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Sports + Fans + Selfie Culture = Business Strategy

Fri, 2015-07-24 13:15

When the LA Galaxy’s newest star, former Liverpool player Steven Gerrard, scored his first goal for the team, the crowd exploded.

And up near the roof of the stadium, cameras were clicking away.

They were focused not on the goal or on Gerrard, but on the ecstatic, high-fiving, scarf-waving fans. Some 20,000 of them were having their picture taken in just seconds.

"We capture the moment, so you don't have to, so that you can enjoy the experience without being on your phone and trying to take a picture of yourself," says Mike Peterson, an intern at Fanpics, a San Diego tech startup that partners with sports teams to take photos of celebrating fans. Tonight, Mike's job is to trigger the cameras at the big-deal moments.

Courtesy:FanPics

Reporter Adriene Hill (center, in the black and white dress) demonstrates how Fanpics sometimes works— and sometimes doesn't.

Fanpics is a free app. You download it, plug in your seat number and you get a set of photos on your phone of game highlights, like that Gerrard goal, and your reaction to them.

"So now when something memorable happens, we have a picture that proves we where there," says Galaxy season ticket holder Andrew Rivera. He usually winds up with a photo or two from each game that he like enough to share on his Instagram account.

That’s free publicity for the stadium and the team, which is part of the reason the Galaxy — and next season the L.A. Clippers and L.A. Kings — will use Fanpics.

"At first, we were a little nervous about how people would react that we are taking your picture," says Katie Pandolfo, the general manager of the StubHub Center, where the Galaxy play.

All the stadium’s entrance gates have a Fanpics disclosure. So far, she says, there haven’t been any complaints. About 15 to 25 percent of fans at games check in to the service.

"It’s important to bring new technology, show our fans that we are keeping up with all the other stadiums, and give them an experience they don’t’ have at another facility," Pandolfo says.

Fanpics and teams get something else out of the arrangement: data.

"We’re saying, 'Here’s this awesome content of you that’s never before existed,'" says Marco Correia, one of Fanpics co-founders. "In exchange for that, we can find out who they are, where they sit, how many times they go to the games, who they are with."

Fanpics and stadiums are still figuring out the best way to make money off all this information, from the easy stuff, like selling prints and tchotchkes with your photo on them, to the not so obvious, Correia says. "We've got a mobile platform where there are a lot of fans using it, so how are we able to monetize that?"

How Amazon can be worth the same as Wal-Mart

Fri, 2015-07-24 13:00

Amazon.com stocks rocketed up 10 percent Friday after the company reported quarterly profits to the surprise of many analysts’ expectations. Amazon’s market value – the price if you wanted to buy the whole company – is nearly that of Wal-Mart, even though Wal-Mart makes 35 times the profit of Amazon today.

Investors, though, are betting on what happens tomorrow. Piper Jaffray analyst Gene Munster figures Amazon added 20 million Prime members this year; those are the website shopping addicts who pay $99 for a year’s free shipping and other perks.

“When you make that $100 investment annually into Prime, it changes how you behave online,” Munster says. “And it makes you think ‘I’ll check Amazon first’ because you’ve invested that into Amazon.”

Prime members buy three times as many goods as non-members, Munster says.

Wal-Mart has a free online shipping club too. But the expectations there are far different.

“Both Wal-Mart and Amazon are making major changes in their companies,” Brian Reynolds, chief market strategist at New Albion Partners, says. “But equity investors aren’t buying it from Wal-Mart. That stock is on the verge of a breakdown, while Amazon just had a breakout.”

Amazon stock does reflect sky-high expectations, but they’re somewhat proven expectations. Last quarter, the company went from losing to making money. And at this rate of growth, Amazon’s profits could eventually match those of Wal-Mart’s.

“Do I think 20 years from now it’s conceivable that Amazon could have as much or more earnings than Wal-Mart? Sure,” says former investment banker Michael Goldstein, who now teaches finance at Babson College.  “Do I think that makes the two equally worth value now? Me personally? No. But it’s not nuts.”

He says Amazon is no pets.com, the firm that famously went bust in the 2000 bubble. Its business plan to sell dog food and other items online failed. Today, that same plan seems to be succeeding at Amazon.

