SoftBank Will Make Life Interesting for Sprint’s Employees

Bungee JumperMasayoshi Son is back in town.

As the second richest man in Japan, 55-year-old Son-San, as he is often called, is an interesting character with a unique business style that I’ve seen up close. Now that his Japanese telecom giant SoftBank has made its move to acquire 70 percent of Sprint, for $20 billion, let’s brace ourselves.

In late 1995, the then 38-year-old Son bought the company I worked for, Ziff Davis Publishing (the publisher of PC Magazine and many other computer magazines), for $2.1 billion, $700 million more than he had offered the year before. We employees were ushered into a vacant movie theater down the street from headquarters and a beaming Son bounded to the stage to greet us in his halting English. “I don’t have one-year plan or five-year plan,” he said. “I have hundred-year plan!”

Smiling even more broadly, he added, “For me this is not about money. I have $4 billion. If I try to spend a million dollars a year, it will take me 4,000 years! It’s not about money because if it’s about money, I already won! Ha ha ha!”

Somewhat flabbergasted, we marched back to the office and got back to work.

One thing Son did was load Ziff Davis with $1.5 billion of debt from some other corner of his conglomerate, thereby sandbagging the IPO of the company he launched a couple of years later even before it got off the ground (and I had the worthless stock options to show for it). The press noted his “cavalier attitude to corporate governance” and his “creative accounting.” Ultimately, his hundred-year plan lasted only about four, and a staggering Ziff Davis was delisted and sold in pieces to a series of private equity firms, each of which diminished it a bit more. Today the company is a shadow of its former self.

As for Son, he went back to Japan and got much, much richer. “I’m a man,” he said in a press conference last week. “It’s part of my male ego to strive to be number one.” Indeed.

As the business press has said, the SoftBank/Sprint deal is insanely complicated and involves moving a lot of money around to a lot of people and places. I’m not surprised. Although Son has spoken about the technological innovation that he wants to bring to Sprint’s network — and we could certainly learn a few things about wireless speed from Japan — he’s not a technologist. He’s a dealmaker who shuffles billions from one pile to another to make quarterly reports look good and to make himself a mint.

I hope Sprint fares better under SoftBank’s control than Ziff Davis did. I, for one, will be watching with great interest.

 

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