Rose Bowl is about football -- and marketing

When Pasadena staged the initial Rose Bowl Parade in 1890, the civic venture was viewed as much as a marketing gambit as something for the proud locals to do on New Year's Day.

Here's what an early parade backer had to say about the affair:

In New York, people are buried in snow. Here our flowers are blooming and our oranges are about to bear. Let's hold a festival to tell the world about our paradise.

Now, with the unemployment rate rising, housing prices still falling, Detroit imploding and the global economy stalled, the parade and the football game (that first was played in 1902) remain, at heart, a marketing gambit.

Sure, the festivities make for a fun weekend, but they're also supposed to draw free-spending consumers -- as well as media attention -- to Pasadena and Southern California. So how effective are the game and parade when it comes to providing a boost to the economy?

After the 2005 events, the UCLA Anderson School of Management estimated the direct economic impact of the game and parade on Southern California at $189 million. The study also suggested that the Rose Bowl activity also generated $181 million in indirect spending across Southern California.

In November, the City of Pasadena made public some data contained in a study conducted by the USC Sports Business Institute. The study completed in the wake of the Jan. 1, 2008, festivities estimated the economic impact of the game alone on the Pasadena economy at $58.6 million. (That figure included $38.6 million in estimated direct economic impact and another $20 million in indirect spending.)

No one questions the fact that sports is a big business. The Los Angeles Sports Council estimates that sports (including professional baseball, basketball and hockey and such special events as the Rose Bowl game) drive $4.1 billion in economic activity in Los Angeles and Orange County.

But, just as Penn State and USC fans will beg to differ on which university has the better football team, sports-minded economists are quick to argue over the merits of studies that attempt to define the economic impact of big games.

"Independent studies consistently show that there just isn't much of an impact from these events," said Dave Berri, an associate professor of economics at Southern Utah University.

No matter if it's the Super Bowl, Rose Bowl or America's Cup, the result is the same, said Berri, a blogger at the Sports Economist and co-author (along with Martin Schmidt and Stacey Brook) of "Wages of Win," which examines the economics of sports.

David Carter, executive director of the USC Sports Business Institute, admits to wearing Rose-colored glasses. He also acknowledges that economic estimates are open to debate. But he contends that the Pasadena study provides strong evidence of tangible economic benefits within the city limits.

He also points to "intangibles" generated by the millions of eyeballs around the world

that are fixed on Pasadena during the Rose Bowl parade and game. "How do you measure the value of that global notoriety and branding each year," Carter asked. "And what's the inherent value to Pasadena next year," he adds, when the Rose Bowl is scheduled to host both the traditional "granddaddy of all bowl games" on Jan. 1, 2010, as well as the BCS Championship Game a week later?

Meanwhile, as this year's kick-off draws closer, two forces are expected to slow consumer spending.

"The economy is a little bit tougher," said Jack Keyser, chief economist for the Los Angeles Economic Development Corp. "So you might not get the full impact of the Nittany Lions, even though they have a tradition of traveling well to these big games."

"Consumers in general are either traveling less, or, when they do travel, spending less time and money," said Bruce Baltin, a Los Angeles-based senior vice president at PKF Consulting, which monitors the hospitality industry. "Naturally, the recession has got to have an impact this year."

There also could be a bit of "USC fatigue," given that the Trojans have played in four of the last five Rose Bowl games -- and the fact that this year's game isn't for all of the BCS marbles.

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Source: LA Times Blog

Focus group

A focus group is a form of qualitative research in which a group of people is asked about their attitude towards a product, service, concept, advertisement, idea, or packaging. Questions are asked in an interactive group setting where participants are free to talk with other group members.

Ernest Dichter originated the idea of having a "group therapy" for products and this process is what became known as a focus group.^[1]

In marketing

In the world of marketing, focus groups are seen as an important tool for acquiring feedback regarding new products, as well as various topics. In particular, focus groups allow companies wishing to develop, package, name, or test market a new product, to discuss, view, and/or test the new product before it is made available to the public. This can provide invaluable information about the potential market acceptance of the product.

