Strictly Business

The big news dominating the music business world over the last few months has been the proposed merger of entertainment-giant Live Nation Inc. and the largest ticket seller Ticketmaster Entertainment Inc., thereby creating Live Nation Entertainment, Inc. The merger is currently under review by the Federal Trade Commission for signs of monopolization of the entertainment industry. The biggest issue in the merger appears to be the size of each corporation.

Currently, Ticketmaster has a market share of 30% for all entertainment event ticket sales and 70% for all concerts. These ticket sales are completed through either the primary ticket sales company, Ticketmaster, or the secondary (resale) ticket sales division, TicketsNow. On the other hand, Live Nation estimates that it is three times the size of its nearest competitor in concert promoting, AEG.

The merger of these two companies would make Live Nation Entertainment a one-stop-shop for concerts. The company would control the largest market share for primary and secondary ticket sales, concert promotion, and venue management. Then you have to look at Live Nation’s ventures into Artist Management and 360-Record deals. If you go to a Madonna show today, there is likely not an aspect of that show that Live Nation does not have a stake in (it is probable that Madonna performs at non-Live Nation venues), aside from ticketing.

If the merger were to proceed, Live Nation would not only gain access to ticketing for their own shows but for the shows of essentially every other concert promoter. The company would have unprecedented access to its competitions ticket pricing and fee structures and could have some say in those decisions. The fear is that this merger would block competition at all levels of concert promotions and harm the consumer through increased ticket prices. Live Nation’s business decisions beg the question, at what point does vertical integration become monopolization?

For further reading on the issue see:
http://www.fmqb.com/article.asp?id=1275227
http://news.bbc.co.uk/2/hi/entertainment/7047969.stm
http://www.bloomberg.com/apps/news?pid=20601103&sid=aClNsIlV6EuI&refer=news
http://www.nytimes.com/2009/02/05/business/05ticket.html

Posted by Kim May at 09:58 AM | Permalink | Comments (0)

Congratulations to Dr. Jane Finley, Belmont University Deloitte and Touche Professor in Accounting, for being elected to the Publix Super Markets Board of Directors. “Dr. Finley has an impressive background in finance and information technology that will complement our current Board of Directors,” said Maria Brous, Publix director of media and community relations. “She also adds another geographic area of our company to the Board as a Nashville, Tenn., resident. We are proud to have Jane as part of the Publix family.” For more on this story, visit Belmont News.

We are also proud of our Delta Epsilon Chi Team for their performance at the International Delta Epsilon Chi competition last week in Anaheim. This is the second consecutive year that we took first place in Entrepreneurship Business Plan and first and second place in the Entrepreneurial Challenge! For a list of award winners, please visit Dr. Cornwall’s blog.

After winning the Regional Championship for the fourth consecutive year, Belmont’s Students in Free Enterprise (SIFE) team will participate in the SIFE National Exposition in Philadelphia on May 12-14. In addition to the Regional Championship, the Belmont team was selected as a finalist for the 2009 SIFE USA Topic Competition for six of their projects.

Posted by Jocelyn Gutekunst at 03:34 PM | Permalink | Comments (1)

With all the media hype about the loss of IT-related jobs via off-shoring, it’s a good time to be in IT. In 2008, employment for IT-related jobs reached a new milestone of over four million. Over the next 8 years, IT majors will hold 3 of the top 8 growth jobs (Bureau of Labor Statistics) and will enter careers with strong salaries (Hot IT Jobs). So in a down economy the question remains, why would IT employment remain robust while unemployment is on the rise in many other job categories?

IT employment remains strong because all organizations rely on technology to conduct business and operate efficiently. With a premium placed on efficient productivity, IT-related skills are needed to help organizations use technology effectively to attain this objective. Therefore, IT-related jobs are a necessity if businesses want to remain competitive.

