National News

Sizing up Donald Sterling's other business interests

Marketplace - American Public Media - Wed, 2014-04-30 02:58

Donald Sterling is number 972 on Forbes' list of billionaires, with a net worth of $1.9 billion. Forbes values the LA Clippers at $430 million, though some say they could be worth more.

The bulk of Sterling’s wealth comes from real estate -- buildings in LA.  So, will his real estate business be tarnished because Sterling has been banned from the game for racist comments?

“Yes, of course,” says Robert Baade, an economist at Wake Forest University. Baade wouldn’t be surprised if people started boycotting all things Sterling.

Any fall out will be short-lived, according to Leonard Baron, a San Diego realtor and lecturer at San Diego State.  He doesn’t think Sterling will lose any tenants. “People renting are going to be like, 'What’s the price and what’s the location?'" he says. "So I doubt it’s going to have any lasting effects at all.”

And, Baron says, if Sterling wants to sell any real estate, there are plenty of buyers willing to pay top dollar.

Innovation: A Gadget That Scrambles The Egg Inside The Shell

NPR News - Wed, 2014-04-30 02:48

This new kitchen tool promises to scramble egg whites and the yolk to create delicious culinary creations, and save you from washing a whisk. A soft cradle keeps the egg from breaking.

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AT&T jumps on board with airplane Wi-Fi

Marketplace - American Public Media - Wed, 2014-04-30 02:43

This week, AT&T announced it will offer Wi- Fi service on U.S. flights next year.

Until this week, the in-flight internet business was dominated by Gogo.

Roger Entner, with Recon Analytics, says the challenge for AT&T is that only a small fraction of passengers actually use Wi-Fi on flights.

“AT&T is looking at it and says if we bring down price, and we accelerate the speed, more people will use it and then it will become a bigger market.”

Are we moving away from "too big to jail"?

Marketplace - American Public Media - Wed, 2014-04-30 02:32

Federal prosecutors are preparing criminal charges against Credit Suisse and BNP Paribas, according to reporting in the New York Times. 

Ben Protess, with the Dealbook section of the New York Times, wrote:

Federal prosecutors are nearing criminal charges against some of the world’s biggest banks, according to lawyers briefed on the matter, a development that could produce the first guilty plea from a major bank in more than two decades.

In doing so, prosecutors are confronting the popular belief that Wall Street institutions have grown so important to the economy that they cannot be charged. A lack of criminal prosecutions of banks and their leaders fueled a public outcry over the perception that Wall Street giants are “too big to jail.”

"These investigations have been going on for years," Protess told Marketplace. "This is kind of a new batch of cases the last few years."

In the case of the Swiss bank, it involves allegations that it helped clients avoid taxes. In the case of BNP Paribas, it's about doing business with companies in violation of U.S. economic sanctions. The Times says this would challenge a common belief in the financial world that big banks are too important to charge in criminal cases.

"In the Credit Suisse case, that one could really be in the next couple weeks," Protess says. "We're expecting either a guilty plea for the main arm of Credit Suisse in Zurich, or perhaps even the parent company."

Donald Sterling donates a lot of Clippers tickets

Marketplace - American Public Media - Wed, 2014-04-30 01:55

Donald Sterling, the owner of the Los Angeles Clippers who on Tuesday was banned for life from the NBA and fined $2.5 million for racist remarks, reportedly has something of a history of offensive remarks and questionable business practices. Even before the furor over Sterling's most recent indiscretion, he was widely reviled by the rest of the NBA for his tight-fisted management of the Clippers that for years earned the team a reputation as the worst franchise in the NBA (and even all major league sports).

He also has a history of philanthropy, as Sterling has been the recipient of donor awards from numerous organizations like the Special Olympics and the NAACP. Whether or not Sterling's charitable efforts were a form of "reputation laundering," his aversion to spending money seemingly didn't extend to his charitable donations.

But one thing tends to pop up when reviewing Sterling's philanthropy: He gives away a lot of Clippers tickets in lieu of cash.

Not to misrepresent Sterling; he has donated millions of dollars over the years to various organizations. But his donations of Clippers tickets -- over 280,000 tickets to more than 2,000 community groups over the past few years -- are a high-profile aspect of his philanthropy.

Sterling would give around 2,000 to 3,000 tickets per game to youth groups. Those tickets may have been hot commodities over the past few seasons, but before the Clippers successful streak, Sterling's generosity had more of an appearance that he was just filling empty Staples Center seats to boost attendance.

