Domestic News
Stillman News
Ethics
Stillman students compete in SIFE Competition; win Rookie of the Year Award. See p. 6
Is it ethical for Congressmen to receive “perks”? See p. 8
Level of student loan debt surpasses credit card debt. See p. 13
The Stillman Exchange
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TUESDAY, APRIL 19, 2011 - VOL. 7 NO. 13
A Call for Mobile Payment Solutions Help from the Transform Student Entrepreneurship DR Congo By Wesley Satterwhite, International News Writer There is a raging conflict in the Democratic Republic of the Congo (DRC), a struggle so vast that it has often been referred to as Africa’s World War. An estimated 4 million people are dead and millions more have been displaced. These staggering statistics place the conflict in the DRC second only to World War II in number of casualties. Last month Kambale Musavuli, a Congolese representative, came to the John C. Whitehead School to shed light on the plight of the DRC. He informed the students of Seton Hall about the struggles his nation is facing and asked that we, as young leaders, work to shed light on the issue. Currently, there are 30 armed groups in the DR Congo, all of which are abusive. Rape is used as a weapon of war that thousands of women fall victim to each year. Rebel groups use child soldiers, sometimes abducting them and forcing them to fight. The military compounds the issue by engaging in the same brutalities as the rebels. In order to understand how the DRC got to this point, I spoke with Musavuli. He shared with me that the conflict in DR Congo was actually a product of the Rwandan genocide. In 1994, over one million refugees from Rwanda entered the country. Among these refugees were the perpetrators of the genocide: the Hutu militias. Once in the Congo, the Hutus formed a coalition with Mobutu Sese Seko, then the dictator of the DRC. Then, just as in Rwanda, they then began attacking the Tutsi ethnic group. Rwanda’s Tutsi leaders had gained control of their government, and with the aid of the Congolese military, private militias and Ugandan forces, were able to overthrow Mobutu’s government. In order to provide the country with a new leader, Laurent Kabila was placed in power. Kabila did little to oust the Hutu militias, and Rwanda sent forces to remove him. Kabila, who attempted to maintain power, sought help from neighboring Zimbabwe, Namibia, and Angola. The conflict that followed lasted for six years. Continued on page 15...
INDEX Money & Investing.............. 2 Stillman News...................... 6 Ethics ................................... 8 Editorials ............................. 9 Sports Business.................... 10 Domestic News..................... 13 International News.............. 15 International Business........ 16 Picture courtesy of Morgan Tornetta
By Lee Duan, Managing Editor Student entrepreneurship has been traditionally limited to cash businesses, constraining growth potential. With technological advances in smartphone technology and the mobile payment industry, students are
now able to charge credit cards almost anywhere. Several companies, such as Square, Intuit and VeriFone, are competing in a rapidly expanding industry that processes millions of dollars in daily transactions. These firms provide users with a credit card reader and smartphone application that allows
them to charge credit cards right on their mobile devices. Students will no longer have to go through red tape to accept credit cards, which used to require merchant accounts with numerous fees and multiyear contracts. For example, startup firm Square Inc. provides users with a free one-inch credit card reader that plugs into the smartphone’s audio jack. Each transaction costs just 2.75 percent of the transaction amount whether it’s for a $1 packet of post-it notes or a $3,000 oil painting. The barrier to entry for payment solutions is so low that anyone can sign up and start a successful business. All a person needs is a creative idea. Even if you are an automobile detailer, SAT tutor, piano instructor or yoga teacher, credit card payments are now just a swipe away. Caitlin Ditchfield, a junior in the Whitehead School of Diplomacy, uses Square for credit card payments. According to Ditchfield, “It’s just so simple. You swipe a card, have the payer sign the screen and you’re good to go.” You can even “send customers an electronic receipt to their email.” Transactions completed with mobile payment services have all of the security features built into one’s credit card. Banks that issue credit cards do “not hold you responsible for fraudulent charges,” said Jack Dorsey, CEO of Square and cofounder of social networking website Twitter, when addressing concerns over credit card security. Continued on page 3...
LeBron Makes Splash in Liverpool Deal By Anthony Holesworth, Sports Business Writer In our world today, globalization is becoming increasingly widespread. This is most evident in socioeconomic and technological changes. A significant industry that is becoming more global is the sports industry, one of the most lucrative businesses in the world. The latest breaking news in the sports world’s global expansion comes from one of the most popular athletes in the world, LeBron James. By signing a sponsorship deal with Fenway Sports Group, James has become a partial owner of Liverpool F.C, the popular English Premiere League soccer
club. Since his arrival in the league at age eighteen, James and his sports marketing firm, LRMR, have constantly been on the prowl for business expansion. Until now, LRMR’s scope of business has been purely national, sticking solely to ventures inside the U.S. James’ last notable business deal is one he struck with rapper and producer Dr. Dre.; this deal was a joint venture involving the creation of PowerBeats, a set of popular headphones. Now, James feels that it is time to expand his brand’s scope of business. James described his step into the business world with these words, “The first time I stepped on an NBA court I became a businessman,”
said James. Fenway Sports Group is most notable for its ownership of the Boston Red Sox, one of the largest baseball franchises in the world. In addition to the Red Sox, FSG has ownership interests in the sports channel New England Sports Network, NASCAR auto-racing team Roush Fenway Racing, and most recently, Liverpool F.C. In the deal that James and FSG have struck, both brands are expanding their business ventures and reach. Also, the newly merged company has become James’ official worldwide representation. Continued on page 10...
EU Busts P&G and Unilever for Detergent Cartel By William Suggs, International Business Writer The European Commission announced last week that fines have been levied against consumer goods groups Proctor & Gamble (P&G) and Unilever for fixing prices of laundry detergent over a three-year period in collusion with Henkel, a German competitor. Henkel brought the tip to the European anti-trust body in 2008 and will therefore not be fined for their involvement in the scheme. Meanwhile, a total of 211.2 million
euros ($304.9 million) in fines was split between P&G and Unilever after a 10 percent discount for their admission of running a cartel. P&G was fined $304.9 million while Unilever was fined $150 million. Although the fines originally totaled $456 million, the combination of P&G and Unilever’s admission of running a cartel as well as their cooperation with the investigation reduced fines by 60 percent and 35 percent respectively. Chief Compliance Officer of Henkel, Mr. Dirk-Stephan Koedijk, issued a statement on Wednesday saying, “In 2008, we
had to acknowledge concrete evidence of misconduct by employees in several Western European countries… This is why we have intensively investigated internally and have made our findings available to the authorities promptly and in an unrestricted manner.” The cartel, consisting of the manufacturers of well-known products such as Tide and Surf, operated in Belgium, France, Germany, Greece, Italy, Portugal, Spain and The Netherlands between 2002 and 2005. Continued on page 16...
