DealBook: Helping Start-Ups With Local Support and National Networks

When Will Fuentes planned an extended business trip to Seattle last year, he tapped into the local chapter of a national networking group there. Within hours, Mr. Fuentes, who founded the Arlington, Va., software company Lemur Retail, had secured a work space, introductions and even restaurant recommendations via the group, the Startup America Partnership.“Before I flew out there, I already had five or six meetings set up with potential clients and other key contacts, as well as one potential acquirer,” Mr. Fuentes said.

A couple of years ago, entrepreneurs would have needed several trips to make similar connections outside their own cities. Even in this era of social networks and venture conferences, start-ups are still surprisingly disconnected on a national level.

“Each region has its ties, but in many cases, entrepreneurs are operating in silos,” said Carolynn Duncan, the chief executive of Portland Ten, a mentoring program for early-stage companies, mainly in Oregon. “An entrepreneur in Oregon doesn’t have an easy way to network with entrepreneurs in Washington D.C.”

Startup America, a nonprofit organization with an all-star cast of deep-pocketed backers, is trying to bridge the gap. The organization, which was started in January 2011 as the brainchild of AOL’s co-founder, Steve Case, and the Ewing Marion Kauffman Foundation, wanted to bring a private-sector support to start-ups — without financial strings attached.

“Supporting start-ups throughout the country is the only way to make sure the American economy is firing on all cylinders,” said Mr. Case, who is the chairman of the partnership.

Start-ups are a crucial driver for job creation in the United States. From March 1994 to March 2010, businesses less than one year old created 3.9 million jobs a year on average, according to the Bureau of Labor Statistics, though that number has declined during the recent economic weakness.

The Small Business Administration and United States Chamber of Commerce have long been a resource for start-ups, but these government agencies have a broad mandate. There is a “growing recognition,” said Mr. Case, that high-growth start-ups — those with the potential to be national or international companies — have different needs and requirements than traditional small businesses.

Startup America’s initial focus was to provide support to start-ups through deals on goods and services, like 40 percent off FedEx shipping and free flights on American Airlines. But the group quickly realized that start-ups needed more practical help, like sharing best practices and networking.

Soon after the partnership’s start, entrepreneurs around the country starting contacting Startup America, asking how they could create their own networks and reach out to counterparts in other states. “Most of these regions were already coming up with their own initiatives or thinking about them,” said the organization’s chief executive, Scott Case, a founder and former chief technology officer of Priceline.com (and no relation to Steve Case). “We’re helping to stitch together all these parts.”

Taking cues from the entrepreneurs, Startup America has turned its attention to building such a network. Nearly 12,000 members are now affiliated with local Startup America initiatives in 30 states. The partnership expects to add another 10 states this year.

Each Startup America region is spearheaded by local “champions” who come together several times a year at national conferences, communicate via Google groups and have access to an online “idea center” where they can brainstorm about, say, bringing in outside capital or hosting a start-up conference. These envoys are all “founder types” at different stages of their careers, Scott Case said. “Some have exited companies and are looking to continue to feed that creative drive. Others understand that if they can strengthen their community, they can strengthen their own company.”

Brooks Bell, founder of an eponymous 22-employee digital consulting business based in Raleigh, N.C., became involved with the partnership in 2011 after realizing that many potential clients considered her area a backwater. “I realized that was impacting my company’s brand, too,” she said.

Mrs. Bell pointed out that other national groups, like Entrepreneurs’ Organizations, offer resources for high-growth companies. Yet, their emphasis is typically on supporting individuals rather than elevating the region and networking nationally. “They also tend to focus on early-stage companies,” she said. Until Startup America, she added, “there weren’t a lot of opportunities for early-stage companies to interact with funded companies.”

Though Startup America regions work off the same blueprint, each takes a slightly different approach. In Maryland, the staff and champions volunteer virtually. Startup Tennessee partnered with the Entrepreneur Center in Nashville, which runs a nonprofit incubator program. Startup Colorado works out of Silicon Flatirons, a center for law, technology and entrepreneurship at the University of Colorado Law School, and finds partners to finance specific projects.

Although the regional chapters operate independently, they benefit from the credibility of a national organization. “It’s helping elevate our start-ups nationally and get them in front of audiences we never would have,” said Andy Stoll, an entrepreneur in the Iowa City, Iowa, area, where rebuilding from the floods in 2008 has helped generate a boom in start-up activity.

“To have the opportunity to sit in a room with their board and have Steve Case ask me, ‘What are the three things that those of us at this table can do to really help support the Indiana community?’ is amazing and a humbling experience,” said Michael Coffey, a partner at DeveloperTown, an Indianapolis design and development firm that works with companies of all sizes.

In the end, it’s all about business.

Aaron Schwartz, a co-founder of the San Francisco-based Modify Watches, initially joined Startup America for the discounts. Now, he’s also tapping into the partnership to network, including finding corporate clients who order custom watches and vendors. “I now have a contact in Tennessee who has offered to look into manufacturing our watches there,” he said

Mr. Fuentes of Lemur Retail found two potential clients, both national chains, through his connections in Seattle last year; he’s currently in talks with those companies. He’s also helping his Northwest counterparts make inroads in the Washington area. He likens the experience to a fraternity or alumni organization of entrepreneurs.

