When big corporations flex their muscles by taking a stand on an issue of principle, the sheer force of their power can be breathtaking.
General Motors, Proctor & Gamble and Britain’s GlaxoSmithKline were among a group of major advertisers which read the riot act to CBS and MSNBC this week over the broadcasters’ foul-mouthed shock jock Don Imus.
Imus had breathed new life into a defunct term of racial abuse from the deep south by referring to a team of black female basketball players as "nappy headed hos". The epithet originated on a CBS radio station in New York, which is syndicated to 61 affiliates nationwide, and on MSNBC, which shows Imus’s program on television.
The broadcasters’ immediate reaction was to do nothing – after all, Imus’s popular show pulls in an estimated $20m to $25m in annual revenue. When civil rights leaders including Al Sharpton got involved, Imus was suspended for two weeks. But on Wednesday, advertisers began pulling out – and within 24 hours, Imus was fired with immediate effect.
A Glaxo spokeswoman, Nancy Pekarek, said the drugs company routinely bought daytime spots for general healthcare and specific drugs on MSNBC but that the broadcaster allocated them to particular programs itself.
"This programme was not something we would have chosen in the first place," she said. Imus, after all, has form – he has referred to Arabs as "towelheads" and described a black New York Times reporter at the White House as a "cleaning lady".
"We have a policy standard that we will not have our ads placed on any program considered offensive or inflammatory," said Pekarek. "This was clearly inappropriate and not something we’d approve of in any way."
The Imus in the Morning show was a peculiar hybrid, mixing political discussion with barrack-room humor. In spite of its host’s course leanings, it attracted "A" list guests – Barack Obama has been on and the Democrat senator Christopher Dodd chose it as the forum to declare he was running for president.
The week’s events left CBS desperately scrambling to pretend that it was making a principled decision rather than being bullied into acting. CBS’s chief executive, Leslie Moonves, declared that "all of us have been deeply upset and revulsed by the statements that were made on our air" about a Rutgers University team which showed "class, energy and talent".
Moonves was appalled, he said, at the effect such language might have on "young women of colour trying to make their way in this society".
It seems a shame that it required physical evidence of revenue going down the toilet for Moonves and his colleagues to develop racial sensitivity. For once, a bunch of multinationals which took decisive action can bask in the glow of moral superiority.
Shaky foundations
When the chief executive of a company splashes out on a vast mock-Tudor pile, it is time to sell the shares. Swimming pools, private cinemas, tennis courts and stables are particularly compelling signs to dump the stock.
Two academics have been scrutinizing property deeds databases to work out the living conditions America’s top bosses. Apparently the median home for an S&P 500 chief executive is worth $2.7m, has 4.5 bathrooms, covers 5,600 square feet and sits on one-and-a-quarter acres of land.
In an intriguing twist, the study reckons that when a boss buys a big mansion, the shares tend to take a dive – shorting the stock at the moment of purchase would yield average profits of 29% in a year.
New York University’s David Yermack reckons 12% of CEOs have waterfront residences and 8.5% are either on or next to a golf course. Some 6% live more than 250 miles from the office.
Many executives sell shares or exercise options to pay for their new homes. Yermack says that in some cases, they might suspect things are about to go pear-shaped. Spending the money on a big new home is a convenient excuse, covering their tracks in case anybody asks why they are cashing out.
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