Deals & People April 30, 2009

Lewis Says BofA Poised for Growth

Bank of America (BofA) Chief Executive Kenneth Lewis was forced out of his role as chairman and will be replaced by Walter Massey.
Reported by

At the company’s annual meeting, a shareholder proposal was approved to change the company’s by-laws to require an independent chairman, according to a release from BofA. Lewis will remain chief executive.

Lewis faced pressure from shareholders after BofA has been scrutinized for its acquisition of Merrill Lynch (see “Some BofA Shareholders Want Lewis Out’). BofA is under investigation for $3.6 billion in bonuses doled out to Merrill Lynch executives in the final hour before Merrill was acquired by BofA (see “Cuomo Says Merrill Accelerated Bonus Payments’ and “Merrill Executives Supoenaed in Bonus Probe’).

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During the meeting, Lewis defended the acquisition of Merrill. According to the release, he said the company’s long-term vision for profitable growth is being advanced by the acquisitions of both Merrill and Countrywide Financial Corp., despite the challenging economic environment.

“Merrill will help the company move toward its goal of developing stronger, deeper, and more profitable customer relationships over the long term through its leading positions in capital markets and wealth management,” Lewis said. “My strong feeling is that organizational integration—and a renewed focus on organic growth—will be the almost exclusive focus of our efforts in the coming years.’

Data & Research April 29, 2009

Diamonds in the Rough?

Apparently the softening economy is also weighing on the value of major league baseball teams.
Reported by

Well, some teams. Overall team values increased an average of 1% over the past year to $482 million—led by the New York Yankees, which saw their value jump 15% to $1.5 billion, according to survey by Forbes. The Yankees had the biggest percentage increase in value on the list partly because they moved into a lucrative, new $1.5 billion ballpark this season.

League revenue, including funds used to finance stadium debt, rose 5.5% to $5.8 billion last year, while operating income increased 1.8% to another record at $501 million, according to the magazine.

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Top Teams

The second-ranked team was the cross-town rival of the Yankees, the New York Mets, whose value rose an impressive 11% to a net worth of $912 million. The Mets also moved into a new stadium, Citi Field, this year, and the team will get an average of $20 million a year in naming rights and related advertising from the bank, not to mention a cable deal.

The next three most valuable teams—the Boston Red Sox (up 2% to $833 million), Los Angeles Dodgers (gaining 4% to $722 million), and Chicago Cubs (surging 9% to $700 million) —own their stadiums and generate a lot of money from tickets, concessions, and sponsorships—not to mention cable television, according to Forbes.

Series “Split?”


Last year’s World Series loser (or American League champion, depending on your perspective), the Tampa Bay Rays, rose 10% to $320 million. The 2008 World Series champion Philadelphia Phillies rose just 3% to $496 million, good enough for seventh place in the Forbes ranking.

However, Forbes said the decline in value of 10 teams—a third of the league—was the most since 2004, as the U.S. recession has hurt franchises with a lot of debt or stadiums in cities with high unemployment. And it could get worse: Although the season is young, Major League Baseball has already been hurt by the recession, which has led consumers and companies to cut spending.

The Washington Nationals had the biggest decline in value, 12%, to $406 million. High unemployment in Michigan and Ohio was a factor in the value of the Detroit Tigers and the Cleveland Indians, falling 9% and 4%, respectively. The Atlanta Braves shed 10%, while the Houston Astros, Seattle Mariners (-9%), San Francisco Giants (-5%, but still in the top 10), Oakland Athletics, and Pittsburgh Pirates also lost ground.

The complete Forbes list can be found at www.forbes.com/mlb.

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