It's not just about goodwill; it just makes business sense

by Kirkendall on Jan 28, 2009 1:07 PM EST in Analysis Comment 8 comments

Paul Daugherty inaccurately points out that Paul Brown Stadium is one of the major causes for Hamilton County's financial struggles. Not that millions of lost jobs in the past month, depleting state-wide funds (some states claiming bankruptcy) because of a massive federal deficit has anything to do with it. Daugherty's final point is that "It's not Mike's problem. He could offer some of the solution, though." What incentive does Mike Brown have offering anyone anything? He's blasted, torn down, cursed out, publicly shamed and made fun of by people in the same county. Where's the incentive? Goodwill? Please. As soon as he did something like that, the "goodwill" goes unnoticed, and if it's not forgotten, it's too little too late in the minds of Hamilton County residents. We're not defending Brown -- we rarely do. But it wouldn't surprise me if that were his thought process.

Personally, we agree with Daugherty, but not for the sake of goodwill. It just makes financial sense to us. Helping the county helps residents and fans alike with more money to spend casually with additional prospect increasing the franchise's revenue benefits the team more than doing nothing. Goodwill is nice and all, and is too often a forgotten quality. However, helping the county helps Brown because it helps more people buy more things. There. You have a logical, business sense reason that would be more appealing.

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The Economist in me had to step in here for a moment. It’s fallacy to think that by giving the city $10 million you will ever see more than that 10 million trickle back in revenues. It’s like all the supply-side Republicans who used to claim that you could raise revenues by cutting taxes. It just doesn’t happen.

Ignoring the city and county is Brown’s best financial choice unless you can construct some goodwill argument (i.e. avoidance of a massive boycott). When a company gives to charity, it’s to increase that good will, not in any hope of the charity money coming back to them through spending.

by math_geek on Jan 28, 2009 1:22 PM EST reply actions 0 recs

Workers

You have to remember workers, government workers, who are also laid off, which would have a trickle down effect joining the unemployment lines. Thing about it is, Hamilton County workers, the base of those that go to PBS are being laid off.

Blogger at CincyJungle.com -- SB Nation Cincinnati Bengals blog.

by Kirkendall on Jan 28, 2009 1:34 PM EST up reply actions 0 recs

Then again.

I’m hardly an economist. About the only thing I know about money is a limited understanding about the salary cap… usually my bank has glossy eyes when I bring that up!

Blogger at CincyJungle.com -- SB Nation Cincinnati Bengals blog.

by Kirkendall on Jan 28, 2009 1:38 PM EST up reply actions 0 recs

The basic idea is this.

Let’s say I own a Pizza place in Cincinatti. I see that the city is struggling, so I give the city 60,000 dollars to keep one worker employed. That worker is going to save some of that money and spend some of it. The people that worker pays will do the same, and so on and so forth. However, because some of that money is being saved every step of the way, 60,000 will never see it’s way back to my pizza place. You can model it as follows -

Step 1 Pizza 10,000, Savings, 10,000, Other 40,000
Step 2 Pizza 10,000, Savings, 10,000, Other 20,000
Step 3 Pizza 10,000, Savings, 10,000, Other 0

So I get 30,000 back on a 60,000 investment. Doesn’t sound like a great deal to me.

by math_geek on Jan 28, 2009 3:12 PM EST up reply actions 0 recs

OK

So you’re saying Mike Brown giving back to Cincinnati would be meaningless, because that “investment” wouldn’t be returned to either the citizens or the team itself.

Blogger at CincyJungle.com -- SB Nation Cincinnati Bengals blog.

by Kirkendall on Jan 28, 2009 3:24 PM EST up reply actions 0 recs

Oh NO

I said it wasn’t going to turn him in a financial profit to do so. Let me be absolutely clear on this.

I give to charity not because I plan on benefiting financially from it (I’m quite aware that I don’t) but because I believe I have a moral obligation to and because I want to live in a more free and stable society. Altruism is a necessary element of being a respectable human being.

Mike Brown should give back to Cincinatti out of a sense of gratitude for the city that’s taken such good care of him, or because it’s simply the morally and socially right thing to do. However, it is, in fact, a sacrifice. It’s not going to benefit him personally (at least money wise. Might give him some goodwill and maybe a sense of pride).

But, while I’m a relative expert on economics, I’m an amateur at morality.

by math_geek on Jan 28, 2009 4:51 PM EST up reply actions 0 recs