Just days before Tuesday’s PGA Tour hearing before the Senate Permanent Subcommittee on Investigations, prominent tour board member Randall Stephenson resigned. His reason? He said he could not support the golf organization’s proposed tie-up with LIV Golf, its Saudi-backed rival, DealBook’s Lauren Hirsch and The Times’ Alan Blinder report.

In a scathing resignation letter obtained by DealBook, Mr. Stephenson, the former AT&T chairman, said he – like most of the board – was left out during the tour negotiating a deal with Saudi Arabia’s sovereign wealth fund that faltered. the sports world

“I have serious concerns with how this framework agreement came about without board oversight,” Mr. Stephenson wrote, adding that he could not “objectively evaluate or, in good conscience support” it “particularly in light of the 2018 U.S. intelligence report on Jamal Khashoggi.”

Mr. Stephenson had already planned to step down from the board, two people familiar with his thinking told DealBook. (In fact, he has already attended most board meetings via video conference recently, except for last month’s meeting in Michigan.)

The Saudi deal sped up the timeline. Days after the deal was announced, he told the board’s chairman, Ed Herlihy, a partner at the law firm Wachtell, Lipton, Rosen & Katz, of his plan to resign. Herlihy asked Mr Stephenson to hold out while Jay Monahan, the PGA Tour commissioner, was away on medical leave. Mr Monahan announced his return on Friday. Stephenson’s resignation letter was dated Saturday.

He wants the board to consider alternatives. “I hope that as this board moves forward, it will comprehensively rethink its governance model and keep its options open to evaluate alternative sources of capital beyond the current framework agreement,” Mr. Stephenson writes.

There are other interested investors, DealBook has heard. But it is unclear how they could compete with the Saudi wealth fund. And the Saudi-Arab alliance was the only one that could stop a lawsuit between both sides.

The optics are looking bad for the PGA Tour. At Tuesday’s Senate hearing, Jimmy Dunne, a PGA Tour board member who has been heavily involved in negotiations, is set to testify along with the tour’s chief operating officer, Ron Price. Mr Stephenson’s exit also raises further questions about the deal itself, which still needs approval from the tour’s 10-member governing body, which includes five players.

Threads surpasses 100 million users, a record for app downloads. Meta’s new social network has reached that level just a few days, significantly faster than the two months it took ChatGPT to hit that milestone, according to The Verge. Meanwhile, traffic to Twitter seems to have fallen sharply during that same period.

Carl Icahn is negotiating breathing room with his banks. Under pressure from a short seller over loans tied to his publicly traded investment vehicle, Icahn Enterprises, the billionaire reached a settlement with some lenders that decoupled some of that loan from the company’s stock price, The Wall Street Journal reports. That could help ease pressure on the company’s declining stock.

The moguls are set to arrive at Sun Valley. Allen & Company’s annual conference for tech and media CEOs will begin in Idaho on Tuesday, with leaders such as Apple’s Tim Cook, Meta’s Mark Zuckerberg and Warner Bros.’s David Zaslav. Discovery. on the guest list. The meeting is famous as a place where big deals are born – think Comcast buying NBCUniversal or Jeff Bezos acquiring The Washington Post.

Elon Musk made good on his threat of revenge against those who forced him to buy Twitter. The social network’s parent company on Friday sued Wachtell, Lipton, Rosen & Katz, the Wall Street law firm that represented Twitter’s former board in an effort to get the billionaire to complete his $44 billion takeover.

Twitter accused Wachtell, long among Wall Street’s most prestigious and profitable companies, of “unjust enrichment” by negotiating a hefty success fee just before the deal closed. Some legal experts said the lawsuit faces long odds because Twitter’s board approved Wachtell’s fee — but it also raises the question of whether the high-powered firm’s advice was worth its price.

It’s the first time Twitter has tried claw back seller’s fee, after months of stiffing councilors and landlords alike over unpaid bills. By any measure, Wachtell’s bill was high: “Oh My Freaking God,” Martha Lane Fox, then a board member, wrote in an email after seeing the cost.

Twitter executives wired $84 million to Wachtell just 10 minutes before Mr. Musk fired them after the takeover closed, according to the lawsuit. That was lucky for Wachtell: Other advisers on the deal, including the PR firm Joele Frank, Wilkinson Brimmer Katcher and the shareholder relations firm Innisfree M&A, sued Twitter for fees they weren’t paid.

Wachtell did provide value for Twitter’s shareholders at the time. It helped the board to force Mr. Musk to complete his takeover, even as the the company’s business worsened during months of uncertainty about whether the deal would close. Wachtell also helped Twitter avoid a lawsuit that would have cost even more in billable hours.

