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12 Harv. Negot. L. Rev. 137 (2007)
The MasterCard IPO: Protecting the Priceless Brand

handle is hein.journals/haneg12 and id is 139 raw text is: The MasterCard IPO: Protecting the Priceless Brand Victor Fleischer INTRODUCTION This case study examines the legal infrastructure of the Master- Card IPO. I argue that the IPO design undertook two tasks related to the MasterCard brand: (1) managing regulatory costs (in particu- lar, reducing antitrust exposure) and (2) enhancing the company's image as a safe, secure brand that facilitates a middle-class consumer lifestyle. These tasks are unusual for an IPO, a transaction which is normally thought of as an exercise in managing transaction costs.' Here, the legal structure of the deal not only affected brand image in the usual sense (how consumers view the Priceless brand). It also affected brand image in the sense that it influences how regulators, judges, and juries, standing in the shoes of consumers, view the firm. There is a potential positive feedback effect: increased transparency and independence from the member banks reduces antitrust expo- sure, which in turn protects the image of the firm as consumer- friendly, which in turn reduces the likelihood of hostile action by an- titrust regulators. In this Article, I focus on two unusual structural elements: a reverse dual-class voting structure and the creation of a charitable foundation. T Associate Professor, University of Colorado School of Law. I thank Guhan Subramanian, Michael Simkovic, and Crystal Blum for their efforts in putting this conference together. I am also indebted to my students in my Fall 2005 Deals class at Georgetown University Law Center for their input on this case study. For helpful discussions and comments on the project, I thank Kenneth Basin, Colin Daniels, Mark Fenster, Laura Heymann, Michael Klausner, Scott Peppet, Miranda Perry, Steve Salop, Susan Scafidi, Gordon Smith, Ethan Stone, Guhan Subramanian, and Josh Wright. I also thank Steve Hurdle and Michael Ingrassia for their wonderful research assistance. On why this is a pi footnote instead of a star footnote, see Victor Fleischer, Brand New Deal: The Branding Effect of Corporate Deal Structures, 104 MICH. L. REV. 1581, 1602 (2006) (discussing the building numbers at Google's headquarters and nerd signaling more generally). See generally Charles A. Sullivan, The Under-Theorized Asterisk Footnote, 93 GEO. L.J. 1093 (2005). 1. Deal structures are generally driven by a desire to manage transaction costs. See generally Ronald J. Gilson, Value Creation by Business Lawyers: Legal Skills and Asset Pricing, 94 YALE L.J. 239 (1984). I explore the branding implications of deal structures in more detail in Fleischer, supra note TT.

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