Monday, 31 December 2012

Division of Labor, Talent and Journalistic Branding

A clear divide exists between generic labor and talent in media companies and it is now increasingly dividing journalists. The divide initially appeared in the motion picture industry and moved into broadcasting as competition led companies to vie for the talented people—or at least those who could generate the largest audiences and revenue for media companies.

The talent concept moved into journalism with the development of television news and salaries for news presenters and leading correspondents that were far above those of average television reporters.   In print journalism, talent initially involved columnists and then encompassed a few well-known reporters.
Today, the appearances of journalists at events and on talk shows, individually-authored digital news sites, and the increasing uses of blogs and social media by journalists is transforming many into individual brands that are being using to improve their social standing and connections with audiences. This journalistic branding no longer primarily supports employers’ interests for audience creation and retention. Instead, it creates an individual brand that increases the demand for the services of the branded journalist. This, of course, can be translated in higher wages, better employment opportunities, or self employment via the digital media.

The fact that individual journalists are finding ways to increase their value isn’t a problem, but journalists need to thinking about the point where branding transforms them into celebrity—thus moving them from being an observer to a participant in the news they report.
The development of talent—whether as journalists, investment managers, sports personalities, and even publicly recognized scholars—represents a significant shift in capital-labor relations.  In industrial society, capital had disproportionate power because it controlled factories and labor had few ways to counteract that power outside of collective bargaining. In post-industrial society, however, power is shifting toward talent because these branded professionals are a new class of personnel who are crucial for companies—but talent doesn't fall into the traditional capital or labor categories.

One of the downsides of this shift, according to Roger Martin, dean of Rotman School of Management at University of Toronto, is that it is creates two classes of labor: generic labour and talent. The first is often undervalued and the second sometimes overvalued.  The process is creating disproportionate incomes, opportunities, and mobility for the latter group and there is growing animosity between generic labour and talent because they do not share similar experiences or have a common identity.
What talent will mean to the future of journalism is uncertain, but digital communications are clearly making it possible for some journalists to separate themselves from others and to move into the talent category. It is something we should be watching.

Friday, 21 December 2012

Whenever I talk to an MBA student these days, they're like:

Thursday, 20 December 2012

When my husband asks if he can go out all night and celebrate being done with finals, I'm like:
And 20 minutes later, he's like:
And another 20 minutes later, he's like:

Wednesday, 19 December 2012

When I show up to a holiday party and people are like, "Oh, your boyfriend couldn't make it?" I'm like:

Tuesday, 18 December 2012

The Business December 19th 2012, The "Life Is Excellent" Edition


We will, we will rock you. Rock you.

Well, more specifically, we are more than happy to welcome Bobby Joe Ebola and the Children MacNuggets to rock you!!

Bobby Joe Ebola and The Children MacNuggits began in 1995, in a trash-strewn fast-food parking lot in Pinole, CA. Guitarist Dan Abbott and singer Corbett Redford rose from humble circumstances as a satiric folk rock band that played for friends to their current majestic heights with hilarious and sometimes frightening acoustic performances. The MacNuggits have gathered loyal legions of fans with their infamous combination of searing social satire, soaring harmonies, outlandish and shocking truths, and poop jokes. The songs draw upon a variety of pop culture, of global crises, of interpersonal labyrinths, of nightmares and daydreams, skewering them on a rusty spit for the world to see. With a nod to social satirists like Lenny Bruce and George Carlin, and musical influences ranging from Slick Rick to They Might Be Giants, Bobby Joe Ebola is the vaudeville routine for your personal apocalypse.

Bobby Joe Ebola will be CELEBRATING the release of their brand new new CD/LP, TRAINWRECK TO NARNIA on Rooftop Comedy Productions & Dirt Cult Records! Come pick up a copy!
We are also pleased to have Kevin Hawkins joining us. The internet says: “Kevin Hawkins has worked as a teacher, principal, school head, and social worker in the UK, Africa, and Europe. He brings to education a holistic understanding of children and young people from his lifelong work with adolescents, and he strives to support the development of young minds through enhancing students’ self-awareness and emotional intelligence. “ but I’m pretty sure that’s a different Kevin Hawkins, and our guest this week is just a cool funny dude up from LA.

