There are many great businesses in the world but surely none is as great as being paid money not to do stuff. I was in that line of work for two glorious months in the summer of 2011 and I’m pretty sure it was the peak of my career. Counterintuitively this business is not always massively scaleable,1 but there are some examples. My favorite is that in the 1980s companies would pay Skadden Arps a retainer fee to prevent Skadden from representing a hostile acquirer; I have idly suggested that David Einhorn look into charging similar fees to direct-marketing companies who want peaceful earnings calls.
If I were Moody’s I’d have a sliding scale of CMBS fees that goes like:
- Undeserved good rating: $3X
- Fair rating: $2X
- No rating: $X
- Random petulant sniping at a deal not actually rated by Moody’s: still free!