Advertising Age to Print Every Other Week

Advertising Age, the trade publication introduced in 1930, announced Monday that it would publish its print edition every other week rather than weekly.

The magazine, the largest publication in the ad trade field, will publish 25 issues in 2014, according to an email sent to subscribers on Monday, compared with 46 in 2013. (Advertising Age typically combined weekly issues in July, August, November and December.)

The minimum number of pages in each issue “will increase by 50 percent,” the email said, and the articles will be “supported by richer visuals and deeper data.”

The print edition of Advertising Age had been weekly for almost its entire history, except for a period in the mid-1980s when it was published twice weekly.

The decision by Crain Communications, the parent of Advertising Age and its website, adage.com, is another example of the changing economics of print publishing in an increasingly digital world. It comes after consumer publications like New York magazine reduced their frequencies in print.

It is “a big decision, but the right one for everything we’re doing right now,” Allison P. Arden, vice president and publisher of Advertising Age in New York, said in a phone interview Monday afternoon.

The cutback is “iterating on” the redesign of Advertising Age that was introduced in September 2012, Ms. Arden said, which included a resizing of the print edition as well as a shift in its focus from breaking news to analysis, centered on “more magazine-style content.”

The goal is fewer but larger print issues that are “more robust,” Ms. Arden said.

“We want to make sure we’re using every platform to the best of its ability,” she said.

The principal competitor of Advertising Age, Adweek, published by Prometheus Global Media, is a print weekly. As Advertising Age used to do, Adweek combines some weekly issues in the summer and around Christmas so it does not publish 52 weekly issues a year.

Your Money: Fine Print and Red Tape in Long-Term Care Policies

But some family members are shouldering another type of burden: one that involves piles of paperwork and repeated phone calls, as they are forced to navigate a labyrinth of requirements to collect benefits that the insured spent many years paying.

“There is no possible way an elderly person who is ill and needs help can possibly do this work,” said Fiona Havlish, who coordinated her father’s home care in Pottstown, Pa., before he died last year, a week after his 90th birthday. “It took six to eight weeks to get the insurance into place, and this was working on it every single day. It was an incredible amount of work.”

Ms. Havlish, a former nurse who now works as a life coach in Boulder, Colo., said she first had to find a home care agency that was not only covered by the long-term care policy but one that she felt comfortable entrusting with her father’s care. Later, she had to follow up continually with the aides and doctors to make sure they were filing the proper paperwork so that they insurer would pay. “Three months after he was gone,” she added, “I was still fighting with them over paper.”

At least the bill for her father’s care was eventually paid. In other cases, families have had to fight to overturn denials, and have gone as far as hiring lawyers to file suit. Many Americans now in their 80s and 90s who are collecting benefits — or trying to — bought their policies decades ago when the policies were more restrictive than now. On top of that, many insurers have since left the business after mispricing the policies and failing to judge the economics of the industry, which has made collecting payments even more difficult.

“Everything is not rosy,” said Jesse Slome, director of the American Association for Long Term Care Insurance. “When insurers stop selling or exit the business, many of them hire these third-party administrators to adjudicate claims and that is where interpretations don’t seem to be as liberal.”

Insurance agents who have specialized in long-term care policies for a couple of decades, however, told me that most of the top-rated insurers pay claims without issue. And clearly, claims worth billions are paid each year: An estimated 264,000 people received long-term care benefits at the end of 2012, according to Mr. Slome, and $6.6 billion in benefits were paid that same year.

Still, “the process can be pretty daunting for people,” said Bonnie Burns, a policy specialist at California Health Advocates, an education and advocacy group.

If you need to file a claim on behalf of a loved one, it helps to know why claims are denied and where filers tend to get tripped up. Here’s what I gathered, from longtime brokers, consumer advocates and lawyers who do battle with insurers on these issues:

DEDUCTIBLES In the long-term care world, deductibles work a bit differently than typical insurance policies. The policies have waiting periods, or elimination periods, and they are typically measured in days: 30, 60, 90 or 100 days. So if your policy covers $150 a day for in-home care, and you have a 60-day waiting period, you will typically owe the first $9,000 — 60 times $150 a day — before the policy kicks in.

But the way the waiting periods are counted is critical, too. “If a person is getting home care a few days a week, and the company only counts those days of care toward the waiting period, the total time needed to satisfy the waiting period will be much longer than 60 days,” Ms. Burns said. “So it isn’t just the $9,000, but the total time that has to be satisfied.”

With certain older policies, meanwhile, the insured person must also spend three days in the hospital before the policy will pay any benefits. “Some of these older policies have requirements that most states don’t allow today,” Ms. Burns said. “But these requirements must still be met in these older policies.”

