Most libraries simply don’t have the money to do that.
11 Likes
This is one of those cases were it seems likely they are using the purchase to bolster a stream of revenue for other take overs/break ups. There’s no profit in buying it and destroying it in this case, at least none that I can see given the thin margins schools and library systems operate on. But I admit my “profits uber alles” imagination is rather limited compared to the vulture capitalists and they may see stuff I don’t.
1 Like
See, this is exactly why we need Elizabeth Warren. If not as President, then as Sec Treas. Maybe more as Sec Treas. There must be some piece of this that can be regulated that would make the whole process not pay. Some small, technical thing.
The whole trope of separating risk from profit needs to stop.
- Banks who write mortgages should manage the mortgage for its entire life and take the risk.
- Investors in companies should hold the downside risk.
- Hedge fund managers who invest along with their clients should get no fees, but share in the profit and risk their clients face. Get as big a fee as you like, as long as you don’t also invest.
9 Likes
5 Likes
That would be a big fuckin’ graph - right now, in the US alone, 3 million houses and 13 million apartments are now owned by shell companies.
4 Likes
Private equity is based on the conceit that the current management isn’t exploiting the resources it does have, and a corporate reorganization is necessary to get them to do so.
For instance, Apple has 245 billion cash on hand. Conceivably it could be put to better use, since R&D isn’t that shockingly expensive, and monopoly concerns prevent Apple from making serious acquisitions. But no private equity firm is going to be able to leverage a buyout.
It was said of Sears that it’s primary value was in real estate-- a stupidly naive supposition since the real estate it did own was threatened by internet shopping. Shopping malls are declining in value for a good reason.
And that’s putting the aside the avaricious nature of capitalism.
2 Likes
I worked for a company once which was bought from a publicly traded company, by a private equity company.
The mature product group I worked for basically got defunded. Just enough new money to keep small features rolling in and bugfixes. The market was starting to change, and every quarter the product did less and less sales, and so make up for it they just raised the price year after year.
It’s arguable if they could have kept sales up if they had invested more in development. Who knows?
6 Likes
Vampires w/ an upgrade, which allows them to extract essence from whole groups at a time. So much for the lie about the market regulating itself for the benefit of humankind.
2 Likes
Currently there is minimal development support for Libby and Overdrive. Certainly not to the level expected in a company worth 410M. Small dot releases take months.
I don’t think that there is any questioning those morals 
Typical Alphahole Psycho Behaviour.
@Jon_Bremont Welcome aboard, comrade!
3 Likes
I’ll let my good friend Ray Liotta explain - Goodfellas, restaurant takeover monologue
5 Likes
“Unpopular”=/=“crappy”. One of the functions of libraries is to make books available that aren’t on the bestseller list, and one of the traditional advantages of ebooks is that you can do that without competing for real estate.
14 Likes
I think the applicable term here is probably “Rent Seeking”.
4 Likes
This, a thousand times this. The books I want to read are usually obscure; they’ll never be bestsellers. And I often discover them several years after publication.
I’ve had the experience of an older e-book appearing in the library catalog but being not actually available, because the library stopped paying for the license. Still, the interface allows me to request the book, and so far the library has gotten around to re-upping.
I consider this to definitely be a feature, not a bug.
4 Likes
I think “crony capitalism” is your precise target here.
1 Like
you mean where is the continuous profit in making it die. as long as you can pocket more money than you spent thats a profit. and as others have already explained, loading up the business with loans is where it gets the large amount of cash to make it worth killing.
2 Likes
So does this affect Hoopla or Axis360? I know Overdrive has been around a long time- do they own IP or backend parts that will degrade the rest of the library ebook market if KKR starts mucking around?
I find Hoopla to be the best app anyway, then Libby, then Axis360. Axis360 seems to want to repaginate the whole book every time you open it, which is awful. Libby’s best feature is multiple account support.
I hear you.
We’re doomed.
https://austinlibrary.overdrive.com/
I just renewed my library card two days ago for US$120 because I live outside of the Austin Public Library service area. First thing I did was check out books for my elderly mom.
mentioned in this planet money report
Private equity firms, like Bain Capital, where Romney and Conard were partners, often engage in similar sorts of rent-seeking behavior. For example, it is standard practice for these firms to fill up the companies they acquire with debt. This offers a big advantage to private equity companies, since the money they pay out in interest to lenders is tax deductible. This can increase profits simply by reducing their tax bill. In this case the private equity company is gaining at the expense of taxpayers. Private equity firms routinely engage in many other tactics along these lines. These practices can allow private equity companies to garner great profit while creating little or no actual benefit for society. (My colleague Eileen Appelbaum has done some excellent research on this topic.) [link corrected from the original].
I think it’s useful to temporarily accept claims for the the purpose of demolishing them. The tax games played by private equity strike me as particularly ripe for reform.
5 Likes
I suspect this is a situation where bad money will chase out good. Actually rehabilitating a “distressed” company is more expensive and riskier than stripping it for parts. And then your hypothetical honest PE firm is going to need revenue to complete with the chop shops for buyouts.
Furthermore, some companies genuinely are long-term losers that just need to be brought in for a soft landing, and what I suspect is, once you put yourself in a position of having to make that evaluation on one hand, and having to show a return to your $5/mo investors on the other, the very nature of the business will be corrosive to your good intentions.
3 Likes