 

 

 

 

 

 

Weekly Wrap: Hillary Clinton, mergers and commodities

Fri, 2015-07-24 13:00

Joining us to talk about the week's business and economic news are the Washington Post's Catherine Rampell and Cardiff Garcia of FT Alphaville. The big topics this week: Hillary Clinton's speech on the "tyranny" of quarterly earnings reports, healthcare mergers and a decline in commodities' prices. 

Converse unveils a revamp of the classic Chuck Taylors

Fri, 2015-07-24 13:00

Converse’s Chuck Taylor All Stars are iconic. They’ve been around for almost a hundred years and haven’t changed all that much. Now Converse is releasing a revamped version called Chuck Taylor IIs.

Converse didn’t want to overhaul the look of the shoe. The big change is that it's using Nike technology for the first time in the sole of the shoe. It’s a foam called Lunarlon which has been used in basketball shoes. Don’t worry, there won’t be a swoosh on the outside.

“The move to make them more comfortable seems like a no-brainer. If you’ve ever worn Chuck Taylors in your life, you’ve probably had the same feeling I did.…Yeah, I remember them not being the most comfortable shoe,” says Matthew Townsend of Bloomberg Business. He wrote a piece about the change called "After a Billion Sore Feet, Converse Wants Chucks to Feel Like Nikes."

Chuck Taylor IIs won’t replace the originals entirely, so if you’re a die-hard fan, you can still purchase the classic shoes.

Click on the media player above to hear the interview.

 

Gamers' new challenge: a urine sample

Fri, 2015-07-24 13:00

"Video games as sport" is finally entering the big time — and it's a little depressing.

The Electronic Sports League says it's going to start a performance-enhancing drug testing program. 

Before you pooh-pooh it, you should know e-sports (as its known) is a quarter-billion-dollar-a-year business, with an estimated a fan base of more than 100 million. 

The performance-enhancing drug, by the way?

Not steroids or anything like that. It's Adderall. 

Sports + Fans + Selfie Culture = Business Strategy

Fri, 2015-07-24 13:00

When the LA Galaxy’s newest star, former Liverpool player Steven Gerrard, scored his first goal for the team, the crowd exploded.

And up near the roof of the stadium, cameras were clicking away.

They were focused not on the goal or on Gerrard, but on the ecstatic, high-fiving, scarf-waving fans. Some 20,000 of them were having their picture taken in just seconds.

"We capture the moment, so you don't have to, so that you can enjoy the experience without being on your phone and trying to take a picture of yourself," says Mike Peterson, an intern at Fanpics, a San Diego tech startup that partners with sports teams to take photos of celebrating fans. Tonight, Mike's job is to trigger the cameras at the big-deal moments.

Courtesy:FanPics

Reporter Adriene Hill (center, in the black and white dress) demonstrates how Fanpics sometimes works— and sometimes doesn't.

Fanpics is a free app. You download it, plug in your seat number and you get a set of photos on your phone of game highlights, like that Gerrard goal, and your reaction to them.

"So now when something memorable happens, we have a picture that proves we where there," says Galaxy season ticket holder Andrew Rivera. He usually winds up with a photo or two from each game that he like enough to share on his Instagram account.

That’s free publicity for the stadium and the team, which is part of the reason the Galaxy — and next season the L.A. Clippers and L.A. Kings — will use Fanpics.

"At first, we were a little nervous about how people would react that we are taking your picture," says Katie Pandolfo, the general manager of the StubHub Center, where the Galaxy play.

All the stadium’s entrance gates have a Fanpics disclosure. So far, she says, there haven’t been any complaints. About 15 to 25 percent of fans at games check in to the service.

"It’s important to bring new technology, show our fans that we are keeping up with all the other stadiums, and give them an experience they don’t’ have at another facility," Pandolfo says.

Fanpics and teams get something else out of the arrangement: data.

"We’re saying, 'Here’s this awesome content of you that’s never before existed,'" says Marco Correia, one of Fanpics co-founders. "In exchange for that, we can find out who they are, where they sit, how many times they go to the games, who they are with."

