Adam's Touch
19Dec/091

Less Risk, More Steady

This is a piece I wrote for my Business and Financial Journalism class at Carleton, a company profile on Wi-LAN, a high-tech company in Ottawa. The full piece can be found on Ottawa Insight

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Less risk, more steady

By Adam Stanley

OTTAWA — January 2010 — Although the high-tech sector has struggled this year just as the rest of the world has – relying on government funding and reacting to the global economic downturn – it has not gone through a full-blown recession.

In fact some companies, such as Ottawa-based Wi-LAN Inc. have come through the worst while remaining profitable.

“The recession was not as severe in our sector and that’s because our sector normally does better than the economy. We grow faster than the economy, so the measures taken to cut costs have actually allowed many firms to maintain and even improve their profitability,” says president and CEO of the Information and Technology Association of Canada (ITAC) Bernard Courtois.

Wi-LAN President and CEO Jim Skippen echoes that analysis. “We’re forecasting that we’ll have cash earnings between $9 to10 million (this year) so it’s profitable, it’s growing.”

Founded in 1992, Wi-LAN was established to commercialize technology inventions to make low-cost, high-speed wireless networking a reality. It was during the early 2000s when Wi-LAN entered numerous business ventures and became very profitable.

Almost four years ago Wi-LAN changed its business model to generate most of its revenue through licensing intellectual property and not by manufacturing goods. This was a change for the better, explains Barry Richards, a financial analyst with Paradigm Capital.

“Being publicly traded is new, it’s a good model. People were quite apprehensive and weren’t sure about the business model, but it’s worked out quite well.”

High tech is more than manufacturing

Moving away from a manufacturing business isn’t as inconsistent with the high-tech community in Ottawa as some may think.

“As much as Ottawa likes to call itself the ‘Silicon Valley of the North’ there is nothing. There is no silicon, even though there are good kinds of solutions to societies needs in the technology sector,” says Dev Bhangui, a financial analyst at Haywood Securities.

Wi-LAN is one of those companies involved with many sectors of the high-tech industry.

“It’s not just in the telecommunications area. It’s broader than that. We’re not just a telecommunications play,” says Skippen. “A long time ago Wi-Lan was, but today, we’re not really. We are in the telecommunications industry, but we’re also in the television industry, and we’re also in other industries.”

That diversity seems to have paid off for Wi-LAN.

With the release of its financial results for three and twelve months on December 10, Wi-LAN saw earnings of $35.1 million.

“Last year we did $26.6 million so it’s been a significant increase,” says Skippen.

Looking for growth

It’s an increase of $8.5 million or 32 per cent from the same period in 2008. Wi-LAN also saw a net loss of $9.2 million or 10 cents per share turn into net earnings of $10.3 million or 11 cents per share.

Richards explained that the economy can only be stimulated by government spending for so long before it has to run on its own, but he says that retail and industrial investors seem to be feeling pretty good.

The next steps to economic recovery lie in industry growth, and the high-tech industry is no exception.

That growth is especially evident in areas of digital content, digital commerce, and digital media, according to ITAC’s research, says Courtios.

TV and wireless

Wi-LAN is working on a new research initiative for television stations going from analog distribution to digital, which should put the company in that new area of technological promise, says Skippen.

This past year Wi-LAN grew especially in the wireless area, as well as in television licensees. It has over 200 license agreements currently, and over the past two years Wi-LAN has signed approximately one new licensee per week.

They are not all cookie-cutter agreements either. Tyler Burns, Wi-LAN’s director of investor relations and communications says that “the number of licensees signed compares very favourably to peers in our industry. You (will) find a dramatic difference between what Wi-LAN has done and what others have done.”

As Wi-LAN deals so closely with patents and patent agreements, there are also litigation issues with other companies.

This year though, there has only been one new action where, in California, Intel launched a claim against Wi-LAN. Wi-LAN is also involved in two cases of litigation in Texas with trial dates at the end of next year. “There will be a lot of activity between now and then,” says Skippen.

Investors like what they see

With the change to the new business model, Wi-LAN has attracted investors, especially institutional investors this year, says Burns. Wi-LAN is hoping to increase its institutional investors this upcoming year.

Being a public company it’s difficult to provide any financial forecasts before the release of their annual report. But Skippen is confident that Wi-LAN will continue to be doing more of what it has always done.