“When people contact me from my high school or college, I pick up the phone,” he said. “This is no different.”

A version of this article appeared in print on 02/08/2013, on page B5 of the NewYork edition with the headline: Helping Start-Ups With Local Support and National Networks.

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Way of the World: Theorizing About Taxing High Earners

NEW YORK — Academics can be dismissive of the concerns of the popular media. But when it comes to the growth of the superrich, the tabloids may have gotten it right.

The numbers tell the story. According to a study by John Van Reenen of the London School of Economics and Brian Bell of Oxford University, the share of national income earned by the top 1 percent in the United States surged to 18.3 percent in 2007, from 8 percent in 1979. In Britain, the trend was almost identical: The top 1 percent received 15.4 percent of the national income in 2007 compared with 5.9 percent in 1979. And these figures exclude capital gains.

“A lot of the action has been at the very top end of the distribution, the top 1 percent or the top 0.1 percent,” Mr. Van Reenen, director of the Center for Economic Performance at the L.S.E., told me. “It shows you that the media’s focus on the very rich and on bankers’ bonuses wasn’t misplaced.”

But while much of the shift in income distribution has been at the apex of the pyramid, that is not where most academic research on rising income inequality has been focused.

If anything, Mr. Van Reenen said, academics “have tended to focus on the bottom of the distribution, much more than the top.”

Mr. Van Reenen and some like-minded colleagues have been working to fill that gap. Their efforts made it to the economic major leagues in January, when Mr. Van Reenen convened a panel discussion on extreme wage inequality at the prestigious annual get-together of the American Economic Association.

One of the most striking findings will probably give comfort to the plutocrats: In contrast to previous generations, the superrich today tend to have earned their fortunes rather than inherited them.

Steven Kaplan of the University of Chicago and Joshua Rauh of Stanford University in California studied Forbes magazine’s annual list of the 400 richest Americans. They found that in 1982, just 40 percent of these plutocrats had built their own businesses. By 2011, the superrich had gotten much richer — the combined wealth of the Forbes 400 was $92 billion in 1982 and had surged to $1.53 trillion by 2011 — and many more of them had, as the meme of the 2012 U.S. presidential election campaign had it, built it themselves: 69 percent.

“This isn’t the Downton Abbey rentier class,” explained Mr. Van Reenen, who has found a similar trend in Britain. “These incomes come from the labor market. You can say it is a triumph of the human capitalists over the physical capitalists.”

Among economists who study the surge in pay at the top, it is pretty much a truth universally acknowledged that taxes should rise at the summit, too. “Economics would suggest that when you have big increases in inequality, the top tax rate should rise,” Mr. Van Reenen said. “That seems very right and very reasonable.”

The impact and the structure of higher taxes for the rich are a more complicated and controversial issue. Timothy Besley and Maitreesh Ghatak, both of the London School of Economics, make a robust case for higher taxes on bankers’ bonuses. Their work is theoretical, but beyond the campus green, what may be particularly interesting is the way they frame the wider debate.

“Little undermines the case for a market economy more than the perception that there is injustice in the rewards that it generates,” they argue in a recent paper. “The greatest clamor for reform should come from those who support the market system.”

“We have shown that some form of bonus taxation in the financial sector is optimal above and beyond standard progressive income taxation,” they conclude. “We have identified a form of taxation that we believe makes the market system both fairer and more efficient.”

This robustly pro-market rationale for higher taxes on bankers, who like to think of themselves as the very embodiment of capitalism, is eye-catching, particularly for anyone who spends much time in the United States, where higher taxes and more efficient markets are usually portrayed as being anathema to one another.

Emmanuel Saez, an economist at the University of California, Berkeley, who is one of the pioneering students of incomes at the very top, has offered an even more provocative suggestion. At the American Economic Association meeting, he argued that when tax rates at the top are low, “top earners extract more pay at the expense of the 99 percent.” Higher tax rates for the rich, he suggested, “reduce the pretax income gap without hurting economic growth.”

This is a truly radical idea: that higher taxes at the top can reduce pretax inequality and not weaken the economy as a whole.

Outside the seminar room, however, these elegant ideas may run into political opposition intensified by the trends within the 1 percent that these same economists have documented.

“It may have a political effect,” Mr. Van Reenen said of the shift from inherited fortunes to self-made ones. “You feel you’ve earned it. This does make people more strongly inclined to resist taxation.”

Chrystia Freeland is editor of Thomson Reuters Digital.

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TCU shocks Kansas, 1st losing streak in 7 years

FORT WORTH, Texas (AP) — Kansas coach Bill Self's Big 12 bullies are suddenly beatable.

Even against the league newcomer that hadn't won a conference game.

The fifth-ranked Jayhawks have their first losing streak in more than seven years after trailing throughout in a 62-55 loss Wednesday night at TCU, which had never before beaten a top 5 team.

"It's not so much that we lost, it's just so much to me that we were kind of the bullies of the league, and we let people think they could whip us," Self said. "And when they did, everybody now thinks they can whip us."

Four days after an 85-80 home loss to Oklahoma State ended their nation-best 18-game overall winning streak and 33-game streak at Allen Fieldhouse, the Jayhawks went more than 7 minutes from the tip before finally scoring.

