung’s foremost domestic enemy during the Communist revolution in China. Kung died in Houston in 1996 also claimed to be a direct descendant of Confucius, so he seemed to be pretty well-connected.
Houstonian, former heavyweight boxing champ and now successful businessman George Foreman is featured in this Timothy O’Brien/New York Sunday Times article from last weekend that explores the question of why many prominent people are incapable of maintaining their wealth and end up wrestling with insolvency.
Foreman, who is a remarkable and fascinating fellow, tells the story in the article of how he blew his first fortune from winning the heavyweight championship the first time around and how that experience drove him to make the attempt to win it again at the age of 45. Big George rebounded from his insolvency experience by earning several multimillion-dollar purses during his brief return to boxing in the early-1990ís and then making millions more by reinventing himself as a good-natured entrepreneur and pitchman, cleverly peddling the popular hamburger grills that bear his name.
Interestingly, Foreman’s flirtation with insolvency did not involve the usual story of corrupt managers taking advantage of a young, uneducated and unsophisticated boxer. Rather, Foreman experienced insolvency the right way, taking risks and learning from them:
Mr. Foreman, unlike most entertainers and athletes, had homegrown financial antennae, and his budgetary acumen surfaced at a relatively early age. He slugged his way into prominence by winning a gold medal at the 1968 Olympics, and a year later, when he was 20, he turned pro. Schooled, he said, in the perils of errant spending by the financial predicament of the boxing legend Joe Louis, he decided to form the George Foreman Development Corporation in 1971.
Despite Hewlett-Packard’s current problems with its board of directors, my sense is that Dell, Inc. would prefer to have H-P’s problems rather than the ones that the Round Rock-based computer manufacturer faces (previous posts here and here).
This NY Times article reports that Dell will delay filing its fiscal second-quarter reports because of a widening Securities and Exchange Commission investigation and an internal company probe into its financial accounting. To make matters worse, Dell also reported that the U.S. attorney for the Southern District of New York has subpoenaed records in regard to an investigation of the company’s financial reporting from 2002 to present. Continuing a trend that has knocked 30% of the value of Dell’s stock this year, Dell shares declined over 2% yesterday to $21.19.
Dell was already being investigated by the SEC for the timing of its revenue recording, but yesterday’s announcement stated that the investigations have branched into areas “relating to accruals, reserves and other balance sheet items.”
Translation: “We many need to restate prior earnings.”
The Wall Street Journal’s Alan Murray reports in this article ($) (related NYT article here and Newsweek article here) about the internal investigation that ensued of the Hewlett-Packard board of directors after former HP CEO Carly Fiorina (previous posts here) was forced out early last year. The subject of the investigation was the leaking of confidential information to a Wall Street Journal reporter regarding board deliberations and ultimately led to the resignation of one board member — venture capitalist Tom Perkins — and the board’s decision not to nominate a second board member — George Keyworth, the alleged leaker — for another term on the company’s board.
The article is interesting and all, and certainly maintaining the confidentiality of board deliberations is important. However, if I were an HP investor, I would feel a whole lot better about the company if I was not left with the impression that the company’s board members behaved in a manner not quite as mature as my 16 year-old daughter’s social circle of friends.
Update: Professor Bainbridge predicts that HP’s directors are not going to react kindly in regard to the way in which the HP board chairperson handled the investigation, and Larry Ribstein is about as impressed with the HP’s corporate governance as I am.
Chevron Corp. and partners Devon Energy Corp. and Norway’s Statoil ASA are expected to announce today (WSJ ($) article here and NYT article here) the first successful oil production from a deep-water region in the Gulf of Mexico called the Jack Field that could become the biggest domestic source of oil since the discovery of Alaska’s North Slope over 30 years ago.
Meanwhile, the Wall Street Journal ($) is reporting that Paris-based Compagnie Generale de Geophysique has agreed to acquire Houston-based geophysical seismic company Veritas DGC Inc. for about $3.1 billion in cash and stock.
And Clear Thinkers favorite James Hamilton notes a drop in gasoline prices, which is good news. Or is it?
