OCTOBER 2-3, 2014
SIGNS EMERGE THAT LIBERALS' LOVE OF POPE FRANCIS IS FLAGGING
by THOMAS D. WILLIAMS, PH.D.
“Losing hope that Pope Francis will bring real change to the Church” read a recent headline, capping an article that decries Francis’ lack of support for American nuns, which the article describes as “the de facto leaders of the country’s liberal Catholics.”
“If the new pope were serious about shifting the Church’s attention, one sign might be his treatment of these women... But a year and a half into his papacy, Pope Francis is looking an awful lot like his predecessors.” These words, cited from a recent essay in Harper’s Magazine called “Francis and the Nuns,” suggest that the revolution feared by some and hoped for by others simply is not happening.
The article went on to observe that stories of continuing problems in the Church “tend to take the air out of any suggestions that Francis is, well, some kind of savior.”
Meanwhile, similar fears of dashed expectations for change are beginning to circulate around the upcoming synod on marriage and the family, set to begin this coming Sunday.
A recent piece observed that “the discussions are raising expectations among the faithful that some change in doctrine is inevitable. If the reforms don’t materialize, or don’t go as far as many want, they worry that the faithful will become disillusioned with the church.”
The disappointments have already begun. As soon as the list of attendees for the upcoming synod were released, the lay reform group “We Are Church Ireland” pronounced themselves “extremely disappointed,” as did Fr. Thomas Reese, former editor of the Jesuit Magainze America. Reese, a well-known liberal spokesman, called the list of participants “a disappointment to those hoping for reform of the Curia and for those who hope that the laity will be heard at the synod.”
Likewise, in a recent interview, Cardinal Wilfrid Fox Napier, the archbishop of Durban, South Africa, said that his greatest worry for the synod is “unrealistic expectations, one of which is the media-driven false hope that Pope Francis is going to overturn, single-handedly, a most serious section of Church teaching to satisfy the demands of the modern world.”
History sometimes repeats itself, and something similar already occurred back in 1968, when media reports that Pope Paul VI was planning to reverse traditional Catholic teaching on artificial birth control proved false. Paul’s encyclical letter called Humanae Vitae reaffirmed the teaching, and huge numbers of Catholics were disillusioned.
Pope Francis recently praised the courage of Paul VI in standing up to the majority, for which he lost the favor of church liberals. Francis may be set up for a similar fate.
by THOMAS D. WILLIAMS, PH.D.
“Losing hope that Pope Francis will bring real change to the Church” read a recent headline, capping an article that decries Francis’ lack of support for American nuns, which the article describes as “the de facto leaders of the country’s liberal Catholics.”
“If the new pope were serious about shifting the Church’s attention, one sign might be his treatment of these women... But a year and a half into his papacy, Pope Francis is looking an awful lot like his predecessors.” These words, cited from a recent essay in Harper’s Magazine called “Francis and the Nuns,” suggest that the revolution feared by some and hoped for by others simply is not happening.
The article went on to observe that stories of continuing problems in the Church “tend to take the air out of any suggestions that Francis is, well, some kind of savior.”
Meanwhile, similar fears of dashed expectations for change are beginning to circulate around the upcoming synod on marriage and the family, set to begin this coming Sunday.
A recent piece observed that “the discussions are raising expectations among the faithful that some change in doctrine is inevitable. If the reforms don’t materialize, or don’t go as far as many want, they worry that the faithful will become disillusioned with the church.”
The disappointments have already begun. As soon as the list of attendees for the upcoming synod were released, the lay reform group “We Are Church Ireland” pronounced themselves “extremely disappointed,” as did Fr. Thomas Reese, former editor of the Jesuit Magainze America. Reese, a well-known liberal spokesman, called the list of participants “a disappointment to those hoping for reform of the Curia and for those who hope that the laity will be heard at the synod.”
Likewise, in a recent interview, Cardinal Wilfrid Fox Napier, the archbishop of Durban, South Africa, said that his greatest worry for the synod is “unrealistic expectations, one of which is the media-driven false hope that Pope Francis is going to overturn, single-handedly, a most serious section of Church teaching to satisfy the demands of the modern world.”
History sometimes repeats itself, and something similar already occurred back in 1968, when media reports that Pope Paul VI was planning to reverse traditional Catholic teaching on artificial birth control proved false. Paul’s encyclical letter called Humanae Vitae reaffirmed the teaching, and huge numbers of Catholics were disillusioned.
Pope Francis recently praised the courage of Paul VI in standing up to the majority, for which he lost the favor of church liberals. Francis may be set up for a similar fate.
Facebook plots first steps into healthcare
BY CHRISTINA FARR AND ALEXEI ORESKOVIC
(Reuters) - Facebook Inc (FB.O) already knows who your friends are and the kind of things that grab your attention. Soon, it could also know the state of your health.
On the heels of fellow Silicon Valley technology companies Apple Inc (AAPL.O) and Google Inc (GOOGL.O), Facebook is plotting its first steps into the fertile field of healthcare, said three people familiar with the matter. The people requested anonymity as the plans are still in development.
The company is exploring creating online "support communities" that would connect Facebook users suffering from various ailments. A small team is also considering new "preventative care" applications that would help people improve their lifestyles.
In recent months, the sources said, the social networking giant has been holding meetings with medical industry experts and entrepreneurs, and is setting up a research and development unit to test new health apps. Facebook is still in the idea-gathering stage, the people said.
Healthcare has historically been an area of interest for Facebook, but it has taken a backseat to more pressing products.
Recently, Facebook executives have come to realize that healthcare might work as a tool to increase engagement with the site.
One catalyst: the unexpected success of Facebook's "organ-donor status initiative," introduced in 2012. The day that Facebook altered profile pages to allow members to specify their organ donor-status, 13,054 people registered to be organ donors online in the United States, a 21 fold increase over the daily average of 616 registrations, according to a June 2013 study published in the American Journal of Transplantation.
