Thursday, January 22, 2015

Fareed Zakaria Calls Out Rupert Murdoch Over Paris Terrorism Comments

CNN's Fareed Zakaria sat down with HuffPost Live at Davos on Wednesday, where he called out Rupert Murdoch for his comments on the recent terror attacks in Paris.

"I think it was outrageous to claim that moderate Muslims, or Muslims in general, are responsible for the attacks," Zakaria said. "If you had a significant portion of the Muslim world up in arms against the West... we'd have a lot of attacks every day."

"We're talking about a small number," Zakaria added.

Tweeting after the terror attacks in France that left 20 dead, Murdoch said Muslims must "recognize and destroy their growing jihadist cancer," and "they must be held responsible."

"We don't hold Rupert Murdoch responsible for every crazy, radical, quasi-fascist statement made by a television host -- oh, wait a minute, I guess we do in the case of Rupert Murdoch because he hires most of them," Zakaria joked.

Zakaria pointed out the hypocrisy of Murdoch's comment.

"He has no responsibility for the hacking scandal that was done by his employees, but yet Muslims in Indonesia who are moderate are somehow responsible for what some guy in France does," Zakaria said.

Below, more updates from the 2015 Davos Annual Meeting:

live blog

Oldest Newest Share + Today 6:48 AM ESTAnne-Marie Slaughter: The U.S. Needed To Be 'Front And Center' In Paris

New America President and CEO Anne-Marie Slaughter talks with HuffPost Live about how surprised she was that the U.S. didn't send a higher-ranking official to the Paris unity march.

Share this: Tweet Share tumblr Share + Today 6:42 AM ESTGuilherme Leal's Fight To Curb Greenhouse Gas Emissions

Guilherme Leal, Co-chairman of the board of directors of Natura Cosmeticos, talks about the B-Team's efforts on climate justice.

Share this: Tweet Share tumblr Share + Today 6:35 AM ESTAbousteit: More Women At Davos, Please

Abousteit said she thinks there should be more women at Davos.

"I just think there should be a very hard quota, 50/50, to make sure there's enough women there," she said. "[Davos should] also give women a chance who are not in that position yet, that they couldn't get to because there is a glass ceiling... give them a chance to get more visibility."

Share this: Tweet Share tumblr Share + Today 6:31 AM EST'It's Not About The Saving'

Abousteit said making clothes isn't about saving money.

"It's not about the saving," she said. "It's about doing something that makes you happy."

Share this: Tweet Share tumblr Share + Today 6:30 AM ESTNora Abousteit: Being Passionate About Work Makes It Easier To Get Through Hard Times

Nora Abousteit advocated for doing a job that you love.

"I studied what my passion was... but then I saw an opportunity at work that made my heart beat faster, and I pursued that, and it was always about a gut feeling," she said.

She said working in a field she's passionate about makes it easier to get through hard times.

Share this: Tweet Share tumblr Share + Today 6:28 AM ESTNora Abousteit Knitted The Sweater She's Wearing At Davos

Nora Abousteit, founder and CEO of Kollabora and the Kollaborator Network, said her company helps people "start making."

Abousteit said she knitted the sweater she wore on HuffPost Live while she was on her honeymoon.

Abousteit she grew up crafting, knitting with her mother and welding with her father. She said she saw growth in people wanting to know the origins of their products and wanting the experience of production, which is what inspired her company.

"I realized there was a lot of potential, because a lot of young people were staring to make things," she said.

Share this: Tweet Share tumblr Share + Today 6:18 AM ESTSuzanne DiBianca: Giving Back Should Be A Core Part Of All Companies' DNA

Salesforce Foundation President & Co-Founder Suzanne DiBianca talks about the success of her company's commitment to public service.

Share this: Tweet Share tumblr Share + Today 5:52 AM ESTHow InvestKL Has (Or Hasn't) Been Impacted By The News

Amanshah noted that InvestKL's goal is to get 100 companies to invest in Greater Kuala Lumpur/Klang Valley by 2020, and they're "just under halfway." He said this is a signal the business opportunities in Kuala Lumpur haven't been negatively impacted by the recent crises like the December AirAsia plane crash and the missing Malaysia Airlines Flight 370.