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TUESDAY, APRIL 19 2011
Money & Investing
Company Comparison
This Week’s Poll Question:
Graph courtesy of Google Finance
Are you satisfied with this year’s federal budget? A: There is too much money going to defence B: There is not enough focus on research and development C: There should be more money in education D: The government did a good job allocating money
THE STILLMAN EXCHANGE
Money Funny Corner
Facebook to Go Public; All Other Public Companies Admit Defeat By Danny Jones, Money & Investing Writer
Last Week’s Poll Question: Graph courtesy of Google Finance
How often do you purchase a new cell phone? Whenever the next best thing comes out (20%) Every time my contract runs out (62%) Never, I still have my brick (4%) If my old phone breaks, I’ll get a newer phone (14%)
Sector Summary
NEWS BRIEFS
Courtesy of Google Finance
Earnings Stock to Watch: Northwest Pipe Company
• Drivers in Washington, D.C. last Saturday joined motorists in five states who are paying more than $4 per gallon for gasoline. • The multi-billion-dollar business of the three largest internet poker companies became a target of federal authorities before an indictment was revealed last Friday, charging 11 people with bank fraud and illegal gambling. Graph courtesy of Yahoo! Finance
•More Americans paid their credit card bills on time in March, a positive sign for the banking industry in a month that has proved volatile over the past few years
World Currencies Courtesy of Google Finance
• Southwest Airlines Co. more than doubled its CEO's compensation last year to nearly $3.4 million; stock awards totaled $1.8 million. • Wal-Mart de Mexico SA says its firstquarter profit rose 13 percent thanks to higher sales in Mexico and in stores bought last year in Central America.
The social networking website Facebook has decided to go public, making shares of stock available to purchase in the marketplace. According to projections, Facebook’s market capitalization would surpass every company by at least $400 billion. Josh Lieberstien, Chairman of Operations at the NASDAQ, said, “I have never seen projected numbers for a company’s stock such as these. The last company that received this much hype about an initial public offering was MySpace, but we all know what happened there. It will be interesting to see how Facebook handles itself once the firm goes public.” With all this hype surrounding Facebook, other major technology firms will be reducing their stock prices by as much as 90 percent. Google, Dell, Intel, Adobe, Samsung, Microsoft and even Apple, to name a few, will be practically giving their shares away in order to maintain shareholders. Google’s president commented on their tactic by saying, “Well, what the hell are we supposed to do? Once Facebook goes public it…it could very well be the end of us all.” Creator of Facebook Mark Zuckerberg is reputed as a modest man who is not in it for the money. Therefore, we asked him, why do you want Facebook to go public? “Gates,” said Zuckerberg clinching his fists with a sinister looking face. “A couple years ago, I told Bill Gates about my idea for Facebook and how one day it would be so popular, we could sell shares of stock and become the world’s richest people and take down other corporations.” Zuckerberg spoke about Gate’s response, “Do you know what he said to me? Gates said, ‘The day you create a company that goes public, Zuckerberg, will be the day I resign as chairman of Microsoft and give you my company.’ Well that slimy nerd won’t be laughing now.” We would have continued to ask Zuckerberg questions but he started laughing uncontrollably just thinking about his takeover of Microsoft. In a related story, Twitter CEO Dick Costolo held a press conference claiming that Twitter will also be going public in order to continue expanding its business. He was quoted saying, “Facebook is going to be for seniors soon, who just want to look at pictures of their nephews. Don’t buy stock in something you know will succumb to the failure that all social networking sites have gone through. I’ll let you decide which is cooler: Facebook or Twitter. Just know that Obama has a twitter account. BARACK Obama, our President, so yeah!” Contact Danny at daniel.jones@student.shu.edu
All information contained in this publication is not intended to substitute for the advice of a professional financial planner. It is meant only for informational purposes. The Stillman Exchange assumes no liability for any investment losses incurred as a result of information provided in this publication. Readers should consult a professional financial planner.
Money & Investing
THE STILLMAN EXCHANGE
TUESDAY, APRIL 19, 2011
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Party Bickering Dominates Fiscal Budget Proposals By Kobbie A. Darkwah, Money & Investing Writer In February, President Barack Obama proposed a $3.7 trillion budget for fiscal year 2012, which included $1.1 trillion in deficit reductions over ten years, with twothirds coming from spending cuts. These cuts would make room for increases in innovation, research, education, infrastructure and clean energy in an effort to promote long-term economic growth and strategically position the U.S. for global competition. The president also said that his proposal would place the nation on a path towards fiscal sustainability, as well as ensure that the government will be paying for what it collects by the middle of the decade. The budget stressed the need for innovation, with $148 billion allocated to Research & Development, such as investments in biomedical and energy efficiency research. It would also eliminate 12 tax breaks to oil, gas, and coal companies in order to raise $46 billion over 10 years, which would support the goal of putting one million electric vehicles on the road by 2015 and doubling the proportion of electricity from clean energy sources by 2035. It would also simplify, expand, and make the Research & Development tax credit perma-
nent. In terms of Education, the maximum Pell Grant award would be preserved, providing aid to 9 million college students. This would be backed by over $100 billion in savings. There would also be a reform in K-12 school funding supporting high standards, encouraging innovation, and rewarding success. In the process, it would prepare 100,000 new science, technology, engineering, and math teachers. One of the key components of the President’s budget is that it creates hundreds of thousands of jobs in the development of infrastructure. The hope is that within 25 years, 80 percent of Americans will have access to high-speed rail as a result of a $35 billion per year comprehensive surface transportation bill, in addition to other projects that would also boost infrastructure. Furthermore, the plan includes a number of spending freezes and cuts, including a five-year non-security discretionary spending freeze, a $78 billion cut from the Pentagon’s defense spending plan, and cuts of more than $2 billion in administrative costs. Meanwhile, there has been a longstanding battle over the 2011 budget. A federal government shutdown was narrowly avoided on April 8 as members of the House
passed a bill that would fund the federal government until September 30, the end of fiscal year 2011. Two days prior, House Budget Committee Chairman Paul Ryan unveiled his party’s 2012 budget. He said that this Republican budget would cut spending by more than $6 trillion over a decade; thus, reducing the deficit by eliminating $6.2 trillion from Medicare, Medicaid and programs such as food stamps, farm subsidies, and Pell college tuition grants. According to the Congressional Budget Office, health care costs for most Americans will increase. States would also have to drop participants in Medicaid, leaving many poor people without necessary health care. Overall, the Republicans’ plan demands $31 billion in 2012 budget cuts in addition to the $38.5 billion in savings that was passed to avoid a shutdown. Although this budget would also cut top corporate and individual tax rates by 10 percent, it would not be reflected in the government’s books until 2040. On April 12, President Obama put forward a revised plan that would cut the nation’s budget by $4 trillion over the next 12 years, in the wake of Republican criticism regarding the need for bold action. He claimed that this was a more balanced
Photo courtesy of Reuters
Ryan’s budget proposal was passed last Friday in the House of Representatives.
approach of tax increases for the wealthy, as well as spending cuts. Last Friday the House passed Ryan’s proposal on a 235-193 vote. No Democrats voted for this plan while four Republicans opposed it: Representatives Denny Rehberg of Montana, David McKinley of West Virginia, Walter Jones of North Carolina and Ron Paul of Texas. The bill is expected to be thrown out in the Senate, where Democrats have endorsed the President’s urge to reduce the deficit through a combination of tax increases and spending cuts. Contact Kobbie at nanakwabena.antwidarkwah@student.shu.edu
AT & T P u r s u i n g M e r g e r w i t h T- M o b i l e By Jeff Aiello, Money & Investing Writer The mobile industry will never be the same as AT&T (NYSE: T) announced March 21 that it will buy T-Mobile USA. Since the Bell telephone system broke up in 1984, customers have enjoyed increased competition and lower prices among phone companies. Yet, consumers’ mobile phone options are limited today, and this provides the few mobile service providers with even more power. AT&T, the second largest wireless phone company, will merge with T-Mobile USA, the fourth largest wireless phone company, in a massive $39 billion deal. This will make AT&T the largest wireless phone company in the U.S., and also will result in possible changes for consumers. For example, there will be expanded coverage by the combined company, and TMobile users will be able to purchase iPhones within the first year of the merger. Although these are considered exciting
Photo courtesy of impactlab.net
AT&T, which is the second largest wireless phone company in the world, is planning to merge with T-Mobile, the fourth largest firm.
developments, there are also problems with the acquisition for the consumer. It is likely that the reduction in the number of service providers will result in higher prices, billing cycle changes and the elimination of unlimited data plans.
