Monday, December 07, 2009
Big Money On The Move; Maloofs Out Of NM As Their Empire Shakes; Madoff In Mix? Plus: UNM Update, City Council Action Tonight, And: More TV News
The Maloof Family
Word that the wealthy Maloof family is ending their business ties with New Mexico after being staked here for over a century rattled old-timers and newcomers alike as the shaky economy and the fallout from it continues to hold everyone in thrall. But there's more going on business wise with one of the state's most storied families than just the sale of its Coors beer and liquor distributorship.
The cornerstone of the Maloof business empire was that Coors distributorship the family secured in the 1930's and which made possible all the later and varied investments that eventually landed the family on the Forbes 400 Rich List for 2003, showing them with a net worth of $1 billion.
But they are long gone from that list and the Great Recession is reshaping their empire and their lives. The Maloofs recently sold the Sacramento Monarchs, a team in the Women's National Basketball Association. And word is growing louder that the family's once-high flying NBA franchise--the Sacramento Kings--will soon go up for sale. Sports insiders say a struggling NBA franchise like the Kings can lose $30 million a year.
But it is the crown jewel of the empire that is at the heart of the tumultuous times for the family of Lebanese decent whose ancestors settled in the Las Vegas, NM area late in the 19th century.
The Palms Resort and Casino, erected just off the Las Vegas strip in 2001 for $285 million, is being ravaged by the recession, along with the rest of Vegas. It's known as a fabulous property, managed by George Maloof, Jr, 45, and where famous Hollywood personalities and the Playboy philosophy are mixed into a highly profitable blend. But there's no let up in sight for the gambling recession as consumers--even well-off ones--reassess their past and future spending.
In the context of the basketball and casino stories, it's not surprising that the NM Coors business is being put up for sale. And then there's this...
MADOFF AND THE MALOOFS?
The rumor mill is always churning when it comes to the high and mighty. Slam, a magazine that bills itself as a top source for pro basketball news, recently put out this sensational item:
There are persistent rumors that the Maloofs had money invested with Bernie Madoff, and we can all guess how that turned out.
Madoff ran a ponzi scheme, bilking billions from unsuspecting wealthy investors.
In addition to family matriarch, Colleen, who sold her Beverly Hills home this year for around $8 or $9 million (depending on the report), a couple of the Maloof children also put their Los Angeles estates on the market. Phil Maloof's Beverly Hills house was first listed at$16,995,000 and then listed at a much lower $10,865,000, and Joe Maloof sold his Brentwood mansion for $4.2 million. He purchased it in 2004 for $4.75 million. Colleen has owned a home in the affluent Altura Park area of ABQ's mid-NE Heights for many years. (We don't know the current ownership status.)
The four sons of Colleen and George Maloof (who passed in 1980) are all sought after bachelors who have had their share of time in the tabloids, but their mother is given credit for running a tight ship. The Maloof businesses grew exponentially under her early leadership and the sons carried it to even higher heights, all without a hint of scandal or other public issues that so often track the monied classes. Maloof daughter Adrienne is secretary-treasurer of the Maloof companies, is married and lives in Los Angeles.
Whether they invested with Madoff or not, the Maloof's are gone from the upper tier of the world-class rich as well as from the New Mexico business landscape. But their support of several generations of workers here, their generous philanthropy and the story of their hard scrabble ancestors building something where there was nothing, has earned them a chapter all their own in the never-ending book of La Politica.
We wondered if the Maloof's pulling out of New Mexico will make a difference when the debate over slapping more taxes on booze heats up next month at the state legislative session. You may recall it was several years ago when the last serious attempt was made to hike alcohol taxes. The Maloof's engineered a very effective lobbying campaign that included postcards sent far and wide. The tax was killed. They won't be around with such passion this session and the liquor industry could feel their absence. But lobbyist Ed Mahr, who represents the Maloof companies in NM, still doesn't see higher booze taxes in the future:
Republicans are against any tax increases and there are too many Dems who do not want to raise the price of liquor on their blue collar constituents. Also, NM's liquor taxes already are among the highest in the country and the liquor industry is part of NM's hospitality industry and that industry has tanked. Raising liquor taxes is not a good way to attract more tourists...Our retail liquor prices are already horrendous and raising them higher will not help the industry...