A Sports Illustrated profile on Sterling from 2000 offers probably the most striking example of Sterling's attitudes toward his ticket donations:

Not that every charity has found it easy to separate Sterling from his swag. Linda McCoy-Murray recognized that last summer when she phoned him to help sponsor a golf tournament in honor of her late husband, venerated L.A. Times sports columnist Jim Murray. Every pro franchise in California, according to McCoy-Murray had forked over at least $5,000 to her foundation, which provides journalism scholarships. Every pro franchise, that is, except the Clippers, which had memorialized Murray on the final page of last season's media guide. Sterling offered McCoy-Murray two season passes. "You know, that's wonderful," she remembers telling him. "but we're trying to endow a college scholarship fund. We could really use cash."

Sterling, she says, replied, "Those two tickets have a face value of $4,000!"

"Fine," she said. "We can use the tickets for our silent auction. But would you also consider donating $5,000?"

Sterling said he would mull it over and call her the following week. He never did nor did he send over the season passes.

Becoming a YouTube star

Marketplace - American Public Media - Wed, 2014-04-30 01:00

Not many teenagers can claim self-made stardom. 18 year old YouTube star Bethany Mota has developed a devoted online following with her videos on makeup, clothes, and other teen-related topics. Her interest in making YouTube videos was a result of being bullied online. 

"I think because at the time I was experiencing the dark side of online media, I found this really positive community on youtube that I didn’t even know existed," says Mota. These days, she has a lot to be excited about - Mota has close to 6 million followers on her YouTube channel.

Check out her latest video here:

Training Men And Women On Campus To 'Speak Up' To Prevent Rape

NPR News - Tue, 2014-04-29 23:31

Colleges are teaching students what's known as bystander intervention, based on the idea that both men and women can intervene to interrupt behaviors that could lead to sexual assault.

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An Afghan Village Of Drug Addicts, From Ages 10 to 60

NPR News - Tue, 2014-04-29 23:31

Afghanistan is not just a world leader in producing drugs. It's also a leading consumer. Drug users addicted to heroin, and more recently crystal meth, are everywhere in the western city of Herat.

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Mysterious Kidney Disease Slays Farmworkers In Central America

NPR News - Tue, 2014-04-29 23:30

One community has lost so many men that it's now called the Island of Widows. Researchers are struggling to figure out the cause of the disease. Some suspect a popular herbicide.

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Heartened By Sterling's Ban, Clippers Beat Warriors 113-103

NPR News - Tue, 2014-04-29 21:40

The Los Angeles Clippers lead the Golden State Warriors 3-2 in the series. Owner Donald Sterling wasn't there. On Tuesday, the NBA banned him for life after he made racist comments.

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Lab Rats May Be Stressed By Men, Which May Skew Experiments

NPR News - Tue, 2014-04-29 15:34

Scientists noticed the phenomenon when mice and rats did not react to pain in the presence of men. They ran an experiment and found it had to do with certain pheromones produced by men.

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The history of the marketing of Cinco de Mayo

Marketplace - American Public Media - Tue, 2014-04-29 15:23
Friday, May 2, 2014 - 04:05 Bryan Steffy/Getty Images for Bud Light

Party goers enjoy the poolside Bud Light Lime 'Lime -A - Rita' Cinco de Mayo party on May 5, 2012 in Las Vegas, Nevada.

Technically, Cinco de Mayo falls on a Monday this year. But beer companies want people to get an early start, celebrating over the weekend.

But celebrating what, exactly? What does Cinco de Mayo mean for marketers and consumers?

Many in Los Angeles celebrated Cinco de Mayo last weekend. Tens of thousands of Latinos attended a street fair that big corporations saw as a marketing opportunity, even if their message was a little fuzzy.

At the Ford booth, I spoke with Marie, a 'brand ambassador.' I asked her to make the connection between the car company and Cinco de Mayo.

"Ford, to me, is about the people. And people need to drive to get around this city and Ford is a great way to do that," said Marie.

She struggled to make the connection. But, to be fair, it is sort of a hazy holiday.

After all, May 5 commemorates an obscure battle where the Mexican underdogs defeated the French.

"In Mexico, we don't really do Cinco de Mayo," said Marie. "It's more of an American-ized holiday."