Even though the merger is being heavily criticized, Randall Stephenson, AT&T’s chief executive, sees it differently. He said that this deal will produce “significant customer, shareowner and public benefits” that would enable the company to “better meet
[their] customers’ current demands.” Stephenson believes the buyout is a beneficial business move. Yet, the mobile service industry is moving towards greater monopolization with only AT&T and Verizon Wireless as big-time competitors. One major loser in this deal will be Sprint, which will continue to lag behind the two largest mobile companies. Casey Thormahlen, a Senior Research Analyst at IBISWorld, said, “AT&T would have 40.1 percent of the U.S. wireless-market share…up from 28.6 percent now. Verizon has 33.2 percent; Sprint, 17.2 percent; TMobile, 11.5 percent; and smaller players the rest.” The effects of this acquisition may hit customers much harder than expected. Will the benefits of the merger outweigh the possible consequences on consumers? We will soon find out. Contact Jeff at jeffrey.aiello@student.shu.edu
Ga s Prices o n Tra ck t o R each $ 4 Per Ga llo n
By Scott Watson, Money & Investing Writer The price of oil and gasoline has been a hot topic since they peaked during the summer of 2008. Yet, during December of that year, the average price of gasoline decreased to $1.62 per gallon. Since then, prices have been increasing at a steady pace and do not show signs of leveling. The price had held below $3 for an extended period of time, but has recently
passed this barrier and continues to rise. Problems in Africa and the Middle East have increased volatility, which have driven prices up for oil, leading to hikes in the price of gasoline. On April 13, gasoline prices per gallon rose to $3.81, an increase of almost 19 percent since February. A similar increase occurred in 2008 when gasoline prices were hovering around this same level. In June of that year, prices rose to $4 per gallon. This trend is leading experts to
wonder whether or not gasoline will surpass these historic highs. Officials from the US Energy Information Administration (EIA) believe prices will increase to near record levels by summer. However, according to the EIA, there is only a 33 percent chance that the price of gas will reach $4 by July. In other parts of the country, however, regular gas prices are already over $4 per gallon. For Chicago and areas on the coast of California, there are environmental
requirements that increase costs. This constraint is causing people in those areas to pay higher prices than the rest of the country. As a result, it is projected that people will not travel as much during the spring season. With gasoline prices rising, consumer spending will likely fall; hurting an already sluggish economy. Contact Scott at scott.watson@student.shu.edu
Mobile Payment Solutions Transform Student Entrepreneurship ....continued from page 1 The mobile payment industry takes advantage of the trillions of dollars that credit card companies, such as Visa, MasterCard and American Express, handle each year. According to forecasts by MarketResearch.com, the mobile payment industry will process over $1 trillion annually by 2014. Students can also take advantage of the large volume of credit card transactions by using these services to expand their own
Photo courtesy of Square
small businesses. It is easy to see how a mathematics tutor or a computer repair technician, who could not previously provide services to cash-strapped individuals, can now expand his or her list of possible clients. According to Ditchfield, “Students can reach a much broader audience of payers now that they can use services like Square to accept credit cards.” Renee Stroinski, a junior in the Stillman School of Business, said, “Mobile payment services really benefit students that want to put their entrepreneurial skills
into practice. The cost of entry is almost nonexistent and can lead to enormous business growth opportunities.” With the Stillman School’s increased emphasis on entrepreneurship, mobile payment solutions can help increase the number of startup companies that students at Seton Hall form. “All you need is an iPhone, iPad or Android phone, which can be found all over campus,” said Ditchfield. Contact Lee at li.duan@student.shu.edu
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TUESDAY, APRIL 19, 2011
Money & Investing
THE STILLMAN EXCHANGE
Wal-Mart Returns to Strategic Plan with New Changes By Dylan Mortensen, Money & Investing Writer Last Monday, Wal-Mart, Inc. announced various initiatives to win back consumers, which include the restocking of thousands of beloved products and simplifying its ad match policy. The retailer’s planned one-stop shopping experience would deliver “low prices, every day, on everything,” the company stated. The nation’s largest retail store is suffering from the worst U.S. sales decrease in its history. Wal-Mart has been unable to get out of its same-store sales slump for seven consecutive quarters, an alarming indicator regarding the firm’s future growth. So what went wrong with the largest retailer in the world? To answer this, one must address three important issues: First, Wal-Mart is suffering from a loss of identity. When the economy slumped, stores across the nation tried to appeal to wealthier Americans that could no longer afford to shop at higher-end retailers. As a result, Wal-Mart eliminated hundreds of cheaper items, while importing more expensive products and clothing. Not only did this push away Wal-Mart’s core shoppers, it also did not draw in enough wealthier consumers. Therefore, Wal-Mart was in a limbo
Photo courtesy of boxturtlebulletin.com
Wal-Mart, the nation’s largest retail store, has been suffering from decreasing sales for seven consecutive quarters.
that did not attract a specific market segment. Mike Duke, chief executive of WalMart told The Wall Street Journal, “Sometimes we will try things and sometimes they work and sometimes they don’t.” Second, Family Dollar, Dollar General and the Dollar Tree are just three of the discount stores that drove consumers to turn their backs on Wal-Mart. When the recession was in full effect, shoppers came to these stores for cleaning supplies, medicines and other essential goods that were more expensive at WalMart. Even now, consumers are opting to
shop at these small discount stores and continue to save money. Lastly, pricing strategy at Wal-Mart has been inconsistent. Last April, Wal-Mart cut prices on over 10,000 items. When this reduction showed minimal effects on sales, the prices promptly hiked back up in October. Consumers like sticky prices. These price changes provide mixed messages to the customers regarding the retailer’s targeted audience. As a result, consumers began questioning if Wal-Mart is really the place to go for the best bargains for all their shopping needs.
Because of poorer than expected performance in recent quarters, Wal-Mart is ready for change. The retailer announced that it is bringing back thousands of products that have been stables in its business strategy. This includes Hellman’s mayonnaise, Febreze and Glade handle products. Wal-Mart is catering to local areas as well. In Central Florida, Wal-Mart is adding more fish supplies and boat gear; in Minnesota, the retailer are putting more ice fishing and hockey gear on its shelves; in Phoenix, more pool supplies and hiking accessories will be hitting its stores. With the new ad match policy in effect, Wal-Mart stated that if customers find a lower advertised price, it would match the price of any local competitor’s ad for an identical product in the store. Duncan Mac Naughton, chief merchandising officer of Wal-Mart U.S., said, “WalMart’s reputation was founded on the principle of providing low prices day-in and day-out on the broadest assortment of merchandise. Our company is determined to create the best one-stop shopping experience and low prices on the right products backed by a clear, consistent ad match policy.” Contact Dylan at dylan.mortensen@student.shu.edu
Cisco Restructures Consumer Business, Laying Off 550 By John Cenzia, Money & Investing Writer Cisco, the giant communications technology and services company, announced last Tuesday, that it is restructuring its consumer business plan, which resulted in the closing of the firm’s Flip video camera business and laying off 550 employees. The company stated that the exiting of certain aspects of its consumer business would help it refocus on its core competencies. Cisco does not expect that this overhaul will affect consumers, but rather, it represents an internal streamlining to help make its existing business more profitable. Cisco plans to make four major changes. In addition to closing its Flip video camera business, the firm will support current FlipShare customers with a transition plan. The company will refocus its efforts on its Home Networking business in order to increase its profitability as it plans to expand a video platform for households. Cisco also plans to integrate Cisco Umi into Business TelePresence, and assess its video technology of its Eos media solution for businesses. Cisco acquired Flip in 2009 for around $600 million. Flip’s sales last quarter only
Photo courtesy of cbslocal.com
Cisco, the communications and technology company, is making major changes in order to focus on streamlining its existing businesses.