Separately, Facebook product teams noticed that people with chronic ailments such as diabetes would search the social networking site for advice, said one former Facebook insider. In addition, the proliferation of patient networks such as PatientsLikeMe demonstrate that people are increasingly comfortable sharing symptoms and treatment experiences online.
Chief executive Mark Zuckerberg may step up his personal involvement in health. Zuckerberg and his wife Priscilla Chan, a pediatric resident at University of California San Francisco, recently donated $5 million to the Ravenswood Health Center in East Palo Alto.
Any advertising built around the health initiatives would not be as targeted as it could be on television or other media. Pharmaceutical companies, for instance, are prohibited from using Facebook to promote the sale of prescription drugs, in part because of concerns surrounding disclosures.
PRIVACY CONCERNS
Privacy, an area where the company has faced considerable criticism over the years, will likely prove a challenge. This week, the company apologized to users for manipulating news feeds for the purposes of research.
But Facebook may already have a few ideas to alleviate privacy concerns around its health initiatives. The company is considering rolling out its first health application quietly and under a different name, a source said. Market research commissioned by Facebook found that many of its users were unaware that photo-service Instagram is Facebook-owned, the source said.
Facebook's recent softening of its policy requiring users to go by their real names may also bolster the company's health plans. People with chronic conditions may prefer to use an alias when sharing their health experiences.
"I could see Facebook doing well with applications for lifestyle and wellness, but really sick patients with conditions like cancer aren't fooling around," said Frank Williams, chief executive of Evolent Health, a company that provides software and services to doctors and health systems.
People would need anonymity and an assurance that their data and comments wouldn't be shared with their online contacts, advertisers, or pharmaceutical companies, Williams said.
It remains unclear whether Facebook will moderate or curate the content shared in the support communities, or bring in outside medical experts to provide context.
Facebook declined to comment on its health care plans.
(Editing by Tomasz Janowski)
BY CHRISTINA FARR AND ALEXEI ORESKOVIC
(Reuters) - Facebook Inc (FB.O) already knows who your friends are and the kind of things that grab your attention. Soon, it could also know the state of your health.
On the heels of fellow Silicon Valley technology companies Apple Inc (AAPL.O) and Google Inc (GOOGL.O), Facebook is plotting its first steps into the fertile field of healthcare, said three people familiar with the matter. The people requested anonymity as the plans are still in development.
The company is exploring creating online "support communities" that would connect Facebook users suffering from various ailments. A small team is also considering new "preventative care" applications that would help people improve their lifestyles.
In recent months, the sources said, the social networking giant has been holding meetings with medical industry experts and entrepreneurs, and is setting up a research and development unit to test new health apps. Facebook is still in the idea-gathering stage, the people said.
Healthcare has historically been an area of interest for Facebook, but it has taken a backseat to more pressing products.
Recently, Facebook executives have come to realize that healthcare might work as a tool to increase engagement with the site.
One catalyst: the unexpected success of Facebook's "organ-donor status initiative," introduced in 2012. The day that Facebook altered profile pages to allow members to specify their organ donor-status, 13,054 people registered to be organ donors online in the United States, a 21 fold increase over the daily average of 616 registrations, according to a June 2013 study published in the American Journal of Transplantation.
Separately, Facebook product teams noticed that people with chronic ailments such as diabetes would search the social networking site for advice, said one former Facebook insider. In addition, the proliferation of patient networks such as PatientsLikeMe demonstrate that people are increasingly comfortable sharing symptoms and treatment experiences online.
Chief executive Mark Zuckerberg may step up his personal involvement in health. Zuckerberg and his wife Priscilla Chan, a pediatric resident at University of California San Francisco, recently donated $5 million to the Ravenswood Health Center in East Palo Alto.
Any advertising built around the health initiatives would not be as targeted as it could be on television or other media. Pharmaceutical companies, for instance, are prohibited from using Facebook to promote the sale of prescription drugs, in part because of concerns surrounding disclosures.
PRIVACY CONCERNS
Privacy, an area where the company has faced considerable criticism over the years, will likely prove a challenge. This week, the company apologized to users for manipulating news feeds for the purposes of research.
But Facebook may already have a few ideas to alleviate privacy concerns around its health initiatives. The company is considering rolling out its first health application quietly and under a different name, a source said. Market research commissioned by Facebook found that many of its users were unaware that photo-service Instagram is Facebook-owned, the source said.
Facebook's recent softening of its policy requiring users to go by their real names may also bolster the company's health plans. People with chronic conditions may prefer to use an alias when sharing their health experiences.
"I could see Facebook doing well with applications for lifestyle and wellness, but really sick patients with conditions like cancer aren't fooling around," said Frank Williams, chief executive of Evolent Health, a company that provides software and services to doctors and health systems.
People would need anonymity and an assurance that their data and comments wouldn't be shared with their online contacts, advertisers, or pharmaceutical companies, Williams said.
It remains unclear whether Facebook will moderate or curate the content shared in the support communities, or bring in outside medical experts to provide context.
Facebook declined to comment on its health care plans.
(Editing by Tomasz Janowski)
JPMorgan Chase & Co, others underwrite aggressive Tibco buyout loan: IFR
(Reuters) - JPMorgan Chase & Co (JPM.N) has teamed up with unregulated lenders to underwrite a highly leveraged buyout financing for the acquisition of business software maker Tibco Software Inc (TIBX.O), which could contravene regulatory guidelines on risky lending, Thomson Reuters IFR reported on Friday, citing sources.
The recent move by the U.S. bank comes just weeks after rival bank Credit Suisse Group AG (CSGN.VX) was rebuked by the Federal Reserve for failing to adhere to U.S. leveraged lending guidelines.
The sources said the debt package provided by JPMorgan, along with Jefferies, to Vista Equity Partners to finance its$4.3 billion acquisition, had leverage well in excess of eight times and includes loans and bonds.
The overall size of the debt was not known.