Your regulars will be there “Alex Reflux” Koll, Bucky “SARSnister”, Caitlin “Rhinovirus” Gill, Sean “Croup” Keane, and Mike “Diphtheria” Drucker.

The show is just $5! If you want to bring a friend, bring em for free!!  Print out you your 2-for-1 coupon from above!!!

When my husband sends an e-mail to a recruiter and addresses it to the wrong person, he's like:

Monday, 17 December 2012

The Taxman Cometh

With the "fiscal cliff" looming in the not-so-distant future, Washington lawmakers' thoughts naturally turn to the most defenseless among us. As former Louisiana Senator Russell once famously said, "don't tax you, don't tax me, tax that fellow behind the tree." And, from inside the Beltway, that fellow behind the tree could well be a degenerate gambler.

Specifically, there seems to be a growing consensus that a "fiscal cliff" deal will involve some sort of cap or limitation for itemized deductions. Whether that cap takes the form of an absolute limit, barring deductions in excess of, say, $17,000, $25,000 or even $50,000, or whether it takes the somewhat more complicated form of allowing deductions to generate only 28% in tax benefits, even if a taxpayer is in the 35 or perhaps 39.6% bracket, the cap is bad news for horseplayers. In particular, it's bad news for those of us who play the horses at the track or online or who participate in handicapping tournaments, but still have a day job, or at least a regular retirement income. The rest of this post explains why.

The key provision, which has been a part of the Internal Revenue Code forever, and is now codified as IRC Section 165(d), provides that "losses from wagering transactions shall be allowed only to the extent of the gains from such transactions."

To understand that section, one has to understand what the Internal Revenue Service means by "gains" and "losses." If I bet $2 on a 4-1 shot to win and get back $10, my "gain" for tax purposes is $8. If I bet $2 on each of the next four races and lose, then I have an offsetting loss of $8 and I'm even, in both cash and for tax purposes.  Things get more complicated in exotic bets. If I put $1,500 (750 $2 bets) into a Pick Six carryover and hit it for, say, $20,000, then I have a gain of $19,998 on my one winning ticket and a partially offsetting loss of $1,498 for all the tickets that didn't hit (assuming, for simplicity, that I didn't have any five-winner consolation  tickets). In other words, each bet is a separate "wagering transaction" for tax purposes; 750 bets on my hypothetical Pick Six, six bets on a three-horse exacta box, and so on.

Now let's construct an Average Joe gambler. Joe runs a software company, which pays him a net $250,000. His office has three TV screens, tuned most afternoons to TVG, HRTV and the local NYRA racing channel. He makes his bets on the NYRA Rewards network, because he knows that way more of the takeout from his bets goes to the track and the purse account (did I mention that Average Joe is also a partner in my Castle Village Farm partnership operation, and very much wants his horses to earn as much purse money as possible?).

Let's say that Joe is a pretty good handicapper, but not quite good enough to beat the takeout.  In a typical year, he'll wager perhaps $50,000 and have net winnings of $45,000, for an overall loss of $5,000.

Because Joe is not in the "trade or business" of gambling, the tax rules require that he list his wagering gains -- all $45,000 -- as income and then take an itemized deduction for $45,000, thus eliminating any taxable income attributable to gambling, which, of course, he didn't have. So he gets no tax benefit from the net $5,000 loss for the year, but in Joe's view it's a reasonable outcome. And he can't escape reporting that income, because his wagering account keep strack of it in endless detail.

Now Joe also has some other itemized deductions. Let's say he pays $20,000 a year in mortgage interest, $20,000 in state income tax and local property taxes, $5,000 in charitable contributions and $5,000 in medical expenses above the statutory threshold. That's a total of $50,000 in itemized deductions before we even get to his gambling losses.