In social sciences

In the social sciences and urban planning, focus groups allow interviewers to study people in a more natural setting than a one-to-one interview. In combination with participant observation, they can be used for gaining access to various cultural and social groups, selecting sites to study, sampling of such sites, and raising unexpected issues for exploration. Focus groups have a high apparent validity - since the idea is easy to understand, the results are believable. Also, they are low in cost, one can get results relatively quickly, and they can increase the sample size of a report by talking with several people at once. (Material based on: Marshall and Rossman, Designing Qualitative Research, 3rd Ed. London: Sage Publications, 1999, p. 115)

Traditional focus groups

In traditional focus groups, a screened (qualified) group of respondents gathers in the same room. They are screened to ensure that they are part of the relevant target market and that the group is a representative subgroup of this market segment. There are usually 6 to 10 members in the group, and the session usually lasts for 1 to 2 hours. A moderator guides the group through a discussion that probes attitudes about a client's proposed products or services. The discussion is loosely structured, and the moderator encourages the free flow of ideas. The moderator is typically given a list of objectives or an anticipated outline. He/she will generally have only a few specific questions prepared prior to the focus group. These questions will serve to initiate open-ended discussions.

Client representatives observe the discussion from behind a one-way mirror. Participants cannot see out, but the researchers and their clients can see in. Usually, a video camera records the meeting so that it can be seen by others who were not able to travel to the site. Transcripts can be created from the video tape. If the participants speak a different language than the clients, a simultaneous interpreter may be used.

Researchers examine more than the spoken words. They also try to interpret facial expressions, body language, and group dynamics. Moderators may use straight questioning or various projective techniques, including fixed or free association, story-telling and role-playing. Focus groups are often used to garner reaction to specific stimuli such as concepts, prototypes and advertising.

It is often suggested that respondents feel group pressure to conform and this can contaminate the results. Others hold that by using trained and experienced moderators who appropriately manage the discussion, this potential problem can be mitigated. Further, despite the potential for groupthink, marketers and sociologists find that group dynamics are useful in developing new streams of thought and covering an issue thoroughly.

Types of focus groups

Variants of focus groups include:

• Two-way focus group - one focus group watches another focus group and discusses the observed interactions and conclusion
• Dual moderator focus group - one moderator ensures the session progresses smoothly, while another ensures that all the topics are covered
• Dueling moderator focus group - two moderators deliberately take opposite sides on the issue under discussion
• Respondent moderator focus group - one or more of the respondents are asked to act as the moderator temporarily
• Client participant focus groups - one or more client representatives participate in the discussion, either covertly or overtly
• Mini focus groups - groups are composed of four or five members rather than 8 to 12
• Teleconference focus groups - telephone network is used
• Online focus groups - computers connected via the internet are used

Traditional focus groups can provide accurate information, and are less expensive than other forms of traditional marketing research. There can be significant costs however : if a product is to be marketed on a nationwide basis, it would be critical to gather respondents from various locales throughout the country since attitudes about a new product may vary due to geographical considerations. This would require a considerable expenditure in travel and lodging expenses. Additionally, the site of a traditional focus group may or may not be in a locale convenient to a specific client, so client representatives may have to incur travel and lodging expenses as well.

The use of focus groups has steadily evolved over time and is becoming increasingly widespread.

Problems and criticism

However, focus groups also have disadvantages: The researcher has less control over a group than a one-on-one interview, and thus time can be lost on issues irrelevant to the topic; the data are tough to analyze because the talking is in reaction to the comments of other group members; observers/ moderators need to be highly trained, and groups are quite variable and can be tough to get together. (Ibid.) Moreover, the number of members of a focus group is not large enough to be a representative sample of a population; thus, the data obtained from the groups is not necessarily representative of the whole population, unlike in opinion polls.