"In terms of impact on tourism, yes, perhaps [the planes had an impact], because people are human and they are all touched by such instances," he said.

"The investors look at the fundamentals of the opportunities," he added.

Share this: Tweet Share tumblr Share + Today 5:47 AM ESTZainal Amanshah On InvestKL's Goals

InvestKL CEO Zainal Amanshah spoke to HuffPost Live at Davos about the goals for his company, which aims to get other companies to invest in Greater Kuala Lumpur/Klang Valley.

While Amansha said traditional markets "are still of prime interest" to InvestKL, he said he hopes to branch out.

"We want to do better in our neighboring countries like China, India, perhaps even Indonesia... and we want to continue attracting companies that have high technology," he said. "We've moved up the value chain now."

"Substance is very important to us as opposed to numbers of companies," he added.

Share this: Tweet Share tumblr Share + Today 5:34 AM ESTThe B-Team's Challenge

Guilherme Leal said the B-Team is issuing a challenge to companies to help eliminate greenhouse emissions and fight for climate justice.

"As a B-team group, we are challenging [companies] to reach a net zero greenhouse emission by 2050, because we want to take the leadership," Leal said. "We know that many companies will not reach this net zero emission [by 2050], but some of them need to reach it before the end of the century. If [they don't], we're facing many problems"

Leal said to get to net zero greenhouse emissions, all sectors need to be involved.

Share this: Tweet Share tumblr Share + Today 5:27 AM ESTGuilherme Leal At Davos

Guilherme Leal, co-chairman of the board of directors of Natura Cosmetics, on HuffPost Live at Davos

Share this: Tweet Share tumblr Share + Today 5:20 AM ESTAnstey On A 'Very Simple But A Very Powerful Idea'

Anstey said she is helping raise awareness about girls in Africa who must walk 6 kilometers go get to school each day by having Davos participants wear Fitbits.

"I think it was a very simple but a very powerful idea," she said.

Anstey said the goal is to give bikes to the students in Africa in order to make their daily commute a lot easier.

"We've challenged Davos participants to walk 6 km during their three-day stay we're recording how far they walk," Anstey said, noting that some children in Africa must walk that distance in one day to get to school.

Share this: Tweet Share tumblr Share + Today 5:18 AM ESTAnstey: 'We Have To Embrace' Public-Private Partnerships

Anstey spoke on impact investing and how it can be fostered by public-private partnerships.

"Impact investing, which is creating bonds, creating financial instruments to help the private sector come in and finance those things but finance them against the provision of results... I think is a very interesting concept, and I think these public-private partnership are going to be even more important for low-carbon growth, sustainable cities," she said.

"We tend as a society to have this divide between private and public," Anstey added. "We have to now recognize that, saying people can do well and do good... it something we have to embrace."

Share this: Tweet Share tumblr Share + Today 5:15 AM ESTCaroline Anstey: Millennials Aren't Waiting To Decide On A Legacy

Caroline Anstey, Global Head of UBS and Society, on HuffPost Live at Davos, said it's promising that younger people are wanting to invest in issues they care about as they grow, rather than waiting until old age to decide on what their legacy might be.

"The millennials are making it clear they want to invest alongside their values," she said. "Younger people are saying, 'I want my investments to reflect my beliefs, I want my workplace to reflect my beliefs,' and I think there is a big potential... to direct that."

Anstey said "despite all the gloom and doom," it's "very exciting" that people are looking to contribute to global issues.

"Imagine if you get 1, 2 percent of that money going into impact investing," Anstey added, noting that could mean billions of dollars going toward different causes.

Share this: Tweet Share tumblr Share + Today 5:12 AM ESTCaroline Ansety At Davos

Caroline Anstey, Global Head of UBS and Society, on HuffPost Live at Davos

Share this: Tweet Share tumblr Share + Today 5:05 AM ESTSlaughter On What Democrats Need To Do

Slaughter shared her thoughts on what Democrats need to do to get ahead in 2016.

