Long and the short of new corporate code
Long-term incentive plans are about to get longer – but long-term board appointments will have to get shorter, writes Matthew Vincent. That’s the (extremely) short and sharp version of the new UK Corporate Governance Code, as published by the Financial Reporting Council this morning. And it seems to be aimed at removing two long-standing reasons for public mistrust of business: money for old rope and jobs for the boys.
Private equity investors are paying through the nose for midsize companies
If finance academics have taught us anything, it’s that you make more money buying things when they’re cheap than when they’re expensive. For private equity investors, this means lower entry multiples are generally better than higher ones. Buying low makes it easier to generate the high absolute returns that attract investors to PE as a strategy. Limited partners in PE funds should therefore be concerned by the latest figures from Pitchbook on how much people are paying for companies worth less than $1 billion:
Sky still under Magic Kingdom’s spell
Sky’s future ownership looks uncertain (again), as news that 21st Century Fox may yet sell its 39 per cent stake to Disney means Isleworth could still end up as part of the Magic Kingdom, writes Matthew Vincent. Reports at the weekend suggested that Rupert Murdoch’s Fox had resumed talks over the sale of its entertainment and international assets — including its holding in the UK and European pay-TV company. Although initial discussions between the two sides ended last month, they are now back on, according to people with knowledge of the situation. And, if a deal were agreed for Disney to buy Fox’s entertainment assets, these would include the Sky stake but not preclude the continuation of a Disney-owned Fox’s bid for the rest of the shares.
The DOJ’s case against the AT&T/Time Warner deal makes no sense
The greatest trick the media companies ever pulled was convincing consumers to blame the cable companies for rising bills. This misconception seems to inform the US Department of Justice’s complaint against the proposed deal to combine AT&T;’s distribution channels with Time Warner’s content. The DOJ lawyers say pay-TV has “huge profit margins”, and that AT&T; is keen to acquire original content from Time Warner “to hinder the growth of online distributors that it views as a threat to the traditional pay-TV model”.
Productivity and the crisis of attention
Dan Nixon from the BoE’s content and strategy division asks an important question this week regarding the connection between digital distraction and flailing productivity. As he points out on the Bank’s Bank Underground blog, there’s a chance digital systems, rather than adding efficiency in weird and mysterious algorithmic ways, could be causing something of an attention crisis in modern society.