grew 15 percent year-over-year, which was below Cisco’s projected 30 percent growth. One reason for the segment’s poor performance is the growing sales of smartphones with video cameras. Many analysts agreed with Cisco’s decision to close the Flip business instead of selling it off. As David Goldman, staff writer for CNN Money, puts it, “the product (Flip) is a cult hit, but a tricky business fit.”
In other words, there is not much demand for Flip since it is difficult to integrate the technology into other company products. Umi, Cisco’s HD video chat device, was critically praised. The problem was its expensive, unappealing price and the inability of retailers to sell the service to consumers. The few consumer products that will be remaining on shelves include Cisco’s popu-
lar Linksys and Valet Internet routers. The only change made here will be the refocusing of Cisco’s Home Networking division to support video in households. These changes will result in the layoff of 550 workers in the next three months. Cisco said that it will “recognize restructuring charges to its GAAP financial results, with an aggregate pre-tax impact not expected to exceed $300 million during the third and fourth quarters.” The restructuring is part of Cisco’s attempt to refine its role in the tech world. While the firm is very successful at delivering video conferencing services to businesses, it has found different results in their consumer division. The company has been struggling to grow in recent quarters. Cisco CEO John Chambers notified employees in a memo that management is “making key, targeted moves as we align operations,” and that “our market is in transition, and our company is in transition. And the time is right to define this transition for ourselves.” Contact John at john.cenzia@student.shu.edu
IMF Announces Worries Over Widening Wealth Gap By Amanda Bronson, Money & Investing Writer The International Monetary Fund announced that governments need to work harder towards closing the gap between the rich and the poor in order to recover from economic hardships. Lack of economic opportunity in countries leads to political instability, inefficient production and even conflict. The current international disparity of wealth that exists in so many nations could very easily lead to a new global crisis. Not only has inequality between classes of income widened, unemployment is at record highs; over 200 million people in the world are searching for jobs. “The jobs crisis is hitting the young especially hard. And what should have been a brief spell in unemployment is turning
into a life sentence, possibly for a whole lost generation,” says IMF Managing Director, Dominique Strauss-Kahn. This combination of unemployment and inequality is a major problem that can lead to an inequity of politics and cause countries to be more prone to financial and social crisis. In order to reduce this risk, the IMF suggests that policies and regulations leading to a fairer distribution of opportunities and resources are necessary. The IMF also concludes that sustainable growth is derived from an even distribution of income. Strauss-Khan states that improvements in health and education, social safety nets, and progressive taxation will allow for the market growth to be distributed fairly. Rising product prices are putting a strain on emerging economies, and are emerging as a danger factor that could result
in higher inflation. “Energy prices are rising swiftly, reflecting rapid growth in the emerging economies,” Strauss-Kahn said. “Food prices are rising too ... with potentially devastating consequences for low-income countries. Together, these price increases are beginning to feed into headline inflation.” The G-20 nations will soon hold a meeting in Washington D.C., where the finance ministers will outline certain standards, which will try to reduce economic discrepancies. The IMF believes that the wealth gap needs to be addressed right now. Although some countries in Asia are developing, “growth—at least in the advanced economies—is not creating jobs and is not being shared broadly.” In order for these countries to attain future growth and employment, policies and
market restrictions must be put into place. Re-regulating financial services and cutting down countries’ deficits are among the solutions that the IMF suggests to avoid another recession. Not only is it necessary to worry about financial setbacks due to these problems, social and political repercussions must also be considered. Unemployment and income inequality are at the basis for political upheaval and could ultimately lead to war. Strauss-Khan and the IMF stress the importance of a middle class in order to maintain stability. With employment and equity comes productivity and peace. Contact Amanda at amanda.bronson@student.shu.edu
THE STILLMAN EXCHANGE
Online Te l e v i s i o n Becomes Billion Dollar Industry
Money & Investing
TUESDAY, APRIL 19, 2011
U . S . A u t o m a k ers May Ga in Ma rk et S h a re A f t er Jap an Eart h q u ak e Photo courtesy of MSNBC
By Doug DeMarco, Money & Investing Writer Do you watch shows on Hulu, CW Television Network or other websites that allow internet users to watch television shows online for free? You may not know it, but you are part of an ongoing trend in the world of media entertainment. According to a study by IHS, online television brought in a total of $1.6 billion in 2010, which was an increase of about 34 percent from 2009. Online television advertising brought in a total of $719 million in 2010; the total made up almost half of all revenue from online television services. These numbers are surprising, given that major media contributors have hesitated over the idea of placing content online. The number of online television websites that display advertisements increased by 10 percent in 2010. Companies such as Hulu are able to bring in revenue through advertisements, because of the core interest in the online television market. Dan Cryan, head broadband media analyst at IHS, said, “Even in this conflicted market, revenue was up, thanks to the proactive attitude of a handful of players, including Hulu and the CW Television Network, which have managed to expand revenue even as consumption growth has leveled out” Hulu, on average, displays 47 ads to each viewer every month. If you examine the number of people using Hulu’s services, the amount of revenue an online television company can make through advertising is astounding. Dan Cryan also said, “With those kinds of numbers, broadcasters could lend greater support to a business that is potentially a much larger source of revenue. TV networks could do more to promote on air the fact that their shows can be viewed online.” There also has been a drop-off in the amount of advertisement revenue paid to television networks. With more people spending time online watching shows as opposed to watching television, the television advertising market has declined significantly by 21.2 percent. More businesses are finding that they can target more potential customers on the world-wide web than traditional television networks. As a result, television networks are trying to squeeze as much revenue as possible from a large number of shows. Broadcast stations have partnered with Apple and have begun selling ad-free versions of their shows in a digital version. Online television is quickly becoming a large market for advertisers. With more people spending their time online, advertisement revenue is reaching new heights that were previously unimaginable. Look for online television to continue to grow and make a splash in the coming months, as it continues to take market share away from traditional forms of television viewership. Contact Doug at doug.demarco@student.shu.edu
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Many Japanese manufacturing plants have been damaged by the recent disaster in Japan. The recovery process is expected to take months.
