Bloomberg Weighs Making a Run for Financial Times

Not long ago, The Financial Times would have been the crown jewel of any media company, instantly conferring prestige and influence on its owner. Now, given the likely bidders, one of the world’s most respected and distinctive financial newspapers could end up as a trophy to help sell more computer terminals.

Chris Ratcliffe/Bloomberg News, via Getty Images

Like most newspapers, The Financial Times is struggling with an industrywide decline in print advertising revenue.

Pearson, via Agence France-Presse — Getty Images

John Fallon, who is to succeed Marjorie Scardino as chief of Pearson in January, does not share her fondness for print.

Michael R. Bloomberg is weighing the wisdom of buying The Financial Times Group, which includes the paper and a half interest in The Economist, according to three people close to Mr. Bloomberg who spoke on the condition of anonymity to divulge private conversations.

Mr. Bloomberg has long adored The Economist, and his affinity for The Financial Times, at least as a reader, has deepened lately. Its bisque-colored pages, once rarely seen in the thick stack of newspapers Mr. Bloomberg carries under his arm all day, have become a mainstay. Friends say he favors its generally short, punchy and to-the-point articles, which match his temperament.

In October, Mr. Bloomberg visited the London headquarters of The Financial Times, a few blocks away from Bloomberg L.P.’s giant new London complex, which is still under construction. When an editor asked if he would buy the paper, Mr. Bloomberg replied, “I buy it every day.”

He has spoken openly with friends and aides about the potential benefits and pitfalls of making such a costly acquisition in an industry he admires deeply as a reader but sneers at as a businessman, these same people said. And he has recently taken to rattling off circulation figures and “penetration” rates for the paper.

“It’s the only paper I’d buy,” he has said to one associate. “Why should I buy it?” he has asked another.

His ambivalence speaks to the troubles facing the newspaper business, and to the complex motivations of the mayor himself. Drawn to power and prominence, Mr. Bloomberg is wrestling with his affection for the paper as its potential publisher and his wariness of an investment that could mar his company’s reputation for achieving outsize profits. Pearson, the parent company of The Financial Times Group, does not break out separate financial results for the paper, but analysts estimate that it loses money. A spokesman for the mayor declined to comment on his conversations about the paper.

For Thomson Reuters, the other likely bidder, the calculation is somewhat different. Unlike Mr. Bloomberg, who started his financial information company in 1982, James C. Smith, president and chief executive of Thomson Reuters, came up through Thomson’s regional newspapers and has ink in his veins. A replica of an old-fashioned printing press is on display in his corner office overlooking Times Square.

But the company has been hurt financially after its newest desktop terminal product struggled to catch on. In the first nine months of 2012, the company reported revenue of $9.88 billion, a 3 percent decrease from the period a year earlier. A company spokesman declined to comment.

The Financial Times could expand the Thomson Reuters brand and give its reporters additional exposure since, unlike Bloomberg, which bought Businessweek in 2009, the company does not own a regular magazine. Thomson Reuters, partly a British company, and The Financial Times also have large footprints in Asia.

But first, the paper needs to be put on the block. Pearson is about to lose two of its top executives, raising speculation the paper could be for sale. Analysts value The Financial Times Group at about $1.2 billion, well within the reach of Bloomberg L.P., which in 2011 had revenue of $7.6 billion, and Thomson Reuters, which posted revenue of $13.8 billion.

The paper has a successful digital strategy, and analysts have said that its strict online pay wall is considered a financial success. But like most newspapers, it is struggling in an industrywide decline in print advertising revenue. In the three months ending Oct. 1, the paper’s total paid circulation exceeded 600,000, more than half of which was from digital subscriptions. In its most recent earnings report, Pearson said it expected profit to decline because of a sluggish advertising market and “the shift from print to digital.”

Marjorie Scardino, Pearson’s longtime chief executive, who once said the paper would be sold “over my dead body,” is departing on Dec. 31. Rona Fairhead, chief executive of The Financial Times Group, will leave at the end of April. Both executives had championed the print businesses. A successor to Ms. Fairhead has yet to be named, though one person close to the company pointed to John Ridding, the chief executive of the paper.

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Changes to Agriculture Highlight Cuba’s Problems

HAVANA — Cuba’s liveliest experiment with capitalism unfolds every night in a dirt lot on the edge of the capital, where Truman-era trucks lugging fresh produce meet up with hundreds of buyers on creaking bicycle carts clutching wads of cash.

“This place, it feeds all of Havana,” said Misael Toledo, 37, who owns three small food stores in the city. “Before, you could only buy or sell in the markets of Fidel.”

The agriculture exchange, which sprang up last year after the Cuban government legalized a broader range of small businesses, is a vivid sign of both how much the country has changed, and of all the political and practical limitations that continue to hold it back.

President Raúl Castro has made agriculture priority No. 1 in his attempt to remake the country. He used his first major presidential address in 2007 to zero in on farming, describing weeds conquering fallow fields and the need to ensure that “anyone who wants can drink a glass of milk.”

