We've all become hawks when it comes to banking excess. Now that our money is helping prop up these teetering titans, we're primed to pounce on the next whisper of year-end bonuses or company retreats.
But what happens when the lens turns back at us - when a little extravagance helps out the hometown?
Wells Fargo is cutting spending on the Wachovia Championship golf tournament that starts in April, Bloomberg is reporting.
Wells Fargo, which acquired Wachovia Corp. in December, has a sponsorship contract with the PGA Tour through 2014. The company is reducing costs of the tournament, including some related to client entertainment, said spokeswoman Mary Beth Navarro, but the specifics haven't been determined.
Until now, the Wachovia has cultivated a reputation on the Tour as a top-notch tournament, from the cars the players drive in Charlotte to the perks their wives get to the swankness of the corporate parties.
All of which might be bothersome in this economic climate, especially when the name in the tournament title is getting billions in bailout aid.
The PGA's elite don't come to Charlotte merely for the pricey perks; the challenging Quail Hollow course and less-cumbersome pro-am setup are two big draws, players say. But the tourney's glossy feel from Thursday to Sunday certainly contributes to the lure - not to mention the puffed chests and good press this city gets each year.
Even if those perks stay intact, cutting some non-player luxuries means cutting back on things local businesses provide. Excess helps stir commerce - in this case our commerce.
It's easier, maybe, to understand why Las Vegas mayor Oscar Goodman is exasperated at public criticism that has caused Citibank, Goldman Sachs and, yes, Wells Fargo to pull out of meetings in his city.
Outrage isn't so simple when the benefits you're sneering at might ultimately benefit you.
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Your Morning Edge:
The government is fully back into the student loan business, the New York Times reports.
A list of what President Obama might be cutting when he unveils his budget today, from CNN.
Renting a home isn't so much of an advantage now, the Wall Street Journal reports.
Thursday, February 26, 2009
The other side of banking outrage...
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33 comments:
These are not any perks to me. Let all that crap fall by the wayside.
It is expensive and it is also cost effective marketing for a nationwide banking brand. These things are measured on a cost-per-impression basis as well as a brand awareness basis. They would not be spending the money if it did not produce a good return on the investment for the shareholders.
Further, much of the expense is contractually obligated years in advance, so while cutting expenses is possible in some areas, it not possible at this date to significantly reduce the expense.
Why is it still called The Wachovia? Wouldn't Wells Fargo want it to reflect parent bank's name?
In case you haven't noticed, they haven't rebranded yet. The signs on the bank branches all still say Wachovia.
Fat cats! Fat cats! Fat cats!
These fancy pants bank bosses and their country clubs. Those rotund felines don't deserve their fun. How dare banks that my government owns shares in engage in any marketing whatsoever! I want those portly animals to wither on the teat. I don't care if I ever see any return on investment!
It is probably still called The Wachovia to save money. The Wachovia logo is on everything from hats to shirts to tickets to signage.
If the name is changed to Wells Fargo, you have to throw all of the signage into the dumpster and reduce the cost on all of the logo branded apparel.
It would be easier to transition at some point after this event or down the road after bailout money.
Pete, Duke Energy is announcing this AM it is taking over the Wachovia Tower Uptown. What does that tell you about the future of the little Quail Hollow junket?
And: "They would not be spending the money if it did not produce a good return on the investment for the shareholders."
Huh?
JAT
Pete,
The idea that the Wachovia is good for our town's image and allows us to 'puff our chests out' a bit is one only the Uptown Crowd and the like care about. The average guy COULD CARE LESS about what hosting the Wachovia Championship does for the image of this town. Total crap.
The average Charlotte citizen is lucky to just get in to watch the tournament let alone attend one of the swanky corporate parties or after-parties. The average Charlottean is attempting to pay his mortgage on a home worth less than it was last year, not giving a hoot about our image and ego. Why does the observer constantly obsess over image and our status?
We have 3,000+ homeless children in Charlotte today. Do you think it matters to them what our city's image is?
