September 20, 2014

Enough, Roger!

Guest Blogger, Bruce Braun writes:

I’ve been a fan of the NFL since childhood, but no longer. It is not because the 49er’s charge $117 a pop for one ticket and parking can easily be $50. Violence on the field is one thing, but that is where it should stop. Ray Rice has become a metaphor for the daily violence we see in our country. Tolerance has effectively become tacit license by the NFL management and owners for players to commit crimes off the field. Sit out a few games, pay a fine? No big deal when you are being paid $10M a year. “I was drunk, lost my head, but I now see the error of my transgressions and promise to not do it again.” Bullshit!

Enough is enough.

In every other profession, new hires are subject to reference checks, applications inquire if the applicant has ever been arrested or convicted of felonies, etc. Why not the NFL?

If Roger and the owners were really concerned about players being arrested, charged or convicted, consideration ought to be given to a more comprehensive screening of players before hiring them. Cops have to pass psychological and criminal background checks, government security clearances draw similar scrutiny.

I submit the following for just the last 12 months that should prove sufficient for more screening than just playing ability. My source is http://www.utsandiego.com/nfl/arrests-database/.

Ray McDonald, defensive tackle, San Francisco 49ers. Arrested Aug. 31 on suspicion of felony domestic violence in San Jose, Calif.

Greg Hardy, defensive end, Carolina Panthers. Arrested May 13 on two misdemeanor charges after he allegedly assaulted and threatened his ex-girlfriend.

Ray Rice, running back, Baltimore Ravens. Arrested and charged Feb. 15 after striking his then-fiancee, Janay Palmer, in an Atlantic City casino elevator.

A.J. Jefferson, cornerback, Minnesota Vikings. Arrested and charged Nov. 25, 2013 with one felony count of domestic violence following a fight with his girlfriend.

Daryl Washington, linebacker, Arizona Cardinals. Arrested May 3, 2013 for assault after an argument with his ex-girlfriend in her Phoenix apartment.

Amari Spievey, safety, Detroit Lions. Arrested March 26, 2013 for third-degree assault, risk of injury to a child, disorderly conduct after a child-support argument in Middleton, Conn., his hometown.

Michael Boley, linebacker, New York Giants. Arrested Feb. 8, 2013 on child abuse charges in Etowah County, Ala., three days after being cut by the team.

Leroy Hill, linebacker, Seattle Seahawks. Arrested Jan. 29, 2013 on two felony counts of domestic violence after an incident with his girlfriend in his Issaquah home.

Chris Rainey, running back, Pittsburgh Steelers. Arrested Jan. 10, 2013 and charged with misdemeanor simple battery after an altercation with his girlfriend in Gainesville, Fla.

Robert Sands, defensive back, Cincinnati Bengals. Arrested Jan. 4, 2013 and charged with fourth-degree assault after an altercation with his wife in their Florence, Ky home.

Bryan Thomas, linebacker, New York Jets. Arrested Oct. 31, 2012 and charged with aggravated assault of his wife and drug charges in Randolph, N.J.

And recently, we read Minnesota Vikings running back Adrian Peterson beat his 4-year-old son with a tree branch as a form of punishment this summer, an incident that allegedly resulted in multiple injuries to the child. According to reports, Peterson has been indicted in Montgomery County, Texas for injury to a child.

What about former New England Patriot, Arron Hernandez who is currently being held without bail following his indictment on three murder charges?

Would Michael Vick be playing in the NFL today if TMZ had broadcast video of his tossing cash bets as dogs tore each other apart?

I can’t fathom any corporation with an employee arrest record like the NFL. How many companies would continue to employ persons exhibiting behaviors such as those above? Only a zero-tolerance policy on assaults, battery, drugs, drunk driving, weapons charges, and domestic violence will ever send the proper message to players. Game suspensions and fines don’t cut it.

We should keep in mind the League enjoys an anti-trust exemption that enables individual teams to not compete for TV revenues with other teams, that it has benfitted hugely by taxpayer bonds to fund stadiums and their improvements, that it is the beneficiary of numerous federal state and city taxes and that it has misrepresented the seriousness of brain concussions for years until very recently, like this week.

Football has become a game in which millions live out their fantasies of “killing the opposition”, has become too powerful and too violent and is becoming a metaphor for American ignorance and aggression.

What say you Roger, other than using terms like ambiguous?

Gannett Spin-Off Makes the Score Wall Street, 4 – Public Service, 0

On Tuesday, August 5, Gannett announced it was spinning off its publishing business, consisting of USA Today, 81 daily newspapers and the British news company Newsquest. The new spinoff newspaper company will keep the Gannett name.