The leverage total is higher than the six times ceiling that the Fed, the Federal Deposit Insurance Corp and the Office of the Comptroller outlined as acceptable under new guidelines announced last year as they try to curb reckless underwriting.
"The real story here is that JPMorgan, which is generally deemed to be more conservative and has got the same letters as all other Wall Street banks from regulators about lending, decided to go in with such an aggressive deal," said one of the sources.
"There are huge adjustments to EBITDA (on the deal) and cov-lite loans. It flies directly in the face of regulators."
Market sources told IFR that at least three other banks, including Bank of America Merrill Lynch (BAC.N) and Deutsche Bank (DBKGn.DE), had already agreed to lend to Vista.
JPMorgan, who the sources said was originally backing a rival bidder for Tibco, came in at the last minute offering a more aggressive finance package that the company could not turn down and the other banks could not compete with.
JPMorgan and Jefferies declined to comment. Vista did not return calls for comment, IFR said.
BOLD MOVE
The sources said JPMorgan's debt commitment was almost definitely non-compliant. The guidelines, however, remain a gray area and banks have been grappling with their interpretation for the past 18 months.
The regulators, for example, also focus on loans that can be criticized or considered "non-pass" if a company cannot amortize or repay all senior debt from free cashflow, or half their total debt, in five to seven years.
Some on Wall Street believe this is a more important criteria than the overall leverage number.
A number of deals over six times have been done over the past six months and still been deemed satisfactory by regulators following the annual examination of banks' loan books, known as Shared National Credit reviews, the sources said - the results of which will be published soon.
The leveraged buyout of marketing firm Acosta last month was roughly eight times levered, with bankers arguing the business can cope with that amount of debt.
JPMorgan's decision to team up with Jefferies, though, which is not regulated by the Fed or the OCC, has come as a surprise.
One of the sources said some of the financing was also coming from direct lending from alternative capital providers, signaling that others are willing and able to fill the gap left by banks.
Privately held brokerage Jefferies was one of the banks that stepped in to lend to private equity firm KKR earlier this year on a buyout loan for Brickman's acquisition of ValleyCrest that other banks snubbed on concerns it was too risky to pass muster with US regulators.
Macquarie, Mizuho, SMBC and Nomura also joined Jefferies.
Bankers have been complaining for months of an uneven playing field and different treatment from the Fed and the OCC on the banks they oversee.
"Sponsors do not have to accommodate these changes. If the banks won't lend to them, they'll just go to people that will," said one of the sources.
"How does that stop systemic risk?"
Credit Suisse recently received a letter – known as "Matters Requiring Immediate Attention" – highlighting problems with the bank's adherence to leveraged lending guidelines.
One of the sources said Credit Suisse had pulled out of several new leveraged buyout financings over the past three weeks, including that for Grocery Outlet.
Goldman Sachs was Tibco's financial adviser. Vista was also advised by Bank of AmericaMerrill Lynch, Deutsche Bank, Jefferies, JPMorgan and Union Square Advisors.
Founded in 1997 as a subsidiary of Reuters Holdings Plc with backing from Cisco Systems Inc, Tibco went public in 1999. Thomson Reuters Corp is no longer a material shareholder in the company.
(Reuters) - JPMorgan Chase & Co (JPM.N) has teamed up with unregulated lenders to underwrite a highly leveraged buyout financing for the acquisition of business software maker Tibco Software Inc (TIBX.O), which could contravene regulatory guidelines on risky lending, Thomson Reuters IFR reported on Friday, citing sources.
The recent move by the U.S. bank comes just weeks after rival bank Credit Suisse Group AG (CSGN.VX) was rebuked by the Federal Reserve for failing to adhere to U.S. leveraged lending guidelines.
The sources said the debt package provided by JPMorgan, along with Jefferies, to Vista Equity Partners to finance its$4.3 billion acquisition, had leverage well in excess of eight times and includes loans and bonds.
The overall size of the debt was not known.
The leverage total is higher than the six times ceiling that the Fed, the Federal Deposit Insurance Corp and the Office of the Comptroller outlined as acceptable under new guidelines announced last year as they try to curb reckless underwriting.
"The real story here is that JPMorgan, which is generally deemed to be more conservative and has got the same letters as all other Wall Street banks from regulators about lending, decided to go in with such an aggressive deal," said one of the sources.
"There are huge adjustments to EBITDA (on the deal) and cov-lite loans. It flies directly in the face of regulators."
Market sources told IFR that at least three other banks, including Bank of America Merrill Lynch (BAC.N) and Deutsche Bank (DBKGn.DE), had already agreed to lend to Vista.
JPMorgan, who the sources said was originally backing a rival bidder for Tibco, came in at the last minute offering a more aggressive finance package that the company could not turn down and the other banks could not compete with.
JPMorgan and Jefferies declined to comment. Vista did not return calls for comment, IFR said.
BOLD MOVE
The sources said JPMorgan's debt commitment was almost definitely non-compliant. The guidelines, however, remain a gray area and banks have been grappling with their interpretation for the past 18 months.
The regulators, for example, also focus on loans that can be criticized or considered "non-pass" if a company cannot amortize or repay all senior debt from free cashflow, or half their total debt, in five to seven years.
Some on Wall Street believe this is a more important criteria than the overall leverage number.
A number of deals over six times have been done over the past six months and still been deemed satisfactory by regulators following the annual examination of banks' loan books, known as Shared National Credit reviews, the sources said - the results of which will be published soon.
The leveraged buyout of marketing firm Acosta last month was roughly eight times levered, with bankers arguing the business can cope with that amount of debt.
JPMorgan's decision to team up with Jefferies, though, which is not regulated by the Fed or the OCC, has come as a surprise.
One of the sources said some of the financing was also coming from direct lending from alternative capital providers, signaling that others are willing and able to fill the gap left by banks.
Privately held brokerage Jefferies was one of the banks that stepped in to lend to private equity firm KKR earlier this year on a buyout loan for Brickman's acquisition of ValleyCrest that other banks snubbed on concerns it was too risky to pass muster with US regulators.
