...
After his company went public. I had to include that in the title. Maybe now he won't be such a cheap bastard with his GMs. I had no idea Gilbert was now the second richest owner in the league.
Which made me wonder what other owners are worth (the title of this post was almost "why is Tilman Fertitta such a cheap bastard while
Joe Lacob spends money like he thinks the shit's gonna rot?").
Which brings us to
this handy Forbes list from March:
1. Steve Ballmer (Los Angeles Clippers): $51.4 billion
Ballmer scored a huge win this week for his dream of building a new arena. He bought the Forum for $400 million from the Madison Square Garden Company, which tried to block a new Clippers arena near the Forum in Inglewood, California.
2. Philip Anschutz (Los Angeles Lakers): $11.2 billion
Anschutz owns one-third of the Lakers, plus the arena in which they play, the Staples Center, in addition to the NHL’s Kings.
\For those wondering, it's hard to find a reliable source on Jeanie's net worth but according to unreliable sources it's in the ballpark of $500 million*
3. Stanley Kroenke (Denver Nuggets): $10 billion
The real estate and sports mogul owns teams in the NBA, the NHL, the NFL, MLS and the Premier League.
4. Joseph Tsai (Brooklyn Nets): $9.9 billion
The cofounder of Alibaba Group completed his purchase of the Nets last year for $2.3 billion and bought the Barclays Center for an additional $1 billion.
5. Robert Pera (Memphis Grizzlies): $7.1 billion
Pera owns nearly three-quarters of wireless equipment maker Ubiquiti Networks. He was the lead investor in the Grizzlies purchase in 2012.
6. Daniel Gilbert (Cleveland Cavaliers): $6.2 billion
Gilbert made his first fortune from Quicken Loans, the largest online mortgage lender, which he cofounded in 1985 at 22 years old.
*List is from March, before the IPO 7. Tom Gores (Detroit Pistons): $5.7 billion
Gores and his brother Alec are both private equity billionaires. The Pistons opened a new $90 million headquarters and training facility in September.
8. Micky Arison (Miami Heat): $5.3 billion
Arison’s net worth plummeted 33% over the past six weeks with the collapse in the stock price of Carnival Corp. The world’s largest cruise ship operator was founded by Arison’s father in 1972.
9. Tilman Fertitta (Houston Rockets): $4.4 billion
Fertitta furloughed roughly 40,000 employees at his casino and restaurant empire to curb the economic impact caused by coronavirus-induced shutdowns. His fortune is derived from his ownership of the Golden Nugget Casinos and Landry’s, a Texas-based restaurant and entertainment company.
10. Mark Cuban (Dallas Mavericks): $4.3 billion
Cuban was one of the first sports team owners to commit to paying hourly arena workers for games missed during the coronavirus crisis. He’s invested more than $20 million as a “shark” on ABC’s popular
Shark Tank show.
11. Joshua Harris (Philadelphia 76ers): $3.7 billion
Harris cofounded private equity powerhouse Apollo Global Management in 1990 with fellow billionaires Leon Black and Marc Rowan. He remains a managing director there.
12. Gayle Benson (New Orleans Pelicans): $3.2 billion
Benson inherited the Pelicans and the NFL’s Saints when her husband, Tom, died in 2018.
13. Glen Taylor (Minnesota Timberwolves): $2.8 billion
His printing firm, Taylor Corp., generates more than $2 billion in revenue annually. Taylor also owns stakes in Minnesota’s MLS and WNBA teams.
14. Herb Simon (Indiana Pacers): $2.6 billion
The real estate mogul bought the Pacers with his since-deceased brother, Melvin, in 1983, for $10.5 million. Simon Property Group is one of the world’s largest real estate investment trusts, with 206 properties in the U.S.
15. Antony Ressler (Atlanta Hawks): $2.4 billion
Ressler cofounded private equity firm Ares Management in 1997. He owns a small piece of the Milwaukee Brewers, in addition to his controlling stake in the Hawks.
16. Michael Jordan (Charlotte Hornets): $2.1 billion
The NBA’s GOAT sold a minority stake in the Hornets in September in a deal that valued the team at $1.5 billion. Nike pays Jordan more than $100 million annuallybased on growing sales for the company’s Jordan Brand.
17. Marc Lasry (Milwaukee Bucks): $1.8 billion
Lasry, a hedge fund titan, joined Wes Edens to buy the Bucks in 2014 for $550 million. He was born in Morocco and moved to the U.S. at age 7 with his family.
18. Gail Miller (Utah Jazz): $1.7 billion
Miller transferred ownership of the Jazz in 2017 to a family legacy trust to deter her heirs from selling or moving the team. Gail and her since-deceased husband, Larry, bought the team for $22 million in 1986.
19. Jerry Reinsdorf (Chicago Bulls): $1.5 billion
Reinsdorf led a group of investors who bought a controlling stake in the Bulls for $9.2 million in 1985. Good timing. It was one year after the team drafted Michael Jordan, who led the Bulls to six NBA titles. The team is now worth $3.2 billion.
20. Theodore Leonsis (Washington Wizards): $1.4 billion
Leonsis initially built his fortune as a senior executive at AOL, before investing in sports teams like the Wizards and the NHL’s Capitals.
*Not included on the list but googled for your edification: DeVos Family (Magic): $5.4 billion
James Dolan (Knicks): $2 billion
Joe Lacob (Warriors): $1.2 billion
Vivek Randive (Kings): $700 million
Robert Sarver (Suns): $400 million
Jody Allen (Trail Blazers): The sister of Microsoft cofounder, Paul G. Allen, took control of the team after his death. At the time her brother was worth $20 billion though he intended to give most of his fortune away...
Boston Basketball Partners LLC (Celtics): An American local private investment group formed to purchase the Boston Celtics
Maple Leaf Sports & Entertainment (Raptors): The Raptors are a subsidiary of MLSE
The Professional Basketball Club, LLC (Thunder): A group of OKC businessmen "who represent a wide variety of local and national business interests" owns the Thunder
Spurs Sports & Entertainment LLC (Spurs): An American sports & entertainment organization, based in San Antonio, Texas owns the San Antonio Spurs
submitted by Please feel free to read more of City coverage here.
Section One: The Legal Battle Before there was the Isco Disco™, the seemingly perennial (and at times bi-annual) links to Real Madrid’s talented attacking midfielder – before there were transfer sagas that eventually resulted in the sale of high profile stars like Leroy Sané, or being spurned by the likes Dani Alves, Alexis Sánchez, or Jorginho – there were the links to Lionel Messi.
Dating back to 2011 when it was reported that City’s bosses had met with Lionel Messi’s entourage to ascertain the diminutive superstar’s intentions in light of news that Barcelona were trying to sign then-emerging Brazilian talent Neymar, rumors linking the Barcelona star to City have been injected into the news cycle like a steady drip from an IV. The links would continue over the decade, with City officials taking each chance they were given to impress the Argentinian, both on the pitch and off it.
