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  • After failed buyout, Penn National Gaming focuses on growth

    Its $6 billion buyout may have collapsed, but business life goes on – quite aggressively – for Penn National Gaming.

    Last week, the grand opening of its new slot machine palace in Maine set revenue and attendance records. This quarter it plans to open a new hotel at its casino and race track in Charles Town, WV, near the lucrative Washington, DC, market. It also is planning a new 270,000 square foot gambling barge in Indiana and positioning itself to move into Maryland if voters there approve slots in November.

    Penn National, one of the nation’s biggest gambling companies outside of Nevada, also has nearly $1.5 billion in new cash to spend because of its termination agreement with the firms that had agreed to take it over and the banks that were going to fund the deal.

    “We believe the substantial capital infusion will enable Penn National to be aggressively opportunistic at a time when gaming industry valuations appear very attractive,” CEO Peter Carlino said in a statement.

    The gambling industry, once thought recession proof, is being hurt by the national economic slowdown.

    Carlino said he was disappointed that the $67 a share buyout didn’t go through, but given current economic conditions and the gaming industry outlook, he believes this is a good outcome for Penn National. The company’s stock closed at about $30 a share last week.

    “We may be in the gaming business, but we would never gamble the Company’s future,” Carlino said.

    Founded in 1972, Penn National operates casinos, horse race tracks (and one dog track) in 14 states and Canada. It employs 16,000 and generates about $2.5 billion in annual revenue. Last year, the Pennsylvania-based company made Fortune’s list of the 100 fastest growing companies for the sixth time.

    The buyout deal with Fortress Investment Group and Centerbridge Partners was announced a year ago, but was undermined by turmoil in the credit markets and a slowing economy. The Wall Street Journal reports that one-fifth of all the leveraged buyout deals for American companies that were announced in 2007 have been terminated.

    Penn National, with about $3 billion in long-term debt, said it plans to use the money from the termination agreement to repay existing debt, acquire and develop gaming facilities and repurchase company stock.

    As part of the deal, Fortress chairman and CEO Wesley Edens will join Penn National’s board of directors.

    In February, Tim Wilmott joined Penn National as COO. Previously, he held the same position at Harrah’s Entertainment, one of the largest gambling companies in the world.

  • In an Absolut World, you can be Kanye West (Muckety)

    Absolut Vodka and Kanye West are testing the power of viral marketing by releasing a spoof infomercial online.

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    BeKanyeNow.com, the website for Absolut’s newest celebrity endorsement campaign, features West starring in an ad for “Be Kanye,” a fictional pill that the rapper says will turn you into him.

    The concept is that “In an Absolut World,” anyone could become Kanye West. However, the tablet is a goof; the ad plugs Absolut, even though the campaign slogan “In an Absolut World” is only mentioned once in the video.

    The website is hosted by Absolut, and requires legal age verification to enter.

    Absolut is also a sponsor of West’s Glow in the Dark Tour, currently in progress, to support his Grammy-winning album, Graduation.

    The “In an Absolute World” campaign features other celebrity endorsers, including Zach Galifianakis, a comedian who also spoofed Kanye West’s video “Can’t Tell Me Nothing.”

    Galifianakis, who did the Funny or Die Comedy Tour with Will Ferrell, teamed up with comedy duo Tim Heidecker and Eric Wareheim of the Adult Swim program Tim and Eric Awesome Show, Great Job! for his Absolut commercial.

    Absolut also features “In an Absolut World” slogans by the websites Thrillist (”In an Absolut World all your spam would be true” and TreeHugger (”In an Absolut World everything would be downloadable”) and the nonprofit organization Live Earth Concerts for the Climate Crisis (”In an Absolut World none of these films would be necessary”).

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  • Copied passages cloud judicial nomination of Michael E. O’Neill

    On paper, the nomination by President Bush of Michael E. O’Neill to be a federal judge would seem to have a good chance of being confirmed by the U.S. Senate.

    But O’Neill’s prospects of serving on the U.S. District Court for the District of Columbia cannot have been helped by a story in Friday’s New York Times.

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    Adam Liptak of the Times reports on concerns about the legal scholarship of O’Neill, a former Supreme Court clerk and counsel to the Senate Judiciary Committee, who is now a professor at George Mason University Law School.

    Liptak reports that some of O’Neill’s writing contains unacknowledged, nearly verbatim, passages of other scholars’ work.

    In an interview with Liptak, O’Neill, 43, blamed the echoes on “a poor work method.” He said that his writing and the writing of others might have gotten mixed together as he put them into a single computer file.