The field of IT is vast in terms of the areas of study and the types of jobs one can pursue, but the over arching goal of IT is to meet the needs of an organization. Some of the hottest jobs in IT include: developers, project managers, business analysts, network administrators, systems administrators, and IT security. Regardless of the area of emphasis, IT-related jobs are projected to be one of the fastest growing occupations over the next decade (Bureau of Labor Statistics).

When looking to fill IT-related jobs, employers generally prefer applicants who have at least a bachelor’s degree in information systems management (ISM) or computer science. Job opportunities are best for applicants with a strong understanding of business and good communication skills, who can identify the needs of the organization, and provide implementable solutions. So despite what the media portrays, it’s good to be IT!

Posted by Gary Garrison at 01:33 PM | Permalink | Comments (0)

Happy Earth Day! The news this week is full of environmental statistics. On campus, we will discontinue the sale of bottled water at the end of the semester. This move is estimated to cost the campus $20,000 in revenue. But, other costs will incur, as well. Water stations will be installed. Water fountains will be upgraded, making it easier to fill reusable water bottles. Besides our “earth consciousness,” what strategic goals do we address with this move? How do we evaluate its success? How do we measure the tradeoffs made?

We manage what we measure. So, measurement matters. But, many of the measurement tools associated with ecological management are denominated in flow speeds or error rates or landfill tons. These measures are not meaningful to many of us. Here, we can learn from quality management. Reporting quality problems and progress received appropriate attention when we converted all the problems to a single, common and familiar denominator (dollars!) and added them up. Cost of quality reports revealed to company managers, regulators, legislators and the public reasonable estimates of the expense associated with poor quality. With this data in hand, managers justified expenditures necessary to fix, or even better prevent, quality problems.

Environmental accounting is as old as Earth Day. This generic term applies to multiple levels of accounting from measuring national income to supporting decisions within business organizations. The utility of environmental accounting in supporting business decisions has been documented. Understanding the true costs of business operations allows managers to make better choices. Decisions regarding product and process design, material use and capital investment can be influenced by environmental accounting information.

Environmental costs are frequently hidden across various categories of costs and multiple areas of responsibility. Consider an example in support of this claim. The Tellus Institute submitted a report to the US Environmental Protection Agency addressing the role of environmental accounting in implementing environmental improvements in hospitals. This report identified the following costs associated with purchasing routine supplies for hospitals.

• Cost of acquisition
• Cost of storage
• Cost of utilization (for reusable goods, this may include the costs of cleaning and sterilization)
• Cost of obsolescence (incurred when a product in inventory expires and must be disposed of)
• Cost of disposal (disposal of various waste streams incurs a real cost per unit of weight or volume – costs are significantly higher for products which must be disposed of as hazardous waste)
• Labor cost (include labor costs not elsewhere captured – e.g., labor to collect and segregate waste, receiving and warehousing, staff training)
• Regulatory costs (some items incur costs associated regulatory reporting and compliance)
• Return on investment or avoided costs (savings from cleanup)
“Healthy Hospitals: Environmental Improvements Through Environmental Accounting”
Submitted to the US Environmental Protection Agency by the Tellus Institute
July 2000

Identifying and accumulating these costs potentially change purchasing decisions. Without the information, even well-intentioned managers make environmentally irresponsible choices. And cost their organizations substantial profits.

At the other end of the spectrum are calls to include environmental accounting in measuring national income. Where do we recognize the environmental value of watershed protection afforded by forests or the crop fertilization that insects provide? Similarly, where do we record the degradation of these services? Interest in formalizing the accounting for links between the economy and the environment continues to grow.

So, in observance of Earth Day, an accountant turns her thoughts to how systems of accounting can contribute to environmental sustainability by improving measurement. Will we get it right the first time? Undoubtedly not. Can we wait until we have precise measures of all the cost and revenue elements? Estimates will be necessary. But, we are really good at estimating. Let’s start adding up the dollars associated with environmental decisions.

Posted by Lee Warren at 02:47 PM | Permalink | Comments (0)

I wrote a post this past weekend at my blog the Entrepreneurial Mind about the dramatic drop in venture capital funding, particularly for newer ventures.