Speculation that Messi could actually join City reached it’s zenith during the first half of 2016 when it was announced that his former Manager, Pep Guardiola, would be joining the Manchester club. That his arrival happened to coincide with Messi entering the final 12 months of his contract at the Camp Nou, speculation reached new levels. Though there were many who wondered aloud if circumstances may be ripe for a move, in the end no formal approach was made. City embarked on an expensive and extensive rebuilding project for their new star manager, one that was largely built on the backs of precocious young talents like Leroy Sane, Raheem Sterling, Kevin De Bruyne, and Gabriel Jesus, along with a cohort of tenured City stalwarts like Sergio Aguero, Fernandinho, Vincent Kompany, and David Silva.
With the 2016 summer window coming having come to a close with no formal approach having been made, Messi put pen to paper on a new four year extension with the only club he’s ever known. In doing so he set a new standard for himself financially, earning a compensation package that’s worth anywhere between €45m and €100m a year depending on which source you choose to trust. In turn the club gained the safety of an untouchable €700m release clause. Also inserted into that contract was a little thought of termination clause that would allow Messi to void the final year of his contract should he choose to do so. But it would be that clause, one few expected he would ever trigger after a lifetime at the club, in combination with the emergence of global health pandemic that would set the stage for one of the most stunning transfer sagas of the century.
If the journey to reach this day has been long, and the path winding, the process of actually signing Messi is likely to be even more complex. So while this will be a meandering article that will cover many topics – from contract law, to FIFA rules, to finance, it’s perhaps best to start at the beginning.
What About His Release Clause? On August 25th a Burofax arrived at the offices of Barcelona Football Club containing official, legal notice of Messi’s intent to activate the termination clause in his contract and become a free agent. It’s this clause, and the impact of the coronavirus pandemic upon that clause, that lie at the heart of all the difficulties that have followed.
Only a few people are privy to the exact terms of Messi’s contract, but it has been widely reported that his contract contained a termination clause that would allow him to void the final season of his deal as long as he provided notice of his intention to do so prior to June 10th. Under normal circumstances that date would’ve allowed him somewhere between two and four weeks from the completion of the season to serve notice that he would be leaving. However, due to league shut-downs brought about by the pandemic, Messi’s season didn’t end until August 14th, by which point his termination clause had long since expired. As a result Messi’s future has been left in limbo, with the outcome hinging upon complex and sometimes competing legalities, financial difficulties, and a healthy dose of hubris.
While the player’s camp will continue to try and make the argument that his clause should be honored due to extenuating circumstances, Barcelona is certainly under no obligation to do so and Joesp Bartomeu, President of Barcelona, is plainly in no mood to to do. He is in fact in no mood to allow Messi to leave under any circumstances other than the complete fulfillment of his €700m release clause.
Could City Trigger His Release Clause? Though there were reports circulating that the €700m release clause built into Messi’s contract had somehow expired at the end of this season, those reports have been shown to be false. On it’s face, the reports made little sense, as all players in Spain are required to have a release clause, so the idea that he suddenly did not never didn’t add up.
The reports led to La Liga taking the highly unusual step of publicly and officially declaring that Messi is still very much bound to Barcelona, and that his release clause is still very much in force. Again, operating under the assumption that Messi does indeed have a release clause (as he is legally obligated to) and that La Liga hasn’t foolishly exposed themselves to a lawsuit for falsely disseminating details of his contract in an official and public capacity, that would mean that the one guaranteed way for City to move the transfer forward would be to pay his release clause.
For obvious reasons paying €700m for a transfer fee alone would be extremely challenging under the existing Financial Fair Play frameworks. While clubs have the ability to amortize the costs of a transfer fee over the duration of a player’s contract, that would still leave City on the hook for €140m a year in expenses over the next five years (should they sign Messi to a five year contract) for the fee alone, before accounting for any potential salary. The numbers only get more challenging if the contract is for the two years that’re being reported. In that case City would have an FFP hit of €350m per year for the next two years just for the transfer fee.
Assuming a salary in in the range of €60m per year, that would leave City shouldering a FFP hit of somewhere between €200m and €410m per year. The first number would be extraordinarily challenging, the latter, likely impossible.
Given the financial difficulties associated with triggering his release clause, and Barcelona’s – or at least Bartomeu’s – stance that they will not agree to sell Messi for a lesser fee, that leaves all parties looking at what would likely be a protracted legal battle.
Could Messi Secure His Exit Through The Courts? That, in many ways, is the million dollar question. While Messi and his attorneys will argue that extenuating circumstances should allow him to have the June 10th deadline in his contract extended to reflect the date when the season
actually ended, it’s hardly a certainty that the Spanish legal system will allow this.
Thanks to excellent reporting work done by a team of writers at The Athletic, including City correspondent Sam Lee amongst many others, we know that under Spanish law deference is always given to the specific date when a question of interpretation arises in contracts. Plainly, that means that Messi and his team would have an uphill battle on their hands to show that his option to terminate his contract should be honored more than two months after it actually expired.
The one saving grace they may have is if there was what is known as a ‘force-majeure’ subclause attached to his void-option. Force-majeure is a fairly common clause to see written into contracts that protects one or both parties from harm due to unforeseeable, and catastrophic events (the term literally means, ‘force of nature.)’ In the event that there is such a clause, it would give Messi’s legal team a fighting chance. They’d still need to successfully argue that the Coronavirus pandemic qualifies as such an unforeseeable and devastating act, and they may very well do so successfully, but it’s far from a sure thing. If there is no such clause, the odds of success are likely stacked firmly in Barcelona’s favor.
There is, of course, another problem with needing to go to the court: legal proceedings take time. Sometimes a lot of time. Even under a best-case scenario (from Messi’s perspective) it’s likely that any legal battle would last months, taking both the player and any interested parties well beyond the transfer deadline of October 5th.
If Messi Believes His Contract Is Void, Could He Just Sign For Whomever He Wants? Let’s call this the, “going rogue” option. As I’ve discussed above, Messi is in a sub-optimal position from a legal perspective, but if he’s really of the opinion that his contract is indeed void, could he just sign for City – or whomever else he wanted to – anyway?
In short: yes, he could… But both Messi and the acquiring club would be subject to an Article 17 Breach, and Barcelona would then be in an extremely strong position to bring a lawsuit for breach of contract, holding Messi liable for (at least) the full amount of his €700m release clause, plus whatever material damages that Barcelona feels it might incur as a loss of his services. That amount could, at least theoretically, be even greater than the €700m from his release clause, depending on what types of de-escalation clauses are (or are not) tied to Barcelona’s various marketing contracts.
Unfortunately, In order to understand the second part of those potential liabilities we have to delve into the realm of hypotheticals.
For example: Barcelona is reported to receive somewhere between €140m and €155m a year from Nike as their primary kit sponsor. If there is a clause in that contact that would trigger a decrease in that payment should Messi leave (as is likely to be the case) to, say, €100m a year, Messi could be held legally liable for the €40m-€55m loss Barcelona were to incur.
Again, and I cannot stress this enough, that’s a hypothetical scenario, but it’s likely that Nike would demand language to that effect before signing the biggest kit contact in history. There may be no such clause, or it may be for a smaller – or larger – number. No one besides the interested parties knows.
Furthermore, should the loss of Messi lead to a devaluation of the club by the lenders currently financing the club’s debt of approximately €1.3b, that could trigger escalator clauses that could increase their interests rates on those loans. Again, the club would have a strong legal position to argue that Messi is liable for those increased expenses.
