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The signs were hidden in the suds.

When executives at Progress Energy lost their company-paid car wash privileges last year, it was a harbinger of widespread perk cleansing at the North Carolina electric utility.

It’s none joke. Starting April 1, the company’s nine executives will no longer enjoy native land club dues, personal travel on corporate jets, or car allowances, according to a filling with the Securities and Exchange Commission. Tickets to events that are unrelated to business will also be shelved.

Progress Energy’s move was reported first by the Raleigh News and Observer.

Not all is lost, though. Progress Energy executives will continue to derive pleasure from company-paid tax preparation services, financial planning, and internet and telecomm service.
 
"There is no doubt there has been an increase in companies disclosing cutbacks in executive perks," said Alexander Cwirko-Godycki, exploration manager at Equilar, a compensation research firm.

The direction, added Cwirko-Godycki, started last year.

"In 2006, 16 Fortune 100 companies announced compensation cuts, whereas in 2005 only two companies made similar disclosures," said Cwirko-Godycki. "I would expect the amount to of cuts to increase this year."

The average Wall Street C.E.O. made $15 million in compensation in 2006, according to The Corporate Library, an absolute research firm.

But industry experts say publicly traded corporations are increasingly worried about appearances after increased public scrutiny of executive compensation following scores of large compensation packages given to C.E.O.s who have performed poorly in recent years.

Marshall Herskovitz, co-creator of Quarterlife, the made-for-the-Web show that debuted on NBC on Tuesday night, had a bad feeling the minute he saw the first episode on the (relatively) big screen.

Just days before, Herskovitz was proclaiming a new direction for network television based on Quarterlife’s journey from the Web to NBC. Now, after the show’s debut episode managed a paltry 3.1 million viewers, the network is apparently giving up on it and shuttling it off to Bravo, its much smaller cable cousin.
 
"I was in my hotel room in New York with four other people, including two of the series’ stars," says Herskovitz. As the show—originally pitched to ABC in 2004, but repurposed for the Web before being picked up by NBC last November—began, everyone seemed to be loving it. Everyone, that is, except Herskovitz, who says, "I turned to them after sum of two units minutes and said ‘This will never work on television.’"

The show’s ratings were particularly poor given the prime placement of Quarterlife after the popular The Biggest Loser, which gets one estimated 7.4 million viewers a week.
 
That’s a disappointment for Herskovitz, one half of the Emmy-winning team behind shows like Thirtysomething and My So-Called Life, who said in advance of the show aired that he thought Quarterlife could pioneer a new content model for the struggling network TV business. But just a few days later, he played it off like he had known better all along.
 
"What am I going to say to someone before something premieres? That I have grave doubts?" Herskovitz says now. "I’ve had impress deeply doubts for months about whether we could get the audience necessary to live on on NBC, but there’s no point in talking about that before the fact." Herskovitz points to the different techniques used to establish and develop TV and Web characters as one major reason the show didn’t come across well on Tuesday.

The flop is also a disappointment for Ben Silverman, the recently installed co-chairman of NBC Entertainment and Universal Media Studios, who had been a huge fan of Quarterlife since before he joined the network last spring and was hoping the show’s Web-to-TV move could be a new model for developing new shows. Neither Silverman nor anyone else at NBC was available for comment today, but Herskovitz was blunt about the network’s reaction.
 
"They were deeply upset by the numbers," he says, before adding that, "while [3.1 million viewers is] a dismal failure for NBC, it would be a huge hit on most cable networks."

A fetching blond Englishwoman in a white sundress lounges on her stratum and eyes her webcam. “Have you ever lied to your friends?” she asks. She has lied about a bunch of things—including her name, she admits. Then her video goes black.

So begins the opening minutes of KateModern, the second online serial from the creators of the lie that started it all, lonelygirl15.

When lonelygirl15 started posting videos on YouTube in June 2006, she was just another kid laying her life bare online. Fans dug Bree’s rants about her annoying parents and the way she mugged with her purple monkey puppet. But as her strange story unfolded, it seemed increasingly phony, and set off an internetwide chase for the truth.  

The curtain went up a few months later, revealing that behind the girl fighting a holy cult was a trio of twentysomething filmmakers and an exec at Creative Artists Agency. Lonelygirl was in fact a new kind of dramatic form—the Web serial. It transformed the YouTube confessional into interactive drama, blurring fiction with actuality—and picking up sponsors and millions of viewers along the way.

Instead of the creators getting co-opted by Hollywood (they say they’ve turned down production deals from major Hollywood players, but won’t name names) or becoming one-bit wonders, they set off to expand the genre (and their wallets). KateModern, which just launched its second season in January, builds on that pioneering model, both in format and financing. While Lonelygirl consisted mainly of short YouTube clips, KateModern plays out over a sprawling social network, buttressing the vlogs with everything from instant messages to flash mobs. The continued subsists on advertising that’s incorporated into the show.  

