Let's see how that how that plays out for two sports franchises: the Los Angeles Dodgers and the Green Bay Packers.
The Dodgers recently filed for bankruptcy. How did one of the sports' most vaunted teams fall so low? Two words: Frank McCourt.
McCourt bought the team from NewsCorp (Fox) in 2004 for $430 million. McCourt made his wife, Jamie, CEO. The couple separated in 2009, during the playoff season. After the Dodgers were eliminated she was fired as CEO and filed for divorce.
Forbes valued the Dodgers at almost $800 million in 2010, an increase in value obtained largely by jacking up ticket and concession prices year after year. But now McCourt has bankrupted the team in order to pay off his divorce settlement. Another scandal involved the charitable Dodgers Dream Foundation, which was run by Howard Sunkin, one of McCourt's cronies who helped with his divorce. Sunkin's salary was $400K, a quarter of the foundation's entire budget.
McCourt, a prototypical high-flying capitalist Master of the Universe, has driven the Dodgers into the ground. He used the team's TV deal as a private piggy bank to pay $150 million for his wife's divorce settlement. He let his personal problems bankrupt a national icon.
On the other hand, we have the Green Bay Packers. Named the "best sports franchise" by ESPN The Magazine, the Packers have fans all around the country.
The Packers are a non-profit public corporation. Over 100,000 people hold the 4.7 million shares of Packer stock. The president is the only paid executive. The other members of the oversight committee provide their services gratis. In short, the Packers are the closest thing you can get to a government-run pro football team.
Green Bay is not a big town, but it manages to field a team that can win national championships. Cities with 10 times the population are told they're too small a market for professional sports franchises.
The Packers should be the model for all major-league sports franchises. Most every other team in the country has threatened to pick up and go to another city if the city or state doesn't pony up a billion dollars for a stadium. A stadium where there'll only be 13 four-hour home games a year. Given the average life-span of a stadium these days is only 20-30 years, this is not a good deal.
The Vikings are begging for a stadium in Minneapolis. Vikings owner Zygi Wilf claims they need one because the Metrodome is old and doesn't have the right facilities for luxury boxes. I might be inclined to build a stadium for the Vikings if they were organized like the Packers, and were certain to stay in town forever. But why should we pay a billion dollars for a stadium where millionaire CEOs can watch millionaire players toss a ball around for a billionaire owner? To add insult to injury, those luxury boxes are paid for by corporations, which will claim them as expenses and deduct them from their taxes. So I get to pay for the stadium and for the CEOs to watch it in sybaritic comfort.
Worse, if Wilf pulls a McCourt and bankrupts the Vikings, the team could be taken over by the league and sent to another higher-bidding city, leaving us with a billion-dollar white elephant.
I'm sure the Packers have their problems. But private corporations like Frank McCourt's Dodgers by their very nature are rampant with nepotism, cronyism, corruption and backroom deals. The slavish devotion conservatives pay to guys like Frank McCourt, Donald Trump, Donald Keating, Bernie Madoff, Ken Lay and the like makes no sense if you're interested in efficient, well-run corporations that do well for their shareholders.
Conservatives insist that government is inherently inefficient, wasteful, filled with cronyism and corruption. But as we've seen over and over again, private corporations are just as prone to these ills.
The difference is that with government we choose who's running the show. We have the right to see what's going on. And when we watch the process we see how messy and noisy and annoying it is. Because everyone gets their say, and government officials have to listen. Or we fire them in the next election.
Corporations don't work that way. They can hide all their dirty laundry beneath a veil of secrecy, so we don't see all the ugliness. The CEO dictates his decisions and fires any dissenters. The board of directors -- the only constraining force on the CEO -- is composed of other corporate CEOs who are only too happy to rubber-stamp the CEO's decisions, knowing that he will in turn rubber-stamp their decisions because he serves on their boards.
