B8 Business The Boston Globe FRIDAY, AUGUST 2, 2019
BLOOMBERG NEWS
WASHINGTON — Cable sys-
tems provide towns and cities with
public-access channels that broad-
cast school board and city council
meetings, as well as networks like
the one that keeps New York City
firefighters connected to the Net.
The services are free, but that
may change. The Federal Commu-
nications Commission on Thurs-
day decided cable providers like
Comcast Corp. and Charter Com-
munications Inc. should assign a
value to the channels and data net-
works, and then reduce fees owed
to localities by that amount.
The proposal, from FCC chair-
man Ajit Pai, who leads a Republi-
can majority, succeeded on a 3-
vote with both Democrats dissent-
ing. Pai said cutting fees would
leave more money for cable com-
panies to invest in new services:
“We will reduce costs for consum-
ers and expedite the deployment
of next-generation services.”
Mayors anticipate a budget
squeeze and expressed alarm
about a change to arrangements
that in many cases were negotiat-
ed long ago. “Local governments
around the country would be
forced to make difficult decisions,”
cities including Atlanta, Boston,
Dallas, and Rye, N.Y., said in docu-
ments filed with the FCC.
The decision “risks grave
harms” to municipalities, said FCC
Commissioner Geoffrey Starks, a
Democrat.
Thursday’s vote was another
example of the FCC trimming local
efforts to regulate phone and cable
companies. Last year, it limited
their power over cell tower sites.
At issue are in-kind services cit-
ies, towns, and counties get, in ad-dition to fees, which are capped at
5 percent of revenue. Examples of
the services include discounts for
seniors, channels for community
use, and informational networks
that link government buildings.
The FCC decided to classify in-
kind offerings as fees, subject to
the 5 percent limit. Cable provid-
ers backed the move.
The FCC action will “help rein
in abusive practices and over-
reaching” by municipal officials,
the NCTA (Internet & Television
Association, a trade group) said in
a filing. It cited what it called
abuses that include a requirement
in Minnesota to deliver cable ser-
vice to municipal liquor stores and
demands to extend service with
550 miles of new lines in Vermont.
Cable operator Altice USA said
that because it needs permits to
lay lines, it’s difficult to resist mu-nicipalities’ requests. “The result
is that the company is confronted
with demands for payments” and
“consumers bear the added cost.”
The industry pays $3 billion an-
nually in fees, the NCTA said. Rev-
enue was about $132 billion in
2018, according to statistics com-
piled by Bloomberg Intelligence.
Cities feel burned. Existing law
lets them impose both fees and ob-
ligations, and the FCC is muddling
the two, the cities said in their fil-
ing.
The US Conference of Mayors
passed a resolution saying the FCC
plans “undermine local authority,
turn public property over to pri-
vate interests, and remove long-
standing community benefits.”
New York City will see “adverse
and significant impact,” Michael
Pastor, general counsel for the
city’s Department of InformationTechnology & Telecommunica-
tions, told the FCC. As an example
of what’s at stake, the city’s infor-
mational network feeds cable TV
and Internet service into every
firehouse and carries public safety
messages, Pastor wrote.
There are no alternatives aside
from building a parallel network
that would take years “and cost a
massive amount,” Pastor wrote.
“The stark reality is that the cities
will be forced to pay extortionate
fees” because the alternative
would be to disrupt municipal ser-
vices, he wrote.
Democratic members of Con-
gress had asked the FCC not to
move forward.
The change is “very concern-
ing,” Senators Kirsten Gillibrand
and Chuck Schumer, both Demo-
crats of New York, said in a July 25
letter to Pai.FCC vote threatens municipal cable offerings
By Kate Sheridan
STAT
Boston-based venture capital
firm Vida Ventures said Thursday
that it has snagged $600 million
more to invest in early-
stage biotech companies in
a second fund.
That fund should bolster the
firm’s attempts to become a more
significant player in the cottage in-
dustry of biotech venture capital-
ists. Vida has only formally invested
in 14 companies since its launch in
April 2018, though one — the cell
therapy company Allogene — has
already gone public. Merck bought
another, Peloton Therapeutics, for
$1 billion upfront.
The company also announced it
is hiring Helen Kim, the former vice
president of business development
at Kite Pharma, to run its Los Ange-
les office. Kim was most recently a
partner at The Column Group, an-
other well-known venture capital
firm.