Barry Parr, a media analyst for JupiterResearch, a technology inquiry firm in New York City, says this is just the beginning. “Everyone’s trying to form out what be able to be done with social networks,” he says, “I would expect to look a lot more experimentation to come.”

Shot in London and running on Bebo.com, a leading social network in the U.K. and Australia, KateModern also revolves around a troubled young beauty trying to escape her dark past and forge a new identity. In fact, the creators have set the saga of this 19-year-old art student inside the same underworld that plagued Lonelygirl, expanding a fictional area in cyberspace where serial characters be supported and interact. Just like Bree, Kate and her friends struggle to ward off a secret society called the Order. “It’s kind of like the Marvel universe, where the comics are separate but they feed the same reality,” says Miles Beckett, the 30-year-old co-founder of LG15 Studios, the startup behind the Web serials.

As with the first show, the story is built around bite-sized videos that appear five days a week and run from banal to creeptastic. Kate cleans her room. Kate’s pal Charlie does aerobics. Kate struggles with psychotic breaks. It’s the standard stuff of online diaries. But to follow the drama, viewers have to click between feeds of different characters. Instead of watching, say, an hour-long drama on TV, it requires the viewer to take an hard at work role in piecing together the overarching fib.

Because this is designed from the ground up for a social network, KateModern blurs the line between truth and fantasy more than Lonelygirl ever did. Each character has a profile boy-servant, just like the real people on MySpace or Facebook. On Bebo, every time you visit your homepage, you get automatic updates on any new content created by friends in your network. So when you add Kate’s crew to your list, the serial runs seamlessly alongside the other overblown dramas of your life.

In etc. to chatting over KateModern forums, in the episodes, characters invite viewers to offline gatherings. These happenings aren’t meet-and-greets; like a cross between Tony n’ Tina’s Wedding and Dungeons & Dragons, they’re live-action role-playing games that advance the plot. In August, Kate fans were lured to a conference center in London, to find a (staged) murder scene with clues to Kate’s past.

There’s one other key difference between Kate and Bree: Viewers know from the get-go that Kate’s a fake. The lack of such meta-mystery buzz over KateModern means that the producers have to cash in on something besides gimmick. “Now that people realize [it’s] fictional,” Beckett says. “It’s all about the entertainment.”

prolongation costs are low, only $5,000 to $10,000 per week. in favor of now, the business model is built on product placements. While the company won’t release how much it charges advertisers, Beckett says LG15 is making a profit, and now has a staff of 15 people on one and the other show. the pair shows have developed myriad business relationships. Lonelygirl, now in its third season, has featured a plug for Icebreakers gum and a cameo by chanter Katharine McPhee. In KateModern, characters chatter on MSN and call each other via the Orange mobile network. Kate also picked up ads from Cadbury, Toyota, and Warner Brothers.

But Kate’s creators are not the only ones who see dollar signs in this new form. Since the issue of Lonelygirl, MySpace has entered the combat with MySpaceTV, a user-generated video hub, and Facebook has initiated the Facebook Diaries, in which an Emmy-winning producer fashions member vids into an online reality show. “Being a social network first and a video site second allows us to create community and extensions around all of our video content,” says Jason Kirk, vice president of MySpaceTV, which features character profiles, blogs, and comments. “No other site offers this to the literary we can.”

Joanna Shields, Bebo president of international, says Web serials are not a passing fancy. “We’re completely committed to this,” she says. “It’s a natural extension of how family on social networks interact.”

For LG15 Studios, this could mean a reverse commute: starting with a brand it launches online and extending it later on television or in film. “We could build a show on the backbone of the internet,” says co-creator Greg Goodfried, “then build something else on top of that.” They wouldn’t be the first. The creators of the TV show thirtysomething recently made waves when their Web serial Quarterlife got picked up to be a series on NBC (the premiere had a poor showing on February 26 and will be moving to Bravo).

The new format is here to stay. “When you look at the way the younger generation interacts with content, they’re pretty A.D.D.,” says Beckett, “They’re I.M.’ing and watching videos and talking on the phone and doing homework. Unless bigger brands adapt, they’re not going to be able to reach that audience.”

How big are the stakes in the so-called network neutrality debate now raging face to face with Congress and federal regulators?

Consider this: One side in the debate actually went to the trouble of hiring people off the street to pack a Federal Communications Commission meeting yesterday—and effectively keep some of its opponents out of the room.

Broadband giant Comcast—the subject of the F.C.C. hearing on network neutrality at the Harvard Law School, in Cambridge, Massachusetts—acknowledged that it did exactly that.