THE MALOOF CAMPAIGN
The peak of the Maloof's political involvement came when Phil Maloof, now 42, won the 1998 Democratic nomination for the ABQ congressional seat. He had served a term as a ABQ West Side state senator. The US House seat opened up upon the death of GOP Rep. Steve Schiff. The R's put up Heather Wilson who beat Maloof in both a special election and a regular election. Maloof spent $5.3 million on the losing effort. He now oversees Maloof Music in LA, a joint venture record label.
THE YEAR WAS 1974
Tonight the ABQ City Council gathers for its first meeting with the new councilors elected in the October election and all eyes will be on the vote to confirm Democratic lawyer Dave Campbell as Republican Mayor RJ Berry's chief administrative officer.
Three of Berry's fellow R's--Councilors Winter, Cook and Lewis are wary of Campbell, saying he has a conflict of interest because he was a land use attorney who did business with the city prior to becoming CAO. But the ABQ Journal, echoing community sentiment first heard here, urges in a Sunday editorial that the GOP councilors back off. They cite Campbell's lengthy response to the councilors concerns and the tradition of letting a new mayor like Berry form his own team.
If the three R's tonight vote against Campbell, it will be unusual but not unprecedented. Democrat Marion Cottrell, one of the members of the 1974 ABQ City Council--the first under the modern mayor/council form of government--recalled the CAO vote of that year when we ran into him recently at the local coffee shop.
Frank Kleinhenz was nominated by Republican Mayor Kinney to be his CAO. Three votes were cast against him, including mine. Frank had run against me for my council seat and I did not think mixing politics with the CAO position was appropriate. He was confirmed, I believe, on a 7 to 3 vote. We had more than nine councilors those first couple of years because we held over some of the old city commissioners...
The council today has nine members who will vote tonight on Campbell's nomination as well as choose a new council president for the coming year.
Cottrell, a Democrat, is a retired UNM professor who was a staunch supporter of Mayor Chavez, but he wished Mayor Berry well and said "things will work out fine" under his leadership. That's the spirit of bipartisanship that has survived in city government, though tested over the decades. One can only hope that it does not become part of history and that the new councilors and the old ones meeting tonight for the first time pause to reflect on its importance.
Now we go deep inside the resignation story of University of New Mexico Foundation president, John Stroop. He is leaving within six months after a year and a half on the $325,0000 a year job. Analysis from a Senior Alligator and avid UNM watcher:
(Stroops's departure) could mean that (University of New Mexico David) Schmidly's days are numbered. It appears he wasn't consulted much on the "retirement." Schmidly brought John Stropp here to overhaul the foundation and that is occurring but not completed. The amount of money--as a percentage--taken from endowments really made some powerful interests like the Sandia Foundation angry.
The start of the UNM Foundation's capital campaign has been an on and off affair for three or four years and with Stropp leaving before the launch, I think we can see it delayed again. It is just as well, given the unresolved controversies hanging over UNM. Better to wait until Diane (Denish) is Governor and (UNM Regent) Jamie Koch and (UNM Vice-President David) Harris are gone.
The UNM Foundation is governed by a 42-member board of trustees that supervises the investment of approximately $325 million. The newspaper reported: "The foundation had to ask regents in May for help in covering a $3 million budget shortfall. Part of the foundation's operating funds are earnings from the endowment it manages and from short-term interest returns, both of which suffered when the economy tanked."
THE GUV RUN
Yes, we noticed how that Senior Gator said in his UNM missive "until" Diane Denish is Governor. Well, there are still a few ifs to go in the eleven months running up to election day, but with no obvious GOP heavyweight in the battle, engaging the public is in this contest is going to be a challenge and that benefits Denish.
