Interview: Neil Blackley, media analyst (Evening Standard)
AN ICY GUST of Schadenfreude blew through Fleet Street earlier this month at the news that Merrill Lynch's star media analyst — a multimillionaire who once unwisely described his annual bonus as "a gigantic financial orgasm" - had resigned. By David Rowan
Neil Blackley, whose pronouncements have moved markets and whose contacts book is a directory of today's media elite, has no job to go to, and at 47 he is hardly at retirement age. So the story could be conveniently written up as Blackley's downfall — if not as a result of his ill-advised backing of Vivendi Universal last year, before the share price plunged, then because of the troubles facing investment banking.
Merrill Lynch's difficulties were compounded by a $100 million (£63 million) settlement with New York's Attorney-General, Eliot Spitzer, over its analysts' alleged conflicts of interest.
Blackley is none too well disposed towards much of the press at the moment. Having once caused Granada shares to fall by 20 per cent with a single pessimistic forecast, he now finds himself facing the "nightmare" of having to write to newspapers to correct their hostile assertions about him. What bothers him most is that, in picking apart Vivendi, no one mentions the forecasts that he got right - the "buy" recommendation last year on Johnston Press, for instance, or the prescient "sell" on Reuters, which this week announced record losses and 3,000 redundancies.
When we meet near his City office, he starts by handing me 515 pages of "global strategic analysis" to prove that he has earned his crown.
Why, then, would Blackley choose to leave a job that has gained him a reputation over seven years for making and breaking corporate media fortunes, and earning himself reported million-pound-plus packages in the process?
"Well, first there's the state of the market, and I don't think there's a quick-fix solution," he explains, describing a "dire" decline among the media sector. “Secondly, the position of analysts has changed because of what's happened in the States under Spitzer (who has fought to clarify the relations between corporate financiers and their research departments). And there is also my personal situation."
Blackley stresses that the decision to go now was his alone, although he knew that his days were numbered at Merrill Lynch: last year he lost four of his team of ten analysts and admits that "if I hadn’t gone of my own volition, I'd have been out by Christmas".
"The media sector's relative decline is easily as bad as the 1971-72 recession," he says. "The only crumb of comfort is that the rates of decline have been moderating in the past two months - but we don't think that marks a turning point. The concern now is that the consumer rolls over and we get a second hit of decline."
Blackley admits he was "spectacularly wrong" to back Vivendi so enthusiastically, even as serious problems with the company were emerging: "Sheer carelessness," he says. He may have caused investors to lose hundreds of millions - so did he get into trouble? "There was an inquest, yeah. But others we got very right."
Tall, unsmiling and prematurely grey, Blackley lacks the personal presence you might expect from a media power-player. Only when talking about his young family does his voice break out of the monotone in which he discusses bubble charts and price-earning ratios.
He is married with healthy twin daughters aged six, but it is his youngest daughter, Arianne, who represents the "personal" aspect of his decision to leave now. "Arianne is almost one and has severe developmental delays," he explains. "She's not even crawling, and we don't know if she can recognise her own name. She has been in hospital for much of the past two months, awaiting a diagnosis - cerebral palsy was suggested, but that proves not to be the case. And we've just been told we're eligible for disability allowance."
He may be a power in the City but, faced with an ill child, the status become less important. "Dealing with the NHS has been unbelievable," he says. "You cancel important meetings for a 10 o'clock appointment and are still waiting at 12.30 - and then you're told the doctor hasn't even been in the hospital. If I had a tenth of that lack of organisation in my own team, I'd be out of work."
Meanwhile, for another few weeks he has the day job to deal with - one that typically starts at 6.55am and goes through to 8.30pm, sometimes 11pm. "I'm not some kind of Bonfire of the Vanities character - this is not a romantic job," he says. But isn't he well rewarded for the sacrifices, with houses in Wandsworth and Barbados? "You’re going to quote something I once said about some years there being 'a gigantic financial orgasm'. Well, this year there definitely isn't one. Am I still well paid compared with other people? Yes. But I need a physical and mental detox."
What, then, is his parting investment advice to Times readers? The music industry, he says, is "in serious trouble", in part because it is over-paying artists, as are book publishers. Stay away from cable and professional financial services, but look favourably on radio, pay TV, directories and professional publishing. ITV is "dysfunctional" and in desperate need of new management, and Five urgently needs a new "tentpole" programme to succeed Home and Away.
As for his own future, that depends on his daughter's hospital tests. "We must see if we need special treatment which means we'll have to stay in this country. Otherwise we might stay in Barbados for two years,” he says. "Personally, I want to be more creative. I got my wife to give me a guitar at Christmas. I need a challenge."