Kansas (19-3, 7-2 Big 12) had played 264 games in a row since January 2006 without consecutive losses, the longest active streak in Division I.

Against TCU (10-12, 1-8), the Jayhawks looked nothing like the team that has won or shared 12 of the league's 16 regular-season titles — and now has company at the top of the Big 12 standings with 13th-ranked Kansas State.

They trailed 22-13 at halftime on 3-of-22 shooting, the fewest points and field goals in a half since Kansas started keeping those records nearly 25 years ago.

"It was the worst team that Kansas ever put on the floor, since Dr. Naismith was there," Self said. "I think he had some bad teams when he lost to Topeka YMCA and things like that in the first couple years. But for the first half, there hasn't been a team play worse than that offensively."

Instead of a bounce-back win, Kansas had six turnovers and missed its first four shots before finally scoring 7:17 into the game. Ben McLemore's bounce pass to Jamari Traylor for a layup made it 8-2, but the Jayhawks then went 8 more minutes before making another field goal.

The Jayhawks finished 29.5 percent from the field (18 of 61), their worst in 514 games — since making only 15 of 51 shots (29.4 percent) against Kentucky on Dec. 1, 1998. It was their lowest-scoring game since also scoring 55 in an NCAA tournament loss to UCLA on March 24, 2007.

They made only 3-of-22 from 3-point range, including two in the final minute.

McLemore led Kansas with 15 points, 13 after halftime. Jeff Withey had 12 points and Naadir Tharpe 11.

"We knew going in that we would have to play extremely well, offensively, defensively, extremely hard, and they were going to have to help us out," said first-year TCU coach Johnson said. "When I said help us, obviously they missed a lot of shots they probably would make."

Garlon Green scored 20 points for the Horned Frogs, including five in a row after a late 17-4 Kansas spurt.

"It means a lot. Obviously we've had some tough years," said Green, a senior forward. "We've had a tough year right now, but this is a big win. We need to carry this momentum."

TCU played the first of three games in six days. The Frogs host fellow league newcomer West Virginia on Saturday and go to Oklahoma on Monday night.

Kansas, which plays at Oklahoma on Saturday, hasn't lost three games in a row since February 2005 — a stretch with games that went to overtime and double-overtime.

Tharpe scored nine points in a 2-minute span for Kansas, with a 3-pointer and six consecutive free throws, before a basket by Withey with 6:49 left got the Jayhawks within 44-40 — the closest they got after TCU's game-opening spurt.

After Tharpe missed a 3-pointer on a break, Adrick McKinney slung a pass inside to Green for a layup. McLemore, the Big 12's top freshman scorer, missed an open 3-pointer before Green had a three-point play to stretch the TCU lead back to 49-40.

"Everybody came to play today," said Connell Crossland, who had eight points and 15 rebounds for TCU. "I just saw everybody was ready (in warmups). That's when I knew it was going to be a good game. And we pulled it off."

The record sellout crowd of 7,412 fans in the Daniel-Meyer Coliseum included a large portion of loud Jayhawks fans, but they filed out quietly after this game while TCU students stormed the court to celebrate.

"All teams go through funks, but we're certainly in probably the worst funk that I've ever seen a Kansas team be in," Self said. "Just a bad, bad, bad night. Not a good team right now. ... This thing has turned on a dime and it could certainly continue to turn worse if we don't right the ship real soon."

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Well: Think Like a Doctor: A Confused and Terrified Patient

The Challenge: Can you solve the mystery of a middle-aged man recovering from a serious illness who suddenly becomes frightened and confused?

Every month the Diagnosis column of The New York Times Magazine asks Well readers to sift through a difficult case and solve a diagnostic riddle. Below you will find a summary of a case involving a 55-year-old man well on his way to recovering from a series of illnesses when he suddenly becomes confused and paranoid. I will provide you with the main medical notes, labs and imaging results available to the doctor who made the diagnosis.

The first reader to figure out this case will get a signed copy of my book, “Every Patient Tells a Story,” along with the satisfaction of knowing you solved a case of Sherlockian complexity. Good luck.

The Presenting Problem:

A 55-year-old man who is recovering from a devastating injury in a rehabilitation facility suddenly becomes confused, frightened and paranoid.

The Patient’s Story:

The patient, who was recovering from a terrible injury and was too weak to walk, had been found on the floor of his room at the extended care facility, raving that there were people out to get him. He was taken to the emergency room at the Waterbury Hospital in Connecticut, where he was diagnosed with a urinary tract infection and admitted to the hospital for treatment. Doctors thought his delirium was caused by the infection, but after 24 hours, despite receiving the appropriate antibiotics, the patient remained disoriented and frightened.

A Sister’s Visit:

The man’s sister came to visit him on his second day in the hospital. As she walked into the room she was immediately struck by her brother’s distress.

“Get me out of here!” the man shouted from his hospital bed. “They are coming to get me. I gotta get out of here!”

His brown eyes darted from side to side as if searching for his would-be attackers. His arms and legs shook with fear. He looked terrified.

For the past few months, the man had been in and out of the hospital, but he had been getting better — at least he had been improving the last time his sister saw him, the week before. She hurried into the bustling hallway and found a nurse. “What the hell is going on with my brother?” she demanded.

