Who came up with the phrase "deal economy"? Excellent question. Who the hell knows? What I recall is that back in 1998, when we were first wrestling with what deal reporting might involve, I snatched the phrase from the air while I was scrambling (I was a little late) to lay out some thoughts about how we might organize this venture. For me to grab it, of course, suggests that it was already floating around like Marley's ghost; or perhaps not, though episodes of true verbal invention are vanishingly rare. What I do know is that we spent far more time pondering what it might mean and what it might involve than anyone else; we long ago assumed squatter's rights. And while "deal economy" sounds like marketing copy, it really has been a kind of road map to what, a decade or so later, we think of as our particular world.
As you'll notice, this blog now carries The Deal Economy moniker. There's a logic to that. It is a subject that continues to produce. It's also the name of a two-day conference we are putting on Dec. 2-3 in New York, which uses the notion of a deal economy as its organizing principle. This blog, that conference, the broader reporting we do through The Deal magazine and The Deal Pipeline, should be viewed as a kind of single fabric, in the sense conveyed by that ubiquitous-verging-on-clichéd phrase, a "conversation" (which always conjures up to me a smelly pipe, a dash of Dubonnet and a dog's head in need of scratching).
Still, that's what's most vital about the concept of the deal economy: It's a continuum rather than a set of boxes. From the early days here, we viewed our task as one of connecting dots between different kinds of financial dealmaking, and bringing together the often varied -- and segregated -- communities of specialists who practice the craft. The original metaphor was the proverbial dealmakers' table (oblong, mahogany, Pledge shiny), around which gathered lawyers, investment bankers, lenders, accountants, public relations specialists, not to say entrepreneurs, corporate dealmakers and investors, particularly private equity and hedge funds, to buy and sell assets. Just outside the room waited judges, regulators, policymakers, the media. Dealmaking, in this sense, involved bringing together many specialists to negotiate the disposition of assets; they were engaged in a complex activity of communication, valuation and change. It suggested, journalistically, that these disparate groups shared common interests, whether it's in personalities, trends, analysis or data. It was community building.
Indeed, that's how we set out here to organize the newsroom. Several ideas flowed from that core deal economy notion. All these folks were involved in given deals from beginning to end (and even beyond): We tried to report deals the same way, accumulating bits and pieces from the first hint of a bid to the look back at how it all went. We wanted to cover what we thought was the full cycle of deal types, starting with venture capital, encompassing all the varieties of M&A and ending with bankruptcy. It was a cycle, a continuum through time. And we recognized a third axis: depth. There were megadeals and minideals. We wanted to cover the biggest deals, of course, but it wasn't long before we recognized the incredible dynamo represented by the middle market. So we set out to do that too.
Let's pull off memory lane. What's all that got to do with this blog? The gist of what we do as reporters involves the quotidian activities of dealmaking. But dealmaking, and particularly the deal economy, involves an intellectual component that, over the past few years, has become more apparent and, arguably, more important, hence the conference. Again, it involves continuums and the frictions and anxieties they create -- between Wall Street and Main Street, between politics and finance, retail and wholesale, shareholder and manager, prudence and growth, have and have-not. Is Wall Street too big? Should banks be broken up? Does shareholder democracy work? What are the origins of the financial crisis? What kind of regulatory system should we have, and can we effectively regulate a sophisticated financial system in a democracy? How has the past shaped the present? What does it mean to operate in a market? Many of these involve broad, shifting and often murky frontiers between politics and finance, and that means wrestling with the kind of ideas that continually circle above us (like the deal economy itself) rattling their chains: the efficient market hypothesis, stakeholder and shareholder governance, regulatory models, bonuses, size, conflicts, notions of sophistication and fiduciary responsibility, strategy, valuation.
For seven years or so now, I've been trying readers' patience on some of these subjects in a regular column in The Deal magazine called Transactions; and for several years I was also an enthusiastic contributor to a communal blog we ran here (there's an archive of selected columns and crisis book reviews). Now there's The Deal Economy Blog. A few caveats. I can't promise I will write every day and certainly not toss posts up throughout the day; I have another job here that keeps interfering. While I hope to stay close to events of current interest, this blog will not substitute for a comprehensive real-time jolt of deal news, data and our famous sophisticated ideas; for that consult The Deal Pipeline, which displays the full output of our newsroom. This is also not Twitter. It's a weakness, I know, but I'd rather try to explore an idea as completely as possible rather than blast telegraphic dispatches from deep within my sluggish id. The posts here are mine alone; don't bug my colleagues with complaints, though we are more than eager for comments, the best of which (my choice) we will publish. And I will promise one more thing: Unlike this post, you will not be assailed by the faux-intimacy of the first person singular, and you will not have to read my bitter thoughts about life or footwear or fate. Much as I enjoy a glass or two of wine, there will be no tasting notes. No sports. No movie reviews. Alas, no sex. Few celebrities. No tales of genius children.
In short, this is all about The Deal Economy. Hope you'll stop by. We'll break out the Dubonnet and scratch the dog. - Robert Teitelman
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