In this case, 'American-ized' meant commercialized. Festival goers moved from line to line, waiting for free samples and gift bags. A fiesta of freebies from McDonald's and Palmolive and Colgate.

"The consumer products companies have been the early-adopters of understanding that this is the market that is going to move the needle, and they've really fought hard to create brand recognition," said Xavier Gutierrez with Meruelo Group, one of the event's sponsors.

While some companies try to connect with Latinos, beer companies try to get everyone to party.

According to Nielsen, the market research company, Americans bought more than $600 million worth of beer last year for Cinco de Mayo. That's more beer than was sold for the Super Bowl or St. Patrick's Day.

"Beer companies have been largely responsible for the commodification of Cinco de Mayo. I mean, they spend millions and millions of dollar in Spanish-language advertising," said Jose Alamillo, a professor of Chicano studies at California State University Channel Islands.

Alamillo said the beer industry ignores alcohol related health issues that affect the Latino community.

He'd like to see Cinco de Mayo promoted as a history lesson, instead of -- as critics allege -- an excuse to sell booze.

Marketplace Morning Report for Friday May 2, 2014Story Byby Jeff Tyler and Shea HuffmanPodcast Title The history of the marketing of Cinco de Mayo Story Type FeatureSyndication SlackerSoundcloudStitcherSwellApp Respond No

Obamacare Enrollees Emboldened To Leave Jobs, Start Businesses

NPR News - Tue, 2014-04-29 14:50

Some people who felt stuck in certain jobs, just because they needed the employment-based health insurance, say they are finding the Affordable Care Act liberating.

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Frontier Airlines will charge to use overhead bins

Marketplace - American Public Media - Tue, 2014-04-29 14:29

You've got your low cost airlines, and then you've got your ultra-low cost airlines.   Frontier has a new pricing structure. Base fares are going down. But if you want to use the overhead bin, it'l be $20 for frequent fliers who book online, and $50 for those who wait until they get to the gate.   That space at your feet under the seat in front of you: Still free... for now.  

In The City Of Love, There's No Love Lost For Tourists' Love Locks

NPR News - Tue, 2014-04-29 13:42

Lovebirds write their names on a padlock, attach it to something and toss the key. Sweet, right? Non, say opponents in Paris who want to ban a practice they say is damaging architecture and more.

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In The City Of Love, There's No Love Lost For Tourists' Love Locks

NPR News - Tue, 2014-04-29 13:42

Lovebirds write their names on a padlock, lock it to something and toss the key. Sweet, right? Non, say opponents in Paris who want to ban a practice they say is damaging architecture and more.

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Yahoo's making content of its own

Marketplace - American Public Media - Tue, 2014-04-29 13:41

Original online content is still in its infancy, but boy, is it a crowded crib.

Beyond the TV and the movie screen, there's YouTube, Netflix, HBO GO, Vimeo, Vice, Vevo and Hulu -- and now there's Yahoo, too. 

Courtesy of a new deal with Live Nation, Yahoo will air live concerts every day starting this summer. It'll also offer two new comedy series: "Other Space," a so-called galactic adventure set a hundred years from now, and "Sin City Saints," about a fictional pro basketball team. Yahoo is getting into this business because video ads command much higher prices than typical banners and popup ads, but it's a costly strategy.

Whether it pays off ultimately depends on how good the shows are, how much visibility they get and how well they're marketed to the public. Otherwise, they risk sinking without trace.  

A Texas-sized bankruptcy for giant Texas energy deal

Marketplace - American Public Media - Tue, 2014-04-29 13:39

Texas was dealt a blow by the U.S. Supreme Court Tuesday, via a ruling that the Environmental Protection Agency can order states to cut down on emissions if those emissions are drifting over to neighboring states.

Texas has the highest CO2 emissions of any state in the country. Texas also consumes the most energy, which brings us to the second major blow dealt to Texas: The state’s largest electricity provider, Energy Future Holdings Corp., filed for bankruptcy.

In 2007, Goldman Sachs and private equity firms acquired TXU for $45 billion, making it the biggest leveraged buyout ever. There were lots of reasons to believe that owning the largest provider of electricity in the largest state in the continental U.S. had lots of potential for growth, so private equity firms loaded the company -- renamed "Energy Future" -- with debt.

“The problems, of course, are when the business becomes less valuable, or there are meaningful hiccups,” says Peter Cowan, managing director of Clear Capital Advisors.