The company that will own Gannett’s television stations and digital assets doesn’t have a name yet, but will consist of 46 stations, including the Belo stations, which Gannett purchased last year for $1.5 billion. The new broadcasting company will be the largest group of TV stations in the top 25 markets.

Gannett’s response seemed like a knee-jerk reaction to the Tribune Company and E.W. Scripps Company doing the same thing – spinning off its newspapers and keeping its TV stations in a separate company.

And several weeks before these two spinoffs, Time Warner spun off its huge magazine businesses, including Time, People, Fortune and Sports Illustrated, into a stand-alone print business and kept its content-creation and distribution businesses, Warner Bros., HBO and Turner Cable channels.

All of these spinoffs were justified based on maximizing shareholder value. TV stations and cable channels rake in gobs of money and are highly profitable. Newspapers and magazines are slowly bleeding to death as readers move from paper to mobile screens and as advertisers inevitably follow this audience diaspora (and pay less for the corresponding mobile ads).

But when the notion of “maximizing shareholder value” is bandied about, we have to ask who are the shareholders that are demanding more “value,” which really means a higher stock price. Today’s shareholders are not individuals, but are huge institutional investors, such as pension funds, mutual funds and hedge funds that all demand outsized returns. They have a Wall-Street-Gordon-Gekko-greed-is-good mentality.

In the good old days (ahh, nostalgia) most newspaper and many magazine owners thought of their publications as delivering useful, important news and information to serve the public good, convenience and necessity, and were typically guided by the tenants of responsible journalism as well as, and often before, profits.

What seems to have happened in the four recent spinoffs is that the media companies involved have spun off anything that smacks of public service.  Separate the profits from the journalism – keep the state, throw away the church.

Wall Street, 4 – Public Service, 0.

But wait. There is hope. One counter trend to the Wall-Street-greed-is-good approach is reflected in Jeff Bezos buying the Washington Post, and there are indications that the WAPO is scurrying to catch up digitally and continue to serve a more mobile public. And BuzzFeed and The Huffington Post have hired responsible investigative journalists and are publishing responsible, in-depth journalistic reports to intersperse with their click-bait content.

Another counter trend is the rise of B corporations, as reported by James Surowiecki in the August 4, issue of The New Yorker. The B in B corporations stands for benefits, and the firms are for-profit companies that “pledge to achieve social goals as well as business ones.” (I’d link to the The New Yorker article, but you can’t get in unless you subscribe, so I don’t bother.)

Warby Parker, Patagonia, Etsy, and Seventh Generation are examples of B corporations, of which there are currently over 1,000, and are allowed by law in 27 states.

Surowiecki writes:

The rise of B corporations is a reminder that the idea that corporations should be only lean, mean, profit-maximizing machines isn’t dictated by the inherent nature of capitalism, let alone human nature. As individuals, we try to make our work not just profitable but also meaningful. It may be time for more companies to do the same.

I would add one word to the last sentence: “It may be time for more media companies to do the same.”

But what are the odds that the old-line media moguls such as Murdock, Redstone, Moonves, Roberts, Bewkes, or Iger will get a sudden public service urge or that the Wall Street owners of their companies’ stock will allow them to achieve social goals as well as business ones.

Don’t hold your breath.

“Programmatic Buying Killed Us”

NEW YORK – July 5, 2020. “Programmatic buying killed us,” said CEO Jill Jack in an interview the week after she closed down National Spot Sales Representative, Inc. (NSSR), the last remaining independent television and radio national sales representative company.

ABC, CBS, FOX and NBC’s TV station representative divisions and Clear Channel’s Katz Media Group all shut down their operations a year earlier, leaving NSSR struggling with only 5% of all TV and radio inventory sold on a direct, guaranteed basis.

“With so little inventory sold non-programmatically, we couldn’t survive,” Jack said. “There weren’t any buyers left because all the agencies used their own or independent trading desks, so we had to call direct on small- and medium-sized businesses that typically made us call on their Purchasing Departments.”

“Selling used to be fun – calling on buyers, taking them to lunch, plying them with drinks, sneakers, jeans and all sorts of swag.  Purchasing Departments don’t take swag. All they want is Big Data and insights. What do my salespeople know about that? It’s no fun,” Jack said wistfully.

I asked Ms. Jack if there was any single event or watershed moment that might have foreshadowed the end of direct media selling. “Sure,” she said, “On June 4, 2014, Ad Age reported that the world’s largest advertiser, Procter & Gamble announced that 70-75% of its digital media wold be bought programmatically. I remember Ad Age’s sub-head on the story: ‘Other Marketers Likely to Follow P&G’s Example.’

“It was like the bottom fell out of direct selling. Up to that point, most digital ad dollars went for direct marketing, not for branding. P&G’s decision opened the floodgates for digital branding dollars. Everybody followed P&G like lemmings, as they always do.”

