GoreTV, revisited

| March 26, 2008

Nearly two years ago, I wrote a post about the future of broadcast video, comparing Al Gore’s venture, Current TV, with YouTube and similar venues. The post ended thus:

On our DirecTV satellite system, we have hundreds of channels, though fewer than we used to; we dropped all the movie channels when we discovered that we only watched one or two movies a month on them. Yet, outside of the local morning news/weather and occasional news channel updates, I seldom watch more than half a dozen shows and/or movies on TV each week. By contrast, I suspect there are few days that go by in which I don’t watch one or more YouTube videos, embedded in a blog or linked to in an e-mail I receive. In terms of total hours, I still watch more TV; in terms of discrete video productions, I watch more YouTube.

I don’t watch Current TV at all.

Now, BusinessWeek has an article that suggests that Current TV may exist primarily to line the pockets of Al Gore:

Something about this deal just doesn’t sit right with me. Gore isn’t just taking piles of cash. According to the filing Gore, who is listed as executive chairman, and his CEO partner, lawyer-turned-entrepreneur Joel Hyatt, each loaned the company $1 million to get it started. They’ll get that back in the IPO. But the two guys also collect hefty salaries for a company that hasn’t shown a profit in three years—taking down $491,677 apiece last year in cash, plus bonuses of $550,000 each for, in Gore’s case, helping get the company new affiliate agreements, broadening exiting agreements, and putting together a management team. The two currently receive $600,000 a year in salary and are eligible for additional bonuses, according to the IPO filing.

By comparison, at the time of the Google IPO in 2004, its two founders were each taking home a total of $356,556 in salary and bonuses, while sitting on top of a company that had earned nearly $106 million the year before.
Outsize Shareholder Clout

What really sticks out to me, however, is that Gore and Hyatt, who started the company in 2002 (and jump-started it with a broken-down Newsworld International channel they bought for $70.9 million) will have the kind of hammer-lock control over the company decried by shareholder rights activists and many of the same unions that supported Gore for years. According to the filing, once the dust has settled Gore and Hyatt will control all of the company’s Class B shares, which give them 10 votes for every vote a common shareholder gets with a Class A share.

Go read the whole thing. ..bruce webster..

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Category: 2008 Election, Business, Main, Media, US Politics

About the Author ()

Webster is Principal and Founder at Bruce F. Webster & Associates, as well as an Adjunct Professor of Computer Science at Brigham Young University. He works with organizations to help them with troubled or failed information technology (IT) projects. He has also worked in several dozen legal cases as a consultant and as a testifying expert, both in the United States and Japan. He can be reached at bwebster@bfwa.com, or you can follow him on Twitter as @bfwebster.

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