Fanpics and stadiums are still figuring out the best way to make money off all this information, from the easy stuff, like selling prints and tchotchkes with your photo on them, to the not so obvious, Correia says. "We've got a mobile platform where there are a lot of fans using it, so how are we able to monetize that?"

CFO's rise beyond the balance sheet

Fri, 2015-07-24 13:00

The job of chief financial officer has expanded dramatically over the past 15 years — they’re not just accountants anymore. 

Not that CFOs are complaining.

“Thank goodness I’m not just sitting behind a desk with a calculator,” says Vincent Burchianti, CFO of Firehouse Subs

When Burchianti started his accounting career in 1991, CFOs just did the books, but now they’re also involved in strategy. Burchianti works closely with Firehouse’s CEO Don Fox.

“I jokingly say we’re BFFs, because we work hand in hand almost on a daily basis,” Burchianti says.

One reason the CFO role has expanded: companies are getting rid of their chief operating officers, the COOs.

“So the CEO and CFO then fill this vacuum of change as the COO role has diminished," says Peter Crist, chairman of the executive search firm Crist/Kolder Associates.

Some CFOs are also being groomed to become CEOs, so they have to be able to do more than just crunch numbers. 

John Percival wonders if too much is expected from them. He’s a retired adjunct professor of corporate finance at the Wharton School, who now runs seminars on the expanding CFO role.

“I’m still concerned about CFOs having to be Renaissance people," he says. "And I think there are some CFOs who probably are capable of doing that, but I think there are some that are probably not ever going to be able to do that.”

Percival says technology can help CFOs balance the books, so they may not have to work as hard on that. 

Still, he says, there are only so many hours in a day.

El Niño: Be careful what you wish for

Fri, 2015-07-24 13:00

Lots of people along the West Coast are hoping that predictions of a strong El Niño this winter will prove correct, because a season of hard rain is needed.

But even if a season of rain does provide some relief for western states, banking on El Niño to fix what amounts to a four-year drought is problematic for a lot of practical reasons.

Based on estimates from 2014 satellite data, California may be facing a groundwater deficit of some 63 trillion gallons. So it seems natural that folks out there are crossing their fingers and hoping for a long rainy winter. But there’s a problem.

“We don't know what to do with rain in places like Los Angeles,” says Hadley Arnold, Arid Lands Institute co-director. “We know it as flood, we know it as threat, we know it as waste and we get rid of it as fast as we can.”

Arnold points out that much of the water infrastructure in the West is designed for water coming from mountain snow pack, which melts gradually into rivers and reservoirs. Rain, by comparison, requires a completely different system.

Moreover, rain accounts for just one part of the supply side of fresh water. Frank Marsik, a climate researcher at the University of Michigan's Department of Atmospheric, Oceanic and Space Sciences, says making headway against the California drought requires policies to curb demand, beyond simply “praying for rain.”

“You know they might have helped with an El Niño, for instance, in an area that has been seeing some very dry conditions," Marsik says. "But that’s certainly not something you can count on every year. What you can count on are your habits.”

Even if an El Niño does materialize, its effects could vary significantly. 

“You might fill up your reservoirs in one year, but you're not likely to recharge groundwater," says Mike Halpert, a director at the Climate Prediction Center, part of the National Oceanic and Atmospheric Administration. "So this is a drought that I wouldn't expect to end even with a good rainy and snowy winter."

Looking beyond this year, many climate researchers predict drought might actually become an increasingly common condition for large parts of the globe.

A dim law? Imagine Times Square without billboards

Fri, 2015-07-24 13:00

If you had to classify the streets that run through Times Square — Seventh Avenue and Broadway— what would you call them? Streets? Avenues? "Principal arterials," perhaps?

Onlookers take photos in Times Square.

Isaak Liptzin / WNYC

If you guessed the last answer, you must be up on your transit taxonomy.

The name matters because how city streets are classified has big implications in the eyes of the federal government. When the federal law called Moving Ahead for Progress made "principal arterials" into highways, Broadway and Seventh Avenue became highways. And that in turn puts most of the billboards in Times Square, at least technically, in violation of the Highway Beautification Act of 1965. By law, the city could lose federal funding if the billboards don't come down.