Those meaningful hiccups can be caused by a larger economic downturn, or from changes within the industry. In this case it was both. The 2008 recession caused an overall decline in energy use. And then came the fracking boom, which drove the price of natural gas down, along with the utility’s profits. When Energy Future filed for bankruptcy today, its total assets were $36.4 billion. Its debt was nearly $50 billion. 

Barbarians at the Gate and the other largest LBO that you might have heard of 

by Tobin Low

It was the largest buyout in U.S. history. At the time, the 2007 purchase of Energy Future Holdings for $45 billion was called that.

But credited with creating the LBO environment of the next 20 years, the 1989 purchase of Nabisco was both contentious and dramatic. The food company sold for $31.1 billion at the time, and when adjusted for inflation, the sale price is closer to $55.38 billion. With the adjusted price of Energy Future coming in at around $47.23 billion, Nabisco's sale wins by almost $7 billion.

Plus, as dramatic as Energy Future's end may be, Nabisco's LBO started out with a bidding war that has since been immortalized in book and on screen. F. Ross Johnson, then executive of the company, partnered with with a buyout firm to attempt an in-house purchase of the company. Enter Kohlberg, Kravis, Roberts & Company (also involved in Energy Future's purchase). KKR started a bidding war that continued to hike the price of Nabisco higher and higher. At the end of the day, Johnson lost out, and ultimately left the company. 

To this day, it is still considered to be "one of the most game-changing deal in American financial history."

How Donald Sterling won 'humanitarian' awards

Marketplace - American Public Media - Tue, 2014-04-29 13:37

Among the sanctions NBA Commissioner Adam Silver loaded on Los Angeles Clippers' owner Donald T. Sterling today for what can charitably be described as Sterling's racist remarks, was a lifetime ban from the NBA, and a $2.5 million fine. The NBA will donate the money to organizations that "promote anti-discrimination and tolerance."

Those groups, though, have actually already gotten a fair amount of money from Sterling and his charitable foundations. This comes as no surprise if you live in Los Angeles and still read the newspaper. The Los Angeles Times periodically prints giant ads that Donald Sterling designs himself, promoting his donations to, and awards from, all sorts of community groups.

Just this weekend he took one out celebrating his pledge to UCLA to support kidney research. (Today, UCLA rejected that pledge.) Past ads have celebrated Sterling's honors from the Black Business Association, and his first lifetime achievement award from the Los Angeles chapter of the NAACP.

Sterling has "contributed to a lot of minority charities, including the NAACP," Leon Jenkins, president of the Los Angeles NAACP chapter, said at a press conference on Monday, explaining why his chapter had planned to give Sterling another life time achievement award next month—a move they thought better of this week.

Sterling has been accused of racist behavior several times over the course of his career. But that shouldn't make his donations to groups that promote tolerance, or their celebration of his donations, all that surprising, says Rob Reich, co-director of Stanford's Center on Philanthropy and Civil Society.

"Philanthropy has too frequently been a form of 'reputation laundering,'" Reich says, adding that using charitable gifts to "wash" one's reputation has a long history. Think: an oil company that gives a university money for a clean energy research center.

In the case of Sterling, he's known for small donations to dozens of community groups—a strategy that has the benefit of maintaining your social status in the local circles where you do business, Reich says. "Because one stands in actual relationships with people in the local area, the philanthropic donations one makes goes to sustain ones local relationships."

Regardless of Sterling's motivations, or his racist comments, Augustin Pantoja, the financial manager at Jefferson High School in south Los Angeles, is glad for Sterling's local charity.

"He's helping our community," Pantoja told me when I reached him by phone at the school, which has a largely black and Latino student body. Pantoja says he won't refuse the annual $5,000 that Sterling gives to help Jefferson students go to college, many of whom "have the capacity to further their education, but because of lack of money they don't pursue that."

"I'm a minority," Pantoja tells me, cautioning that he doesn't want to wade too deeply into the controversy around Sterling's comments. But, he says of Sterling's charity, "at least he's doing something."

UPDATED: After One Botched Execution, Oklahoma Stays A Second

NPR News - Tue, 2014-04-29 13:37

The state was set to use a new combination of drugs, but the execution of Clayton D. Lockett failed. He died after the execution was aborted. The new drugs have been the subject of controversy.

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