"I think the Democrats have to be focused less on specific interest groups and specific issues and much more on a government that delivers," she said. "It's more the millennial, tech mentality of, deliver the services first."

"Show people that government can deliver, and show people other parts of government are listening and watching," she added.

Share this: Tweet Share tumblr Share + Today 5:01 AM ESTSlaughter On Syria

Slaughter criticized the Obama administration for not holding "an intervention to save as many Syrian lives as possible." She said the U.S. has focused too much on politics and not enough on people.

"I approve a lot of what the Obama administration has done... I approve of the way they handled Ukraine," she said. "With Syria, honestly, there was an intervention you could have made three years ago that would have avoided a huge amount, including the rise of ISIS."

Share this: Tweet Share tumblr Share + Today 4:59 AM ESTSlaughter: U.S. Absence In Paris Confirms Unfortunate Obama Narrative

Anne-Marie Slaughter said she thought the U.S. was wrong not to send a more high-profile official to a unity march to honor the victims of the recent terror attacks in Paris.

"I just couldn't believe that the United States was not front and center in that march. Yes, it's optics, but it was a moment in which the world came together to stand for [what are] certainly American values," she said.

"[U.S.] leadership would have been better advised to be front and center," Slaughter added. "I thought that was not only a moment missed, but it confirmed a narrative the Obama administration does not want confirmed, which is, you're not there."

Share this: Tweet Share tumblr Share + Today 4:56 AM ESTHow the Future of Work May Make Many of Us Happier

Anne-Marie Slaughter, president and CEO of the New America, writes on HuffPost:

We're headed towards a dramatically different economy in which most workers will be independent contractors. Freelancers will work on demand for whoever needs their services rather than for fixed periods of time for a single employer.
As The Economist describes, workers will be on a platform that matches them with customers and provides verification, security and payment systems. This is the world of Uber and will increasingly be the world of just about everything: handyman services, cooking, laundry, shopping, scheduling, personal training, coding, doctoring, lawyering, bossing and creating everything from television ads to Ebola suits. As these services spread, they will create the "on-demand economy" or the "platform economy."

What Obama Didn't Say About Rising Wages

By Jason Lange

WASHINGTON, Jan 20 (Reuters) - When President Barack Obama called attention on Tuesday to rising U.S. wages, he noted employers had not planned so many raises in years. But what he left out is that government data suggests actual wage increase are stuck in low gear.

"Today, thanks to a growing economy, the recovery is touching more and more lives," Obama said in his annual State of the Union address.

The president was not entirely triumphant in his speech, calling on Washington to help lift more Americans out of poverty by raising the minimum wage. He also said reforms to the country's education system were needed to help more people get high-paying jobs.

But in making a case that America had broken out of the economic doldrums, he said: "Wages are finally starting to rise again."

While it is true that earnings are rising, the problem with that statement is that multiple government surveys suggest income growth remains much slower than before the 2007-09 recession.

Average hourly earnings in the private sector rose just 1.7 percent in the year through December, according to the U.S. Labor Department.

On the eve of the recession, which began in December 2007, earnings were growing more than 3 percent every 12 months. Since 2010, they have averaged about 2 percent growth.

Obama also noted that a bigger share of small-business owners planned to raise wages than at any time since 2007.

That was an apparent reference to data from the National Federation of Independent Business from December, which genuinely lifted hopes workers were poised to get a pop in their paychecks.

But even relatively upbeat data on actual earnings suggests workers are not getting much in the way of raises.

A separate Labor Department survey on employment compensation showed wages growing 2.1 percent in the third quarter compared with a year earlier. That was the fastest pace since 2009, but still well below growth rates in 2007, when they were consistently above 3 percent. (Reporting by Jason Lange; Editing by Peter Cooney)

10 Most Hated Companies In America

This story was originally published by 24/7 Wall St.

To be truly hated, a company must alienate a large number of people. It may irritate consumers with bad customer service, upset employees by paying low wages, and disappoint Wall Street with underwhelming returns. For a small number of companies, such failures are intertwined. These companies managed to antagonize more than just one group and have become widely disliked.