But the lawsuit sheds light on Wachtell’s billing practices. On June 27, 2022, according to the complaint, one Wachtell attorney billed $1,625 for five hours’ worth of editing stock price reactions. On July 9, a lawyer charged $3,006.25 for 9.25 hours of minor tasks and being on general standby.

Wachtell’s billing has been scrutinized before: Carl Icahn unsuccessfully sued the company over its advice defending CVR Energy against a takeover bid by his.

(DealBook wonders: What did Mr. Musk’s legal counsel, Skadden, charge?)

What follows: The parties are likely headed for arbitration. But the lawsuit raises the prospect of Mr. Musk eventually suing Twitter’s former board for breach of fiduciary duty, accusing the directors of doing so by approving Wachtell’s payment.

Recall that Mr. Musk fired the company’s former management for cause, denying them golden parachutes, but never specified why. Maybe he can argue that it was?

Janet Yellen’s China trip received mostly positive headlines, despite a lack of policy successes and some complaints on the diplomatic protocol of the secretary of the Treasury. Yellen said relations were on a “more stable footing” and China’s official news agency called the talks constructive.

But that anyone would consider the mere fact that the world’s two largest economies are talking about success shows how low relations have sunk (or is an indicator of how desperate Beijing is to cool tensions amid a worsening domestic slowdown).

The focus was on building relationships. Ms. Yellen met with the newly appointed economic policy officials, many of whom have little international experience and are little known to Western policymakers. She spoke of “diverse” supply chains – an alleged Chinese target as well – and avoided any mention of “unbundling” or “derisking”.

“Chinese policymakers understand that she is more moderate compared to many other senior officials in Washington when it comes to China policy,” Li Mingjiang, a Chinese foreign policy expert at Nanyang Technological University in Singapore, told DealBook. “In particular, Beijing likes her public reiteration that disengagement would be disastrous for both countries,”

But the pressure points were not resolved. No new policies have been announced and the retaliation and criticism continues: China has said it will impose restrictions on the export of minerals crucial to chipmaking and Ms Yellen has slammed Beijing’s treatment of US companies.

China has big problems at home. Official data released on Monday show that the country is reeling on the brink of deflation, as consumer spending slows and weak global economic growth hits exports. It is the latest sign that China’s post-Covid recovery has not materialized, prompting renewed calls for new stimulus measures.

What follows: John Kerry, President Biden’s climate envoy, will travel to China this month to resume talks on global warming.

Speaking of Joele Frank, Wilkinson Brimmer Katcher … the firm, best known for its behind-the-scenes advice on deals and corporate crises, just made headlines of its own: Several executives – along with Ed Hammond, star M.&A. reporter at Bloomberg — set up Collected Strategies, a new PR firm.

DealBook’s phone lit up Sunday night after the news broke because it was the first time in Joele Frank’s two decades that a partner had left to set up a rival firm.

Joele Frank is one of the leading PR firms on Wall Street. Founded in 2000 by Ms. Frank, it has become popular for companies that want to make – or oppose – deals, defend themselves. against activist investors or find their way through a crisis. (Its clients over the years have included GE, Sony, Time Warner and US Airways.)

Mrs. Frank also distributed broad equity among her partners, who were handsomely paid. That’s a reason Joele Frank hasn’t followed rivals like Sard Verbinnen in selling itself, and why no partner has jumped in to create a rival firm – until now.

The departing partners include Scott Bisang, who advised Twitter on its deal with Elon Musk, and Jim Golden, who advised First Republic and PacWest.

Starting a new company is hard, based on the years it takes to build relationships with corporate leaders and M.&A. bankers and lawyers. Often, as in other industries, executives must also take long leaves between jobs.

In this case, the Collected founders cannot after some time after their former clients, because they have unsolicited agreements.

But anyway it’s a boom time for new advice shops, formed by veterans of long-standing companies such as Brunswick and Sard Verbinnen (which is now part of FGS Global, after a series of mergers).

Among the PR firms that have emerged over the past decade are Gladstone Place Partners, C Street Advisory Group, Gasthalter & Company and Reevemark.

Corporate profits, geopolitics and inflation will be big this week. Here’s what to watch:

Tuesday: The annual NATO summit begins with Ukraine’s entry into the alliance in focus.

Wednesday: The Consumer Price Index is ready for release. Economists polled by Bloomberg had expected headline inflation to cool in June to 3.1 percent on an annual basis, the smallest increase since March 2021.

Thursday: Earnings season begins with PepsiCo and Delta Air Lines reporting results. Investors are worried on corporate profitability, given inflation and elevated interest rates.

Friday: It’s Wall Street’s turn, with BlackRock, Citigroup, JPMorgan Chase and Wells Fargo set to report.



Best of the rest

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  • “America Is Wrapped Up Miles of Toxic Lead Cables(WSJ)

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