Before today, Occupy Wall Street was a "movement" involving a vocal minority who claimed to represent 99% of Americans, yet could only convince a couple hundred of the 20 million people in the New York metropolitan area to camp out in Zuccotti Park.
Before today, this vocal minority carried out their demonstrations with a minimal amount of physical disruption to the everyday lives of New Yorkers or those in other OWS locations (except for maybe that hotbed of banking and capitalism, Oakland).
Before today, Wall Street was cordoned off to a five foot wide path for pedestrians causing delays and inconvenience, and those unfortunate enough to live by Zuccotti Park for the last two months had to endure never ending noise and stench.
Before today, OWS stuck to Zuccotti Park to carry out their first amendment rights, and while you might be puzzled by their message or disgraced that they are trying to represent the 99%, you respected their right to protest.
Before today, OWS was annoying, but not threatening or disruptive.
Today, OWS has officially jumped the shark.
Today, the OWS “movement” evolved from peaceful protest (for the most part), to a semi-violent, abusive and disruptive demonstration, infringing on the daily lives of anyone reporting for work in or around Wall Street (as well as other locations around the country). Whether you work for Goldman Sachs, JP Morgan, Duane Reade, Subway or the local shoe repair store, NYPD funneled you down streets lined with hostile OWS protesters hurling verbal attacks on everyone who walked by.
New Yorkers are used to fighting crowds on the streets and in rush hour subways, but they typically aren’t yelling at you, and they certainly aren’t yelling at you for the sole reason that you work on or around Wall Street. The closest I’ve seen to this behavior is Yankee fans “welcoming” a Red Sox fan into the bleachers in Yankee Stadium. The Red Sox fan knew what he was getting himself into when he decided to wear a Pedro jersey into the bleachers in The Stadium, but the thousands of workers in and around Wall Street don’t deserve this treatment for simply earning a living near a certain street.
Demonizing American’s who have spent their entire lives working hard to get an education and working hard to further their careers in order to provide a quality life for themselves and their families, is not only counterproductive to their “movement”, but is downright childish and ignorant.
If OWS thought this behavior would advance their cause, they couldn’t have been more wrong.
RIP OWS.
Finally.
Thursday, November 17, 2011
Wednesday, November 9, 2011
Newsflash: 52.5% of zero is zero
We’re not NBA experts, but we are accountants, so let us breakdown some facts and figures that only accountants would think of when debating the NBA lockout:
The figures above assume the 2011-12 season would generate the same revenue as 2010-11, a conservative assumption knowing that NBA revenues have grown in recent years.
To date, the players have effectively spent $349 million to try and convince the owners to move the Players portion of BRI from 47% to 52.5%. As of yesterday, it looks like they’ve been successful in negotiating their way up to 50% BRI – a gain of $1,164,000 per game from 47% BRI. If the dispute was settled today and no further games were lost, the players will recoup their $349 million investment after 3.7 seasons. This of course ignores the fact that a dollar today is worth more than a dollar in three years.
Given that the Players only want a three year deal, they’ve already “lost” and any further “investment” is really just throwing good money after bad.
Hopefully the Players recognize this soon, hammer out a deal and get back on the court (sooner rather than later).
If the season is lost in order to fight for 52.5% BRI (or other “structural” issues), the players will have spent approximately $2 billion dollars in compensation to “gain”, in the most unlikely best case scenario of 52.5% BRI, approx $4.5 million per game. Even with these most improbable gains, it would still take the Players five seasons to recoup the investment of a single lost season. Again, the five season best case scenario ignores the fact that a dollar today is worth much more than a dollar in 5 years. Additionally, the average career in the NBA is less than 5 years, so the average player will never recoup their investment.
That’s the best case for the Players.
If they lost a year and ended up back at 50%, it would take almost 20 years to recoup the investment, even longer if the owners were successful in reducing it below 50%.
If this information was presented to the Players, and they ignore it, they deserve their fate. If, however, this information was not presented to the Players, Billy Hunter and Derek Fisher have completely failed in their responsibility to represent the average NBA player. The Kobe’s and LeBron’s will be just fine, but the 10th, 11th and 12th man on each roster, and the reputation the NBA has worked so hard to build, will get crushed. Just ask the NHL or MLB...
For some additional perspective on the demands made by the Players, let’s compare the BRI percentage demanded from NBA players to the compensation ratio received by the set of employees most well-known for “excessive” compensation – investment bankers.
In what is arguably the most hated and reviled industry in the world right now, employee compensation during normal and prosperous times was typically set at or just below 50% of net trading revenues (effectively the same as BRI for investment banks). However, during the not-so-prosperous times, this ratio fell dramatically. As an example, the “poster child” for excessive compensation, Goldman Sachs, set its compensation ratio at 36% in 2008 and 2009 and 40% in 2010, after consistently setting it at 50% in years prior to 2008. So, in the midst of the Great Recession, the big, bad investment bankers received 35% of their employers revenue in compensation while NBA players received 57% of their employers revenue in compensation.