No other industry has seen as much liberalization, with a steady rollout of incentives for farmers. And Mr. Castro has been explicit about his reasoning: increasing efficiency and food production to replace imports that cost Cuba hundreds of millions of dollars a year is a matter “of national security.”

Yet at this point, by most measures, the project has failed. Because of waste, poor management, policy constraints, transportation limits, theft and other problems, overall efficiency has dropped: many Cubans are actually seeing less food at private markets. That is the case despite an increase in the number of farmers and production gains for certain items. A recent study from the University of Havana showed that market prices jumped by nearly 20 percent in 2011 alone. And food imports increased to an estimated $1.7 billion last year, up from $1.4 billion in 2006.

“It’s the first instance of Cuba’s leader not being able to get done what he said he would,” said Jorge I. Domínguez, vice provost for international affairs at Harvard, who left Cuba as a boy. “The published statistical results are really very discouraging.”

A major cause: poor transportation, as trucks are in short supply, and the aging ones that exist often break down.

In 2009, hundreds of tons of tomatoes, part of a bumper crop that year, rotted because of a lack of transportation by the government agency charged with bringing food to processing centers.

“It’s worse when it rains,” said Javier González, 27, a farmer in Artemisa Province who described often seeing crops wilt and rot because they were not picked up.

Behind him were the 33 fertile, rent-free acres he had been granted as part of a program Mr. Castro introduced in 2008 to encourage rural residents to work the land. After clearing it himself and planting a variety of crops, Mr. Gonzalez said, he was doing relatively well and earned more last year than his father, who is a doctor, did.

But Cuba’s inefficiencies gnawed at him. Smart, strong, and ambitious, he had expansion plans in mind, even as in his hand he held a wrench. He was repairing a tractor part meant to be grading land. It was broken. Again.

The 1980s Soviet model tractor he bought from another farmer was as about good as it gets in Cuba. The Cuban government maintains a monopoly on selling anything new, and there simply is not enough of anything — fertilizer, or sometimes even machetes — to go around.

Government economists are aware of the problem. “If you give people land and no resources, it doesn’t matter what happens on the land,” said Joaquin Infante of the Havana-based Cuban National Association of Economists.

But Mr. Castro has refused to allow what many farmers and experts see as an obvious solution to the shortages of transportation and equipment: Let people import supplies on their own. “It’s about control,” said Philip Peters, a Cuba analyst with the Lexington Institute, a Virginia-based research group.

Other analysts agree, noting that though the agricultural reforms have gone farther than other changes — like those that allow for self-employment — they remain constrained by politics.

“The government is not ready to let go,” said Ted Henken, a Latin American studies professor at Baruch College. “They are sending the message that they want to let go, or are trying to let go, but what they have is still a mechanism of control.”

For many farmers, that explains why land leases last for 10 years with a chance to renew, not indefinitely or the 99 years offered to foreign developers. It is also why many farmers say they will not build homes on the land they lease, despite a concession this year to allow doing so.

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Marquez knocks out Pacquiao in 6th round

LAS VEGAS (AP) — No need for Juan Manuel Marquez to impress the judges. No need for the referee to count to 10.

Marquez took care of all of his business Saturday night with a thunderous right hand that left Manny Pacquiao face first on the canvas with his remarkable career in question.

Unable to win a decision in their first three fights, Marquez won the old-fashioned way with a huge right hand that put Pacquiao down for the second time in the fight at 2:59 of the sixth round.

Referee Kenny Bayless never bothered to count as Marquez leaped into his handlers' arms in celebration and Pacquiao's wife broke into tears at ringside.

"I threw a perfect punch," Marquez said. "I knew Manny could knock me out at any time."

It was a stunning end to a thrilling fight, the fourth one in the last eight years between the two men. It could also be the end of the Filipino's career, though he said in the ring afterward he would like to fight Marquez for a fifth time.

"If you give us a chance, we'll fight again," Pacquiao said. "I was just starting to feel confident and then I got careless."

Pacquiao had been down in the third round but knocked Marquez down in the fifth and the two were exchanging heavy blows in the sixth round before Marquez threw a right hand that flattened Pacquiao face down on the canvas.

"I thought I was getting him in the last couple of rounds but I got hit by a strong punch," Pacquiao said. "I never expected that punch."

Pacquiao was down for about two minutes before his handlers managed to get him up as Marquez celebrated and the sold-out crowd at the MGM erupted.

After being helped to his corner, Pacquiao sat on a stool, blew his nose and stared vacantly ahead as his handlers cut his gloves off. It was a stunning end to a furious fight, and Pacquiao was later taken to a hospital for precautionary examination.

"We always worked on that punch," Marquez said. "We knew he was going to come out aggressive so we had a fight plan that was more technical. We were able to capitalize on it."

Marquez had vowed to finally beat Pacquiao after losing two close fights and settling for a draw in the first fight. But after Pacquiao knocked him down in the fifth round and was landing big left hands, it looked like it would be Pacquiao's night.

The two came out for the sixth round and the pace was just as relentless. Both were landing big punches and both were brawling when suddenly as the round came to close Marquez shot out a right hand that landed flush to the jaw of Pacquiao, who crumpled to the canvas in a heap.

