Technophoria: The Enduring Promise of a Thinner You

Just in time for bikini season, the syndicated "Rachael Ray Show" featured a new beauty machine with a girly-sounding name: the LiLa Strawberry Laser.

Advertised for quick slimming, the device involves low-level laser diode panels that are belted around a person's waist for a series of 10-minute sessions.

"This thing right over here," Ms. Ray said on a segment last month, pointing to a white console and treatment belt, "well, it claims that it can reduce your waistline by inches in just one 20-minute treatment."

"Whoooaaa!" the audience responded.

Ms. Ray introduced Candace, a young woman in a black sports bra and shorts, who was apparently unhappy with a slight convexity to her abdomen. Candace had just had her photo and measurements taken by Dr. David E. Halpern, a plastic surgeon from Tampa, Fla., who offers the device in his practice. Now he gave her the Strawberry treatment for 20 minutes.

"How many inches total has she lost?" Ms. Ray asked afterward.

"Eight inches off her circumference in the four areas measured," Dr. Halpern reported — including, he added, about two inches off her lower abdomen. (He is a scientific adviser to LiLa Enterprise, a company in Suwanee, Ga., that distributes the device.)

On screen, a "before" profile photo of Candace with a slightly protruding abdomen appeared, next to a live video shot of her, taken from farther away, where she appeared more svelte. The audience clapped excitedly. "This is really remarkable," Ms. Ray enthused.

Body-conscious consumers often jump on the latest technology that promises easy slimming, only to discard it for the next thinning gimmick. Inventions advertised as new technology to whittle waistlines have been around for decades. Vibrating belts were introduced in the 1920s, and massage rolling machines in the '40s.

Today, the audience for superficial fat-zapping is largely composed of people hoping to transform themselves without the medical risks and recovery time entailed by invasive surgeries like tummy tucks and liposuction. The aesthetic medical industry has its own name for the category: "noninvasive body contouring."

Devices in this category typically hit the skin with cold or thermal energy, in an effort to disrupt and diminish underlying fat cells. The machines can cost from $60,000 to about $110,000 — and that doesn't include recurring use fees that some companies charge doctors for replacement treatment heads. Capital expenditures on the machines in the United States are expected to top $200 million by 2019, compared with around $73 million this year, according to projections from the Decision Resources Group, a health care analytics company. A session can cost consumers from $200 to several thousand dollars, depending on the type of device and the extent of the area to be treated.

"Physicians know there are patients who are willing to spend more money on noninvasive procedures than they would on an invasive procedure like liposuction," April Lee, an aesthetics industry analyst at Decision Resources, told me. "As long as there is new technology, there will be people willing to try it."

Oddly, the treatments aren't aimed at the seriously overweight. Experts told me the ideal candidates are those who are already reasonably fit, exercise regularly, eat sensibly and just want to address an unwanted nubble here or there.

"If you are trying to lose 10 to 15 pounds, this is not for you," says Dr. Mathew M. Avram, a dermatologist at Massachusetts General Hospital. "This is just sculpting areas to improve the appearance."

The Food and Drug Administration vets the machines, but that doesn't guarantee their effectiveness. For those manufacturers able to prove that their gizmos are comparable to devices that have already received federal clearance, the agency does not typically require rigorous, long-term scientific proof of benefit.

In fact, some methods for corroborating machines' fat-busting claims in marketing — like before-and-after photos, or tape measures — can be quite unreliable. A person inhaling and sucking in her abdomen could have a waistline that is several inches smaller than when she is exhaling.

The F.D.A. has cleared the Strawberry Laser to reduce the waistline temporarily by hitting fat cells under the skin with low-level laser energy, causing cells to release their lipids. Consumers typically have eight sessions per treated region and are encouraged to exercise afterward to further the process.

Some medical experts are skeptical. Dr. Mark L. Jewell, a plastic surgeon in Eugene, Ore., who is a past president of the American Society for Aesthetic Plastic Surgery, contends that low-level laser devices are unlikely to result in significant changes since they emit about as much energy as a hand-held laser pointer.

"This defies reasonable thinking that in 20 minutes you could lose eight inches," Dr. Jewell said of the "Rachael Ray" segment. (Dr. Jewell has conducted research for a different kind of device, Liposonix, which uses high-intensity focused ultrasound energy and for which more modest waistline-reduction claims are made.)

Mark Patterson, president of LiLa Enterprise, the distributor of the Strawberry Laser, said the results reported on "Rachael Ray" were typical of the device.

"We say 'two inches or more in 20 minutes or less,' " he told me.

The leading procedure in the "noninvasive body contouring" category is called CoolSculpting. It is intended to freeze fat cells and prompt them to die off. Dermatologists at Mass General came up with the idea after pondering case reports of toddlers who developed divots in their cheeks after sucking on ice pops. (Dr. Avram is a scientific adviser to Zeltiq Aesthetics, the company behind the device.)