The Wall Street Journal has an article on an innovative attempt to get money flowing back into start-up deals:

In the latest example of investors trying new approaches during the downturn, a venture-capital firm that was an early backer of Facebook Inc. is devising a plan to outsource early investing decisions to hand-picked entrepreneurs and technology executives.

The Silicon Valley firm Founders Fund plans to give at least 12 "fellows" $25,000 to invest in an early-stage company of their choosing. Founders Fund will invest $25,000 alongside those initial investments and request the right to invest an additional $250,000 when the companies raise their next round, according to Sean Parker, managing partner at Founders Fund, which announced it raised a $220 million fund in late 2007. The firm expects to devote roughly $3.6 million to the new program.

We have launched a similar program here at Belmont University called our Runway Loan fund. So far, we have given two loans to alumni ventures of $25,000 each. The terms are that these are set up as interest free loans. Once the principle is repaid, the student or alumnus agrees to begin paying an annual gift to our Center of Entrepreneurship that is equal to one percent of their revenues for the life of the business.

The first two ventures to receive Runway Loans are Cell Journalist and Just Kidding Productions.

Our hope is that we can gain permanent funding for this program so it can be expanded. It provides badly needed seed funding for our students and alumni and a means of creating a revenue stream for our Center that can help us expand what we do over the long-term.

Given our dependence on new businesses to pull us out the recession, we need try all the creative solutions we can think of to support these entrepreneurs.

Posted by Jeff Cornwall at 09:05 AM | Permalink | Comments (0)

This week I got an interesting letter from my car insurance company, letting me know that they are excited to announce the transition to a new brand name – 21st Century Insurance. According to the letter, “This new brand name is meant to reflect our commitment to being the kind of forward-thinking insurance company you need today, in the 21st century.” While I compared prices from various companies, I’m not a bargain hunter when it comes to my car insurance. I stick to the deal that my “dad’s guy” offers me. I have had the same car insurance since my 16th birthday and I like being able to pick up the phone and talk to someone who knows me when I’ve smashed up a car. I have always been happy to be insured by AIG; I’ve been a loyal customer. I still remember when the agent explained how AIG is the largest insurer around, bragging how the company is “a name you know you can count on.” That was all he ever had to say, it sounded great.
The rebranding letter insulted me, it really hurt my feelings. I’ve stuck with AIG through the years, despite tempting offers from cavemen and geckos. Marketing classes teach concepts about the importance of branding. I find it amazing that the company bailed on its good name across the board. CBS reported, “CEO Edward Liddy revealed that while the company’s healthy businesses would survive, its name probably wouldn’t. ‘I think the AIG name is so thoroughly wounded and disgraced that we're probably going to have to change it,’ he said.” (http://blogs.abcnews.com/moneybeat/2009/03/liddy-aig-name.html)
AIG has now changed their brands in an effort to trick their own customers. I believe that marketing gurus will study AIG’s branding strategy from now on. While I could argue both sides, I’m not convinced that this is a smart move. I do think if my insurance company is not willing to be loyal to their own good name, then I’m no longer willing to be a loyal customer. Changing the name might help retain some of their customers, but it convinced me that I should shop around.
Apparently AIG’s end-game is to sell the car insurance division. MSNBC is reporting that a deal is being worked out with Zurich Financial Services to sell 21st Century for $1.9 Billion (http://www.msnbc.msn.com/id/30249719/). The letter writer must have forgotten to mention that. The end of the letter reads, “At this point you are probably wondering what this means to you. It means that although our brand name will change, our service and commitment never will.” How is AIG’s commitment unchanged if they are currently trying to sell-off my relationship? While the terms and conditions of my current insurance policy may remain the same, our relationship is nearing the end.