“We’ll continue to sign licenses with somesignificant players and continue to show that kind of progress (and) we’re hoping to make significant progress in our litigations as they near their conclusion.”

From an investment prospective, Wi-LAN has come a long way from the company it once was.

“In the beginning it was riskier because they didn’t have a lot of revenue, they didn’t have a lot of cash, they didn’t have a lot of history,” says Richards.

“They’ve done a fantastic job now three-and-a-half years later it’s a more steady company. Less risk, more steady.”

Wi-LAN is changing its fiscal year end from October to December to match the business cycles of its customers. It will release audited financial results for the fourteen months ending December 31, 2009 in early March of 2010.

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18Dec/091

PART II…

A little over a week since my last post, and so much has happened that there needed to be a part two. Allegedly, Tiger now has more mistresses than Majors, and the drama continues to unfold.

I miss the days when I would only hear news about Tiger that was preceded by “ESPN is reporting” or “The Golf Channel is reporting” no, the stories I hear about Tiger these days come from the tabloids.

It’s become pretty apparent that he has had some problems at home, and it appears as though Tiger and Elin are headed for divorce.

Nope, he’s not out of the woods yet.

They’ve all had their input. Rick Reilly from ESPN, arguably the best sports scribe of my time, has outlined a multi-step plan for Tiger’s return. The usually satirical Reilly seems to be onto something here though, and Tiger looks to be on that path so far. I doubt that he’ll be appearing on Oprah any time soon, it’s just not Tiger’s style.

Although, has anything since the end of November been “Tiger’s style?” He gets in a car accident, the media storms his once quiet and personal lifestyle, and he’s on the cover of magazines he never thought he would be.

Tiger (Courtesy: Baltimore Sun)

Tiger (Courtesy: Baltimore Sun)

When Tiger announced that he would take an indefinite leave from golf, all those covering the game looked at each other wondering, “Well… now what?” no one really knows when he is going to return, no one knows what he is going to get up to in the next three or four months, but what they all know, even though they might not admit it, is that Tiger will return with a vengeance to the game he loves.

Not only is it the game he loves, but it’s the game he dominates. The recently named “Athlete of the Decade” will not be coming back to the game of golf unless he feels he can compete at the highest level. His one misstep came at the 2006 U.S. Open, where he missed the cut after coming back soon after his Father’s death.

We all know what happened after that though, he came into the next major, the Open Championship, and won with a -18 score.

There’s no doubt that when Tiger returns it will be a circus. Media from all over the world, not only sports outlets, but entertainment outlets too, will be there. Like I wrote before, in no way do I condone his actions. But hasn’t he suffered enough?

He’s acknowledged his wrong-doings and he’s attempting to make the best for his family. With a divorce allegedly in the works, and an announcement for taking an “indefinite leave” from golf, these may be the first steps.

Hero worship for Tiger Woods will never be the same. He’ll come back from all this as more than just a brand, he’ll finally be a real person who makes real mistakes and has to recover from them.

In a recent call, PGA Tour commissioner Tim Finchem said “We’re in a down economy and not having the No. 1 player in our sport playing is not a positive […] it won’t be at the same level without our No. 1 player; no sport would be the same. But I think the doom and gloom needs to go away and I think it’s misleading to our fans.”

Finchem spoke for the first time since the incident on November 27 at this call, and it’s a positive thing to see that the Tour is ready to move on without Tiger. It was never going to stop, though. It is a business just like any other sports league.

When Tom Brady went down in Game 1 of last year’s NFL Season, the league went on. The Patriots even racked up an 11-5 record and almost made the playoffs! This could be another opportunity for some of the “shoulda-beens” to step up (Padraig Harrington could win another two majors, it’ll probably be his only other chance to) but I’d argue that Tiger will come back with a renewed sense of purpose. I’d argue that this is the first time that Tiger has to come back and prove something to the world.

The other times that Tiger has come back, the media has taken it easy on him. His father dies; he misses the cut because he came back too early. His knee gets ripped up (wins the U.S. Open); and no one expects him to do much… except he goes out and wins six times on the year.

The cover of Maclean’s this month shows a picture of Tiger with the headline “the fall of the world’s greatest athlete.” I disagree with this whole-heartedly. We haven’t seen the fall of anything athletic from Tiger and we never will. If he gets on the course and drops faster than David Duval, then I’ll be the first to eat a whole bunch of humble pie.