A CoolSculpting treatment involves clamping and cooling a section of fat about the size of a stick of butter for one to three hours. After 12 weeks, the fat layer of each treated area has typically diminished by about 20 percent or more, according to company-financed studies on pigs and humans. In very rare cases, people have developed lumps of fat after the procedure. For the moment, at least, consumers seem convinced. Zeltiq reported net revenue of $111.6 million last year, compared with $76.2 million the year before.

Of course, the next ostensible fat buster is already on the horizon. A drug company in California is developing a fat-melting injection to be aimed, at least initially, at people seeking to downsize a double chin.

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DealBook: 1nvestor, Bettor, Golfer: 1nsider Trading 1nquiry 1ncludes Mickelson, 1cahn and William T. Walters

Sam Greenwood/Getty ImagesThe investigation is focusing on trading in two different stocks by Phil Mickelson, above, and the gambler William Walters.

The divergent lives of a championship golfer, a high-rolling gambler and a billionaire investor have collided in a federal insider trading investigation.

Federal authorities are examining a series of well-timed trades made by the golfer Phil Mickelson and the gambler William T. Walters, people briefed on the investigation said, focusing on trading in two different stocks. The authorities are also questioning what role, if any, the investor Carl C. Icahn may have had in sharing information about one of the stocks: the consumer products company Clorox.

Mr. Mickelson, a three-time winner of the Masters golf tournament and one of the country's highest-earning athletes, placed his Clorox trade in 2011, the people briefed on the investigation said. Mr. Walters, an owner of golf courses who is often considered the most successful sports bettor in the country, made a similar trade about that time, the people added.

Mr. Icahn, a 78-year-old billionaire and one of the best-known investors in the world, was mounting a takeover bid for Clorox around the time that Mr. Mickelson and Mr. Walters placed their trades.

Heidi Gutman/CNBCAuthorities are said to wonder if trades by a golfer and a gambler were prompted by illegal information from the investor Carl Icahn.

The F.B.I. and Securities and Exchange Commission, which are leading the inquiry along with federal prosecutors in Manhattan, are examining whether Mr. Icahn leaked details of his Clorox bid to Mr. Walters, the people briefed on the investigation said. One theory, the people said, is that Mr. Walters might have passed that information to Mr. Mickelson.

Around the time of the trading, the S.E.C. sent Mr. Icahn a routine request for information about his dealings in Clorox, the people briefed on the matter said. Federal authorities, whose investigation has dragged on for more than two years without yielding definitive evidence of insider trading, are also examining phone records to see whether Mr. Walters spoke to Mr. Icahn shortly before the trades. Mr. Icahn's bid for Clorox ultimately failed. Mr. Mickelson, Mr. Walters and Mr. Icahn have not been accused of any wrongdoing. Mr. Icahn, even if he did leak secret information about his firm's intentions with Clorox, may have done so legally. It would be illegal if he breached a duty of confidentiality to his own investors.

In a separate strand of the investigation, federal authorities are looking into trading in Dean Foods that has no apparent connection to Mr. Icahn, the people briefed on the matter said. Mr. Walters and Mr. Mickelson placed the trades around August 2012, according to the people, just before the food and beverage company announced its quarterly earnings and a public offering of stock for one of its subsidiaries. The authorities are investigating whether Mr. Walters had a source inside the company itself — and whether others who know Mr. Walters may have traded on the information as well.

Mr. Walters, reached on Friday evening, said, "While I don't have any comment, pal, I'll talk to you later."

In an interview, Mr. Icahn said "I don't give out inside information," adding that "for 50 years I have had an unblemished record." Mr. Icahn, who acknowledged knowing Mr. Walters but said he never met or spoke to Mr. Mickelson, argued that any suggestion he did anything wrong is "irresponsible."

Representatives for Mr. Mickelson did not respond to a request for comment. Federal authorities declined to comment.

For two years, authorities had little to go on besides trading records and a hunch. Then last year, F.B.I. agents approached Mr. Mickelson at Teterboro Airport in New Jersey, one of the people briefed on the matter said, asking the celebrity golfer to discuss his trading.

It is unclear whether Mr. Mickelson knows Mr. Icahn or provided any evidence implicating him or Mr. Walters in the trading. It is possible that the investigations will not produce any charges.

But if the investigation proceeds, it could undermine the reputation of one of America's most popular athletes in Mr. Mickelson, who has won five major championships over a two-decade career. And for Mr. Icahn, the investigation might complicate one of the longest running and most successful careers on Wall Street.

Mr. Icahn made his foray into finance as a stockbroker in the 1960s. He later became a professional agitator, haranguing the country's biggest companies to give him a board seat.