While our government hands out billions and corporate execs attend parties entertaining clients my taxes go up, the education CMS gives my kids gets worse (b/c the are cutting teachers) and your worry about our image. Nice priorities.
The average guy should care about these sorts of things - they create jobs in many different ways. There are the direct impacts of these things - local restaurants and hotels do more business (and generate more tax revenue), companies provide support services from food and beverage to signs to fuel for transportation. The airport and rental car companies get more business (and again contribute more in taxes.) Even more important, but more subtle, companies see this and say "Charlotte looks like a nice place to have a business, the community is active and vibrant, they have major events like this and they have enough people with disposable income to attend."
I personally get nothing from this, but these sorts of things - see also races, basketball tournaments, concerts, etc. - generate a lot of business and tax revenue.
I don't see how it is wrong to take a closer look at some of this spending. Allowing the city to puff its chest may just not be a luxury that we have now sort of like how on a personal level heading out to Lake Tahoe for a ski trip is something I've decided to skip this year.
For those of you who gripe about this not being important because of the fat cats and their perks. You miss the point about the lower rank employees who work on these type of projects all year long. No, they don't make more than 40K a year and work very hard to promote this event which helps the economy of this town. Everyone wants the top of these organizations to fall, well guess what people, when they fall, they land on the front line workers who are working at just trying to make a living.
If you really want to stop wasteful spending by banks and finalcial firms abolish the billions in community reinvestment loans they are required to make to areas and people who can't pay them back and the 100's of millions in charitable donations they voluntarily make to the community each year. The TARP loans could be paid back probably within a year and people on a fixed income could start getting their dividends again.
I think the championship is one of the most exciting events in Charlotte each year. Pricing for the event allows for the average consumer to the corporate executive access.
$140 for access all week (7 days)!
$25 for the practice pack Mon-Wed.
$40-$50 per day for Thurs-Sunday.
I don't think you can get much better pricing for a premium professional sporting event, period.
Oh, and please don't forget that the championship also contributes significantly to Teach For America each year.
To Anonymous @9:51
The idea that golf tournaments, nascar halls of fame, whitewater centers and basketball arenas all create jobs 'for the little guy' and we should be ever-so-thankful for them is bunk.
I could use the same arguement for spending for my own family: go out and run up $100k on credit cards - taking my kids to disney world, sea world, buying a new car, doing all sorts of things. In the end I have stimulated the economy and helped create jobs, plus provided fun times for my family, right? Problem is at some point, I'm going to get a bill in the mail from the credit card company saying I have to pay back that $100k I just spent stimulating the economy and providing fun times for my family. And I don't have that extra $100k sitting around.
In case you miss my point I'll spell it out for you. All this frivolous spending (and yes, the whitewater center is frivolous. Sorry.) has a cost attached to it. We (as in you and me - the taxpayers) have to pay for all this stuff at some point. So no matter how good I feel helping provide jobs I have to look at the cost to get that effect. Business executives call that ROI - Return On Investment. Politicians are not familiar with the term, I guess.
At some point we taxpayers have to pay back all these billions being spent bailing out BoA, building whitewater centers, and basketball arenas. And when that bill comes due it will not be pretty. It will be a HUGE tax increase for all of us. So the idea that we're creating jobs for the little people and should feel good about it comes with too big of cost associated with it.
Lastly, add to this the fact us taxpayers are subsidizing the Wachovia and the corporate events and that some midlevel VP from BoA and Well-Wachovia will be entertaining clients and buying drinks at the golf tournament and I, as a taxpayer, get to help pay for that...well that ticks me off. It's BS.
My husband's work hours have been cut to 15 a week for several months in order to not layoff any employees and still be able to keep our health insurance. I support two aging parents and have a mortgage to struggle with while I watch our 401K go down the tube.
Approaching retirement- we have little to look forward to- The Wachovia Championship is just one of the events in this town that our livelihood depends on. When corporation and special events start shutting down or cutting back it effects the little guy also. Don't be to quick to judge- there is always two sides to these situations.