"I felt he was coming to knock me out the last three rounds and I knew he was going to be wide open," Marquez said.

It was the second loss in a row for Pacquiao, who dropped a decision to Timothy Bradley in June and who had vowed to regain his prominence in the ring.

Pacquiao was aggressive from the opening bell, but paid the price in the third round when he got caught by a Marquez right hand that put him down. Pacquiao got back up and seemingly took control of the fight, dropping Marquez in the fifth round and landing the bigger punches until he was dropped.

"I got hit by a punch I didn't see," Pacquiao said.

Pacquiao, who earned more than $20 million for the fight, was ahead 47-46 on all three scorecards after the fifth round.

There was no title at stake in the 147-pound fight, but that didn't stop 16,348 fans from filling the MGM Grand Arena and roaring in unison from the opening bell as the two fighters went after each other.

Ringside punching stats underscored the ferocity of the bout, showing Pacquiao landing 94 of 256 punches to 52 of 246 for Marquez. But it was the one big right hand from Marquez that counted more than anything, knocking Pacquiao out for the first time in a career that goes back 17 years.

"He was in charge," Pacquiao's trainer, Freddie Roach said. "He just got a little too careless and got hit with a punch he didn't see."

Promoter Bob Arum immediately said he could see a fifth fight between the two boxers, and a dazed Pacquiao seemed to agree.

"Why not?" he said.

Pacquiao weighed the class limit of 147 pounds, but it was Marquez who looked like the stronger fighter entering the ring after having bulked up with the help of a strength conditioner, though he weighed in at 143 pounds. In their earlier fights, Pacquiao had been the bigger puncher, knocking Marquez down a total of four times, but on this night it was Marquez who had the biggest punch.

The stunning knockout was the first real loss by Pacquiao in seven years. He lost a close decision to Bradley in his last fight, but most ringside observers believed he had won it fairly convincingly.

Marquez improved to 55-6-1 with 40 knockouts, while Pacquiao fell to 54-5-2.

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New Taxes to Take Effect to Fund Health Care Law

WASHINGTON — For more than a year, politicians have been fighting over whether to raise taxes on high-income people. They rarely mention that affluent Americans will soon be hit with new taxes adopted as part of the 2010 health care law.

The new levies, which take effect in January, include an increase in the payroll tax on wages and a tax on investment income, including interest, dividends and capital gains. The Obama administration proposed rules to enforce both last week.

Affluent people are much more likely than low-income people to have health insurance, and now they will, in effect, help pay for coverage for many lower-income families. Among the most affluent fifth of households, those affected will see tax increases averaging $6,000 next year, economists estimate.

To help finance Medicare, employees and employers each now pay a hospital insurance tax equal to 1.45 percent on all wages. Starting in January, the health care law will require workers to pay an additional tax equal to 0.9 percent of any wages over $200,000 for single taxpayers and $250,000 for married couples filing jointly.

The new taxes on wages and investment income are expected to raise $318 billion over 10 years, or about half of all the new revenue collected under the health care law.

Ruth M. Wimer, a tax lawyer at McDermott Will & Emery, said the taxes came with “a shockingly inequitable marriage penalty.” If a single man and a single woman each earn $200,000, she said, neither would owe any additional Medicare payroll tax. But, she said, if they are married, they would owe $1,350. The extra tax is 0.9 percent of their earnings over the $250,000 threshold.

Since the creation of Social Security in the 1930s, payroll taxes have been levied on the wages of each worker as an individual. The new Medicare payroll is different. It will be imposed on the combined earnings of a married couple.

Employers are required to withhold Social Security and Medicare payroll taxes from wages paid to employees. But employers do not necessarily know how much a worker’s spouse earns and may not withhold enough to cover a couple’s Medicare tax liability. Indeed, the new rules say employers may disregard a spouse’s earnings in calculating how much to withhold.

Workers may thus owe more than the amounts withheld by their employers and may have to make up the difference when they file tax returns in April 2014. If they expect to owe additional tax, the government says, they should make estimated tax payments, starting in April 2013, or ask their employers to increase the amount withheld from each paycheck.

In the Affordable Care Act, the new tax on investment income is called an “unearned income Medicare contribution.” However, the law does not provide for the money to be deposited in a specific trust fund. It is added to the government’s general tax revenues and can be used for education, law enforcement, farm subsidies or other purposes.

Donald B. Marron Jr., the director of the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, said the burden of this tax would be borne by the most affluent taxpayers, with about 85 percent of the revenue coming from 1 percent of taxpayers. By contrast, the biggest potential beneficiaries of the law include people with modest incomes who will receive Medicaid coverage or federal subsidies to buy private insurance.

Wealthy people and their tax advisers are already looking for ways to minimize the impact of the investment tax — for example, by selling stocks and bonds this year to avoid the higher tax rates in 2013.

The new 3.8 percent tax applies to the net investment income of certain high-income taxpayers, those with modified adjusted gross incomes above $200,000 for single taxpayers and $250,000 for couples filing jointly.