Macquarie, Mizuho, SMBC and Nomura also joined Jefferies.
Bankers have been complaining for months of an uneven playing field and different treatment from the Fed and the OCC on the banks they oversee.
"Sponsors do not have to accommodate these changes. If the banks won't lend to them, they'll just go to people that will," said one of the sources.
"How does that stop systemic risk?"
Credit Suisse recently received a letter – known as "Matters Requiring Immediate Attention" – highlighting problems with the bank's adherence to leveraged lending guidelines.
One of the sources said Credit Suisse had pulled out of several new leveraged buyout financings over the past three weeks, including that for Grocery Outlet.
Goldman Sachs was Tibco's financial adviser. Vista was also advised by Bank of AmericaMerrill Lynch, Deutsche Bank, Jefferies, JPMorgan and Union Square Advisors.
Founded in 1997 as a subsidiary of Reuters Holdings Plc with backing from Cisco Systems Inc, Tibco went public in 1999. Thomson Reuters Corp is no longer a material shareholder in the company.
Should Jennifer Lawrence Have an IPO for Herself?
by Eriq Gardner
Is the world ready for a Tom Cruise IPO? How about trading shares of Melissa McCarthy for a piece of Ben Affleck?
It might not happen this year, but don't be surprised if one day soon, celebrity fandom mixes with market capitalism to produce stock offerings tied to the income of top-earning stars such as Robert Downey Jr.,Sandra Bullock or Denzel Washington. According to Buck French, CEO of Fantex, Inc., his company certainly has such designs.
Read more Hollywood Salaries Revealed, From Movie Stars to Agents (and Even Their Assistants)
Fantex, based in San Francisco, is a recently launched trading exchange where investors can buy and sell interests in real-life people. So far, Fantex has focused on professional athletes, launching IPOs for San Francisco 49ers tight end Vernon Davis and Buffalo Bills quarterback E.J. Manuel. In September, Fantex announced its latest signing — Chicago Bears wide receiver Alshon Jeffery, who will be offering investors a 13 percent stake in his future income from playing contracts, endorsements and other activities related to football. In return, Jeffery will get most of the $7.94 million being raised from the stock offering up front.
In focusing first on athletes, Fantex is attempting to capitalize on the fervor around fantasy sports to give "owners" even more rooting interest. But French says he believes the same financial model holds "tremendous potential" for top actors and music superstars who have become brands in their own right and have projectable cash-flow streams to offer. For instance, if a star like Jennifer Lawrence decided to go public using the Fantex model, she would agree to sell Fantex a portion of her future income from acting, endorsements and appearance fees. In exchange for a big check up front, Fantex would collect her earnings, sell the shares to investors and decide when to pay out dividends. Lawrence would keep the authority to make her career choices, meaning the investors would never have a say in whether she returns for the next X-Men sequel.
Still, this prospect gathers mixed reactions in Hollywood.
See more Robert Downey Jr.'s Life and Career in Pictures
Schuyler Moore, a film finance lawyer at Stroock, is optimistic at the idea of generating up-front cash for entertainers and establishing a new vehicle to leverage a star's fan base. "I can almost guarantee it's going to happen," he says. But there are skeptics, such as attorneyKen Hertz, whose clients include Will Smith and Britney Spears. "One problem is this: It creates a relationship with potentially thousands of strangers looking over your client's shoulder, curious about their personal and professional choices," he says. "All the waivers in the world can't make that a good idea."
Fantex wouldn't be the first to allow investors to share in entertainer income. In 1997, rocker David Bowie began offering bonds based on his future revenue, with his older recordings used as collateral. But according to attorney Donald Passman, author of All You Need to Know About the Music Business, the "Bowie bonds" model never took off because the high fees and tax payments represented a more expensive option for entertainers than just borrowing from a bank.
Read more Studio Perks of the Hollywood Exec: Home Screening Rooms, Private Jets, Huge Expense Accounts
Fantex also wouldn't be the first to allow fans to treat entertainers like public corporations.Cantor Fitzgerald runs a platform called the Hollywood Stock Exchange that allows users to buy and sell virtual shares of films and celebrities. At its height in 2010, it reported 1.7 million users, and there were plans to begin using real money. Then the government put a stop to it and the hype died down, though it's still quietly in operation, with about 55,000 users.
No company has gone quite as far as Fantex. The start-up registers its listings at the SEC and uses Latham & Watkins, a white-shoe law firm, to conduct due diligence on its offerings and prepare prospectuses. French says athletes "remain CEO of their brand," though Fantex is given audit rights to verify income. To French, the biggest difference between athletes and actors is the "lumpiness" of entertainer income, meaning paychecks can vary depending on creative choices or hot and cold streaks. He gives the example ofJohn Travolta as an actor whose career has seesawed unpredictably. That would make projections more challenging — but not impossible.
See more 'Hunger Games: Mockingjay' Posters Introduce a Dark District 13
Kleinberg Lange attorney Jill Smith, who previously worked at Dustin Hoffman's production company, says she commends Fantax's entrepreneurial spirit, "but once you get past that highly superficial appeal, I see a lot of problems in this concept: What happens when the actor decides to take a couple of years off to have a family? Go on a year-long humanitarian aid trip? Check in to rehab? Or, perish the thought: retire?"
Even if actors signing up with Fantex disclaim any fiduciary duties to investors and don't mind sacrificing secrecy about their pay, a stock market for entertainers raises other issues that would need to be sorted. For example, Greenberg Glusker attorney Andrew Apfelberg expresses concern over "insider trading, given the numerous people who would know that an actor is signed up to do a given project long before the public ever knew."