By Matthew Magi, Money & Investing Writer The tragic earthquake and resulting tsunami, which devastated Japan on March 11, is severely limiting production capacity for Japanese automakers; this will decrease the supply of Japanese vehicles offered in the U.S. this summer. Manufacturers with most of their production based in Japan were hit the hardest, but other manufacturers which use supplies and parts from Japan will also be affected by the deterioration of Japanese infrastructure. Efforts to rebuild after the disaster are being slowed by rolling blackouts caused by the lack of nuclear power. Prior to the disaster, Japan received about 30 percent of its electricity from nuclear reactors. The destruction of the Fukushima reactor has not only decreased the avail-
ability of electricity on its grid, it has also released dangerous radioactive materials into the environment. This radioactive disaster, coupled with the physical damage of the powerful earthquake and tsunami, is affecting manufacturing companies. Toyota (NYSE: TM), Honda (NYSE: HMC), Mazda and Nissan have all had to halt production as a result of the disaster, and none of these manufacturers will be back to pre-quake production levels for some time. Toyota released a statement saying that their plants will only be working at half of their normal production rate until at least June. Nissan’s vehicles and dealerships, which were near the epicenter of the disaster area, were badly damaged, which will sharply decrease North American exports in the immediate future. Mazda’s plants were not damaged, but due to power
outages and low supply of parts, the production of new vehicles has been slow. Honda has been affected least by the disaster because much of its production and parts are based in North America, but its Japanese sector was affected and production in Japan is still slow. In the wake of slowed production and a limited supply of Japanese vehicles, U.S. and Korean automakers stand to gain a portion of their lost market share. Ford and General Motors will have a nearly full selection of vehicles ready to sell this summer, while Japanese models may be few and far between. Korean based Hyundai receives almost none of its parts from Japan; as a result, the firm remains at full production capacity. Although it is unfortunate that Japanese automakers will be affected by this disaster, huge losses may ensue for Japanese automakers that cannot sell their damaged inventory. With gasoline prices on the rise again, demand for small and economic vehicles will rise. This may mean another surge in demand for hybrid vehicles such as the Toyota Prius, which is only manufactured in Japan. If consumers are unable to find these vehicles in dealerships, U.S. shoppers may look for domestic vehicles as replacements. Therefore, the strengthening U.S. automobile manufacturers may be able to take market share away from their foreign competitors. Companies such as Ford and General Motors may finally be able to put their financial woes behind them and gain a few new loyal customers. Contact Matthew at matthew.magi@student.shu
New York City Startup Job Fair Shows Increased Hiring in Technology By Jennifer Crowe, Money & Investing Assistant Editor Last Friday, New York City hosted the technology industry’s second annual “NYC Startup Job Fair.” The number of people, both employers and individuals seeking jobs, was overwhelming; because of the large number of people in attendance, the organizers running the fair had to turn a number of people away. The technology job fair was started last year by business analyst Alex Horn, who wanted to make it easier for people to find jobs hiring in the industry because he believes that the technology industry has a lot to offer. According to Drew Nichols, a development manager for a career website, the tech industry is “the only industry that has a booming number of jobs.” With the sluggish economy, jobs have become few and far between. The New York City job fair was filled with young people, both recent college graduates as well as students who are preparing for graduation, all with resumes in hand and dressed in professional attire. Mixed in with students were professionals that have years of experience. CNN Money interviewed one of the job fair attendees, Anku Oberoi, a student at the New Jersey Institute of Technology. Oberoi, impressed by the number of people in attendance said, “New York is the finance capital of the world and I think it’s time that another industry take over.” Jobs in the technology industry are on the rise across the country. In Rochester,
Photo courtesy of overfiftyandoutofwork.com
The NYC Startup Job Fair attracted a wide variety of people of all ages and backgrounds. Crowds of people showed up at the fair with resumes in hand.
New York, General Electric (NYSE: GE) is creating additional jobs by investing $2 million in one of its manufacturing sites. In North Carolina, 4,840 technology jobs were listed in the month of March alone. In California, the overall unemployment rate has been decreasing, partially as a result of increased hiring by the technology industry. The New York City job fair is just one
of many examples of how the technology industry is currently helping the job market. Unlike the lack of hiring experienced by other industries, the technology industry is looking for talented individuals to produce the next successful startup. Contact Jennifer at jennifer.crowe@student.shu.edu
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TUESDAY, APRIL 19, 2011
Stillman News
THE STILLMAN EXCHANGE
Seton Hall SIFE Team Takes Home Rookie of the Year Award By Kimberly Camperlino, Stillman News Guest Writer The 2011 U.S. Regional SIFE Competition was held in New York City on Monday, April 4. Seven Stillman students and members of Epsilon Nu Tau formed one of the several SIFE teams from schools across the Northeast who gathered to present their projects, in hopes of qualifying for the national competition. The Seton Hall University SIFE team included seniors Nicole Wallace, Juliet Payseur, Nick Fania, Francesca Laraque, Johanna Ferreira, sophomore Kimberly Camperlino and freshman Bill Leahy. The team advisor, Dr. Elizabeth McCrea, supported the team and provided insight during the team’s preparation. SIFE (Students in Free Enterprise) is an international non-profit organization introduced to Seton Hall this past fall by Wallace and Payseur. SIFE encourages students to apply their business skills to the real world while working alongside academic and business leaders to develop community outreach programs. The goal is to improve lives, strengthen communities, and grow into socially responsible business leaders. Teams are divided into several leagues at the SIFE competition. Leagues are selected randomly and as a result, experience ranges from seasoned veterans to newcomers, such as Seton Hall. Teams must provide an annual report with efforts, results and achievements to the judges and present their projects for the current academic year; specifically, teams must emphasize how they improved the quality of life, standard of living, and promoted sustainability in the
Photo courtesy of Kimberly Camperlino
The Seton Hall SIFE Team. From Left: Megan Peason, Johanna Ferreira, Nick Fania, Kimberly Camperlino, Nicole Wallace, Juliet Payseur, Bill Leahy and Francesca Laraque.
targeted community. A panel of 20 experienced business professionals judged the teams based on how well they applied business, economic, and entrepreneurial concepts to the relevant economic, social, and environmental factors involved. They looked at which team had the greatest impact on the people in need and the sustainability of the work. Projects can target many different communities locally and around the world. Seton Hall’s team focused on Orange, NJ, one of the most crime ridden and underprivileged cities in New Jersey. The team was involved in the Orange Revitalization Project to bring business back to the city of Orange and the surrounding area. They also worked with the Profeta Urban Entrepreneurship Foundation to provide financial and technical assistance to entre-
preneurs seeking to establish or expand businesses in Orange, NJ. The students helped develop comprehensive business plans for several disadvantaged business owners in Orange and Newark; they presented these plans to a panel of Venture Capitalists who funded two of the entrepreneurs. By breaking down the financial and marketing strategies for the entrepreneurs, the team helped to improve their standard of living. Next year, the team hopes to continue these efforts and expand into mentoring and educating middle and high school students in Newark and Orange, NJ; the team plans to educate them on college and business topics so that they can have productive goals to work towards; the students can then make informed decisions as they grow into young adults.
