In this morning's WALL STREET JOURNAL, Larry Greenberg
reports that institutional shareholders of John Labatt Ltd. are
concerned about the company's overall direction, and "nervous
about the company's plans to get deeper into the sports and
entertainment business." Labatt currently has a varied sports
portfolio that includes the Blue Jays, a stake in the Toronto
SkyDome, and Canada's TSN sports television network -- "which now
generates 'substantial earnings' after years of heavy start-up
costs." Greenberg: "Labatt reckons that making investments in
other sports teams will boost TSN's advertising revenue. It also
wants to take advantage of TSN's expertise by acquiring
additional broadcasting interests." Heather Arnold, partner
with Toronto pension fund manager Knight, Bain, Seath, & Holbrook
said "sports and entertainment are 'glory assets' that enhance
management's profile but return little to shareholders." In a
plan to "allay" shareholders' concerns, Labatt has a plan to sell
49% of its sports and broadcast businesses -- "a move that
analysts estimate could yield proceeds to Labatt of C$500M" and
cut "the company's interest in the Blue Jays to about 20 percent"
(WALL STREET JOURNAL, 9/21).
ALSO FROM THE JOURNAL ... VIDEO GIANTS READY TO BATTLE:
Sega of America and Nintendo are preparing to "do battle" during
the upcoming holiday season, and both companies -- the nation's
two largest video-game makers -- are embracing different
strategic approaches. Sega will push its new 32X adapter, which
"attaches to [its] Genesis video-game player and transforms it
from a 16-bit machine into a 32-bit unit"; while Nintendo says it
"will offer a more exciting array of software titles." Jeff
Goodby, chairman of Goodby, Berlin & Silverstein, Sega's ad
agency: "We've got a product that will make the 15 million Sega
Genesis machines now in place 40 times as fast." Nintendo
VP/Marketing Peter Main: "Our campaign will stress that you
don't have to buy yet more hardware in order to have a great
entertainment experience" (Jeffrey Trachtenberg, WALL STREET
JOURNAL, 9/21).
