Posts in category Business


ApprovedBusinessBusiness and finance

The global property business tries to adapt to e-commerce

Stores of value

FIFTH AVENUE in New York is the most expensive stretch of retail property in the world, now festooned with lights in the approach to Christmas. The pavements heave with crowds eager to see the diamonds sparkling at Tiffany & Co, a jeweller, and festive displays at Saks Fifth Avenue, a department store. But storefronts further downtown in once-thriving shopping districts remain vacant.

The global retail property business is having to adapt as consumers spend more online. Consolidation is in vogue. On December 12th two retail property companies, France’s Unibail-Rodamco and Australia’s Westfield, agreed to merge in a deal worth $24.7bn to form the world’s second-biggest owner of shopping malls by market value. Westfield earns about 70% of its revenues from property holdings in America.

In November, Brookfield Property Partners, another mall owner, bid $14.8bn for the 66% of GGP, a rival, that it did not already…Continue reading

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ApprovedBusinessBusiness and finance

America’s Public Company Accounting Oversight Board gets a new boss

THE collapses of Enron and WorldCom in the early years of this century turned book-cooking into front-page news. Investors lost over $200bn; in 2002 the stockmarket fell by over a fifth between April and July. In response, America’s Sarbanes-Oxley Act set up a new body, the Public Company Accounting Oversight Board (PCAOB), to supervise auditors.

Its quest to give auditors more teeth continues, with the introduction of new rules that James Doty, its outgoing chairman, bills as the most significant changes to reporting by auditors in over 70 years. The question now is whether Mr Doty’s successor, who was announced by the Securities and Exchange Commission (SEC) on December 12th along with four new PCAOB board members, will keep heading in the same direction.

New disclosures on auditors’ tenure and independence take effect this week. And from 2019 auditors must go above and beyond the low bar they have historically set themselves, which is a pass or fail “opinion” on…Continue reading

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ApprovedBusinessBusiness and finance

Companies in the region vote with their feet against political uncertainty

Employees, customers, separatists

“WE ARE used to dealing with political crises, but not a break in the rule of law,” says the boss of a big Barcelona cement firm, of Catalonia’s constitutional crisis. Fearing separatists in the region would declare independence, as they did on October 27th, he shifted its headquarters to Madrid. That ended decades of family tradition, but there is no plan to return. “It was a painful decision, but we had no alternative,” he says.

Catalonia accounts for roughly a fifth of Spain’s GDP and a quarter of its exports, but only a sixth of the country’s population. Its diversified economy is the envy of much of Spain, notes Jordi Alberich Llaveria of Cercle d’Economia, a business lobby in Barcelona, thanks to flourishing medium-sized, family-run industrial, textile and perfume-making firms. It has become a hub for multinationals, carmakers, pharmaceutical firms, fashion boutiques and hundreds of…Continue reading

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ApprovedBusinessBusiness and finance

An accounting scandal sends Steinhoff plummeting

Steinhoff goes on special offer

THE scale is staggering, even by the standards of scandal-worn South Africa. Steinhoff, a retailer that is one of the country’s best-known companies, admitted to “accounting irregularities” on December 6th when it was due to publish year-end financial statements. Its chief executive, Markus Jooste, resigned, and the firm announced an internal investigation by PwC. Within days Steinhoff had lost €10.7bn ($12.7bn) in market value as its share price fell by more than 80% (see chart). Much is unclear, but it is shaping up to be the biggest corporate scandal that South Africa has ever seen. The company has said it is reviewing the “validity and recoverability” of €6bn in non-South African assets.

Steinhoff traces its roots to West Germany, where it found a niche sourcing cheap furniture from the communist-ruled east. The company merged with a South African firm in 1998 and is based in Stellenbosch, near Cape Town—a…Continue reading

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Not even “The Last Jedi” will reverse Americans’ retreat from cinemas

THE new “Star Wars” film opens this week. “The Last Jedi” arrives in cinemas in time to boost expected ticket sales for the year to about $11bn in America, only slightly down from last year’s record. But the American film industry is in trouble. Tickets sold per person have declined to their lowest point since the early 1970s, before the introduction of the multiplex. Expensive flops have prompted studio executives to complain that Rotten Tomatoes, a ratings website, is killing off films before their opening weekends. The studios count on remakes and sequels to attract fans; such films account for all of this year’s top ten at the box office.

