In Business This Week: HEADLINER: MICHAEL WHITE
MAYOR ON THE BALL
Just a year ago, Cleveland Mayor Michael White faced a crisis: The Cleveland Browns were moving to Baltimore. White launched a rescue mission on behalf of this sports-mad city, preparing legal challenges and begging the NFL to give Cleveland another team. Ultimately, the NFL relented, promising another club by the 1999 season if it could raise the money to help build a new stadium by then.
White met the challenge. He quickly sold most of a new stadium's 114 luxury boxes to Cleveland's corporate community. He clinched the deal on Jan. 21 when fans snapped up leases for 5,600 club seats, 1,600 more than needed. That means the NFL now must cough up $48 million for the stadium, which could cost up to $250 million.
White, considered one of the nation's more promising mayors, faces another huge problem: Cleveland's failing public school system. He's working on that one, too. His plan to take personal control of the schools is working its way through the Ohio legislature and is expected to pass.By Peter Galuszka EDITED BY GEOFF LEWISReturn to top
A HARDER LINE ON SOFT MONEY
IS IT TOO LATE TO BUY A night in the Lincoln bedroom? Stung by the continuing scandal over 1996 Democratic campaign contributions from Asian donors, President Clinton on Jan. 21 ordered strong reforms in the way his party solicits money and treats big givers. The guidelines prohibit contributions from non-U.S. citizens and American subsidiaries of foreign-owned corporations. And "soft money" donations will be capped--at $100,000 a year. Clinton and the departing Democratic Party chairman, Christopher Dodd (D-Conn.), challenged the GOP to adopt similar restrictions and join in bipartisan campaign reform. Republicans' response: Why? We followed the law, and they didn't.EDITED BY GEOFF LEWISReturn to top
FORSTMANN LITTLE'S NEW WAR CHEST
TED FORSTMANN, HEAD OF the buyout firm of Forstmann Little, has never relished sitting on the sidelines. So after rivals Kohlberg Kravis Roberts and Donaldson, Lufkin & Jenrette succeeded late last year in raising $5.8 billion and $3 billion, respectively, Forstmann apparently figured he had to make a big move. And big it will be. Less than a year after raising $2.3 billion for its previous fund, the firm is quietly tapping its longtime backers for as much as $4 billion in equity and subordinated debt to underwrite a new round of dealmaking, Wall Street sources say. Investors are said to include mostly corporate pension funds, notably those of General Electric and AT&T.EDITED BY GEOFF LEWISReturn to top
DANGER: LOW-FLYING PILOT SALARIES
PILOTS AT CONTINENTAL AIRlines think they deserve a big raise this year--38%. On Jan. 21, the company's independent pilots' union said it aims to get wage and benefit levels lifted to industry levels in new contract talks due to begin in April. The carrier's pilots currently receive, on average, $113,000 a year, 62% of what pilots earn at other major airlines, according to the Independent Association of Continental Pilots. The low pay is a legacy of former owner Frank Lorenzo, who used a 1983 bankruptcy to slash employee pay nearly in half. Continental's pilots argue that the airline can afford parity after posting a record $556 million in pretax profits for 1996. Their move comes after pilots at United rejected a 10% pay hike over four years and those at American set a mid-February strike deadline.EDITED BY GEOFF LEWISReturn to top