Long before activist investing was in vogue, Mr. Icahn was waging war with executives at companies like Motorola, RJR Nabisco and United States Steel, pushing for corporate changes to increase shareholder value. In the 1980s, Mr. Icahn became synonymous with an era of corporate raiding, leading a hostile takeover of Trans World Airlines.

In recent years, his strategy has mellowed some. Mr. Icahn has become something of an elder statesman on Wall Street, often appearing on the CNBC business channel, at investing conferences and even on Twitter, though he continues to pursue headline-grabbing takeover bids for companies like Clorox.

Mr. Icahn laid the groundwork for a Clorox takeover in early 2011, when he disclosed in a regulatory filing that his various investment firms began amassing shares in the consumer goods manufacturer, thinking the stock was undervalued. Shares of Clorox rose about 6 percent in February 2011, after Mr. Icahn disclosed his stake.

The shares jumped again a few months later after he announced an unsolicited takeover bid for the company. In a letter to Clorox, Mr. Icahn proposed buying the company for $76.50 a share and noted that his firms were Clorox's largest investor.

In the days leading up to Mr. Icahn's bid, there was unusual trading activity in shares of Clorox and options to buy the stock, according to published reports at the time. Successful options trading that comes ahead of corporate deals can be a red flag for regulators.

The investigation into the Clorox trading began at the Financial Industry Regulatory Authority, or Finra, Wall Street's self-regulatory group that monitors suspicious trades. In 2011, the people briefed on the matter said, Finra traced a series of well-timed Clorox trades to Mr. Walters and Mr. Mickelson, just as Mr. Icahn was aiming to gain a foothold on the company's board.

Ultimately, Clorox rebuffed Mr. Icahn's overture. By September 2011, Mr. Icahn withdrew the bid.

Because the bid failed, it is unclear what inside information, if any, Mr. Icahn may have been privy to other than the trading strategy of his own firm, Icahn Enterprises. If Mr. Icahn provided Mr. Walters a heads-up about his activities in connection with the takeover bid, it is not necessarily a violation. Under the laws that govern insider trading, it is not illegal to leak secret information about a future trade.

For such a leak to be illegal, Mr. Icahn most likely would have had to breach a duty to keep the information confidential. Since Mr. Icahn never joined the Clorox board, he probably owed no duty to the company or its shareholders.

Yet if any potential bidder for Clorox breached a duty of confidentiality to his or her own investors, then that could present a legal problem. And in certain cases, even if there is no duty of confidentiality, a little-known securities rule might prevent someone who is mounting a takeover bid to leak "material, nonpublic information" about the offer.

It is unclear how well acquainted Mr. Icahn and Mr. Walters are, but they have crossed paths in Las Vegas. Mr. Icahn is no stranger to the city. Over the years, Mr. Icahn has invested in Las Vegas real estate and is chairman of Tropicana Entertainment, a casino company based in the city. Regulatory filings also show that a small Nevada company controlled by Mr. Walters and his business partner was an early investor in the mobile data provider Voltari, whose largest shareholders include Mr. Icahn's investment firms.

Mr. Mickelson and Mr. Walters have participated in the Pebble Beach Pro Am golf tournament during which professional golfers partner with amateurs and celebrities. Mr. Walters won the tournament in 2008.

Mr. Walters, better known as Billy, has drawn federal scrutiny off and on for years. In 1992, he was acquitted of illegal gambling charges. Years later, the Nevada attorney general charged Mr. Walters with money laundering stemming from his gambling operation. The case resulted in three indictments; courts dismissed each one.

Despite the scrutiny, Mr. Walters firmly belongs to the Las Vegas elite, a generous philanthropist who epitomizes the city's unconventional brand of capitalism. He bought up golf courses — his Bali Hai Golf Club has hosted what it calls the "sexiest golf tournament" in the world, featuring female caddies — and auto dealerships. He also helped finance political campaigns.

In 2011, "60 Minutes" captured Mr. Walters's high-roller status. The anchor, Lara Logan, remarked that "It's hard to find anyone better at winning than Billy Walters."

But during the segment, Mr. Walters complained that his stock picks had not fared as well as his sports bets. He discussed how the worst "crooks" he met were on Wall Street, not in the casinos or betting parlors, mentioning that the most money he lost was on stocks like Enron.

Alexandra Stevenson, Azam Ahmed and Peter J. Henning contributed reporting.

A version of this article appears in print on 05/31/2014, on page A1 of the NewYork edition with the headline: Investor, Bettor, Golfer: Inquiry Into Big Names .
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$2 Billion for Clippers? 1n Time, 1t May Be a Steal for Steve Ballmer

Men with vast fortunes who have bought professional teams as toys are not uncommon. Whether they considered the franchises sound investments is almost beside the point.

The latest major player in the business is Steve Ballmer, the former Microsoft chief executive, who agreed on Thursday to pay $2 billion for the Los Angeles Clippers — nearly four times as much as the previous record price for an N.B.A. franchise.