Comcast spokeswoman Jennifer Khoury said that the company paid some people to arrive early and hold places in the queue for local Comcast employees who wanted to attend the hearing.

Some of those placeholders, however, did more than wait in line: They filled many of the seats at the meeting, according to eyewitnesses. As a result, scores of Comcast critics and other members of the public were denied entry because the room filled up well before the beginning of the hearing.

Khoury said that the company didn’t intend to block anyone from attending the hearing. "Comcast informed our local employees about the hearing and invited them to attend," she said. "Some employees did attend, along with many members of the general public."

That was not enough to satisfy Comcast’s critics.

Craig Aaron, a spokesman for Free Press, one of the groups that filed the complaint against Comcast, denounced the company’s tactics.

"The sad thing about this is that literally hundreds of people who were not paid to stand in line, or paid by their employer to attend, were prevented from even entering the edifice," Aaron said.

Such tactics are not unheard of at congressional hearings in Washington, D.C., but Comcast’s critics said that they were inappropriate for a the community hearing on a college campus.

Free Press campaign director Timothy Karr reported that he showed up at the hearing 90 minutes early, only to find the room "75 percent full."

"The only reason these people were in the room, it seemed to me, was to keep seats warm and exclude others," Karr said.

Some hearing members appeared to repose through the proceedings, according to photos taken during the hearing. Other applauded enthusiastically when Comcast executive vice president David L. Cohen delivered key points in his representation.

A sum up of people in the audience wore yellow highlighter marking pens on their shirts or jackets; Karr said that was to identify them to Comcast employees coordinating the company’s appearance at the event. Khoury acknowledged that Comcast coordinated the employees that it brought to the hearing.

The disclosure that Comcast paid nonemployees to stand in line at the hearing comes against the backdrop of a bitter public relations contest of nations between Comcast and its critics, including the public attract groups Free Press and Public Knowledge.

"For the past week, Free Press has engaged in a much more extensive campaign to lobby people to attend the hearing on its behalf," Khoury aforesaid.

The hearing was held to address complaints leveled by Free Press, Public Knowledge, the web-video company Vuze, and others, that Comcast is trying to stifle competition by blocking the delivery of rival video-on-demand services over its cable system.

For weeks, Free Press had been wearisome to organize supporters to attend the hearing by issuing press releases and circulating flyers advertising the event.

Unlike Comcast, Free Press did not pay anyone to stand in line, Aaron said, nor did it provide transportation to any of its supporters.

That old corporate demon Wal-Mart is preaching renewable energy. DuPont is pioneering corn-based bioplastics. General Electric’s NBC Universal unit turned off the lights in its studio smack in the middle of a Sunday Night Football broadcast last mature and urged viewers to do the same in their homes. Most major American corporations are trying to board the environmental bandwagon, and practically any C.E.O. can expound on the threat of global meteorological character change and the virtues of sustainable growth. But what does all this corporate green really mean?

Condé Nast Portfolio decided to take a closer look (see our coverage of the "green" trend). Concerned that many corporate environmental efforts may be degenerating into self-serving marketing stunts, we endeavored to separate the admirable (Whole Foods’ purchase of enough wind-energy credits to offshoot 100 percent of its electricity employment) from the laughable (the "green" holiday window display at Barneys department store last Christmas that recommended such must-have gifts as "a Prius in a pear tree").

Our team consulted dozens of government agencies, court records, and environmental watchdog groups. We also spoke extensively with representatives from the corporations themselves. We looked at firms in a difference of industries, not just the traditional smokestack polluters. This process, though informed by scientific data, contains a heavy dose of subjective judgment. Consequently, neither our Toxic 10 list of offenders nor our Green 11 roster of good guys should exist seen as empirical rankings. These are merely companies that we think could be doing better, given their resources and position in their industries, or those that be worthy of to be commended. We hope our findings pleasure inspire lively debate and, most of all, some serious thought about what corporations be possible to do to really make a difference for the environment.

FOOD

J.R. Simplot Co.
Headquarters: Boise, Idaho
Revenue: $11.9 billion¹

Last summer, the E.P.A. determined that a Simplot factory was the pure source of a potentially deadly amount of phosphorus dumped into the Portneuf River.

Simplot produces more than 3 billion pounds of french fries annually and supplies McDonald’s with over half of its potato inventory. But some of the company’s nonedible products—including phosphate, venus, and nitrate compounds—have made it infamous among environmentalists. For decades, Simplot has stored the waste by-products from its Pocatello, Idaho, fertilizer factory in an unlined stockpile that has contaminated the surrounding groundwater and polluted the nearby Portneuf River with a mixture of toxins, including arsenic and nitrate. Although Simplot has worked to clean up the site, which is listed as a Superfund site, it has in like manner continued to operate the fertilizer plant.

