The case of the combative CFO.
Minute Publishing Chairman and CEO Neil Harcum has a right to be proud of his new national newspaper, America Today. It has won three Pulitzer Prizes and attracted one million readers in just three years of publication. But, as CFO Peter Rawson points out, it's also losing $100 million a year and has broken Minute's 20-year string of earnings gains. In the process, the company has been split between two warring factions: one is backing Harcum and favors continuing the paper. The other agrees with Rawson that the project must be stopped. The board of directors has been assembled to decide the newspaper's fate. In his speech to the board, Rawson says it's time to cut Minute's losses and put an end to America Today. And Wall Street agrees. Several brokerage houses have taken Minute off their buy lists, and rating agencies are about to down-grade the company's debt. "America Today is not a good investment," Rawson argues. "Certainly, it isn't in keeping with our commitment to deliver maximum value to our shareholders." But Harcum thinks Rawson is way out of line. "We cannot allow our bean-counters to set policy," he claims. Harcum sees the newspaper as a product of the future that has created its own market. It's only a matter of time before America Today attracts enough advertising to put it in the black. He has a successful track record, and he doesn't want the board to lose faith in him now.(ABSTRACT TRUNCATED AT 250 WORDS)
Nichols
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Bagley
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Beard
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Dworkin
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Millstein
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D000288:Administrative Personnel; D003659:Decision Making, Organizational; D005376:Financial Management / Q000379:methods*; D006075:Governing Board; D007221:Industry / Q000191:economics / Q000458:organization & administration*; D007400:Interprofessional Relations; D007449:Investments / Q000191:economics; D014481:United States