What we have seen instead, is the inside of a once-gated personal life, a marriage gone wrong, and a man trying to rebuild his place in society.

But until he steps on to a golf course, his escape from it all, no one has seen the “fall” of Tiger Woods – the world’s greatest athlete.

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7Dec/093

MY TWO CENTS…

Last week, Tiger Woods crashed his car. He crashed his 2009 Cadillac Escalade into a tree in the yard of his $2.4 million home, was fined $164 and got four demerit points. He committed a driving offence that he could repeat over 64,000 times if he desired, because the man is worth over $1 billion, and there’s no other athlete on the planet who makes as much money as he does.

Tiger Woods

Tiger Woods

Oh, then there was a whole bunch of other stuff that happened too.

The online news world exploded with stories, accusations, tweets, and pictures. Some of the stories might be true, some might not be so true, and some sound just flat out erroneous – we’ve heard it all.

Apparently, Tiger got attacked by Elin with a golf club. Apparently, Tiger is a sex addict who thrives on ambien. Apparently, Tiger has had six mistresses and that number is set to climb in the coming weeks.

These rumours are being started and followed up on by media outlets such as TMZ and the National Enquirer who, with all do respect to their “investigations” (not sure if I would call it journalism) make a living off of making people look bad.

This whole situation was probably not helped by the state of the media today, with social networking websites allowing stories to be told as-they-happen. All you need to do is check the stats from Twitter: Tiger Woods was a “trending topic”, one of the most popular items that people were talking about on the site, for more than 170 straight hours. That’s almost seven straight days.

Does anyone know what else happened in those seven days? I do. President Barack Obama escalated the war in Afghanistan, committing to send 30,000 more troops and extend the campaign until 2011. The leader of the biggest country in the free world just escalated a war and all the media talked about was Tiger Woods.

Unfortunately, media outlets that I would of course call “real” journalism are lowering themselves to tabloid standards.

For example, a recent article from the Toronto Star quoted another paper, who quoted a tabloid, who quoted “unnamed sources”, and that got past an editor? I’m all for giving the people what they want, but what about respect and privacy for the greatest athlete of our time.

In 1997, Tiger’s father Earl Woods said about his then 21-year-old son that, he “will do more than any other man in history to change the course of humanity.” Twelve years later, Tiger has won 14 majors, has earned over $1 billion through sponsorships and on-course successes, and has helped out over 10 million youth through his various charitable efforts not only through the game of golf, but through education as well.

He has influenced millions of people to play golf and has done more for the game than any man has done, and ever will. He brought the game into the 21st century, injecting it with a fiery passion that has allowed it to connect to a whole new generation. All of his peers have him to thank for the multi-million dollar tournament purses, and arguably, him to thank for the Olympics wanting to include golf as a sport in 2016.

Thanks to a bizarre 48 hours though, some of the world has forgotten all that. Some in the media are convinced that Tiger owes the world an apology for his personal life. Society should not believe that an explanation is owed, just because he is in the public eye.

This media scrutiny is an unknown world for Team Tiger; paparazzi are following their every move. Some say that his chase to win more majors than Jack Nicklaus will now be on the same level as the Aaron versus Ruth home run chase, because of the racial undertones of this whole story.

For allegedly cheating on his blonde-haired, blue-eyed, Swedish super model wife, Tiger is no doubt in the dog house (a very expensive one) and this is turning uglier as the weeks go on. This situation has launched the once-reclusive Tiger into the world of rumours and gossip, and it is up to him and him alone for how much he wants to share.

But really, does he have too?

Some argue that he deserves the distain from the public for refusing to comment. I don’t condone what he may or may not have done, but the worst part of the whole story, is the way that the media has treated it.

If the media wants to exploit the lives of celebrities to make money, then that’s their prerogative, but take a long hard look at what the man has done in the past, rather than what might be done in the future.

We most likely will not hear from Tiger until late January 2010, when he makes his tournament debut and he gets back to doing what he does best, playing golf.

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About Me:

Thanks for making an appearance on my Blog. My name is Adam and currently I'm a 4th-year student at Carleton University in Ottawa but originally from Toronto (and very proud of it). My passions include Golf, Style, and The Media, all things that will be covered in here.

I can be reached at: wstanley@connect.carleton.ca
or follow me on Twitter (@adam_stanley).

Website design by Jeff Close (www.thisisjeff.ca)

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