The $400 Million Enabler

Among the regular news about sports and an all-too-early election cycle and several more instances of police brutality, the story of hedge fund manager (a.k.a. wealthy, lucky break-catching, tangible job skill-lacking individual) John Paulson donating $400 million to Harvard might have gotten lost in the shuffle. Except for two things: 1) it made history (being the largest donation to Harvard, and maybe any other school, ever), and 2) Harvard doesn’t really need the cash.

Author Malcolm Gladwell didn’t miss a beat jumping on the donation as unnecessary and ego-serving, and he made the major points I would’ve made. Could that money have been better used somewhere else? Why not donate to two schools, or ten? Etc. (Another takedown of the ego donation courtesy of Slate as well.) Similarly, this Washington Post headline pokes fun at the situation a bit, then goes on to point out (as most articles do) the $36.4 BILLION (with a “b”) that Harvard is already sitting on.

Some fellow rich people came to the rescue, defending the donation (in the second link above), as you would expect. Gotta stick together and protect each other from the poverty-stricken rabble, right?

One thing I haven’t seen mentioned yet, though, is whether this donation, and many others like it, make Paulson and his fellow well-heeled alums enablers.

Enablers of what, you ask? Well, how about enabling one of the biggest problems with universities nationwide right now – the explosion of outlandish, nonsensical executive/administrative salaries/contracts/benefits.

There are many issues currently in academia, from the skyrocketing student loan debt to the buildings constructed for no reason or purpose other than to be shiny and to have someone’s name on them. But my focus here is on the obscenity inherent in leadership salaries at supposedly non-profit institutions of higher learning. And beyond the salaries, the absurd benefits, expense accounts, and golden-parachute severance packages given to even the worst examples of failed leadership.

Even the AAUP has issued a report titled “Losing Focus,” which, as you probably guessed, speaks to the short shrift many faculty are getting while board members, trustees, presidents, deans, and other administrative positions are granted more and more lucrative salaries.

The ridiculous growth of administrative positions and salaries has been noted time and again in reports that clearly show students’ money is being spent less and less on teachers and more and more on “attracting top talent” or whatever nonsensical phrase is being used to justify ridiculous pay packages, such as the $600K base salary recently bestowed upon the new University of Illinois president.

This is especially absurd when you begin to look at the discrepancy in average pay rates between administration and faculty – you know, the people to conduct the research and teach the classes and are generally the reason that students show up and pay tuition in the first place.

So, back to the point – are enormous donations like Paulson’s enabling the institutional irrationality of paying higher and higher salaries to glad-handers who only truly work to solicit further donations and financial support? Is Mr. Paulson guilty of encouraging Harvard to forget about faculty in order to pay more money to fundraisers and “development officers” and the like?

There are some simple solutions. Mr. Paulson could’ve put stipulations on his donation, requiring faculty in the college that will be named for him to receive regular, guaranteed raises as well as performance bonuses. He could’ve required that the money be spent in a certain amount of time in order to have the most impact on education seekers right now. He could’ve required that at least 25% of his donation be dedicated to scholarships for underprivileged students who want to pursue engineering and the sciences. He could’ve easily split the donation four ways and donated $100 million each to four different colleges within Harvard, or even four separate but equally grateful universities. The list of options go on and on.

But that does not appear to be the case.

The academy will eat itself at this rate, bending over backwards to demonstrate that it can be run “like a business” while failing miserably at it. After all, you can’t run a non-profit like a for-profit without finding/justifying ways to spend that money you “made” – and that’s where these obscene leadership salaries come into play. Never mind that you could award more scholarships, reduce tuition and room and board rates, improve on-campus infrastructure and transportation, etc., etc. That never even crosses the minds of the board members, probably because too many of them are coming at the task from the business model. Which is dead, dead wrong.

 

New blog, more snark, lots o’ fun

Good morning!

I’ve launched a new blog/magazine project – Road & Trash.

It’s devoted to reviews of the terrible (and occasionally not-so terrible) cars we’ve all had to drive throughout life.

I hope you’ll follow over there, and perhaps follow on Facebook and Twitter as well. And I hope you’ll consider sharing your awesome stories of awful automobiles.

Thanks for reading!

Payola 2.0 – Clear Channel and Warner Music Group engage in some “revenue sharing”

Clear Channel, the media behemoth that is still lording over the nation’s airwaves and broadcast markets in a variety of ways, announced today a revenue-sharing agreement they have reached with Warner Music Group. According to CC’s CEO, “This is a win for all parties…”

There are lots of numbers in that article, most of them figures that aggrandize the status of Clear Channel’s scope and reach among listeners (a.k.a. “potential customers”). And of course there’s the requisite bloviating about how this is great for everybody, including the artists, etc.