ELIGIBILITY To become eligible for benefits, patients must be expected to need “substantial assistance” for at least 90 days, either because they are suffering from a form of dementia, for instance, or because they can’t perform two basic daily activities from a list of six, including items like bathing, getting dressed and eating. (This applies to certain policies written after 1997.)

“What we are finding today is that when people are getting assessed, they fire on 8 or 10 cylinders on some days and they will trick people,” said Brian I. Gordon, president of MAGA, a long-term care insurance agency in Riverwoods, Ill. “They want to become Superman the day the assessor comes out. And then the insurer may deny the claims.”

Glenn R. Kantor, a lawyer in California whose firm focuses on insurance claims, said he represented a woman, blind from severe macular degeneration who was receiving benefits for home care. But when the representative from the insurer asked her if she could bathe by herself, the woman told the company she could as long as her aide led her into the shower and gave her soap and a washcloth. Shortly thereafter, the insurer cut off her payments.

Then, “they sent her to collections to get the money back,” Mr. Kantor said, because the caregiver was not within arm’s length but left the bathroom to go into the next room while the woman bathed. The insurance company settled, but the terms were confidential so Mr. Kantor could not divulge the insurer or the exact amount it paid.

Times-Picayune Plans a New Print Tabloid

Nearly one year after The Times-Picayune of New Orleans announced that it would print only three days a week, the paper said it planned to roll out a three-day-a-week tabloid edition.

Starting this summer, a tabloid called TPStreet will be published on Mondays, Tuesdays and Thursdays, according to a statement released online by Jim Amoss, editor and vice president for content at The Times-Picayune.

TPStreet will be available on newsstands for 75 cents and not be delivered to subscribers’ homes. At the same time, The Times-Picayune will continue to publish and offer home delivery of its traditional newspaper on Wednesdays, Fridays and Sundays.

“We promised to invest in our community, and we’re fulfilling that promise,” said Ricky R. Mathews, president and publisher of The Times-Picayune in a statement posted on the Web site Nola.com

Last May, the paper’s owners, Advance Publications, announced it would cut back printing of The Times-Picayune and would make major cuts to the newsroom. Advance Publications then introduced similar changes at other papers.

Mr. Mathews said in an e-mail that he was still figuring out how many people to hire for the new edition.

But there are no guarantees that any other cities with papers operated by Advance’s Newhouse unit, which lost daily newspaper coverage, also will get tabloids. Randy Siegel, president of local digital strategy for Advance Publications, said in an e-mail about the change in New Orleans “this was purely a local market decision.”

Many New Orleans residents posted comments tinged with sarcasm on Nola.com. One reader of Nola.com named BeignetBob posted on the site, “C’mon guys, just admit it: The grand digital experiment is a big bust. We tried to tell you, but would you listen? Nooooooooo. Next time, listen to the readers.”

Deal Professor: Reading the Fine Print in Abacus and Other Soured Deals

A common refrain from the financial crisis is that poor disclosure was a big contributor, if not the cause, of the financial crisis. Buyers of even the most complicated financial instruments were misled or were not provided full information concerning their investments. The results were catastrophic when the mortgage market crashed.

The story sounds convenient: investors were deceived! That would imply that all we need to do to prevent a similar problem in the future is to provide better disclosure.

The problem is that when you actually look at the documents from some of the troubled investments during the financial crisis, in many cases the disclosure was copious. There were warnings of the risks; investors just failed to heed the warning signs that should have led them to further investigation. In other words, the disclosure failed to work.

In a new paper, “Limits of Disclosure,” Claire Hill and I examine the types of disclosure that were made before the financial crisis. Specifically, we examine disclosure made in connection with the sale of synthetic collateralized debt obligations, or C.D.O.’s, where the reference securities were mortgage-backed securities. These were synthetic bets on the value of mortgage securities with one party taking the long side and the other the short.

The investments had names like Timberwolf and Class V Funding III. The now infamous Abacus C.D.O. promoted by Goldman Sachs was also a synthetic C.D.O. And these products were at the epicenter of the financial crisis. One analysis estimates that asset-backed C.D.O. write-downs alone will be $420 billion, or 65 percent of the original balance, with C.D.O.’s issued in 2007 losing 84 percent of their original value.

In the wake of this colossal failure, allegations have been made that the banks promoting these financial instruments did not disclose that they also had short positions in them. Alternatively, in the Abacus case, the allegation was that Goldman allowed John Paulson’s hedge fund to hand-select the securities to bet against, thereby creating an investment that was “doomed to fail.”

But a review of the offering documents for these deals shows that there were ample warning signs, had buyers looked deeper. Take the Abacus C.D.O., for example. The pitch book for the deal stated specifically that Goldman Sachs “shall not have a fiduciary relationship with any investor.” That is, Goldman was not bound to see if the investment was suitable for an investor or to act in investors’ best interest.