These may all be hypotheticals – we don’t know what clauses (if any) are attached to Barcelona’s sponsorship agreements, and if so, how much they would cost Barcelona should Messi leave during this window. But there are almost certainly a bevy of material damages Messi could be held liable for, and those – along with the €700m release clause – would constitute the better part of a billion Euros.
The odds that Messi is bold enough to throw caution to the wind to simply sign with whomever he wants without being absolutely certain that his contract with Barcelona either is, or will be voided would be suicidally foolish, and as such it’s highly unlikely to happen.
Additionally – as if there weren’t enough reasons to avoid going rouge – if Messi were to sign for another club without being absolutely certain his contract was indeed voided and FIFA were to review the case and side with Barcelona – which seems unlikely given their stated guidelines on contracts as it pertains to contracts and Covid-19 (more on this in a moment) – Barcelona or FIFA could file an Article 17 complaint.
Article 17 of FIFA’s Transfer Regulations states that in the event that a player unilaterally terminates his contract without just cause, the player is liable for all potential damages.
“In all cases, the party in breach shall pay compensation. Subject to the provisions of article 20 and Annexe 4 in relation to training compensation, and unless otherwise provided for in the contract, compensation for the breach shall be calculated with due consideration for the law of the country concerned, the specificity of sport, and any other objective criteria. These criteria shall include, in particular, the remuneration and other benefits due to the player under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, the fees and expenses paid or incurred by the former club (amortised over the term of the contract) and whether the contractual breach falls within a protected period.” Additionally and specifically to address potential meddling by the acquiring club, it goes on to state in section two that no third party can pay the resulting damages (IE: a club can’t pay those damages for the player).
Additionally under section three the player would be subject to a ban from all competitions for a period of 4-6 months depending on the severity of the breach.
And of last, but of course not least, the acquiring club would be subject two a minimum two window transfer ban.
What About FIFA, Could They Intervene On Messi’s Behalf? There is, at least in theory, some ground for thinking this may be a possible avenue for Messi to escape his contract, and it would involve invoking
Article 14 of FIFA’s Transfer Regulations, which states,
“
A contract may be terminated by either party without consequences of any kind (either payment of compensation or imposition of sporting sanctions) where there is just cause.“
Exactly what FIFA would accept as a just cause remains to be seen, as the wording of the clause is incredibly vague when compared to, say Article 15, which governs contract termination for sporting cause, and to my knowledge, there have been no attempt at invoking Article 14.
In Messi’s favor would be FIFA’s own declared stance that contracts should handled with the spirit of the contract in mind as they declared
in their April 7th release to address the legal consequences of Covid-19. Of relevant note:
“If parties cannot agree and, as a consequence, cases come to FIFA, the factors to be examined will include the following: - whether there was a genuine attempt by the club to reach agreement with the players;
- what the economic situation of the club is;
- the proportionality of any adjustment to player contracts;
- the net income position of players after any contract adjustment; and
- whether players have been treated equally or not.”
Invoking Article 14 or appealing directly to FIFA are of course hardly grantees of success. In the case of Article 14 it will be difficult to define precisely what qualifies as ‘just cause.’ Messi clearly wants the spirit of his contract to be honored, but he has not been materially harmed in any way by the club, and as such, that argument may not be enough.
And though the FIFA guidelines with regards to player contracts exist, they are guidelines, not official policy, and have never been subject to any kind of legal test like the ones they would surely face at the Court of Arbitration for Sport, who are the designated arbitrators for FIFA. Should FIFA agree with Messi that his contract is voided, Barcelona’s next step would be to file an immediate appeal to CAS and hope for an injunction.
As if all of that weren’t muddy enough, this is where things get really murky. Let’s say FIFA declares Messi’s contract void and he immediately signs with a new club, but upon review, the Court of Arbitration for Sport were to rule in favor of Barcelona – what then? Is Messi’s new contract voided? Are the new club and/or Messi liable for damages? Worse still – what if a Spanish civil court ruled Messi is in breach of contract regardless of what FIFA or CAS say?
This is, to say the least, extremely shaky legal ground that has no precedent to guide it, and both Messi and his new club would be taking an enormous financial risk even if FIFA were to back the player’s desired move.
Given the enormous financial risks involved, it’s unlikely that either the player or the acquiring club would have much of a stomach for this fight, even if the odds of success were somewhat better, especially if such resolution were to take another five to six months to achieve, during which time the player would be in limbo, and the club be deep into the most meaningful matches of their season.
What else is possible? With Barcelona’s stance appearing to be fixed – no negotiations will be had – and all legal avenues either against the player or on unsteady legal footing, and with both sure to take many months to finalize, what other options does Messi have?
So far Messi and his camp are taking an approach that would be familiar to fans of the American NFL – he has refused to show up to mandatory team actives in violation of his contract – a holdout. In doing so he’s made himself subject to fines that could cost him his paychecks, but he’s also ratcheted up the pressure on Barcelona to find a solution.
If Messi’s stance is indeed to hold out – to refuse to play for the club without signing for someone else – he’s showing that he’s willing to stay at home for an entire year and in the process forfeit his pay. That, at least in theory, leaves the club in a bit of a bind. Assuming they don’t care about the optics of playing hardball with a club legend – and it certainly doesn’t appear Bartomeu cares much for what those around the club think of him – then the holdout does very little from a financial perspective. In fact, they can maintain all of their sponsorship agreements as they are, and the club won’t have to pay Messi a single Euro (at least in base salary, he’d still be due his image rights and other provisions). In doing so the club would likely save somewhere in the neighborhood of €45m/€60m – Messi’s exact salary is unknown.
Although we don’t know what stipulations are attached to Barcelona’s many sponsorship agreements as it pertains to Messi, it’s fair to say the club stands to lose a
lot of money if Messi is sold or released before the start of the season. As a result
it could be that Bartomeu’s refusal to sell Messi is borne less of any malignance toward the club legend than it is pure economics. In short, he may believe that between the money the club save in salary they aren’t paying Messi, in addition to the sponsorship revenue that they would be able to maintain – there is no financial agreement that could be made that would be of greater value than meeting his €700m release clause.
Or it could simply be that Joesp Bartomeu is an egomaniacal ass. There’s certainly some precedence for the belief, as the long – and ongoing – legal battles between Barcelona and former star Neymar clearly illustrate. The two parties have been engaged in near perpetuity from the moment the player left for PSG in a string of lawsuits, countersuits, and countersuits to countersuits; with the club accusing the player of being in breach of contract, while the player accuses the club of refusing to pay him wages he is owed for his time with the club. All of which was preceded by attempts by La Liga to intervene on the club’s behalf by initially refusing to accept his buyout clause, while lodging appeals with UEFA surrounding PSG’s adherence to Financial Fair Play.
The lesson: Barcelona under Bartomeu is not averse to engaging in long, protracted legal engagements against star players even when there is precious little to be gained by doing so.
So What’s Most Likely To Happen? Regardless of whether Barcelona’s stance under Bartomeu is the result of financial imperative, ego, or a combination of both, it’s left no one with a clear path forward, and it may be that in the end the best option for everyone is for Messi to simply see out the final year of his contract, and sign a pre-contract with the club of his choice, free of any legal ramifications Barcelona could bring to bear, on January 1st.
