SharkJumping

Gay Marriage is Legalized in California

I normally keep personal topics on a small blog called SF Breeders, but today's big CA Supreme Court win was too big to not spread to a larger audience - feel free to ignore if not interested...

In a tight 4-3 vote, the California Supreme Court today ruled that same-sex couples have the constitutional right to marry.  This is a huge win for everyone, especially for the countless LGBT couples in San Francisco which want to have the full rights of a married couple when it comes to raising children in SF - why shouldn't it be easier for them to join all of us in the pain and joy of raising children in San Francisco?  Given that my brother will be marrying his boyfriend in NY in August (technically a civil ceremony), I'm now encouraging them to swing by CA at some point in August to make it fully legal.

In addition, as my father pointed out, it's going to be a big economic win for California.  For the months of June through November, we're going to have countless gay couples rushing to get married in CA, driving the economy upward since weddings are incredibly expensive affairs.  On a less favorable note, tons of right wing, conservative and religious organizations will now hurl tens of millions of dollars into CA politics and media trying to to pass the November ballot initiative banning this inevitable process - but at least it will help our economy in the meantime  :)

The anti-gay wedding bigots may win in the short run, as has happened in most states in the US where this process has gone forward. That having been said, this decision is one more chip in the wall, and as we saw in Berlin, that wall eventually comes down.  As the homophobic older voter base continues to die off, the gay marriage effort will finally pass, just as it did with inter-racial marriage in the 60's, but unfortunately, millions of loving gay couples will suffer in the meantime. 

For now, however, this is a great day for everyone, including parents in San Francisco.

CBS/Cnet Deal - Good Price/Great Fit

CBS (NYSE:CBS) announced today that it will acquire CNET Networks (NASDAQ:CNET) for $11 a share, or $1.8B, which is a big bump up from the $7-8 where Cnet has been trading in recent times.  Some analysts are questioning how CBS justified a price that high, but I think it's a great fit, and it's a really well thought-out purchase.

Like all traditional media companies (newspaper, magazine, radio, broadcast), CBS's core business is declining - no matter what CBS does, fewer people will listen to the radio and watch CBS tomorrow than they do today, although their cable businesses are doing fine.  So, the company either needs to exit those declining businesses or find complementary ones which are growing faster.  In order to do this, they need to pay higher valuation multiples than their core businesses, which is why they can justify the Cnet deal and price.   

To not do a deal like this would simply make future deals more expensive, as all traditional media companies are finding out as they watch their core assets decline - e.g. what are the big magazine conglomerates doing, waiting for their circulation to totally disappear before the make a move?  There is always risk in acquisitions, but this $1.8B bet comes with an actual business attached to it, unlike the Google YouTube deal for $1.6B, so it's a fairly good bet.

With a market cap of $16.5B, CBS needed a core, complementary Internet asset that was big enough to make a difference to their company, but not so large that a failure would pull down the entire firm, a la AOL/Time Warner.   With Cnet in house by next quarter, they can then go back to smaller, bolt-on acquisitions which fit nicely into their larger Internet strategy, which looked a little random before this deal.  On the CNet side, they (and the shareholders) get a strong price for what I regard as a top notch set of properties, and they finally get away from this unrelenting proxy fight being pursued by a group of hedge funds - it's truly a win win on both sides.

Knowing the players at both firms, the culture fit is strong, there are tons of synergies across the offline and online media groups, and on the selfish front, it means SF's only true media company lands in good hands.

No Chance Spitzer Survives

I normally don't cover non-tech news, but the highly amusing story today (NYT link here) of NY Governor Spitzer getting caught in a federal wire tap prostitution investigation is a story directly from TV show, "The Wire".  There is ZERO chance Spitzer doesn't resign. 

Why?  It's highly unlikely this was his first foray into the extra-curricular side of life, meaning we will now see a steady stream of prostitutes doing interviews about his particular preferences, and we'll also see a lot of time spent investigating whether state resources were used in any of these activities - he's dead in the water.

At least with our own mayor Gavin Newsom, he was already a well known "player" with sky-high approval ratings when he had an affair with his close friend's/campaign manager's wife - he immediately claimed alcohol addiction and fled into treatment, and was later re-elected.   In Spitzer's case, he's married, is known as a moral crusader, she was a prostitute, and he is generally not beloved by anybody, unless you're concerned with the state legislature battles in NY, where it was just looking pretty good for the Dems until today.  It's unfortunate since Spitzer was a possible national leader for the Dems, and now he's been dragged down by personal issues.