Not only that, these materials warned investors that they should do their own investigation. Again, the Abacus pitch book stated that “Goldman Sachs may, by virtue of its status as an underwriter, advisor or otherwise, possess or have access to non-publicly available information.” It continued, “Accordingly, this presentation may not contain all information that would be material to the evaluation of the merits and risks of purchasing the Notes.” In other words, Goldman told its customers to do their own investigation and not rely on the firm.

As for allegations that Goldman’s trading arm was simultaneously taking a short position in the housing market, there is disclosure on that too. The Abacus offering memorandum stated that “Goldman Sachs is currently and may be from time to time in the future an active participant on both sides of the market and have long or short positions” adding that the firm may have “potential conflicts of interest.”

Despite the warnings, the evidence is that the buyers of these synthetic collateralized debt obligations did not do a thorough investigation into the securities themselves, let alone follow up on the above disclosure.

The recent S.E.C. case against the Citigroup employee Brian Stoker shows this. The S.E.C. contends that Citigroup had sold another such investment, the Class V Funding III C.D.O., while simultaneously planning to short the security, a fact it did not disclose to buyers. Citigroup settled the action, but Mr. Stoker disputed the allegations.

The largest buyer of Class V Funding III was Ambac, the mortgage-backed security insurer, which was a very sophisticated investor. When David Salz, the Ambac manager who made the decision to invest in this security, was asked at trial whether he had done an investigation of the securities underlying the C.D.O., he claimed that Ambac had not because it had relied on the work of the portfolio selection manager, Credit Suisse Alternative Asset Management.

Yet, the offering memorandum for Class V Funding III stated that the Credit Suisse unit was not acting as “advisors” or “agents” to the buyer, and that any buyer should make its investment decision determine “without reliance” on either. The memorandum further stated that not only could Citigroup and Credit Suisse have conflicts, but also that the firms’ “actions may be inconsistent with or adverse to the interests of the Noteholders.” And the offering memorandum had the same disclosure as the Abacus that place the onus on the investors to do their own homework.

All these various offering memos did not even acknowledge that the mortgage market was heading downward. This disclosure taken from Timberwolf C.D.O., a residential mortgage-backed security and another Goldman deal that has resulted in litigation, began to appear in 2007: “Recently the residential mortgage market in the U.S. has experienced a variety of difficulties and changed economic conditions that may adversely affect the performance and market value of R.M.B.S.” It continued: “In addition, in recent months, housing prices and appraisal values in many states have declined or stopped appreciating. A continued decline or expected flattening of those values may result in additional increases in delinquencies and losses on R.M.B.S. generally.”

Yet, not only did investors ignore this disclosure, they ignored it despite reading it. At the Class V Funding III trial, Mr. Salz of Ambac was asked at trial about the risk factor disclosure in the Class V Funding III offering memo. Asked if he read it, he replied: “Yes. It’s boilerplate language. . . . it was standard language.”

In other words, Ambac felt comfortable to ignore it because it the language was commonly appearing in documents. Furthermore, Ambac’s legal counsel even marked up the offering document and made comments on the offering memorandum.

Ambac lost $300 million on this deal. Mr. Stoker was acquitted by a jury of the civil charges against him.

What is so troubling about all of this is that the investors in these C.D.O.’s were the most sophisticated investors with considerable money — $100 million or more — under management. Class V Funding III’s buyers included not only Ambac but also the Koch brothers and a number of hedge funds.

These were not the “stupid” sophisticated investors that Michael Lewis depicted in his book “The Big Short.” These were investors who should have known that this disclosure should have prompted further inquiry. In particular, these investors knew that for them to take a long position on the C.D.O. there had to be someone on the short side.

So why did these investors make these investments if they did not do their due diligence or even pay real attention to the disclosure? From the testimony given at the Class V Funding III trial, it appears that these investors made macroeconomic bets on housing, following the herd, which thought housing would go up. In this regard, arguments that the securities were too complex to understand don’t bear out.

This is a problem. Sophisticated investors are supposed to read the documents. We all know that retail investors don’t often take the time to read disclosure, but the securities laws are based on the idea that information is filtered into the markets through disclosure to sophisticated investors who then set the real price of the security.

This is a form of the efficient market hypothesis. If sophisticated investors can’t be bothered to read the documents and act on them, then we have a real gap in the entire disclosure regime and asset pricing generally.

Unfortunately, this is what the evidence from the C.D.O. market before the financial crisis shows. And because of this, the idea that requiring still more, better or clearer disclosure is likely to be unfruitful in many cases.

I have no great solution to this. Until we better understand how sophisticated investors process and read disclosure, regulators should be wary of trying to solve the problem by simply requiring more disclosure.

This post has been revised to reflect the following correction:

Correction: November 2, 2012

An earlier version of this article misstated the name of the financial products that were in part blamed for the financial crisis. They are collateralized debt obligations, not credit-default obligations.