What?! Who's still doing LBO deals?!

This is hilarious. Bain Capital and THL are suing their lenders in Texas over the terms of the debt that the lenders are offering to fund Bain and THL's leveraged buyout of Clear Channel.

Bain and THL should consider themselves lucky that their lenders even exist, much less that they are still offering to attempt syndication of LBO debt in this frozen, illiquid market.

I'd recommend a quick read of the memo from Ropes & Gray, counsel to Bain and THL, the sponsors of this ill-fated LBO.

We're living in a completely different LBO landscape from 2006 (when this deal was struck) and even as late as May 17, 2007 (when it was re-negotiated), sponsors were getting crazy stuff from banks like equity bridges, cov-lite and paper-thin covenants (e.g., no debt-to-equity maximum ratio, no "no call" protection). Banks were bending over backwards to get lending business from sponsors. But that worm turned around June/July '07 and we're in a completely different world. The banks have a solid argument that the credit crunch is an event similar to legal concepts like force majeure and impossibility of performance. They should walk away clean. Paying the breakup fee would be noblesse oblige.

Tyler Kepner's Objective Journalism

The NY Times Sports section is a consistently amusing section of the paper, full of credulous reporting and thinly veiled homerism. The disconnect between the national ambitions of the rest of the paper, with barely any city coverage on Page One and proliferating lifestyle sections (House & Home, Thursday Styles, etc.), and the Sports section (relentlessly centered on New York) is a little jarring when you pull back to 30,000 feet to look at it. It would seem that the Sports section, like the City section, is left to its own devices by the powers that be. And where the City section has excelled, as in the Eliot Spitzer/Ashley Alexandra Dupre reporting, the Sports section has been almost irrelevant for many years.

A particularly lame exemplar of this section is Tyler Kepner, whose breathless reportage of the Greatness of All Things Yankee commences once again today with a turd of a story about Yankee Stadium.

Horace Mann

Lots of chatter over at Gawker about the New York magazine cover story on Horace Mann. It's a long story about students mocking teachers online, watered-down disciplinary actions for children of rich trustees of the school and various "liberal" teachers getting booted.

From an editorial standpoint, this story is great for New York magazine. It helps feed the idea that NYM is a "must read" for folks on the Upper East Side that sit right in the magazine's sweet spot for advertisers. Is it "news"? In a conventional sense, no, of course not. 99% of New Yorkers do not care about Horace Mann or any of the "elite" private schools. But that 1% that do care have to read this article and talk about it with their friends. Great niche marketing/journalism.

On the other hand, it's poorly written, confusing, too long and tedious. The subject matter is a hash of old news with a sprinkling of new quotes.

Ban the Presidential First Pitch

As a Nats fan, I have to ask: why are we burdened with the Presidential first pitch? It's just wrong. He's not a king, he doesn't represent the United States (just the executive branch) and the team represents the people of Washington D.C., not any particular political party. Putting out the red carpet for this putz (or any of the many morons to come in future years) is just embarassing.

Jaffee tri-folds

The classic MAD magazine tri-folds by Al Jaffee are available on the NYT website. I don't know why but I recall Richard Nixon and Vietnam featuring in more than their fair share of these tri-folds back in the Seventies when I was a kid reading MAD Magazine.