So, to take the simplest case, let's say that the "fiscal cliff" settlement raises Joe's marginal tax rate from 35% to 39.6% and, in addition, caps his itemized deductions at $50,000. All of a sudden, Joe has an extra $45,000 of income -- his winning bets -- that can no longer be offset by an itemized deduction for his losses. At the new 39.6% top marginal rate, Joe now has an additional tax bill of $17,820, attributable entirely to completely imaginary income.

Joe might have been content to lose $5,000 a year, but now he's losing almost $23,000. Wonder how long he's going to keep making those oh-so-reportable bets on his NYRA Rewards account?

Things are different if our hypothetical bettor -- let's call him Ernie Dahlmann -- is in the "trade or business" of gambling. In tax-speak, "trade or business" doesn't necessarily mean full-time, but it does mean something more than recreational betting. Being ensconced in a suite at a Las Vegas hotel and putting $50,000 or more through their race book every day probably qualifies. For these professional gamblers, wagering losses are not itemized deductions subject to whatever cap Washington eventually imposes. Instead, a professional gambler reports gambling activity as a trade or business on a Schedule C. Wagering losses can be deducted from wagering gains up to the point that the Schedule C reports zero net income, and the professional gambler can still take whatever other itemized deductions -- mortgage interest, state and local taxes, etc. -- are available. And if the professional gambler has a loss for the year that he can't deduct against other income, well, he's not much of a professional gambler.

The NTRA and the American Horse Council, the principal lobbying groups for the racing industry, have taken up the issue, but it's hard to tell if they, and Sen. Mitch McConnell (R-Horse Racing) have much influence in the "fiscal cliff" pressure cooker. If they don't succeed in carving out an exception from the deduction cap for wagering losses, it might be time to stop betting on the ponies and start betting on something where losses are fully deductible, like, say, pork bellies.

Gamblers may not be the powerful interest group that, say, assault-weapon owners are, but still, it couldn't hurt if we all get in touch with our Senators and Congress members on the deduction-cap issue. Just might mean the death knell for race track gambling if it passes.

(For those who want to explore the invidious tax treatment of gambling in more detail, I wrote about it in "The Federal Income Tax Treatment of Gambling," 49 Tax Lawyer 1 (1995). More recently, the February, 2001 Gaming Law Review has an article by Charles Blau on "Tax Treatment of Gambling: the Pros and Cons." Alas, neither of these articles seems to be available for free on the web. Consult your local friendly law library.)

When I am picking my husband up from school and he doesn't see me waiting in the car line with all the other wives, I'm like:

Sunday, 16 December 2012

When my husband told me he that was done 
with night classesI was like:
but then me told me that he has weekend classes 
instead, so I'm like:
When my husband starts getting GroupMe texts when I actually have his attention, I want to be like:

Saturday, 15 December 2012

When I found out that some people's signing bonus is more than I make in a year, I was like:
When my fiancé called our upcoming wedding a 
"merger", I was like:

Friday, 14 December 2012

When I visit school during on-campus interviews and everyone's wearing a suit, I'm like:
When I meet an MBA student who actually wants to be my friend, I'm like:
Background here
When I saw the apartment we'd be living in, at first I was like:

and then I was like:

Thursday, 13 December 2012

When someone asks me how my "summer" of working 
my regular job was, I'm like:

Wednesday, 12 December 2012

During finals, my fiancé is like:

and I'm just like:

NYRA's Quarterly Results: Transparency Plus Good News

For the first time in living memory, the New York Racing Association (NYRA) has voluntarily released its financial data. The NYRA balance sheet as of September 30, 2012, plus the quarterly results for July through September of this year can be found here.

Historically, NYRA has strenuously resisted disclosing its finances. Both former CEO Charlie Hayward and the current incumbent, Ellen McClain, initially responded to to earlier state government requests for finances by saying no way, only to reverse themselves soon after, under public and political pressure. But now, on the eve of the first meeting of the "New NYRA" Board of Directors, with a majority appointed by New York Governor Andrew Cuomo and other state politicos, NYRA has released to the public something that looks very much like an ordinary corporate quarterly report. High time, and let's hope the practice continues.

