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A ten-year-old theory turns out to have been correct-with afew important surprises.
Editor's Note: In writing last month's cover story 'A Decade to be Proud Of, " (ELT, September 1999, page 24) the author supplied far more material on a broad range of subjects than we could use in one article-a great problem to have. Much of it fell victim to the red pen, but the following piece was too interesting to go unpublished.
It's been around since the late 1980s, the "WhaleMinnow Theory," and it basically says the industry will be comprised of very large lessors and very small lessors. The mid-sized company will be squeezed out, the thinking goes. The actual sizes were never determined, but there will be little business for anyone in between the big guys and little guys.
As it does with most every trend in leasing, ELT gave the theory plenty of ink a decade ago, but we haven't heard much about it in subsequent years, despite the acceleration in merger and acquisition activity.
Looking Back
Robert Stubbs, then president and CEO of Bell Atlantic Capital Corporation, once said of the theory, "the big, strong companies-whales-seem to be getting bigger and stronger by gobbling up the smaller leasing and finance companies the minnows." But, he noted, companies "sometimes bite off more than they can chew. They may want to grow in an area where they shouldn't be growing, such as real estate or insurance."
Today Stubbs says, "Yes, and many of them backed off to various degrees. AT&T and the Baby Bells have all but exited the business. Greentree...