A Long Series of Illnesses:

Three months earlier, the patient had been admitted to that same hospital with delirium tremens. After years of alcohol abuse, he had suddenly stopped drinking a couple of days before, and his body was wracked by the sudden loss of the chemical he had become addicted to. He’d spent an entire week in the hospital but finally recovered. He was sent home, but he didn’t stay there for long.

The following week, when his sister hadn’t heard from him for a couple of days, she forced her way into his home. There she found him, unconscious, in the basement, at the bottom of his staircase. He had fallen, and it looked as if he may have been there for two, possibly three, days. He was close to death. Indeed, in the ambulance on the way to the hospital, his heart had stopped. Rapid action by the E.M.T.’s brought his heart back to life, and he made it to the hospital.

There the extent of the damage became clear. The man’s kidneys had stopped working, and his body chemistry was completely out of whack. He had a severe concussion. And he’d had a heart attack.

He remained in the intensive care unit for nearly three weeks, and in the hospital another two weeks. Even after these weeks of care and recovery, the toll of his injury was terrible. His kidneys were not working, so he required dialysis three times a week. He had needed a machine to help him breathe for so long that he now had to get oxygen through a hole that had been cut into his throat. His arms and legs were so weak that he could not even lift them, and because he was unable even to swallow, he had to be fed through a tube that went directly into his stomach.

Finally, after five weeks in the hospital, he was well enough to be moved to a short-term rehabilitation hospital to complete the long road to recovery. But he was still far from healthy. The laughing, swaggering, Harley-riding man his sister had known until that terrible fall seemed a distant memory, though she saw that he was slowly getting better. He had even started to smile and make jokes. He was confident, he had told her, that with a lot of hard work he could get back to normal. So was she; she knew he was tough.

Back to the Hospital:

The patient had been at the rehab facility for just over two weeks when the staff noticed a sudden change in him. He had stopped smiling and was no longer making jokes. Instead, he talked about people that no one else could see. And he was worried that they wanted to harm him. When he remained confused for a second day, they sent him to the emergency room.

You can see the records from that E.R. visit here.

The man told the E.R. doctor that he knew he was having hallucinations. He thought they had started when he had begun taking a pill to help him sleep a couple of days earlier. It seemed a reasonable explanation, since the medication was known to cause delirium in some people. The hospital psychiatrist took him off that medication and sent him back to rehab that evening with a different sleeping pill.

Back to the Hospital, Again:

Two days later, the patient was back in the emergency room. He was still seeing things that weren’t there, but now he was quite confused as well. He knew his name but couldn’t remember what day or month it was, or even what year. And he had no idea where he was, or where he had just come from.

When the medical team saw the patient after he had been admitted, he was unable to provide any useful medical history. His medical records outlined his earlier hospitalizations, and records from the nursing home filled in additional details. The patient had a history of high blood pressure, depression and alcoholism. He was on a long list of medications. And he had been confused for the past several days.

On examination, he had no fever, although a couple of hours earlier his temperature had been 100.0 degrees. His heart was racing, and his blood pressure was sky high. His arms and legs were weak and swollen. His legs were shaking, and his reflexes were very brisk. Indeed, when his ankle was flexed suddenly, it continued to jerk back and forth on its own three or four times before stopping, a phenomenon known as clonus.

His labs were unchanged from the previous visit except for his urine, which showed signs of a serious infection. A CT scan of the brain was unremarkable, as was a chest X-ray. He was started on an intravenous antibiotic to treat the infection. The thinking was that perhaps the infection was causing the patient’s confusion.

You can see the notes from that second hospital visit here.

His sister had come to visit him the next day, when he was as confused as he had ever been. He was now trembling all over and looked scared to death, terrified. He was certain he was being pursued.

That is when she confronted the nurse, demanding to know what was going on with her brother. The nurse didn’t know. No one did. His urinary tract infection was being treated with antibiotics, but he continued to have a rapid heart rate and elevated blood pressure, along with terrifying hallucinations.

Solving the Mystery:

Can you figure out why this man was so confused and tremulous? I have provided you with all the data available to the doctor who made the diagnosis. The case is not easy — that is why it is here. I’ll post the answer on Friday.

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Rules and Regulations: Post your questions and diagnosis in the comments section below.. The correct answer will appear Friday on Well. The winner will be contacted. Reader comments may also appear in a coming issue of The New York Times Magazine.

Correction: The patient’s eyes were brown, not blue.

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DealBook: K.K.R.'s Earnings Rise 22% on Investment Gains

Improving markets lifted the fortunes of Kohlberg Kravis Roberts in the fourth quarter, as the investment firm reported a 22 percent rise in profit.

K.K.R. said on Thursday that it earned $347.7 million for the quarter, as all of its businesses showed strong gains. For the year, the firm reported earning $2.1 billion.

The fourth-quarter profit, reported as economic net income and which includes unrealized gains from investments, comes out to 48 cents a share. That is more than double the 20-cents-a-share average of analyst estimates compiled by Capital IQ.

Private equity firms have benefited from an improvement in the markets, which have bolstered the value of their own holdings. Last week, the Blackstone Group reported a 43 percent increase in fourth-quarter earnings.

K.K.R. said the value of its investments rose 4 percent for the quarter and 24 percent for the year.

