Archive for the Category Uncategorized
It’s hard to think back to 2008, back before the Seattle Sounders officially existed in anything more than everyone’s imagination.
The Sounders were to become the 16th team in a league with a couple of marquee names in David Beckham and Landon Donovan. LA, DC and Toronto were the only teams to draw more than 18k fans a game.
So when the Sounders announced that Xbox was going to commit $20 Million bucks to the team and the league, it really seemed like – and was – a large sum of money to risk.
But now as we look at the end of the 3rd year of the deal, it’s the Sounders who can’t wait for the contract to expire. Unfortunately for them, they still have 2 more years of the deal. When you look back, the Xbox media team made a heck of a deal.
At $20 Million over 5 years, you are looking at a deal that is only $4 million a year. For that 4 million Xbox got rights to the front of the jerseys, signage in all MLS stadiums, naming rights to Xbox Pitch at Qwest (then Century Link) Field, and TV spots on all broadcasts.
Let’s look at some of the other deals in the MLS (sourced from The Brotherly Game):
So if we assume the national value to the Sounders sponsor is roughly the same as the value any other team’s sponsor receives, the delta is in the value at home. So lets say maybe 1/2 – 2/3 the value is in national exposure, and 1/3 – 1/2 is in local. If that’s the case, then the national value is about $2 million for each team.
So in those terms, the local value of DC United’s sponsorship would be about $1 Million per year. For Salt Lake, it’s $3 Million per year. Now the 38,500 fans per game in Seattle just about doubles everyone but the #2 LA Galaxy at 23,000 per game. So if the Sounders drive 2x more fans than Salt Lake, and 2x the TV impressions, you’d have to estimate the local value is at least $6 Million per year (2x Salt Lake).
There are probably more scientific ways to figure this out, but we don’t have access to impression volumes, jersey sales and hard stats. And we haven’t included the premium that Xbox pays for being the local guys recruiting employees, and the international value of having the team play across Central America and Mexico, or the fact that they’ve gotten a smoking deal the last 3 years.
So let’s ballpark a number of $9 Million per year to start the new deal in 2014. ($2 Million National Value, $6 Million Local value, $1 Million Premium.) How does that look?
There’s no question that we are in some ridiculously bad economic times. And when you look at the system as a whole, the problem certainly seems unfixable. Now there is a lot of rhetoric on each side of the political aisle but here are the few humble thoughts from a small business owner.
1) There are actually jobs out there – This may seem like an inflammatory comment to my unemployed readers. But when we spun off our new company, Relaborate, a little while ago, one of the first things we needed was a developer to help us flesh out the prototype. And let me tell you – that developer was really hard to find. You may not want to code. But if you want a job, learn to code. You won’t be the best coder in the world but the economy needs more coders.
2) The Unemployment system is horrendous – I’d like to hire more people to full-time, full benefit roles. However, our clients aren’t always signing 12 month deals. So often that means contract/project work. And too many times, I hear the following positively ridiculous statement: “How long is the gig? I’m not sure I can do any work or get paid for doing project work, because it will mess up my unemployment benefits.” That’s insane. The entitlement system provides incentive to not do part time projects, which could lead to a full time role. The system actually discourages productivity. Sure, someone could argue that I should just give the person a full-time job. But that’s not always an option. If I have a specific time-bounded project that I need someone with a specialized skill set to help me with, I’d like to pay a fair market wage to someone to help me with it. The system shouldn’t be stopping that person from being able to say yes. Someone should be able to fix this.
3) The labor “Supply and Demand” Curve is out of whack – This goes back to the point about developers. The Universities need to do a better job of controlling how many degrees are given out in each field of study. If the country only has jobs for 10,000 Art History majors, the Universities shouldn’t pump out 20,000 new Art History majors a year, paying $40k a year in college tuition. I know it would take a little foresight and research to make these projections, but I kind of assume the Universities should have the collective intellect to pull this off.
4) It takes a little effort - A friend of mine recently offered to help someone with some connections. The job seeker sent a Facebook Wall post asking for those connections. No resume, no personal email, no phone call…just a Facebook Wall post. The entitlement generation needs to figure out a few things about professional behavior.
Now the point of this post is not to be a rant. It’s actually optimistic. Every day I work with people who are hungry to work more. I see entrepreneurs trying to build companies that will enable them to hire people. I see people who are under-employed wanting to work. But I call upon the high schools and universities to push students towards careers where there is demand, I urge the politicians to fix the arcane unemployment rules that make it hard for people to take short-term project work, and I strongly encourage the under-employed to think about what kind of roles people are desperate to hire. I want to be Commissioner of Baseball. But there’s already a line of people more qualified than me for that role, so I’ll have to keep doing these Marketing jobs. It’s just the way it is.
