Orange County NC Website
Browse       Search
20 <br />C. Financial Aspects of the Deal for the CEOs <br />The deal creates several sets of multimillionaires and places Gerald Levin and <br />Steve Case squarely in the super wealth class. Recall that AOL is swapping 1.5 of <br />its shares for each Time Warner share. The day before the deal was announced, <br />AOL stack was trading at $75 per share, Time Warner was at $b4 per share. AOL <br />is paying a bit above $110 a share, a $45 premium over the pre-deal price of Time <br />Warner. The merger represents a good deal for Time Warner stock shareholders <br />and Gerald Levin. The $110 price increases the value of Levin's unvested options <br />by $125 million and the value of his vested options by $240 million; total gain is <br />$365 million. Steve Case is the clear winner. The value of his unvested options <br />exceeds $600 million, which he could not otherwise sell unless AOL was traded <br />to a new company. Mr. Case's vested options are valued at near $775 million; his <br />new found wealth approaches $1.375 billion. <br />D. Public Policy Questions to Consider <br />The questions for local government officials to weigh follow. <br />1. Without Open Access AOL-TW Internet service subscribers maybe directed first <br />to Company or affiliated content providers and would have to perform intense <br />searches to find similar content and e-commerce retail outlets offered by <br />independent providers. <br />The Internet, atwo-way communication pathway, came of age over the common <br />carrier telephone system. Recently, it made a transition to the cable television <br />broadband platform. If local government concludes the Internet must be an "open <br />medium," and that it is a significant public interest issue, then it must act to <br />preserve the Internet's common carrier heritage. Absent any requirement by <br />government to obligate AOL-TW to the terms of the MOU, AOL-Time Warner <br />has the power to limit their customers from web content offered by unaffiliated <br />Internet service providers. <br />2. Whether local government should take up the gauntlet and become involved in <br />over arching anti-competitive monopolistic concerns, such as the City of <br />Portland's stance an Open Access, currently before the 9`h Circuit Court of <br />Appeals, is a legitimate public policy question. As Portland learned, doing sa <br />may result in substantial legal defense expenditures. Henrico County, Virginia is <br />now traveling the same path. <br />Cable Carried Incentive for AOL Merger, Allan Sloan, Newsweek. <br />Franchise Fee U-Tax Auditing & Cable Television Administration <br />101 Pocono Lane, Cary, North Carolina 27513-5316 Voice # 919.467.5392 Fax # 919.460.6868 <br />