As it stands today, September 2nd, Messi is less than four months away from such a situation. With nothing but a contentious legal minefield awaiting him – a field where there are no real winners, only those who lose less – perhaps it’s an opportunity for Messi to prove to the Barcelona faithful one last time that even in the face of the absurd stance of the club’s President, one man, despite being short of stature, can find yet another way to rise above the rest.
Section Two: The Finances Determining what type of financial package an acquiring club would have to put together to make a Messi transfer a reality is a multi-part problem. The first requires determining what type of fee would be required to secure the players release from his current club, the second would be determining how large his wage packet would be.
In most cases these matters are relatively straight forward, but due to the legal uncertainty surrounding Messi’s contact status with Barcelona, and the enormity of his existing wages, the task of signing Messi is anything but routine.
In order to paint as thorough a picture as possible we’ll first explore the three primary scenarios in which Messi could sign for another club: by payment of his release clause; through a negotiated fee; or on a free transfer after securing his release, or in the winter window.
We’ll then look at ways that City may try to finance such a move.
Paying The Release Clause The easiest way, and indeed perhaps the only way that Lionel Messi will be leaving Camp Nou during the summer window, will be for an interested club to take the audacious step of meeting his daunting €700m release clause. Doing so would require that club to find a way to finance a fee most triple that of any that’s ever been paid. To say the least, there are very few clubs in the world who could dream of financing such an outlay, but Manchester City may be one of the few who could.
In City’s favor will be the fact that they have a large amount of liquid assets at their disposal after
the sale of 10% of the Club to Silver Lake Capital for $500m (£389m/€423m) in November of 2019. It is possible that the club could utilize the capital raised in that sale to fund – at least in part – his release clause. What would be more difficult, would be funding the remaining €275m. Seeking to sell more shares of the club is likely out of the question – such ventures take at a minimum many months to complete, and City have just over a month to raise the necessary capital. That would likely mean taking out a loan.
If we assume that City can raise the funds, and/or have the willingness to do so, the next question is how can they account for that expense under the constraints of Financial Fair Play?
Working in that club’s favor will be what’s called amortization. Though we briefly touched on the concept earlier, let’s do it slightly more justice now. Amortization at it’s most basic is the process of spreading a payment out of a longer period of time.
What may be confusing to some in this instance is that the actual payment itself would
not be able to be spread out – if someone want’s to trigger Messi’s release clause they will need to find a way to furnish the entire €700m in one go. Instead what this is referring to, as we touched on earlier in the article, is how the payment is accounted for.
As a result of this allowance, a player’s transfer fee, at least for the purposes of compliance with Financial Fair Play, is usually not accounted for as a single lump sum, but rather is apportioned out across the length of the players contract. Still, no matter the accounting methods used, the acquiring club would be looking at a substantial FFP hit.
Reportedly Messi is only interested in a two-year contract, if so, that would leave the acquiring club in a highly untenable position, as that would mean taking an FFP hit of €350m per year on the transfer fee alone before accounting for any salary he would be owed. If we assumed a fairly conservative wage packet of €50m/yr for the Argentinian superstar that would mean the acquiring club would be taking on an eye-watering €400m FFP hit for each of the next two seasons. To give that number some context, Manchester City’s entire player expense sheet for the 2019/2020 season was roughly €450m. Even if Messi were to accept a longer five year contract, the Financial Fair Play hit would be €190m per season.
However, as a result of the Silver Lake sale, and the capital it raised, City
aren’t necessarily priced out of this move. If the contract is only for two years, they can use that cash influx in any three-year Financial Fair Play accounting period. Th Silver Lake capital alone wouldn’t cover the expense of Messi, but it would take them more than half way home, and that combined with the sale of someone like Riyad Mahrez or Gabriel Jesus – two players who’s minutes would be directly impacted by Messi’s arrival – would get them closer.
The club could then
do what Juventus did in renegotiating their sponsorship with Jeep after their acquisition of Christiano Ronaldo. Though City have only recently locked in their new apparel deal with Puma,
their long standing – and much maligned – sponsorship with agreement with Etihad is due to expire at the end of the 2021 season. City could, at least in theory, use the acquisition of Messi as justification for renegotiating that contract at a significantly higher value – just as Juventus has.
Further, they could get creative with their wage packet. The could offer Messi a token salary, along with full image rights, and competition bonuses – all things we would normally receive – but make the bold move of offering him an ownership stake in City Financial Group. Given the firm valuation £3.89b that was imparted upon them with the Silver Lake acquisition, a 4% share of CFG would be worth roughly £155m. That would be strong compensation for two years service.
In that scenario, City may, just barely, be able to ride a combination of a fortuitously timed capital injection, player sales, a cleverly designed wage packet and renegotiated contracts, over the FFP finish line. Still, it would take every resource at City’s disposal to cover that release clause and even then, it may not be enough without the sale of another significant player or two.
Let’s call this scenario highly unlikely.
Paying A Negotiated Fee In most cases, including that of Christian Ronaldo at rival Real Madrid, losing a long-tenured star player is a painful process, but one that both club and player work to make as amicable as possible. Doing so protects both the players image amongst supporters, and the clubs image to those who may with to join in the future. It’s never been a necessity, clubs have always been free to refuse to sell, and players have alway been free to hold out to try and force a move away – but football has an unspoken gentleman’s agreement that when a painful situation arises, it will be handled with class and dignity.
Josep Bartomeu does not appear to be a man who cares for the rules of convention. Whether it was with his aforementioned treatment of Neymar, or as it would appear to be in this instance – when Bartomeu has decided a player will not be allowed to leave, he would appear to mean that quite literally.
Though many may view that behavior as petulant or egotistical (and it may well be), there is a another far more likely culprit driving his decision making: financial imperative.
Though
Barcelona are an incredibly wealthy and successful club, they are also a club carrying a significant debt load (almost €1.3b), and one that would appear to have been particularly hard-hit by the impacts of Covid-19, with the President himself taking the unusual step of declaring, “
since March 14, we have barely receieved nearly €1. We have lost €200 million in revenues. 200! We have recovered some money by reducing wages and with the ERTE. We had to close the shops and the museum and there were no ticket sales. We also gave money back to season ticket holders for the games that were not played.”
While the motivations of that kind of statement should be questioned – heads of major companies are loathe to publicly declare loses as it negatively impacts their leverage at the negotiating table – there’s no doubt that the pandemic will have hurt the club.
On it’s face then it would appear that agreeing a fee for Messi would be a logical move to counteract that financial pain. After all, they could secure a significant fee, whilst ridding themselves of his onerous wage bill.
There are, however, hidden landmines that may be lurking in the field should the club allow Messi his leave. The first and most obvious is that there are likely de-escalator clauses in many of Barcelona’s sponsorship agreements. Just as Juventus was able to renegotiate their primary kit sponsorship with Jeep, it’s likely that there are clauses which would see Barcelona’s major sponsorships cut dramatically in the event Messi leaves.