The following are several reading recommendations for a busy Wednesday:
In this TCS Daily article, Hoover Institute fellow David R. Henderson examines the media coverage of the criminal trials of Frank Quattrone and concludes that it left much to be desired:
The evidence seems to suggest that [Quattrone] was innocent. And even in the unlikely case that he was guilty, the prosecutor never made the case beyond a reasonable doubt, the standard for conviction for a crime. What wasn’t a victory, though, was the media’s role in this. Many reporters pandered to their audiences’ desire to see a wealthy man take the fall because of the dotcom bust.
Meanwhile, the always insightful Stephen Bainbridge posts this interesting TCS Daily article on New York’s next governor, the Lord of Regulation, Eliot Spitzer, in which the Professor makes the following observation:
A fair reading of Eliot Spitzer’s record as presented by [Brooke Masters’s biography of Spitzer] suggests that he is both a genuine cause crusader and a career political hack. Spitzer has consistently used — and abused — his authority as New York attorney general to level sweeping accusations against a wide swath of American business. In some cases, like the proverbial stopped clock, he got it right. In a lot of cases, however, the much ballyhooed charges got a lot of press attention but then quietly went away. Indeed, on the few occasions he’s taken one of these high profile business cases to trial, he’s lost at least as often as he’s won. Instead, his record consists mainly of using media pressure to extort settlements from frightened executives.
Finally, I’ve not addressed the sad case of the the Duke University Lacrosse team members accused of rape, but this recent NY Times article provides a comprehensive review of the case. Perhaps not surprisingly, the two NY Times reporters who reviewed the public documents in the case concluded that the evidence against the three students is neither as strong as prosecutors have publicly claimed nor as weak as defense attorneys have asserted. However, where the standard of proof is beyond a reasonable doubt, this would appear to be a case where prosecutors should have concluded on the front end that the allegations are better left for resolution in the civil justice system rather than the criminal justice system. It’s an ugly case that promises only to get uglier as the criminal trial nears.
The NY Times continues today with another installment in its excellent The Katrina Year series focusing on the status of the rebuilding of New Orleans. To the surprise of no one who has ever been involved in the interplay of business development nad government bureaucracy, the re-development of areas of the city that are most attractive for investment has actually gone reasonably well, while the areas in which government subsidies are necessary to induce private capital to invest have lagged. Also not surprising is the fact that local governmental entities still have not been able to put together a plan for providing basic governmental services for redevelopment. So it goes.
As noted in posts here and here last year in the immediate aftermath of Hurricane Katrina, one of the biggest problems confronting redevelopment of the New Orleans area was the storm’s destruction of small businesses, which on an aggregate basis was the largest provider of jobs in the New Orleans area. This NY Times article reports on the struggles that small businesses in New Orleans have confronted in attempting to stay afloat in the year after Katrina and how many of the pre-Katrina small businesses have little hope of coming back.
Update: In this Opinion Journal editorial, the Wall Street Journal editorial board eviscerates the federal government’s handling of the enormous amount of federal aid thrown at New Orleans in the year since Katrina.
Eliot Spitzer’s long-running propaganda campaign and lawsuit against former New York Stock Exchange chairman and CEO Richard Grasso has been a frequent topic on this blog, so I couldn’t help but notice this NY Post article (hat tip to Peter Lattman) in which Grasso is derided for defending his lucrative pay package during a recent television interview. I mean, why should anyone make that much money, right?
Meanwhile, for a much more lucid analysis of the true issues should be in the Grasso lawsuit, check out this Larry Ribstein post:
[T]he main thing to keep in mind is that [Grasso’s] pay was approved by a highly sophisticated board. The only issue should be whether that board was informed. This is the way it should and would be in a standard fiduciary duty case (e.g, Disney). There is significant reason to believe it was, . . .
Alas, this isn’t the end of the matter because the NYSE was a non-profit that comes under Eliot Spitzer’s tender care. Grasso’s trial has been broken into two parts, so that the trial judge first rules on reasonableness separate from board process. In the first part, . . . Spitzer will try to prove “that the pay judgments of executives who worked in the highest echelons of the business community were not ‘reasonable.'” In other words, a NY trial judge may end up substituting his judgment for that of a board that included the likes of the Treasury Secretary and former head of Goldman Sachs.