Wednesday, October 14, 2009
Barry / Media Corporate Media? (Oh, Wait--That's Us.)
Posted by Bruce Barry on Wed, Oct 14, 2009 at 10:11 AM
Intrepid Enclave blogger Mike Byrd first posted Monday some commentary questioning whether Solidus is committed to high-quality journalism, offering unsourced conjecture about how SouthComm editorial staff views their jobs and the enterprise, and rebuking without substantiation SouthComm executive editor Liz Garrigan's supposed view of alternative media.
Last night on Enclave, NashvillePost.com writer Tom Wood penned a lengthy comment responding to Byrd's concerns. Wood defended how NashvillePost journalists have covered Solidus in particular and Nashville's venture capital community in general in recent years.
My own quick take is that it's eminently reasonable for Byrd to raise questions about potential conflicts of interest in local journalism related to media ownership. Any press outlet owned by a corporation whose other activities are an object of news coverage faces these potential conflicts. It also incurs the obligation to address and overcome them.
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My view is that obviously the Morrow, Georgia Fire Department has no fitness requirement, but hopefully has extra-strength fire ladders.
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Let's see, the Scene takes random pot shots occasionally at the Tennessean because its publisher is on some board that has something to do with something -- but it's not okay to raise similar questions about the Scene's new corporate masters? Hmmm.
Anon: ...but it's not okay to raise similar questions about the Scene's new corporate masters?
This post: ...it's eminently reasonable for Byrd to raise questions about potential conflicts of interest in local journalism related to media ownership.
Where was it said that it's not okay to raise these questions? Do we have a reading comprehension problem here? Of course it's reasonable to raise these questions about SouthComm and its funders just as it would be about any other media company.
Having said that, Tennessean publisher Ellen Leifeld's conflict of interest is concrete rather than theoretical or hypothetical. It is bordering on astonishing that she would agree to chair the board of the Convention and Visitors Bureau -- among the most prominent and activist pro-convention center organizations in town -- at the same time that her newspaper is covering the political matter of the convention center project. Although the Tennessean is doing the obvious thing to manage the conflict -- disclosing Leifeld's CVB role in just about every story on the convention center -- one suspects that most daily metropolitan newspaper publishers would have declined to assume a role like this during a time when the group in question is a principal player in such a large and controversial civic project.
Say you; say me:
http://enclave-nashville.blogspot.com/2009/10/in-my-best-jack-nicholson-got-little.html
I hope they don't change the yeast rolls. Wait ... wrong shareholder/investor activists ...
tennessee.gov/ecd/tninvestco/faq.html
Q 6.6 – May a TNInvestco whose affiliates were previously invested (prior to the allocation date) in an otherwise qualified business make new qualified investments in that business out of TNInvestco funds?
Yes, provided that the entity continues to fulfill its fiduciary duty to the program.
Q 6.12 – Is a manager or affiliate of a TNInvestco permitted to be employed by a qualified business in which the TNInvestco makes a qualified investment? If so, are payments to the manager or affiliate by the qualified business treated as qualified distributions?
A manager or affiliate of a TNInvestco is permitted to be employed by a qualified business in which the TNInvestco makes a qualified investment. Remuneration paid by the qualified business to the manager or affiliate is not considered to be a qualified distribution. However, if the TNInvestco compensates the manager or affiliate directly for services rendered to the qualified business, such compensation will be treated as a qualified distribution.
Q 6.13 – If a TNInvestco affiliate performs interim management services for a qualified business, is the qualified business permitted to compensate the affiliate for such services?
Yes. The qualified business is permitted to compensate the affiliate for services rendered, provided that such compensation does not exceed fair market value.
Q 6.15 – May a qualified TNInvestco make a qualified investment in a company if the TNInvestco had previously invested in the company prior to being selected as a qualified TNInvestco?
Yes, assuming that the company in which the qualified investment is made is a qualified business.
Q 6.16 – May a qualified TNInvestco make a qualified investment in a qualified business, when the managers of the TNInvestco also manage a separate fund that is already invested in the same qualified business?
Yes.
Q 6.17 – May a fund make an investment in a qualified business, when the managers of the fund also manage a TNInvestco that is already invested in the same qualified business?
Yes.
So, am I correct in reading that the state government's FAQ section indicates that SouthComm could receive TNInvestco funding regardless of whether or not they are qualified because Solidus is judged as qualified to receive the funding, Also Anon?
I can't seem to get a straight answer from TNInvestco or Solidus proponents.
Do the rules allow a winning Solidus either to give TNInvestco investments to SouthComm or to accept TNInvestco investments for another affiliate while reallocating affiliate funds to SouthComm (which would be basically the same thing as passing TNInvestco investments to SouthComm)?
Liz says I lack curiosity. Bruce claims that I have an incomplete handle. Why can't I get answers to the curious questions I ask that would help me complete my handle?
Or if we're going by past Scene scripts, perhaps its time to send in Mr. Pink just to tell me how stupid my questions are.
The rules obviously would not allow TNInvestco funds to go to SouthComm since SouthComm is not a qualified business (its employee headcount substantially exceeds the maximum).
Could a TNInvestco give TNInvestco funds to a qualified "NorthComm" and give non-TNInvestco funds to non-qualified SouthComm? Sure.
Would doing the latter "be basically the same thing as passing TNInvestco investments to SouthComm"? The clear objective of the program is to generate new investment in qualified businesses. Accordingly, the act of, say, liquidating NorthComm equity in order to move funds to SouthComm, with the TNInvestco funds then going to NorthComm to replace the now-shifted equity, would not represent net new investment in the qualified business NorthComm. I don't see in the enabling legislation (http://tennessee.gov/ecd/tninvestco/pdf/PC0610.pdf) any explicit guidance here, but the measure does require that each qualified investment gain approval from state economic development officials, who also must perform an annual review to determine "to determine if the qualified TNInvestco is abiding by the requirements of the program and to ensure that no investments have been made in violation of this chapter." An equity shell game that yields no net gain in investment in the qualified business certainly violates the spirit of the thing and would appear to represent a corruption of its intent.