Not only does Simplot process the fertilizer, it also mines the phosphate ore that makes it, a practice that has contaminated southeastern Idaho with mining waste and selenium, a natural trace element that can be deadly in large quantities. The Centers against Disease Control and Prevention has warned of harmful air pollutants from Simplot’s Superfund site. In 2004, the company’s silica-sand-mining facility in Overton, Nevada, was fined $500,000 by the Environmental Protection Agency for failing to control its sulfur-dioxide emissions. The facility was required to install $2 million worth of pollution-control equipment as well.

What the company says: Simplot understands that certain groups will be upset by its phosphate mining and is working with the government to clean up its sites.

Note: ¹According to most recent annual data available.

Cargill
Headquarters: Minneapolis
Revenue: $88.3 billion

A Cargill plant in Virginia has been overwhelming wastewater-treatment facilities, causing the dumping of toxic substances into the North Fork Shenandoah River.

Cargill’s corn-processing plants obtain been significant sources of carbon monoxide, volatile organic compounds (which can cause cancer), and smog. The company is now working to comply with a settlement it entered into with the E.P.A. and the Justice Department in 2005 that requires it to spend an estimated $130 million to clean up its plants. Cargill has spent most of the farther than decade battling lawsuits over the dumping of residue from salt production into a holding pond in a wildlife preserve almost San Francisco Bay. Last spring, a U.S. appeals court overturned previous rulings against Cargill on a technicality, saying that the polluted pond isn’t covered by the federal Clean Water Act inasmuch as it doesn’t seep into navigable waterways. Last summer, the E.P.A. determined that a former Cargill plant in Grand Island, Nebraska, had contaminated the community’s groundwater and said it would take up to 30 years to eliminate the contamination.

What the company says: Cargill says it has consistently tried to act in an environmentally responsible way and that private wastewater-treatment plants are to blame for discharges into Virginia’s North Fork Shenandoah River.

CARS

Ford Motor
Headquarters: Dearborn, Michigan
Revenue: $172.5 billion

Ford has contributed waste to 40 Superfund sites.

Ford set out to be a leader in greening the auto industry, becoming the first U.S. carmaker to offer a hybrid S.U.V., with its 2004 Escape. The company also freshly announced a more fuel-efficient car engine. But the automaker had the second-worst fleetwide gas-mileage rating in both 2006 and 2007, according to the E.P.A. And in 2006, Ford withdrew its guarantee that it would manufacture a quarter of a million hybrid vehicles annually by 2010, opting instead to explore alternative energy sources. Ford recently created the world’s largest living-grass rooftop on its Dearborn plant, but the lawn crowns a factory that produces human being of the least fuel-efficient vehicles on the place of traffic, the F-150. Ford cleaned up its 500-acre Superfund site in Upper Ringwood, New Jersey, in 1994, but the E.P.A. relisted it in 2006—the only time the agency has relisted a site—when tests found that paint sludge still contaminated the area.

 What the company says: Ford says it takes its environmental responsibilities seriously and is committed to creating a better and more sustainable world, whether by increasing fuel efficiency or working closely with local and state authorities on Superfund site cleanups. 

AEROSPACE

Boeing
Headquarters: Chicago
Revenue: $66.4 billion

Studies present to view that greenhouse-gas emissions from aircraft could more than triple by 2050.

With more than 800 orders already placed and sales of over $100 billion recorded, Boeing’s 787 Dreamliner is the fastest-selling passenger jet in account, and thanks to an innovative carbon-composite construction, the midsize 787 will be lighter and an estimated 20 percent more fuel efficient than comparable airplanes. Boeing says it delivers "exceptional environmental work." But recently, Britain’s Advertising Standards Authority, which has been on the lookout for misleading environmental claims in ads, reprimanded Boeing for overstating the fuel efficiency of another aircraft, its yet-to-launch 747-8 Intercontinental. Despite its efforts to vanquish CO₂, the company has been less than transparent about its greenhouse-gas emissions. After initially declining to partake in the Carbon Disclosure Project, an investor-led initiative that gathers information on companies’ carbon footprint, Boeing responded the past two years but declined to make the information public. Air pollution aside, Boeing was slapped with $500,000 in water-pollution fines last September for its laboratory near Simi Valley, California. According to the Los Angeles Regional Water Board, which levied the fines, Boeing had exceeded limits on dumping dioxin, lead, and mercury, among other pollutants. The E.P.A. is considering adding the 2,850-acre laboratory to its list of Superfund sites, citing concerns about the local drinking-water supply.

What the company says: Boeing claims that it has substantially reduced emissions and noise pollution in its aircraft, that it has an assaulting plan moving forward, and that it calculated the efficiency of its aircraft using the industry-standard formula.