It may get worse. Americans are losing the film-going habit as new sources of entertainment seize their attention. Netflix and other streaming services have made it more convenient to watch movies and TV programmes anywhere, on internet-connected TVs, tablets and smartphones. Apps such as Facebook and YouTube are fine-tuned to…Continue reading

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ApprovedBusinessBusiness and finance

American business has concerns on tax reform

PRESIDENT DONALD TRUMP’S effort to change America’s tax code is approaching the finishing line. Republican negotiators from the Senate and the House of Representatives this week hashed out a consensus bill behind closed doors. On December 13th, Mr Trump expressed confidence that he would be able to sign the reform into law before Christmas.

The key provision is the slashing of the corporate tax rate, from 35% to 21%. Big business in America uniformly cheers this reduction. The US Chamber of Commerce calls it a measure to “grow the economy, create jobs, and increase paychecks”. The Tax Foundation, a right-leaning think-tank, claims that reducing the corporate rate to 20%, just one percentage point lower, would increase the size of the economy by 2.7% over the long run. Yet big firms are less enamoured of controversial international provisions that may make it into the final law. Both the Senate bill and the House bill try to stop the shifting of profits by American…Continue reading

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ApprovedBusinessBusiness and finance

The Santa clause

DEAR Team, I trust you are looking forward to your vacations and that the spirit of love and generosity infuses your family gatherings. I also hope that this spirit will be left next to the Christmas tree when you return to work at this incredible company on January 2nd. Because 2018 is going to be the year when America Inc loses its head after a decade of iron financial self-control. And I am not going to make that mistake. Let me drop some festive wisdom: when everyone else is throwing money around like Santa, it is best to behave like Scrooge.

During my workout at 5.10am this morning my trainer played U2. I love Bono for his personal advice on charitable giving, but he is also a perceptive lyricist. “It’s a beautiful day” captures the mood in business. Third-quarter results blew the roof off. Earnings per share for the S&P 500 are 23% above the last peak in 2007. The world economy is rocking. At this week’s digital town halls our sales teams in Houston and Guangzhou reported…Continue reading

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ApprovedBusinessBusiness and finance

The Ivanka Trump label repositions at home and soars in Asia

Waja to go, Ivanka

LAUREN, a Democrat from Maryland, makes an impassioned case for not shopping at Ivanka Trump, the business founded by Donald Trump’s daughter. First comes a predictable argument; she abhors supporting any brand that uses the Trump name. Second, the sparkly sandals she bought back when Ms Trump was a tabloid celebrity, not an adviser to the president, fell apart within a year. Shoppers will soon be able to take such complaints directly to sales staff: the brand is about to open its first standalone store, in Trump Tower in New York.

Floral frocks, stilettos and bangles aimed at the mid-market customer do not often inspire strong reactions, but Ms Trump’s fashion line is divisive. Though Ms Trump distanced herself from her company in January, she owns it and receives money through a trust. Some consumers are boycotting it. Others have purged their wardrobes of items they already own. Thredup, a second-hand fashion site, says…Continue reading

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ApprovedBusinessBusiness and finance

Rio Tinto puts its faith in driverless trucks, trains and drilling rigs

Data-mine ore

FOR millennia, man has broken rocks. Whether with pickaxe or dynamite, their own or animal muscle, in a digger or a diesel truck, thick-necked miners have been at the centre of an industry that supplies the raw materials for almost all industrial activity. Making mining more profitable has long involved squeezing out more tonnes of metal per ounce of brawn. Now robots, not man, are settling themselves into the driving seat.

Rio Tinto, one of the world’s largest mining firms, is leading that transformation in its vast iron-ore operations in the Pilbara region of Western Australia. It is putting its faith in driverless trucks and unmanned drilling rigs and trains, overseeing them from the office equivalent of armchairs about 1,000km (625 miles) south, in Perth. Jean-Sébastien Jacques, Rio’s chief executive, says it is ten years ahead of mining rivals in autonomous technology. For him and for Simon Thompson, a new chairman appointed on December…Continue reading

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ApprovedBusinessBusiness and finance

Western companies are getting creative with their Chinese names

MCDONALD’S drew ridicule in China when it changed its registered name there to Jingongmen, or “Golden Arches”, in October, after it was sold to a Chinese consortium. Some on Weibo, a microblogging site, thought it sounded old-fashioned and awkward, others that it had connotations of furniture. The fast-food chain was quick to reassure customers that its restaurants would continue to go by Maidanglao, a rough transliteration that has, over the years, become a recognisable brand name. But for most companies now entering Chinese markets, transliterations are a thing of the past, says Amanda Liu, vice-president of Labbrand, a consultancy based in Shanghai that advises firms on brand names.

Companies are instead choosing Chinese names with meanings that capture people’s imagination. That often involves going beyond a direct translation. New entrants are taking inspiration from BMW, which is the evocative Baoma, or…Continue reading

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ApprovedBusinessBusiness and finance

The beast of Bentonville battles Amazon, the king of the e-commerce jungle

A BOA constrictor swallowing capitalism. A cyclone dragging the economy into its vortex. If you look back at how people described Walmart a decade ago, it is eerily similar to how Amazon is viewed now. The supermarket chain has “a scale of economic power we haven’t encountered before”, warned “The Walmart Effect”, a best selling book in 2006. But capitalism never stands still. The world’s largest company by sales is now the perceived underdog in an escalating grocery war with Amazon to fill 320m American bellies. The struggle will probably end in a messy stalemate. That will mean mediocre returns for investors—and happy days for consumers.

Just when Walmart’s aura was at its most intimidating, in 2006, stagnation beckoned. Its reputation for bullying its suppliers and staff became toxic. Over the next decade it hit saturation point. About 95% of Americans shop at Walmart at least once a year. It has three square feet of shop space for every adult in the country and has sunk…Continue reading

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ApprovedBusinessBusiness and finance

Video games could fall foul of anti-gambling laws

Four-sided bandit

A DECADE ago the idea of paying real money for virtual items was strange and exotic. These days many video-game publishers build their business models around it. Some of the world’s biggest games, such as “League of Legends”, cost nothing to buy. Instead they rely for their revenue on players buying things for use in the game, such as new characters to play with or costumes to put them in.

A new twist on that model has been attracting the attention of regulators in recent weeks. “Loot boxes” are yet another type of “in-game” item that gamers buy with currency. Unlike the usual sort of purchase, however, players do not know in advance what they are buying, for the contents of a loot box are generated randomly. Sometimes they might be desirable, and therefore valuable; prized items include new gestures or “emotes” for a character, or a pearl handle for an automatic weapon. If less alluring, well, players can pay a bit more money…Continue reading

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Business

Major Players Roll Up Sleeves to Solve Open Source Licensing Problems

Four big tech players this week moved to improve their handling of open source software licensing violations. Red Hat, Google, Facebook and IBM said they would apply error standards in GNU GPLv3 to all of their open source licensing, even licenses granted under older GPL agreements. “This will make everything consistent with GPLv3,” said IP attorney Lawrence Rosen.

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ApprovedBusinessBusiness and finance

Digital news outlets are in for a reckoning

GREAT expectations attended digital journalism outfits. Firms such as BuzzFeed and Mashable were the hip kids destined to conquer the internet with their younger, advertiser-friendly audience, smart manipulation of social media and affinity for technology. They seemed able to generate massive web traffic and, with it, ad revenues. They saw the promise of video, predicting that advertising dollars spent on television would migrate online. Their investors, including Comcast, Disney and General Atlantic, an investment firm, saw the same, pouring hundreds of millions of dollars each into Vice Media, BuzzFeed and Vox (giving them valuations of $5.7bn, $1.7bn and over $1bn, respectively).

They have had successes. Some became ninjas in “SEO” long before most print journalists knew it stood for “search engine optimisation”. They introduced “clickbait” to the lexicon. Some, like BuzzFeed and Vice, worked out that fortunes were to be made in brand-supported viral hits—or “native advertising” that looks similar to the sites’…Continue reading

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Tech giants will likely dominate speakers and headphones

MUSIC lovers do not typically go to the opera to buy a speaker. But at the Palais Garnier in Paris they now can: Devialet, a local maker of high-end speakers, on November 29th opened a store in the 19th-century music venue to sell its most sophisticated product, called Phantom. Looking like a dinosaur egg, this supercomputer for sound (priced at $3,000) is considered one of the best wireless speakers available. It also comes with a dedicated streaming service for live performances, including some at the Palais Garnier.

This Phantom at the opera is the latest example of how digital technology is transforming speakers, headsets and other audio devices. Once mostly tethered to hi-fi systems, they are now wireless, increasingly intelligent and capable of supporting other services. As a result, the industry’s economics are changing.

