As part of my quarantine I've started to listen to quite a few different podcasts - it's the best way to tune out the kiddos as my "office" also is in the dinning room and my son doesn't get this concept of me being home but not playing hot wheel with him. Where was I going with this... Oh, yes, finances. I've listened to how many clubs (across Europe, especially) are struggling to make ends meet. We're not even a month into this thing and people are losing jobs, clubs are slashing wages, there seems to be a lack of money. Which begs the question: how are things THAT tight in a world where we laud this sport as a "business". The numbers for transfer fees, salaries, "club value", all point to there being ample money in this sport. However, it seems the ownerships/management has take it to an extreme in terms of spending that value. That's some awful business, honestly. I work in banking (hold off with the pitchforks, for now at least) and there are A LOT of regs that tie to each organization having enough cash reserves to make customers whole should a bank go under. One of the things that I hope comes out of this awful situation is FIFA/League mandates that clubs have a cash reserve, at all time, to be able to pay out their employees for at least a year (or some set amount of time). Otherwise, this isn't a business. Lauding it as such is so off base. A club like Barcelona can't be as massive as it is and yet not be able to sustain itself without revenues for just a few weeks. That's insane. I'm not sure how this is executed, but if the footballing/soccer world goes back to the financial setup it was in before the virus, then I'll be really sad. This is an awful event, but it's not a thing that couldn't have been managed much better.
I agree. And it’s not just them. The airlines and, seemingly, every major corporation have few reserves. There is much pressure to issue dividends to shareholders. That’s where a lot of it goes. Need a requirement that corporations maintain an emergency reserve of a certain level, and no dividends if that amount is not maintained. ps: will never fly in Congress.
Just to play devils advocate, not many investors will put money in a company where it will just sit as cash. Ive spent most of my career in financial planning and analysis for PE backed companies, these companies or so leveraged they can't afford a downturn for a few months. Not saying I agree with it, but I'd be surprised if when things start turning up again they dont go right back to trying to show off all their returns. That all being said, "experts" tell people in personal finances to have cash reserves for at least 3-6 months. Business shouldn't be different.
Funny how everyone is expected to be able to survive 3-6 months, but big businesses can routinely get bailed out for mismanaging.
Because they fund themselves on credit based on future earnings. If there are no earnings coming in, then the current costs can't be put off onto those future earnings.
why is that allowable? It's like thinking housing prices could never go lower than what they currently are...
ESPN is reporting that US Soccer (i.e. #USSF) has been approved to receive a bailout due to coronavirus. This is from an organization that had in 2017, according to SI, a cash surplus of roughly $140 million.https://t.co/7FEw1n4PPU— World Soccer Talk (@worldsoccertalk) April 20, 2020
how in the actual ******** is this possible. Are they saying they spent all those reserves? if so, where? If not, why are they approved for this?
Lots of questions indeed. I doubt they had to disclose reserves to the White House. Just had to demonstrate a financial impact related to the virus and have connections to the WH.
From my limited knowledge, many are just using it as a low interest loan whether they need it or not. From a few conversations I've had with people at my former employer (I left a while ago, not fired due to the virus thankfully), they are doing just as well or better than before but are getting a loan too. I generally try not to begrudge these companies from taking advantage of things like the tax code to their benefit. Most of us try to. But taking money meant for businesses truly in need just to make some rich people slightly richer (generally), its just slimy.
Agreed. I really don't begrudge anyone for making money or wanting to make lots and lots of money. It's just such a shame we have a system that allows for so few to have so much. It then shouldn't come as a surprise to anyone when a situation arises, such as the current COVID-19 experience and the previous meltdown a decade ago, that those truly in need are the last to be considered and to find relief. You would think that 6 trillion dollars or so wouldn't equate to 20+ million unemployed.
I do a bit once you're in the billion plus category. At that point you're beyond set for life, and your family for generations if they're not stupid. Especially at things like 10 billion plus, you're likely actively taking away from your employees just to pump up a number that really doesn't matter.
I can not agree more. Just 1 billion dollars is a staggering amount. You literally can’t count to a billion in your lifetime unless you forego stuff like eating, drinking, sleeping for like 80 years. Money makes people callous and the more money you make, or more accurately, the more money people make for you the more callous you become towards them. Jeff Bezos exhibit A. Dear Leader exhibit B.
I won’t say all billionaires are callous and uncaring. There’s a line of thought that postulates callous billionaires are by nature callous and would act so even if they were not billionaires. Certainly that’s true of Dear Leader’s behavior prior to becoming a billionaire.
Working in the finance industry, i can tell you a portion of the reason for that is how little directive was given from the government on how to actually pull this thing off. A swift movement of money was needed, without a doubt, but the actual instructions on it were beyond pathetic. As I said, though, that is not 100% the reason. There is the banking industry. It is filled with folks who act like a billionaire despite not having anywhere near that worth. Some seem to think that acting like it will suddenly make it true. And I don't mean that in a "they spend so much money" kind of way. I mean these folks act without any regard except for the amount of money being made. It is why there was, without surprise, a lawsuit brought up within moments of the whole thing being launched. Banks were told to take applications as they came, but were financially rewarded to pick and choose larger ones. With a limited pool of money to pull from, banks were fretting to pull the most profitable loans. Further, the due diligence side of things was discouraged as the public outcry would be "how dare they not approve me for this limited pool of money!" Which, to me, means there is certainly going to be a problem down the line of one or many banks being frauded by some of the worst people out there. Imagine the headlines of "Bank XYZ Found to have Given PPP Funds to Finance Terrorism". On a personal level, I know youth soccer clubs in the area have asked many of their coaches (who are contract workers) to apply for the PPP. Some of those folks truly rely on that income to make ends meet. Others do not. The latter category has a number of people that are still applying for the PPP. With a limited set of funds, should those folks be approved and someone in the former category not, they are actively stealing money that others need, at the basic level. At a bigger picture level, they're abusing the government's generosity which doesn't simply come for free. These trillions of dollars don't just fix themselves, even with "quantitative easing".