The report itself is full of positive news, and in particular shows the positive effect of video lottery terminals, which opened last November, on NYRA's financial health.

Despite a doubling of legal costs, largely attributable to the Pick Six takeout scandal that cost Charlie Hayward and General Counsel Pat Kehoe their jobs, NYRA's operating income for this year's 3rd quarter was $24.8 million, more than double the figure for last year's 3rd quarter, whiuch was the last before the arrival of VLT money. But even without the VLT funds, NYRA turned in an improved performance. Here are some of the specifics:

  • NYRA purses, fueled by the slots, increased from $37 million in last year's 3rd quarter to $55 million. That 48% increase means it's no longer impossible for a horse owner to break even -- just difficult. But it's a huge plus. And, although NYRA accounted for only 4% of US race days in the quarter, it offered 16% of all the purse money on offer nationally. In other words, racing your horse in New York is four times more lucrative than the US average. Wondering why every stall at Belmont and Aqueduct isn't filled.
  • Total handle, including on-track, OTB, account wagering, simulcastiung, etc. jumped to $839 million from last year's $737 million. That's a healthy 13.9% increase in handle, at a time when handle in the rest of the US is flat or declining.  The increase was fueled in part by a gain in average field size, from 8.08 horses per race last year to 8.47 this year. The 3rd quarter, of course, includes Saratoga and the Belmont Fall meet, the highlights of the season, son these numbers won't necessarily repeat in the Aqueduct quarters, but still, the gain in year-to-year comparable numbers is impressive. NYRA's handle represented almost 30% of all betting on US Thoroughbreds during the quarter, even though NYRA had only 4% of US race days. NYRA's is clearly the industry's premier racing product.
  • in the "bang for a buck" category, each dollar of purses offered at NYRA generated $15 of handle. That's nearly double the national average of $8 in handle for each dollar of purse money.
  • The Aqueduct VLTs, running at a "net win" of $388 per machine per day, generated $23.8 million for racing during the quarter -- $11.4 million for purses, $5.3 million for NYRA's operating budget, and $7.0 million for NYRA's capital budget.
  • On the capital-investment front, NYRA spent $3.5 million during the 3rd quarter. A good chunk of that went to concrete wash pads in the barn areas, to comply with environmental rules. Also, there was spending for some "patron area improvements" at all tracks (though on a recent visit to Aqueduct, I'm not sure that the closing of the Man 'O War Room and related areas, albeit for asbestos removal, and some new paint and chairs really merits the name "improvement"). Installing wi-fi at all three tracks is certainly useful, and the front-side improvements at Saratoga should yield results next year.
  • NYRA Rewards account wagering continued to gain slowly, rising 13% compared to last year. This is important because all the takeout from NYRA Rewards wagering goes back to NYRA and to the purse account, while takeout from other wagering platforms (e.g., Churchill's Twin Spires) has to be shared with them. I'd love to see even more aggressive promotion of NYRA Rewards in the future.
  • For those who still think the New York OTB system ihas anything to do with racing, the report is instructive. Total revenue to NYRA from all five surviving OTB systems in the state was a mere $8.4 million for the quarter, a mere 9% of NYRA's total revenue from wagering. In contrast, On-track (including NYRA Rewards) wagering accounted for almost 50%, and other simulcast-based revenue for 40%. The OTBs are of no value to racing; rather than let Catskill OTB into New York City, as a pending bill would do, it would be better to shut down the whole patronage-laden system and use NYRA as the platform for all horse-race betting in the state. As of September 30, the OTB system was $8.0 million in arrears to NYRA, the biggest chunk of that attributable to the twice-bankrupt Suffolk County OTB operation.
  • Of particular concern to horsemen is NYRA's "purse cushion." That's the amount of money that NYRA has earned from betting and is designated by state law for purses, but has not yet been paid. When NYRA went into bankruptcy some years ago, the "cushion" exceeded $20 million; in other words, NYRA had been taking money earmarked for purses and using it to pay salaries and turn on the lights. One result of the bankruptcy proceeding was an agreement with the horsemen, subsequently enacted into law, calling for a gradual reduction in the cushion. The 3rd quarter financial report shows that NYRA, to its credit, is way ahead of schedule. As of September 30th, the "cushion was down to $4.5 million. Kudos to NYRA for that.
  • The report also shows that NYRA has achieved a measure of stability, at least compared to the bad old bankruptcy days, in its cash position. This important measure of liquidity is leveling off around $20 million, probably still too low for a corporation of NYRA's size, but a great improvement on prior years.
So, while there's still much to be done on the operating side, NYRA, and especially its financial team, including Ellen McClain, Susanne Stover and Dave O'Rourke, deserve credit for turning things around financially. Yes, the VLTs were a necessary part of that turnaround, but the new financial report shows that someone is, in fact, minding the store.

