Late Night - Early AM on WBZ-AM is now Mr. Computer

A Joseph Ross
Thu Jan 16 23:48:33 EST 2020

I think that shareholder value was always part of the obligation of 
corporate officers and directors.  It's something I remember hearing 
about in law school, in the course on corporate law, back in the late 
1960s.  I seem to recall that permissive state legislation was necessary 
in order to allow pubic-spirited corporations to make charitable donations.

What has changed, since at least the 1980s, is that value for 
shareholders used to be seen from a broader and longer-term point of 
view.  Now, it's hard to get beyond this quarter's bottom line. This is 
a problem in many parts of the current economy, and it's starting to get 
some pushback.

On 1/16/2020 2:21 PM, Rob Landry wrote:
> On Thu, 16 Jan 2020, Ron wrote:
>> Wasn't Gannett, Westinghouse, Hearst, CBS, NBC, ABC, Metromedia and 
>> the rest
>> "publicly held companies driven, as usual, by short-term financial 
>> goals"?
> They were publicly held companies, sure enough, but up until about 
> 1980 the focus in such companies used to be the long term. Remember 
> when AT&T had Bell Labs, and other companies like IBM had similar 
> divisions, experimenting with new technologies and the like?
>> I'm sure stock price, dividends and such drove all those companies as 
>> well,
>> yet somehow they were able to service their communities, right?
> The narrow focus on "maximizing shareholder value" was originally 
> proposed, if I remember right, at Harvard Business School in the mid 
> seventies. It didn't catch on generally until about a decade later, 
> and the deregulation of the radio industry during the 80s and 90s 
> allowed it free reign in our industry.
>> Smaller, privately owned stations aren't doing much better.
> We are all blown by the same economic winds.
>> I think this has to do with the realities of the financial world, 
>> where once
>> valuable properties (assets) are now worth a pittance of what they were
>> purchased for.  Blaming "publicly held companies" driven by their 
>> fiduciary
>> responsibilities is an easy excuse.
> Publicly held companies have obligations that privately held companies 
> don't have; everything they do has to be reationalized in terms of 
> shareholder value. A publicly held company can't, for instance, build 
> a big rocket and send its CEO's car to Mars, as Elon Musk's 
> privately-held SpaceX can. Nor can it employ people for their own 
> sake, the sake of the communites they live in, or anyone else's sake 
> but shareholders.
>> I think when the FCC allowed and Congress removed the ownership caps
>> (through the "Omnibus Telecommunications Act") set the stage. (Always 
>> watch
>> out for anything with the adjective "Omnibus" attached.)
> That is true, but the pressure on Congress and the FCC to change those 
> laws and regulations was applied by Wall Street.
> Rob

A. Joseph Ross, J.D. · 1340 Centre Street, Suite 103 · Newton, MA 02459
617.367.0468 · Fax:617.507.7856 ·

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