Only occasionally, as with Frank McCourt, is the veil of secrecy ripped away, when their greed and stupidity outpace their capacity to cover it all up.
So, which is more efficient? Frank McCourt's personal Dodgers fiefdom? Or the Green Bay Packers' non-profit public corporation?
6 comments:
Another difference is that when private companies are inefficient and wasteful they could go out of business and cease to exist. and no, I'm not talking about the very tiny percentage of businesses that received a bailout markadelphia (hat tip to last in line). Government just papers over its wastefulness and inefficiencies with more and more of our tax dollars.
Back in February of this year, markadelphia told us the packers were government owned. Now you're telling the readers here they are a corporation with stockholders. You two need to get you're story straight.
Knock it off about the deductions nikto - like you don't take deductions on your own taxes.
We have the right to see what's going on.
How's that 'transparency' been working out during the Obama administration?
Because everyone gets their say, and government officials have to listen. Or we fire them in the next election.
So are you saying Bush listened to you? Or are you saying you fired him back in 2004? Was an entire party being locked out of the process of crafting Obamacare an example of "everyone getting their say" in your world?
Well, we almost fired him but sadly there were too many true believers out there who easily duped into believing ghat John Kerry was a traitor.
Nikto, what with all the strawmen you and Mark carry around with you for demolishing at moment's notice, I hope neither of you smoke or you might start a 5-alarm fire.
You start off with an utterly false premise, that conservatives, and I would add libertarians and classical liberals. That is to say,the kind of liberals that Mussolini denounced, not the modern American ones who co-opted the name after the Progressive label soured on people as they learned what it meant in practice. Of course, now that the Liberal brand has turned to shit, they're re-adopting the Progressive label because nearly everyone who has a bad memory of that mess is dead or nearly so.
Anyway, you make the claim that conservative believe that corporations are the best at what they do. You must not read a damned thing anybody but Mark writes here, or else it goes in one ear and out the other. We don't believe that corporations will always be the best, but that over the long haul, a free market will be better than anything else anyone has yet devised (or is likely to devise). Corporations who do dumb shit will either mend their ways or go under (unless they use political pull and get government help, which both you and Mark seem to love, at least for unionized companies).
Your idea that government is accountable and transparent is laughable. Fannie Mae and Freddie Mac have lost several times as much money as Enron and for not dissimilar types of accounting fraud, yet who's gone to jail for that thievery? Raines and Gorelick (whose leaden touch has poisoned everything she touches) and others got multi-million dollar payoffs. Let's check out what happens with the ATF "Fast and Furious (bullshit)" operation. At the least, Holder and others should be impeached, but I'll bet that what happens in the end is that lower people will take the fall, and then be quietly re-hired later with full benefits and step-level increases as if they had never been gone. It's happened before in BATFE.
I don't know why I bother. If the owners of the Dodgers ruins the team he bought, so the fuck what? Someone else will then buy the franchise at a discount and try to rebuild it. As should have happened with GM and Chrysler if normal bankruptcy law had been followed.
You guys are such economic ignoranuses that I really do think that the Dunning-Kruger effect must be in operation here:
his paper describes four experiments that found that people who overestimate their abilities in areas where they lack skill or knowledge are suffering a dual burden: not only do they reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the ability to recognise it. This is known as the Dunning-Kruger effect, for the study's authors, David Dunning and Justin Kruger.
"You guys are such economic ignoranuses that I really do think that the Dunning-Kruger effect must be in operation here:"
It's been pointed out before that Mark's writings reflect the attributes of this effect. Of course, since that was pointed by conservatives, that makes it "conservative dogma" which Marxy always ignores.
Marxy should reproduce this T-shirt for the header of his blog:
http://www.snorgtees.com/i-can-t-hear-you
Then at last, there would be one thing he would be right about.
Well, we almost fired him but sadly there were too many true believers out there who easily duped into believing ghat John Kerry was a traitor.
The fact that Hanoi considers him a hero means nothing.
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