Timing is everything

Behind The News
July 18, 2008 1:43:50 PM PDT
It's purely coincidence of course, but what timing with two big developments with Merrill Lynch, the brokerage firm that is not having what Harvard MBA's would call, in technical terms, a "banner year." Unless your definition of success is a $1.8 billion loss in the second quarter.

The first development is the company pulling out of talks to move its headquarters to Ground Zero as a major tenant.

It's another in a series of blows to the redevelopment of the old World Trade Center site. If it weren't such a tragic situation that occurred on Sept. 11, the attempts to rebuild down there would be more laughable. There are so many people to blame for dropping the ball and for lack of leadership, that I'm not going to begin to go there in this space.

But that's incident number one - and it's a blow to all New York elected officials who are trying to redevelop Lower Manhattan, including Mayor Michael Bloomberg.

But the Mayor is also reportedly benefiting from Merrill Lynch's troubles.

According to The New York Times, the Mayor is buying Merrill Lynch's 20% stake in his company, Bloomberg L.P., the financial information and news provider he founded and which made him a gazillionaire. The purchase price is a reported $4.5 billion, or thereabouts - below the market value estimates of Merrill's CEO last month of $5 billion to $6 billion.

Now to be sure, Merrill made a pretty penny on its investment in the once-struggling Bloomberg company. It bought a 20% share back in 1985 for $30 million.

It saved the company.

But it's a good investment. To put it in lay terms -- cause $4.5 billion is a bit heady for most of us -- it's as if you put $100 in an investment in 1985 and then, 23 years later, it was worth $15,000. A nice return of 150 times the original investment.

The Mayor now owns, through a trust that manages the day to day operations, 92% of his company. And it has given us a peek into what the value of his company may be. If 20% is worth $4.5 billion, then the company is worth at least $22.5 billion - I say "at least" because the $4.5 billion may indeed be something of a fire-sale number. We just don't know. Bloomberg is listed on the Forbes list of wealthiest people at number 65, with a net worth of $11.5 billion.

As my father used to say, rich or poor - it's nice to have money.

And one more interesting tidbit from Ground Zero. The 9-11 memorial, which has been delayed and frustrated by fundraising efforts during a tough economy, has added actor, comedian and New Yorker Billy Crystal to its board of directors. He joins fellow actor Robert DeNiro. Will the addition of celebrities help the cause? We'll see, and we'll have the latest on any developments at Ground Zero, tonight at 11.

We're also on the Lower East Side of Manhattan, where hundreds of families are angry and worried that they'll be kicked out of their affordable housing, as the landlord tries to improve the properties with a multi-million dollar federal loan.

Jeff Pegues is there for us.

I'm not sure where she went, but Senator Hillary Clinton is about to be the guest of honor at a "welcome back" event. The host: Mayor Bloomberg. The two met privately today and Mayor reportedly offered to throw a shindig for New York's junior Senator.

And there's this note from the group Public Citizen: The Republican Party, which is supposed to loathe lawsuits, is now threatening to sue a website for letting its users make bumper stickers and T-shirts that have elephants or "GOP" written on them.


We'll also have any breaking news of the night, plus Lee Goldberg with his AccuWeather forecast, and Scott Clark with the night's sports. I hope you can join Sade Baderinwa (in for Liz Cho) and me, tonight at 11.