The most hated companies have millions of customers. With such a large customer base, it is critical to keep employees happy in order to promote high-quality customer service. Poor job satisfaction among employees can lead to unsatisfied customers. McDonald’s and Walmart have risked alienating workers, and therefore also customers, by not adequately addressing protests against their employees’ low wages. While pay may be low enough to put some workers below the poverty line, executives at these companies often make millions. The total compensation of McDonald’s CEO Donald Thompson, for example, was nearly $9.5 million in 2013 and nearly $13.8 million in 2012.

Layoffs, or even the prospect of layoffs, can also contribute to low employee morale. Sprint announced it would cut 2,000 jobs late last year. Workers at Comcast can reasonably expect layoffs should its planned merger with Time Warner Cable receives government approval.

Many of the most hated companies angered the public because of quality issues with their products.. Comcast has long been one of the worst companies in America in terms of customer service and satisfaction. Another example is the General Motors recall scandal. GM announced a recall in early 2014 due to faulty ignition switches in a number of its cars, now believed to have cost 42 people their lives. The company’s problems were compounded by the realization that it had known about the defect for over a decade.

Nothing harms the long-term reputation of a company in the eyes of investors more than a steep drop in its share price. In the past 12 months, shares of Sprint have fallen by more than 50%, as hopes for a tie-up with rival T-Mobile were dashed while the company had little success in retaining customers.

It is worth noting that some of the companies on the list may have performed very poorly by some measures but relatively well by others. A few of the most hated companies have had good stock performances. Others have relatively satisfied customers. All of these factors were taken into account in compiling the final list.

Click here to see America’s most hated companies

Several companies from last year list have improved their public perceptions enough to be removed from this year’s list. For example, J.C. Penney is in the midst of a modest turnaround. Abercrombie & Fitch’s controversial long-time CEO Michael Jeffries resigned last December. However, the retailer still has problems attracting teenage customers.

To identify the most hated companies in America, 24/7 Wall St. reviewed a variety of metrics on customer service, employee satisfaction, and share price performance. We considered consumer surveys from a number of sources, including the American Customer Satisfaction Index (ACSI) and Zogby Analytics. We also included employee satisfaction based on worker opinion scores recorded by Glassdoor.com. Finally, we reviewed management decisions and company policies that hurt a company’s public perception.

These are America’s most hated companies.

Here's Where Obamacare Costs The Most

This post was originally published by Kaiser Health News (KHN). Kaiser Health News is a nonprofit national health policy news service.

In health insurance prices, as in the weather, Alaska and the Sun Belt are extremes. This year Alaska is the most expensive health insurance market for people who do not get coverage through their employers, while Phoenix, Albuquerque, N.M., and Tucson, Ariz., are among the very cheapest.

In this second year of the insurance marketplaces created by the federal health law, the most expensive premiums are in rural spots around the nation: Wyoming, rural Nevada, patches of inland California and the southernmost county in Mississippi, according to an analysis by the Kaiser Family Foundation, which has compiled premium prices from around the country. (KHN is an editorially independent program of the foundation.)

The most and least expensive regions are determined by the monthly premium for the least expensive “silver” level plan, which is the type most consumers buy and covers on average 70 percent of medical expenses. Premiums in the priciest areas are triple those in the least expensive areas.

Along with the three southwestern cities, the places with the lowest premiums include Louisville, Ky., Pittsburgh and western Pennsylvania, Knoxville and Memphis, Tenn., and Minneapolis-St. Paul and many of its suburbs, the analysis found.

Highest and Lowest Premiums
Here are the 10 most and least expensive regions in the country – with the counties listed in parenthesis – based on premium prices for the lowest-cost silver plan. Regions are counties that share the same price for the same lowest-cost-plan and are either geographically contiguous or are part of the same rating area created by the state.