I asked if agencies weren’t reluctant to fire all of their media buyers. “Hell no,” Jack replied, “they couldn’t wait to automate the digital buying process and turn over buying to software at their trading desks. Media departments are cost centers; trading desks are profit centers. Automating their media buying process saved the agency’s bacon. Made them profitable again.”

I asked Ms. Jack what happened in the upfront market. “The upfront market went programmatic in 2017,” she said. “The big advertisers and their agencies still made deals under the table to allocate prime time and sports inventory and to shut out smaller brands, but the final buying was done on an automated basis. Actually, it was handled by Google.”

I asked if Google still handled the automated buying process even after it bought CBS in 2016. “Yes,” Jack said, “but killing salespeople wasn’t Google’s fault.  Google has added a lot of salespeople, who they, like Facebook, call evangelists. Google didn’t kill media salespeople, P&G did. They never liked us calling on them anyway.”

USA World Cup Team Survives, Aereo Doesn’t

On Thursday, June 26, the USA men’s football team moved on to the knock-out round of 16 in the World Cup, but the day before, startup Aereo lost its battle for survival in the Supreme Court.

What does USA FIFA football team advancing have to do with Aereo losing? ESPN and sports on television.

The Supreme Court case was titled American Broadcasting, Co. (ABC) vs. Aereo. ABC and ESPN are owned by the Walt Disney Co., which was joined in the case by CBS, NBC Universal (owned by cable TV giant Comcast), FOX and all the large cable TV companies and cable networks. The broadcast networks and their owned TV stations all claimed that it wasn’t fair for Aereo to retransmit their programming without paying them.

The details of copyright law are too complicated for me to fathom, so I can’t comment on that aspect of the case. Many bloggers and other news sources commented intelligently by focusing on the legal issues in the case, as Jerry Markon, Robert Barnes and Cecilia Kang did in the Washington Post. Some, like Farhad Manjoo in the NY Times Bits blog, commented on the technology issues involved, especially the implications that the Court’s decision might have on cloud storage companies.

But I think it’s interesting to see how the Supreme Court members divided in the 6-3 split. The Court’s three most conservative members (Alito, Scalia and Thomas) were on the dissenting team. Did they not understand the technology involved or interpret the copyright laws differently than the majority (Breyer, Ginsburg, Kagan, Kennedy, Roberts and Sotomayor)?

Could it be the conservatives were voting in favor of a free-market solution and the majority was voting for a more liberal-oriented regulatory solution? Or could it be that the conservatives were sick and tired of their cable TV bills ballooning and wanted to cut the cord, or maybe they just weren’t interested in World Cup football? Free, over-the-air NFL, yes; cable-and-ESPN-delivered FIFA, no.

Or could it be that the conservative trio were looking ahead to 2018, when Fox and Telemundo will be carrying the World Cup, for which they paid $1.2 billion for the two-year package, outbidding ESPN and Univision, which paid $425 for the current FIFA package. Maybe they thought it was a fair, free-market solution for Aereo or other retransmission delivery systems not to pay anything to sports rights holders such as ESPN and FOX.

If you were a Supreme Court justice and liked the World Cup, loved ESPN and other cable network programming (MTV, CNN, MSNBC, FOX News, CNBC, Bloomberg News, etc.) and couldn’t bear the thought of cutting the cord, you would vote in favor of the broadcasters and cable networks and believe it was not fair for Aereo to pay nothing to broadcast networks for programming, especially not to pay for expensive sports programming.

The majority might have seen the chaos that would have ensued if they voted for Aereo. FOX and Telemundo would more than likely demand that FIFA re-negotiate the $1.2 billion deal. FOX, CBS, NBC and ESPN would more than likely demand that the NFL re-negotiate the multi-billion rights deals.  FOX and ESPN would want to re-do their deals with Major League Baseball. All too much to contemplate — too much money involved.

Thus, the decision against Aereo was the easiest way out – give the money to the broadcast and cable networks, the TV stations and the sports leagues, not to upstart Aereo and its backer, Barry Diller. The decision also put off the eventual demise of broadcast and cable TV a little longer, just like the USA World Cup football team’s advancement put off its eventual defeat a little longer.

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Please go to Forbes.com to read the full post.

Media Curmudgeon Moves to Forbes.com

My Media Curmudgeon blog will be published initially on Forbes.com.  So I would love it if all of my loyal followers would go to Forbes.com and follow my blog posts there.

I was honored to be asked to blog on Forbes.com, which ranks fourth among Web business sites, with 34.5 million unique visitors a month, ahead of the Wall Street Journal with 32 million uniques.

Please follow the new media curmudgeon on Forbes.com.

Turkish Delight – A Confection, Not a Strategy

My wife and I returned to New York in July from a three-week trip to Jordan and Turkey.