The strongest performers among the firm’s investments included Alliance Boots, a British pharmacy chain; HCA, the giant hospital operator that went public last year; and the Nielsen Company, the media measurement company.

The improved market conditions also make selling portfolio companies a more attractive prospect, letting the firms harvest tangible returns from their investments. That was reflected in K.K.R.’s results, as it reported a nearly fourfold increase in distributable earnings for the quarter, to $546.3 million. That metric tracks how much a firm actually pays to its limited partners.

And K.K.R.’s assets under management rose 13.9 percent from the third quarter, to $75.5 billion.

The firm’s co-founders and co-chairmen, Henry R. Kravis and George R. Roberts, said in a statement that the growth of their private equity portfolio outpaced the Standard & Poor’s 500-stock index by about 7 percent last year.

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IHT Rendezvous: The Best Asian Art? You Can Vote on It

HONG KONG — Heading into its 10th year, the Sovereign Asian Art Prize has grown far beyond its Hong Kong base to span the very edges of the continent, including former Soviet republics and the Middle East.

Its list of 30 finalists, announced last week, was light on the usual contemporary art superpowers — there was only one name from mainland China — and heavy on Muslim-majority states that may not get as much attention in the art world. Saudi Arabia, Kazakhstan, Oman and the Palestinian territories produced finalists for the first time.

Sovereign focuses on developing talents from developing nations. The $30,000 award goes to a mid-career artist — someone who may be acclaimed in his or her home country, but who has not made it big internationally. (Its sponsor, the Hong Kong-based Sovereign Group, also has an award in Africa).

The majority of the Asian finalists are in their 30s and working in photography, prints or mixed media. While politics is nothing new in contemporary Asian art — those ironic Chairman Mao heads have become a stereotype in Chinese painting — these works also offer views on faith, culture and sexuality. (You can vote for your favorite here.)

Saudi Arabia is represented by Shadia Alem, whose photographic work “Supreme Ka’ba of God” represents her birthplace, Mecca.

“Wedding Memory” by Hassan Meer of Oman depicts a bride and groom, her face partly veiled, his entirely covered.  The catalog notes describe the backdrop as the “room that accommodates the consummation of the marriage,”  though the black-and-white image shows the exterior of a home half-destroyed and marked by graffiti.

Raeda Saadeh, from the Palestinian territories, was born in Umm al-Fahm, an Arab city in the Haifa district of Israel. Her photograph “Penelope” depicts the mythical Greek figure calmly knitting and waiting on a pile of rubble and wire in East Jerusalem, where Israeli forces had destroyed homes.

Evgeny Boikov — representing Kyrgyzstan, but originally from Azerbaijan — depicts a protester who is said to represent the 2005 and 2010 uprisings in Kyrgyzstan, the former Soviet state. Mr. Boikov uses industrial-sized printers (the kind usually used for billboa rds) to print on small canvases. The result is the indigo imprint of a man bent over, though it’s not clear whether from pain, exertion or something else.

From neighboring Kazakhstan, Said Atabekov photographs a girl holding a korpeshe, a traditional textile used as bedding, made here in the likeness of an American flag.

Also using textiles, Risham Syed, who teaches art in her native Pakistan, used acrylic, lace and army coat buttons on a square of Pakistani printed cotton to  riff on Thomas Cole’s 19th-century painting “Indians Viewing the Landscape.”

Pakistan and Hong Kong had the best showings, with four finalists.

Faiza Butt printed a poem on a light box, in Urdu on one side and English on the other. It’s a pretty, almost floral-looking work at first glance. On a closer look, you can see that she has used debris, garbage and half-eaten food as decoration.

Muhammad Ali, 24, fashioned a sepia-toned homoerotic portrait of two scantily clad men, an image that might not be risqué in the West but which could be controversial in a country where homosexuality is illegal.

Waseem Ahmed’s “Fusion” is also sexually charged. A  female nude, rendered in the type of Mughal classical art, is overlaid with details from a Western painting of Adam and Eve, just their groins showing, covered by fig leaves.

When the Man Asian Literary Prize was announced last month,  it called into question two issues concerning arts prizes in Asia. First, where, exactly, does Asia begin and end? (The Man Asia included Orhan Pamuk on its short list, although Mr. Pamuk, the Turkish Nobel laureate, has written about his desire for Turkey to join the European Union). The second is whether Asia’s budding cultural scene still needs Western corporate support. The Man Group, the hedge fund management firm, has said it would no longer underwrite the literary prize. The Sovereign Art Prize has the Swiss bank Julius Bär behind it.

An exhibition of the finalists runs through Friday at Exchange Square in Hong Kong and will later travel to Seoul and Singapore. The winner will be announced, and the works will be auctioned by Christie’s, at the Four Seasons in Hong Kong on Feb. 21.

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Braun says he used Fla clinic owner as consultant

NEW YORK (AP) — Milwaukee Brewers slugger Ryan Braun said the person who ran the Florida clinic being investigated by Major League Baseball was used only as a consultant on his drug suspension appeal last year.

"I have nothing to hide," Braun said in a statement released by his representatives on Tuesday night.