Premiums are listed for 40-year-olds; and for most states the difference in prices stays the same for people of any age. Vermont and two upstate New York areas— Ithaca and Plattsburgh—also are among the 10 most expensive places, although those states do not let insurers adjust premiums based on the consumer’s age, making comparisons inexact. Older residents in those states will end up getting better deals than in most places, while younger ones tend to pay more.
10 HIGHEST PREMIUMS

$488 Alaska (entire state)

$459 Ithaca, NY (Tompkins)

$456 Bay St. Louis, Mississippi (Hancock)

$446 Plattsburgh, NY (Clinton)

$440 Rural Wyoming (Albany, Big Horn, Campbell, Carbon, Converse, Crook, Fremont, Goshen, Hot Springs, Johnson, Lincoln, Niobrara, Park, Platte, Sheridan, Sublette, Sweetwater, Teton, Uinta, Washakie, and Weston)

$428 Vermont (entire state)

$418 Rural Nevada (Churchill, Elko, Eureka, Humboldt, Lander, Mineral, Pershing, and White Pine)

$412 Casper, Wyoming (Natrona)

$410 Inland California (Imperial, Inyo, and Mono)

$401 Cheyenne, Wyoming (Laramie)

10 LOWEST PREMIUMS

$166 Phoenix, Ariz. (Maricopa)

$167 Albuquerque, N.M. (Bernalillo, Sandoval, Torrance, and Valencia)

$167 Louisville, Ky. (Bullitt, Jefferson, Oldham, and Shelby)

$170 Tucson, Ariz. (Pima and Santa Cruz)

$170 Pittsburgh, Pa. (Allegheny and Erie)

$179 Western Pennsylvania (Beaver, Butler, Washington, Westmoreland, Armstrong, Crawford, Fayette, Greene, Indiana, Lawrence, McKean, Mercer, and Warren)

$181 Knoxville and Eastern Tennessee (Anderson, Blount, Campbell, Claiborne, Cocke, Grainger, Hamblen, Jefferson, Knox, Loudon, Monroe, Morgan, Roane, Scott, Sevier, and Union)

$181 Minneapolis-St. Paul (Anoka, Benton, Carver, Dakota, Hennepin, Ramsey, Scott, Sherburne, Stearns, Washington, and Wright)

$184 Memphis and suburbs (Fayette, Haywood, Lauderdale, Shelby, and Tipton)

$189 North of Minneapolis (Chisago and Isanti)

Starting this month, the cheapest silver plan for a 40-year-old in Alaska costs $488 a month. (Not everyone will have to pay that much because the health law subsidizes premiums for low-and moderate-income people.) A 40-year-old Phoenix resident could pay as little as $166 for the same level plan.

That three-fold spread is similar to the gap between last year’s most expensive area — in the Colorado mountain resort region, where 40-year-olds paid $483—and the least expensive, the Minneapolis-St. Paul metro area, where they paid $154.

Minneapolis remained one of the cheapest areas in the region, although the lowest silver premium rose to $181 after the insurer that offered the cheapest plan last year pulled out of the market. Premiums in four Colorado counties around Aspen and Vail plummeted this year after state insurance regulators lumped them in with other counties in order to bring rates down.

Cynthia Cox, a researcher at the Kaiser foundation, said the number of insurers in a region was a notable similarity among both the most and least expensive areas. “In the most expensive areas only one or two are participating,” she said. “In the least expensive areas there tends to be five or more insurers competing.” She said that other factors, such as whether insurers need state approval for their premiums and the underlying health of the population, may play a role as well in premiums.

The national median premium for a 40-year-old is $269, according to the foundation’s analysis.

Alaska’s lowest silver premium rose 28 percent from last year, ratcheting it up from 10th place last year to the nation’s highest. Only two insurers are offering plans in the state, the same number as last year, but the limited competition is just one reason Alaska’s prices are so high, researchers said. The state has a very high cost of living, which drives up rents and salaries of medical professionals, and insurers said patients racked up high costs last year.

Ceci Connolly, director of PwC’s Health Research Institute, noted that the long distances between providers and patients also added to the costs. Restraining costs in rural areas, she said, “continues to be a challenge” around the country. One reason is that there tend to be fewer doctors and hospitals, so those that are there have more power to dictate higher prices, since insurers have nowhere else to turn.