David J. Kautter, the director of the Kogod Tax Center at American University, offered this example. In 2013, John earns $160,000, and his wife, Jane, earns $200,000. They have some investments, earn $5,000 in dividends and sell some long-held stock for a gain of $40,000, so their investment income is $45,000. They owe 3.8 percent of that amount, or $1,710, in the new investment tax. And they owe $990 in additional payroll tax.

The new tax on unearned income would come on top of other tax increases that might occur automatically next year if President Obama and Congress cannot reach an agreement in talks on the federal deficit and debt. If Congress does nothing, the tax rate on long-term capital gains, now 15 percent, will rise to 20 percent in January. Dividends will be treated as ordinary income and taxed at a maximum rate of 39.6 percent, up from the current 15 percent rate for most dividends.

Under another provision of the health care law, consumers may find it more difficult to obtain a tax break for medical expenses.

Taxpayers now can take an itemized deduction for unreimbursed medical expenses, to the extent that they exceed 7.5 percent of adjusted gross income. The health care law will increase the threshold for most taxpayers to 10 percent next year. The increase is delayed to 2017 for people 65 and older.

In addition, workers face a new $2,500 limit on the amount they can contribute to flexible spending accounts used to pay medical expenses. Such accounts can benefit workers by allowing them to pay out-of-pocket expenses with pretax money.

Taken together, this provision and the change in the medical expense deduction are expected to raise more than $40 billion of revenue over 10 years.

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Changes to Agriculture Highlight Cuba’s Problems

HAVANA — Cuba’s liveliest experiment with capitalism unfolds every night in a dirt lot on the edge of the capital, where Truman-era trucks lugging fresh produce meet up with hundreds of buyers on creaking bicycle carts clutching wads of cash.

“This place, it feeds all of Havana,” said Misael Toledo, 37, who owns three small food stores in the city. “Before, you could only buy or sell in the markets of Fidel.”

The agriculture exchange, which sprang up last year after the Cuban government legalized a broader range of small businesses, is a vivid sign of both how much the country has changed, and of all the political and practical limitations that continue to hold it back.

President Raúl Castro has made agriculture priority No. 1 in his attempt to remake the country. He used his first major presidential address in 2007 to zero in on farming, describing weeds conquering fallow fields and the need to ensure that “anyone who wants can drink a glass of milk.”

No other industry has seen as much liberalization, with a steady rollout of incentives for farmers. And Mr. Castro has been explicit about his reasoning: increasing efficiency and food production to replace imports that cost Cuba hundreds of millions of dollars a year is a matter “of national security.”

Yet at this point, by most measures, the project has failed. Because of waste, poor management, policy constraints, transportation limits, theft and other problems, overall efficiency has dropped: many Cubans are actually seeing less food at private markets. That is the case despite an increase in the number of farmers and production gains for certain items. A recent study from the University of Havana showed that market prices jumped by nearly 20 percent in 2011 alone. And food imports increased to an estimated $1.7 billion last year, up from $1.4 billion in 2006.

“It’s the first instance of Cuba’s leader not being able to get done what he said he would,” said Jorge I. Domínguez, vice provost for international affairs at Harvard, who left Cuba as a boy. “The published statistical results are really very discouraging.”

A major cause: poor transportation, as trucks are in short supply, and the aging ones that exist often break down.

In 2009, hundreds of tons of tomatoes, part of a bumper crop that year, rotted because of a lack of transportation by the government agency charged with bringing food to processing centers.

“It’s worse when it rains,” said Javier González, 27, a farmer in Artemisa Province who described often seeing crops wilt and rot because they were not picked up.

Behind him were the 33 fertile, rent-free acres he had been granted as part of a program Mr. Castro introduced in 2008 to encourage rural residents to work the land. After clearing it himself and planting a variety of crops, Mr. Gonzalez said, he was doing relatively well and earned more last year than his father, who is a doctor, did.

But Cuba’s inefficiencies gnawed at him. Smart, strong, and ambitious, he had expansion plans in mind, even as in his hand he held a wrench. He was repairing a tractor part meant to be grading land. It was broken. Again.

The 1980s Soviet model tractor he bought from another farmer was as about good as it gets in Cuba. The Cuban government maintains a monopoly on selling anything new, and there simply is not enough of anything — fertilizer, or sometimes even machetes — to go around.

Government economists are aware of the problem. “If you give people land and no resources, it doesn’t matter what happens on the land,” said Joaquin Infante of the Havana-based Cuban National Association of Economists.

But Mr. Castro has refused to allow what many farmers and experts see as an obvious solution to the shortages of transportation and equipment: Let people import supplies on their own. “It’s about control,” said Philip Peters, a Cuba analyst with the Lexington Institute, a Virginia-based research group.

Other analysts agree, noting that though the agricultural reforms have gone farther than other changes — like those that allow for self-employment — they remain constrained by politics.

“The government is not ready to let go,” said Ted Henken, a Latin American studies professor at Baruch College. “They are sending the message that they want to let go, or are trying to let go, but what they have is still a mechanism of control.”

For many farmers, that explains why land leases last for 10 years with a chance to renew, not indefinitely or the 99 years offered to foreign developers. It is also why many farmers say they will not build homes on the land they lease, despite a concession this year to allow doing so.