But fans of celebrities might not necessarily care that actors and musicians represent a riskier asset class than, say, U.S. treasury bonds. As for why talent would sign up for an IPO, French argues that there is an upside beyond a quick payday: "We're premised on the idea that if you forge a financial interest linked to the brand, then you have not just investors, but advocates."
by Eriq Gardner
Is the world ready for a Tom Cruise IPO? How about trading shares of Melissa McCarthy for a piece of Ben Affleck?
It might not happen this year, but don't be surprised if one day soon, celebrity fandom mixes with market capitalism to produce stock offerings tied to the income of top-earning stars such as Robert Downey Jr.,Sandra Bullock or Denzel Washington. According to Buck French, CEO of Fantex, Inc., his company certainly has such designs.
Read more Hollywood Salaries Revealed, From Movie Stars to Agents (and Even Their Assistants)
Fantex, based in San Francisco, is a recently launched trading exchange where investors can buy and sell interests in real-life people. So far, Fantex has focused on professional athletes, launching IPOs for San Francisco 49ers tight end Vernon Davis and Buffalo Bills quarterback E.J. Manuel. In September, Fantex announced its latest signing — Chicago Bears wide receiver Alshon Jeffery, who will be offering investors a 13 percent stake in his future income from playing contracts, endorsements and other activities related to football. In return, Jeffery will get most of the $7.94 million being raised from the stock offering up front.
In focusing first on athletes, Fantex is attempting to capitalize on the fervor around fantasy sports to give "owners" even more rooting interest. But French says he believes the same financial model holds "tremendous potential" for top actors and music superstars who have become brands in their own right and have projectable cash-flow streams to offer. For instance, if a star like Jennifer Lawrence decided to go public using the Fantex model, she would agree to sell Fantex a portion of her future income from acting, endorsements and appearance fees. In exchange for a big check up front, Fantex would collect her earnings, sell the shares to investors and decide when to pay out dividends. Lawrence would keep the authority to make her career choices, meaning the investors would never have a say in whether she returns for the next X-Men sequel.
Still, this prospect gathers mixed reactions in Hollywood.
See more Robert Downey Jr.'s Life and Career in Pictures
Schuyler Moore, a film finance lawyer at Stroock, is optimistic at the idea of generating up-front cash for entertainers and establishing a new vehicle to leverage a star's fan base. "I can almost guarantee it's going to happen," he says. But there are skeptics, such as attorneyKen Hertz, whose clients include Will Smith and Britney Spears. "One problem is this: It creates a relationship with potentially thousands of strangers looking over your client's shoulder, curious about their personal and professional choices," he says. "All the waivers in the world can't make that a good idea."
Fantex wouldn't be the first to allow investors to share in entertainer income. In 1997, rocker David Bowie began offering bonds based on his future revenue, with his older recordings used as collateral. But according to attorney Donald Passman, author of All You Need to Know About the Music Business, the "Bowie bonds" model never took off because the high fees and tax payments represented a more expensive option for entertainers than just borrowing from a bank.
Read more Studio Perks of the Hollywood Exec: Home Screening Rooms, Private Jets, Huge Expense Accounts
Fantex also wouldn't be the first to allow fans to treat entertainers like public corporations.Cantor Fitzgerald runs a platform called the Hollywood Stock Exchange that allows users to buy and sell virtual shares of films and celebrities. At its height in 2010, it reported 1.7 million users, and there were plans to begin using real money. Then the government put a stop to it and the hype died down, though it's still quietly in operation, with about 55,000 users.
No company has gone quite as far as Fantex. The start-up registers its listings at the SEC and uses Latham & Watkins, a white-shoe law firm, to conduct due diligence on its offerings and prepare prospectuses. French says athletes "remain CEO of their brand," though Fantex is given audit rights to verify income. To French, the biggest difference between athletes and actors is the "lumpiness" of entertainer income, meaning paychecks can vary depending on creative choices or hot and cold streaks. He gives the example ofJohn Travolta as an actor whose career has seesawed unpredictably. That would make projections more challenging — but not impossible.
See more 'Hunger Games: Mockingjay' Posters Introduce a Dark District 13
Kleinberg Lange attorney Jill Smith, who previously worked at Dustin Hoffman's production company, says she commends Fantax's entrepreneurial spirit, "but once you get past that highly superficial appeal, I see a lot of problems in this concept: What happens when the actor decides to take a couple of years off to have a family? Go on a year-long humanitarian aid trip? Check in to rehab? Or, perish the thought: retire?"
Even if actors signing up with Fantex disclaim any fiduciary duties to investors and don't mind sacrificing secrecy about their pay, a stock market for entertainers raises other issues that would need to be sorted. For example, Greenberg Glusker attorney Andrew Apfelberg expresses concern over "insider trading, given the numerous people who would know that an actor is signed up to do a given project long before the public ever knew."
But fans of celebrities might not necessarily care that actors and musicians represent a riskier asset class than, say, U.S. treasury bonds. As for why talent would sign up for an IPO, French argues that there is an upside beyond a quick payday: "We're premised on the idea that if you forge a financial interest linked to the brand, then you have not just investors, but advocates."
JPMorgan hack exposed data of 83 million, among biggest breaches in history
(Reuters) - Names, addresses, phone numbers and email addresses of the holders of some 83 million households and small business accounts were exposed when computer systems atJPMorgan Chase & Co (JPM.N) were recently compromised by hackers, making it one of the biggest data breaches in history.
The bank revealed the scope of the previously disclosed breach on Thursday, saying that there was no evidence that account numbers, passwords, user IDs, birth dates or Social Security numbers had been stolen.
It added that it has not seen "unusual customer fraud" related to the attack which exposed contact information for 76 million households and 7 million small businesses.
The people affected are mostly account holders, but may also include former account holders and others who entered their contact information at the bank’s online and mobile sites, according to a bank spokeswoman.
Security experts outside of the bank warned that the breach could result in an increase in crime as scammers will likely attempt to use the stolen information to engage in various types of fraud.
The bank's customers should be on heightened alert for fraud, said Mark Rasch, a former federal cyber crimes prosecutor.
