Skip to comments.The Forbes family's big deal causes big trouble (long)
Posted on 07/28/2011 6:08:40 AM PDT by Pearls Before Swine
The Forbes family has poked itself in the eye with its "capitalist tool."
(snip) But according to nonpublic documents made available to Fortune, the company has been under more financial strain than previously believed. Forbes Media violated covenants on a revolving credit line that it took out in 2006, according to a letter sent to the company by J.P. Morgan. The loan, which was part of a series of transactions that allowed the Forbes family to cash out more than $100 million from the company, is due next July. Some lenders have been selling pieces of it at a discount from face value.
(snip) The Forbes family .... is running out of trophies to sell.
(Excerpt) Read more at finance.fortune.cnn.com ...
I thought this was interesting, because the US is, or was, a place where there's social mobility, both upward and downward. As they say, "shirtsleeves to shirtsleeves in three generations." This might not happen to the Forbes, but the ebbs and flows of the rich are interesting in these times when our Dear Leader acts as if being rich is a permanent state that can be milked regularly for redistribution.
The family did well..they took out $250 mill when they sold a piece to Elevation Partners..They also got lots of cash..when they sold off all of ole Malcolm's toys...and maybe they sold at the top of the market...they kept the internet business..and they borrowed..that's called using OTHER PEOPLE's MONEY..rtaher than their own...the family is doing fine....they'll ride out the downturn
OTOH..let's look at Time.....Fortune's parent comany...or rather, let's not..because there ain't anything good to say about it..
most wealthy families destroy their inherited businesses or sell them.
very few are willing to accept the rigors of competition because their personalities are the opposite of the patriarch who built the business.
the orange county register imploded and destroyed a libertarian-conservative media.
the family didn’t want to run the company and sold it to a management co that hired socialists to write dribble.
I missed the inter-publication rivalry angle, LOL. Clearly the Forbes empire was huge, and some of it has been cashed out and redistributed. As you point out, the article is incomplete about whether it's been dissipated as well as redistributed. Since the Forbes fortune was built around publishing, it's a short step for the reader to confuse diversification with dissipation.
Forbes has taken a hit, as have all magazines. I still subscribe..today each issue is paper thin..15 years ago..300 page issues were common with 200 pages of advertising..those days are gone....and soon will be Time