A fundamental difficulty with focus groups (and other forms of qualitative research) is the issue of observer dependency: the results obtained are influenced by the researcher, raising questions of validity. The issue evokes associations with Heisenberg’s famous Uncertainty Principle. As Heisenberg said, "What we observe is not nature itself, but nature exposed to our method of questioning." Indeed, the design of the focus group study (e.g. respondent selection, the questions asked, how they are phrased, how they are posed, in what setting, by whom, and so on) affects the answers obtained from respondents. In focus groups, researchers are not detached observers but always participants. Researchers must take this into account when making their analysis (Based on: Tjaco H. Walvis (2003), “Avoiding advertising research disaster: Advertising and the uncertainty principle”, Journal of Brand Management, Vol. 10, No. 6, pp. 403-409).

Douglas Rushkoff^[2] argues that focus groups are often useless, and frequently cause more trouble than they are intended to solve, with focus groups often aiming to please rather than offering their own opinions or evaluations, and with data often cherry picked to support a foregone conclusion. Rushkoff cites the disastrous introduction of New Coke in the 1980s as a vivid example of focus group analysis gone bad.

United States government use of focus groups

The United States federal government makes extensive use of focus groups to assess public education materials and messages for their many programs. While many of these are appropriate for the purpose, many others are reluctant compromises which federal officials have had to make as a result of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) The bureaucratic procedures require the federal researcher to go through a very elaborate justification of why he/she needs to conduct a survey or any study that will involve more than 10 people. The researcher must also have the complete methodology approved by the Office of Management and Budgetof the Executive Office of the President--not always the paragon of scientific objectivity. Often, the labor for the approval is far greater than the labor to do the research. Federal researchers most often take the path of least resistance and use 9 person focus group or even several of these with different questions asked. So there are many federal focus groups and few surveys or other type studies independent of whether a focus group is the best or even appropriate methodology.

• References

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Source: Wikipedia

David Gregory to Host ‘Meet the Press’

NBC News officially announced on Sunday morning that David Gregory, its longtime correspondent, would become the permanent moderator of “Meet the Press,” the network’s Sunday political discussion program. It had been expected that Mr. Gregory would replace Tim Russert, who died of a heart attack in June.

The network used the appearance by President-Elect Barack Obama on Sunday to name Mr. Gregory, who will start next week. The interim moderator, Tom Brokaw, formally introduced the 38-year-old Mr. Gregory at the end of his interview with Mr. Obama.

Mr. Brokaw announced that this Sunday would be his last as what he called “the temporary moderator” filling in for his longtime friend, Mr. Russert, and identified Mr. Gregory as both another great journalist and personal friend.

He noted that because of the election and the economic crisis and what he called “a critically important time for the country” that “more people are paying attention” to “Meet the Press” and the other network Sunday programs.

Mr. Gregory said called the appointment “an incredible honor,” and promised to follow Mr. Russert’s advice to “hold leaders accountable.” He added, “It’s all about preparation” and said he would take on the job “with great purpose.”

The interview had been taped Saturday; “Meet the Press” was first broadcast starting at 9 a.m. in Washington.

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Source: NY Times

Harold Simmons

Harold Clark Simmons (born 1931, Golden, Wood County, Texas)^[1] is an American businessman whose banking expertise helped him develop the acquisition concept known as the leveraged buyout (LBO) to acquire various corporations. He is the owner of Contran Corporation and of Valhi, Inc., (a NYSE traded company about 90% controlled by Contran).^[2] As of 2006 he controlled 5 public companies traded on the New York Stock Exchange: NL Industries; Titanium Metals Corporation, the world's largest producer of titanium; Valhi, Inc., a multinational company with operations in the chemicals, component products, wastemanagement, and titanium metals industries; CompX International, manufacturer of ergonomic products, and Kronos Worldwide, leading producer and marketer of titanium dioxide.^[3] As of 2007^[update] he has an estimated net worth of around $7.4 billion dollars.^[4]

Education and Early Life

Both of Simmons' parents, Leon and Fairess Simmons, were teachers who stressed the value of a good education. Simmons' father was a school superintendent, and his mother was an English teacher.^[5] Simmons has BA (1951) and MA (1952) degrees in agricultural economics from the University of Texas at Austin.^[6] Simmons hold a Phi Beta Kappa key.^[7][8]

Career

• After completing graduate school in 1952, Simmons worked for the U.S. government as a bank examiner, then for a Dallas-based bank, Republic National Bank.^[9]