8:44 - great question.
8:59 - lousy answer.
The Charlotte/Quail Hollow event garners exceptional local, regional, national, and global coverage. The primary reasons are (i) great golf course, (ii) attracts a great field, (iii) Tiger (and no guarantee he shows up every year). Having said all that, NONE of it would happen without Johnny Harris, his extraordinary efforts, and the unsurpassed rolodex he owns ;-)
This is the perfect platform for Wells Fargo to promote the combined brand in all the locales listed above. However, I am of the opinion that Wells was walking away from this event after '09 regardless of what happened with TARP or any other thing. These developments give them a viable reason to do just that, walk, and who can blame them?
However, as Charlottean's you you should all use this opportunity to close your Wells Fargo/Wachovia accounts and re-open them over at Bank of America, your hometown bank needs your support. Wells has abandoned your hometown, you should abandon Wells Fargo.
10.47 - right on about Nascar museum, wrong on golf tourney.
Nascar tapped a lot of local taxpayer dollars -- the Quail Hollow event taps none.
Just look around the web a little and you will see that Wells Fargo has consistently and aggressively driven home the point that 100% of the TARP $$$'s go for loans, and ONLY loans.
Further, since Wells has so aggressively said they "didn't want the money", and further said they "don't need the money"...I fully expect that they will pay it back as soon as stress test results are finished (about a month).
Right Wells?!?
Points well taken. As a member of Quail Hollow, I'm good either way - sure it is nice to have the Wachovia Championship; the downside being that while the tournament is in town, I have to play that dog track of course at Myers Park C.C... now that I think about it, I'm good either way.
- Sincerely, Wellington IV
Only PGA event in America where you will see spectators wearing jean shorts and Dale Jr T-Shirts.
Careful what you people wish for. Throw mud at the banks, but I'm sure you're the first to take advantage of that freebie corporate ticket when it's thrown at you, right?
Anonymous 10:51 wrote:
"However, as Charlottean's you you should all use this opportunity to close your Wells Fargo/Wachovia accounts and re-open them over at Bank of America, your hometown bank needs your support. Wells has abandoned your hometown, you should abandon Wells Fargo."
BofA employee?
Wells has NOT abandoned Charlotte, and the best way to keep as many Wachovia jobs here as possible is by maintaining those accounts. As for moving to Bank of America, yeah, they are doing really well right now, eh?
Wachovia has long led the industry in customer service, and Wells has committed to embracing that culture. Why would you want to move to a bank that is coming under increasing pressure and is moving hundreds, if not thousands of jobs overseas?
anonymous 11:52, jean shorts and t-shirts? Have you actually attended this event?
Adam West I agree with you astute assessment of the situation. These country clubs are monuments to the excess of the inflated aristocatic curmudgeons that have overseen the gross mishandling of our nation’s wealth! Their country club membership cards should be affixed to their chests and worn as modern day scarlet letters so that the proletariat can identify and actively rise up against these bloated elitists!
Had Wachovia held on for a week they could have gotten the Bush bank bailout funds a couple months ago and instead the FDIC got involved because CitiBank wanted to buy it when in CitiBank was in worse shape than Wachovia and Wells Fargo got in the picture causing the lawsuit by Citi that was a joke.
Wachovia was a major loss for Charlotte and was totally avoidable had they known Bush was going to have Paulsen allow the banks to borrow up to 700 billion.
Its to bad Wachovia cant get out of the WF deal but its tool late now and now one of the 2 biggest banks in America headquartered in Charlotte will vanish after 130 yrs in business coming from Winston Salem a decade ago and merging with another large Charlotte bank First Union.
The more tragic part is Charlotte could have had 3 major top 10 bankswith BOA Wachovia and 1st Union had it played its cards right.
Now all this is left is BOA who could go under and stupid stupid arrogant Ken Lewis who paid 50 billion for Merrill Lynch when he could have had for ZERO.