But city, state and federal officials say they're looking for a solution to keep the billboards.

New York University professor Mitchell Moss calls it a "bureaucratic hiccup."

Building tiny homes for the homeless

Fri, 2015-07-24 10:52

When Elvis Summers moved to South L.A. last August, he met Smokie, a 60-year-old homeless woman whose real name is Irene McGhee. She was living on the street and would come by to ask for recyclables. 

When Summers learned about Smokie's living situation — essentially in the dirt, with a broken chair — Summers wanted to help. After $500 and a trip (or two) to Home Depot, a tiny home for Smokie was born:

The house was built on wheels and parked on the street — technically a vehicle under city law. As long as the home/vehicle is moved every 72 hours, it's allowed to stay.

After building Smokie's house, he continued to build tiny homes for other homeless individuals he met in the area:

You can learn more about Summers' project in the audio player above or at his website: My Tiny House Project LA

Let's Roomba!

Fri, 2015-07-24 09:45

Robots are coming! Do they save you money? Or time? Are they intelligent? Where are they filling in the gaps, and when are they not good enough?

What would you never trust a robot to do?

We want to hear your stories. Send us an email or reach us on Twitter, @MarketplaceWKND

How do robots collide with your life?

Fri, 2015-07-24 09:45

Robots are coming! Do they save you money? Or time? Are they intelligent? Where are they filling in the gaps, and when are they not good enough?

What would you never trust a robot to do?

We want to hear your stories. Send us an email, or reach us on Twitter, @MarketplaceWKND

The economics of a Los Angeles homeless shelter

Fri, 2015-07-24 09:23

In the basic pyramid of human needs, shelter is right at the bottom. It is a building block of who we are and how we protect ourselves, our families and our societies.

In the past two years, homelessness in and around Los Angeles has gone up by 12 percent, driven largely by unemployment, high rents and low wages. The city council recently passed controversial ordinances to crack down on street encampments. 

Marketplace Weekend visited the Downtown Women's shelter this week in L.A.'s Skid Row, where a lot of homeless people gather. The center offers help with housing and daytime drop-in programs. Lizzie O'Leary spoke with Amy Turk, the chief programs officer there, to find out what it's like to run a shelter.

Russian native finds asylum in Los Angeles

Fri, 2015-07-24 08:25

Daniyar Aynitdinov came to the U.S. from Russia on a work and travel program six years ago. At the time, he was studying to be a petroleum engineer at Gubkin Russian State University of Oil and Gas. Aynitdinov is gay, and in the past few years Russia has instituted laws curtailing rights for lesbian, gay, bisexual and transgender people. He was granted asylum this year.

He's settled now in a rented room in the Silver Lake neighborhood of Los Angeles. He spoke to Marketplace Weekend from his room, where he reads from a diary he kept before he came to the U.S. He writes that he had high hopes of becoming an actor in Los Angeles. Now, years later, he's performing in Hollywood.

Click the media player above to hear Daniyar's full story.

Housing is up and down, but mostly up

Fri, 2015-07-24 07:00

With summer, the housing market has been warming up. According to the National Association of Realtors, existing home sales were up 3.2 percent in June, on top of strong sales in April and May, to a level not seen since early 2007. June’s new home sales figures were disappointing, with sales down 6.8 percent month-to-month.

Overall, though, it’s been a good first half of 2015 for housing, according to research firm RealtyTrac’s mid-year market report. In fact, the housing market has hit multiple benchmarks not seen since the housing crisis in the late 2000s, including: most homes and condos sold; most price appreciation; and fewest foreclosures and distressed properties sold.

RealtyTrac Vice President Daren Blomquist says investors (often paying cash for distressed properties) are exiting the market, making more room for regular folks trying to buy a home to live in.

“More buyers using low down-payment loans are coming back, and that includes the traditional first-time buyers who've never bought a home, and it also includes the boomerang buyers,” Blomquist says. “They're people who lost their home during the last housing crisis. They're coming back to the market, and typically they're going to use a low down-payment loan as well, because they're not moving up, they don't have equity to bring to the table.”