(The Times, February 21 2003)
Neil Blackley, whose pronouncements have moved markets and whose contacts book is a directory of today's media elite, has no job to go to, and at 47 he is hardly at retirement age. So the story could be conveniently written up as Blackley's downfall — if not as a result of his ill-advised backing of Vivendi Universal last year, before the share price plunged, then because of the troubles facing investment banking.
Merrill Lynch's difficulties were compounded by a $100 million (£63 million) settlement with New York's Attorney-General, Eliot Spitzer, over its analysts' alleged conflicts of interest.
Blackley is none too well disposed towards much of the press at the moment. Having once caused Granada shares to fall by 20 per cent with a single pessimistic forecast, he now finds himself facing the "nightmare" of having to write to newspapers to correct their hostile assertions about him. What bothers him most is that, in picking apart Vivendi, no one mentions the forecasts that he got right - the "buy" recommendation last year on Johnston Press, for instance, or the prescient "sell" on Reuters, which this week announced record losses and 3,000 redundancies.
When we meet near his City office, he starts by handing me 515 pages of "global strategic analysis" to prove that he has earned his crown.
Why, then, would Blackley choose to leave a job that has gained him a reputation over seven years for making and breaking corporate media fortunes, and earning himself reported million-pound-plus packages in the process?
"Well, first there's the state of the market, and I don't think there's a quick-fix solution," he explains, describing a "dire" decline among the media sector. “Secondly, the position of analysts has changed because of what's happened in the States under Spitzer (who has fought to clarify the relations between corporate financiers and their research departments). And there is also my personal situation."
Blackley stresses that the decision to go now was his alone, although he knew that his days were numbered at Merrill Lynch: last year he lost four of his team of ten analysts and admits that "if I hadn’t gone of my own volition, I'd have been out by Christmas".
"The media sector's relative decline is easily as bad as the 1971-72 recession," he says. "The only crumb of comfort is that the rates of decline have been moderating in the past two months - but we don't think that marks a turning point. The concern now is that the consumer rolls over and we get a second hit of decline."
Blackley admits he was "spectacularly wrong" to back Vivendi so enthusiastically, even as serious problems with the company were emerging: "Sheer carelessness," he says. He may have caused investors to lose hundreds of millions - so did he get into trouble? "There was an inquest, yeah. But others we got very right."
Tall, unsmiling and prematurely grey, Blackley lacks the personal presence you might expect from a media power-player. Only when talking about his young family does his voice break out of the monotone in which he discusses bubble charts and price-earning ratios.
He is married with healthy twin daughters aged six, but it is his youngest daughter, Arianne, who represents the "personal" aspect of his decision to leave now. "Arianne is almost one and has severe developmental delays," he explains. "She's not even crawling, and we don't know if she can recognise her own name. She has been in hospital for much of the past two months, awaiting a diagnosis - cerebral palsy was suggested, but that proves not to be the case. And we've just been told we're eligible for disability allowance."
He may be a power in the City but, faced with an ill child, the status become less important. "Dealing with the NHS has been unbelievable," he says. "You cancel important meetings for a 10 o'clock appointment and are still waiting at 12.30 - and then you're told the doctor hasn't even been in the hospital. If I had a tenth of that lack of organisation in my own team, I'd be out of work."
Meanwhile, for another few weeks he has the day job to deal with - one that typically starts at 6.55am and goes through to 8.30pm, sometimes 11pm. "I'm not some kind of Bonfire of the Vanities character - this is not a romantic job," he says. But isn't he well rewarded for the sacrifices, with houses in Wandsworth and Barbados? "You’re going to quote something I once said about some years there being 'a gigantic financial orgasm'. Well, this year there definitely isn't one. Am I still well paid compared with other people? Yes. But I need a physical and mental detox."
What, then, is his parting investment advice to Times readers? The music industry, he says, is "in serious trouble", in part because it is over-paying artists, as are book publishers. Stay away from cable and professional financial services, but look favourably on radio, pay TV, directories and professional publishing. ITV is "dysfunctional" and in desperate need of new management, and Five urgently needs a new "tentpole" programme to succeed Home and Away.
As for his own future, that depends on his daughter's hospital tests. "We must see if we need special treatment which means we'll have to stay in this country. Otherwise we might stay in Barbados for two years,” he says. "Personally, I want to be more creative. I got my wife to give me a guitar at Christmas. I need a challenge."
(The Times, February 21 2003)
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