Posted by Chris Tompkins at 03:42 PM | Permalink | Comments (2)

I just read the article “Achieving Accountable Marketing: Six Critical Value Levers Must Be Pulled” by Michael Dunn on brandchannel.com. The article outlines six basic marketing considerations that should be revisited on an ongoing basis— strategy, content, marketing vehicles, investment levels, in-market execution and fixed cost management. While these are certainly not new concepts, it is important to keep these factors in mind as situations change and new opportunities emerge.

Brandchannel.com is a good resource for anyone interested in marketing/branding. You might check out this month’s debate forum to read reactions to “How will Twitter affect Brands?” as you consider new ways of keeping customers engaged.

Posted by Jocelyn Gutekunst at 08:00 AM | Permalink | Comments (0)

Are you standing in line today at the Post Office to mail your tax return to the IRS? The Internal Revenue Service is expecting your completed individual tax return (or an automatic extension request) for 2008 and today is the deadline. But paper and Post Office lines are so ... last century! The IRS wants your tax return ... but digital only please!

The number of returns filed electronically has grown dramatically over the past few years. Electronic, or e-filing, started in 1990 with 4 million returns and reached 90 million last year. Big number? Maybe, but it only represents 58% of individual returns filed and far less than the 80% goal set early this decade by the IRS.

Accounting firms and CPA's have been the driving force for much of the early adoption of electronic filing (which reached 40 million by 2001). In early 2009, new electronic filing options for individuals were made available online. The IRS is "selling" e-filing as a easy way to get a quick refund and is providing new free filing options. According to the IRS press release,

most taxpayers qualify for free tax preparation offered through Free File on IRS.gov. Regardless of income level, taxpayers who are comfortable with filling out paper tax forms and who don't need extra assistance can use the IRS's new Free File Fillable Forms. These new online versions of paper tax forms that can be e-filed are available for the first time by visiting the IRS.gov Free File site.

In addition to the individual e-file initiative, the IRS is working on modernizing the filing systems for other taxpayers, including corporations and nonprofits.

The Modernized e-File (MeF) system was developed to provide a standardized format and standardized transmission methods for e-filed returns. MeF is a web-based system that allows electronic filing of corporate, partnership, exempt organization and excise tax returns through the Internet. MeF uses the widely accepted Extensible Markup Language (XML) format. This is an industry standard that is used when identifying, storing and transmitting data rather than the proprietary data transmission formats used by older e-file programs.

Advantages of the Modernized e-File system:
• Faster acknowledgements – Transmissions are processed upon receipt and acknowledgments are returned in near real-time.
• Integrated payment options – Refunds can be electronically deposited in your bank account or balance due payments can be electronically withdrawn from your bank account.
• MeF accepts supporting forms/schedules
• 24/7 transmissions
• MeF is completely paperless
• MeF supports previous-year filings as well as the current year.

Posted by Del DeVries at 07:43 AM | Permalink | Comments (0)

Many Americans are unaware of a National Day to promote the early development of plans for you and your loved ones during specific medical necessities and adverse situations. April 16, 2008 was the first day the US designed to promote awareness and the need for Americans to discuss (and hopefully execute) their advanced medical directives. What is an advance directive?

An advance directive is a written way of deciding your medical wishes known in advance of a specific medical situation. All adults can benefit from thinking about what their healthcare choices would be if they are unable to speak for themselves. These decisions can be written down in an advance directive so that others know what they are. Advance directives come in two main forms:
A "healthcare power of attorney" (or "proxy" or "agent" or "surrogate") documents the person you select to be your voice for your healthcare decisions if you cannot speak for yourself.
A "living will" documents what kinds of medical treatments you would or would not want at the end of life.

Did you know that:

The U.S. Agency for Healthcare Research and Quality (www.ahrq.gov), in a 2003 article, “Advance Care Planning: Preferences for Care at the End of Life,” found the following:
•Less than 50 percent of the severely or terminally ill patients studied had an advance directive in their medical record.
•Only 12 percent of patients with an advance directive had received input from their physician in its development.
•Between 65 and 76 percent of physicians whose patients had an advance directive were not aware that it existed.