But this is all window dressing in front of the same old five-and-dime – a new twist on “Payola.” In short, Payola is an illegal practice where a content provider (in this instance, a record label) pays a broadcast outfit to include their promoted artist or song as part of the regular broadcast. Payments could be either cash or benefits (exclusive content, concert arrangements, prizes for listeners, travel, etc.). The distinction in the law is that paid content is fine SO LONG AS it is disclosed as being paid-for and not presented as “here’s our regular ol’ broadcast goodies.”

How a “revenue sharing agreement” exclusively between a broadcast conglomerate and a record label is different from paying a radio station (or stations) to play your label’s music I can’t see. I suppose that’s what lawyers are for, though.

Beyond the questionable distinction between the two practices, the potentially bigger issue is the further homogenization of radio content (which, at this point, has to include terrestrial, streaming, on-demand, and internet broadcast). One label and one media company (with one CEO each) colluding to establish a one-way distribution channel for that label’s content (with special attention to the acts they need to prop up, I’m sure)?

NOW THAT’S WHAT I CALL VARIETY.

In all likelihood Clear Channel will sign similar agreements with other labels at some point (if they haven’t done so already), but joining forces with a handful of major labels ignores the vast majority of content being produced these days. And that’s unlikely to change any time soon.

The Least Popular Article in (recent) Chicago Sports History

A dominant regular season record. A triple OT comeback. Two goals in 17.7 seconds. Yes, the Chicago Blackhawks have won their second Stanley Cup title in four years.

It’s a red letter moment for Chicago sports, and for a franchise on the path to establishing a dynasty.

There’s just one small problem with it all – It shouldn’t count.

No one can deny what a feat this was for the Blackhawks, and for any team that made it all the way to chasing the Cup in this lockout-shortened season.

But therein lies the problem.

Take a trip back to 1994. The MLB season is in full swing, approaching the All-Star Break, and several teams are having breakout seasons (including our own Chicago White Sox). The Montreal Expos were having the best season in franchise history, playing truly dominant baseball and making a playoff run look like a foregone conclusion.

The season continued until August 12^th, the date set by MLBPA as the official walk out date. Another four weeks of failed negotiations passed until, on September 14^th, the season and post-season were officially cancelled by Bud Selig.

Sports fans would not get the chance to find out how good the Expos were. Or the White Sox for that matter. But more importantly, none of the owners would get one single nickel of playoff revenue. No TV time, no NLCS and ALCS and division series merchandise money, none of that immense ticket booth cash.

And that’s exactly how it should be. The strike came as a result of the owners’ decisions and actions (or inaction, in some cases). They had ample opportunity and warning (including the entire season that had taken place to that point) to come to an agreement that would’ve kept the season going forward. And they did not.

In essence, they made their bed, and they needed to lie in it – while not making any money.

And so it should have been with this NHL season. The only difference is this – in 1994’s MLB season, they had already started play. In the NHL’s case this year, they nearly threw the entire season out the window before salvaging just under 60% of the regular season. But why should the owners be rewarded for digging their heels in? Hockey viewership and, most importantly, revenue has been climbing extensively in recent years. Why shouldn’t the players – you know, the guys out on the ice taking pucks to the face and all – be entitled to some of the stellar success for which they are, mainly, responsible?

You can make the argument that both sides were to blame for the strike-shortened season, and I would not be entirely indifferent to that argument. The old “it’s millionaires versus billionaires, and only the fans get hurt” chorus echoed awfully loudly in 1994 too.

But again, in only one of these cases did the owners experience actual consequence from their choices. In the case of major league baseball, it took quite a while for the fans to forgive both sides and return to the game.

In the case of the NHL, though, it was business as usual for the shortened season and for the playoffs. The money came streaming in, and will probably continue to do so next year. And some have already declared that all is forgiven because of the regular season action.

The abbreviated season allowed for some stellar playoff hockey and, as we saw Monday night, another Blackhawks Stanley Cup victory. It was fantastically exciting. And the Blackhawks regular season record and push through those playoffs was a genuinely monumental accomplishment. But what could they have done if they had a full season to work with? What records could they have broken if they had maintained that incredible pace through a complete 82 game season?

Just like in the cancelled 1994 MLB season, we will never know. Reason enough, perhaps, to be mad at the owners. For most sports fans, though, that seems unlikely to be the case for long.

Another one (rock station) bites the dust

My latest article is over at Smile Politely, speculating on the death of another rock radio station in Champaign, IL.

Nevermore Shall U-Rock

Check it out at the link above if you’re interested.