"All of this data is useful to hackers and identity thieves," he said. "The kind of information that was stolen is not sensitive itself, but is frequently used to validate people's identities."
Tal Klein, vice president with the cybersecurity firm Adallom, said that the breach could undermine confidence in the security of banks and other companies that people assume are well protected from hackers.
"Criminals could literally take on the identities of these 83 million businesses and people. That's the biggest concern," he said.
"Until now the assumption has been that the companies that get breached are the ones that have poor security practices, but we know that JPMorgan had a good security program and that they invest heavily in this area," he said. "So what we are waking up to is that the fundamental nature of security is broken."
Still, JPMorgan advised customers on its website that it does not believe they need to change their passwords or account information.
Company spokeswoman Patricia Wexler said that the bank is not offering credit monitoring to its customers because no financial information, account data or personally identifiable information was compromised.
At the end of August, JPMorgan said it was working with U.S. law enforcement authorities to investigate a possible cyber attack. As with home break-ins, it can take victims of data attacks months to discover what, if anything, is missing.
(Reporting by Tanya Agrawal in Bangalore, David Henry in New York and Jim Finkle in Boston.; Editing by Ted Kerr and Bernard Orr)
(Reuters) - Names, addresses, phone numbers and email addresses of the holders of some 83 million households and small business accounts were exposed when computer systems atJPMorgan Chase & Co (JPM.N) were recently compromised by hackers, making it one of the biggest data breaches in history.
The bank revealed the scope of the previously disclosed breach on Thursday, saying that there was no evidence that account numbers, passwords, user IDs, birth dates or Social Security numbers had been stolen.
It added that it has not seen "unusual customer fraud" related to the attack which exposed contact information for 76 million households and 7 million small businesses.
The people affected are mostly account holders, but may also include former account holders and others who entered their contact information at the bank’s online and mobile sites, according to a bank spokeswoman.
Security experts outside of the bank warned that the breach could result in an increase in crime as scammers will likely attempt to use the stolen information to engage in various types of fraud.
The bank's customers should be on heightened alert for fraud, said Mark Rasch, a former federal cyber crimes prosecutor.
"All of this data is useful to hackers and identity thieves," he said. "The kind of information that was stolen is not sensitive itself, but is frequently used to validate people's identities."
Tal Klein, vice president with the cybersecurity firm Adallom, said that the breach could undermine confidence in the security of banks and other companies that people assume are well protected from hackers.
"Criminals could literally take on the identities of these 83 million businesses and people. That's the biggest concern," he said.
"Until now the assumption has been that the companies that get breached are the ones that have poor security practices, but we know that JPMorgan had a good security program and that they invest heavily in this area," he said. "So what we are waking up to is that the fundamental nature of security is broken."
Still, JPMorgan advised customers on its website that it does not believe they need to change their passwords or account information.
Company spokeswoman Patricia Wexler said that the bank is not offering credit monitoring to its customers because no financial information, account data or personally identifiable information was compromised.
At the end of August, JPMorgan said it was working with U.S. law enforcement authorities to investigate a possible cyber attack. As with home break-ins, it can take victims of data attacks months to discover what, if anything, is missing.
(Reporting by Tanya Agrawal in Bangalore, David Henry in New York and Jim Finkle in Boston.; Editing by Ted Kerr and Bernard Orr)
Contact Lost With Planes One by One as FAA Fire Spread
By Alan Levin
The first radio links with pilots were lost just as the pre-dawn crush of flights into Chicago began.
Air-traffic controllers in a nondescript Federal Aviation Administration building about 40 miles from the city switched to backup channels. Then those failed. They tried emergency connections, which also went dead.
Within minutes, radar feeds, flight plans and other data controllers rely on to direct more than 6,000 aircraft a day above five U.S. states had vanished as a fire was being set in a communications room one floor below. The attack was thorough and carried out by someone who knew the system intimately -- down to removing steel sheathing on data cables to destroy them, according to three people with knowledge of the incident.
“I opened the door, walked in two or three steps,” said Peter Hartman, a technician. “The smoke in there was just so thick you couldn’t see your hand in front of your face.”
The Sept. 26 outage, blamed on a suicidal communications technician, was the worst case of sabotage in the history of the nation’s air-traffic control system. Thousands of flights were canceled across the country on the first day, a figure that fell to about 200 yesterday. The FAA said it may take until Oct. 13 to replace damaged equipment and fully recover.
Related: Air-Traffic Vulnerabily Examined in Fire Halting Flights
“It was fast,” said Bryan Zilonis, a regional labor leader who used to work at the facility in suburban Aurora, Illinois, and was told what happened by his union members. As controllers started to clear out the airspace “the fire alarms went off and they realized something bigger was going on.”
Insider’s KnowledgeThe attacker knew how to pull back the steel, protective cover so that it would be easier to destroy the wiring and fiber-optic cable, said the people familiar with the incident who asked not to be identified because the case is still under investigation.
The attacker also knew the system’s multiple backups and was able to damage or destroy those key links in a short period of time, they said.
Brian Howard, 36, a telecommunications field technician for Harris Corp. (HRS), was charged Sept. 26 with setting the fire that day to the air navigation facility. His defense lawyer, Ronald Safer, said Sept. 30 that he and his client hadn’t decided whether to contest the charge. Howard remains in custody and faces as many as 20 years in prison if convicted.
Basement FireHartman, a technician at the facility, known as the Chicago En Route Traffic Control Center, was testing an emergency diesel generator in the adjacent building when the fire alarm went off at about 5:40 a.m.
He called the operations center that monitors the technology systems and they told him the fire was in the basement room where Harris’s communications network connects to the center’s equipment.
Hartman rushed to the basement and called out through the smoke to see if anyone was inside. No one answered, so he retreated.
Howard was found there a short time later by paramedics who first spotted his feet under a table, according to an affidavit filed in court by an agent of the Federal Bureau of Investigation. He was shirtless, had cuts on his arms and was attempting to slit his throat, according to the document.
