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From Mar­ket­watch:

The four advis­ers, Gold­man Sachs, Lehman Broth­ers, Mor­gan Stan­ley and Black­stone, stand to make as much as $1.3 bil­lion between them, ana­lysts and experts said.

Even if the dynam­ics lead­ing to these rip-offs are well under­stood (financ­ing need, lit­i­ga­tion pro­tec­tion for the boards, etc.), this just rein­forces Umair’s point. But con­sider the irony here:

• Black­stone itself, before the credit crunch kicked in was hir­ing other iBanks to pro­vide advi­sory services
• Being itself in the busi­ness of pro­vid­ing such ser­vices prob­a­bly explains why it paid them as a way to get the financ­ing from the same banks
• MSFT and YHOO prob­a­bly have by far the best under­stand­ing of their respec­tive busi­nesses and valuation

Advi­sory fees is an eco­nomic rent charged by well estab­lished middle-men, rein­forced by ade­quate legislation.

Source: Microsoft, Yahoo bankers eye $1 bil­lion pay­day – Feb­ru­ary 7th 2008