On Friday, the league said that in light of the sale, it would withdraw its pending charges against the current owner, Donald Sterling.

Could the team possibly be worth that much, fans immediately wondered — or is Mr. Ballmer, whose net worth is estimated at $19 billion, simply indulgent?

In time, the $2 billion bid that seems shocking today may be viewed as a relative bargain.

There was a time when $10 million was considered an outrageous sum to buy the Yankees. It was 1973, the Bronx was crumbling, and George Steinbrenner's purchase (for about $50 million in today's dollars) made jaws drop. Jerry Jones's $140 million outlay for the Dallas Cowboys in 1989 had the same effect, as did the 2012 sale of the Los Angeles Dodgers for $2.15 billion.

Mr. Ballmer, like Mr. Steinbrenner, Mr. Jones and others before him, may be betting that sports will continue to be a growth industry, bringing expanding revenue from broadcast rights, ticket sales and sponsorship deals.

"Everyone looking at this is looking at the future of the N.B.A. and the upcoming TV deals," said Sal Galatioto, the president of Galatioto Sports Partners. He added, "It does significantly boost the price of large-market N.B.A. teams, and all N.B.A. teams."

The Clippers are the 13th-most valuable franchise in the N.B.A., according to calculations by Forbes, which estimated that the team generated $128 million in revenue last year. Nearly 40 percent of that came from fees for television rights — the driving force for major sports deals these days.

The deal for the Dodgers, for example, was largely predicated on the prospect that the new owners — investors from Guggenheim Partners — could set up a local sports network. They did that last year, in an $8 billion, 25-year arrangement with Time Warner Cable.

The Clippers' local cable television contract, for $18 million a year, is nearing renewal, and projections suggest that the team could get as much as $60 million a year. Mr. Ballmer would also benefit from the N.B.A.'s next round of national television deals, which begins in the 2016-17 season. The teams are expected to receive substantially more than the $30 million a year each one currently gets.

The Clippers are a scarce asset, another factor that might have enticed Mr. Ballmer. Clubs in big-market cities like New York and Los Angeles, and cornerstone franchises like the New England Patriots and the Dallas Cowboys, are in position to generate significantly higher bids because there are so few available.

The Clippers are not a cornerstone team, but they are in Los Angeles. And after decades as a doormat, they are on the upswing, with stars like Chris Paul and Blake Griffin. Their more glamorous local rivals, the Lakers, are down.

Assuming his purchase is approved by the N.B.A., Mr. Ballmer, 58, is likely to enjoy significant personal financial benefits. When an investor purchases a sports team, he can attribute a large part of the purchase price to the player contracts he is acquiring. As those contracts expire, their depreciation can offset income.

Given how low interest rates are, he could finance part of the purchase of the team relatively inexpensively, and he could later bring in minority shareholders to recoup some of his purchase.

Still, there are no guarantees that the Clippers will make a profit for Mr. Ballmer. Rob Tilliss, who runs Inner Circle Sports, which advised one of the other bidders, said that there were reasons to be optimistic about the Clippers' financial outlook but that the $2 billion offer was based on wishful assumptions that would all have to come true for Mr. Ballmer to get his money back.

"If you believe in the growth of the league, you believe in the TV rights renewals and you want to be the big guy in L.A., it makes sense," Mr. Tilliss said. "But I can't make the economic argument for you."

The bid was three and a half times the amount the team was recently valued at by Forbes. It was also 20 percent more than the next closest offer. Some analysts said Mr. Ballmer might have purposely submitted a bid that would far surpass those of the other contenders — including a group with Oprah Winfrey — so he could swiftly end the auction and win the support of Rochelle Sterling, who co-owns the Clippers with her husband.

Mr. Ballmer took a similar approach when he ran Microsoft, paying what some analysts thought were obscene amounts for companies. In 2011, for example, Microsoft paid $8.5 billion for Skype, more than tripling what eBay had paid for the company several years earlier.

The team Mr. Ballmer is hoping to buy has never made it past the second round of the N.B.A. playoffs and does not have its own arena, a significant financial handicap.

Mr. Ballmer made one previous attempt at buying a stake in an N.B.A. team. Last year, his group's bid to buy the Sacramento Kings failed; the group had planned to move them to Seattle. Now he stands to play the role of savior and could lobby from within the league to expand to Seattle.

"This comes on the heels of Ballmer going through a wretched fight for the Kings, and he's leaving Microsoft and wondering about what to do next," said Marc Ganis, who advises owners and potential owners. "Now he'll be a hero for stepping up to take over a franchise that the nation wants taken away from Donald Sterling. He will ride in on his shiny steed."

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DealBook: 1nsider Trading 1nquiry 1ncludes Mickelson and 1cahn

The divergent lives of a championship golfer, a high-rolling gambler and a billionaire investor have now collided in a federal insider trading investigation.

