1. Dolans Unscripted
Dolan family madness is alive and well at
The Bethpage, N.Y., cable-system operator
fielded another buyout bid this week from Chairman Charles Dolan and CEO son James. They want to acquire the 77% of Cablevision they don't already own in a $7.9 billion deal.
The Dolans have been down this road before. They tried to take Cablevision's cable operation private in June 2005, but the
convoluted deal fell apart last October in a dispute over terms. The Dolans then pushed Cablevision into a $10-a-share dividend -- but not before an embarrassing
loan-covenant pratfall nearly scuppered the $3 billion payout.
Since then, Cablevision shares have rallied as Wall Street has embraced the company's triple-play growth story, featuring Internet, phone and TV service on one bill. Yet the executive-suite sideshow continues.
Last month, for instance, Cablevision admitted that it was being investigated for apparent stock-option accounting irregularities. But in a novel twist, Cablevision admitted it had improperly awarded in-the-money options to a
That seems like an odd practice, given that options are supposed to prod employees to more and better work. But maybe the Dolans are just unusually hard-headed about the future.
"We continue to feel that succeeding in this fiercely competitive environment," they said in a letter Sunday to the Cablevision board, "requires a long-term, entrepreneurial management perspective that is not constrained by the public markets' constant focus on short-term results."
In the long term, after all, we're all dead.
Dumb-o-Meter score: 93. All due apologies to John Maynard Keynes.
To watch Colin Barr's video take of this column, click here
chief Jay Sidhu finally saw the writing on the wall this week.
stepped down from the Philadelphia-based thrift early Wednesday. Though a company press release says he resigned "for family health-related reasons," news reports suggest directors gave Sidhu a helpful shove.
The Wall Street Journal
reported last Friday that directors were
demanding Sidhu's removal, citing the stock's poor recent performance -- not to mention his obvious disdain for shareholders.
rankled many one-time Sovereign fans was a deal Sidhu
railroaded through last year. He sold a big stake in Sovereign to Spain's
and used the proceeds to buy a New York community bank. Many investors opposed the deals, but that didn't matter, since Sidhu saw to it that the transactions weren't subject to shareholder approval.
Just a month earlier, Sidhu had told analysts at a Lehman Brothers conference, "We consider that an absolute wasting of time to be looking at acquisitions."
Sidhu rarely considered it a waste of time to talk, though. He was prominently featured in a February 2004
poll that raised the weighty question, Should Donald Trump be fired?
"I would vote to severely reprimand him," Sidhu replied. "In today's environment of building trust, we don't want arrogant, imperial CEOs."
Sovereign directors clearly agree.
Dumb-o-Meter score: 90. "Our motto continues to be 'out-local the nationals and out-national the locals,'" Sidhu crooned in a 2002 press release.
3. Forsee's Unforeseen Problems
stumbled deeper into its merger-integration mess this week.
The Reston, Va., telecom giant said Tuesday that Chairman Tim Donahue
will retire early. Donahue, 57, was CEO of fast-growing wireless telco Nextel until it and Sprint joined forces last year in a $35 billion
merger of equals.
"I have poured my heart and soul into Sprint Nextel, and I am confident that the promise of the merger will be realized," said Donahue, who will step aside at year-end. "Instead of being in the thick of the action, it's time for me to start cheering Sprint Nextel along from the sidelines."
The sidelines are starting to get crowded at Sprint Nextel. Strategy chief Tom Kelly, another Nextel alumnus, retired in April. In August, operating chief Len Lauer -- long CEO Gary Forsee's right-hand man --
quit after an
The departures consolidate Forsee's control at Sprint. That's hardly a welcome development on Wall Street, which has been puzzled by the merged company's
failure to build on Nextel's lucrative business-customer base. Shares of Sprint have fallen 20% since the much-hyped union was announced in December 2004, though some of that decline is attributable to a partial spinoff of the
local phone operation.
"Over the next two-and-a-half months," Forsee reassured investors, "Tim and I will be working with the board and the management team to ensure a seamless transition."
If that fails, Forsee should soon be working on a transition of his own.
Dumb-o-Meter score: 85. "We're trying to accelerate the pace of our transition and improve operational execution," Sprint told the
back in August.
4. Monstrous Burdens
It's open season on top execs in the stock-option backdating scandal.
CEOs at online security company
, tech publisher
and wireless shop
all quit this week amid investigations of stock-option chicanery.
Some of the departing chieftains were predictably repentant, what with regulators and prosecutors showing increasing interest in the matter.
"I regret that some of the stock-option problems identified by the Special Committee occurred on my watch," said McAfee's George Samenuk.
And true to form, their replacements wasted no time in promising pained investors dearly desired closure.
"Innovation is part of our DNA," said new CNet chief Neil Ashe, "and will be fundamental to our success moving forward."
But perhaps the best story came from online jobs company
. New York-based Monster said in June that "a committee of independent directors" has been reviewing its stock-option practices. On Monday, it bid adieu to longtime CEO Andrew McKelvey.
So what drove the 71-year-old McKelvey from Monster's penthouse suite? Not a possible
delisting or the probable need to restate earnings, surely. Can last month's suspension of Monster's top lawyer have possibly been a factor?
No, no, a thousand times no. Poor McKelvey was just way too busy.
"At this stage in my life," McKelvey said Monday, "I simply can no longer dedicate the number of hours required by Monster's rapid global growth and the additional demands of time associated with the ongoing historical stock-option grant review."
Maybe that kind of effort isn't part of his DNA.
Dumb-o-Meter score: 82. "Too busy" is certainly an innovative excuse.
5. Free Association
Bank of America
has zeroed in on a bold new way to grab customers.
The Charlotte, N.C., financial giant
stunned Wall Street Wednesday by offering free online stock trading to big depositors.
Bank of America unveiled the program with full-page newspaper ads and a surprise
New York Stock Exchange
bell-ringing. Investors responded by hammering shares of the big online brokerages.
fell 9% and
The move had observers speculating that online commissions everywhere are headed for zero -- a notion Bank of America was happy to drum home.
"Banc of America Investment Services Inc. (BAI) will offer free ($0) online equity trades," reads the first paragraph of a Wednesday morning press release.
In case you haven't made the connection between "free" and "$0," Bank of America is eager to oblige.
"Free ($0) online equity trades at BAI represent the latest opportunity for consumers nationwide to benefit from a broader relationship through Bank of America," the press release continues. And that's not all.
"By introducing free ($0) online equity trading," said Liam McGee, president, Bank of America Global Consumer & Small Business Bank, "we are redefining what consumers can expect from a financial institution."
Blindingly obvious promotional material, for starters.
Dumb-o-Meter score: 79. Hold on, free means paying no dollars? None?