Read More..

President Mohamed Morsi of Egypt Said to Prepare Martial Law Decree

Tara Todras-Whitehill for The New York Times

Egyptian protesters stood next to a destroyed barricade near the presidential palace in Cairo on Saturday. More Photos »

CAIRO — Struggling to subdue continuing street protests, the government of President Mohamed Morsi has approved legislation reimposing martial law by calling on the armed forces to keep order and authorizing soldiers to arrest civilians, Egypt’s state media reported on Saturday.

Tara Todras-Whitehill for The New York Times

Supporters of the Muslim Brotherhood carried the bodies of three people killed during clashes on Wednesday at their funeral in Cairo on Friday. More Photos »

Mr. Morsi has not yet issued the order, the flagship state newspaper Al Ahram reported. But even if merely a threat, the preparation of the measure suggested an escalation in the political battle between Egypt’s new Islamist leaders and their secular opponents over an Islamist-backed draft constitution. The standoff has already threatened to derail the culmination of Egypt’s promised transition to a constitutional democracy nearly two years after the revolt against the former leader Hosni Mubarak.

“President Morsi will soon issue a decision for the participation of the armed forces in the duties of maintaining security and protection of vital state institutions until the constitution is approved and legislative elections are finished,” Al Ahram reported, suggesting that martial law would last until at least February. Parliamentary elections are expected to be held two months after the constitutional referendum, which is scheduled for next Saturday.

A short time later, a military spokesman read a statement over state television echoing the report of the president’s order and calling for a dialogue to resolve the crisis. The military “realizes its national responsibility for maintaining the supreme interests of the nation and securing and protecting the vital targets, public institutions, and the interests of the innocent citizens,” the spokesman said.

Expressing “sorrow and concern” over recent developments, the military spokesman warned of “divisions that threaten the state of Egypt.”

“Dialogue is the best and sole way to reach consensus that achieves the interests of the nation and the citizens,” the spokesman said. “Anything other than that puts us in a dark tunnel with drastic consequences, which is something that we will not allow.”

Al Ahram reported that the defense minister would determine the scope of the military’s role. Military officers would be authorized to act as police and “to use force to the extent necessary to perform their duty,” the newspaper said.

A need to rely on the military to secure a referendum to approve the new charter could undermine Mr. Morsi’s efforts to present the documents as an expression of national consensus that might resolve the crisis.

Even the possibility presents an extraordinary role reversal: an elected president who spent decades opposing Mr. Mubarak’s use of martial law to detain Islamists — a former leader of the Muslim Brotherhood who himself spent months in jail under the “emergency law” — is poised to resort to similar tactics to control unrest and violence from secular groups. After six decades during which military-backed secular autocrats used the threat of an Islamist takeover to justify authoritarian rule, the order would bring the military into the streets to protect an elected Islamist, dashing the whispered hopes of some more secular Egyptians that the military might step in to remove Mr. Morsi.

The move would also reflect an equally extraordinary breakdown in Egyptian civic life that in the last two weeks has destroyed most of the remaining trust between the rival Islamist and secular factions, beginning with Mr. Morsi’s decree on Nov. 22 granting himself powers above any judicial review until the ratification of a new constitution.

At the time, Mr. Morsi said he needed such unchecked power to protect against the threat that Mubarak-appointed judges might dissolve the constitutional assembly. He also tried to give the assembly a two-month extension on its year-end deadline to forge consensus between the Islamist majority and the secular faction — something liberals have sought. But his claim to such power for even a limited period struck those suspicious of the Islamists as a return to autocracy, and his authoritarian decree triggered an immediate backlash.

Hundreds of thousands of protesters accusing Mr. Morsi and his Islamist allies of monopolizing power have poured into the streets. Demonstrators have attacked more than two dozen Brotherhood offices around the country, including its headquarters. And judges declared a national strike.

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Te'o and Manziel hit Manhattan with Heisman hopes

NEW YORK (AP) — Notre Dame linebacker Manti Te'o was looking forward to a break after a five-city-in-five-days tour, during which he has become the most decorated player in college football.

"I'm just trying to get a workout in and get some sleep," he said Friday about his plans for the night.

Texas A&M quarterback Johnny Manziel seemed to have more energy when he arrived at a midtown Manhattan hotel with his fellow Heisman Trophy finalist. In fairness, Johnny Football's week hasn't been nearly as hectic, though this trip to New York city is different from the first time he visited with his family when he was young.

"It's just taking it up a whole 'nother level, but happy to be here," he said.

Manziel and Te'o spent about 30 minutes getting grilled by dozens of reporters in a cramped conference room, posed for some pictures with the big bronze statue that they are hoping to win and were quickly whisked away for more interviews and photo opportunities.

Manziel, Te'o or Collin Klein, the other finalists who couldn't make it to town Friday, each has a chance to be a Heisman first Saturday night.

Manziel is trying to be the first freshman to win the award. Te'o would be the first winner to play only defense. Klein would be Kansas State's first Heisman winner.