• University Pharmacy and Jack Eckerd Corporation: In 1960, using $5,000 of his savings, and a $95,000 loan, he bought a small drugstore,University Pharmacy on Hillcrest Avenue, across from the campus of Southern Methodist University.^[10] Before Simmons owned it, University Pharmacy was the site of a racially charged sit-in in January, 1961, when its owner C.K. Bright sprayed insecticide over and around 60 students, only 2 of whom were black seminary students.^[11] Simmons purchased the store and parlayed it into a chain of 100 stores. which in 1973 he sold for more than $50 million, to Eckerd Corporation. This launched his career as an investor, when he used the proceeds of that sale to begin speculation in the financial services industry. By 1974, he had been indicted for and acquitted of wire and mail fraud, and involved in a pension-related lawsuit brought against him by the United Auto Workers.^{[12] [13]}

• Simmons developed his "all debt and no equity" philosophy of capital managment from having observed banks as a bank examiner, realizing that "Small banks in Texas were casual about getting the maximum use of their funds. . . banks were the most highly leveraged thing I saw. They borrowed most of their money and really didn't need much equity except for purposes of public confidence." Understanding that banks could be bought entirely with borrowed money, Simmons theorized that he should "buy a bunch, because one bank could be used dto finance another. All debt and no equity."^[14]

• Known as a formidable corporate raider, Simmons' acquired the nickname "The Ice Man" in the 1980s. ^[15] Simmons is a "value investor" whose style has been to acquire control of publicly traded companies and to strategically enhance their operations.^[16] Simmons has "acquired and profitably disposed of significant equity positions in a number of companies including GAF Corporation, Sea-Land, Southwest Airlines, Muse Air, PSA, McDermott Intl., Georgia Gulf Corporation, Kerr Glass, Amalgamated Sugar Co., Medford Corp., Sybra, Inc., Valhi, Inc., and Lockheed Corporation.

• Simmons conducted a widely publicized but ultimately unsuccessful takeover attempt on the Lockheed Corporation, after having gradully acquired almost 20 per cent of its stock. Lockheed was attractive to Simmons because one of its primary investors was the California Public Employees' Retirement System (CalPERS), the pension fund of the state of California. At the time, the New York Times said, "Much of Mr. Simmons's interest in Lockheed is believed to stem from its pension plan, which is overfinanced by more than $1.4 billion. Analysts said he might want to liquidate the plan and pay out the excess funds to shareholders, including himself." Citing the "mismanagement" of its chairman, Daniel M. Tellep, Simmons stated a wish to replace its board with a slate of his own choosing, since he was the largest investor. His board nominations included former Texas Senator John Tower, the onetime chairman of the Armed Services Committee, and Adm. Elmo Zumwalt Jr., a former chief of Naval Operations.^{[17] [18]} When Simmons had first begun accumulating Lockheed stock in early 1989 when deep Pentagon cuts to the Defense budget had driven down prices of military contractor stocks, analysts had not believed he would attempt the takeover, since he was also at the time pursuing control of Georgia Gulf.^[19]

• In the 1987 stock market crash, Simmons made a significant portion of his fortune. In an interview ten years after that crash Simmons said," The day they had the big stock market crash, I came away with several hundred million dollars in stock. . . over the years, things have worked out so well that I probably made $5 billion out of the deal."^[20] Simmons was referring to NL Industries, formerly known as National Lead Industries, which was a titanium company on the books as a worthless discontinued operation. Simmons didn't know he owned it for 2 or 3 years, but it eventually became worth about $6 billion.^[21]

• In 1997 Simmons made a $5 million investment in T. Boone Pickens, Jr.'s first fund BP Capital Energy Commodity Fund; by 2005 this had grown to $150 million.^[22]

Capital Gains Tax Opposition & Activism

In 1964, Simmons set up a trust for his daughters, based on a single drugstore worth $33,000.^[23] By the 1990s Simmons had placed the bulk of his fortune, including homes, vehicles, a Falcon jet, and controlling stakes in two companies into two trusts to benefit his daughters and their descendants, to shield his assets from creditors, tax collectors, and their mother, his ex-wife.^[24] The trusts later were challenged by two of his daughters who brought suit against him in 1997 who accused him of using the trusts illegally for political purposes.^[25]

