Another oppo dump
Thursday, Oct 2, 2014 - Posted by Rich Miller
* This time it’s Gaper’s Block…
GTCR, the private equity firm started in part by Republican Gubernatorial candidate Bruce Rauner, brought on disgraced former Tribune Company executive Randy Michaels in 2011 to run Merlin Media.
At the time Emmis Communications sold a controlling interest in Merlin Media and transferred ownership of three radio stations, two of which were in Chicago, to GTCR.
Michaels was an executive at the Tribune company from 2007 until 2010. The New York Times published an article in October 2010 detailing the behavior of Michaels while he was at the Tribune Company, which included sexual harassment of female employees.
Michaels resigned from his job later that month.
* From that NYT article…
When Kim Johnson, who had worked with Mr. Michaels as an executive at Clear Channel, was hired as senior vice president of local sales on June 16, 2008, the news release said she was “a former waitress at Knockers — the Place for Hot Racks and Cold Brews,” a jocular reference to a fictitious restaurant chain.
A woman who used to work at the Tribune Company in a senior position, but did not want to be identified because she now worked at another media company in Chicago, said that Mr. Michaels and Marc Chase, who was brought in to run Tribune Interactive, had a loud conversation on an open balcony above a work area about the sexual suitability of various employees.
“The conversation just wafted down on all of the people who were sitting there.” She also said that she was present at a meeting where a female executive jovially offered to bring in her assistant to perform a sexual act on someone in a meeting who seemed to be in a bad mood. […]
There have been complaints about Mr. Michaels in the past, however. In 1995, Mr. Michaels and Jacor settled a suit brought by Liz Richards, a former talk show host in Florida who filed an E.E.O.C. complaint and a civil suit, saying she had been bitten on the neck by Mr. Michaels and that he walked through the office wearing a sexual device around his neck.
…Adding… Ibedahl had this story back in February…
In June of 2011, Bruce Rauner’s former private equity firm GTCR partnered with media veteran Randy Michaels to form Merlin Media, LLC. “It’s a pretty standard GTCR deal,” said Philip Canfield, Principal at GTCR. “We’re backing a CEO [Randy Michaels] and doing a corporate carve-out and a bunch of transformation of those underlying assets.”
According to an SEC filing dated September 1, 2011, Michaels, whose real name is Benjamin L. Homel, owned only 1% of Merlin Media. GTCR was the main owner with an approximately 74% interest. Emmis Communications owned the rest.
“We [at GTCR] are extremely excited about the opportunity to partner with Emmis and Randy,” said Canfield back in June of 2011. “Emmis’s CEO, Jeff Smulyan, and Randy Michaels are both proven veterans of the media industry and we look forward to working with them to provide valuable media content to Merlin Media’s future consumers.”
Private Equity International, a magazine dedicated to the private equity industry, describes GTCR’s “intense, relentless” CEO recruitment efforts:
GTCR is known today for having one of the most intense, relentless and successful focuses on CEO recruitment in the private equity industry, and its modus operandi is always the same: seek out an ideal CEO for a given platform, doggedly pursue him or her until the offer is accepted, then help the CEO build a company. In many cases, the CEO is hired before a single acquisition is identified
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- RNUG - Thursday, Oct 2, 14 @ 10:57 am:
Just when we think this race can’t sink any lower …
- John A Logan - Thursday, Oct 2, 14 @ 11:00 am:
== saying she had been bitten on the neck by Mr. Michaels and that he walked through the office wearing a sexual device around his neck. ==
I have read a number of bizarre sentences in my life that were in some way connected to Illinois politics. This has to be in the top ten.
- Walter Mitty - Thursday, Oct 2, 14 @ 11:02 am:
I’m lost. The guy was a turd. Did Rauner personally hire him? Did he not deserve another chance? Did he continue this behavior at Merlin, it doesn’t say. Is this supposed to move independents to Quinn? Or will it move them to Rauner as this is reaching? Because we all know who PQ put in charge of funds with Public money that is not accounted for… They must really be worried about next week.. As they should.
- VanillaMan - Thursday, Oct 2, 14 @ 11:06 am:
After reading through it - the “dump” part is right! The “oppo” is more like, “oppo-site”
Pretty weak.
And I’m insulted over the Knocker’s comment. It was the only place that would hire me and Oswego Willy. BTW Willy, you still owe me when I had to get you out from that table forcing you to do those lap dances.
- Oswego Willy - Thursday, Oct 2, 14 @ 11:14 am:
- VanillaMan -,
I read your comment.
- Ron Burgundy - Thursday, Oct 2, 14 @ 11:16 am:
Looks like old Randy was well-named.
- Langhorne - Thursday, Oct 2, 14 @ 11:16 am:
highly offensive, tawdry behavior. GTCR invested, and…..what? there were jerks at the company, and this connects to rauner how, to make him responsible?
- anon - Thursday, Oct 2, 14 @ 11:19 am:
Here’s what I don’t get, Rauner’s company handled thousands of companies during his tenure. Based on numbers alone, one of them had to have been a positive turn around. Why isn’t his campaign using that to stem the bleeding?
- Skeptic - Thursday, Oct 2, 14 @ 11:21 am:
Geez, what’s wrong with men?
That aside, even as an avid Rauner hater, I don’t see this as a ding on him.
- Hank - Thursday, Oct 2, 14 @ 11:23 am:
As a former employee of Merlin Media–which for all purposes doesn’t exist 3 years after Rauner’s people bought into it–I can confirm trusting Randy Michaels was a monumentally stupid idea. And within 2 months of our station launch, we were told “investors” wanted staff cutbacks and other cost reductions.
- pundent - Thursday, Oct 2, 14 @ 11:23 am:
While the connection to Rauner may be a bit strained it is important to remember that his claim to fame is his ability to spot executive talent and put them at the helm of companies that he invests in. Michael’s behavior has been widely reported on and if it didn’t give Rauner pause before putting him in charge of Merlin Media it does reflect poorly on Bruce.
- Frenchie Mendoza - Thursday, Oct 2, 14 @ 11:23 am:
—
Based on numbers alone, one of them had to have been a positive turn around. Why isn’t his campaign using that to stem the bleeding?
—
Probably because the metrics for success in Rauner’s world involve however much GTCR could pocket from these companies. The idea here, I suspect, has nothing to do with “helping” or “improving”.
It all has to do with the number of dollars extracted from the companies. The more extracted, the more successful the investment.
I doubt Rauner is savvy enough to spin it any other way. Because of this, there’s no real “success” in anything Rauner has done. Or, to put it another way, there’s no real persuasive power in rabid, bustout capitalism. If you’re Rauner, it’s great. Rauner’s family? Sure — great. Everybody else? Not so much.
- Juice - Thursday, Oct 2, 14 @ 11:24 am:
More importantly, they then killed Q101.
- J - Thursday, Oct 2, 14 @ 11:25 am:
Rauner is the one who keeps going on and on about how involved he is with everything and how he recruited lots of top flight talent. That’s what this hit goes to.
- Wumpus - Thursday, Oct 2, 14 @ 11:26 am:
Useless without pics, Rich
- walker - Thursday, Oct 2, 14 @ 11:44 am:
Do they or don’t they carefully vet and recruit only the best senior executives to run GTCR holdings?
Rauner has made one clear specific claim about his business experience that applies directly to Government: “I am a great executive recruiter.”
- The Historian - Thursday, Oct 2, 14 @ 11:49 am:
“Whose real name is . . . Homel?”
Everything we’ve seen in the press for years about the guy discussed him using some pseudonym??
Can anyone illuminate this a bit?
- whetstone - Thursday, Oct 2, 14 @ 11:54 am:
What pundent said. I was just talking about this with some media friends–why hiring Michaels isn’t more of a big deal.
On one hand, the aftermath isn’t as striking, as, say, the nursing homes. On the other, Michaels’s tenure at the Trib is well known and not well regarded.
Granted, Michaels had a lot of success prior to that. But there’s a lot of “Randy Michaels? Seriously?” sentiment. Which taps into a broader sentiment about how, at a certain level, upper-level management seemingly never has consequences for failure. (Merlin is a big step down from the Trib, I guess, but still.)
- 47th Ward - Thursday, Oct 2, 14 @ 12:01 pm:
With the special acumen Rauner brings to executive recruitment, I can’t wait to see who he’ll appoint in state government. Maybe he can bring Michaels back to run the Department of Human Rights.
Remember, exectuive recruitment is a cornerstone of GTCR and they thought highly of Randy Michaels. This hit is well above the belt.
- AFSCME Steward - Thursday, Oct 2, 14 @ 12:43 pm:
47th Ward
“Maybe he can bring Michaels back to run the Department of Human Rights.
Under Michaels, Sexual Harrassment trainning would be instructional on how to do it.
- wak - Thursday, Oct 2, 14 @ 12:45 pm:
Is target or point of this maybe women who might find issue with Rauner hiring executives to run his companies with such checkered pasts when it comes to sexual harassment. This seemed weak to me at first but I started thinking about it from a woman’s perspective and it seems to carry more weight from that angle.
- Joe Bidenopolous - Thursday, Oct 2, 14 @ 12:53 pm:
I know people who worked closely with Randy at Trib. If you believe the stories (and I do), he was much, much worse than what’s been reported.
I’m not sure we need Rauner’s brand of executive recruitment at the state. Or anywhere.
- wordslinger - Thursday, Oct 2, 14 @ 12:55 pm:
Hiring Michaels after his tenure at the Tribune is just bizarre.
- Soccermom - Thursday, Oct 2, 14 @ 1:04 pm:
This one inspires me to validate Godwin’s Law — “Yeah, sure, the guy had some problems in his previous position, but…”
- ChrisB - Thursday, Oct 2, 14 @ 1:25 pm:
Wait, they were behind the guys who killed Q101? Election is over folks.
While we’re at it, New Q101 is pretty terrible. If I wanted to listen to the same crap The Mix plays, I’d turn on 101.9.
- ? - Thursday, Oct 2, 14 @ 1:37 pm:
The only reason I would hire someone who’s Google search turns up something like this, is if I owed that person a very big favor for something? Right? He saved my kids life or buried a body for me. Soooooo? Explain this.
- wordslinger - Thursday, Oct 2, 14 @ 1:52 pm:
I suspect GTCR hired Michaels for the same reason Zell did at Tribune Co: to be the hatchet man.
Squeeze more short-term profit by firing veteran staffers, reduce overall staff and resources, and hope that your long-time, hard-earned brand equity can hide the decline in quality before you cash out.
Sure worked at Tribune Co., huh?
GTCR has already cashed out of the radio business, selling all of Merlin’s holdings.
- Jimmy - Thursday, Oct 2, 14 @ 3:55 pm:
In other words, find a patsy willing to do what it takes to inflate share price.