Posts Tagged ‘corporate’
Family Became Corporate
It was only 11 years ago that family became corporate in Los Angeles. The O’Malley family, who had long-stood as the owners of the Dodgers baseball organization, both in Brooklyn and in Los Angeles, had sold the team to Rupert Murdoch and the media moguls at Fox News Corp.
Family became corporate.
The attitude of doing it right was lost for doing it for dollars. And the first move Murdoch and Co. made while at the helm – trading Mike Piazza towards the end of his contract to the Florida Marlins, along with two other Dodgers, for, get this, broadcasting rights. Yes, Murdoch scored his company, Fox, broadcasting rights to the Florida Marlins.
And so began business as a corporation.
Gone are the days when Peter O’Malley took over for his father, Walter. Gone are the days when the O’Malleys would serve ice cream to the office staff at 2 o’clock in the afternoon, everyday that the Dodgers were in first place. In are ratings, merchandising, branding, and cash cow advertising machines.
I remember going to Dodger games and seeing a beautifully illustrated outfield fence, silhouetted with images of Dodger greats and team accomplishments. Today, I count thirty-six, yes, thirty-six individual ads on and around the outfield fence, not including two video screens that change every so often to add more companies into the mix. This was opening day 2008.
The team has returned to a family ownership, run by the McCourts, real estate gurus from the Boston area as I recall. But the game still has a business smell to it.
Players are demanding absurd contracts worth tens of millions of dollars. Their egos continue to rise. And it is all to play this great game of baseball – a game that many only dream of playing. And it is agents like Scott Boras – the scum of professional sports agency – that have fed these egos with above-market value contracts and salaries.
Scott Boras, of Scott Boras Corporation, runs his agency out of, of all places, Newport Beach, California. He has a client list of over 50 baseball players and has an ego himself just as big as his clientele combined. He is what the New Yorker has called an extortionist. He represents all that is wrong with baseball today. The business atmosphere. The cash-cow, money producing organizations that demand year-over-year increases in returns like a publicly-trading company would to appease its stockholders.
But there are no stock-holders in baseball. There are investors. And there are fans. Sadly, the investors have taken precedence over the fans, and what used to be an enjoyable event out to the ballpark with friends and family has become an advertisement with $10 beers, $5 hot dogs, $6 water bottles, and $20 parking. This, of course, is all after you buy your ever-rising costly tickets.
But what can I do, what can anybody do about it? Change has to come from the top – and currently, the top just got paid $17 million last year, even given the current weak economic times. The NFL Commissioner has taken a 20% pay cut. The NHL has instituted salary caps. The MLB – has done nothing. There are several players demanding pay over the $20 million mark per season. And Bud Selig, the Major League Baseball Commissioner seems fine with that.
Success is unfortunately defined by money, and lots of it, in todays game of baseball. The commissioner likes to see that he gets a substantial amount of monetary return from his work. Meanwhile, fans pay more year after year for tickets, concessions, and parking. Where does it all end?
Steve Jobs has an annual salary of $1. One dollar. And that is to stay on the payroll. That is how executives used to run businesses. If their company prospered, they succeeded. Today, that is far from the case. Executives at oil-giants like Exxon-Mobile, Shell, Chevron, to name a few, bring in over $50 million a year in pay, plus bonuses. The big three CEO’s in Detroit have recently taken pay-cuts in wake of stark criticism over corporate luxury while their auto manufacturing companies face filing for bankruptcy – one of them reducing their salary to $1.
Gone with the family, in with the corporate. This is baseball today, and unfortunately, there is no end in sight. With scum like Scott Boras demanding outrageous amounts of money to perform in a game that used to be a childhood dream is only the beginning of the problem.
Forget your financial advisers, and forget your lavish expenditures. Why can’t athletes return to a modest salary, bring the game back to the family atmosphere of the 80′s and before. If the game continues on its current path, it will suffer, and it will falter.
[photo by 7D7 Studio, Unsportsmanlike comment]
Where’s the Responsibility?
Banks, financial institutions, AIG, American Express, and now, the auto industry. What’s being called “The Big Three Bailout,” the major three auto manufacturers have been visiting Washington, pleading Congressional leaders for a share of the bailout which has become a trend of late. How much money are we talking about here? $25 billion shared amongst General Motors (GM), Ford, and Chrysler.
But unlike the $700 billion financial banking bailout that the government began dishing out a couple of months ago, the aid the auto industry is asking for is being met with staunch resistance. Flying in on private company jets, top executives from the top three U.S. auto manufacturers lobbied and begged for economic aid. On the verge of filing for bankruptcy protection, fears are spreading that GM, among the other two companies, is running out of operational capital.
“Our industry … needs a bridge to span the financial chasm that has opened up before us,” General Motors Corp. CEO Rick Wagoner told the Senate Banking Committee.
Wagoner blamed the auto industry’s economic woes not on management failures but on the deepening global financial crisis. And Robert Nardelli, CEO of Chrysler LLC, told the panel the bailout would be “the least costly alternative” when compared with damage from bankruptcy. The companies are reaching out to its consumer base to put pressure on Congress to grant financial support.
The fear of course is that the collapse of the auto industry, and the financial protection of bankruptcy would have a trickle-down effect on not only the American economy, but on the world economy. With the failure of the auto companies, many supply companies would suffer from a sudden decrease in demand. Job losses at all levels would result. And if these auto companies file for bankruptcy, studies show that consumers, by an overwhelming majority (roughly 80%), would not purchase vehicles from a company in bankruptcy. Fears of insecure warranties top the list of reasons causing this consumer thought.
Failure of the auto industry “would be catastrophic,” Wagoner said, resulting in three million jobs lost within the first year and “economic devastation (that) would far exceed the government support that our industry needs to weather the current crisis.”
Just how much money do these companies have left? And how much money do they need to operate each month? GM CEO Wagoner faced direct questions from Rep. Paul Kanjorski in Congressional hearings.
If Congress does grant a bailout stimulus package to the auto industry in some form, what does this say to other industries and organizations? Is our government becoming a fail-safe bailout group that lends an excuse to mismanaged companies and corporations to seek aid in tough times? That is the fear of many on Capital Hill. Had the auto industry focused more research and resources to bringing more economical and green cars to the market, perhaps they would not be bleeding red so much economically. Toyota and Honda both have faired well in the recent economic downturn.
Can some blame be placed on lavish Union contracts of the auto workers, guaranteeing large portions of wage earnings after retirement or layoff? Can some blame be placed on management and organizational factors of the auto industry? The executives would answer that its the economy, stupid. And in part, it no doubt is. But if a bailout package were to be issued, it in no way can be a blank check. Oversight is essential. Stipulations must be abundant. And responsibility must be present. Good faith loans will not cut it. The government, if leaning towards an auto industry bailout, must make it clear to the auto executives that they must change their business models, and show proven change, in order to be rewarded with government funding, funding that comes with a return expectation.
GM has compiled a video they circulated on the company’s YouTube channel explaining the need for government financial assistance. It’s clear that the American auto industries are deeply intertwined in the American and global economies. The fear of a total failure would result in catastrophic economic fallout’s.