In August 1997, President Bill Clinton used a line-item veto to draw attention to the type of "special benefits" that investors such as Simmons employ to avoid paying capital gains taxes since the early 1980s. Simmons had formed the "Snake River Sugar Cooperative" of 2,000 beet farmers and classified it as a joint-venture, shared ownership co-op, to purchase his Amalgamated Sugar Company, for $260 million. At the time, Charles Schumer, serving as a House Representative from New York, wrote a letter to Clinton stating that the measure before him for consideration would benefit Simmons with a $104 million tax deferral. Simmons stated at the time that his tax deferral was only $80 million.^[26]

Political activism

1980s During the Ronald Reagan presidency, Simmons was a contributor to GOPAC, the political action committee originally founded by Newt Gingrich when he was Speaker of the U.S. House of Representatives. Simmons also contributed to the defense funds of Oliver North and John Poindexter, Reagan aides implicated in the Iran-Contra scandal.

1990s In 1993, Simmons was fined $19,000 by the Federal Election Commission for exceeding the legal limit of campaign contributions in 1989 and 1990 elections.^[27]

Between 1993 and 1997, Simmons and family members and Contran gave more than $315,000 to Republican candidates, according to FEC records.^[28]

Family Trust battle: When the Internal Revenue Service judged in 1996 that one of Simmons' two family trusts was used as his own property and therefore subject to tax law,^[29] two of Simmons' four daughters sued him, alleging that he had mismanaged the two trusts he had created for them, valued at that time at one billion dollars, that he had forced them to sign blank letters for political contribution purposes to use for whatever cause he saw fit, that he had contributed money in their names to causes and campaigns that they themselves opposed, and that he had pressured them into making "illegitimate" and "illegal" campaign contributions from the trusts he had established for them.^[30] After a publicly acrimonious Dallas probate court battle that lasted eight weeks, Judge Nikki DeShazo declared a mistrial.^[31] The suit was settled when Simmons agreed to give each of the two daughters $50 million, if they would reliquish all claim to his remaining wealth, which at that time was estimated to be at $1.2 billion. Simmons other two daughters remained the beneficiaries of his wealth. The FEC launched an investigation into the contributions to political campaigns that he had made in his daughters' names.^[32]

2004 presidential election During the 2004 presidential campaign Simmons made a $4 million donation to the controversial and widely discredited group Swift Vets and POWs for Truth, along with Houston homebuilder Bob Perry and Dallas oilman T. Boone Pickens.^[33] He also donated $100,000 to George W. Bush's January 2005 inaugural ball.^[34]

2008 presidential election Simmons, a longtime Republican donor, gave the maximum $2,300 contributions to Senator John McCain last year, as well as to former Governor Mitt Romney and to former Mayor Rudy Giuliani. He's listed as a bundler for the McCain campaign on McCain's website, which says he's raised between $50,000 and $100,000 for the Republican candidate. He's also contributed to Rep. Chet Edwards, a Texas Democrat.^[35] Simmons has given more than $500,000 to Texas governor Rick Perry, and more than $300,000 to Texas Lt. Governor David Dewhurst and Attorney General Greg Abbott.^[36] donor to the American Issues Project, an independent political group with 501(c)4 tax status that created and bought airtime for ads accusing 2008 Democratic presidential candidate Senator Barack Obama of having ties to William Ayers, who had been a member of the Weather Underground.^[37] Obama's political platform had proposed reductions in the capital gains tax codes that would affect investors such as Simmons. AIP's advertisements were so widely discredited that two television networks went so far as to refuse to run the ads on the grounds they implied a connection existed between William Ayers and Barack Obama as well as appearing to be in violation of campaign finance laws. The ads were aired for a short while in the battleground states of Michigan, Ohio, Pennsylvania and Virginia at a cost of $2.8 million.^[38] A complaint against the American Issues Project was filed with the Federal Election Commission on October 10, 2008, by a campaign finance watchdog group, Democracy 21, which alleged that AIP conducted its operations illegally, since 501(c)4 groups must declare that their purpose is not to influence the outcome of elections while their ad was clearly intended to smear Presidential candidate Barack Obama.^[39]