Blomquist says these buyers are taking advantage of favorable loan products now available from the Federal Housing Administration, Fannie Mae and Freddie Mac. But he says the rise in buyers without a lot of cash or equity to plow into a home purchase shouldn’t pose a danger to the economy, since mortgage underwriting standards, as well as employment and income verification have been tightened substantially since the housing crash.

Blomquist says home builders may see promise in the improving sale and price trends, and in coming months he predicts they’ll be breaking ground on more single-family homes and condos. Thus far in the recovery, the hottest market for builders has been multi-unit rental properties.

But Blomquist says the market recovery, though broad-based, is still tentative. “I think this market is still very interest-rate sensitive and fragile,” Blomquist says, “and if we see interest rates go up, the kind of boom we were seeing in the first half of the year could quickly disintegrate,” as homes become less affordable with higher interest payments. 

Mortgage rates are low right now, averaging just over 4 percent for a fixed-rate, 30-year home loan. But borrowing costs could start rising as the Federal Reserve tightens interest-rate policy.

PODCAST: Housing sales for June

Fri, 2015-07-24 03:00

The June report for new home sales is out today - we'll talk about what to expect. Plus, we'll talk about what to make of recent movement in the Chinese stock market. And President Obama arrives in Kenya on Friday for a three-day visit. It's his first trip to the country where his father was born since he was elected. The visit is bringing a mini-economic boost for some Kenyans.

Affordable housing for teachers in short supply

Fri, 2015-07-24 02:00

Jennifer Marlar teaches seventh grade language arts at Jackson Hole Middle School in Jackson, Wyoming, but she doesn’t live anywhere near the tourist town’s shopping district or ski area.

“It just makes the most sense, financially,” Marlar says.

Instead, she commutes one hour — over a sometimes-treacherous mountain pass — from her home in Driggs, Idaho.

“It’s brutal,” says Marlar. “And that hour feels like eternity.”

Marlar makes $70,000 a year. That’s well above the national average teacher salary of $56,000, but it’s not enough to buy a home in Jackson, a swanky resort town south of Yellowstone National Park. The median home price there is nearly $1 million. So, when Marlar’s daughter Aniston starts preschool in Idaho, she’ll likely leave her job in Jackson.

“I’ll probably have to resign there and try to get work on this side so that I can be a part of my community that I live in,” Marlar says.

Renting or buying a place to live is becoming less affordable across much of the country. That’s hit low-income Americans hardest, but increasingly, it also means middle-income earners that hold key jobs — like teachers — can’t afford to live where they work. It’s a problem facing all high-cost communities: big cities, wealthy suburbs, and tiny resort towns like Jackson.

Teacher Jess Tuchscherer works in Jackson and lives here in a converted barn. The tour of his place only takes a few seconds.

“Well, this is the living room, kitchen, bathroom and bedroom — and that’s really it,” says Tuchscherer. “It’s not very big.”

Tuchscherer rents the barn for about $1,000 a month. He loves his job and the winter recreation opportunities here, but knows this isn’t a long-term gig.

“I can’t buy a home here, so therefore I can’t really stay here,” Tuchscherer says. “It’s great, but I can’t raise a family in this house.”

This is a huge problem here. That’s why Jackson just put up its first-ever affordable housing units for teachers.

“If we fail to house the people that work here, then we will not have a quality workforce, we will not have a quality system of education, and we will suffer in all respects,” says Anne Cresswell, of the Jackson Hole Community Housing Trust, which partnered with the school district to build the homes.

The three-bedroom homes were sold to local educators for $403,000 each, but were appraised at closer to $650,000. Cresswell’s group has developed similar housing for hospital workers and national park employees.

“Affordable housing is as basic to the essential infrastructure in Jackson Hole, Wyoming as any other road, water or sewer project is,” Cresswell says.

It’s a solution communities from Baltimore to Los Angeles are trying out. A National Housing Conference report shows teachers can’t afford median-priced homes in one-third of the 200 metro areas it surveyed.

“That can really put communities at a disadvantage for attracting high quality teachers, nurses or police officers who are unwilling to remain committed to extremely long commutes,” says Janet Viveiros, senior research associate at the National Housing Conference.

And, in many communities, the problem is only getting worse.

“There’s not enough affordable housing as there is and many communities are losing the affordable housing that already exists,” Viveiros says.