Perhaps worse still a decline in the valuation of the club – such as the one Real Madrid saw when Ronaldo left – would have more than a paper impact on Barcelona. That’s because when a club takes out a significant loan, such as the €800m loan it’s said to have taken out this past year for renovations of Camp Nou – they’re using the value of the club as collateral against that loan. A significant change in valuation, such as the one that would happen as a result of the loss of Messi, would likely impact the interest rates Goldman Sachs charges.
At the end of that Bartomeu is a businessman. Though he may not be the most pleasant man when he doesn’t get his way, it’s more likely that he has simply looked at the bigger financial picture and come to the conclusion that there genuinely is no fee of less than €700m that would offset the loses he feels the club would incur should Messi be sold this summer.
Logically speaking, if that weren’t the case, there’d be no obvious reason for his refusal to even accept the possibility of negotiating his stars release. He surely understands that Messi could leave the club on a free in ten months time – and sign a pre-contract in less than four – and has decided that despite this, it still makes more sense to refuse to allow the player to leave.
Perhaps it’s merely hubris, or arrogance, or petulance that’s led him to this position, but it’s unlikely that he’s reached this point in his career – as the head of the highest grossing sports franchise on Earth – by being that emotional. Whatever personality traits Bartomeu may possess, he’s a prudent man, and his stance is likely borne of that same view.
Waiting Till The Winter Window If we operate under the assumption that financing the acquisition of Messi by triggering his release clause is either impossible, or implausible enough to treat as such; and that Barcelona will remain steadfast in their refusal to sell – as they very much appear to be – then that leaves Messi but one way out: on a free at the expiry of his contract.
If Messi is forced to stay at Barcelona, he can use it as one last opportunity to further cement his already indelible legacy with the Barcelona fanbase: a player who acted with class and dignity in the face of an ignominious club President. In the process he can use that time to solicit the very best offers from clubs around the world, maximizing the value of whatever contract he signs next.
Messi’s decision to leave the only club he’s every know has always appeared to be a hasty one; driven as much by a realization that Barcelona would be unlikely to deliver his dream of one last Champions League win given their current aging roster, as it was the sting of their humbling at the hands of an ascendant Bayern Munich side.
However, if Messi’s desire to leave had been driven in part by those factors leading up to his announcement, he now likely has a greater one: a disdain for Bartomeu. Though the President’s tenure is up for vote in March, he’s likely to retain his position, and it’s hard to envisage a scenario where Messi agrees to sign a new contract under his tenure, as all faith in his, or the Club’s willingness to honor the spirit of those contracts is now likely decimated.
It will also give Manchester City, and any other clubs that care to make a run at his signature, time to formulate concrete plans for how they’ll fund such an acquisition.
In the meantime, all anyone can do is wait. Perhaps Bartomeu will have a change of heart, or perhaps the approach of the deadline and the threat of losing Messi on a free will compel him into last minute negotiations. Perhaps the player will initiate a lengthy, costly, and uncertain legal battle either though the Spanish courts or through UEFA to try and secure his release during the winter window. But as of this moment, all signs point to Messi playing out the final season of his contract with Barcelona, perhaps reluctantly, before making a decision that will inexorably alter not only his life, but a significant portion of the European football landscape.
submitted by *tap tap…\* Is this thing on?
Good afternoon from the UK. It’s Wednesday 6th May. Sorry about yesterday; my company is coming into peak and I’m having to be creative with my supply chain to avoid the extremely high airfreight prices that I’m being quoted; it ended up being a 18 hour day yesterday.
In case you didn’t yet get the memo that a brutal recession is under way (many say it will be the worst in decades), here’s a canary in the coal mine example; rents are starting to drop sharply in Australian cities with some parts of Sydney seeing drops of as much as 15% (
link). The same thing is happening in US cities
says the USA Today, London is also getting affected
says the Telegraph.
Professional sport leagues are getting affected too. An
article I found in The Guardian says that the English Football League, the Rugby Football Union and the England and Wales Cricket Board are looking at a combined loss of £700m next year ($865m US / €801m). At the other end of the scale, six unnamed British Olympic and Paralympic sport teams are facing a threat to their solvency within the next three months because they are unable to host events and membership fees and sponsorship have dried up. The chairman of the English Football League, Rick Parry, painted a similarly bleak picture when he spoke to MPs, telling them the 71 lower league clubs were facing a £200m black hole by September. Parry said it was impossible to predict how many clubs could go under but was adamant English football would have to undergo huge changes, including a salary cap for players, to sustain itself in the years ahead. “In the Championship wages are 106% of turnover,” he said. “That is ridiculous and it is definitely not sustainable now or in the future. One benefit of going through this pain is that we will be shocked into a more sustainable model.”
ESPN has picked up the theme from an American perspective; it says that the sudden disappearance of sports will erase at least $12 billion in revenue and hundreds of thousands of jobs, an economic catastrophe that will more than double if the college football and NFL schedules are wiped out this fall by the coronavirus pandemic, an analysis conducted for ESPN shows. The meltdown is a fraction of the crisis spreading across the country, but it is nonetheless historic, touching every sector of the $100 billion United States sports industry, it says.
Virus Statistics
I’m no longer going to publish virus statistics from Johns Hopkins because the amazing efforts of
rkuzsma and
TeMPOraL_PL mean it’s fully automated (woohoo!). Get your own daily virus statistics (you can set cut offs as you see fit)
here.
Supply chain news in depth
Seven US states have teamed up to buy $5B of medical equipment to fight coronavirus - Multiple sources
including supplychaindive.com are reporting that tensions have swirled between President Donald Trump and embattled states that have called on the federal government to take the lead with the national COVID-19 response. The states have asked the administration to centralize procurement through the Federal Emergency Management Agency and get it to take ownership of sourcing and distribution. Trump has instead “taken a backseat approach”, says supplychaindive, putting the onus on states as governors report losing equipment negotiations to FEMA which can pay higher prices. Add in competition from private companies as well and some equipment is soaring in value (for example the price tag of a single ventilator has snowballed from $12,000 to $65,000, according to the comptroller of Illinois). The result: Connecticut, Delaware, Massachusetts, New Jersey, New York, Pennsylvania and Rhode Island are aiming to use their combined purchasing power to drive down prices for the in-demand supplies for their combined 53.6 million residents. The group will also coordinate planning on gradually lifting social distancing requirements as the number of confirmed U.S. deaths from the novel coronavirus passed 67,000 on Sunday.
(Cont’d) The new regional supply chain is an attempt to tamp down on those skyrocketing prices as demand is unlikely to let up anytime soon, with some public health experts forecasting a return of the coronavirus in the fall. "When you put all those hospitals together, all that public health capacity together — which will make us more competitive in the international marketplace — I believe it will save taxpayers money," New York Gov. Andrew Cuomo said in a press conference Sunday. "I also believe it will help us actually get the equipment because we have trouble still getting the equipment and just buying the equipment because these vendors on the other side they're are dealing with countries, they're dealing with the federal government —why should they do business with one state when they can do business with an entire country?" The partnership will be especially beneficial to the smaller states involved in the partnership, but all of the states involved should benefit from the increased purchasing power. "We're much stronger together, I wouldn't mind having some of that New York purchasing power, thanks for sharing that with Connecticut going forward,"Connecticut Governor Ned Lamont said during the press conference. In a related move, New York state is now requiring hospitals ot have a 90-day supply of PPE and other key medical supplies at a "rate of use during the worst of this crisis" to ensure enough masks and equipment in event of a resurgence, Governor Andrew Cuomo said.