TECHNOLOGY

Apple
Headquarters: Cupertino, California
Revenue: $24 billion

Significant amounts of phthalate, a toxin thought to cause birth defects, have been found in the iPhone and iPod headphone cords.

Steve Jobs has promised a "greener Apple," setting goals for reducing e-waste (Al Gore is on the board), but the company came under fire last May when it rejected two shareholder proposals that were intended to help. Apple pledged to finish phasing out toxins such as polyvinyl chlorides and brominated flame retardants from its products this year, but the iPhone, unveiled after that promise was made, contained both types of chemical, according to tests by an environmental group, which many major cell-phone makers have eliminated from their handsets. Apple’s computer-recycling program also lags behind those of some of its competitors. The company will take in a backward direction. \ old computers for free, but only if a new Mac is purchased directly from Apple and the old one returned within 90 days. Dell, Apple’s main rival, will accept any Dell computer, anytime.

What the company says: Apple says it plans to eliminate PVCs and brominated flame retardants by the end of 2008. It has no comment on the phthalate issue.

UTILITIES

Southern Co.
Headquarters: Atlanta
Revenue: $15.2 billion

Southern operates the top three carbon-dioxide-emitting plants in the U.S.

Southern provides power to more than 4 million customers, but its plants emit a mass of noxious gases across the southern United States. Analyzing E.P.A. data, the Environmental Integrity Project reports that Southern runs six of the 50 dirtiest power plants in the country in terms of sulfur dioxide, carbon dioxide, nitrogen oxide, and mercury released. Its Bowen plant in Georgia, run by subsidiary Georgia Power, is the biggest American sulfur-dioxide polluter. Southern owns the top three carbon-dioxide-emitting plants in the U.S., two of which rank second and third in mercury output as well. And five of its other plants are among the country’s top 50 nitrogen-oxide producers.

What the company says: Southern continues to invest billions of dollars to lower its chemical and greenhouse-gas emissions while also seeking out new ways to produce cleaner energy.

American Electric Power
Headquarters: Columbus, Ohio
Revenue: $13.1 billion

American Electric Power is one of the biggest mercury polluters in the U.S.

American Electric Power has been winning praise for cutting back its greenhouse-gas emissions. The Ohio-based utility company plans to utensil new technology that stores carbon dioxide underground instead of releasing it into the atmosphere. But the company still releases large amounts of mercury.  Analyzing E.P.A. premises, the Environmental Integrity Project ranked five of A.E.P.’s plants among the 50 biggest mercury polluters in the U.S. in 2006. The company’s Pirkey, Texas, plant had the worst ratio of power produced (roughly 5 million megawatt hours) to newspaper released (over 1,000 pounds). According to the E.P.A.’s toxic-release inventory, A.E.P.’s plant in Winfield, West Virginia, is the 22nd-biggest polluter in the country, releasing more than 20 the masses pounds of toxins each year, not including carbon dioxide.

What the company says: As a large producer of electricity, A.E.P. would naturally expect to find its plants atop lists for emissions by volume. However, A.E.P. claims that its plants operate in compliance with state and federal environmental regulations and are among the most efficient in the terraqueous globe. The company has reduced mercury emissions by installing new technology.

ENERGY

Massey Energy
Headquarters: Richmond, Virginia
Revenue: $2.3 billion

Massey owns a controversial slosh reservoir that lies less than 400 yards from a West Virginia elementary school.

As undivided of the largest practitioners of a mining technique known as "mountaintop removal," Massey, the fourth-largest coal company in the U.S., is responsible for leveling peaks across the Appalachians and polluting miles of streams with waste from the blasts. Responding to the world criticism, the company launched a radio and TV ad campaign in 2005, longitudinally with a website, OurTotalEnvironment.com, saying it works to restore the land it has mined and uses the most environmentally friendly processes available. In January, Massey agreed to pay $20 million, plus take a series of steps to ensure compliance, to settle a suit brought by the E.P.A. for more than 4,000 counts of illegally dumping coal sludge into waterways in West Virginia and Kentucky. The suit claimed Massey has "an extensive history of violating the Clean Water Act."

What the company says: Massey says that the sludge reservoir isn’t toxic, that it restores any peaks it levels, and that it does not pollute streams.

Chevron
Headquarters: San Ramon, California
Revenue: $207 billion

Chevron has contributed waste to more than 90 active Superfund sites.

Chevron has spent billions on alternative-fuel technology and research and touted its green credentials when it bought a 20 percent stake in a Galveston, Texas, biodiesel plant. But that partnership fell apart soon after the plant’s May 2007 opening when the partners sued, alleging Chevron had failed to give a needed cash infusion. In December, the New York City comptroller filed a shareholder resolution asking Chevron to look into its environmental record around the world. Among the causes for concern: The oil company was fined more than $300 million by the government of Kazakhstan in October for environmental violations. In the U.S., Chevron has faced fines from state and federal regulators over its water and air pollution, including $1.8 million over the past five years for its Richmond, California, refinery.