Bringing teaching talent to high-cost communities is hard, and will get even harder in the future. The National Education Association says half of the country’s teachers will likely retire in the next five to seven years.

Kenyans hope to cash in on Obama visit

Fri, 2015-07-24 02:00

During his first trip to the country as president, Barack Obama is expected to discuss ways to fight regional terrorism with Kenya’s leaders and speak at the “Global Entrepreneurship Summit” in the capital, Nairobi.

Kenyan businesses are prepping for his visit, and that of the thousands of diplomats and conference-goers expected to descend on Nairobi for the summit.
 
“I’ve been having so many many clients coming in,” says David Meeriah of Nairobi’s Capital Limo Services. He says his fleet of luxury cars is fully booked, and  he’ll make enough in the next few days to pay salaries for the next three months.  

Kenyan tour operators like Hamadi Durogi of Wildcat Adventure Safaris are banking on those who won’t go home right away.

"We’ve seen like a 40 percent increase in business and also in inquiries," he says. His company, like many others, offers an "Obama Safari" with a stop in the hometown of the President’s father.

Smaller vendors are flooding the capital with Obama-themed t-shirts, hats, and posters. They’re hoping the his visit will bring back tourists frightened away by recent terrorist attacks.

“Since the President of the United States is going to be here," says Durogi, "it’s going to be proof enough that Kenya is very very safe.”

He, and others in Kenya's tourism industry, are hoping the economic boost will last long after the President’s departure.

Kenyans hope to cash in on Obama visit

Fri, 2015-07-24 02:00

During his first trip to the country as president, Barack Obama is expected to discuss ways to fight regional terrorism with Kenya’s leaders and speak at the “Global Entrepreneurship Summit” in the capital, Nairobi.

Kenyan businesses are prepping for his visit, and that of the thousands of diplomats and conference-goers expected to descend on Nairobi for the summit.
 
“I’ve been having so many many clients coming in,” says David Meeriah of Nairobi’s Capital Limo Services. He says his fleet of luxury cars is fully booked, and  he’ll make enough in the next few days to pay salaries for the next three months.  

Kenyan tour operators like Hamadi Durogi of Wildcat Adventure Safaris are banking on those who won’t go home right away.

"We’ve seen like a 40 percent increase in business and also in inquiries," he says. His company, like many others, offers an "Obama Safari" with a stop in the hometown of the President’s father.

Smaller vendors are flooding the capital with Obama-themed t-shirts, hats, and posters. They’re hoping the his visit will bring back tourists frightened away by recent terrorist attacks.

“Since the President of the United States is going to be here," says Durogi, "it’s going to be proof enough that Kenya is very very safe.”

He, and others in Kenya's tourism industry, are hoping the economic boost will last long after the President’s departure.

UN says Syria donors aren't paying their pledges

Fri, 2015-07-24 02:00

Syria’s civil war is now four years old, and there is no end in sight. A variety of international efforts to halt the bloodshed have stymied some of the world’s most seasoned diplomats.

One group of people losing out most from this grinding war are Syria’s refugees. Of the millions displaced by the war, about 4 million people have left Syria entirely. Most of them have fled to Lebanon, Turkey and Jordan.

The Office of the United Nations High Commissioner for Refugees says that it’s again facing its recurring problem: donors don’t pay what they promise

UNHCR has only received about $1 billion of the nearly $5 billion it needs to provide basic assistance to Syrian refugees.

“Our income keeps growing but the problem is our needs keep mushrooming,” says Melissa Fleming, chief spokesperson for UNHCR.

She says only 23 percent of this year’s funding goal has been delivered so far. And winter is coming.

A quarter of the people who have fled Syria live in tiny Lebanon, which per capita has the highest number of Syrian refugees — today, a quarter of its population.

“It is always the case that funding received does not match the needs on the ground,” says Dana Sleiman, spokesperson for UNHCR in Beirut.

Sleiman says UNHCR proceeds with its plans whether the funding is there or not, because they have no choice. “If and when funding does not come through, the repercussions are severe,” she explains.

So severe that more and more Syrian refugees are again risking their lives on sea voyages to Europe.

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