The art of the deal, or why sharks like to eat things

In the days since the reveal of the AOL/Huffington Post union, much analysis and speculation has swirled around the $315 million price HuffPo is fetching, and whether AOL overpaid.

Or vastly overpaid.

A good multiple, after all, is in the eye of the beholder, and since HuffPo is privately held most of the speculation has been exactly that, speculation lacking in solid numbers.

Still, as a journalist trying to peer in from the outside I’ve always been intrigued by the Texas Hold ‘Em aspect to valuations eventually agreed upon in deals like this. It reminded me of “A Good Start,” a recent post by the Epicurean Dealmaker, my favorite pseudonymous Wall Street investment banker.

“A Good Start” is offered as a counterpoint to “6 Ways Bankers Drive Lawyers Nuts,” a post on Wall Street Journal’s DealBlog by Ronald Barusch. In it, those six ways are balanced by counter-arguments from the investment banker’s side of the boardroom table.

“Never get between a banker and his fee,” Barusch writes, for example. “Are you serious? This is a gripe?,” Epicurean Dealmaker replies. “You might as well complain that sharks like to eat things. Counterpoint: Never come between a lawyer and a billable hour.”

Ouch.

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