By contrast, in Maricopa County, Phoenix’s home, the lowest silver premium price dropped 15 percent from last year, when Phoenix did not rank among the lowest areas. A dozen insurers are offering silver plans. “Phoenix, during the boom, attracted a lot of providers so it’s a very robust, competitive market,” said Allen Gjersvig, an executive at the Arizona Alliance for Community Health Centers, which is helping people enroll in the marketplaces.

The cheapest silver plan in Phoenix comes from Meritus, a nonprofit insurance cooperative. The plan is an HMO that provides care through Maricopa Integrated Health System, a safety net system that is experienced in managing care for Medicaid patients. Meritus’ chief executive, Tom Zumtobel, said they brought that plan’s premium down from 2014. The insurer and the health system meet regularly to figure out how to treat complicated cases in the most efficient manner. “We’re working together to get the best outcome,” Zumtobel said.

Katherine Hempstead, who oversees the Robert Wood Johnson Foundation’s research on health insurance prices, found no significant differences in the designs of the plans that would explain their premiums. “In most of the plans – cheap or expensive – there seemed to be a high deductible and fairly similar cost-sharing,” she said.

jrau@kff.org | @JordanRau

3 Reasons The Euro Just Crashed To Its Lowest Level In 11 Years

Book that European vacation now, America: It hasn't been this cheap in 11 years.

The euro was in a crashy mood on Friday, briefly falling to its lowest level against the U.S. dollar since November 2003, according to Bloomberg. One euro is now about $1.15, down from about $1.40 less than a year ago.

Here is a chart, courtesy of FXStreet.com, singing the sad song of the euro today. It measures the number of dollars a euro will buy. The lower the line, the weaker the euro:

As you can see, Europe's common currency has battled back a bit, but it's still in a deep pit. Here's a longer-term chart, courtesy of Bloomberg.com, for perspective:

What ails the euro? At least three things:

Thing One: Europe's economy is in a depression, basically, that is going on its eighth year.

Thing Two: The European Central Bank is getting ready to buy a bunch of bonds to help the economy. This is basically "quantitative easing," the same thing the Federal Reserve did in the U.S., only about seven years too late. The ECB's bond-buying will flood the market with euros, which will make them cheaper.

Third Thing: The Swiss National Bank on Thursday threw a boulder to the drowning euro by giving up on trying to keep its own currency, the franc, artificially cheap by buying euros. Investors have been buying francs and dumping euros because Switzerland is a safer economy, basically. The Swiss hate that because it makes Swiss vacations even more expensive than they already were. But the SNB finally just said, "Eh, whatevs," and let its currency soar, crushing the euro.

Oh, well, who needs Alps when you can see Paris/Berlin/Venice/Barcelona on the cheap this summer? Assuming, that is, that Europe's problems don't spread overseas and cost us all our jobs.

Consumer Prices Just Fell The Most In 6 Years. Start Worrying

Good news, consumers: Everything's on sale! The bad news: Low, low prices aren't always such a great thing.

The U.S. consumer price index tumbled 0.4 percent in December from the month before, the Bureau of Labor Statistics reported on Friday, led by a 9.4-percent crash in the cost of gasoline. It was the biggest one-month drop for consumer prices since December 2008, when the world was still gripped by the financial crisis.

Please note the context there: Sometimes prices fall not because of angel kisses and unicorn dreams, but because everything is going to hell.

Is everything going to hell right now? Maybe not. Probably not? But some scary things are happening. The price of crude oil has been cut in half in a matter of months. The Swiss National Bank on Thursday gave up trying to keep panicky investors from buying the safe-haven Swiss franc, causing turmoil and bloodshed in currency markets. Interest rates around the world keep plunging to record lows, in a year everybody expects interest rates to rise because of booming economic growth and demand for loans.

Meanwhile, U.S. consumer prices are up just 0.8 percent in the past year, the weakest 12-month stretch since 2009. The euro zone is in outright "deflation," which is the opposite of inflation -- prices fall instead of rise. Japan, the World Deflation Champion for two decades, is tottering on the edge of it again.

