THAT WAS QUICK

Source – AAF to immediately suspend operations (ESPN)

Although not official, many sports news agencies are reporting that the AAF will suspend operations and move towards folding short of completing their inaugural season. The spring football league some hoped would serve as a talent farm for the NFL, where the fringe players could harness their skills. Unfortunately, the league is struggling financially.

Football is king in the American sports world, but it needs to fit into a convenient block of the calendar year. After the Super Bowl, sports fans continue to watch potential free agent news while shifting to other sports. One has to question whether competing with the NCAA tournament was the best approach. Combine the interest in the NBA playoff run and Opening Day in MLB, there might not be a convenient window for another football league.

Given the potential quick hook for the AAF, one must question whether resurrecting the XFL makes any sense. The financial situation for the XFL is much different.

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TO PASS A DRUG TEST

Legalized Marijuana Gives Hiring Managers a Headache – The Wall Street Journal.

If hiring managers struggle to fill positions, they might need to reconsider their candidate pools. There are plenty of people who do not partake in marijuana, legal or illegal. In certain, the impact of influence while on the job could be catastrophic, like the building incident in Philadelphia not that long ago. Recreational use may be legal but companies need to consider whether use is an acceptable risk.

SEARS CUSTOMERS

How Sears Lost the American Shopper – The Wall Street Journal.

The above article is a great read on how an iconic American company lost it’s way.

Sears made many mistakes along the way. The lack of concern about the rise of Walmart, Best Buy, and Home Depot. The merger with a bankrupt KMart. The clear lack of concern for store maintenance and appearance. The biggest one was not really knowing its customers and prospective customers.

From the above article,Sears did a lot of things first that are now staples of retail. But, their customer base was not one that sought those conveniences. A clear lack of connection was Sears believing its customers would drive 25 miles to purchase an appliance if they had any other option.

Like many mature companies, Sears leadership valued returns more so than customer growth. Profitability in the near term placed greater importance than profitability in the long term. Sears needed to connect with new audiences to augment its base.

Sears was a great retailer that stood by its products. Sears was a fixture in the homes of many generations. The shame is many future generations may not experience the unique experience of shopping at a Sears.

INDUSTRY STANDARDS

The Problem for Small-Town Banks: People Want High-Tech Services

Small and medium businesses, especially new operations, have the challenge of matching service standards in competing for customers against industry leaders. Industry leaders benefit from brand awareness of not only their name, but their product lines. New players must generate both.

In many industries, there are minimal performance expectations that producers must meet to qualify as a viable option for consumers. In the above article, community banks struggle to meet the convenience standards big banks established in the minds of consumers. Online banking capabilities makes people less likely to go into a branch.

Community banks need to find strategies to provide similar convenience if they want to avoid bank runs.

TRASH TO POWER

SYNOVA Garbage In, Energy Out: Synova Power Turns Waste Into Electricity (Entrepreneur)

Free enterprise will always be the sources of our nation’s best ideas. In the above link, Synova might have found a direct solution to utilizing garbage for the creation of power, which would reduce landfill utilization and ocean pollution. While some on the far left of center want to create green armies, Synova uses innovation and entrepreneurship to identify rational solutions.

GE BIOTECH DIVISION TO DANAHER

GE to Sell Its Biotech Business to Danaher for $21 Billion – The Wall Street Journal.

GE attains some needed cash flow help as it prepares to spin off health care. One division, biotech, will not be part of the new company, but will find a new home in Danaher.

CEO Larry Culp Hope’s to restructure the iconic conglomerate in order to provide better returns and improve retained earnings.

AMAZON CHANGE OF HEART

Amazon Reconsidering Plan to Put Campus in New York City Amazon Reconsidering Plan to Put Campus in New York City – The Wall Street Journal

On principle, government should focus on creating environments attractive to all businesses, not crafting sweetheart deals to lure select entities. Governments should not pick winners or losers, but provide a fair and equal shot at success or failure. In the case of Amazon, New York City and the State of New York gave a significant incentive package that has some lawmakers raising questions.