The coffee supply chain industry is getting affected by Covid-19 too - Perfectdailygrind.com has an article
here explaining that with a lot of people on lockdown, many coffee shops, restaurants and other coffee dispensing locations are closed which in turn means that the roasters supplying them are having to significantly slow down their buying. Karl Wienhold, Director of the Colombian Farmers’ Collective and Exporter Cedro Alto, reveals that some roasters don’t want to be stuck with stale stock if sales are down; if they over-purchase coffee now, it could result in them getting stuck with old crops - it can be hard to sell green coffee that’s been in storage even for only 4-5 months. It means that many are reducing purchase commitments to decrease their risk and plan to buy more should they need it later. The problem is rolling back up the supply chain; if the roasters reduce their purchasing activity the importers who’d usually supply these roasters could be stuck with stock they can’t sell so they in turn will reduce purchasing. This will put their coffee exporters under financial pressure, as importers and roasters will be reducing or delaying their purchasing commitments or purchasing and reserving less coffee altogether. For smaller exporters, this can be a huge blow. Without prompt payments and adequate cash flow, financing even one container can be too expensive, regardless of whether they’re exporting to an importer or roaster. When exporters can’t purchase their usual amounts of coffee or are left in a financial lurch, the producers they work with will be affected. If many producers can’t sell their crops to those who’d usually buy them, they’ll no longer have a market for their coffee.
(Cont’d) Many producers and traders are dealing with their coffees being stuck at the country’s port, unable to move due to closed borders and other restrictions being imposed regarding trade between countries. Additional delays could lead to the coffee ageing, and as Rafael mentions, if a ship or container is detained at port, it will incur penalties, with the incoterms determining who’s responsible for paying these penalties. Green coffee importer Ally Coffee’s COO Ricardo Pereira revealed that they’re currently focusing on helping producers who have coffee that’s processed, dry milled, and ready to be shipped get their coffee out of origin as soon as possible. It’s something that all parties involved need to consider, as it will impact exporters, importers, shipping companies, and those who work on these ships. Rafael mentions that “Both importers and exporters have to do their due diligence and investigate… route options for their containers. Shipping companies have to be a lot more careful about their workers; there are several ships that have been detained due to the crew testing positive for the virus.”
(Cont’d) Some producers are finding that they aren’t able to sell their coffee, as their usual buyers are delaying payments or cancelling commitments. Daniel explains that this could mean that “the farmer will have to sell their coffee to a co-operative for a lower market price. The reduction in demand that is expected for the second and third quarters will also have an effect on the quantity of coffee being purchased at specialty coffee prices.”
According to Karl Wienhold, Director of the Colombian Farmers’ Collective and Exporter Cedro Alto, some micro lot quality coffee might need to be sold at regional prices if there’s no demand for it, and that the premiums usually paid for high-end specialty coffee could suffer. This may mean lower prices and less demand for natural and honey processed coffees as well as low-yielding varieties. A struggle to sell these lots while they’re fresh and worthy of a price premium might result in lower prices later on – when and if the coffee gets sold. Another side effect of roasters reducing their costs is that some might cut back on their social responsibility and sustainability projects involving producers and their farms. With no clear end in sight for COVID-19, this could only resume next year.
It’s a lengthy article and also touches on foreign exchange rate exposure risks, difficulty in crossing borders for migrant workers, that some coffee farms may be forced into taking on very expensive loans and it discusses payments being delayed resulting in cash flow issues for the recipient. The producers and pickers are taking the worst of it right now, says the article, but everyone needs to play their part in helping the coffee supply chain come out of this with as little damage as possible.
Supply chain news in brief
- Cummins struggles with supply chain visibility - Supplychaindive has an article on the difficulties the engine and power generation manufacturer has faced during the pandemic outbreak. Its CEO Tom Linebarger clarified that it had its Chinese factories back up and running in full by the end of Q1 (which I think was no mean feat) but details are hard to come by on what suppliers are shutting down, why suppliers are shutting down and what suppliers are doing to keep their workers safe during a pandemic. "We have a broad and big supply base and we don't know all the things about it I wish I knew," Cummins COO Tony Satterthwaite said. Cummins has been able to find alternative suppliers and sources, which it has been doing since production in China shut down at the end of January, Satterthwaite said, adding that he's been told multiple times "we're a week out from running out [of inventory] and then all of a sudden a week later, we found some way to fix the problem." (Personally I think that’s a startling admission of failure and yet another reminder of why you should map your supply chain - not just your tier one providers but tier two and preferably tier three suppliers too. They clearly need to invest more in their supply chain capabilities and get a better grip on the risk exposure they face and consider what steps to mitigate it. This company is admitting its flying by the seat of its pants on a wing and a prayer though this crisis and I’d love to know how much extra it’s having to spend to keep its supply chains up and running...)
- Xi fears Japan-led manufacturing exodus from China - The Nikkei Asian review has an interesting article on Chinese fears that Japanese Prime Minister Shinzo Abe has proposed building an economy that is less dependent on one country, China, so that the nation can better avoid supply chain disruptions. That’s worried China; Japan is their third largest customer after the US and Hong Kong. Of particular concern is the recent financial stimulus announced by Prime Minister Abe on April 7th to incentivise companies to relocate out of China - the equivalent of $2.2bn USD. They don’t even have to relocate back home to Japan; Abe’s happy for them to spread out around ASEAN countries (link to what ASEAN is for the unfamiliar). For Abe, simply having a China + 1 approach isn’t good enough any more but the issue for China is that Trump also wants countries to pull out of China, preferably to the US, failing that to a friendly nation (reports Reuters). If the U.S. and Japan, the world's biggest and third-biggest economies respectively, move away from China, it will have a huge impact on the world's second-biggest economy.
- Long Island’s NewsDay magazine has a report that illegal drug prices have soared in New York and Long Island due to supply chain disruptions having impacts on illegal manufacturing too. Marijuana has doubled from $800 to $1,600 from March 2019 to March 2020 per pound, the price of cocaine has gone from a low of $28,000 a kilogram to as much as $34,000, heroin has risen from approximately $50,000 to $56,000 per kilogram; and the price of methamphetamine has gone from $12,000 to $15,000 per kilogram. Those figures are from the U.S. Drug Enforcement Administration, which according to Newsday has a long-held policy of making street buys to monitor illegal drug prices.
- A program created by Donald Trump’s son-in-law Jared Kushner has airlifted millions of gloves, masks and other coveted coronavirus supplies into the U.S. from overseas -- but it isn’t clear who’s getting them and at what price, or how much private-sector partners are earning through the arrangement says Bloomberg. Kushner’s “Project Airbridge” provides transportation via FedEx Corp. and others for supplies that medical distributors, including McKesson Corp. and Cardinal Health Inc., buy from overseas manufacturers, mainly in China. Once a supplier’s goods arrive in the U.S., the companies must sell half the order in government-designated hotspots. They sell the rest as they see fit. The U.S. government provides the air transportation for free, to speed the arrival of the products. The six distributors keep the profits, if any. FEMA says the effort has slashed shipping time to two days, from the 30 to 40 days that a conventional sea shipment would normally take (that’s because air freight is faster than sea freight). The White House declined to provide any information on prices charged by the distributors, nor did it offer any accounting of the products brought into the U.S. or their final destination -- even for the half of the products designated for areas the government considers hotspots.