Everybody loves falling prices, but sometimes we love them too much. If prices fall and fall and keep falling, then we'll put off buying stuff because we expect that stuff to be cheaper tomorrow and even cheaper the day after that. When everybody's sitting around not buying stuff, you can have what is known as a depression. Depressions are not good.

To fight off the risk of a depression, central banks around the world have cut interest rates to zero and, in some cases, less than zero, to try to get people to pull money out of banks and spend it on clothes or Google Glass or meth or something, anything.

It's working OK for the U.S., at least. The Federal Reserve got out in front of the deflation thing early and has managed to keep the U.S. economy humping along. Job growth is steady and improving, and wages might some day start rising, which could encourage people to spend more. The Fed expects this recent bout of falling prices to be temporary.

The Fed is so darn confident that all of this stuff will pass, in fact, that it's planning to start raising interest rates, pulling support away from the U.S. economy, just at the moment the rest of the world is having a bit of a moment. Should be interesting.

A Bad Basketball Team Is A Great Investment

It's a great time to own an NBA team. And an even better time to sell one: A bad team losing money in a big city is ten times more valuable than it was just five years ago.

Take Russian oligarch Mikhail Prokhorov: He wants to sell the Brooklyn Nets, Bloomberg reported this week. The Brooklyn Nets are not good (they're 16-23). They lost $144 million last year, too.

Yet the Nets are also worth somewhere between $1.3 and $2.7 billion, according to various estimates.

How can such an bad, money-losing team be worth so much money? Television.

The Nets, like all teams in the NBA, get money from the league's revenue-sharing agreement, which parcels out the proceeds of national TV rights, taking money from rich teams and giving it to poorer ones. As part of that deal, every team gets an equal share of the TV money. That share was about $30 million this year. It will be more than twice that amount once a new nine-year, $24 billion deal takes effect in 2016.

And that’s just national media money. The Nets have their own local TV rights deal in the New York City area. It expires next year and is worth $20 million a year. Which is actually not all that much money -- it’s not unrealistic to think the Nets could get ten times more from a renegotiated deal. After all, the Los Angeles Clippers, who play in the country's second-largest media market, are expected to get $200 million a year when their current $20 million-a-year deal expires in 2016.

The Nets are losing money right now because they’re loaded up with silly expensive contracts for aging, poorly performing players that put them way over the league's salary cap. For breaking that cap, the team had to pay a league-record $90 million in luxury taxes for the 2013-2014 season.

Those player contracts are bad, financially and on the court, but they’re far shorter than media rights deals. Phase them out, sign a new, much-improved local TV deal, add in the soon-to-double league TV checks, and the Nets start looking like a pretty decent business: almost fixed revenue, slashed costs, and no real competition.

It’s actually more than a decent business model, it’s a great one -- unless you’re a basketball fan. Jay Z, former part-owner of the Nets, wasn’t just bragging when he said, “the Nets could go 0-for-82 and I look at you like this shit gravy.”

He was right. That’s just how the economics of owning an NBA team work: The costs of putting a team on the court are variable and under your control, while revenue is set in stone. The best way to make the most money is to spend as little money on players as possible in as big a media market as possible. Owners in such a market have an incentive to put a minimally viable product on the court: just good enough not to be a complete joke, but not much more. And even if you are spectacularly bad for a few seasons, high draft picks help you out.

Once the new owner sunsets the most expensive players, the Nets will be what they always should have been: a great business, regardless of how bad a team they are.

Financial, Economic and Money News

Thursday, January 22, 2015

Fareed Zakaria Calls Out Rupert Murdoch Over Paris Terrorism Comments

live blog

Wednesday, January 21, 2015

What Obama Didn't Say About Rising Wages

Tuesday, January 20, 2015

10 Most Hated Companies In America

Monday, January 19, 2015

Here's Where Obamacare Costs The Most

Sunday, January 18, 2015

3 Reasons The Euro Just Crashed To Its Lowest Level In 11 Years

Saturday, January 17, 2015

Consumer Prices Just Fell The Most In 6 Years. Start Worrying

Friday, January 16, 2015

A Bad Basketball Team Is A Great Investment