In response, Amazon is rethinking its commitment to bring $2.5 billion worth of investments and jobs to Long Island City in Queens. Essentially, it may walk away from the reported $3 billion in incentives to choose another site with less local uproar. There were many other places where Amazon probably could receive a good incentives package while making an impact on the local community. But, Amazon went with a pretty strong sweetheart deal. If reports are correct, pay $2.5 billion for $3 billion of government incentives, not including revenues, is not a bad deal.

Amazon is not the first private sector entity to make local government’s bid on attaining their business. The practice is common for sports teams and other corporations seeking incentives to move significant lines of business to new cities. Many sports teams request financing deals from state and local governments, threatening relocation. The economics of these financing projects are highly questionable at best. Some instances are worth it. Sometimes not.

Understandably, city governments and local politicians want the jobs and the tax revenues. The publicity today can propel political careers for years to come, while local taxpayers deal with the financial ramifications. In the case of Amazon, one can reasonably assume much of the required infrastructure upgrades will run over-budget and create great burden to the already congested area. Over a ten year period, will the economic boom be felt only by Amazon or by the taxpayers as well? We will have to wait and see.

FACEBOOK

Facebook’s Timeline: 15 Years In – The Wall Street Journal.

Mark Zuckerberg did not invent social media when he founded Facebook, but he certainly changed its trajectory. During its inception, MySpace was the king of the social media hill. Ever since, Facebook now sits atop the social media world and MySpace is no longer a relevant name in the market.

As Facebook alludes to in their marketing campaigns, the social media brought the world closer together. The ability to maintain connections with friends, acquaintances, or relatives improved. Geographic distance or varying time zones no longer served as barriers to remain up to date with those in one’s inner circle. Facebook allowed people to grow their network and identify the six degrees of separation between them and others they come across. Facebook allowed people to communicate more efficiently with a single message instantly reaching multitudes of people.

Facebook not only changes our individual behaviors, but it also sparked changes in how companies market products and engage with consumer markets. User behaviors provide great insight on how brands can construct product offerings and marketing campaigns. Instead of costly television adds, many brands are able to connect with core members of their target markets with social media campaigns. Facebook also greatly impacts our social conscience and political system, as it is a common place for people to display political views or voice opinions. 

Like anything that becomes globally popular, there will be some downsides brought to light by inappropriate uses of the product or service. Some people with low moral standards utilize the anonymity of social media to harass, stalk, or bully others. Others used social media to circulate purposefully untruthful content to mislead the public. People evolve over time to understand the need for balance with social media, weighing the level of engagement and separation as well as how to evaluate circulated material.

As it celebrates its 15 years in existence, Facebook should be celebrated for its overall positive impact on society. Whether one simply scrolls to kill time, posts messages to friends and family, or peruses for various products or content, Facebook will continue to serve its over 2.2 billion daily users.

FREE MARKETS AND SPORTS

The broken winter: Why baseball must fix free agency ASAP(ESPN)

The anxiety for the fans waiting for free agent decisions is understandably high. But that does not mean market economics failed.

As mentioned in the article, baseball executives are learning from past spending mistakes. Utilizing data and information to make the best informed decision possible. To decide whether to bid or pass on assets. Doing so requires change in offer structures and more time for both sides to analyze contract value.

Market economics at its core reflect the true price a buyer is willing to pay for a product or service and the price the seller is willing to accept. Market economics at its best occurs when both buyer and seller are highly informed about the total value and impact of transactions. Baseball executives are now becoming more informed buyers and more efficient spenders.

Most unionized structures are the exact opposite of free markets. Many deny the individual of the opportunity to maximize value attainment. What is perceptually good for the gander may harm individual geese.

Baseball fans need to be patient. Teams are being more analytical in decision making and players are demonstrating greater patience to maximize value. Monster contracts of the past harmed both teams operation and the reputation of players not living up to fan expectations. Now, the market is correcting itself.