    “I didn’t keep appropriate track of things,” O’Neill said. “I frankly did a poor and negligent job.”

    The Times looks longest at an article O’Neill published in 2004 in the Supreme Court Economic Review.

    Passages in the article are similar to those in a book review by Anne C. Dailey, a professor at the University of Connecticut. Her review appeared in the Virginia Law Review in 2000.

    O’Neill includes extensive footnotes in his article entitled “Irrationality and the Criminal Sanction.” However, he does not acknowledge Dailey’s review even though some of her language appears in his article word-for-word.

    Dailey called the apparent plagiarism to the attention of the editors of the Economic Review. They, in turn, retracted the article saying that “substantial portions” had been “appropriated without attribution.”

    Daniel D. Polsby, the editor of the review and the dean of the George Mason Law School, told Liptak that he considered the copying to be “negligent behavior.”

    “The idea of O’Neill committing a theft is just impossible,” he said. “It’s just impossible.”

    In an interview, Sen. Arlen Specter, the ranking Republican member of the Senate Judiciary Committee that will consider O’Neill’s nomination, told Liptak that he knew of the concerns about O’Neill’s writings.

    “I’ve heard him out on it and put it in the balance of everything else I knew about him,” Specter said. “I believe he is an excellent prospect for the district court.”

    Specter was chair of the judiciary committee from 2005 to 2007. O’Neill served as the committee’s chief counsel and staff director.

    At the time, some argued that Specter, a political moderator who needed conservative support to head the Judiciary Committee, appointed O’Neill chief counsel because of O’Neill’s conservative credentials.

    After Yale Law School, O’Neill first clerked for David B. Sentelle, a conservative, who was then a judge on the U.S. Court of Appeals for the District of Columbia, and is now the chief judge.

    O’Neill then went on to clerk for Supreme Court Justice Clarence Thomas, also a conservative.

    During his time as counsel to the Judiciary Committee, O’Neill helped guide the nomination of John G. Roberts Jr. to be chief justice of the Supreme Court to confirmation.

    Similarly, he watched over the successful confirmation of Samuel A. Alito Jr. as an associate justice of the Supreme Court.

  • Madonna, Lenny Kravitz, A-Rod love triangle

    The rumors about Madonna and New York Yankee Alex Rodriguez beg for a Muckety map.

    A-Rod and his wife, Cynthia Rodriguez, are separating, according to the New York Daily News. The split comes amidst infidelity rumors concerning both parties.

    A-Rod was linked to Madonna, who has been working hard to combat reports that her marriage to Guy Ritchie was ending, after the Times of London reported that she had retained famed divorce lawyer Fiona Shackleton.

    Madonna’s publicist explained that both Madonna and Rodriguez are managed by Guy Oseary, and that was the only connection between the two.

    Madonna was once linked to singer Lenny Kravitz, who co-wrote her 1990 hit Justify My Love. Kravitz is currently on tour in Europe, where he met up with Cynthia Rodriguez, sparking additional rumors that the two are having an affair.

    Kravitz has released a statement that he is strictly friends with Cynthia Rodriguez. Madonna’s publicist has also issued a statement confirming her client’s happy marriage and denying an affair between Madonna and Alex Rodriguez.

    Alex and Cynthia Rodriguez were married in 2002 and have two daughters, Natasha, 3, and Ella, who was born on April 21.

  • GateHouse Media, Lee Enterprises top newspaper ‘misery index’

    Rapidly shriveling stock prices have produced a new misery index for the nation’s beleaguered newspaper industry: sky-high stock dividend yields. So high, some observers speculate, that some cash-strapped companies will soon have to cut dividends, putting even more pressure on their stock prices.

    Examples of the Newspaper Misery Index (the higher the yield the greater the company’s financial misery), from Google Finance over the holiday weekend:

    GateHouse Media 32.3%
    Lee Enterprises 23.31%
    E.W. Scripps 19.11%
    A.H. Belo 18.35%
    McClatchy 13.16%
    Gannett 8.16%
    Media General 8.12%
    New York Times 6.04%
    Washington Post 1.46%
    News Corp. .82%

    Historically, yields on established newspaper company stocks have generally been in the 1% to 2% range.

    One Wall Street commentator wrote an open letter last month to GateHouse CEO Michael Reed, saying it’s time to eliminate the company’s dividend. The current annual payout is 80 cents a share on a stock that closed last week at $2.47.

    Gatehouse, which went public in 2006, built much of its strategy on a relatively high yield, but not 30%. Wesley Edens, the chairman and CEO of Fortress Investment Group, is also chairman of GateHouse.

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