Lewis should have been run out of town months ago. This guy is a chump of all chumps and refuses to acknowledge his screwups even after taking close to 50 billion off the fed.
Wellington,
Didn't you hear the Bozo Board at MPCC spent a bunch of money they didn't have to redo a perfectly good golf course? The new version is nice, but the changes weren't necessary. Hey, it's the American way, gobs of debt, no problem!
John,
Definitely NOT a BofA employee. No dog in the fight at all, just an interested observer. John, have you read Hugh McColl's book? Go read the part about the Nation's-BofA merger and then ask some people from San Fran how it worked out for them. Wells has committed to NOTHING! The 11-1 executive committee composition is a stark sign you should not ignore. Sure, BofA is struggling (trust me, they all are, including Wells), but like it or not BofA are the hometown bank in Charlotte now. Dollars to Krispy Kreme's that before it's over Wells is in the exact same boat as BofA - just stay tuned.
12.47,
Wells would LOVE to get out of the Wachovia deal if they could - you stay tuned too.
Points well taken, but Adam West & 1231 - Fat Cats & Bloated elitists... what makes me an elitist? Does the fact that I make more money than you, own nicer homes than you, drive fancier cars than you, belong to better clubs than you, have smarter children attending better schools than you? Do my successes and material possessions make me an elitist? Or do they just make you jealous.
Sincerely, WT IV
I say cancell the tournament all together. It should not be called the Wachovia Championship, perhaps the "Greedy Bankers Open" or maybe the "Wachovia Bailout Open"...Aw shucks, just call it the "I'm a Big Loser" tournament which I think will cover it all...
No bank that gets federal bail out funds should be allowed to waste the money on naming rights or sponsorships.
If Charlotte wants to be considered a "big city" and continue growing in that direction, events like The Wachovia Tournament are what big cities host. It doesn't matter if you like golf or not. These types of events bring people here, they spend their money, and they decide to do business here. All of which are good for the local economy and growth. These types of events also do a lot for local charities when they visit. People in Charlotte need to decide what they want this city to be (big or small). If we want to stay competitive in order to gain new businesses and diversify our business market (which I hope we now realize the importance of), we need these types of events and I support them.
The town of Clemmons NC east of Winston-Salem lost it sponsorship and lost its contract for a senior PGA tour. Clemmons has not seen the growth and prosperity that it had for so long in years past.
Charlotte has numerous golf courses in the surrounding area that see increased interest in golf and events due to the Wachovia being here in Charlotte. These courses employee thousands of Families indirectly. One being myself
If Wells Fargo drops sponsorship, the PGA will offer that tour date to another city where the residents understand and appreciate them.-----Charlotte losses how much income?
Holy cow! Will the decimated pasture where a Saks 5th Ave. deal went belly-up years ago adjacent to Quail Hollow CC still be able to hide the atrocity behind a chain link fence with large pictures of rich pretty people plastered on it? What about the pink rose bushes that were planted around the fence in an attempt to disguise this disastrous weed infested mess? What will OUTSIDERS think!
Of course, it is difficult to sell to outsiders the attractive nature of the town to new business when these same well-to-do entrepreneurs have seen Didi's Ditch for many years in a row as they are driven from the middle class of Park Road to the Shangra La of the well heeled!
@12:56 Your run on sentences and utter lack of cadence assure me that the only time you drive fancy cars is when you’re working your night job as a valet at Uptown Cabaret. As for the clubs to which you’re a member, I’m not sure that Club Tan and Sam’s Club qualify you in this regard. Though I imagine Sam’s Club facilitates your indulgence of the insatiable appetites of your no doubt morbidly obese children. I’m sure that whatever school they waddle into is no doubt ruined by their blank stares and educational ambivalence caused by the cerebral atrophy they’ve suffered listening to drone on for years. I would also wager that these sausage fingered cretins that you call offspring have added nothing to the intellectual discourse and spend their time in class sending inane texts about Miley Cyrus and other corporate puppets to which you eagerly turn over your hard earned valet dollars.
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