And it's nice to see the information out there in public, where it belongs.

When my husband starts reading a case study 5 minutes before class starts, he's like:
After a night at Rick's, I'm like:

Tuesday, 11 December 2012

When my husband tells me that Partners aren't invited to an event, I'm like:
When I quit my job and moved to business school 
unemployed, I was like:
When my husband asks me to review his cover letters, I'm like:
Since we now have a car, on roundabouts, I'm like:

Monday, 10 December 2012

When MBA Prom rolls around, I'm like:

The Business December 12th 2012, The "The Cartoonist and the Cartoon" Edition

This Wednesday night is gonna feel like a Saturday morning. The Business is bringing you a talented cartoonist, as well as a human who may very well be a cartoon.

Michael Capozzola has contributed to Mad Magazine, The New York Times and National Lampoon. Each year, Michael produces and hosts the Cartoon Art Museum’s annual “Comics for Comix” comedy fundraiser which he conceived as well. He has been in a bunch of commercials, you can see his broadcast/ TV reel at Born and rais
ed in New Rochelle, NY Michael subsisted on comic books and chocolate until he took up comedy and caffeine. He created his own comedy studies major while at Ithaca College. (NERD.)

Dr. Foxmeat is half warewolf, half cotton candy. He is part liger, part tigon. He is carbon based and also plays bass for The Carbons. He is always a true pleasure to have as a guest. Come experience him.

Your regulars will be there as well: Mike Daffy Drucker, Bugs Sinister, Yosemite Sean Keane, Alex Foghorn Leg-Kol” and Wile. E Caitlin Gill.

This whole show is just $5! You can even bring a friend for free! Just grab a 2 for 1 coupon here!
WE SELL OUT. Get there early so you can get a seat.

BYOBurrito. I still get carnitas, even though it means “That’s all folks” for a Porky.
When my boyfriend is networking with an alum who works at BainMcKinseyBCG, he's thinking:
When someone suggest taco bell as a nightcap, I'm like:

That time my husband suggested we could live apart while he goes off to business school, I was like:
So then he was like:
When we saw an ad for a tiny hellhole quaint apartment in a 
party zone quiet neighborhood close to campus, we were like:

Sunday, 9 December 2012

When people ask me what my fiancé is learning in 
business school, I'm like:
When my husband pitches me his business ideas:

If I'm sober:

If I've had a few drinks:
With the shows my husband DVRs but never has 
time to watch, I'm like:
When my boss said I couldn't work remotely when I moved across the country, I was like:

Saturday, 8 December 2012

Every time I ask my husband to come with me to a 
Partners Club event, he's like:
When I drive my husband to school in 5 minutes without hitting a single red light and make it back for my conference call, I'm like:
To every pedestrian in every college town in America, 
I want to be like:

Friday, 7 December 2012

When we saw that this site got 10,000 hits in just 3 days
we were like:

Thanks for stopping by and for your e-mails and submissions!  It's been a blast!
When I pay $2 for a beer during happy hour on South U, I'm like:

...and then $7 later on Main Street, I'm like: