Time Warner To Be Split Into Four Parts? 107
Shakrai writes "CNN Money is running a story titled Icahn eyes Time Warner break-up. Carl Icahn is a fairly well known investor who is pushing to break the Time Warner empire into at least four different business units. While his motivation seems to stem from business interests -- he thinks it will work out better for Time Warner in the long run -- I thought it raised an interesting point of discussion. Will the vertically integrated media empires that control content creation, content distribution, internet access and the news media become the Ma Bells of the 21st century? What can be done to protect consumers without stifling the technological innovation that we all know is so important?"
A positive merger (Score:4, Informative)
Since they merged with Bell Atlantic and became Verizon, I'm fairly happy with them. They adopted the policy (for their customer service reps, anyway) that one way or another they wouldn't stop working until your problem was resolved.
Their prices are too high, but at least they fix whatever you tell them is wrong.
But Icahn is just trying to "flip" them, as you would a piece a furniture you got at a garage sale and put on Ebay.
Carl Icahn, "Corporate Raider" (Score:3, Informative)
Carl Icahn is an old guy (born to a middle-class Jewish family in Queens, NY). He makes his money by buying controlling interests in firms and reorganizing them in ways that increase the share price. In this regard, he and other corporate raiders have made American capitalism work more the way it is supposed to (according to the law). Sometimes they've broken the law, and screwed over minority investors; clearly that's awful
The methods of someone like Carl Icahn produce anger, hatred and even anti-semitism -- even though what he does is consistent with American law.
The basic idea of "corporate raiding" is to get enough of a controlling interest in a firm that the raider can convince the board to let him break the "unwritten" rules of American capitalism, for the benefit of the shareholders.
For instance, at big firms, younger employees used to get paid less than at other firms, but had job security. When they got old, they still got paid, even though the company would have been better off without them. Also, often the pension funds for the workers contained more money than they were required to have by law. That money could instead go to shareholders.
Doing those things rubs a lot of folks the wrong way, but that's usually because they imagine that a company has a duty to its workers -- which, in America, is not the case. The company is only beholden to its owners. Until the law changes and the owning class is disposessed, that's the law (and please remember to call me when the revolution happens, guys). Carl Icahn's brilliant ideas, among others, were to fire the older workers and give the extra pension fund money to the shareholders. Perhaps a little "creative accounting" allowed him to give more and then some. This was great for shareholders.
The bosses running American companies had always been legally able to act like Carl; they just didn't have the chutzpah to do it. The American system was less meritocratic, chummy and run by whites.
The corporate raiding could have happened in the 60s or 70s, but banks wouldn't loan money to outsiders like Carl Icahn and his fellow corporate raiders. Without the money, they couldn't buy a controlling interest in a firm and reorganize things.
The banks didn't loan to folks like Carl partly out of self-preservation: by loaning money to people like Carl Icahn, they'd be alienating the other bosses of the companies they served, and that could result in them getting cut out of routine transactions that were their bread and butter.
E.g. if a bank helped Icahn to to a takeover, it would lose some business customers, because pissed off company bosses would withold their company's business -- even if the bank had low rates and not using them was bad for the shareholders!
The reluctance of bankers to loan money to corporate raiders changed in the 80s when Michael Milken, working at Drexel, Burnham and Lambert, appeared on the scene. With high yield bonds, he had the money from investors. Michael and his bank (Drexel, Burnham and Lambert) was willing to loan money to corporate raiders, because the Jewish bank (that's not meant to be "antisemitic" --- but just a statement of who owned, ran and staffed the bank) didn't have much corporate business to lose.
As documented in the book "Predator's Ball", by the Jewish journalist Connie Bruck, to a man, almost all of the corporate raiders and bankers who provided the money were Jews with roots in Poland or Russia. A number of things came together: they were intelligent, hard working, insensitive to criticism, full of love for money (I don't want to use the word "greedy" in connection with "Jews", lest I be accused of "antisemitism" by the hypersensitive), able to do business with each other (genetic relatedness helps people to establish trust) and uncaring about the needs/feelings o