"It's the President's desire to have one loyal friend in Washington."
--Presidential spokesman Mike McCurry after Clinton adopted a three-month-old Labrador puppyEDITED BY LARRY LIGHT & ROBERT McNATTReturn to top
COLOR LINE ON THE COURT?
HARD TO BELIEVE THAT THE National Basketball Assn., 80% of whose players are black, would favor whites in pay. But a new study from economist Barton Hughes Hamilton of Washington University says just that. According to Hamilton, the pay discrepancy applies to a carefully defined group, starters below the superstar category. And he says whites come out ahead by 18%.
Hamilton found no problem with superstars like Michael Jordan, who makes $33.1 million. They are virtually all blacks. And there was no problem among the nonstarters, about two-thirds of NBA players. A gap, Hamilton says, showed up among starters who are below superstar status when he accounted for their personal and team records.
Hamilton suggests that the discrepancy is financially motivated. He estimates that each white starter boosts attendance by approximately 25,000 fans per season. "Fans want to see Michael Jordan," he says. "But all else equal, the marginal white fan would prefer to see a white player." The NBA says the study implies executives conspire to hold down black players' salaries, which is a "ludicrous" notion.EDITED BY LARRY LIGHT & ROBERT McNATT David LeonhardtReturn to top
IBM GIVES COMDEX THE COLD SHOULDER
THE COMPUTER INDUSTRY'S sprawling annual trade show in Las Vegas, Comdex, has long been regarded as an obligatory marketing event for major computer companies. But IBM, whose exhibit space is among the largest at the November show, says it has decided to skip Comdex next year. The reason? Some IBM execs think the company doesn't get enough bang for its buck in the crowded, noisy bazaar that Comdex has become. The number of exhibitors this year rose 10%, to around 2,300.
If other large tech companies follow suit and pull out or trim their presence, IBM's move could have repercussions for Softbank, the Japanese software and media concern that runs Comdex. Comdex is a major revenue provider for Softbank, which is saddled with a $2.5 billion debt load, mainly incurred to finance an acquisition spree.
Comdex director William Sell says IBM hadn't told him that it was pulling out. IBM has always seemed to value Comdex, he says, pointing to recent Big Blue ads trumpeting its awards at the show. And he says IBM has contracts for space at next fall's event (although those could be canceled).EDITED BY LARRY LIGHT & ROBERT McNATT Paul C. JudgeReturn to top
FUTURES SHOCK IN CHICAGO
TRADERS IN THE COMMODITY pits of Chicago aren't known for patience. Already, they are dismayed by the thin volume in Dow Jones industrial average contracts that began trading at the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) on Oct. 6.
Call it a case of unmet expectations. Recent CBOT volume of some 14,000 contracts would be a strong start for most products. "It's the strongest new product in our 150-year history," CBOT Chairman Patrick Arbor says. Yet traders are unimpressed. "It's been underwhelming," says Jack Bouroudjian, head of Nikko Securities' Chicago equities desk.
The volume is too small to attract institutional investors, who prefer Standard & Poor's 500-stock index futures. (S&P and BUSINESS WEEK are both units of The McGraw-Hill Companies.) The CBOT thinks volume will rise once Dow Jones licenses its name to mutual funds. Meanwhile, the CBOT is looking to drum up interest overseas.
The exchanges have a five-year deal with Dow Jones. They'll make money as they develop the liquidity to handle big investors, who need to move quickly. Like commodities traders, they don't want to wait.EDITED BY LARRY LIGHT & ROBERT McNATT Andrew OsterlandReturn to top