Federal authorities are examining a series of well-timed trades made by the golfer Phil Mickelson and the gambler William T. Walters, people briefed on the investigation said, focusing on trading in two different stocks. The authorities are also questioning what role, if any, the investor Carl C. Icahn may have had in sharing information about one of the stocks: the consumer products company Clorox.

Mr. Mickelson, a three-time winner of the Masters golf tournament and one of the country's highest-earning athletes, placed his Clorox trade in 2011, the people briefed on the investigation said. Mr. Walters, an owner of golf courses who is often considered the most successful sports bettor in the country, made a similar trade about that time, the people added.

Mr. Icahn, a 78-year-old billionaire and one of the best known investors in the world, was mounting a takeover bid for Clorox around the time that Mr. Mickelson and Mr. Walters placed their trades.

The F.B.I. and Securities and Exchange Commission, which are leading the inquiry along with federal prosecutors in Manhattan, are examining whether Mr. Icahn leaked details of his Clorox bid to Mr. Walters, the people briefed on the investigation said. One theory, the people said, is that Mr. Walters might have passed on that information to Mr. Mickelson.

Seeking additional leads in the investigation, which has dragged on for two years without yielding definitive evidence of insider trading, the S.E.C. sent Mr. Icahn a request for documents about his dealings in Clorox, people briefed on the matter said. Authorities are also examining phone records to see whether Mr. Walters spoke to Mr. Icahn, whose bid for Clorox ultimately failed, shortly before the trades.

Mr. Mickelson, Mr. Walters and Mr. Icahn have not been accused of any wrongdoing. Mr. Icahn, even if he did leak secret information about his firm's intentions with Clorox, may have done so legally. It would be illegal if he breached a duty of confidentiality to his own investors.

In a separate strand of the investigation, federal authorities are looking into trading in Dean Foods that has no apparent connection to Mr. Icahn, the people briefed on the matter said. Mr. Walters and Mr. Mickelson placed the trades around August 2012, according to the people, just before the food and beverage company announced its quarterly earnings and a public offering of stock for one of its subsidiaries. The authorities are investigating whether Mr. Walters had a source inside the company itself — and whether others who know Mr. Walters may have traded on the information as well.

Mr. Walters, reached on Friday evening, said that "While I don't have any comment, pal, I'll talk to you later."

Mr. Icahn did not respond to a request for comment, while representatives for Mr. Mickelson did not return a request for comment. Federal authorities declined to comment.

For two years, authorities had little to go on besides trading records and a hunch. Then last year, F.B.I. agents approached Mr. Mickelson at Teterboro Airport in New Jersey, one of the people briefed on the matter said, asking the celebrity golfer to discuss his trading.

It is unclear whether Mr. Mickelson knows Mr. Icahn, or provided any evidence implicating him or Mr. Walters in the trading. It is possible that the investigations will not produce any charges.

But if the investigation proceeds, it could undermine the reputation of one of America's most popular athletes in Mr. Mickelson, who has won five major championships over a two-decade-long career. And for Mr. Icahn, the investigation might complicate one of the longest running and most successful careers on Wall Street.

Mr. Icahn made his foray into finance as a stockbroker in the 1960s. He later became a professional agitator, haranguing the country's biggest companies to make room for him on their boards.

Long before activist investing was in vogue, Mr. Icahn was waging war with executives at companies like Motorola, RJR Nabisco and U.S Steel, pushing for corporate changes to increase shareholder value. In the 1980s, Mr. Icahn became synonymous with an era of corporate raiding, leading a hostile takeover of Trans World Airlines.

In recent years, his strategy has mellowed some.. Mr. Icahn has become something of an elder statesman on Wall Street, often appearing on the CNBC business channel, at investing conferences and even on Twitter, though he continues to pursue headline-grabbing takeover bids for companies like Clorox.

Mr. Icahn laid the groundwork for a Clorox takeover in early 2011, when he disclosed in a regulatory filing that his various investment firms began amassing shares in the consumer goods manufacturer, believing the stock was undervalued. Shares of Clorox rose roughly 6 percent in February 2011, after Mr. Icahn disclosed his stake.

The shares jumped again a few months later after he announced an unsolicited takeover bid for the company. In a letter to Clorox, Mr. Icahn proposed buying the company for $76.50 a share and noted that his firms were Clorox's largest investor.

In the days leading up to Mr. Icahn's bid, there was unusual trading activity in shares of Clorox and options to buy the stock, according to published reports at the time. Successful options trading that comes ahead of corporate deals can be a red flag for regulators.

The investigation into the Clorox trading began at the Financial Industry Regulatory Authority, or Finra, Wall Street's self-regulatory group that monitors suspicious trades. In 2011, the people briefed on the matter said, Finra traced a series of well-timed Clorox trades to Mr. Walters and Mr. Mickelson, just as Mr. Icahn was aiming to gain a foothold on the company's board.