Environmental Management

• NL Industries, originally named National Lead Industries, Inc. has been involved in numerous lawsuits brought by the U.S. Department of Justice to force the company to pay funds into the Superfund to clean up contaminated sites at various sites around the country such as Granite City, Illinois,^[40] and Depew, New York.^[41]

• Simmons is also the proponent of a controversial plan to store nuclear waste in Andrews County, which is in far West Texas. which his radioactive waste management company, Waste Control Specialists, would administer.^[42] Waste Control Management holds a license for permanenet disposal of uranium mining waste and for storage of low-level waste from medical radiology labs, nuclear power plants and other operations. In May 2008 The Texas Commission on Environmental Quality voted to grant the company a related license for permanenet disposal of radioactive byproduct material, much of it from uranium industry by-products, including a former federal nuclear weapons plant in Ohio. The Texas Sierra Club opposed the site and asked a state district judge to overturn the commission's position, citing the commission's own language in respect to groundwater contamination possible from the proposal. A 30-day period for public comment was then opened.^[43]

Philanthropy

• In 1973, Simmons was a significant contributor to the Dallas Civic Opera.^[44]

• Harold Simmons is a former board member of the Edwin L. Cox School of Business at Southern Methodist University. He has given $1.8 million to establish the Simmons Distinguished Professorship in Marketing, and $1.2 million for the President's Scholars Program.^[45]

• The Harold Simmons Foundation is the philanthropic arm of the Simmons financial empire. Two of Simmons' daughters, Serena Simmons Connolly and Lisa Simmons Epstein, are its administrators. The foundation supports the causes of immigration rights, campaign reform, prison reform, handgun control, and reproductive rights.^[46] The contributions to the presidential bids of Hillary Clinton and Barack Obama made by Serena Connolly were privately made, not funded by the foundation.^[47]

• Simmons donated money to help fund the Hobby-Eberly Telescope Dark Energy Experiment at the University of Texas. He has previously given to UT athletic programs and the McCombs School of Business. By 2005, total donations from his family and foundation to the UT Southwestern Medical Center at Dallas exceeded $70 million.^[13]

• In 2006, Simmons pledged $1 million to the George W. Bush Presidential Library contingent upon its being located at SMU.^[48]

• In 2006, Harold Simmons made a grant to the Young America's Foundation to establish the Harold Simmons Lecture Series, which enabled former U.S. Senator Zell Miller to tour college campuses during the 2006-2007 school year to promote "his message in defense of America from foreign and domestic threats to our freedom."^[49]

• In 2007, Oprah Winfrey announced that Harold and Annette Simmons, her neighbors in Montecito, California, had contributed $5 million to her Oprah Winfrey Leadership Academy for Girls in South Africa.^[50]

• In 2007, Harold and Annette Simmons announced a landmark $20 million gift to Southern Methodist University to provide an endowment for the university's School of Education and Human Development. The gift allocated $10 million for construction of a new facility, to be named the Annette Caldwell Simmons Building; $5 million for graduate student fellowships; and $5 million for faculty support and an endowed deanship.^[51]

• In 2008 the Harold Simmons Foundation made a donation of $5 million to the Dallas Zoo, the largest single private contribution in the zoo's 120 year history.^[52]

• Annette and Harold Simmons have been underwriters for 28 consecutive years to the Dallas Crystal Charity Ball Fashion Show and Luncheon.^{[53] [54]} The Crystal Charity Ball has distributed more than $82 million to children's charities since 1953.