Earlier in the day, Yahoo Sports reported the 2011 NL MVP's name showed up three times in records of the Biogenesis of America LLC clinic. Yahoo said no specific performance-enhancing drugs were listed next to his name.

The Miami New Times recently released clinic documents that purportedly linked Alex Rodriguez, Gio Gonzalez, Melky Cabrera and other players to purchases of banned drugs from the now-closed anti-aging center.

Rodriguez and Cabrera were on the list with Braun that also included New York Yankees catcher Francisco Cervelli and Baltimore Orioles infielder Danny Valencia.

Braun said his name was in the Biogenesis records because of an issue over payment to Anthony Bosch, who ran the clinic near Miami.

"There was a dispute over compensation for Bosch's work, which is why my lawyer and I are listed under 'moneys owed' and not on any other list," Braun said.

"I have nothing to hide and have never had any other relationship with Bosch," he said. "I will fully cooperate with any inquiry into this matter."

On Tuesday, MLB officials asked the Miami New Times for the records the alternative newspaper obtained for its story.

Asked specifically about Braun's name in the documents before the five-time All-Star released his statement, MLB spokesman Pat Courtney said: "Aware of report and are in the midst of an active investigation in South Florida."

Braun tested positive during the 2011 postseason for elevated testosterone levels. He maintained his innocence and his 50-game suspension was overturned during spring training last year when arbitrator Shyam Das ruled in favor of Braun due to chain of custody issues involving the sample.

With that, Braun became the first major leaguer to have a drug suspension overturned.

"During the course of preparing for my successful appeal last year, my attorneys, who were previously familiar with Tony Bosch, used him as a consultant. More specifically, he answered questions about T/E ratio and possibilities of tampering with samples," Braun said.

The T/E ratio is a comparison of the levels of testosterone to epitestosterone.

Braun led the NL in homers (41), runs (108) and slugging percentage (.595) last season while batting .319 with 112 RBIs and 30 stolen bases. He finished second to San Francisco catcher Buster Posey in MVP balloting."

Cervelli, who spent nearly all of last season in Triple-A, posted a statement on Twitter later Tuesday night.

"Following my foot injury in March 2011, I consulted with a number of experts, including BioGenesis Clinic, for (cont)," Cervelli posted, "(cont)legal ways to aid my rehab and recovery. I purchased supplements that I am certain were not prohibited by Major League Baseball."

An email sent to Valencia's agent was not returned.

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Ipswich Journal: Paul Mason Is One-Third the Man He Used to Be

Paul Nixon Photography

Paul Mason in 2012, two years after gastric bypass surgery stripped him of the unofficial title of “the world’s fattest man.”

IPSWICH, England — Who knows what the worst moment was for Paul Mason — there were so many awful milestones, as he grew fatter and fatter — but a good bet might be when he became too vast to leave his room. To get him to the hospital for a hernia operation, the local fire department had to knock down a wall and extricate him with a forklift.

That was nearly a decade ago, when Mr. Mason weighed about 980 pounds, and the spectacle made him the object of fascinated horror, a freak-show exhibit. The British news media, which like a superlative, appointed him “the world’s fattest man.”

Now the narrative has shifted to one of redemption and second chances. Since a gastric bypass operation in 2010, Mr. Mason, 52 years old and 6 foot 4, has lost nearly two-thirds of his body weight, putting him at about 336 pounds — still obese, but within the realm of plausibility. He is talking about starting a jewelry business.

“My meals are a lot different now than they used to be,” Mr. Mason said during a recent interview in his one-story apartment in a cheerful public housing complex here. For one thing, he no longer eats around the clock. “Food is a necessity, but now I don’t let it control my life anymore,” he said.

But the road to a new life is uphill and paved with sharp objects. When he answered the door, Mr. Mason did not walk; he glided in an electric wheelchair.

And though Mr. Mason looks perfectly normal from the chest up, horrible vestiges of his past stick to him, literally, in the form of a huge mass of loose skin choking him like a straitjacket. Folds and folds of it encircle his torso and sit on his lap, like an unwanted package someone has set there; more folds encase his legs. All told, he reckons, the excess weighs more than 100 pounds.

As he waits to see if anyone will agree to perform the complex operation to remove the skin, Mr. Mason has plenty of time to ponder how he got to where he is. He was born in Ipswich and had a childhood marked by two things, he says: the verbal and physical abuse of his father, a military policeman turned security guard; and three years of sexual abuse, starting when he was 6, by a relative in her 20s who lived in the house and shared his bed. He told no one until decades later.

After he left school, Mr. Mason took a job as a postal worker and became engaged to a woman more than 20 years older than him. “I thought it would be for life, but she just turned around one day and said, ‘No, I don’t want to see you anymore — goodbye,’ ” he said.

His father died, and he returned home to care for his arthritic mother, who was in a wheelchair. “I still had all these things going around in my head from my childhood,” he said. “Food replaced the love I didn’t get from my parents.” When he left the Royal Mail in 1986, he said, he weighed 364 pounds.

Then things spun out of control. Mr. Mason tried to eat himself into oblivion. He spent every available penny of his and his mother’s social security checks on food. He stopped paying the mortgage. The bank repossessed their house, and the council found them a smaller place to live. All the while, he ate the way a locust eats — indiscriminately, voraciously, ingesting perhaps 20,000 calories a day. First he could no longer manage the stairs; then he could no longer get out of his room. He stayed in bed, on and off, for most of the last decade.

