This Mogul Swears Off Media


That's the credo of Martin Davis, who is now in the buyout biz. Davis, ex-CEO of Paramount, thinks buying media and entertainment assets is just too expensive. He ought to know.

A year ago, Davis stepped down at Paramount after helping swing one of the most celebrated media deals of all time: his outfit's $10 billion purchase by Viacom. At six times cash flow, that was considered rich at the time, but it still was less pricey than the 15 times cash flow, or $5.7 billion, that Edgar Bronfman's Seagram is paying for MCA. Davis won't comment on the Bronfman deal.

Davis, now 67 and a board member of Viacom's parent, National Amusements, is looking for institutional money for his new investment firm. Wellspring Associates, which opened in January, has hired four professionals from top-flight places. One catch: GE Capital's Robert Johannsen. Davis' strategy is to buy underperforming industrial companies, such as an auto-parts maker, and turn them around. Irony: When he became CEO of Paramount (then called Gulf & Western) in 1983, he divested scores of smokestack outfits to focus on media and entertainment.

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