The Breakfast Table

Business Morality–an Oxymoron?

Since we’ve unexpectedly found ourselves in agreement on scary movies, gross movies, and Monica, I’ve decided to move over to my shareholder activist persona to respond to your complaints about Blockbuster and Universal Studios owner Edgar Bronfman. You criticized Bronfman for dropping Happiness (a black comedy featuring a pedophile) and Blockbuster for refusing to carry NC-17 movies. I don’t think those decisions are based on “morality,” at least not the morality of what should or shouldn’t be depicted in the movies or what people should or shouldn’t see. And certainly the decision is not based on aesthetics. The only basis for the decision is the legitimate morality of business judgment. Those guys went to the public markets to raise money, and promised the shareholders they would do their very best to provide value in return. Bronfman is a businessman, and he made a businessman’s decision that releasing that movie (about which I know nothing other than what you wrote) would be a net loss for the company either in terms of box office, bad publicity, or both. Blockbuster knows that their primary market is the “it’s cheaper than a babysitter” families who come in every weekend to get two videos from the “new releases” shelf, one for the kids, one for the parents. Those are not generally NC-17 renters, and don’t want to have their little darlings running over to them with copies of The Pillow Book. Decisions like this are made all the time. Believe me, if anyone thought that Lolita would be commercially successful, distributors would have gone after it like Humbert went after the nymphet herself. Throughout history, most artists speaking from a personal vision have been on the margins while the ones willing to give the customers what they wanted were socially and financially successful. Look at Mozart and Salieri. I’m sure Happiness will find an audience, maybe on Showtime, like Lolita.Yes, corporations must make decisions that benefit the public good, even at some short-term cost to shareholder value. But Universal has no moral obligation to release any movie and Blockbuster has no obligation to stock any movie unless it believes it will benefit the bottom line.

I’m planning on a Monica moratorium this morning, but I will note that in the Washington Post her banner headline pushed below the fold a very creepy story that sounds like something from a James Bond movie. “North Korea, Iran, and other countries are concealing their ballistic missile programs from U.S. spy satellites by using enormous underground laboratories and factories to build and test the weapons.”

And one more return to corporate governance: I’m delighted that the board of directors of Cendant finally got around to firing CEO Walter Forbes. While he tried to insist that the fact that he was unaware of his company’s “accounting irregularities” (a small mistake of something like $200 million) and therefore should not be held responsible for them, the fact that 44 of his company’s managers wrote to the board insisting on his dismissal seems to have shamed his board (most of whom had business ties with the company) into doing the right thing. The best part is that they did the even righter thing of having eight of the directors resign immediately, with another to leave later this month. Don’t feel too bad for Mr. Forbes, however. His severance package is worth $47.5 million. Now is that a moral decision?

How’s it going with Ulysses?