More Americans Discussing – and Planning – End-of-Life Treatment. The Pew Research Center, January 2006. http://people-press.org/reports/pdf/266.pdf.
•42% of Americans have had a friend or relative suffer from a terminal illness or coma in the last five years and for a majority of these people and 23% of the general public, the issue of withholding life sustaining treatment came up.
•An overwhelming majority of the public supports laws that give patients the right to decide whether they want to be kept alive through medical treatment.
•By more than eight-to-one (84%-10%), the public approves of laws that let terminally ill patients make decisions about whether to be kept alive through medical treatment.
•One of the most striking changes between 1990 and 2005 is the growth in the number of people who say they have a living will – up 17 points, from 12% in 1990 to 29% now.

Brief Communication: The Relationship between Having a Living Will and Dying in Place. Howard B Degenholtz, PhD, YonJoo Rhee, MPH, PhD; and Robert Arnold, MD. Annals of Internal Medicine. 2004; 141:113-117.
•Having a living will was associated with lower probability of dying in a hospital for nursing home residents and people living in the community.
•During advance care planning, physicians should discuss patients’ preferences for locations of death.

Please consider visiting this website to become a more informed healthcare advocate and plan to discuss these advanced directives options with your patients, employees, and families as soon as possible. The website contains valuable forms that can be downloaded for use in developing your advanced directives.

Posted by Chuck Wainright at 09:15 AM | Permalink | Comments (0)

[Authored by Dr. J. Patrick Raines] The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system. – Milton Friedman

Russ Kidder contends in his new book, The Ethics Recession, that there is a growing sentiment that our current economic crisis is not simply unethical but profoundly immoral. He states “There’s a sense that core decencies have been demolished, integrity dissolved, and common values trampled….” Kidder’s recommendation is to look beyond personalities and individuals to create cultures of integrity.

On Thursday April 2, 2009 The Center for Business Ethics at Belmont University hosted an ethics workshop entitled “How Business Ethics Practitioners and Academics Can Work Together More Effectively.” Participants in the dialogue included: Alan Yuspech (Sr. VP and Chief Ethics Compliance Officer at HCA), Megan Barry (VP Premier, Inc.), Dr. Harry Hollis (Medlin Chair of Business Ethics, Belmont Univ.), Dr. Wade Chumney (Ethics Faculty, Belmont Univ.), Mr. Harold Fogelberg (Ethics Faculty, Belmont Univ.), Dr. Keith Darcy (Executive Director, Ethics and Compliance Officer Association), Dr. John C. Knapp (Mann Family Professor of Ethics and Leadership, Samford Univ.), Dr. Wayne Norman (Mike and Ruth Mackowski Professor of Ethics, Kenan Institute for Ethics, Duke University), Dr. Pat Raines (Dean and Professor of Economics, Belmont Univ.) and Dr. Beck Taylor (Dean, Brock School of Business, Samford Univ.).

The dialogue focused on the relationship between the academic practice of teaching business ethics and the reality of working in the profession of building ethical cultures and fostering corporate social responsibility. A consensus emerged from the discussion that business students, scholars in the field and ethics and compliance officers could benefit from greater interaction. Recommendations included the creation of graduate degrees and certificate programs in ethics and compliance management and encouraging the elevation of ethics within organizations to the strategic level.

Future collaboration is planned between the Center for Business Ethics at Belmont University, the Kenan Institute for Ethics at Duke University and the Ethics and Compliance Officers Association.

Posted by Sue Hopfensperger at 04:29 PM | Permalink | Comments (0)

[Authored by Joseph Ormont, MBA Candidate]

Yesterday Congress approved the President’s $3.6 trillion budget, paving the way for a $1.7 trillion deficit (as projected by the Congressional Budget Office) or 11.9% of Gross Domestic Product – the largest deficit as a percentage of GDP since 1945. What’s more is that this figure doesn’t take into account any of the other stimulus/recovery efforts or unfunded liabilities including:

•$787 billion American Recovery and Reinvestment Act passed in February.
•$700 billion Troubled Asset Relief Program (TARP) passed in 2008.
•Potentially billions more that could result from the Treasury’s and Federal Reserve’s plan to ‘clean up’ toxic assets on financial institution’s books through taxpayer-backed loans and private investment.
•Unfunded liabilities in Social Security and Medicare/Medicaid that some sources have quoted as being nearly $56 trillion.