“The smoke was so thick and he could have been right next to me and I wouldn’t have known it,” said Hartman, who was treated for smoke inhalation at the scene.
Facebook PostMinutes before the attack, Howard posted a message on Facebook saying he was “about to take out ZAU and my life,” using the FAA’s three-letter call sign for the center, according to the FBI agent. The full Facebook post, obtained by Bloomberg, contained an anti-U.S. rant calling the government guilty of “immoral and unethical acts.”
Howard worked for Melbourne, Florida-based Harris, which holds the FAA’s main telecommunications contract. He had worked at the Chicago Center for eight years, according to an FBI affidavit. The company has fired him.
At about the same time Hartman was fleeing, controllers working in the dimly lit radar room on the center’s main floor were instructing pilots to radio other air-traffic facilities and began to evacuate, said Zilonis, the regional vice president for theNational Air Traffic Controllers Association.
Workers RallyThe flat-screen panels that display aircraft radar tracks were useless, showing only where computers estimated the planes were headed, not their actual path, said Zilonis, whose union represents 15,000 controllers.
The damage below was so severe that the FAA has decided to rebuild the center’s nerve system. Of 29 racks of computers driving the communications equipment, 20 were destroyed by fire and water damage, FAA Administrator Michael Huerta said Sept. 29.
After 2,000 cancellations of Chicago flights Sept. 26, disrupting travel across the country, that figure fell to less than 200 yesterday, according to FlightAware.com. Flight cancellations rose today to more than 700 as of noon local time as thunderstorms in the region complicated management of air traffic with the Chicago center still down.
Southwest Airlines Co. (LUV), which handles about 90 percent of the passengers at Chicago’s Midway, has canceled the rest of its flights for the day, the Chicago Department of Aviation said in an e-mailed statement.
‘Burst’ BubbleLast week’s sabotage has spawned a massive response from controllers, technicians and FAA officials to keep the airways flowing. They have pulled 20-hour days installing new communications links and cobbled together a patchwork of flight routes allowing planes to reach airports including O’Hare International, which this year has taken over the title of busiest U.S. airport.
“It kind of burst our bubble at first,” Gerald Waloszyk, an operations manager helping oversee repairs at the Chicago center, said in an interview. “But everybody has stepped up to the plate to get the system back on line.”
Waloszyk, Like Hartman and other members of the Professional Aviation Safety Specialists, said they were speaking as members of their union, not on behalf of the FAA.
Even that first day the FAA and its employees were racing to resume service.
Long-range traffic plying the upper altitudes of the center’s airspace, over five states surrounding Illinois, were redirected to other facilities.
Redirecting FlightsGetting planes into and out of Chicago’s airports was a trickier matter. Flights heading for Chicago would normally stay at altitudes above 30,000 feet (9,100 meters) until they reached about 100 miles from their destination. That was impossible with the center shut down.
Controllers and FAA managers devised a plan to bypass the center’s airspace by descending planes far earlier and passing control to as many as 15 FAA radar facilities guiding planes around the region’s major airports.
These facilities, known as Terminal Radar Approach Control or TRACONs, usually handle planes only as high as 11,000 feet (3,350 meters), Zilonis said. Controllers in normally quiet TRACONs in places like South Bend, Indiana; Peoria, Illinois; and Waterloo, Iowa, got a baptism by fire, he said.
“I’m very proud of them,” he said. “There would have been just streams of jets coming through.”
Shout LinesAs the days have passed, the altitudes controlled by those TRACONs has been expanded to 17,000 feet to allow for more flights.
More than 100 of Chicago Center’s almost 400 controllers have volunteered to temporarily transfer to these TRACONs and to four surrounding FAA centers so they can guide the traffic, Zilonis said.
An equal challenge has been replicating the nerve center of the region’s air-traffic system. Phone connections between FAA facilities, radio systems and the flight plans that controllers use to identify aircraft were all knocked out.
Lee Leslie, a PASS member who works at the Chicago TRACON in Elgin, Illinois, knew there was “a big problem” as soon as he saw the TV news showing a fire in the center, he said in an interview. He had taken Sept. 26 off to prepare to take his 86-year-old father to a family reunion in Virginia the next day.
He canceled the trip and volunteered to work.
Over the next two days, he helped install dedicated phone connections known as “shout lines” between the TRACON and four other air-traffic centers. The same spirit has helped teams in Aurora working to patch the center, according to Waloszyk and the others working there.
In addition to cleaning and drying equipment after the fire, they’ve installed links allowing controllers in other facilities to use Chicago’s radio frequencies.
“It is all hands,” he said. “Everybody is pitching in.”
By Alan Levin
The first radio links with pilots were lost just as the pre-dawn crush of flights into Chicago began.
Air-traffic controllers in a nondescript Federal Aviation Administration building about 40 miles from the city switched to backup channels. Then those failed. They tried emergency connections, which also went dead.
Within minutes, radar feeds, flight plans and other data controllers rely on to direct more than 6,000 aircraft a day above five U.S. states had vanished as a fire was being set in a communications room one floor below. The attack was thorough and carried out by someone who knew the system intimately -- down to removing steel sheathing on data cables to destroy them, according to three people with knowledge of the incident.
“I opened the door, walked in two or three steps,” said Peter Hartman, a technician. “The smoke in there was just so thick you couldn’t see your hand in front of your face.”
The Sept. 26 outage, blamed on a suicidal communications technician, was the worst case of sabotage in the history of the nation’s air-traffic control system. Thousands of flights were canceled across the country on the first day, a figure that fell to about 200 yesterday. The FAA said it may take until Oct. 13 to replace damaged equipment and fully recover.
Related: Air-Traffic Vulnerabily Examined in Fire Halting Flights
“It was fast,” said Bryan Zilonis, a regional labor leader who used to work at the facility in suburban Aurora, Illinois, and was told what happened by his union members. As controllers started to clear out the airspace “the fire alarms went off and they realized something bigger was going on.”