Ultimately, Clorox rebuffed Mr. Icahn's overture. By September 2011, Mr. Icahn withdrew the bid.

Because the bid failed, it is unclear what inside information, if any, Mr. Icahn may have been privy to other than the trading strategy of his own firm, Icahn Enterprises. If Mr. Icahn provided Mr. Walters a head's up about his activities in connection with the takeover bid, it is not necessarily a violation. Under the laws that govern insider trading, it is not illegal to leak secret information about a future trade.

For such a leak to be illegal, Mr. Icahn most likely would have had to breach a duty to keep the information confidential. Since Mr. Icahn never joined the Clorox board, he probably owed no duty to the company or its shareholders.

Yet if any potential bidder for Clorox breached a duty of confidentiality to his or her own investors, then that could present a legal problem. And in certain cases, even if there is no duty of confidentiality, a little-known securities rule might prevent someone who is mounting a takeover bid to leak "material, nonpublic information" about the offer.

It is unclear how well acquainted Mr. Icahn and Mr. Walters are, but Mr. Icahn is no stranger to Las Vegas. Over the years, Mr. Icahn has invested in Las Vegas real estate and is chairman of Tropicana Entertainment, a casino company based in the city. Regulatory filings also show that a small Nevada company controlled by Mr. Walters and his business partner were an early investor in mobile data provider Voltari, whose largest shareholders include Mr. Icahn's investment firms.

Mr. Mickelson and Mr. Walters, meanwhile, have participated in the Pebble Beach Pro Am golf tournament during which professional golfers partner up with amateurs and celebrities. Mr. Walters won the tournament in 2008.

Mr. Walters, better known as Billy, has drawn federal scrutiny off and on for years. In 1992, he was acquitted of illegal gambling charges.

Years later, the Nevada attorney general charged Mr. Walters with money-laundering stemming from his gambling operation. The case resulted in three indictments; courts dismissed each one.

Despite the scrutiny, Mr. Walters firmly belongs to the Las Vegas elite, a generous philanthropist who epitomizes the city's unconventional brand of capitalism. He bought up golf courses — his Bali Hai Golf Club has hosted what it calls the "sexiest golf tournament" in the world, featuring female caddies — and auto dealerships. He also helped finance political campaigns.

And he has embraced the high-flying lifestyle that comes with winning. Mr. Walters — who boasts that he has never had a losing year gambling — has homes in Las Vegas, southern California and Arizona. One of several companies he controls also owns a private jet, public records show.

In 2011, "60 Minutes" captured Mr. Walters's high-roller status. The anchor, Lara Logan, remarked that "It's hard to find anyone better at winning than Billy Walters."

But during the segment, Mr. Walters complained that his stock picks had not fared as well as his sports bets. He discussed how the worst "crooks" he met were on Wall Street, not in the casinos or betting parlors, mentioning that the most money he lost was on stocks like Enron and WorldCom.

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After Losing Time 1nc. Business, Distributor to Close

The second-largest magazine wholesaler in the country, Source Interlink Distribution, which employs about 6,000 workers, will soon cease operations.

The shuttering is the result of a decision by Time Inc. last weekend to stop using Source Interlink as the distributor for its magazine because of unpaid fees.

"One of our largest suppliers has recently decided to cease supply and move in a different direction," Michael L. Sullivan, the company's chief executive, wrote in a letter to his other clients that was obtained and published on Thursday by Bob Sacks, an industry consultant who produces his own newsletter. "As such, it's with a heavy heart that I am writing to advise you that Source Interlink Distribution Company will be discontinuing all operations in the near future."

A spokeswoman said the company had no comment.

In a filing to the Securities and Exchange Commission on Tuesday, Time Inc. said it would not be able to collect $19 million of expected revenue from sales made to the discontinued wholesaler during the second quarter of 2014. It also said it would have to write off $7 million of what it called "receivables" that it had booked in previous quarters.

TNG, owned by the News Group, has agreed to take over most of Source Interlink's distribution duties for Time. Time Inc. said it would lose $1 million in transition costs.

Jill Davison, a Time Inc. spokeswoman, said that the regional markets that Source Interlink served — Southern California, Chicago and the Mid-Atlantic States — might face shortages of popular Time magazines like People and Sports Illustrated for up to 12 weeks. In the S.E.C. filing, Time Inc. estimated that this loss of sales could be around $4 million.

The battle between Time Inc. and Source Interlink, based in Bonita Springs, Fla., reflects the tremendous financial pressure that both magazine publishers and their distributors have been facing as the Internet has decimated newsstand sales and as retailers hand over prime shelf space to other products like candy and gum. In the last five years, the retail magazine business has shrunk 40 percent, to less than $3 billion. And while there were hundreds of magazine wholesalers in the 1990s, the industry has consolidated into just a few major players in recent years: Source Interlink, TNG and Hudson News.