I recently saw an author make the statement “Is it just me, or has a ‘trillion dollars’ lost much of its aura?” Well, definitely not from my perspective. It is very concerning the debt obligations that are being placed on my generation (Gen Y), and without a doubt, my children’s children’s generation.

While it is hard to argue that action needed and still needs to be taken to address the economic downturn, such actions consistently seem short-sighted. "Fixing the economy" won’t come from spending, but rather honestly discussing and addressing key issues and investing for the long term (especially in science and technology, which feeds entrepreneurship and job creation). While, of course, this is oversimplified, the fact remains that I love this country and believe strongly in the American "mind-set" – yet we must re-prioritize as a nation, otherwise we’ll be leaving it to our children and grandchildren to clean up.

Authored by Joseph Ormont, MBA Candidate

Posted by Jocelyn Gutekunst at 03:49 PM | Permalink | Comments (2)

[Authored by Mr. Jose Gonazalez, Instructor of Entrepreneurship and International business]

A bipartisan group of US senators has recently introduced a bill that would allow US citizens to travel freely to Cuba. This has added fuel to the fire on the debate regarding the embargo to this Caribbean country of almost 12 million people.

I’ve been interested for quite some time now, about why we continue to dismiss opportunities that may be available for engaging in trade with Cuba just because they’re a communist nation. While I understand the criticism and emotions that surround Fidel and its era- I’m no fan myself- I think we’re long overdue to revisit our policy to engage in business with the Cuban people. We’re stuck in thinking that because they’re a communist country, we should not trade with them. What about China? What about Vietnam? Americans can travel more easily to Iran or Venezuela, which today pose more genuine security and economic threats, than to Cuba.

After 50 years, it’s clear that the embargo didn’t work. Sen. Richard Lugar, the ranking Republican on the Senate Foreign Relations Committee recently commented that "After 47 years ... the unilateral embargo on Cuba has failed to achieve its stated purpose of bringing democracy to the Cuban people.”

Businesses for years have tried to persuade congress to lift the restrictions. From dairy farmers, to service companies in the hospitality industry- they all claim Cuba is a potential attractive market and are ready to sell, invest and do business on the island. A team of my International Business students reported during their presentation that there have been thousands of trademark applications in Cuba from US companies that are anxious and ready to go… when they’re allowed. Time to have a conversation about the merits of the embargo, and explore what a more congruent trade policy should look like responding to the realities of 2009.

Authored by Mr. Jose Gonazalez, Instructor of Entrepreneurship and International business

Posted by Jocelyn Gutekunst at 08:44 AM | Permalink | Comments (1)

Over 30 young Belmont Undergraduate Business School Alumni met with current students yesterday at the “Business Bistro,” a networking mixer sponsored by the College of Business Career Development Center and the Business Student Advisory Board. The Belmont Alumni, representing companies such as Gaylord Entertainment, Smith Barney, Kirkland's, Capital Financial Group, Caterpillar Finance, Tractor Supply, Thomas Nelson Publishers, EMMA Inc., HCA and Big Brothers/Big Sisters, shared their professional experiences and offered advice to current students. Rebekah Gunkel, 2005 marketing graduate now with Protherics, Inc., had this to say about the event, “I loved the Business Bistro event! It was a great opportunity for students to see young alumni, not much older than themselves, using their degrees in different capacities. I think it really helps bridge the gap between a college degree and a career when you talk to someone that had the same major, took the same classes, even sat in the same seats at Belmont, and is now successfully using the information first learned here on a daily basis.”

Posted by Jocelyn Gutekunst at 01:43 PM | Permalink | Comments (0)