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CEO Daily: The Best in Business Reading

Good Morning.

Uber seems to dominate business journalism these days only slightly less than Donald Trump dominates everything else. There are endless tales of the glitzy car-service-app provider and its pugnacious founder and CEO, Travis Kalanick, that portray it as the Death Star of the sharing economy. In that regard, “Uber’s CEO Plays With Fire,” in the New York Times, doesn’t break new thematic ground. Yet it’s well worth reading, if only for the scene of Kalanick reprimanded by Apple CEO Tim Cook for violating Apple’s rules by tagging iPhones even after customers had deleted Uber’s app. Some of the episodes described here have been told before, but others—including that Kalanick was bullied as a child and that he once sold knives door-to-door—were new (at least, to me). The article argues that “Travis Kalanick’s drive to win in life has led to a pattern of risk-taking that has put his ride-hailing company on the brink of implosion” and it backs that with solid evidence. Of course, approaching—but not yet disintegrating in—a full-on implosion seems to be one of Kalanick’s defining talents…so far.

Bannon, The Businessman

Steve Bannon. You need only utter the name of the senior counselor to the president to generate an intense reaction in many quarters. The New Yorker decided to mostly sidestep politics and profile Trump’s advisor, focusing especially on Bannon’s earlier incarnation as a businessman—an investment banker and producer—particularly during his years on the West Coast. “How Hollywood Remembers Steve Bannon,” by business-profile master Connie Bruck, is utterly fascinating. The article describes how Goldman Sachs brought Bannon out to Los Angeles (he eventually formed his own firm) and raises questions about the already-widely-accepted view that Bannon made millions on the TV show Seinfeld. It also casts doubt as to whether, as others have reported, Bannon brought the prominent Saudi prince Alwaleed in as a bidder for PolyGram in the late 1990s. Nothing is accepted at face value under Bruck’s exacting reporting.

One of the most bizarre episodes is Bannon’s role (with one of the Bass brothers of Texas, who are the Kevin Bacons of finance—seemingly connected to so many important people in the investing world) as an investor and later CEO of Biosphere 2. The latter was a prominent project in the 1990s, a glass-domed earth-like habitat that, among other things, was intended to facilitate research on the effects of greenhouse gases on the climate. One passage describes what happened when Ed Bass and Bannon, a former naval officer, decided a management change was needed. They “planned the takeover as meticulously as a paramilitary operation,” Bruck writes. “On April 1, 1994, he and Bowen rode toward Biosphere 2, accompanied by armed U.S. marshals and a phalanx of support people. The marshals went first, followed by investment bankers, accountants, public-relations people, and secretaries. Bannon had placed his younger brother Chris, a former Navy pilot, at the head of the first team. Chris Bannon told Reider, ‘We had to secure the gate out front, get out with the federal marshals, serve the security person at the gate, secure the gate, and then move into the other critical areas that had already been defined in order to insure the safety and security of the Biosphere and its systems.’” Believe it or not, things only get more contentious from there.

Two Worlds, 40 Miles Apart

For a powerful juxtaposition of the lives of rich and poor when it comes to housing, read “What It’s Like to be a Real-Estate Agent to DC’s Super Rich,” in Washingtonian, and then  “Dismissed: Tenants Lose, Landlords Win In Baltimore’s Rent Court,” in the Baltimore Sun. The former is a profile of Nancy Taylor Bubes, the “grand dame” of Washington residential real estate—”a more Hermès version of Kathie Lee Gifford”—who sold $174 million worth of homes last year. The article is an appealing portrait of a top high-end salesperson and it’s filled with fun lines: “Watching Bubes in action is like watching one of those Hindu deities with all the arms.” The details are amusing, too, including the time she agreed to sell a $2.9 million house with the terms scribbled on a napkin at a cocktail party, then called the next day to tell the buyer, “You are going to honor your cocktail napkin. A deal’s a deal.” Of course, you may not feel the same way about the anecdote after reading “Dismissed,” which is filled with wrenching accounts of poor people and how they are at a disadvantage against landlords in Baltimore’s housing court, even when the landlords are failing to provide livable properties or to, say, remediate the lead paint threatening the lives of the tenants’ families. Some people have pointed out that the article is reminiscent of the superb 2016 book “Evicted,” which won the Pulitzer Price recently for its depiction of the housing plight of poor people in Milwaukee, and it’s true. The Sun article is filled with  examples of inequity, including what occurs in the highly rare instances in which tenants are able to persuade a judge that the landlord has failed his or her obligations: “In the 54 cases in which inspectors found homes to be ‘illegal’ or ‘unfit’ for habitation, landlords won 89 percent of the money.” Combined, the two pieces starkly illustrate the income inequality that plagues this country.

Spinal Tap: The Lawsuit

It’s no revelation that Hollywood’s accounting tends to be roughly as accurate as Enron’s. But “This Lawsuit Goes To 11,” in BloombergBusinessWeek, offers an entertaining and illuminating voyage into the miasma of movie bookkeeping. It chronicles efforts by the creators of “This Is Spinal Tap,” the beloved original ‘mockumentary’ of the ill-fated heavy-metal band of the same name, to try to claim a financial return on the movie more than three decades after it premiered and eventually became a beloved cult hit. Wearing the black hat and twirling its mustache is the giant conglomerate Vivendi, which informs actor Harry Shearer (AKA bassist Derek Smalls, most infamous for a foil-wrapped cucumber) that “Shearer and his three creative partners’ share of total worldwide merchandising income from 1984 to 2006 was $81, and the total income from soundtrack sales from 1989 to 2006 was $98. That’s just dollars, with no zeros at the end. It was Stonehenge all over again: They’d expected feet and got inches.”

The article acknowledges this is a hoary form of injustice:

… this is Hollywood, where studios have claimed that some of the highest-grossing films—hits such as Return of the Jedi, Harry Potter and the Goblet of Fire, and the Lord of the Rings trilogy—somehow haven’t turned a profit. As David Zucker, one of the creators of Airplane!, once said of his own sleeper hit, “It made so much money that the studio couldn’t hide it fast enough.”

Usually, I find it hard to muster much sympathy for Hollywood stars claiming studios haven’t rewarded them as richly as they should. But when it comes to the weathered super-annuated lads in this particular faux-metal band, it’s a different matter. In fact, there’s a Spinal Tap song title that I think would properly capture their attitude—and mine, after reading this article—to the movie industry. We can’t print the title in a G-rated newsletter. We’ll just quote the fictional Nigel Tufnel, who says the song is “influenced by Mozart and Bach—it’s sort of in between those—it’s like a ‘Mach’ piece…”

Nicholas Varchaver