Commentary - 08/01/2008

John Kluge: Exposed Agent

When it comes time to shut down a large number of businesses that have been assembled into large plantations, agents are exposed. Bennigans, Steak and Ale, and others have recently declared bankruptcy. Here's just one version of that story: Restaurant Chains Close as Diners Reduce Spending
The restaurant chains are owned by the Texas-based Metromedia Restaurant Group, a unit of a business conglomerate owned by the billionaire John Kluge.
Well, that's interesting. So just what else do they control? More information here:
Metromedia Company has a lot of irons in a lot of fires. The global giant is one of the US's largest private companies. Other Metromedia units include Metromedia Restaurant Group, which owns or franchises Ponderosa, Bennigan's, Bonanza, and Steak and Ale restaurants; and Metromedia Energy, an independent energy marketer. Eatontown, New Jersey-based Metromedia Energy delivers more than 20 billion cu. ft. per year of commercial and industrial natural gas to customers in the Northeast, Midwest, and Mid-Atlantic. Chairman John Kluge and EVP and partner Stuart Subotnick control about 20% of Metromedia Company through a partnership.
So see, they don't actually own all this, and that also brings up another name, Stuart Subotnick.
Stuart Subotnick, age 65, has been a director of Carnival Corporation since July 1987 and a director of Carnival plc since April 2003. Mr. Subotnick has been a general partner and the Executive Vice President of Metromedia Company since July 1986. He is a director of Abovenet Inc. and Metromedia International Group, Inc.
Clicking on the Carnival link above shows the Major Holders; a most familiar group. This is how large plantations become inter-connected via their financiers.

How John Kluge accumulated companies gets even more interesting if you do a little more background checking. The name Allen B. DuMont pops up in John Kluge's history, and shows how an agent can control the evolution of new technology. Just remember that accumulating companies require access to huge amounts of capital. That's usually how you can identify an agent, as their supposed accumulated wealth is fairly recent.

The DuMont Television Network was not an unqualified success, being faced with the major problem of how to make a profit without the benefit of an already established radio network as a base. After ten years, DuMont shuttered the network and sold what remained of his television operations to John Kluge in 1956, which Kluge renamed Metromedia. DuMont's partner, Thomas T. Goldsmith, remained on Metromedia's board of directors from this time all the way until Kluge sold the stations to the Fox Television Stations Group.

DuMont sold his manufacturing operations in 1960. The television manufacturing division was sold to Emerson Radio. His research laboratory became part of Fairchild Camera and later developed semiconductor microchips. Robert Noyce, founder of Intel, originally worked for DuMont as an engineer. In the late 1950s, the Dumont laboratory, now owned by Fairchild, developed the original Sony Trinitron color picture tube, under a subcontract.

The point of this commentary is that agents can construct large plantations just like public corporations. That's why there's a commentary about Warren Buffett as an agent. Agents are used when company information and their associations need to be kept quiet. That's exactly why many of today's large public corporations are taken private, so their actions, relationships and manipulations are not as transparent to the public.

Just another reason why: Sometimes ONLY The Dragon Wins

2008 by Edward Ulysses Cate
Help Support This Site
Commentary Index: