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October 2, 2001

Likely FCC Changes Ahead

The Federal Communication Commission, on Thursday, September 13th, voted unanimously to review laws that limit the number of customers one cable television company can control and prohibit companies from owning a newspaper and a television station in the same city. (The vote is part of a biennial review of telecommunications rules required by law.)

FCC Chairman Michael K. Powell has promised to eliminate decades-old rules that he views as antiquated by technologies such as satellite, cable, and the Internet that have given Americans a multitude of choices for receiving entertainment and information.

The changes would likely eliminate many existing rules and propel further consolidation of the media industry after a decade of mega-mergers. And of course, changes in ownership will have an effect on the bartering endeavors as well...in some cases positive, others will see the reverse.

International Investments Will Drop...Big Time

A dramatic downturn in international investments, the worst in 30 years, will be one of the fallouts of the slowing world economy and terrorist attacks.

DRI-WEFA, an economic forecasting company based in Lexington (MA), estimates the entire $32.3 trillion world economy will be one-half percentage point lower than previous predicted, which will lop off $160 billion. (They now predict a 1.5% growth in the global gross domestic product, which was 4.8% last year...a dramatic drop-off this year for the world economy.)

The decrease in cross-border investments in 2001 will be the first decline since 1991, when a global recession caused a 23% drop from $200 billion to $155 billion. Last year an incredible $1.3 trillion cross-border investments were made. It's expected the number will drop to under $700 billion for 2001.

Many M&A's are done on a trading of equity...acquiring another company in exchange for the acquirer's stock, rather than any cash payment. Over 40% of M&A's in the U.S. were done in that manner last year, an all-time high.

IRTA Convention Rescheduled

The IRTA Global Executive Committee has decided to postpone the International Reciprocal Trade Association's Convention. It will be held November 8-11...same venue. For more information call IRTA (716) 424-2940.

NATE Regional Convention Canceled

The National Association of Trade Exchanges (NATE) has canceled the upcoming regional convention, "Barter By The Lake," which was scheduled in Akron, Ohio, October 4-6. John Sobolewski, Executive Director, says the focus will now be on the National Convention in New Orleans, May 16-18, 2002.

Here And There. . .

  • Almost $100 million in fine art may have gone down with the World Trade Center, report art-insurance firms. Bond broker Cantor Fitzgerald decorated corner offices with Rodin sculptures. Plus dozens of sculptures located around the World Trade Center were destroyed, such as the ones adorning the five-acre plaza at the foot of the Twin Towers and skybridges, including a Calder sculpture titled "Bent Propellor" valued at $25 million to $30 million.

  • Lowestfare.com, created in 1995 to sell cut-rate TWA tickets obtained under a barter deal between corporate raider Carl Icahn and TWA, announced it has stopped selling discounted airline tickets. The resale of TWA tickets made up 87% of Lowestfare.com's bookings in 1999, according to Business Week magazine.

    One innovative barter entrepreneur developed a substantial business by dealing with TWA and then trading the tickets on a leveraged basis throughout the barter community.

  • The "drive market" is suddenly coming into vogue--where vacationers take a trip without taking a plane. Las Vegas has launched a $13 million TV, radio, and print campaign aimed at drive-markets such as Los Angeles and Phoenix.

    And California, where travel and tourism are pillars of the economy ($75 billion in travel expenditures or 6% of the state's gross state product), has a $5 million marketing campaign underway to get residents visiting within the state. Last year more than 80% of the 293 million "visitors" were Californians.

  • They've done it again... The huge, 250 exhibit BXI annual Barter Faire held at the Orange Country Fairgrounds is scheduled for Sunday, December 9th. On the same day, TradeAmericanCard's Orange Country based independent trade exchange is holding their Holiday Barter Expo at the Sequoia Conference Center in nearby Buena Park. Unfortunately, cross-over members spend less time in each location as a result of the conflicting events.

  • Travel will become an important business for Amazon.com the company says, despite the travel industry's decline. Expedia is its preferred online-travel partner allowing customers to book flights, cruises, hotels, car rentals and cruises from Amazon.com.

    Amazon has branched into many different markets, via partnerships such as the Expedia deal. The company is working with book retailer Borders, and with Circuit City for consumer electronics from its huge inventory of goods.

    They've also signed on with Target Corp. of Minneapolis to sell home furnishings, sports gear, luggage, clothing, and other goods as Amazon pushes to be the nation's online sales conduit.

  • The boom times of 1999 for the venture capital community is a distant memory. PricewaterhouseCoopers reports that first round venture funding already had fallen to just $1.04 billion during the 2001 second quarter, down 87% from the year-earlier period. (September was the first month since December 1975 that there were no IPOs, according to Thomson Financial Securities Data.)

  • Jonathan Tisch, CEO of New York-based Loews Corp., estimates that tourism and travel in the U.S. is a $582 billion industry and that the travel industry is responsible for the remarkable growth in employment over the last decade.

    Labor, according to Tisch, is the biggest operating cost for hotels and is the first place many properties cut expenses. (U.S. hotels employ about 1.5 million workers and restaurants employ many times that number.)

  • Warren Buffett, head of the diversified conglomerate Berkshire Hathaway, says its no longer business as usual. "I think in the future, the government is going to have to be the ultimate insurer for acts of terrorism. An industry with very large, but finite, resources is not equipped to handle infinite losses."

    (Berkshire Hathaway is a leader in insurance, owning General Re Corp. and National Indemnity Company. Buffett estimates the firms will owe policyholders close to $3 billion--3% of the insurance industry's total cost for the recent catastrophe.

 

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