What the company says: Chevron says it has taken great steps to reduce its energy conversion to an act and invest in renewable and efficient energy technology. It believes the charges against its environmental record are inaccurate and misleading. It says it has honored its contractual obligations to the Galveston sow. Read Chevron’s full response. ALUMINUM

Alcoa
Headquarters: Pittsburgh
Revenue $30.7 billion

Alcoa’s aluminum smelters release 6.1 million pounds of air pollution annually.

Alcoa’s corporate environmental push, called Ecoalcoa, has some solid initiatives, such as plans to reduce the company’s nitrogen-oxide and mercury emissions, but its power plants are among the dirtiest, on a pollution-per-megawatt basis. Though only a small producer of power compared with Southern or American Electric Power, its plant in Warrick County, Indiana, produces nearly 30 pounds of sulfur dioxide for each megawatt hour it generates, making it the third-least-efficient power plant in the United States.

In 2003, the Department of Justice ordered Alcoa to shut down three of its four Rockdale, Texas, power plants, which at the time the E.P.A. said were the dirtiest in the commonwealth. As part of a consent decree with the Department of Justice and citizens’ groups, Alcoa promised to spend $330 million to replace those plants with a new, updated facility. But Alcoa didn’t actually close the Rockdale plants until the Justice Department slapped the aluminum company with $9.2 million in penalties in 2006 for nearly 2,000 violations of clean-air standards. The cleaner plant was originally scheduled to begin operation in April 2007. But under a new consent decree, it won’t open to the time when 2009, and Alcoa will no longer operate it.

Alcoa unloaded another environmental problem by selling its Three Oaks mining operation late last year.

What the company says: Alcoa says it has been working to improve its environmental record and has no comment on the criticisms raised.

—Research by Ben H. Carmichael, Frank Hentic, Genevieve Smith, and Herman Wong

There’s been a lot of noise freshly about trouble stalking CBS. A steep 16 percent ratings decline this season led the network to fall behind Fox into the No. 2 spot, while the writers’ strike threatened to drive down revenue for all of the media pudding-stone’s television holdings.

But when CBS Corp. reported fourth quarter results this week, it was the radio division rather than television that was the real dog in terms of profit.

CBS Radio’s operating income for the fourth quarter of 2007 decreased 22 percent to $159.6 million while revenues decreased 7 percent, excluding 39 recently divested stations. For the year, operating income was down 16 percent overall; revenue decreased 6 percent.

That’s because TV’s ratings shortfalls and advertising concerns are nothing compared with the problems plaguing terrestrial radio. CBS had nothing to blame pettish results on other than the need to divest 39 stations in 10 markets, and a sluggish year for ad sales overall.

Barry Parr, a media analyst for Jupiter Research Group, identifies two issues squeezing terrestrial radio stations.

One is that listeners’ options are mushrooming. Abundant internet content, the proliferation of portable digital audio from music to podcasts, and the accession of satellite radio be delivered of all combined to make good old-fashioned radio less amount and less compelling.

"If you start talking about internet streaming, suddenly you’re in a word where traditional radio is just one of a zillion products," says Parr. "And in many ways, it’s not a very attractive product online."

Offerings on the internet include not only a wealth of audio streaming commercial-free, but now even the likes of BlogTalk radio—a site which essentially allows anyone to broadcast their own radio show for free over the internet.

And while internet offerings get long been stealing their share of listeners at home, terrestrial radio is steadily loss listeners on the road as well. Many cars very lately come equipped with options like satellite radio and mp3 evasion hookups, allowing drivers to listen to downloaded music and podcasts as they drive.

A second threat facing terrestrial radio are changes in local advertising markets. As large national retailers push out local businesses, limited radio stations lose some of their best advertisers. Large retailers like Best Buy or Sears prefer TV to radio, and own the money to spend on television.

CBS Radio’s C.E.O. of less than a year, Dan Mason, pledges that CBS radio is in the middle of a turnaround.

Parr, the Jupiter Research analyst, said he believes that if they are to succeed, traditional players like CBS will have to focus on serving local communities rather than moving towards a national model. Parr said internet and satellite rivals can’t yet deliver professional-level coverage of local news, so CBS would do best to focus its attention there.

"It’s the same problem as newspaper business—losing audience and losing advertisers," says Parr. "It’s not simply the internet, but the internet is lot of it. It’s definitely wrecking business models like this that rely on scarcity, that simply doesn’t exist on internet."