Given that this was the team’s first year in the competition, their chances to qualify for the national and SIFE World Cup were slim. Despite that, the team did remarkably well and won the Rookie of the Year Award, which is a huge accomplishment. The competition was a great experience for the team. With five seniors leaving and only two underclassmen remaining, team cofounder Wallace expressed her outlook on the team, “As a senior, my goal for SIFE is to set a strong foundation for future SIFE members here at Seton Hall, with the hope that they will soon grow to a point where we can make a big impact on the community. I am confident the two remaining underclassmen will implement what they learned and will make certain that the team will be even stronger next year.” To encourage future SIFE participation, cofounder Payseur reflected on the experience: “Many top executives and companies support the SIFE organization and jump at the chance to hire SIFE participants. The SIFE competition was an excellent networking opportunity. We received the opportunity to connect with SIFE students from other schools, as well as with prominent employers at the Career Fair. Some companies even had specific openings just for students participating in SIFE. I already went on a few interviews because of it.” The team has begun preparation for next year’s competition and is excited to recruit new members. Everyone is welcome and encouraged to join. Contact Kimberly at kimberly.camperlino@student.shu.edu
St illm an N ew s Ed itor S h a res Th a n k s a n d Off ers A d vice By Ryan Garrity, Stillman News Editor Before I even set foot on campus, there was one piece of advice that everyone I came into contact would repeat over and over again: “Make the most of these four years—they’ll be gone before you know it.” Most of the time, I would find myself shaking my head and scoffing—it was four long years; how could they really go by that quickly? Yet here I stand, four years later. I’ve survived seven exam sessions, sophomore assessment, a multitude of papers and projects and I am now just a few short weeks away from graduating and leaving the halls of our beloved institution. However, I wouldn’t be in this place if it weren’t for a number of friends and guides I met along the way. The first person that I want to thank is Jerry Pecoraro. Jerry was my Peer Adviser when I first arrived as a freshman, and he helped to open so many doors for me. He
acted not only as a friend and adviser, but as a mentor. I was introduced to many clubs and organizations through Jerry’s guiding hand, and The Stillman Exchange was the most important one. Jerry was the Stillman
Photo courtesy of Ryan Garrity
News Editor when I began writing, and it was through his teaching and help that I was able to finally achieve that position this year. I’ve told him thank you again and again, but I feel the need to make sure that this is pronounced at least one more time. Second, I would like to thank this year’s Managing Editors—Ian Mehok, Lee Duan, Meg Reilly and Rich Kimsey. I came into this position fairly blind to the process, and they were more than willing to help me find my way through it. They worked tirelessly to produce this fantastic publication, and I give them many thanks for taking me under their wings and making sure that I would be able to follow suit. I also want to extend a thank you to my assistant editor, Beverly Makarios. Much like the Managing Editors, Beverly was able to show me the ropes of the editing process after working with it last year. It is in her hands that I leave the Stillman News section, and I leave confident that she will be able to take this section in the right direction.
To those of you reading this column right now, I have a few words of advice— some things that I have picked up throughout my career at Seton Hall. The first is something that gets repeated like a broken record: get involved. Join clubs and organizations; they will be best way for you to make connections that will last for a long time. In addition, use the resources that Seton Hall provides you with. There is an entire community at your fingertips within these gates, and using relationships to your advantage will help you discover all of the benefits that an education here will bestow upon you. Finally, as stated above: make the most of these four years. Even if you are a freshman, senior year and graduation will be here before you know it. Work hard, play hard, and be sure to make memories that will last a lifetime. After all, these are going to be the best years of your life. Contact Ryan at ryan.garrity@student.shu.edu
Stillman School to Host Market Research Center Opening Ceremony By Tara Stafford, Stillman News Writer Every so often, a wonderful event occurs within the walls of the Stillman School of Business, where students and faculty come together to celebrate the achievements of the school. This year, the planned ribbon cutting ceremony of the Seton Hall University Market Research Center is one of those events. The Market Research Center has been in the works for several years now. It is a full-service market research center, serving
both the university and business communities. Centrally located in the Stillman School of Business, the Market Research Center is located only 14 miles away from picturesque New York City. Opening in the spring of 2011, the Center features a state of the art facility staffed by both faculty and students from the nationally recognized Stillman School of Business. The center conducts qualitative and quantitative market research for small and large businesses across a variety of industries and serves both the university and business communities.
The Market Research Center is also equipped with many different features, including: an interview and conference center, an observation room with a one-way mirror, video capabilities, a surround sound audio system, 42 inch flat-screen high definition television with laptop presentation capabilities, a tiered viewing observation room, internet connectivity and video monitors that allow clients to view stimulus materials and multiple respondent angles. On April 26 at 6 p.m., the Stillman School of Business will host the official Ribbon Cutting Ceremony of the Market
Research Center. Jim Chambers, President of Snacks and Confectionary at Kraft Foods, will be on hand to speak to those in attendance. Immediately following the ceremony, there will be a cocktail reception and tours of the Center will be offered to those in attendance. This proves to be an exciting time for both students and faculty of the Stillman School, and the opening of the Market Research Center is an event that will only build on that excitement. Contact Tara at tara.stafford@student.shu.edu
THE STILLMAN EXCHANGE
Stillman News
TUESDAY, APRIL 19, 2011
7
Stillman Team Reflects on NYSSA Investment Research Challenge By Beverly Makarios, Stillman News Assistant Editor The Stillman School is recognized for taking top honors at the prestigious New York Society of Security Analysis (NYSSA) Investment Research Challenge. The team competed against well-known New York metropolitan area schools such as NYU, Fordham, Rutgers and Yale. Stillman team members Mary Cappelletti, Himanshu Chhabra, David Falk, Vijar Kohli, and Shaun Maloney represented the Stillman School in this year’s ninth annual NYSSA Investment Research Challenge. The team competed against 16 nationally accredited business schools in presenting a research report and presentation to a panel of Wall Street experts. This year, the Stillman team was able to advance to the final four, a tremendous accomplishment! For approximately six months, the team members dedicated themselves to the best practices of researching and reporting on a publicly traded company. The Challenge initially began in September of 2010; however, the team did not receive the company assignment until two months later in November.
Conducted in two stages, the Challenge included the submission of a 10-page written report. Four finalist teams were then asked to present their findings to a panel of industry experts in order to convince the judges of the merits of their investment recommendation. The presentation is then followed by an extensive Q&A session.. The publicly traded company that the Stillman team researched was New Jersey Resources, a national gas and energy utility company, which focuses mainly on New Jersey-owned energy sources. The intensive, time consuming Challenge was the first time members of the team experienced such an extensive competition. They devoted over 200 hours for research and data gathering, creating the report, and refining their presentation. “This was the most intense challenges and definitely not something you can learn in the classroom,” said team member and Finance major Himanshu Chhabra. Each member took on the challenge in the area closest to their expertise. The team’s two Marketing majors, Mary Cappelletti and David Falk, collaboratively worked on the business description, industry overview and competitive positioning. “For the presentation, I was responsible for
tying all of the components together into a compelling ‘story’ that we could sell to the judges,” said Cappelletti. Chabbra focused on creating a dividend discount model of the company, the income statement, as well as parts of the investment summary. As for the team’s only undergraduate student, Finance major Vijar Kohli also focused primarily on the company’s dividend discount. Accounting major Shaun Maloney’s task pertained to the financial analysis and valuation aspects of the project. “I was responsible for creating our free-cash flow model and analyzing the company’s balance sheet and cash flow statement, said Maloney. “We spent a ton of time reviewing the company’s financial statements.” Despite not winning the competition, making it to the final four was still a wonderful accomplishment. “It’s been four years since Seton Hall made it to the final four,” said Vijar Kohli, who is proud to have helped place Seton Hall back to the top. “Overall, I feel our team did a fantastic job! Our strongest points were our in-depth understanding of the company and the market, our poise and professionalism in presenting the material, and our unwavering commitment to working together as a
team,” said Cappelletti. Falk shared, “Going into the final four was a big accomplishment considering how much time and effort we put into our analysis and honing our presentation skills. Additionally, participating in a project that involved real world equity research was a great learning experience, as it went beyond what is traditionally taught inside the classroom.” The Stillman School is proud of the team’s accomplishments, dedication and hard work that came with representing the Stillman School at the NYSSA Investment Research Challenge. In addition, the team’s accomplishments would not have been made possible without contributions by their advisors and professors. The team would like to especially thank Dr. Loviscek, Dean Strawser, Professor Riley and David Dineen for their time and help. Faculty advisor Dr. Tony Loviscek added, “Working with these students was unparalleled to the educational experience.”
