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Saturday, Feb 4, 2023

Fickle Market Lands High-Fliers Among Missing

Fickle Market Lands High-Fliers Among Missing


Staff Reporter

You needn’t worry about the unfortunate few that have left the Business Journal’s richest list. They’ll get along just fine.

Last year all three departees Global Crossing founders Barry Porter and David Lee, and Idealab founder Bill Gross were in the troubled technology sector. While they didn’t quite make the $506 million floor, their net worth is still believed to be well into the nine figures.

This year, five are gone: two from the tech sector and three because the Business Journal’s valuation process was re-calibrated a bit.

Henry Yuen, chief executive of Gemstar-TV Guide International, was able to hold onto his billionaire status last year, but in recent months personal debts, combined with declines in Gemstar stock, have pushed his net worth down more than 80 percent.

Earlier this year investors grew concerned about possible accounting irregularities at Gemstar, including the use of barter transactions in 2001. Then, in early April, Gemstar disclosed that Yuen put up 7 million of his own shares as collateral for personal loans he had taken out to purchase options. The announcement sent the stock down 37 percent in a single day. The Business Journal now estimates his net worth at $250 million, well below the list cutoff of $450 million.

E-business software provider Candle Corp., like its publicly held counterparts, has seen a decline in tech expenditures. So Chief Executive Aubrey Chernick, who was number 47 on last year’s list with a personal net worth of $610 million, is absent this year because, we figure, the value of the El Segundo-based company has declined.

Tech isn’t a lost cause, however. Two of the five newcomers on the list, brothers Alec and Tom Gores, both made their billion plus fortunes with leveraged buyouts in the technology industry and both are in the process of bidding for troubled Global Crossing.

Valuations in the wishy-washy world of Hollywood economics are some of the most difficult to make. Last year, the Business Journal estimated Joe Roth’s stake in Revolution Studios at $600 million, largely based on the company’s billion-dollar valuation. But that widely reported figure was based less on bottom-line performance and more on speculation about the price of Revolution’s future film library.

In the last year the company has produced hits like “America’s Sweethearts” and “Black Hawk Down.” But estimates of the company’s debt load cloud the real value. If Revolution keeps churning out hits, it likely will have a valuable library; until then it’s only as valuable as its last hit.

Sometimes, a little information goes a long way in revealing net worth. Such is the case with Jona Goldrich, whose stake in real estate company Goldrich and Kest has been subject to wild speculation over the years. Last year, the Business Journal placed his net worth at $950 million. But in an interview, Goldrich shot down that figure and disclosed that he has just a 22 percent to 25 percent stake in the company, which would put his net worth at $250 million.

Some of the most prominent wealthy Angelenos didn’t make the Top 50, either because they failed to meet the cut-off or we couldn’t come up with a reliable estimate. Not to be found are former Mayor Richard Riordan (he has at least $100 million most likely a good deal more). Also not qualifying is former Dodgers owner Peter O’Malley. Current Dodgers owner Rupert Murdoch does not make the list because his main residence is not Los Angeles.

And this being the list of wealthiest Angelenos, those who spend most of their time out of town are left off the list. According to associates of film producer Arnon Milchan, the billionaire lives in France and spends less than 30 percent of his time in the United States. He’s still rich, but he’s not an Angeleno.

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