Vida already has strong ties to
Kite Pharma, the cell therapy com-
pany that Gilead bought in 2017 for
$12 billion. Kim will be the sixth
Kite alum to join Vida.
“When you have that type of ex-
perience, name recognition comes
with it,” said Arie Belldegrun, Vida’s
cofounder and the founder of Kite.
“It’s different than starting a tradi-
tional venture [capital firm].”
Vida is not publicly disclosing a
key metric for venture capital
firms: how much money it has
made so far.
“We can tell you that it looks ex-
tremely positive — beyond what I
would anticipate from a two-year
fund,” Belldegrun said.
Some of Vida’s most important
investors are the founders them-
selves. Unusually, Belldegrun and
his cofounders have put up a good
size chunk of the firm’s money;
Belldegrun estimates the founders’
own money amounts to about 30
percent of the two funds.
In fact, the initial idea was to on-
ly invest the founders’ own money.
Then word got out to investors Bell-
degrun knew from his previous jobs
at Kite and Two River, another in-
vestment firm.
“When they heard that we were
coming with a fund, they wanted to
be part of the party,” he said. “So we
created a type of a club — an inves-
tor club — of wealthy family offic-
es.”
Those family offices are also put-
ting up some of the cash promised
for Vida’s second fund; the rest will
be coming from universities, which
invest their endowments.
Vida’s new fund is larger than its
last, and having more money will
allow the firm to lead more financ-
ing rounds — that is, to set the
terms that others investing in the
same company at the same time
must agree to. Typically, the inves-
tor that puts up the most cash in a
given round gets to be the leader.
“If you want to lead a round of fi-
nancing for a company that gets
$150 million or so, it’s very hard to
come [up] with $10 or $15 million
or be the leader,” he said. Now, Vida
can start investing up to $30 mil-
lion or $50 million at a time.
“That will make us a more pro-
nounced and major leader in the in-
dustry,” Belldegrun said. “Not only
a follower.”Kate Sheridan can be reached at
[email protected].Lifesciences
firmcollects
$600mfor
investment
ly put a number on something
investors have long understood.
As Jonathan Feeney, an analyst
at Consumer Edge Research,
puts it, the $8 billion write-off re-
flects baseball that’s already been
played.
And, to extend the metaphor,
the game hasn’t always been
played well by P&G. Feeney notes
that P&G’s global grooming sales
in the fiscal year that just ended
— $6.2 billion — were 26 percent
below 2012 levels. That’s more
than $2 billion in annual revenue
out the door. However, Feeney
says he’s optimistic that the
worst is probably behind the
company.
The two upstarts considered
most to blame — direct-to-con-
sumer operations Harry’s and
Dollar Shave Club — are now tied
to conglomerates, too. Unilever
bought Dollar Shave Club in
2016, while Schick parent
Edgewell is acquiring Harry’s.
uCHESTO
Continued from Page B
These rivals had countered
Gillette with lower-priced offers
in recent years, slicing away at
Gillette’s dominant market share.
Gillette responded by cutting
blade prices by 12 percent in
2017.
But the grooming business,
under the leadership of Gary
Coombe, has taken a different
approach in the past year or so.
Price cuts have been de-empha-
sized. Coombe instead has fo-
cused intensely on building upGillette’s mail-order market, and
rolling out new twists such as a
blade for men with sensitive
skin. The company has shifted its
marketing efforts to court those
all-important millennial consum-
ers, including a controversial
take on its “the best a man can
get” mantra aimed at countering
sexism and bullying.
On the Tuesday earnings call,
P&G chief financial officer Jon
Moeller played down the impact
from its rivals. Unilever and
Edgewell need to make money
from their acquisitions, he said,
not a bad thing for the “overall
value creation” opportunities in
the industry. (Translation: Maybe
those companies will have to
raise prices.)
Forget about bearded hipsters
or hungry startups for a mo-
ment. P&G executives say the
biggest reason for the huge de-
cline in Gillette’s valuation on
their books can be attributed to
forces well beyond their control:
the rise of the US dollar, and thecorresponding decline of curren-
cies in many countries where
P&G sells its blades and razors.
Only one-fourth of P&G’s groom-
ing sales take place in the United
States, so these currency shifts
influence the top line in a major
way, particularly when tallied up
over the past decade or so.
