The Lincoln Plawg - the blog with footnotes

Politics and law from a British perspective (hence Politics LAW BloG): ''People who like this sort of thing...'' as the Great Man said

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Monday, June 21, 2004
 

Air America: the gory financial details


No doubt the likes of Rush Limbaugh and Bill O'Reilly have been glorying in a piece in the Wall Street Journal [1] which picks over the shambolic start that Air America made, looked at as a business. Which certain of the managers eminently failed to do: they seemed to have viewed it as a cross between a charity and a game of Monopoly.

Remember when one of the station owners of its 'network'
MultiCultural locked Air America out of its studios and kicked it off the airwaves in Chicago and Los Angeles. An Air America employee wrote on the network's Web site that MultiCultural's Chief Executive Arthur Liu was a "Liu-ser" and "Liu-cifer" and that Air America was "chasing him down with a pipe wrench."

About as much thought seems to have gone into post-launch Air America by its top men as post-invasion Iraq by USG.

There are one or two nuggets. For example,
As the network tried to repair the damage, it was also fighting with [Al] Franken over how his salary was paid. As the network's star, Mr. Franken had negotiated a pay package valued at more than $1 million a year, according to a copy of the contract viewed by The Wall Street Journal. On the evening of April 26, Mr. [David] Goodfriend [AAR's acting CEO] says he was asked by Mr. [Evan] Cohen [one of AAR's owners] to show Mr. Franken a deposit slip that would prove he'd been paid a portion of his salary. Mr. Cohen says he only asked Mr. Goodfriend to negotiate with Mr. Franken.

The next day, Mr. Goodfriend went to Mr. Franken's Manhattan apartment to meet Mr. Franken's wife, who manages her husband's finances. Over the Frankens' kitchen table, the two tore open an envelope sent over by Mr. Cohen that they thought was going to contain proof of the payment. All they found was a stack of irrelevant documents.


The whole thing was a Mickey Mouse operation [2]: anyone who knows anything about starting this sort of venture knows that the first thing on the lawyers' to-do list is to ensure that the financing is locked in before any investor is committed. If I'm promoting a company, and I get a sucker to invest by falsely telling him that so many millions have already been committed to the venture, I'm committing a criminal offence in most jurisdictions in the Western world, I'd have thought. That seems to be the leading mischief in the case of AAR.

(My beef with AAR is with its content. I've not much changed my views since May 2 - for the very good reason that AARR doesn't much seem to have changed its programmes!)

  1. The eminently sane news pages, rather than the foaming-at-the-mouth op-eds. The source, as ever in this neck of the woods, is the essential Romenesko.

  2. In the colloquial sense: I can't see the Disney Co producing quite so spectacular a series of business snafus.

MORE

I recall a T-shirt on offer on liberal sites a couple of months ago featuring the Bush foreign policy team (Bush to the fore) with the legend Dude, Where's My Weapons? One might repeat the poster, this time with AAR presenters (with Franken taking Bush's place!) and the legend Dude, Where's My Salary?.


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