Source Interlink had been trying to keep its head above water by offering clients like Walmart and Rite Aid a different payment model, one it described as a more modern and efficient way of doing business. Under this system, retailers would pay only for magazines that were actually bought. In the conventional system, retailers paid the wholesaler for an entire shipment and then received credit for returns weeks later.

On average, only 35 percent of a shipment is purchased, according to Bill Mickey, editorial director of Folio, which covers the magazine industry, and the rest might be returned. So the new system was appealing to retailers, but was costly for publishers, who would not be compensated for lost and stolen magazines, which can be up to 7 percent of shipments.

Source Interlink had been demanding higher fees from the publishers to help make up for revenue it was losing from retailers.

A few years ago, Time Inc. and Interlink were involved in a legal battle because Interlink had tried to raise the cost of distribution per magazine. Time and other publishers refused and Interlink sued them for antitrust violations. The suit was settled in 2009, but Time did not have to pay the increase.

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U.S. Consumer Spending Drops Slightly

WASHINGTON — American consumers cut back on spending in April for the first time in a year, taking an unexpected pause after a big jump during the previous month. The results, however, are unlikely to derail an expected spring rebound in the economy.

Consumer spending, which accounts for 70 percent of overall economic activity, fell 0.1 percent in April, the Commerce Department said on Friday. The drop was the first in 12 months. But it followed a 1 percent surge in March spending, which was the biggest increase in more than four years.

"It is obvious that after an unseasonably colder January and February, consumers came out with a vengeance in March," Chris Christopher, an economist at IHS Global Insight, said in a note to clients. "So, April's poor showing on the spending front is payback for a strong March."

Also on Friday, the University of Michigan said that its index of consumer sentiment fell in May as Americans grew more pessimistic about future pay increases, though they remained optimistic about the broader economy. The index dropped to 81.9 this month from 84.1 in April.

Still, Richard Curtin, director of the survey, said that confidence in the first five months of this year had been at the highest level since 2007, before the recession began.

Nearly half of all households expect their inflation-adjusted income to decline over the next 12 months, the survey found. And among those that did anticipate gains, most expect increases of just 1 or 2 percent.

The figure from the Commerce Department reflects reductions in durable goods purchases and in services like utilities. While disappointed, analysts say the results do not change the broader upward trajectory of the economy and predict consumer demand to bounce back in May.

An "improving job market should support stronger spending in coming months," Jennifer Lee, senior economist at BMO Capital Markets, wrote in a research note.

The Commerce Department report also showed that income rose 0.3 percent in April after advancing 0.5 percent in March. That was the fourth consecutive monthly climb. The economy has been generating jobs at a solid pace in recent months, including a gain of 288,000 jobs in April, the strongest uptick in hiring in two years.

With spending down and Americans earning more, the saving rate rose in April to 4 percent of after-tax income, up from a saving rate of 3.6 percent in March.

Inflation, as measured by a gauge tied to spending, showed prices rising 1.6 percent from a year ago, up from a 1.1 percent year-over-year price gain in March. However, even with the increase, inflation remains below the Federal Reserve's 2 percent target.

In April, consumers reduced spending on durable goods like autos by 0.5 percent. The drop followed a big 3.6 percent jump in durable goods spending in March. Consumers spent more on nondurable goods, a slight 0.1 percent increase, while trimming spending on services by 0.1 percent. Spending on services, which includes utility bills, had been rising rapidly during the winter, reflecting higher heating costs because of the severe cold in many parts of the country.

Consumer spending remained strong through the first quarter, rising at an annual rate of 3.1 percent. But much of that strength came from increased health care spending, reflecting new enrollments through the Affordable Care Act.

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Shortcuts: Tips for Those Who Set Their 0wn Salaries

Taylor Johnson works as a graphic designer, Mary-Kay Demetriou as a marketing consultant and Debra Kling as a color consultant. And they all work as negotiators.

The three are among the one-third of the American work force – about 42 million people, according to the Freelancers Union – who work independently. And as freelancing has increasingly evolved from a hobby or part-time work to a full-time job, those who learn how to price – and sell – themselves are the ones who succeed.

"Many people didn't wind up freelancing by choice, and how to bill and what to charge are not skills most people started with," said Laura Vanderkam, who writes and speaks about time management.

A first step is to determine the right rate for your profession and level of expertise. Talk to others, do market research and join professional organizations where pricing is often a hot topic of conversation.

Lindsay Van Thoen, in a blog for the Freelancers Union, a labor organization, suggested one method for setting an hourly rate, and developing longer-term economic goals — although she warned it's "a guide, not a rule."