Insider’s KnowledgeThe attacker knew how to pull back the steel, protective cover so that it would be easier to destroy the wiring and fiber-optic cable, said the people familiar with the incident who asked not to be identified because the case is still under investigation.
The attacker also knew the system’s multiple backups and was able to damage or destroy those key links in a short period of time, they said.
Brian Howard, 36, a telecommunications field technician for Harris Corp. (HRS), was charged Sept. 26 with setting the fire that day to the air navigation facility. His defense lawyer, Ronald Safer, said Sept. 30 that he and his client hadn’t decided whether to contest the charge. Howard remains in custody and faces as many as 20 years in prison if convicted.
Basement FireHartman, a technician at the facility, known as the Chicago En Route Traffic Control Center, was testing an emergency diesel generator in the adjacent building when the fire alarm went off at about 5:40 a.m.
He called the operations center that monitors the technology systems and they told him the fire was in the basement room where Harris’s communications network connects to the center’s equipment.
Hartman rushed to the basement and called out through the smoke to see if anyone was inside. No one answered, so he retreated.
Howard was found there a short time later by paramedics who first spotted his feet under a table, according to an affidavit filed in court by an agent of the Federal Bureau of Investigation. He was shirtless, had cuts on his arms and was attempting to slit his throat, according to the document.
“The smoke was so thick and he could have been right next to me and I wouldn’t have known it,” said Hartman, who was treated for smoke inhalation at the scene.
Facebook PostMinutes before the attack, Howard posted a message on Facebook saying he was “about to take out ZAU and my life,” using the FAA’s three-letter call sign for the center, according to the FBI agent. The full Facebook post, obtained by Bloomberg, contained an anti-U.S. rant calling the government guilty of “immoral and unethical acts.”
Howard worked for Melbourne, Florida-based Harris, which holds the FAA’s main telecommunications contract. He had worked at the Chicago Center for eight years, according to an FBI affidavit. The company has fired him.
At about the same time Hartman was fleeing, controllers working in the dimly lit radar room on the center’s main floor were instructing pilots to radio other air-traffic facilities and began to evacuate, said Zilonis, the regional vice president for theNational Air Traffic Controllers Association.
Workers RallyThe flat-screen panels that display aircraft radar tracks were useless, showing only where computers estimated the planes were headed, not their actual path, said Zilonis, whose union represents 15,000 controllers.
The damage below was so severe that the FAA has decided to rebuild the center’s nerve system. Of 29 racks of computers driving the communications equipment, 20 were destroyed by fire and water damage, FAA Administrator Michael Huerta said Sept. 29.
After 2,000 cancellations of Chicago flights Sept. 26, disrupting travel across the country, that figure fell to less than 200 yesterday, according to FlightAware.com. Flight cancellations rose today to more than 700 as of noon local time as thunderstorms in the region complicated management of air traffic with the Chicago center still down.
Southwest Airlines Co. (LUV), which handles about 90 percent of the passengers at Chicago’s Midway, has canceled the rest of its flights for the day, the Chicago Department of Aviation said in an e-mailed statement.
‘Burst’ BubbleLast week’s sabotage has spawned a massive response from controllers, technicians and FAA officials to keep the airways flowing. They have pulled 20-hour days installing new communications links and cobbled together a patchwork of flight routes allowing planes to reach airports including O’Hare International, which this year has taken over the title of busiest U.S. airport.
“It kind of burst our bubble at first,” Gerald Waloszyk, an operations manager helping oversee repairs at the Chicago center, said in an interview. “But everybody has stepped up to the plate to get the system back on line.”
Waloszyk, Like Hartman and other members of the Professional Aviation Safety Specialists, said they were speaking as members of their union, not on behalf of the FAA.
Even that first day the FAA and its employees were racing to resume service.
Long-range traffic plying the upper altitudes of the center’s airspace, over five states surrounding Illinois, were redirected to other facilities.
Redirecting FlightsGetting planes into and out of Chicago’s airports was a trickier matter. Flights heading for Chicago would normally stay at altitudes above 30,000 feet (9,100 meters) until they reached about 100 miles from their destination. That was impossible with the center shut down.
Controllers and FAA managers devised a plan to bypass the center’s airspace by descending planes far earlier and passing control to as many as 15 FAA radar facilities guiding planes around the region’s major airports.
These facilities, known as Terminal Radar Approach Control or TRACONs, usually handle planes only as high as 11,000 feet (3,350 meters), Zilonis said. Controllers in normally quiet TRACONs in places like South Bend, Indiana; Peoria, Illinois; and Waterloo, Iowa, got a baptism by fire, he said.
“I’m very proud of them,” he said. “There would have been just streams of jets coming through.”
Shout LinesAs the days have passed, the altitudes controlled by those TRACONs has been expanded to 17,000 feet to allow for more flights.
More than 100 of Chicago Center’s almost 400 controllers have volunteered to temporarily transfer to these TRACONs and to four surrounding FAA centers so they can guide the traffic, Zilonis said.
An equal challenge has been replicating the nerve center of the region’s air-traffic system. Phone connections between FAA facilities, radio systems and the flight plans that controllers use to identify aircraft were all knocked out.
Lee Leslie, a PASS member who works at the Chicago TRACON in Elgin, Illinois, knew there was “a big problem” as soon as he saw the TV news showing a fire in the center, he said in an interview. He had taken Sept. 26 off to prepare to take his 86-year-old father to a family reunion in Virginia the next day.
He canceled the trip and volunteered to work.
Over the next two days, he helped install dedicated phone connections known as “shout lines” between the TRACON and four other air-traffic centers. The same spirit has helped teams in Aurora working to patch the center, according to Waloszyk and the others working there.
In addition to cleaning and drying equipment after the fire, they’ve installed links allowing controllers in other facilities to use Chicago’s radio frequencies.
“It is all hands,” he said. “Everybody is pitching in.”