Slacker
Well-Known Member
- Joined
- Nov 22, 2017
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- 10,597
You're missing the point. Did you read the article?Is there ANY print business that's thriving like it used to? Newspapers, magazines, shoppers, phone books, paper back novels?
THE PRESS IS NOT THE ONLY victim of private equity, one of the most predatory and poorly understood parts of contemporary American capitalism. The idea that managers can make a fortune by bleeding an enterprise dry seems to defy gravity, but that is increasingly the pattern, not just in media but in other sectors where private equity has made major inroads, including retailing, fast food, airlines, hospitals and nursing homes, private prisons, private universities, and a great deal more. Today, private equity firms control some $4.3 trillion of operating companies that employ at least 11 million workers.
The basic model is the same whatever the sector. Borrow heavily against the assets of the operating company, extract income in the form of excessive dividends and management fees, sell off real estate and other assets, cut wages, pensions, and other operating costs. And then, as an exit strategy, either find a buyer for part or all of the business, or take it into bankruptcy. Though private equity owners are hailed in some quarters as turnaround artists, for the most part the model is inconsistent with reinvesting in the long-term health of the enterprise.