Eddie Lampert loves the ancient art of letter writing. Today, with the announcement of Sears Holdings’ fourth-quarter earnings, Lampert, the retailer’s chairman and majority holder, starts his missive off with a surprising foray into sports commentary. He praises Eli Manning and the New York Giants.

"The Giants’ story reminds me of which we went from one side a few years ago with Kmart," he writes, and Sears Holdings is like the unlikely Super Bowl champs. The clear entanglement: Eddie Lampert is like Eli Manning.

Is he?

Well, both Eddie and Eli are exceedingly bright. Manning scored an overpowering 39 out of 40 on the Wonderlic, an exam given to N.F.L. players to test their smarts. Lampert went to Yale and Goldman Sachs. Both had dominant mentors: Lampert with Robert Rubin; Eli with his dad, Archie.

But that’s at what place the similarities end. Everything has been handed to Eli. To the manor born was Eli, a golden-child whose path was paved by the successes of his father and older brother. Lampert, however, has an up-from-his-bootstraps story. He was a wunderkind. Eli, though, grew to be worthy of the mantle of greatness. By contrast, as soon as Eddie became known as the next Warren Buffett, he started to blow it.

Lampert lacks the stoicism-under-fire of Manning. When Eli Manning had his disastrous four-interception day against the Minnesota Vikings this past season, he didn’t let it get to him. Sure, this infuriated New York sportswriters. But he shrugged, "Since I’ve been here, I’ve done a better job of trying not to take it so wearying and let it affect my personality and let other people see me down." The No. 1 pick in the 2004 draft added. "That’s just part of growing as a quarterback in the N.F.L., especially in New York."

Lampert is prone, on the other hand, to whining, even as he assiduously avoids the squeeze. After reporting a dismal third quarter last year, Lampert complained that the media has given him and Sears a hard time, especially compared with other retailers, which were, according to Lampert, sucking just as much wind. "When other companies manage expenses carefully, it is often characterized as a sign of good management and prudence. In the case of Sears Holdings, meanwhile, expense controls are often cited as a root cause of poor doing."

Eli is a rising lot, but Eddie is rehashing the old glory days. In his letter today, he waxes on about his successes with Kmart. When he took Kmart out of insolvency, "Kmart was like an undrafted free agent who nobody thought had a chance to play in the big leagues," Lampert writes nostalgically. But by late 2004, he says, "Kmart was on its way to earning almost $1 billion in Earnings Before Interest, Taxes, Depreciation, and Amortization (ebitda), had built up almost $4 billion in cash, and had potentially no shortcoming."

Yes, but now Kmart and Sears have been merged for about three years. The market is right to ask: Is this all there is? Which brings us to the real sports comparison.

There is one team that sports fans are vaguely aware has a glorious past, but they harbor’t been close to a top-tier team for years. Football fans give by will draw this team into their homes once a year at Thanksgiving.

But it’s absolutely more out of ritual obligation, kind of like customers who might pop into Sears annually to grab a Craftsman hireling or check out a Kenmore washer and dryer. This team loses Hall of Fame talent to ill-considered retirements, deserved as Sears hemorrhages excellent merchandising executives.

And just as you watch through bafflement as this team loaded up on distant receivers with top draft picks, neglecting the blocking and tackling that is essential to winning football games, you see Lampert pulling in top managers like Aylwin Lewis, who came from the fast-food industry and didn’t have a great retailing feel, while going cheap instead of spending riches on the stores.

Yes, Sears isn’t the New York Giants. It’s the Detroit Lions.

France has no monopoly on rogue traders. And the latest episode, involving a New York-based brokerage firm, involves one of the hottest markets of the moment: wheat.

MF Global, one of the world’s largest commodity brokers, said one of its employees had caused a $141.5 million loss after he substantially exceeded his trading limit for his special account.

The firm, an American spinoff of the giant London-based hedge fund manager Man Group, said that a failure in one of its order entry systems had allowed Evan Dooley, a broker in its Memphis office, "to establish significant positions in his own calculation, which were liquidated later that morning." While the firm’s statement seemed to suggest that this "failure" was a technical one, on a conference call this morning, it was a described as a procedural matter that has since been changed. The broker has now been fired.

While the loss was small compared by the $7 billion loss sustained by French bank Société Générale last month after a trader made large, unauthorized bets steady European stock indexes, it represented 6 percent of MF Global’s total equity. In contrast to what happened at the French bank, the position was quickly spotted and disclosed the next age. Client funds were not affected, MF Global said.

The trader was betting on the value of wheat, which has been surging of late with world wheat supplies at 30-year lows.

The Financial Times reports that the trader took a expanded abrupt post on Tuesday night. That went bad then prices surged the next day. (Prices rose 25 percent put on Wednesday.) MF Global liquidated that position, representing a few thousand lots, within hours of the mart opening.