Fraternity on campus. Why did you start it up and how will this help you as a graduating senior?
always been interested in Finance and have a good amount of exposure to the industry, so I wanted to make sure that I explored the Marketing industry before I made a career decision. After spending a summer and a semester in Finance, I feel confident that I belong in that industry. I am glad that I took the opportunity; otherwise, I would have wondered whether or not I made the right decision.
MR: I would say that my education has given me the basic skills that I need to be successful in my professional career, as well as giving me the confidence to aggressively pursue the positions that I want. I feel that I have had the opportunity to work with my professors on a personal level and use resources like the trading room to become more prepared for the job market.
Contact Beverly at beverly.makarios@student.shu.edu
I n t erview w it h St illm an St an d ou t S en ior Mart h a R o on ey
This week’s featured Stillman Standout Senior is Finance major Martha Rooney. Martha has made an impressive mark in her undergraduate career by becoming one of the founding members of the ENT, an entrepreneurship fraternity. Her interest in Finance has secured Martha a position at Bloomberg upon graduation. In the following interview, Martha shares with The Stillman Exchange her undergraduate experience and post graduation plans. Rory Manning: What do you plan to do with your degree in Finance? Martha Rooney: I plan to use my degree in my position at Bloomberg. I will be entering the Sales and Analytics department and plan to further my education by getting a Masters in Finance to help me reach my long term goal of upper level management for a large corporation. RM: I know you were one of the founders of ENT, the new Entrepreneurship
MR: When Julie approached me with the idea to bring a new fraternity to campus, I was instantly intrigued. ENT is a unique opportunity for the students to network and grow as entrepreneurs. My father owns a small shoe retail chain and I have always had a strong entrepreneurial spirit. Being a founder of ENT helps me by giving me the opportunity to give back to Seton Hall and help build recognition of the school, which ultimately will enhance my degree. RM: What internships have you had and how have they helped you to choose your future career? Have they taught you anything you may not have learned in the classroom? MR: I am a double major and took a marketing internship last summer in order for me to explore other industries. I have
RM: Why did you choose to study abroad in Argentina and what did you learn from your experience there? MR: I think it is important to travel as much as possible in order to be well rounded as a student, employee and life in general. I was eager to learn about a culture that I otherwise would have no exposure to. RM: As you look back on your undergraduate experience at Seton Hall, how would you say your Stillman education has benefited you for the future?
RM: You were a department manager at Nordstrom’s before you came back to school at SHU; did this experience teach you anything that will apply to your future career? MR: I would not trade my experience at Nordstrom for anything in the world. It was there that I learned how to be a leader and how to communicate effectively. Contact Rory at rory.manning@student.shu.edu
S p rin g Flin g Brin g s Fu n A ct ivit ies Ba ck t o t h e Ha ll
By Ryan Garrity, Stillman News Editor As the sun comes out and the campus begins to warm up to the delightful weather of spring, students are beginning to set up camp on the green. There is wifflebal, music being blasted, footballs being thrown and voices extending the air. On the grounds of Seton Hall, the coming of spring weather also means one more thing: Spring Fling! Normally taking place towards the end of April or the first week of May, Spring Fling is a week for all of the student body to come together and enjoy food, fun and great weather. In years past, the week has been chock full of exciting activities, and this year’s Spring Fling, April 26 to May 5, appears to be just as packed with fun! The week of excitement kicks off with a “Stuff a Safari Animal” event on the green, where students will be able to create their own safari themed animal—much like the well known “Build-a-Bear”. The Public Relations Students Society of America will also be hosting a car wash, and the night will cap off with comedian Adam Mamawala taking on the Pirates Cove. Wednesday brings about a program that has not been experienced before on campus. Travelling reptile show Snakes Alive! will
be located in the Main Lounge during the afternoon. Snakes Alive! is a national touring program that offers an exciting, handson educational experience, letting students interact “up close and personal” to discover first hand the fascinating world of reptiles. Herpetologist Tom Kessenich will let partakers touch, hold and even talk to his friendly “critters”. This program is quickly becoming one of the most sought after programs across the country, and students will get to experience it first hand. Thursday and Friday present students with the opportunity to get free stuff on the green, in addition to the Jungle Boogie Dance that will take place Thursday night. Much like the other dances that the Student Activities Board offers throughout the year, this will be a chance for students to come together and dance the night away. One of the biggest draws of Spring Fling takes place on Saturday, April 30. It is on this day that the Student Alumni Association will host the Pirate’s Birthday Party. This is a day to celebrate our mascot, and the event promises to be better than ever. In addition to the dunk tank, magician, birthday cake, and various other mainstays, the Pirates Birthday will feature a giant Piñata for all to take a swing at. The final days of Spring Fling wrap up with a few exciting trips, especially one to
Six Flags Great Adventure. There are more activities on the green as well, including a night where a movie will be shown, as well as Tie-Die and airbrushing. The week comes to a close on Thursday May 5, with a Cinco De May Fiesta that will surely have everyone’s mouths watering. It appears that the Student Activities
Board has done an outstanding job preparing for another exciting Spring Fling, and it will be wonderful to see all the students of Seton Hall coming out to enjoy the warmth and the fun. Contact Ryan at ryan.garrity@student.shu.edu
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TUESDAY, APRIL 19, 2011
Ethics
THE STILLMAN EXCHANGE
Is it ethical for U.S. politicians to receive “congressional perks” from lobbyists and corporations? Many politicians are being taken on trips, dinners or given lavish gifts and campaign donations by corporations that almost cross the line of bribery. For example, Representative Ileana Ros-Lehtinen from Florida, stayed at the historic King David Hotel in Jerusalem and attending a $18,500 per person gala party free of charge.