And look at this. Is it possible the Dems could actually get a break on the pay to play stories that have been haunting the Richardson administration? First, this news from ABQ Journal investigative reporter Mike Gallagher:
Another money manager with ties to New York and New Mexico state investment scandals has pleaded guilty to bribing state officials in New York in exchange for a $250 million investment from that state's pension fund.
Elliott Broidy, founder and chairman of Markstone Capital Group, admitted paying nearly $1 million in bribes..to employees of the New York State Comptroller's Office to secure an investment from the state pension fund.... In 2004, the New Mexico State Investment Council invested $20 million in Markstone Capital...
Now the money line:
Broidy, a prominent fundraiser for the Republican National Committee, also served as a trustee of the Los Angeles Fire and Police Pension fund until earlier this year.
Say what? A Republican mixed up in New Mexico's ethics mess? Well, several insiders say look for the Dems to try to take advantage of that and try to have the blame spread around come campaign time.
NM GOP Chairman Harvey Yates, Jr. has been doing a good job hanging the ethics yoke around Denish, but no political house is completely clean in the aftermath of the money-soaked days of the recent past.
THE EARLY BIRDS
We told you last week about the ratings for the 10 p.m news broadcasts on the ABQ network affiliates, but several readers asked what about the 9 p.m. news on KASA FOX 2? A lot of viewers--especially early risers--are getting their prime time news fix not at 10 p.m. but at 9.
KASA's 9 p.m. hour long newscast finished the November sweeps with a 4.6 rating, up more than half a point from last November. That's a solid showing. KOB-TV's 10 p.m. news scored a 4.9. KASA now has its eye on tying the NBC affiliae in total households.
Lin Broadcasting owns both KASA and CBS affiliate KRQE. They bought KASA in 2006 for $55 million.
The KASA news hour is produced by the KRQE news team and anchored by Michael Herzenberg and Jessica Garate. Because of the tie-in with channel 13, the news is up-to-the minute and viewers do not feel they are missing out by not being around at 10. Of course, the news junkies watch both 9 and 10.
Jessica presents an interactive segment for the 9 p.m. broadcast where she reviews news from the blogs (including ours) and other Internet sources.
My industry insiders say the bad news for local TV news is that the overall number of viewers for their 10 p.m. news has been on a steady decline as viewers continue to break off to other media or diversions. For those of us in politics, it's important to remember, however, that older viewers are still avid local news consumers. That's the group most likely to vote and why the ubiquitous 30 second campaign commercial is not about to go the way of the horse and buggy.
The ABQ television market is now ranked the 44th largest of the 210 rated markets.
Will there come a day when all four stations--KOB, KRQE, KOAT and KASA--do not all take part in the news game? The stations seem to have weathered the worst of the recession, but there have been layoffs and/or cutbacks at all of them. Ad revenue appears to be flat at best. And with the audience splintering with the use of DVR's and the Internet, it is not unthinkable that in the next three to five years one of the NM stations could scale back or drop its news department entirely.
Still, local news is often less expensive to produce than purchasing syndicated programming. For now, that is helping to keep the current business model alive.
On our analysis from Friday showing how Indian gaming in the state is taking a hit from the recession, a reader of experiene notes that the drop in revenue at two of the casinos is not necessarily because of the economy:
...I estimate that at least half of Laguna’s (Dancing Eagle and Rt. 66) and Acoma’s (Sky City) drop in revenue between the 3rd quarter of '08 and '09 is not due to the economy, but to the opening of the new Navajo Casino. All the locals in the Gallup area no longer have to drive to the more distant casinos to have their fun. Also, a lot of eastbound commuters are stopping at the Navajo casino thus bypassing the ones in Cibola and western Bernalillo County.
This is the home of New Mexico politics. Email your news and comments. Interested in advertising here? Drop us a line.
(c)NM POLITICS WITH JOE MONAHAN 2009
Not for reproduction without permission of the author