Only a few years ago the audio industry was highly fragmented, says Simon Bryant of Futuresource, a market-research firm. Hundreds of brands offered…Continue reading

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Plant-based “meat” is so tasty that Europe’s meat industry has to bite back

Carroticide

THE “kapsalon” is a healthy mix of chips, melted Gouda cheese, shawarma, lettuce and garlic sauce and is a tried and tested hangover cure in the Netherlands. So naturally, a butcher’s shop on the Spui, in The Hague, put it on its takeaway menu, alongside burgers and sausage rolls. As two young women walk out, tucking into their steaming kapsalons, an elderly gentleman asks how to prepare the steak he has just bought. The scene would have most carnivores fooled. For this butcher deals only in meatless “meat”.

“We want to become the biggest butcher in the world without ever slaughtering an animal,” says Jaap Korteweg, a ninth-generation farmer and founder of The Vegetarian Butcher. Since opening its first shop in The Hague in 2010 the company has been developing plant-based products that look, smell and taste like meat. “This shouldn’t just taste like real chorizo, it should leave the same red stains on your fingers,” says Maarten…Continue reading

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Two more illustrious Japanese firms admit to falsifying quality data

AKIO MORITA, co-founder of Sony, liked to recall his first trip to Germany in 1953, when a waiter stuck a small paper parasol in his ice-cream and sneered: “This is from your country.” Like many of his post-war compatriots, Mr Morita was ashamed that Japan was known for shoddy goods. The fierce drive to reverse that reputation resulted in the Deming Prize, a quality-control award named after an American business guru so revered in Japan that he received a medal from the emperor for contributing to its industrial rebirth. All that hard work is under threat.

Toray Industries, a textiles and chemicals giant, is the latest pillar of corporate Japan to admit to quality problems. This week a subsidiary said it had faked inspections on reinforcement cords used to strengthen car tyres. Sadayuki Sakakibara, a former president of Toray, said he was “ashamed” and apologised on behalf of Keidanren, the powerful business lobby he now heads. On November 23rd, Mitsubishi Materials sheepishly confessed (during a public holiday) that its subsidiaries had falsified data, on aluminium and other products used in aircraft and cars, given to customers in Japan, America, China and Taiwan. Those customers include Japan’s air force, earning a rebuke from Itsunori Onodera, the defence minister.

Kobe Steel, which was founded in 1905, recently revealed that it had sold…Continue reading

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ApprovedBusinessBusiness and finance

In the Trump era, big business is becoming more political

AT THE start of Donald Trump’s presidency bosses rushed onto his business councils, hoping to influence policies in their favour. Their ardour has cooled. When Mr Trump banned travel from Muslim-majority countries, withdrew from the Paris agreement on climate change and equivocated on racist protesters in Charlottesville, to name but a few occasions, chief executives roared their protest.

“Un-American,” declared Reed Hastings, Netflix’s chief executive, of the immigration ban. Sergey Brin, a co-founder of Google, told a reporter, “I am here because I am a refugee” as he joined protesters against the ban at San Francisco’s airport. “I feel a responsibility to take a stand against intolerance and extremism,” wrote Kenneth Frazier, boss of Merck, a pharma giant, after Charlottesville. “Isolate those who try to separate us,” added Lloyd Blankfein of Goldman Sachs. Other executives have joined lawsuits to overturn Mr Trump’s policies and condemned his actions in memos to…Continue reading

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China’s largest online publisher enchants investors and readers alike

WeChat, we read

WHENEVER Xu Jie goes to the cinema to watch mystery and detective films, she leaves disappointed: to help stamp out superstition, China’s censors excise ghosts and zombies from the screens. So for her fill of phantoms, she turns to the flourishing online-literature scene. There, authors are allowed to take liberties from which most of China’s state-owned publishing houses would recoil. Homophones stand in for forbidden words. Danmei, a new online class of homoerotic story, is especially popular among young women. Readers can choose from over 200 established genres such as xianxia, a fantasy world of deities and martial arts.

The corporate prince of this virtual realm is China Literature, a spin-off from Tencent, a gaming and social-media giant. The four-year-old online publisher listed on Hong Kong’s stock exchange on November 8th, raising just over $1bn. The offering was a huge success; at…Continue reading

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What if the unwashed masses got to vote on companies’ strategies?

ANGLO-SAXON capitalism has had a bad decade. It is accused of stoking inequality and financial instability. A relentless pursuit of shareholder value has led big firms to act in ways that often seem to make the world a worse place. Aeroplane seats get smaller, energy firms pollute the air, multinationals outsource jobs and Silicon Valley firms avoid tax. Some people think that governments should exert more control over private enterprise. But what if the answer to a deficit of corporate legitimacy was to give shareholders even more—not less—power?