Social service workers did everything for him, including changing his incontinence pads. A network of local convenience stores and fast-food restaurants kept the food coming nonstop — burgers, french fries, fish and chips, even about $22 worth of chocolate bars a day.

“They didn’t deliver bags of crisps,” he said of potato chips. “They delivered cartons.”

His life became a cycle: eat, doze, eat, eat, eat. “You didn’t sleep a normal sleep,” he said. “You’d be awake most of the night eating and snacking. You totally forgot about everything else. You lose all your dignity, all your self-respect. It all goes, and all you focus on is getting your next fix.”

He added, “It was quite a lonely time, really.”

He frequently got infections and was transported to the hospital — first in a laundry van, then on the back of a truck and finally on the forklift. For 18 months after a hernia operation in 2003, he lived in the hospital and in an old people’s home — where he was not allowed to leave his room — while the local government found him a house that could accommodate all the special equipment he needed.

This article has been revised to reflect the following correction:

Correction: February 6, 2013

The headline on an earlier version of this article misstated Paul Mason’s current weight relative to what he weighed nearly a decade ago. He is now about one-third of the weight he was then, not two-thirds.

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DealBook: Liberty Global Reaches Deal for Virgin Media

8:07 p.m. | Updated

LONDON – Liberty Global, the international cable company owned by the American billionaire John C. Malone, agreed on Tuesday to buy the British cable company Virgin Media for about $16 billion.

The deal gives Liberty Global access to Europe’s largest cable market, and pits Mr. Malone against Rupert Murdoch, his longtime rival and biggest shareholder in Britain’s largest pay-TV provider British Sky Broadcasting.

Under the terms of the deal, Liberty Global said it had offered a package of cash and stock that it valued at $47.87 for each share in Virgin Media, a 24 percent premium over Virgin Media’s closing price on Monday.

The takeover ranks as one of the 10 largest cable deals of all time, according to figures from the data provider Thomson Reuters.

“Virgin Media will add significant scale and a first-class management team in Europe’s largest and most dynamic media and communications market,” Mike Fries, Liberty Global’s president and chief executive, said in a statement.

“After the deal, roughly 80 percent of Liberty Global’s revenue will come from just five attractive and strong countries — the U.K., Germany, Belgium, Switzerland and the Netherlands.”

News of the talks, confirmed earlier in the day in a statement by Virgin Media, came amid heightened merger and acquisition activity in the European television business. As European broadcasters suffer from stagnant or falling advertising revenue, American media conglomerates, looking to expand their international presence, are playing a significant role.

Mr. Malone and Mr. Murdoch have gone head-to-head before. From 2004 to 2006, they fought for control of DirecTV, the American satellite television provider.

The clash ended with Mr. Malone yielding a stake that he had built up in News Corporation. But the Liberty Group, which has operations in 13 countries, completed its purchase of a controlling stake in DirecTV from News Corporation in a cash-and-equity deal worth roughly $11 billion.

In recent years, Liberty Global has been expanding its presence in Europe and has operations from Ireland to Romania, though it failed last month in its bid to acquire the Telenet Group of Belgium for $2.7 billion. Liberty Global owns a 58 percent stake in Telenet.

Since early 2010, Liberty has bought two German rivals to build its operations in Europe’s largest economy.

In response, News Corporation has been expanding its global cable business, including the $2.1 billion acquisition of Consolidated Media, the Australian pay-television company, late last year.

Since the beginning of the financial crisis, Virgin Media, whose commercials feature the Olympic sprinting star Usain Bolt, has announced job cuts and invested in its broadband structure to reduce costs and increase its market share in Britain’s competitive cable market.

The company’s market capitalization stands at more than $10 billion. Including debt, its enterprise value is around $19.4 billion, according Thomson Reuters. Shares of Virgin Media, which are primarily traded on the Nasdaq, were up nearly 18 percent to $45.61 on the news of the Liberty talks.

Virgin’s shares have jumped almost 90 percent in the last 12 months, as more consumers sign up for so-called bundled services, including Internet and cellphone contracts. Virgin Media will announce its earnings on Wednesday.

Analysts warned that it would be difficult for Liberty Global to make additional savings between its current European operations and those of Virgin Media because Liberty does not have a business in Britain.

They said Liberty waited to make its move until Virgin made several upgrades to its network and restructured its debt. While Virgin has been gaining market share, it has 4.9 million customers, or roughly half the number of subscribers as its larger rival, BSkyB, according to filings by the companies.

The British billionaire Richard Branson, whose Virgin brand is used for a variety of products and services, including airlines and banks, owns less than 3 percent of Virgin Media.

News of the talks also came amid heightened merger and acquisition activity in the European television business. In December, Discovery Communications agreed to pay $1.7 billion for the Scandinavian operations of a large German commercial television company.

According to news reports this week, the majority owners of the German company are considering a sale. American media companies, including Time Warner, have been mentioned as potential buyers.

Analysts say the flurry of activity is driven by a desire among pay-television companies and broadcasters to diversify revenue sources that are coming under increased pressure. So broadcasters are setting up pay-television channels, and cable and satellite companies are looking to new content delivery platforms, like the Internet.

