I would respond to Mark Cuban, but given the total lack of content or facts in his (still remarkably long) blog entry on CEO compensation, I don't really know how to begin. But we can't really blame him. He pulled substantially all of his multi-billion in net worth out of the single dot-bubble sale of Broadcast.com to Yahoo! in 1999. (You remember, back when "pooling of interests" accounting was still permitted?) Still, given his position it is strange that he seems to think shareholders have it tough. Then again, if Yahoo! or Broadcast.com actually had strong management teams back in 1999 I doubt Cuban would be a billionaire today. Strong management teams aren't rewarded in Mark Cuban's world. Lucky shareholders are. Internet spin doctors are. Is it wrong of me to refuse to accept the change when spellcheckers try to get me to capitalize the word "internet"?
Yahoo! effectively closed Yahoo! Radio (the leftovers of Broadcast.com) in 2002. Not a sign of it remains today. And how much did their next big bet on internet radio cost after the bubble? $12 million. (That folded too). Yet, I would be surprised if anyone even lost their job over either bet.
And if I'm supposed to be impressed with Cuban's management acumen, shouldn't the Dallas Mavericks have done better than a $17.8 million EBITDA loss in 2005 and a $36.0 million EBITDA loss in 2004? And this with a 35-40% debt load? Only the Portland Trailblazers had greater losses in 2005. Portland. Population ~500,000. Dallas. Population ~1.2 million. What does that tell you? And guess who owns the Portland Trailblazers? I'll give you a hint, his performance since his one-trick has flagged too.
Thank god Cuban has got an investment newsletter targeting the "little investor." I'm sure his years of experience in that category guide his scintillating advice. Or maybe anyone with real money won't touch his advice with a ten foot pole.
You see a lot of this lately. The return of the internet spin doctors. After 6 years they are bored. Some are broke. People, they hope, have forgotten. It was so long ago, after all, that whole "bubble" thing. Now they need money again. A second chance. A third, even. Why not? Their poster boy is back in the game.
They don't own internet companies anymore, of course. They are pretending to be managers though. You can recognize them because a lot of people think they are cool, and want to hang out with them or go to their parties, (they are talented speakers, the top of the bullshit salesman foot chain; that's how they snowed everyone in the 1990s) but they have almost no real performance to point to. Not even 6 years after the bubble. What have they been doing? If they got lucky back then, or got fired and cashed all their options before the crash, then they have probably been spending a lot of money. They also love to hold themselves out as authorities on everything from social policy to international relations to, yes, CEO pay. This despite the fact that they might have sunk a big piece of their net worth into something stupid and they might not even have a college degree.
I am going to start calling these people "Bono." (I was going to use Tom Cruise and call them Cruisers, but "Larry (Ellison) and the Cruisers" just seemed too spin-doctorish). Managers because they could afford to buy a firm and run it poorly and unprofitably for years without wincing. Able to afford it only by fluke. Authorities on
everything, lack of knowledge notwithstanding. Celebrity is their
asset. Attention span is their leveraged finance. But their significant use of attention leverage means you have to service the quarterly attention debt payment. No wonder they all have blogs now, are getting slapped with record amounts of fines from their sports leagues owing to their "straight talk," or buying toilet companies to be outrageous. Attention.
Oh, they love attention. They love to be heard. And they work at this. Shameless self promoters. Sometimes they write a bunch of "pop-biz" books that hit it big, but say almost nothing. They love to brag about how they dropped out of school, because learning how to really work would change them in some bad way. Sometimes this portion of their bio, the bragging about dropping out, can go on for 1/3 of the total print surface inside the dustcover. These books of theirs usually have bright covers and cool titles. They are usually endorsed by all sorts of interesting types, who turn out, on further investigation, to be endorsed by the people they endorsed and the whole crowd appears to have worked at the same now defunct start-up together. No one talks about this, of course.
The books themselves are primarily a series of war stories and platitudes that pass for "advice" for the masses. Finance is a particularly popular subject, it being just complex enough in which to hide bullshit from the layman. Anyone who might be able to spot the bullshit is too busy working to actually spend time reading such books, much less calling attention to the bullshit in them, although this is quite easy because there's some on every page.
Sometimes they take long understood concepts or quotes that have already been stolen from someone once, and put some lipstick on them, give them a new name, and unveil them to the world as original ideas. The few surviving dot-com firms (maybe able to survive because they are employed by a sea of jobless Bonos, filled with answers to tough questions like "is it ok to lie on your resume?" and manged to get sponsored by Starbucks) then endorse these posts with awards. People buy this because no one who finds cutsie concepts important bothers to do any real work, reading or research on where they came from. This brings me to a corollary to Leo Rosten's original genius quote, "First rate people hire first rate people. Second rate people hire third rate people." The corollary seems to be: "Third rate people quote first rate people to second rate people." I also think the term we are looking for here is a Bono Explosion, not a Bozo Explosion.
I think Rosten would have been good at spotting Bonos in their many forms. He once also said: "I never cease being dumbfounded by the unbelievable things people believe."
If the Bono has a blog it purpose is generally to tout how cool they
are. (Financial performance or real management experience is rarely
accessible on the blog). Instead, it is common to point out what their Technorati rank is.
(This being a proxy for the financial performance they do not have).
Strangely, while the less well-to-do Bonos are always wearing expensive
shirts and ties in their many expensive head-shots, and though they may
have dozens of books in print or professional sports teams in their
portfolio, somehow they still seem to need context-based advertising on their weblogs.
It is enough to make me scream, "Please, who must I plead with, what petition must I sign to have these Bonos finally exorcised from management positions?" It is enough to give me cramps. But I can't scream. We buyout types need broken firms to snatch up. And no one leaves a wider trail of wrecked and shattered shells of former firms than the Bonos. And given the direction of interest rates? The Corporate Highway of Death is about to be quite full.
Don't want to be a little smoking cinder? Just lay down your wireless microphones and walk off the stage with your hands up. Then we won't have to bomb the company into a charred wreck with you still in the driver's seat.
The Bonos are dead! Long live the Bonos!
Ok that's over. Where'd I put the Midol?