Figure out what you want to make yearly and put that aside as a salary you pay to yourself. Then add expenses, such as purchases and overhead, plus the profit you hope to make above expenses. Ms. Van Thoen suggested 10 to 20 percent of your salary.

Divide all that by the number of billable hours you plan to work for a basic hourly rate.

If possible, get a budget from the client before crunching the numbers, she said. "There's nothing worse than doing all of your calculations, giving a client your price and then getting complete silence on the other end because your price is very different from what they expected," she said.

One of the perennial freelancer questions is whether an hourly rate or a flat fee is more advantageous. Both have pros and cons, but as people gain experience and confidence, they tend to change to a per-project system.

"I've moved away from hourly billing for many clients," Mr. Johnson, of Palo Alto, Calif., wrote by email. "My creative process often involves time strategizing over coffee, walking, driving and thinking. At times, I'll take a break from working on a project only to have a sudden flash of inspiration. It's these times away from my Mac that are often worth every billable penny. Billing in hourly (or even 30-minute) increments tends to discourage the creative process and limits my time to actual production time."

In addition, some part of each day – maybe an hour – should be spent on business development, Ms. Vanderkam said, such as networking and researching new projects, and that needs to be covered by your income.

"It's just like grocery shopping isn't just the time in the store, but making the list, driving there and putting away the groceries," she said.

Whether by the hour or by the project, you need to keep track of your time, and many apps are available to help.

Ms. Kling, who lives in Larchmont, N.Y., swears by Toggl, which allows her to easily see the exact minutes spent on each project – she's juggling 30 now — on her computer and mobile devices by using color coding for each job.

While "I'm not a stickler about hours," she said, "Toggl lets me see if the 10 minutes here and there I'm doing for a client add up." Sometimes she even gives a client the time sheet so they can understand that her pricing "is not voodoo." she said. "I don't just come up with a number."

She said Toggl, which is free but can be upgraded for $5 a month, also permitted her to see if she accurately estimated the amount of time she spent on a project and readjust in the future if need be.

Ms. Vanderkam, who has written about such apps, said Toggl was one of the most popular, but there were also tools that keep track of the unproductive hours as well as the productive ones.

RescueTime, for example, runs in the background, timing the minutes spent on various sites or applications. Those "five minutes" spent on Twitter or Facebook might, in reality, be an hour. It's free, but a $9-a-month upgrade also includes services like blocking distracting websites and more detailed reports and filters.

Other freelancers mentioned using Budgetic.com and Itrackmytime.com. Mr. Johnson said he used Roninapp.com, which starts at $15 a month, for invoices. Fanuriotimetracking.com, which also does invoices, costs $59 for purchase and a year of technical support.

Most of the apps have free trial periods, so try a few to see which works best for you.

While an app keeps tracks of the minutes, work is more than that. Freelancers need to know – and communicate – the value they add to a business beyond the nuts and bolts, said Mike McDerment, co-founder of FreshBooks, which sells accounting software for small businesses.

"People start by undervaluing their own work," said Mr. McDerment, who also wrote the free Portable Document Format book "Breaking the Time Barrier,"which addresses pricing strategies for freelancers.

"A lot of people start by saying 'I just hope I get the job,' " he said. But they need to transition to selling the idea that they are a valuable part of a team and "bring expertise and knowledge and talent," to a customer.

Or as Mr. Johnson said, "I'm getting my clients to understand they are paying for a design solution and not just actual production time. By understanding the creative process more, it allows them to better value the service I provide."

Of course, even with the best effort in the world, things go wrong. Ms. Demetriou, the Santa Monica, Calif., marketing consultant, thought she had everything covered when she started a project for a market research company. She provided a timetable, set her hourly rate, had an agreed-upon scope of work and a signed agreement, and kept in touch with her clients with status reports, as well as updating her work online.

But when she sent her first bill, she received a big surprise. She was told the deal was for only 10 hours of work and no money was available to pay the invoice in full.

"I had probably done 50, and they could have seen all along that I was doing way more than 10," she said.

Ms. Demetriou said she believed the budget of the department that hired her was cut between the time she was assigned the work and the time she billed.

"Even though companies are using a lot more freelance talent, they're not always sure how to manage it internally and externally," she said. "And budgets are constantly changing."

She learned a few valuable lessons from the experience: Even with a detailed scope of work, you need to ensure that your contract or agreement specifies the maximum amount a client will pay, something her contract did not include.

Bill early and often. She now bills every two weeks.

Also, if you do end up in a similar situation, negotiate. Ms. Demetriou suggested a payment plan, and agreed to prorate some hours at an administrative rate and some at the higher strategic rate. She did get more money than the company initially offered, although not as much as she felt she deserved.

All of the roles a freelancer must now play can seem overwhelming, but the trick is to build slowly. And if your business takes off, who knows? Perhaps one day you can put in for vacation time.

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