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Strange incentives for buying sports franchises

Does a billionaire like Steve Ballmer really need tax incentives in connection with his ridiculous $2 billion purchase of the Los Angeles Clippers?

This video and article from CNBC explains how it works.

Battle goes on regarding Detroit Institute of the Arts

Detroit Institute of the Arts

How much is the Detroit Institute of the Arts worth? That’s one of the battles brewing in the Detroit bankruptcy litigation as a creditor tries to challenge the grand bargain reached that will wipe out $7 billion in debt for the city.

The key question is whether the grand bargain — $815 million pledged by foundations, state government and the DIA to bolster city pensions and shield the art from sale by transferring ownership of the museum to an independent nonprofit — represents a reasonable proxy for the value of the collection in the overall context of the city’s plan.

The other side is claiming the art can be worth up to $8 billion if sold off. The drama here is pretty interesting and the case could have interesting implications for the rights of creditors in bankruptcy.

Lame phone commercials

Why is this guy’s “dad” a hamster? Why is the other dude dress up like he’s in a Cure tribute band? Does anybody get this? Do commercials have to be quirky and stupid these days? The whole Sprint Framily Plan line of commercials comes across as lame so far.

The AT&T commercials aren’t much better, though they do have lovely actress Milana Vayntrub starring in them.

Milena Vayntrub
From Milana’s official website

The latest commercial in this series features Gordon Ramsay is a particularly unfunny appearance.

There’s so much money at stake for these phone companies and this is the best they can come up with?

Sales continue to drop at McDonald’s

McDonald's Big Mac

Are tastes finally changing? Are people starting to realize that too much fast food isn’t good for you?

The executives at McDonald’s will have to grapple with that question as sales continue to falter. There was a problem in Asia that made things even worse, but in the US same store sales fell 2.8%. The trend is against McDonald’s and the stock is rightfully taking a hit.

Younger people seem to prefer chains like Chipotle that clearly offer better food. Meanwhile people are paying more attention to the quality of food they eat. That may not be as true for less affluent customers, but the middle class is certainly paying more attention.

How will McDonald’s respond? Some blame the bloated menu and the slow service. I have to admit that I prefer the days when a warmed-over burger was served immediately over a freshly made burger that takes way to long and doesn’t taste much better.

Will they try to offer more healthy alternatives? That hasn’t worked in the past, but perhaps fresh wheat bread buns might be a nice option for some customers over the lame buns they serve now.

We’ll see what happens, but I wouldn’t want to be in this stock at the moment.

The business of Johnny Football

With Johnny Manziel’s trip to Las Vegas this weekend, the sports media had plenty to blather about. Should he have gone, or should have stayed and studied in Cleveland? We can let them worry about the football implications and whether partying in Las Vegas makes sense for a rookie quarterback trying to learn the playbook. Perhaps he should have stayed home and enjoyed himself playing www.888casino.com instead of enjoying the trappings of late-night Vegas parties. But that wouldn’t have done quite as much for the brand of Johnny Football. Selfies by the pool trump sitting in front of a computer when you’re thinking about brand and endorsements. And Johnny definitely cares about his brand.

Of course, we’ve seen this before so it’s not that new. Remember Broadway Joe Namath? His lifestyle generated a brand and endorsements as well. With Johnny Football everything is just more immediate. Like Namath, he knows how to work the system of his time.

In Cleveland the frenzy has spurred all sorts of business ideas, with t-shirts leading the way. The Browns have always been big business in Cleveland, but years of losing have made it harder for businesses to capitalize on the Browns. All that changes with Johnny Football, especially if he can win football games.

Johnny Manziel is represented by self-proclaimed King James’s agency, so he’s definitely surrounded by like-minded people. Brand and money definitely matter. Endorsements matter. Of course, Lebron James learned to get past his choking in the past to finally win some championships. Johnny Manziel on the other hand is just getting started, so he’s milking what he can now, and setting the stage for even bigger things if he can be a real NFL quarterback. Of course, if he can bring a winner to the long-suffering fans of Cleveland, he’ll be a hero for generations.

So the potential is there for the business of Johnny Football to be quite substantial.