Daily Archives: June 13, 2005

The state of golf

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us_open.gifWith the U.S. Open Golf Tournament gearing up this week at Pinehurst, S.I.com has this interesting roundtable discussion on the state of golf between golf writer Geoff Shackelford, PGA Tour player Brad Faxon, USGA Executive Director David Fay and Callaway Golf spokesman Larry Dorman.
While the entire discussion is interesting and worth reading, the following comment indicates that Mr. Faxon and Jack Nicklaus probably aren’t playing many practice rounds together:

SI: Why is everybody talking about the ball? Deane Beman, Jack Nicklaus, Greg Norman, Arnold Palmer, Gary Player — they all say the ball needs to be rolled back in the pro game.
FAXON: If Jack Nicklaus had a successful ball, he would never say another word. But he’s never sold a ball that’s made a dime. There are so many other, more important things to worry about. Like allowing the putter to touch a part of your body other than your hands. . . .

By the way, an interesting incident occurred yesterday during the final round of the Booz Allen Classic at Congressional Country Club in Bethesda, MD. On the 17th hole, Rory Sabbatini, who is a fast player, got tired of waiting for his playing partner Ben Crane, who is a slow player. So, Sabbatini hit his second short on 17, walked up to the green ahead of Crane, chipped up and putted out of turn, and then left for the 18th green and teed off out of turn before Crane putted out on 17. Subsequently, on the 18th green, Sabbatini barely acknowledged Crane during the traditional post-round handshake and then walked to the scoring tent spewing expletives. In short, over the course of about fifteen minutes, Sabbatini established himself as a first-class jerk.
Then, ABC on-course reporter Judy Rankin interviewed Crane after the incident. In a truly remarkable moment in this day of self-absorbed professional athletes, Crane exhibited grace and depth by refusing to criticize Sabbatini, acknowledging that he is a slow player, admitting that he is working on getting faster, and essentially downplaying Sabbatini’s infantile reaction.
Thus, in less than a one minute interview, Ben Crane became one of my favorite PGA Tour golfers.
By the way, ABC commentator Paul Azinger appropriately proceeded to do what Crane would not, which was to hammer Sabbatini on the air for his conduct. Good for you, Zinger.

Baylor Medical School lays the wood to Methodist

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medical center.jpgFollowing up on a story noted in this earlier post, the Chronicle’s Todd Ackerman continues his outstanding reporting over the past year on the historic split between Baylor Medical School and Methodist Hospital with this article in which he reports that Baylor has formally accused Methodist of attempting to put the medical school out of busienss in connection with an administrative proceeding before the entity that manages the Texas Medical Center.
The context of the current phase of the dispute between the two longtime Medical Center partners is a proceeding before the Texas Medical Center’s covenant compliance committee in which the committee will determine whether Methodist is violating the Medical Center’s deed restrictions by starting competitive education and research programs with New York’s Cornell University Weill Medical School. Baylor contends that the programs and affiliation between Methodist and Cornell is an attempt by Methodist to harm Baylor.
Although a legal longshot (Texas law does not favor covenants that restrict competition), Baylor’s latest salvo is another public relations nightmare for Methodist, which is attempting to carve out a post-Baylor plan to remain a primary research institution. Methodist has a big advantage in that its $2.3 billion endowment is over twice the size of Baylor’s endowment, but Baylor is aggressively pursuing new affiliations with other Medical Center institutions. Consequently, there is no assurance that Methodist’s current financial advantage will result in a dominant position in the Medical Center five to ten years down the road, particularly if Methodist’s research affiliations do not compete effectively with those of Baylor and other Medical Center institutions.

NASA shakeup continues

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NASA3.jpgAs noted in this earlier post, new NASA chief administrator Michael D. Griffin is shaking things up at the space agency. This Washington Post article reports on Mr. Griffin’s latest moves, which include the building of a less political and more scientifically-oriented management team to implement the initiative to return humans to the moon by 2020 and eventually send them to Mars. One particularly interesting part of the article is the following:

“[Mr. Griffin] wanted to be NASA administrator for a long time and has given a lot of thought to what has been done well or badly,” one congressional source said. “Because of that, he is not going to take a year or two to get to know the organization.”
Instead, the sources said, he expressed dismay that NASA over the past several years had put a lot of people in top management positions because of what one source described as “political connections or bureaucratic gamesmanship — not merit.”
Several sources spoke of a corps of younger scientists and engineers, including Griffin, who had been groomed in the 1970s and 1980s as NASA’s next generation of leaders only to be shoved aside during the past 15 years. They said Griffin hopes to bring them back.
“The people around him will be quite outstanding,” one source said. “The philosophy is that good people attract outstanding people. This is going to be a very high-intensity environment, and NASA needs experienced, outstanding people.”

General Re continues to serve up sacrificial lambs

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Gen Re 7.gifAs predicted in this earlier post, this NY Times article reports on the guilty plea of Richard Napier — a senior vice president at General Re in 2000 and 2001 when the questionable transaction with American International Group occurred — to a single criminal conspiracy count in United States District Court in Alexandria, Va. on this past Friday. Here are the previous posts on the investigation into AIG and Berkshire Hathaway, Inc.’s General Re.
Meanwhile, General Re continued its attempt to hedge the risk of loss resulting from the criminal probes by negotiating with the government about settling a continuing criminal investigation that focuses on whether General Re conspired with AIG to distort its finances and mislead investors. The negotiations are complicated by the competing government investigations into AIG and General Re, which a Justice Department probe, an SEC investigation, and the New York attorney general office’s investigation.
A deal between General Re and the government would be based upon the Justice Department’s 2003 Thompson Memo, which contains guidelines that federal prosecutors are supposed use to charge companies in criminal cases. For example, prosecutors can offer lighter charges against companies that “identify culprits” within their organizations, make witnesses available to prosecutors, disclose results of their own internal investigations and waive attorney-client protection.
Berkshire’s Warren Buffet has been pushing General Re’s cooperation with authorities as a basis for leniency. Berkshire’s lawyers have instructed General Re executives to provide emails, notes and other documents to investigators in connection with the various investigations, and Berkshire has publicly stated several times that it is cooperating fully with all government investigations of its reinsurance businesses. AIG’s Board has adopted a similar approach with regard to the investigations.

Optimism and pessimism in the airline business

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nw logo.jpgIt’s a bit difficult to keep up with the different perspectives regarding the airline business these days.
On one hand, this NY Sunday Times article laments just how close some of the major airline companies are to breaking even on an operations basis. It is perhaps the best reflection of the state of the airline industry that breaking even on an operational basis is viewed as a breakthrough achievement for many airlines.
On the other hand, this Wall Street Journal ($) article on Monday reports that Northwest Airlines appears headed toward chapter 11. The company’s stock has lost 42% of its value this year and its largest individual shareholder is bailing out. Rating agencies recently downgraded the company’s senior unsecured debt to junk while citing unsustainably high labor costs and pension-plan obligations.
Professor Ribstein continues to tout the right idea for beginning to solve the financial problems of the airline industry, but it remains difficult to put an airline company out of its misery.