That is the intriguing possibility raised by a new paper by Oliver Hart of Harvard University and Luigi Zingales of the University of Chicago. Their argument has two parts. First, the concept of shareholder capitalism should be expanded, so that firms seek to maximise shareholders’ welfare, not just their wealth. Second, technology might allow firms to make a deeper effort to discover what their true owners want. Over 100m Americans invest…Continue reading

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Unilever dodges the Brexit crossfire

IN 1929 the Lever Brothers, a British soapmaker, merged with Margarine Unie, a Dutch margarine manufacturer, to form Unilever. The company has an annual turnover of over €50bn ($59bn), and a portfolio of brands that is recognisable worldwide, from its Flora spread to its Persil detergent. It has retained dual nationality for nearly 90 years, with holding companies and share listings in both Britain and the Netherlands.

Now Unilever says that for the sake of its business, it needs to pick a side. But it is hesitating. On November 28th, ahead of its annual investor meeting, the board provided an update on an ongoing review of its corporate structure. Unifying the company’s share structure, it said, would offer “strategic flexibility” and be in the best interests of both the company and its shareholders—but the announcement left unanswered whether the firm’s new headquarters would be in London or Rotterdam (pictured). Paul Polman, its Dutch chief executive, told the Financial Times that he was recommending that the…Continue reading

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Japan is embracing nursing-care robots

AT SHINTOMI nursing home in Tokyo, men and women sit in a circle following exercise instructions before singing along to a famous children’s song, “Yuyake Koyake” (“The Glowing Sunset”). They shout out and clap enthusiastically even though the activities are being led, not by a human fitness guru, but by Pepper, a big-eyed humanoid robot made by SoftBank, a telecoms and internet giant.

Japan leads the world in advanced robotics. Many of its firms see great potential in “carerobos” that look after the elderly. Over a quarter of the population is over 65, the highest proportion of any country in the OECD. Care workers are in desperately short supply, and many Japanese have a cultural affinity with robots.

For now the market is small. Although the government expects it will more than triple between 2015 and 2020, to ¥54.3bn ($480m), that is a long way below the revenues from industrial and service robots. One big reason for that is expense; few individuals can afford their own robots. Private firms partly rely…Continue reading

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China’s bicycle-sharing giants are still trying to make money

Shades of cycling joy

STEVE JOBS liked to describe computers as “bicycles for the mind”—tools that let humans do things faster and more efficiently than their bodies would allow. The internet-connected bikes flooding the streets of urban China could be called “computers for the road”. Networked, trackable and data-generating, they are ones and zeros in aluminium form.

The cycles belong to Ofo and Mobike, two startups that, taken together, have raised $2.2bn of capital and are valued at more than $4bn. Each has between 7m and 10m bikes in China, averages 30m-35m rides a day and, having entered more than 100 Chinese cities, is expanding abroad. At the start of 2016 neither firm had a single bike on a public road. Ofo’s canary-yellow cycles and Mobike’s silver-and-orange ones can now be found in cities from Adelaide to London and Singapore to Seattle.

Most city bike-sharing systems, such as the Vélib scheme in Paris, depend on fixed…Continue reading

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Google can no longer count on political goodwill at home

“WE USED to be so dismissed,” says Jeremy Stoppelman, the boss of Yelp, an online-review site which has waged a six-year-long battle against Google over how the online giant ranks its search results. Now American regulators are taking concerns about Google more seriously. On November 13th, Josh Hawley, Missouri’s attorney-general, launched an investigation into the search giant to determine whether it had violated the state’s antitrust and consumer-protection laws. Other entrepreneurs, too, congratulate Mr Stoppelman for speaking out about Google; they would not have done so before.

Until then it had been chiefly in Europe where Google had trouble. In June the European Commission announced a record-breaking €2.4bn ($2.7bn) fine against it for anticompetitive behaviour, concluding it had suppressed online-shopping results from rivals in its search results. Other investigations into Google’s behaviour in European countries are ongoing. America has taken a more benign view of its…Continue reading

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Australia is the new frontier for battery minerals

Recession proofer

FORGET the “resource curse”. Australia is blessed with the stuff. For more than a quarter of a century it has not had a recession, thanks largely to Chinese demand for its raw materials. It is only a few years since the end of one such China-led boom, in base metals such as iron ore. A new speculative flurry has started in minerals such as lithium, cobalt and nickel to feed another China-related craze—making batteries for electric vehicles (EVs).