In a lot of ways, we are all our own small businesses, and we are all selling a set of services to someone. We all need to have something that people are willing to pay for.
Clever. Way to take a potential negative, and use it to your advantage.
Sure, I know we all equate July 4th with a nice 3 day weekend in the middle of the summer. But I want to take 2 minutes to reflect on exactly what we are celebrating. Now, I don’t know what really happened 200-300 years ago, but I’ll try to remember what my history teachers told me.
Sometime in the 1600′s, we were all living in England. And then some of our friends and neighbors decided they had had enough of religious oppression. So they hopped on boats like the Mayflower and headed to the new “colonies” in America.
Eventually, enough of us moved over here that we developed some sort of free market up and down the Eastern seaboard. And we must have been doing pretty well developing new products, exporting new crops and creating a nice sustainable economy that didn’t require subsidies or loans. Because the guys back in England said, “You guys are really showing success. We need to raise taxes on you so we can spread that money around over here.”
Eventually, we got tired of a bunch of professional politicians and lifelong royalty-types telling us what to do. We were sick of a government that reached out too far, who taxed us too much, and who got involved with things they had no expertise or knowledge about, passing arcane laws that made no sense.
So, as one big group we denounced our relationship with the oppressors. We announced independence, and developed a loose government in which the colonies – now called states – would govern themselves. The national government would pretty much be in charge of monitoring interstate commerce and running a national defense made up of all the state militias. But at the core of the idea, was that we would govern ourselves in a manageable, state by state way. We’d be responsible for our own welfare, and only rely on the federal government to arbitrate disputes and manage a defense – where if you attacked one of us, you attacked all of us.
Obviously times have changed and we’re in a more complex world now. But every Independence Day, I like to reflect back and remember what our whole country was based on. I wonder how many ways we’ve deviated from the original plan, and whether that’s a good or bad thing.
Ok, it’s been a while since I ranted a little on here. And truthfully, there’s a calmer gentler me who decided this is not a forum for ranting.
So instead, let me tell you a story.
Once upon a time, there was this guy, who was a partner in a small business. Now, business is good, so the partners decide that they should start a health care plan for the team. They do everything by the book, use a consultant to help them, and settle on a program administered by Group Health. Now Group Health has to be reputable, because they sure do a lot of advertising that says they are.
Now when one of these team members was under their own insurance, they were diagnosed with an issue that would need some special testing that would require a small procedure. All of this previous work was done under the watchful eye of another insurance company and accredited physicians.
This is where the fun begins. Here’s a paraphrased transcript between Group Health and the patient.
Patient: Hi Group Health Insurance. I got a weird call from the surgeon’s office. Even though I was referred by a doctor, they said you aren’t sure you will cover it.
GH: Well was the referring physician In Network or Out of Network?
P: Well I don’t know. They were covered by my old insurance company.
GH: (Exasperated sigh) Well let’s see. Well that physician is out of OUR network, so if you go to the surgeon, it counts as a self-referral.
P: How could it be a self-referral if another doctor did the referring?
GH: Maybe you didn;t hear me. Because they are out of network.
P: So what does that mean? Do you cover it or not?
GH: Of course we do. Don’t be silly. We’re the greatest people on earth. Even though you have clearly abused the system by going out of network, we – out of the goodness of our heart – are still going to cover 80% of the procedure, after the deductible of course.
P: Well what would you have covered if I was referred by an In-Network doctor?
GH: 80% after the deductible
P: So whats the difference?
GH: Nothing really. If your surgeon has a contracted rate with us, he’ll charge the contracted rate and we’ll pay 80%
P: Wait, what’s this contracted rate thing?
GH: Oh it’s nothing really. We work really really really really hard to get you the lowest rates from doctors, so that your 20% is nominal.
P: What if my suregeon isn’t on contract rate?
GH: Well then we pay 80% of what we WOULD HAVE PAID if the doctor was on contract with us.
P: So who pays the rest?
GH: Well I guess you would.
P: So…..you are going to pay the same amount either way, it’s just in some cases I have to pay more.
GH: But we negotiated these lower rates for you.
P: But…..you pay the lower rate. I pay the difference. Actually, the lower the rate, the more I pay.