Manziel and Te'o were on the same flight from Orlando, Fla., where several college football awards were handed out last night. The 6-foot-1, 200-pound quarterback was just happy the 255-pound linebacker didn't try to record another sack when they met.

"He's a big guy," Manziel said, flashing a big smile from under his white Texas A&M baseball cap. "I thought he might stuff me in locker and beat me up a little bit."

The two hadn't had much time for sightseeing yet, but they did walk around Times Square some, saying hello to a few fans. They probably weren't too difficult to spot in their team issued warm-up gear.

"We've just been talking about goofy stuff. Playing video games. Playing Galaga. Just some things from back in the day. Messing around with each other," Manziel said. "Kind of seeing who is going to take more pictures. He's definitely taking that award right now."

Te'o is already going to need a huge trophy case to house his haul from this week. He has won six major awards, including the Maxwell as national player of the year. He'll try to become Notre Dame's eighth Heisman winner and first since Tim Brown in 1987.

"I can only imagine how I would feel if I win the Heisman," he said.

Charles Woodson of Michigan in 1997 is the closest thing to a true defensive player winning the Heisman. Woodson was a dominant cornerback, but he also returned punts and played a little receiver. That helped burnish his Heisman credentials.

Te'o is all linebacker. He leads the top-ranked Fighting Irish with 103 tackles and seven interceptions.

Klein was the front-runner for the Heisman for a good chunk of the season, but he played his worst game late in the season — in a loss at Baylor — and the momentum Manziel gained by leading Texas A&M to victory at Alabama has been tough to stop.

Manziel's numbers are hard to deny. He set a Southeastern Conference record with 4,600 total yards, throwing for more than 3,000 and rushing for more than 1,000.

Klein, by comparison, averages about 100 fewer total yards per game (383-281) than Manziel.

A freshman has never won the Heisman. Oklahoma running back Adrian Peterson came closest in 2004, finishing second by Southern California's Matt Leinart.

Manziel is a redshirt freshman, meaning he attended Texas A&M and practiced with the team but did not play last year. Still, he'd be the most inexperienced college player to win the sport's most prestigious award.

"It's surreal for me to sit here and think about that this early in my career," he said. "With what me and my teammates have gone through, with how they've played and how they've helped me to get to this point, it's just a testament to how good they are and how good they've been this year.

"Without them I wouldn't be here and that's the real story to all this."

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Cairo Protesters Take to Streets as Political Crisis Deepens

CAIRO — Supporters and opponents of the government of President Mohamed Morsi staged competing demonstrations on Friday after noon prayers, throwing Egypt deeper into political crisis.

Thousands of pro-government Islamists attended the funeral of two men killed in clashes on Wednesday outside the presidential palace, the site of continuing demonstrations by the opposition. “With blood and soul, we redeem Islam,” they chanted, while calling opposition leaders “murderers” the Associated Press reported.

Simultaneously, thousands of opposition protesters streamed in separate marches toward the presidential palace, gathering there to shout “Leave!, Leave,” even though Mr. Morsi does not make his residence in the building. Speakers accused the Muslim Brotherhood, which Mr. Morsi once helped lead, of sparking the violence by sending “hired thugs” to destroy a tent camp set up by the president’s opponents, the news agency reported.

Rival protests were reported throughout the country, including in Alexandria in the Nile delta, the tourist center of Luxor and Assiut, in the south, where marchers chanted “No Brotherhood, no Salafis, Egypt is a civic state,” the A.P. said.

News reports quoted several leaders of the opposition coalition as saying they would not join the dialogue proposed by Mr. Morsi in a speech on Thursday in which he blamed the outbreak of violence on a “fifth column.” He also vowed to proceed with a referendum on an Islamist-backed constitution that has prompted deadly street battles between his supporters and their opponents.

Mr. Morsi spoke a day after the growing antagonism between his supporters and the secular opposition triggered the worst outbreak of violence between political factions here since Gamal Abdel Nasser’s coup six decades ago. By the time the fighting ended, six people were dead and hundreds were wounded.

The violence also led to resignations that rocked the government, as advisers, party members and the head of the commission overseeing the planned vote on a new constitution stepped down, citing the bloodshed.

“The National Salvation Front is not taking part in the dialogue, that is the official stance,” Ahmed Said, a member of the coalition and head of the liberal Free Egyptians Party, told Reuters.

Several other prominent opposition figures, including Mohamed ElBaradei, the former head of the International Atomic Energy Agency, said they would not participate.

In a message on Twitter, Mr. ElBaradei said the president’s offer “lacks the basics of real dialogue.”

“We are for dialogue that is not based on arm-twisting and imposing a fait accompli,” he said.

The sight of protesters on Cairo’s streets has been common since the beginnings of Egypt’s transition toward democracy that began with the ouster of former President Hosni Mubarak last year.

In the latest protests, the target of the demonstrations has been the presidential palace in the wealthy suburb of Heliopolis, where protesters converged on Friday.

Since clashes there earlier this week, the elite presidential guard has ringed the palace with barbed wire, tanks and armored vehicles. After Mr. Morsi’s speech on Thursday, his opponents mocked his words and called for new demonstrations on Friday.