Everyone is to blame for this mess, the Players for their incredible demands and the Owners for being poor businessmen and previously agreeing to those incredible demands. The solution is easy to see – agree to disagree, split the difference (i.e. 50% BRI), and get back on the court. Meanwhile, the non-millionaire employees of the NBA and its individual teams, and the thousands of small businesses that rely on the NBA, are jobless, waiting for Players and Owners to decided if the average NBA salary should be a paltry $5 million or an excessive $6 million.
This debate is so focused on who’s going to win, and who’s to blame, that the easy solutions get ignored. Sound familiar?
The figures above assume the 2011-12 season would generate the same revenue as 2010-11, a conservative assumption knowing that NBA revenues have grown in recent years.
To date, the players have effectively spent $349 million to try and convince the owners to move the Players portion of BRI from 47% to 52.5%. As of yesterday, it looks like they’ve been successful in negotiating their way up to 50% BRI – a gain of $1,164,000 per game from 47% BRI. If the dispute was settled today and no further games were lost, the players will recoup their $349 million investment after 3.7 seasons. This of course ignores the fact that a dollar today is worth more than a dollar in three years.
Given that the Players only want a three year deal, they’ve already “lost” and any further “investment” is really just throwing good money after bad.
Hopefully the Players recognize this soon, hammer out a deal and get back on the court (sooner rather than later).
If the season is lost in order to fight for 52.5% BRI (or other “structural” issues), the players will have spent approximately $2 billion dollars in compensation to “gain”, in the most unlikely best case scenario of 52.5% BRI, approx $4.5 million per game. Even with these most improbable gains, it would still take the Players five seasons to recoup the investment of a single lost season. Again, the five season best case scenario ignores the fact that a dollar today is worth much more than a dollar in 5 years. Additionally, the average career in the NBA is less than 5 years, so the average player will never recoup their investment.
That’s the best case for the Players.
If they lost a year and ended up back at 50%, it would take almost 20 years to recoup the investment, even longer if the owners were successful in reducing it below 50%.
If this information was presented to the Players, and they ignore it, they deserve their fate. If, however, this information was not presented to the Players, Billy Hunter and Derek Fisher have completely failed in their responsibility to represent the average NBA player. The Kobe’s and LeBron’s will be just fine, but the 10th, 11th and 12th man on each roster, and the reputation the NBA has worked so hard to build, will get crushed. Just ask the NHL or MLB...
For some additional perspective on the demands made by the Players, let’s compare the BRI percentage demanded from NBA players to the compensation ratio received by the set of employees most well-known for “excessive” compensation – investment bankers.
In what is arguably the most hated and reviled industry in the world right now, employee compensation during normal and prosperous times was typically set at or just below 50% of net trading revenues (effectively the same as BRI for investment banks). However, during the not-so-prosperous times, this ratio fell dramatically. As an example, the “poster child” for excessive compensation, Goldman Sachs, set its compensation ratio at 36% in 2008 and 2009 and 40% in 2010, after consistently setting it at 50% in years prior to 2008. So, in the midst of the Great Recession, the big, bad investment bankers received 35% of their employers revenue in compensation while NBA players received 57% of their employers revenue in compensation.
Everyone is to blame for this mess, the Players for their incredible demands and the Owners for being poor businessmen and previously agreeing to those incredible demands. The solution is easy to see – agree to disagree, split the difference (i.e. 50% BRI), and get back on the court. Meanwhile, the non-millionaire employees of the NBA and its individual teams, and the thousands of small businesses that rely on the NBA, are jobless, waiting for Players and Owners to decided if the average NBA salary should be a paltry $5 million or an excessive $6 million.
This debate is so focused on who’s going to win, and who’s to blame, that the easy solutions get ignored. Sound familiar?
Monday, October 17, 2011
Open Letter to "Occupy Wall Street"
Dear "Occupy Wall Street" -
We respect your right to protest and "occupy" Lower Manhattan in an attempt to promote your agenda (or lack thereof), but please stop claiming to represent 99% of the population. You don't. Don't flatter yourselves.
2%, 10%, maybe even 25% in general terms, but certainly not 99%.
We're quite sure you wouldn't want us representing you (see below), so please don't claim to represent us. We can, and will, represent ourselves. Thank you very much.
Kind Regards,
At least 75% of the 99%
P.S. Please clean up after yourselves and respect your neighbors.
We respect your right to protest and "occupy" Lower Manhattan in an attempt to promote your agenda (or lack thereof), but please stop claiming to represent 99% of the population. You don't. Don't flatter yourselves.
2%, 10%, maybe even 25% in general terms, but certainly not 99%.
We're quite sure you wouldn't want us representing you (see below), so please don't claim to represent us. We can, and will, represent ourselves. Thank you very much.
Kind Regards,
At least 75% of the 99%
P.S. Please clean up after yourselves and respect your neighbors.
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