Ken Brinsden, an Australian mining engineer, says he pinches himself over these remarkable turns of fortune. Until 2015 he was a boss at Atlas Iron, which shipped low-grade iron ore to China. In 2011, at the height of the China-led supercycle, it had a valuation of A$3.5bn ($3.8bn). This has now shrunk to A$167m. But he now heads Pilbara Minerals, whose Pilgangoora lithium mine in the outback of Western Australia lies so close to two of Atlas’s former iron-ore mines that he can see them from…Continue reading

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The tumultuous career of Patrick Drahi

WHAT does France’s corporate establishment make of the change in fortunes of Patrick Drahi, a telecoms billionaire who achieved brief greatness before crashing to earth? In August he was reported to be planning a $185bn bid for Charter Communications, America’s second-largest cable operator, which is part-owned by John Malone, a famous cable investor. This month the market value of his indebted firm, Altice, collapsed by half, removing much of his personal wealth.

Mr Drahi’s empire is centred on his control, since 2014, of SFR, France’s second-largest telecoms operator and a big cable firm. It was not his only acquisition; in recent years the Franco-Israeli dealmaker went on a shopping spree, buying dozens of firms and building a transatlantic telecom-and-media empire. He typically sacked 30% of the acquired firms’ employees and squeezed salaries and other costs. Customer service often tended to worsen. In doing so Altice amassed a debt burden of over €50bn ($59bn), far bigger than the value of the firm itself. That made it vulnerable: investors dumped its shares after poor third-quarter figures at SFR.

Mr Drahi is not entirely untypical in France, even if the extent of his activity is. Other swashbuckling dealmakers exist: Vincent Bolloré, a media investor with wide interests, for example, or Xavier Niel, owner of Iliad, another mobile-phone…Continue reading

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How tech giants are ruled by control freaks

THIS month Schumpeter visited the Barnes Foundation, a gallery in Philadelphia full of paintings by Picasso, Matisse and Van Gogh. Albert Barnes, born in 1872, is notable for two things. He made a fortune from an antiseptic that cured gonorrhoea. And he stipulated exactly how his art collection should be posthumously displayed. The result is hundreds of paintings jammed together nonsensically, often in poky rooms, and the creepy feeling of a tycoon controlling you from the grave.

Barnes’s string-pulling comes to mind when considering today’s prominent tycoons, who often hail from technology, e-commerce and media. At the moment they seem omnipotent. But many founders are gradually cashing in shares in their companies. The consequences will vary by firm, with some tycoons gradually ceding control, and others clinging on to it.

A flurry of selling activity has been in evidence of late. On September 13th Jack Ma and Joe Tsai, co-founders of Alibaba, a Chinese e-commerce…Continue reading

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The last media mogul stuns his industry with talk of selling

THE only media mogul still bestriding his industry in old-fashioned style is used to being a predator rather than prey, a builder of empires, not a dismantler of them. So Rupert Murdoch’s reported willingness to sell off much of 21st Century Fox, whether to a rival such as Disney or to a distribution firm like Comcast or Verizon, has come as a shock to many. It should not.

If Fox does follow through with selling the assets—its film and TV studio, its stake in Sky, a European satellite broadcaster, and many of its cable networks—it may well be remembered as one of his cleverest moves. Mr Murdoch would have correctly judged a shifting media and regulatory landscape and sold high (perhaps for $50bn or more; see chart). He would retain lucrative assets in news and sports broadcasting, notably Fox News Channel, which could serve as the base for a new fief of a different sort. Mr Murdoch would also retain plenty of political sway through his newspaper businesses, housed at separately…Continue reading

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The rules on allocating take-off and landing slots favour incumbents

LAST year nearly 3.7bn passengers took to the sky on commercial jets. Few would have given much thought to exactly why their flight was scheduled at the time it was. Even fewer know about the tussles between regulators and airlines over how landing and take-off slots are allocated.

For the past 70 years the business of thrashing out timetables at international airports has been the job of the Slot Conference, a semi-annual meeting of airlines and airport co-ordinators run by the International Air Transport Association (IATA), an airline trade group. The 141st meeting, held last week in Madrid to set next summer’s schedule, attracted over 1,300 representatives from 250 airlines and nearly 300 airports around the world. Sitting around tables (with one for each country’s airports) in a massive hall, airlines negotiate and reschedule their slots to maximise their network’s efficiency. It is like “speed dating for airlines”, says Lara Maughan, the conference…Continue reading

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