Some observers said the president speech echoed his predecessor, Mr. Mubarak, who always saw “hidden hands” behind public unrest. Mr. Morsi said that corrupt beneficiaries of Mr. Mubarak’s autocracy had been “hiring thugs and giving out firearms, and the time has come for them to be punished and penalized by the law.” He added, “It is my duty to defend the homeland.”

Mr. Morsi received a phone call on Thursday from President Obama, who expressed his “deep concern” about the deaths and injuries, the White House said in a statement.

“The president emphasized that all political leaders in Egypt should make clear to their supporters that violence is unacceptable,” the statement said, chastising Mr. Morsi and the opposition leaders as failing to urge their supporters to pull back during the fight.

Prospects for a political solution also seemed a casualty, as both sides effectively refused to back down on core demands.

David D. Kirkpatrick reported from Cairo, and Alan Cowell from London. Two employees of The New York Times contributed reporting from Cairo.

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Vols hire Cincinnati's Jones as new football coach

KNOXVILLE, Tenn. (AP) — Butch Jones wasn't Tennessee's first choice as its next football coach. The Volunteers believe the former Cincinnati coach will prove he's the right choice.

Tennessee announced Friday morning that Jones had agreed to become its fourth coach in six seasons, ending a tumultuous couple of days for both parties. Tennessee has scheduled a Friday afternoon news conference to announce the hiring, which was first reported by VolQuest.com.

"It is truly an honor and a privilege to be a part of the Vol Nation!" Jones, 44, tweeted Friday morning.

Jones has a 50-27 record in six seasons as a head coach. He went 27-13 in three seasons at Central Michigan and was 23-14 at Cincinnati the last three years. He now faces the task of rebuilding a former Southeastern Conference power that has posted three consecutive losing seasons.

Tennessee went after at least two other candidates before hiring Jones.

During the 19-day search to replace Derek Dooley, who was fired Nov. 18 after going 15-21 in his three-year tenure, the Volunteers contacted ESPN analyst and former Super Bowl-winning coach Jon Gruden, who indicated he wasn't interested. The Vols then pursued Charlie Strong, who said Thursday he had turned down their offer and would stay at Louisville.

Jones, meanwhile, was apparently waiting for a job like Tennessee.

On the same day Strong made his announcement, Jones rejected an offer to take over Colorado's program. He also had been linked to the Purdue coaching job before withdrawing his name from consideration.

Jones' hiring means each of the four Southeastern Conference teams that fired coaches this year have filled their vacancies.

Kentucky hired Florida State defensive coordinator Mark Stoops last week to replace Joker Phillips. Arkansas hired Bret Bielema away from Wisconsin on Tuesday to take over for John L. Smith. Auburn selected Arkansas State's Gus Malzahn on Tuesday as the replacement for Gene Chizik.

Jones becomes Tennessee's fourth coach in a six-season stretch, not including offensive coordinator Jim Chaney's stint as interim head coach in the 2012 season finale after Dooley's dismissal. Phillip Fulmer was fired in 2008 after posting a 152-52 record. Lane Kiffin coached Tennessee in 2009 before leaving for Southern California. Dooley lasted three years.

After winning at least eight games for 16 consecutive seasons from 1989-2004 and posting double-digit wins in nine of those years, Tennessee hasn't earned more than seven victories in any of its last five seasons. The Vols went 5-7 this fall for their fifth losing season over the last eight years. This also marks the first time since 1909-11 that Tennessee has finished below .500 three years in a row.

Tennessee athletic director Dave Hart said at the start of the search that head coaching experience was "critically important" and that he wanted a coach who "knows the difficulty of climbing the ladder in the SEC." Jones lacks SEC experience, but he has a career winning percentage of .649. Jones' teams have earned at least a share of a conference title in four of his six seasons as a head coach.

After replacing Notre Dame coach Brian Kelly at Central Michigan and then again at Cincinnati, Jones maintained the momentum his predecessor had established at each school.

In Jones' three-year stint at Central Michigan, the Chippewas won two Mid-American Conference championships and posted a combined league record of 22-3. Jones went 4-8 in his first year at Cincinnati, but the Bearcats are 19-6 since and have tied for first place in the Big East each of the last two seasons. Cincinnati's 2011 season included a 45-23 loss at Tennessee.

Jones signed a contract extension after the 2011 season that includes a $1.4 million buyout if he left before Jan. 1. Cincinnati has named defensive line coach Steve Stripling its interim head coach for the Dec. 27 Belk Bowl against Duke in Charlotte, N.C., while it begins searching for Jones' permanent successor.

"There is no timetable to make the hire," Cincinnati athletic director Whit Babcock said Friday. "Making the right hire is better than the quickest hire, but admittedly sooner is better if possible."

Jones' background as an assistant is entirely on offense, but one of his biggest challenges at Tennessee initially will be strengthening a defense that allowed the most points (35.7) and yards (471.4) per game of any SEC team this season. The Vols hadn't allowed that high a scoring average since 1893, when they gave up 42.7 points per game while playing a six-game schedule. They hadn't yielded that many yards per game since at least 1950, the earliest year Tennessee's sports information department has that statistic on file.