- What’s the next thing likely to be running out of stock? Yahoo Finance has the answers. It reckons laptops, medical products (e.g. gloves), pharmaceutical products (e.g. meds), iPhones, toilet paper (not convinced by that one), LCD TV’s, garlic (most of the global production is in China), vapes, while toys likely to be harder to buy come the Christmas holiday season (for example baby yodas). The article also clarifies that disinfectant, virtual reality headsets, video consoles, thermometers, hand sanitiser and freezers are hard to come by too.
- John Deere (maker of agricultural machinery) has announced it will temporarily suspend production at its Davenport Works and Dubuque Works facilities for two weeks. The temporary suspension, which will begin May 11, is due to supply chain disruptions and weakened demand for construction and forestry equipment amid the coronavirus pandemic. Production is expected to resume May 26. “Temporary production shutdowns such as this occur regularly on an annual basis at our facilities,” says Jen Hartmann, director, strategic public relations at Deere & Company. “This is a common measure to adjust for supply and demand adjustments as referenced above.” Earlier this week, 159 employees at the Dubuque Works facility were informed they would be laid off indefinitely beginning June 1. These layoffs are in addition to the 105 employees who were notified in February they would be laid off effective April 6, which has since been moved to May 4. Source: agriculture.com
- If you’re struggling to keep track of all the food production plants shut down in the US, fooddive has a solution for you here. Also, some supermarket chains in the US have begun to start to ration meat sales (link).
- Talking of food, remember the potato mountain problems that the Dutch, Belgians, Canadians have - all those potatoes and no restaurants open that can fry them? Add the American farmers to that list, reports the LA Times; they’ve got 453 thousand tonnes (you read that right, 453,000 tonnes). The coronavirus pandemic has left Washington’s farmers with at least a billion pounds of potatoes they can’t sell, a new crop growing without any buyers and millions of dollars in debt they have no way to pay. The state’s fertile Columbia Basin produces nearly a quarter of the potatoes grown in the United States, 10 billion pounds in 2019. The vast majority — 90% — were turned into frozen French fries and shipped to restaurants, some in the United States but mostly to Asia. “We’re afraid there’s still going to be potatoes in storage when we go to dig up this year’s crop in September,” (farmer) Wollman said. “These are good potatoes. We don’t want to throw them away. It’s just, what do you do with them?” As it turns out, getting rid of a billion pounds of spuds isn’t easy — or cheap. It usually takes Washington farmers a year to sell that quantity to grocery stores. “Now we’re trying to move it in a couple months,” Chris Voigt, executive director of the Washington State Potato Commission said. That means each of the 2 million citizens expected to use the state’s food banks this year would have to take 500 pounds. And moving all those potatoes would require filling at least 20,000 tractor-trailers — and paying for fuel.
(Cont’d) The Washington potato farmers hope the U.S. Department of Agriculture will step in and buy their billion-pound glut, then donate the potatoes to food banks or even cattle ranchers as supplemental livestock feed. Local congresswoman Kim Schrier (
Democrat) said she couldn’t answer whether that was likely. “I think we have to expand that question to whether the USDA will buy up all the tomatoes or apples or carrots farmers can’t sell around the country, because they’re all hurting,” she said. “Just in Washington state, we grow other things too, like apples and cherries. We’re afraid a third of our farms could go out of business. It’s a heartbreaking situation.“ The article goes into detail about a 33 year old farmer who is about to default on a $500,000 loan through no fault of his own and is at risk of losing his family farm and also discusses decisions that some farmers are making to try and reduce the size of the financial calamity facing them.
- Emirates has launched 4 flights a week to New Zealand to aid airfreight export volumes in a deal with the New Zealand government (source). Air New Zealand has also struck a deal with the government to carry cargo (source).
- Talking of air cargo, Forbes has done a lengthy piece on it. China Southern’s freighters are flying 15.5 hours a day, a rate enviable even for passenger aircraft. Freighters at Air China, China Airlines and Korean Air have also surpassed their annual record. Airlines with cargo aircraft have a rare source of revenue and cash flow as passenger flights dwindle and refunds outstrip new bookings. Air cargo sustained some Asian airlines during SARS, and may do so again during this coronavirus downturn. Forbes explains that belly cargo (carried in the bottom of passenger airlines) makes up at least half of the world’s air cargo. Korean Air carries over 60% of its cargo in the bellies of passenger flights, while for Singapore Airlines it is 75%. Stopping passenger flights during the coronavirus outbreak has removed this cargo capacity. China alone has lost the equivalent of 50 daily 747 flights. The utilization gains airlines are achieving this month add up. The extra 45 minutes of flying for a China Southern freighter theoretically allows the airline another Guangzhou-Frankfurt roundtrip every 2.5 days. With its improvements, Korean Air can fly an extra Seoul-Singapore roundtrip every day. Air China can make 12 Shanghai-Los Angeles returns in a month with its same fleet.
- Emirates SkyCargo operated a Boeing 777-300ER passenger aircraft on 23 April 2020 from Mumbai loaded with just over 66 tonnes of cargo in the lower deck of the aircraft - that’s a new world record record for maximum cargo loaded in the lower deck of a Boeing 777-300ER passenger aircraft. The cargo carried was a mix of general cargo, perishables and sanitisers. The cargo was loaded on 12 pallets and six containers (source).
Good news section
Here’s a wholesome article that popped up over the weekend on The Hustle about a
man feeding a remote Alaska town with a Costco card and a ship. Scroll down past the dreadful animated picture at the top of the article and give it a
read.
Donations
Several asked if they can send me $/£/€ via Patreon (in some cases because I've saved them time or money, others for no reason at all). I don't need the cash (that's lovely though) but as you may have read above, food bank charities are getting really hit hard with all this panic buying. Please consider giving whatever you'd have given me to a foodbank charity instead:
UK:
https://www.trusselltrust.org/ France:
https://www.banquealimentaire.org/ Germany:
https://www.tafel.de/ Netherlands:
https://www.voedselbankennederland.nl/steun-ons/steun-voedselbank-donatie/ Italy:
https://www.bancoalimentare.it/it/node/1 Spain:
https://www.fesbal.org/ Australia:
https://www.foodbank.org.au/ Canada:
https://www.foodbankscanada.ca/ USA:
https://www.feedingamerica.org/ Thanks in advance for any donations you give. If there's foodbank charities in your country and it's not listed above, please suggest it and I will include it going forward.
submitted by Edit 01/20/20: Long story short all these companies are shady AF. Deal with them as you would with a guy selling watches on the pedestrian overpass - you may or may not get what you wanted, but it's gonna be a hassle if you end up wanting your money back.