• The Harold Simmons Foundation is a major donor of over $500,000. to the Dallas Women's Fundation which commissioned a study of women's economic security in the 12-county Dallas-Arlington-Fort Worth metropolitan area.^[55]

• The Harold Simmons Foundation issued a $50 million challenge grant to the Parkland Foundation, to aid in fundraising to build a new public hospital, one of the largest private gifts for a public hospital campaign in the nation.^[56]

Awards

• Charles Cameron Sprague Comunity Service Award
• Annette G. Strauss Humanitarian Award
• 2002 Angel of Freedom Award,(Harold Simmons Foundation) Human Rights Initiative

Personal life

• On February 25, 1961, Harold Simmons married Sandra Katherleen Saliba in Fort Smith, Arkansas.^[57] The marriage ended in divorce after he lost his first bank job, when "she was so distressed that he had thrown away a stable and lucrative future that she moved out of their home and left him with their two young daughters."^[58]

• A second wife also left Harold Simmons in the aftermath of 1970s indictment for mail and securities fraud, though he was acquitted.^[59] Simmons had two additional daughters from this marriage.

• Simmons married his third wife, Annette Caldwell, in 1980.^[60] She and Simmons became friends of television host and entertainment mogul Oprah Winfrey when they purchased neighboring property in Montecito, California. In October 2004, Mrs. Simmons was featured on the Oprah! television show, giving a tour of Simmons' boyhood town, Golden, Texas, during its sweet potato festival.^[61] In another episode, "Annette's Tea Party," Mrs. Simmons entertainment style was a feature.

• References

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Source: Wikipedia

December 2008 Calendar

Click the images to enlarge. Happy December and Happy Christmas!

Dispute shakes up One World cafe

A Salt Lake restaurant that was based on the altruistic model that diners pay what they can afford has adopted a standard business model after a labor dispute. The restaurant's chef/manager was fired and its employees walked off the job last month.

That doesn't mean that One World Everybody Eats is closing or abandoning its original mission, founder and owner Denise Cerreta said Friday. The cafe at 300 East and South Temple and the nonprofit agency behind it have had to impose changes to its day-to-day kitchen operation as well as rectify some legal unknowns regarding its tax-exempt status, she said.

During a telephone press conference that One World called in response to an article in the current issue of the alternative newspaper City Weekly, Cerreta said that she and the two fellow governing board members were taking a firmer hand, particularly in reducing overhead in the wake of recent economic troubles that were driving up food costs as well as the size of its clientele, but driving down revenue.

"We started as a mom-and-pop place," Cerreta said. "But as we've grown more popular, my lack of expertise for running a kitchen and a business was becoming more pronounced. We realized we needed a lot more structure and accountability, and we started moving that direction about a year ago."

Employees were generally resistant to the idea, believing that imposing an establishment business model was a fundamentally wrong approach to running a restaurant that has gained both local success and national attention by letting customers pick the size of their meal portions and trusting them to pay what they believe the food is worth.

According to employees cited in City Weekly, Cerreta's taking control started to violate the basic trust the restaurant is built on. When chef and manager Bo Dean was fired for what the staff believed were unjustified or at least vague reasons, employees grew increasingly upset and walked out Oct. 16.

Governing board member Don Merrill said the issues weren't about trust but about inventory control, employee hours "and a variety of costs that were unexplainable."

The per-plate average that had been steady at $10 to $12 the past several months had fallen to around $7 per meal. At the same time, the payroll had reached what Cerreta called an "outrageous" $20,000 a month. "We had to find out at the ground level what was going on," Merrill said.

It wasn't the board "just deciding we had bad employees," Cerreta said, noting that she wishes them well, even if, as some have claimed, they will start their own restaurant. "We will help them any way we can. That's what we're about."

The change hasn't been easy but was necessary, she added, noting that it was induced in part by the board's desire to resolve the collective inexperience of how to do it. "The lack of adopting an initial business model is one of our failings."

Someone who has the business model down is Steve Lyman, the restaurateur behind Gastronomy, the Bambara and others. He also regularly entertains One World diners, playing background classical guitar. Lyman has been helping Cerreta free of charge to recast the structure of daily operations, including the hiring of a new chef who starts today.

Merrill said the basic idea of "helping people fill their stomachs and their spirits" will be maintained. "There is an arc to altruistic endeavors like this. At first, it's volunteers, everybody's family and the rules are loose. If you start to get successful — and this one is modeled all over the country — it has to take on a professional appeal. It's been difficult and painful, but people just felt it was moving away from meeting those new expectations."

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Source: Deseretnews.com