The makeup of Jones' first offense at Tennessee also remains uncertain, at least for now.

Starting quarterback Tyler Bray and star wide receivers Cordarrelle Patterson and Justin Hunter all are projected as first- or second-round draft picks if they choose to turn pro rather than returning to school for their senior seasons. Bray threw for 3,612 yards and 34 touchdowns this year to rank second on Tennessee's single-season list in both categories, behind Peyton Manning's 3,819 yards and 36 touchdown passes in 1997. Hunter caught 73 passes for 1,083 yards and nine touchdowns. Patterson gained a school-record 1,858 all-purpose yards.

Junior offensive tackle Ja'Wuan James also has been mentioned as a possible draft candidate.

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AP Sports Writers Joe Kay in Cincinnati, Larry Lage in Ann Arbor, Mich., and Teresa Walker in Nashville, Tenn., contributed to this report.

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Resignations Continue in Egypt as Tanks Deploy Around Presidential Palace

Tara Todras-Whitehill for The New York Times

Egyptian soldiers put up barbed-wire fences near the presidential palace on Thursday in Cairo. More Photos »

CAIRO — Resignations rocked the government of President Mohamed Morsi on Thursday as tanks from the special presidential guard took up positions around his palace and the state television headquarters after a night of street fighting between his Islamist supporters and their secular opponents that left at least 6 dead and 450 wounded.

The director of state broadcasting resigned Thursday, as did Rafik Habib, a Christian who was the vice president of the Muslim Brotherhood’s Freedom and Justice Party and the party’s favorite example of its commitment to tolerance and pluralism. Their departures followed an announcement by Zaghoul el-Balshi, the new general secretary of the commission overseeing a planned constitutional referendum, that he was quitting. “I will not participate in a referendum that spilled Egyptian blood,” he said in a television interview during the clashes late Wednesday night.

With the resignations on Thursday, nine Morsi administration officials have quit in protest in recent days. In a day of tension and uncertainty unlike any other since the revolt that overthrew Hosni Mubarak nearly two years ago, state media reported that Mr. Morsi, of the Muslim Brotherhood’s political arm, was meeting with his top advisers and would deliver a public address in response to the clashes. The top scholar of Al Azhar, the center of Sunni Muslim learning that is considered Egypt’s chief moral authority, urged both sides to pull back from violence and seek “rational dialogue.”

The scale of the violence around the palace has raised the first doubts about Mr. Morsi’s effort to hold a public referendum on Dec. 15 to vote on a draft constitution approved by his Islamist allies over the objections of his secular opposition and the Coptic Christian Church.

About 1 p.m. Thursday, hundreds of his supporters who had camped outside his palace to defend it — many waking up with bandaged heads from wounds sustained from volleys of rocks and the blows of makeshift clubs the previous night — abruptly began to pull out of their encampment in unison, a development that suggested that their organizers in the Muslim Brotherhood had ordered a withdrawal. It took place just moments after several Brotherhood members camped there had vowed to stay put until the referendum, set for Dec. 15.

The Egyptian military, which seized power from Mr. Mubarak in February 2011, saying it was stepping in to protect the legitimate demands of the public, stayed silent after a statement Wednesday that it would not intervene in a dispute between political factions. The presidential guard that deployed Thursday is a separate unit that reports directly to the president.

Wednesday night’s battle was the worst clash between political factions here since the days of President Gamal Abdel Nasser’s military coup six decades ago, and Egyptians across the political spectrum responded with shock and dismay.

Abdel Moneim Aboul Fotouh, a popular former leader of the Muslim Brotherhood who ran for president as a liberal Islamist and has stayed on the sidelines of the escalating conflict between Mr. Morsi and his secular opponents, slammed the president and the Brotherhood for calling on their civilian supporters to defend the palace with force rather than relying the institutions of law enforcement.

“The palace is not a private property to the Muslim Brotherhood or Dr. Morsi; it belongs to us, all Egyptians,” Mr. Aboul Fotouh said in a televised news conference. He was flanked by a Morsi adviser who had just resigned and by a well-known revolutionary poet who is the son of Sheik Yusuf al-Qaradawi, perhaps the most influential religious scholar in the Sunni Muslim world and a spiritual guru to the Muslim Brotherhood.

Wednesday night’s clashes followed two weeks of sporadic violence around the country that erupted after Mr. Morsi, a former leader of the Muslim Brotherhood movement, seized temporary powers beyond the review of any court, removing the last check on his authority until ratification of the new constitution.

Mr. Morsi has said he needed the expanded powers to block a conspiracy by corrupt businessmen, Mubarak-appointed judges and opposition leaders to thwart Egypt’s transition to a constitutional democracy. Some opponents, Mr. Morsi’s advisers say, would sacrifice democracy to stop the Islamists from winning elections.

Mr. Morsi’s secular critics have accused Mr. Morsi and the Islamists of seeking to establish a new dictatorship, in part by ramming through a rushed constitution that they say could ultimately give new power over society to Muslim scholars and Islamists groups. And each side’s actions have confirmed the other’s fears.

Mai Ayyad contributed reporting.

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