Working in the finance industry, i can tell you a portion of the reason for that is how little directive was given from the government on how to actually pull this thing off. A swift movement of money was needed, without a doubt, but the actual instructions on it were beyond pathetic. As I said, though, that is not 100% the reason. There is the banking industry. It is filled with folks who act like a billionaire despite not having anywhere near that worth. Some seem to think that acting like it will suddenly make it true. And I don't mean that in a "they spend so much money" kind of way. I mean these folks act without any regard except for the amount of money being made. It is why there was, without surprise, a lawsuit brought up within moments of the whole thing being launched. Banks were told to take applications as they came, but were financially rewarded to pick and choose larger ones. With a limited pool of money to pull from, banks were fretting to pull the most profitable loans. Further, the due diligence side of things was discouraged as the public outcry would be "how dare they not approve me for this limited pool of money!" Which, to me, means there is certainly going to be a problem down the line of one or many banks being frauded by some of the worst people out there. Imagine the headlines of "Bank XYZ Found to have Given PPP Funds to Finance Terrorism". On a personal level, I know youth soccer clubs in the area have asked many of their coaches (who are contract workers) to apply for the PPP. Some of those folks truly rely on that income to make ends meet. Others do not. The latter category has a number of people that are still applying for the PPP. With a limited set of funds, should those folks be approved and someone in the former category not, they are actively stealing money that others need, at the basic level. At a bigger picture level, they're abusing the government's generosity which doesn't simply come for free. These trillions of dollars don't just fix themselves, even with "quantitative easing".
It's an interesting discussion because perhaps it's more about how people are or are not changed depending upon their financial circumstances. Studies seem to show that the optimal range for happiness, depending upon where you live, can range from about $70,000- $105,000 annually. https://www.inc.com/eric-mack/the-e...o-make-a-person-happy-just-got-an-update.html I have witnessed what people do when they start to make money and how they choose to treat those that actually do the work that helps to make them successful. More often then not the wealth created is not shared equitably. I am not suggesting that everyone should make the same or that if you own a company you shouldn't make more than those that work for you. What I am saying is that when people start to make money the vast majority begin to think they did it all by themselves and that those that do the actual work for them are less deserving and expendable. Sadly. I think that Jeff Bezo's is callous. He may not have been when he started Amazon but his actions and how his company continues to treat its workers says differently. Money changes people. Most people anyway. Maybe lottery winning money doesn't change people, but wealth made by people like Bezo's certainly does have an effect. We just spent 5 trillion dollars to help who? 5 trillion dollars given away to companies and corporations that are worth hundreds of millions and tens of billions and yet we end up with 20 million workers unemployed. Rather than just giving corporations money with virtually no strings attached perhaps making sure that workers stayed employed and off unemployment might have been a good idea. But we do get $600 extra for unemployment for a couple months and states are doing their darndest to eliminate that benefit as soon as possible by calling people back to work so they can be denied unemployment. The government is also working to shield employers from liability for not protecting workers from the virus. Because we're expendable. If you are a corporation and you face challenges you get bailed out almost immediately by tax payers. If you are a tax payer and lose your job because of utter incompetence and mismanagement that you had no control over that should/could have at least been mitigated by thoughtful preparation and planning you get boot straps. Socialism for the rich, capitalism for the rest of us. Not a single lesson learned.
While there are some clearly divisive issues separating the 2 parties in Congress, almost all members are united in the effort to make the rich richer. The Republicans are more public about it. The Democrats tend to be less public. I’m convinced the House could have negotiated more direction and conditions for distributions of the Stimuli, and for more rigorous accounting of those distributions...but they didn’t. And they purposefully didn’t.
If all companies must have a cash reserve, then people will still make the rational choice of which companies will do better than others, over and above the cash reserve.
MLS proposes 20% across the board pay cut to PA. Plus other financial concessions. This differs from the original talking points which protected those making $100,000 or less and no player to make less. https://www.espn.com/soccer/major-l...roposes-20-percent-pay-to-players-association
My question is: if every MLS team is based in Orlando does that mean no team will qualify for the playoffs? https://www.si.com/soccer/2020/05/1...ne-players-orlando-disney-world-resume-season
Following up on Pablo's follow up: Sources tell me that Inter Miami declined their PPP funds and that the Seattle Sounders accepted their PPP money.Original story: https://t.co/jwSLyWXvPY https://t.co/wvexnLuXhY— Sam Stejskal (@samstejskal) May 19, 2020
.@samstejskal & I have been following up with the 5 #MLS teams who had until today to decide whether to take federal Paycheck Protection Program funds. The Philadelphia Union, D.C. United & Orlando City have all declined to say whether they did or didn't. Time to file some FOIAs! https://t.co/MF4PF2PCzl— Pablo Iglesias Maurer (@MLSist) May 18, 2020