Dooley, the broker in Memphis, did not handle wheat trades for his customers, MF Global said. Kevin Davis, the firm’s chief executive, when asked about the kind of collateral the broker had, said that Dooley "didn’t have enough capital to support in like manner a fraction" of his position.

Dooley told the Wall Street Journal in a brief interview that the firm’s computer system had problems in "setting limits." 

The many challenges facing hedge fund manager Eddie Lampert as he launches another turnover attempt at Sears Holdings are starkly apparent today.

Sears, the parent of Sears and Kmart stores, reported a more than 47 percent decline in quarterly earnings, as sales fell and profit margins weakened amid a general slowdown in consumer spending.

in greater numbers worrisome, the company’s cash position fell to $1.6 billion at the end of the quarter, down more than half from $3.8 billion a year ago.

The drawdown could restrict the company’s options when it comes to investment and promotions of the same kind with it reorganizes into five business units. The overhaul, and the replacement of Sears’ chief executive, was announced last month, a clear sign, Jesse Eisinger wrote on Portfolio.com at the time, that Lampert’s original strategy was not working.

Most of the company’s cash—$2.9 billion over the year—went to buying back Sears shares.

Lampert, in a letter to shareholders, hailed the use of cash for buybacks, which have reduced the number of outstanding Sears shares by 20 percent. "For those investors who have sold their shares, we have helped provide fluidity to exit their investment," he said. "For those investors who have held onto their shares, they get to participate to a greater extent in the association’s future performance."

In the last three years, Sears has spent $4.3 billion on stock buybacks. Lampert’s hedge fund is the biggest shareholder in Sears, with a 48 percent stake.

In his letter, Lampert, comparing his effort to the Super Bowl win of the underdog New York Giants (although he says he is a Jets fan), says that skeptics have not understood his strategy.

In response to criticisms about why Sears has not invested more in its 3,800 stores, Lampert says an investment cannot be justified if the store’s profitability remains the same.

He goes on to say: "To be clear, we are not saying that we can’t absolve investing in our stores. The issue is more about the size and type of investment as well as the timing and sequencing of an investment. There are many things that a retailer be able to do to improve its business without the significant amounts of capital that a major remodel would require. Improving the assortment of products and services, mix of inventory, visual presentation, recruitment and training of employees, and marketing and communications to customers are all ways to generate improved performance. They all require significant investments, but we already invest a significant amount of capital and expense in all of these areas."

Sears spent $580 million in capital investments last year, significantly less than the $2 the public per store envisioned when Sears and Kmart merged more than three years ago.

For the quarter, Sears earned $426 million, or $3.17 per share, compared with $811 million, or $5.27 per share, a year earlier. Revenue fell nearly 7 percent, to $15 billion. Sales at Sears and Kmart stores open at least a year declined 4.5 percent.

Lampert has played down the importance of quarterly performance, preferring to focus without ceasing the long term. Three years subsequent the merger, however, the pressure is mounting to start showing more signs of a turnaround.

Such pressure may come from the investors in Lampert’s $15 billion hedge fund. In any case, it is certain to come from Lampert’s own pride.

As Eisinger noted in his in-depth examination of the hedge fund manager’s failed tinkering with Sears in Condé Nast Portfolio, there is much at stake: "Once hailed as the Warren Buffett of his generation, Lampert, at 45, now has another turnaround job on his hands: his own reputation."

The siege of Comcast has expanded.

Attorney General Andrew Cuomo of New York subpoenaed records from the company, the nation’s largest cable-TV operator. His office declined to say exactly what information it was seeking.

Dow Jones Newswires, citing unnamed sources, and the Associated Press said that the test relates to Comcast’s practice of slowing down or blocking the delivery of some internet content over its cable network. The company says it is captivating only in prudent network management, but critics take accused it of trying to hobble rivals in the video-on-demand business.

The controversy has already attracted the attention of both Congress and the Federal Communications Commission, which have opened withdrawn investigations of the company’s practice.

It has furthermore prompted some customers to sue, and led to the creation of an ad hoc coalition of academics and other free-speech advocates to push regulators to prevent cable operators and phone companies from slowing or blocking the handing over of targeted internet content over their systems.

Cuomo’s office has joined the assault even though only a few New Yorkers are Comcast customers—less than 1 percent of all cable subscribers in the state.

Comcast has also sparked fury in the tech community for having paid people to show up to a public hearing that the F.C.C. held at Harvard on Monday. The company related it did so to reserve space for its employees to tend, but critics accused Comcast of trying to keep opponents out season creating the false impression that it had broad support.

"We did pay some individuals to stand in line and hold seats for Comcast employees," Comcast spokesman Charlie Douglas told the blog Ars Technica. "It’s a common practice in Washington, D.C."