So much about the trip was memorable: Petra, Istanbul, the boat traffic on the Bosphorus, a sunrise balloon ride in Cappadocia, dondurma (Turkish ice cream), and, of course, Turkish Delight – a chewy confection.

But because I’m a media salesaholic (and it is an addiction), I paid particular attention to the way people tried to sell me stuff, especially in Istanbul.

Turkey has between 30 and 32 million tourists a year, most of whom wind up in Istanbul and most of whom are buyers of stuff – rugs, trinkets, clothes, or meals. With 32 million potential buyers wandering around, you’d expect a lot of sellers.

And a lot of sellers there are, and their focus is entirely on meeting their own needs – parting you from your money. It’s me-first selling. The concept of delighting customers by anticipating their every want and need hasn’t yet migrated to Turkey or the Middle East. In America, we even have apps, such as Google Now, that delight customers by anticipating their wants and needs.

Apple for a while became the most valuable company in the world by delighting customers with gorgeous design and gee-whiz functionality. Amazon became the biggest online retailer in the world by delighting customers with relevant recommendations and ease of use.

The strategy of many leading-edge corporations has shifted from maximizing shareholder value, which management icon Jack Welsh called the “dumbest idea in the world,” (See Steve Denning’s column on Forbes.com) to delighting customers first, then worrying about profits.

Selling, too, has been transformed in this era in which the knowledgeable customer is in charge. Such books as Daniel Pink’s To Sell Is Human: The Surprising Truth About Moving Others and Lisa Earle McLeod’s Selling With Noble Purpose: Drive Revenue and Do Work That Makes You Proud emphasize that selling is serving others, helping others get what they want.

Turkish Delight may be a delicious confection, but it isn’t a sales strategy in Turkey or in too many U.S. media sales organizations, especially TV networks when they sell in the upfront market. Gouging buyers and allocating inventory based on increasing share of budgets is a greedy, me-first, street-hawker strategy that’s guaranteed not only not to delight customers but also to drive them to programmatic buying, which will eliminate me-first salespeople.

Media sales organizations had better start thinking about delighting customers not as a nice add on – a confection – but as a strategy.

Beancounters, Not Creatives, Now Run Don Draper’s Ad Business

Don Draper must be spinning in his grave, or he would be if he had read Business Insider’s May 13 post by Jim Edwards titled “The 37 Richest People in Advertising, Ranked By Income.”

Of the 37 people on the list, only one was on the creative side of the advertising agency business. The rest were white male finance, legal, and management types – suits – with one exception: Mercedes Erra, board member of Havas and founder of BETC Euro RSCG, was the only woman on the list. She was #17 at $2.2 million.

The list was dominated by CEOs (11 of the 37) and CFOs, treasurers, chief accounting officers, and controllers – beancounters (ten of the 37) – and the list had only one Don-Draper-type chief creative officer, Jacques Séguéla, of Havas. He was #28 at $1.2 million.

If there were any agency conglomerate sDon Draper would want to work for, it wouldn’t be, WPP, Publicis, or Omnicom, because the big three in terms of total billing were tied for sixth in terms of the number of executives on the list of the 37 richest people in advertising. Draper would have wanted to be employed by little old conglomerate Havas; it had 11 of the 37 (27%).

In Don Draper’s Sterling Cooper Draper Pryce (SCDP) the creative people are the stars, as they were in real-life Madison Avenue of 1970: Bill Bernbach, David Ogilvy, Rosser Reeves, Leo Burnett, and George Lois were all creative superstars who founded (or co-founded), ran, and skyrocketed their agencies to fame, glory, and riches.

However, in the 1980s and 90s, the agency business founders got a little greedy and their agencies started to go public in order for them to get big paydays. Then, large agency holding companies, mostly from Britain and Europe, started gobbling up the stock or just outright bought most of the creative-driven agencies. Finance types like Martin Sorrell and the Saatchi brothers took over and started making decisions based on making money, not on making great advertising.

The beancounters began controlling the ad agency business and started price wars — cutting commissions to earn business – and this trend plus cost-conscious advertisers led by procurement-officer mentalities have driven profits steadily downhill ever since. Instead of delighting customers with great ads, agencies began to delight top executives and board members with big bonuses. The agency business began taking on the greed, ethics, and inequitable compensation of Wall Street and left behind the creativity focus of Draper’s Madison Avenue.

So, instead of paying creative people to make great ads, WPP pays its CEO, Martin Sorrell, $27 million a year, its Finance Director, Paul Richardson, $12.4 million, and its CEO of WPP Digital, Mark Read, $3.4 million – the only three WPP execs on the list of 37. WPP pays Sorrell so much it’s no wonder it can’t afford to pay creative people a lot, and that really would set Draper off on another rage-filled binge.