While commercial broadcasters remain powerful in Germany, Britain is the most lucrative pay-television market in Europe, according to Screen Digest, a research firm.

The deal for Virgin Media is expected to close during the second quarter of this year.

LionTree Advisors, Credit Suisse and the law firms Shearman & Sterling and Ropes & Gray advised Liberty Global, while Goldman Sachs, JPMorgan Chase and the law firms Fried Frank and Milbank advised Virgin Media.

Mark Scott reported from London, and Eric Pfanner from Paris.

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This post has been revised to reflect the following correction:

Correction: February 5, 2013

Because of an editing error, an earlier version of this article misstated the first name of the leader of News Corporation. He is Rupert Murdoch, not Richard.

A version of this article appeared in print on 02/06/2013, on page B6 of the NewYork edition with the headline: Liberty Global Reaches Deal for Virgin Media That May Inflame Old Rivalry.

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Bulgaria Implicates Hezbollah in Deadly Israeli Bus Blast

Reuters

Bulgaria's Burgas airport on July 18 after an explosion on a bus carrying Israeli tourists outside the airport.

SOFIA, Bulgaria — The Bulgarian government said on Tuesday that two of the people behind a deadly bombing attack that targeted an Israeli tour bus six months ago were believed to be members of the military wing of the Lebanese militant group Hezbollah.

The announcement could force the European Union to reconsider whether to designate the group as a terrorist organization and crack down on its extensive fund-raising operations across the continent. That could have wide-reaching repercussions for Europe’s uneasy détente with the group, which is an influential force in Middle East politics, considers Israel an enemy and has extensive links with Iran.

Bulgaria’s interior minister, Tsvetan Tsvetanov, said at a news conference that the investigation into the bombing in Burgas in July 2012 found that a man with an Australian passport and a man with a Canadian passport were two of the three conspirators involved in the attack, which claimed the lives of five Israeli tourists and a Bulgarian bus driver.

Bulgarian investigators had “a well-founded assumption that they belonged to the military formation of Hezbollah,” Mr. Tsvetanov said.

Bulgarian officials have found themselves under pressure from Israel and the United States, which consider Hezbollah a terrorist organization, to blame it for the bus attack. But the Bulgarians also have been facing pressure from European allies like Germany and France, which regard Hezbollah as a legitimate political organization, to temper any finding on the sensitive issue.

Mr. Tsvetanov spoke to reporters here after briefing top government officials and security personnel about the state of the investigation.

“We have followed their entire activities in Australia and Canada so we have information about financing and their membership in Hezbollah,” he said.

Mr. Tsvetanov did not mention Iran, however, Hezbollah’s ally and chief backer.

Analysts said the bombing was just one chapter in a shadow war pitting Israel against Iran and Hezbollah. Israel is believed to be behind the killings of Iranian nuclear scientists. Operatives of the Iranian Quds Force, an elite international operations unit within Iran’s Islamic Revolutionary Guards Corps, were believed to be behind a series of plots against Israeli targets in Thailand, India and Georgia. Israeli officials said the Burgas attack bore the hallmarks of a Hezbollah operation.

The European calculation all along has been that whatever its activities in the Middle East, Hezbollah does not pose a threat on the Continent. Thousands of Hezbollah members and supporters operate in Europe essentially unrestricted, raising money that is funneled back to the group in Lebanon.

Changing the designation to a terrorist entity raises the prospect of unsettling questions for Europe — how to deal with those supporters, for example — and the sort of confrontation governments have sought to avoid.

“There’s the overall fear if we’re too noisy about this, Hezbollah might strike again, and it might not be Israeli tourists this time,” said Sylke Tempel, editor in chief of the German foreign affairs magazine Internationale Politik.

The significance of their determination has put pressure on Bulgarian officials, who would like to maintain strong ties with Israel and the United States, and European allies like France and Germany. Bulgarian officials had maintained a studied silence for more than six months since the attack.

“If you factor in the suspicion that there are political implications beyond Bulgaria’s borders, it’s completely understandable that they’ve been playing for time,” said Dimitar Bechev, head of the Sofia office of the European Council on Foreign Relations.

Mr. Tsvetanov spoke after the meeting of the president’s council for national security, which includes the prime minister, top cabinet members and military and security personnel.

Bulgarian officials are acutely aware of the consequences of their findings even though larger European Union members did not exert blatant pressure on them regarding the Hezbollah question. “It was not a campaign,” said Philipp Missfelder, a leading member of Chancellor Angela Merkel’s Christian Democrats and the foreign policy spokesman for the party in Parliament. “Some German officials dropped a few words.”

But Mr. Missfelder said that attitudes toward Hezbollah were gradually shifting. “It’s clear that they are steered from Iran and they are destabilizing the region,” Mr. Missfelder said. “The group that thinks Hezbollah is a stabilizing factor is getting smaller.”

Hezbollah’s dual nature as what Western intelligence agencies call a terrorist organization and a political party with significant social projects, including schools and health clinics, make it more difficult to dismiss. Hezbollah is a significant political actor in Lebanon, and many European officials are particularly wary of upsetting the status quo as the civil war drags on in Syria.

Jodi Rudoren contributed reporting from Jerusalem.

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