Moeller and his boss, chief ex-
ecutive David Taylor, remain big
believers in the future of the
grooming business. Let’s hope
so: The jobs of the 1,200 Massa-
chusetts employees who still
work for Gillette in South Boston
and Andover depend on it.
P&G executives are now
showing momentum with their
turnaround efforts. But they still
need to prove to Wall Street that
King Gillette can reign supreme
again in the shaving world. Oth-
erwise, investors might not be so
kind the next time.Jon Chesto can be reached at
[email protected]. Follow
him on Twitter @jonchesto.Shavingcut:P&GsaysGillettehaslost$8binvalue
Gillette’s World
Shaving
Headquarters
in South
Boston. Procter
& Gamble
acquired
Gillette in 2005
for $57 billion.By Allison Hagan
GLOBE CORRESPONDENT
Stonewall Kitchen has a new
owner with a goal to make the
Maine-based specialty food
brand a household name across
North America.
The new proprietor Audax Pri-
vate Equity, a Boston-based in-
vestment firm, said the two com-
panies want to make Stonewall
the leading specialty food compa-
ny in North America, expanding
into new markets by acquiring
more premium brand makers of
high-quality products.
“Expansion into new markets
and products will largely be de-
termined by the growth of our
family of brands,” Stonewall chief
executive John Stiker said.
Stonewall Kitchen founders
Jim Stott and Jonathan King
started making cranberry mar-
malade, roasted garlic mustard,
and other homemade goods as
Christmas gifts for friends and
family in the late 1980s.
The duo soon began selling
their preserves and condiments
at farmers markets. Before long,
the brand took off and they were
receiving orders for thousands of
jars of marmalade from Crate &
Barrel.
The brand had been owned by
a New York firm, Centre Partners
since 2014, and under its tutelage
expanded its national distribu-
tion and partnered with local
chain restaurant Legal Sea Foods.
Stonewall Kitchen has also
made a series of acquisitions, in-
cluding cocktail accessory brand
Tillen Farms, culinary oil and
vinegar brand Napa Valley Natu-
rals, and organic Italian pasta
brand Montebello.
“We’ve experienced a signifi-
cant amount of growth over the
last five years, and by partnering
with Audax, we’ll look to provideeven more innovative, high-quali-
ty, and delicious products for our
customers and guests as we con-
tinue to grow going forward,”
Stiker added in a statement.
Stonewall Kitchen’s range of
gourmet offerings from truffle
ketchup to raspberry peach
champagne jam to Maine craft
ale mustard are now sold in 60
countries. It also has nine retail
stores, where taste tests of its
jams and jellies are popular with
customers, and operates a cook-
ing school with locations in York,
Maine, and Costa Mesa, Calif.
In addition to its signature
spreads and condiments, Stone-
wall Kitchen makes chips, coffee,
tea, baking mixes, and syrup. The
company also sells a line of kitch-
en and home goods that features
cookware, kitchen appliances,
and home decor.
Stott retired five years ago but
King still serves as chief creativeofficer for the company.
The company’s management
will remain the same, the state-
ment said.Allison Hagan can be reached at
[email protected]. Follow
her on Twitter@allisonhxgan.NewStonewallKitchenownerhasbigplans
STAT
Nancy DiGaetano (center, at left)
celebrated Thursday as the first
subscriber of JOE-4-SUN, Citizens
Energy Corporation’s low-income
community shared solar energy
program. The JOE-4-SUN program
will be providing DiGaetano’s
Revere home with energy from solar
panels. DiGaetano shared an
embrace with Citizens Energy
chairman Joseph P. Kennedy II
(above) at the event. To be eligible,
renters or homeowners must be R-
discount customers in National Grid
or Eversource service territories.GOODDAYFORSUNSHINE
PHOTOS BY NIC ANTAYA FOR THE BOSTON GLOBE
FCC chairman
Ajit Pai says
cutting the fees
paid to
municipalities
will leave more
money for cable
companies to
invest in new
services.TOM HERDE/GLOBE STAFF/FILE 2002
Founders Jim
Stott (left) and
Jonathan King,
seen in 2002,
began their
business making
food for friends.NATHAN KLIMA FOR THE BOSTON GLOBE/FILE