GH: Well that’s ONE way to look at it I suppose. Now, that’s only if you don’t see an IN NETWORK Specialist first. It’s different if your surgeon is in network, under contract AND you get referred by an IN NETWORK specialist.
P: And has a dog named Blue?
P: Never mind.
P: Ok, so I guess I need do make an appointment with one of your in-network specialists so I can make sure my contracted, IN Network surgeon doesn’t charge me an arm and a leg. No pun intended. So, can I make an appointment?
GH: Of course. Not a problem at all. I will get you down for the next slot we have open for an IN NETWORK specialist. Now that will be the 2nd week in June. Should I put you down?
P: It’s March.
GH: So would you prefer morning or afternoon?
P: I’d prefer March.
GH: Well June is the next time we have available for an IN NETWORK specialist who can refer you to an IN NETWORK contracted surgeon.
P: So even though a doctor suggests I get this tested, you want me to wait 3 months.
GH: No, you can just go ahead and do the procedure. Like I said – and geez are you frustrating – we’ll still cover 80% of Necessary and Usual costs associated with the procedure.
P: Wait, what does that term mean?
GH: (SIGH) What term?
P: Necessary and Usual.
GH: Well like I said before, we cover what we think is fair. We can’t be responsible for any extra fees the doctor tries to stick you with.
P: So let me get this straight. You lowball the doctors into a “Necessary and Usual” rate in order to allow them in your sales pipeline. Then you make the patients responsible for anything the doctors want to charge above that “Necessary and Usual” rate you’ve forced them into. And the only way a patient can avoid those extra charges is if they are referred by an IN NETWORK specialist.
GH: That’s right.
P: BUT, AND A BIG BUT HERE, YOU DON”T HAVE ANY IN-NETWORK SPECIALISTS.
GH: Well we do have one in June.
P: Who’s on First?
P: Never Mind.
Now lucky for mortals like our Patient, there are people at the doctors offices who are fluent in the language of insurance phone reps. Those people can actually explain how to avoid the traps that companies like Group Health try to put in your way. Not that the doctor’s office is any saint in this matter when you think about it. They’re playing the same twisted game, allowing the insurance companies to claim “80%” coverage when really just being responsible for 33-50%. In fact, they are the ones who actually lose out if the patient is able to find an in network doctor to make the referral, though you have to imagine there’s a back door way it all gets settled later.
Anyway, here’s a toast to Health reform. Thank goodness it’s taking such care to take care of the patients who need the care to begin with.
So the other day I was accused of bailing out of the 1/2 marathon since my training had seemed to come to a halt. Not so.
Now I’ll admit, I’ve run into a few stumbling blocks. I’ve had a few unexpected things pop up recently that have cut into my training time, but there’s no real reason to go into them here. (I’m sure when I see you in person you won’t be able to get me to shut up about them.) Plus, the every 2 year occurance of my back blowing out came about 15 months early this time. So that has slowed me down a little as well. But I managed to make it through the St. Paddy’s Day Dash thanks to an heavy dose of muscle relaxers. God bless technology.
Anyway, the race is still a good 12-13 weeks out. I’m at a solid 4-5 miles at around 9:30/mile. The next big milestone is the Seahawks 12k in April. Shoot me an email if you are up for some runs around Greenlake or Lake Union, or better yet up on Cougar Mountain where there are some hills.
A couple of early thoughts.
1) Merry Christmas everyone – It’s a little funny that we’re well into Xmas morning and some of you guys are still getting a few last minute gifts in at 4pm Xmas eve.
2) No WordPress access in China? – So I have an alternate spot set up for this blog, but am having trouble getting to the Wrodpress admin page. Very odd. Is WordPress blocked in China?
3) Beijing is gigantic – My first impression of Beijing was totally wrong, in that I did not understand how humongous it was. I’ll write volumes on this shortly. But think of the biggest most spread out city you’ve ever seen, and add 30 story buildings everywhere.
We’re headed out the Great Wall now and I’m getting hurried out the door. More later. Merry Xmas.
16 people – including 7 kids, 7 adults and 2 Grandparents.
4 cities in mainland China, over 10 days (or 11 depending on how you count that whole first day International Date line issue.)
I’ll have a whole new blog set up shortly with details of the trip, so email me if you want the address. But for now, we’re done with night one in Beijing. I’ve never been to mainland China, so I won’t lie when I say I was disappointed, when the first thing I saw after customs, the first thing I saw in the hear of the capital of china, was a KFC and Starbucks…
But, the real show starts today. More to come as we set up for 11 days in a foreign land.