Edit 09/09/19: New pay model is in effect for LV. Rolling out incrementally across the country by 09/30. You can now safely tip in-app knowing that the tip goes 100% to the driver, & not to DD's coffers. You can also choose not to tip or to tip in cash, but that probably isn't the best strategy, b/c
driver offer screens look like this now when you zero the tip out. Doubtful to get your food on time, if at all. But at least for customers the tipping shenanigans for DD are over,
so much of what is written here can be disregarded as outdated reference. Edit 07/26/19: DD recently announced they will be changing their pay model. No details given & status quo for now, but best guess is by Week 1 NFL they will have changed things (
read: pay cut), & my advice about DD will become outdated. Will update accordingly for anyone keeping tabs. Lastly,
don't believe a word Tony Xu says. He's a liar & a fatmouth & would steal your socks if you weren't looking. Scroll the comments to his tweet for verification.
TLDR: Okay this this going to be super long, but it is meant as a comprehensive expository regarding what you as a customer are paying for, & the root motivation behind it is that
locals are being deceived, & to an extent, stolen from. Source: Full-time driver for the past 15 months.
Disclaimer: Depending on your reaction, this may benefit me financially. I invite you to cross-check my claims with other drivers, driver subs, google, other references, etc.
First of all, I need to thank you as customers. I have my gripes with the platforms, but you customers have enabled me to pay off quite a few bills. In 15 months I've taken 11 days off, usually clocking 10-12 hr days, racking up around 75,000 miles & putting a proper beating on more than one vehicle. So I do feel like I've earned it - but much moreso than to the restaurants or the platforms, I owe a debt of gratitude to you.
The most beneficial info here will be to DoorDash customers - but the only way I can really explain what's going on there is to break down the other platforms first, so bear with me.
Postmates. PM works most similarly to how you would tip a server at a restaurant - you order your food, & then post-delivery, you rate & tip accordingly, based on the service. Late food / poor service, & you have every right to withhold your tip. Good communication / prompt delivery, & do what you feel is right.
However, keep in mind regarding PM - they hire anybody/everybody. All bets are off on arrival time, if your driver is on a moped with a milkcrate, if he ate half your food, or if he robs you at gunpoint. Don't mean to exaggerate here; they have good drivers too, but like I said - no bets.
GrubHub. Probably the most reliable to receive your order correct & on time (if you tip). The reason for this is b/c you have to set your tip when you order, so the offer screen sent to the driver shows the total payout, including your tip. Thus, the driver knows up front exactly what they'll be paid, & is properly motivated to get it delivered quickly & move on to the next delivery.
The flip side to the GH coin, when you don't tip (or zero it out to say 'cash tip'), is that the offer screen shows the total payout as low as $2-$3. Most drivers will reject that offer, & your no-tip order may sit in the queue for an hour or more before GH can find a driver to accept it. That driver is also likely to be less than enthusiastic.
[Please note that while
you might tip in cash every time, 99/100 customers don't. So drivers never rely on cash tips, & regularly reject lowball offers.]
Just to recap; on PM with no tip I get shit, & they don't show if you tipped or how much until the next day. So I'm very wary of accepting PM offers b/c I don't want to get stiffed. On GH, I see the total payout including your tip before I accept the delivery, so naturally I reject the no-tip/low-tip offers, & cherry-pick the big ones.
Which brings me to
DoorDash. Finally. The point of the damn post, & where you as a customer might be throwing money away.
DD plays the middle for the driver & says, "Hey, with DD you'll never get stiffed, b/c our minimum payout is $7.00." So even when the customer tips $0, the driver still gets $7, as opposed to $2 on GH or PM. Sounds great, right? Except that money has to come from somewhere, & FYI, locals - it's coming out of your pocket.
Grab your shovel & dig this: - If you tip $0, DD pays me $7. - If you tip $3, DD pays me $4, I still get $7. - If you tip $5, DD pays me $2, I still get $7. - If you tip $8, DD pays me $1, I get $9.
In essence, DD uses your tip to subsidize driver pay. When you tip any amount $6.00 or less,
the driver doesn't get a penny more than if you had tipped nothing. When you tip $6.01 or more, that means
DD only has to pay the driver $1.00. The vast majority of my DD deliveries include a $1-$5 in-app tip. I receive absolutely none of that. In-app tips do not
really go to the driver - you are only paying DD a higher fee for your order.
Solution: if you use DD, zero out the in-app tip, then tip your driver in cash upon delivery, assuming it's on time & correct. Totally understandable if you prefer to not use cash, but in that case I suggest using other platforms b/c DD is just playing verbiage games. "100% of tips go to the driver" - technically true, but I think you see what's going on here.
[That last part applies to DD only; if you tip in the app on PM or GH, the driver gets it with no shenanigans.]
Again, I apologize for post length, but this is about your money, so please help spread the word. With your friends & neighbors, on FB, etc. Not looking for any credit & it wouldn't make sense to link to this long ass post, but
here is a pic you can download & share, taken from
this driver activist site. (Note that the minimum payout is different for every market - in Vegas it's $7, but I have seen other cities where it's lower than $5.)
I really just want to effectively convey the message that Vegas locals who use this service are spending more than they have to, & are being deceived about the tips they give.
And to hell with all that. .
Edit: Formatting, clarification, additional points.
Example of DD payout screen after delivery. An interesting Forbes article about how Instacart recently reversed a similar pay model under pressure, but DD & Amazon refused. A petition page where Tech workers have been boycotting working for DD b/c of this pay model. submitted by NFL Week 15 TV Schedule And Odds. Thursday, December 12. New York Jets at Baltimore Ravens (BAL -14.5, 45) 8:20 p.m., FOX/NFLN; Sunday, December 15 A matchup between two of the NFL’s top-three offenses, this is the best game on the Week 16 schedule. Neither team plays much defense, and the last quarterback with the ball might win. The opening lines for Week 12 of the NFL season have been posted, a full 16-game Thanksgiving holiday slate; The largest spread is 7 points, with the Miami Dolphins favored over the New York Jets and the Green Bay Packers over the Chicago Bears by that many; The over/under is just 43.5 points for the New York Giants-Cincinnati Bengals game Super Bowl LV Point Spread And Moneyline. The Chiefs opened as a 3.5-point favorite in Super Bowl LV and many shops are still offering these same odds more than a week after the game first went up ... Bleacher Report's Expert Consensus Week 12 NFL Picks. 0 of 15. ... nobody will fault you for staying away from the Baltimore Ravens as a double-digit road favorite in Week 12. NFL Football Week 12 odds and betting lines. Includes updated point spreads, money lines and totals lines. Considering the injuries on both sides, Denver and New York might be the NFL’s two worst teams in Week 4. The Broncos have at least been competitive in a pair of their losses. The Jets are 0-3 ... NFL picks against the spread for Week 12. Game of the Week: Chiefs (-3, 53 o/u) at Buccaneers. Sunday, 8:20 p.m. ET, NBC. The Chiefs are coming off a thrilling, emotional last-minute comeback win ... NFL odds, lines, spreads, picks, predictions for Week 12, 2020: Proven model loving Giants, Colts SportsLine's computer model simulated every Week 12 NFL game 10,000 times with surprising results Week 12 in the NFL begins on Thursday, Nov. 21, 2019 (11/21/19) when Jacoby Brissett's Indianapolis Colts visit Deshaun Watson's Houston Texans. Dak Prescott's Dallas Cowboys visit Tom Brady's New ...