Christopher Lash, Senoir Diplomacy Major
Trusting Our Leadership is Key Many may argue that politicians are corrupt; they spend too much and are heavily influenced by outside corporations by donations or campaign funds. Are these corporations a wolf in sheep’s clothing or are they sheep in wolves clothing? I conclude the former. The companies that donate to politicians are harmless, because influencing a single politician is meaningless unless it’s the president; yet, he is “untouchable”. Corporations can take one politician or even twenty on a trip to the Caribbean or donate a large sum towards their next campaign, but so what? There are still 435 members of the House and 100 members of the Senate who ultimately make the decisions concerning our country. Additionally, these decisions are public, as one can witness from watching C-SPAN for any prolonged period of time. As citizens, we must trust and believe in our politicians even with all the negative media that surrounds them, discussing the corruption and “back-door”
deals they are involved with. What we, as citizens, are missing are the reports about the positive decisions and impacts that Congress and the government are making for our country. It is easy to report that politicians are being flowered with gifts and money from major corporations but so what? What can we do? There is nothing to get around this sort of situation. We elected them and therefore we should trust in them to make the optimal decisions for our benefit and not be swayed by other influences. The corporations don’t elect politicians: we do. No matter how many gifts politicians are showered with, we are still the ones who cast the ballot at the voting booth. If the people are still uneasy or skeptical about the situation, then rally your Congressman or Congresswoman to create more transparency in government. Have them explain the rationale behind their voting decisions or committee group actions. That way, they will always be in the “hot seat”; I like to think of it as an “audit”. Contact Chris at christopher.lash@student.shu.edu
Ashley Lorenzo, Sophomore English Major
Vicious Cycle of Corruption Various companies have always bribed Congress and other politicians; this seems to be even more predominant today. Bribery inhibits our representatives from doing their job, even though they may have started off with honorable intentions; this vicious cycle hinders them to effectively represent their state or district. In 2008, there was an infamous case: The Franklin Scandal. You may not have heard of it, because it was “hushed up” by the media. This scandal was a nationwide prostitution ring, where children were used by the rich and powerful. The pimps of these children were none other than Republican powerbrokers using “Boys Town,” a non-profit organization that supposedly helps poverty stricken orphans. These Republicans had access to not only the highest ranks of government but also to the CIA. When the Discovery Channel filmed and created a documentary; members of the Congress threatened and underhandedly used laws to control the content. As a result, the video was pulled from the Discovery Channel, but no one from Congress can deny that the video was never made because the show was documented. There was a copy uploaded on YouTube, but unfortuJoan Orejuela, Junior Political Science Major
Politicians on the Wrong Track
Gabriella Petrillo, Junior History Major
A Tradition of Dirty Politics Since authority was first introduced to civilization, corruption and the government have always had a mutual relationship. So why must this surprise us now? This may be because in 2011, the U.S. should be an important model for nations around the world. People have put in their sweat, blood, faith, hope and love for the American flag. Why should we do anything to take that honor away? Politicians are supposed to be contributing to the high reputation Americans have always worked for, based on honor, respect and honesty. Now it seems as though all they have been working for is personal luxury, another reputation that Americans have. The money that politicians use comes from the hard work of the American people; yet, they only use it for themselves. They are stealing hard work for their own pleasures. Politicians say that they will accomplish tasks for their constituency, but in reality do not actually accomplish anything. If politicians have money that they can spend, they should at least inform the public regarding where the money is going, or alternatively, where it is coming from. However, there are two reasons why this
would be difficult for them. One, if the public knew that tax dollars are not being used for their advancement, they will not vote for that person. Secondly, it would seem unethical for any of the money to be going towards something other than the state. Political scandals are nothing new. If politicians want to be respected by the people, they need to show that they deserve the respect. If they have any interest in promoting American political life and gaining trust, they need to stop tarnishing the American name. More importantly, beyond the misuse of funds through pork barreling and other political strategies, is the issue of lavish luxury trips, gifts, or any other perks granted to politicians by major corporations who seek to influence their votes on issues of interest or even draft certain laws in their favor. Governmental regulation is powerful; it decides on the laws of the world, ranging from tax policy to import, export regulation. Corporations target politicians with “gifts” of campaign funds, lavish dinners, trips, shows and other luxuries in order to influence the decisions made by them. This definitely doesn’t sound like a government of the people, by the people and for the people. Contact Gabriella at gabrielle.petrillo@student.shu.edu
Republican Joe Barton can be considered a poster-child for the lack of objectivity and at times, the pure inconsideration currently running rampant in the streets of Washington, D.C. Barton., the representative for Texas’s 6th Congressional District since 1985, made headlines on June 17, 2010 when he stood before the House of Representatives and accused the White House of a “shakedown” on the BP oil corporation because of the $20 billion fund BP oil was made to set up by the government for their fault in the oil spill in the Gulf of Mexico. As BP’s Chief Executive Officer, Tony Hayward, looked on, Barton stated, “I apologize. I do not want to live in a country where any time a citizen or a corporation does something that is legitimately wrong, is subject to some sort of political pressure that is, again, in my words — amounts to a shakedown, so I apologize.” His actions quickly prompted questioning as to why Joe Barton, a seasoned veteran of the House, would be so prone to dismiss the tremendous negative effects that the spill had on the American people and their livelihoods in order to defend the oil giant. The answer was simple: one must, of course, defend the people that fund your political campaigns and help you become that seasoned veteran of the House, and one must never do anything that compromises that relationship for future elections. This type of behavior is not easily subdued, but it would be irresponsible for the American people to also think that it is rare.
nately was deleted almost immediately. It is no longer just Big Brother is looking over us or Big Brother is destroying our economy, but Big Brother is also hiding prostitution. This sort of abuse and distrust by government politicians is what is leading many to lose faith in American Government and part of the reason why the approval ratings for Congress is generally less than twenty percent. This singular case leads to a much bigger question, specifically: how much control do we have over the actions of our politicians. It seems there needs to be much more regulation, especially regarding the funding they receive from companies in the form of gifts. If one wants to be a civil servant making decisions for over three hundred million individuals, the public needs to know what this individual is doing during their time off, who they are meeting with, why are they meeting with them and what are they doing during those meetings? Some may claim that it is necessary that politicians have their share of “privacy” but I argue against this. Of course, we aren’t going to follow them into their homes with video cameras, but when they purchase a five million dollar yacht on their congressional salary of $100,000, it seems justified to ask questions. We must cut this vicious cycle at its source. Contact Ashley at ashley.lorenzo@student.shu.edu The extravagant perks from lobbyist groups to our Congressional members are happening more often than bills are made laws, and cannot be considered anything but bribery; bribery is the primary reason that these members forget about their democratic duties. As a result, they focus on their paid-in-advance trips to Maui.
This type of behavior is not easily subdued, but it would be irresponsible for the American people to also think that it is rare. It is an insult to the American people that bribery occurs; after all, the freedoms that we citizens grant politicians are so staggering that if they want more, they can mandate it themselves given that Congress does, in fact, set its own pay, perks and pensions. The issue here is not only what members receive from outside “donors”, but the blatant deception in their act of accepting these perks. These acts of bribery can mean only one thing: instead of going to Capitol Hill to defend your rights, these elected officials are representing the interests of the “Big Corporation” instead. Contact Joan at Joan.orejuela@student.shu.edu
The Stillman Exchange proudly offers students, faculty, and administration the opportunity to write about their views on controversial topics. These opinions are to be read as the opinions of individuals and not the views of the newspaper as a whole.
THE STILLMAN EXCHANGE
Editorials
TUESDAY, APRIL 19, 2011
9
Taunting Rule Changing College Football? By Tony Bonkalski, Sports Assistant Editor Picture your favorite college football team in the National Championship game against their most heated rival. Your team needs a touchdown to win the game and as time runs out, your dreams come true, your team scores on a Hail Mary to win the game, the title, and all the fame that comes with it. The only problem with this is the yellow flags littering the field; your team was penalized for excessive taunting. With the new rules that are being established for the 2011 season comes one change that is up for debate around the college football world. There is a new taunting rule that takes unsportsmanlike conduct to a whole new level. According to the rule, teams will be assessed a 15-yard penalty if one of their players “taunt” the opposition on their way to the end zone. It can be either a touchdown, 2-point conversion or even on a kickoff. This seems like a valid rule besides the fact that if a player taunts their opponent before they actually score the touchdown, the points will come off the scoreboard. “Taunting” can be anything from pointing the ball at your opponents to merely high stepping their way into the end zone. To me, this rule totally eliminates the competitive edge and the personality factor of players in the game.
Photo courtesy of rivals.com
USC player Curtis McNeal takes a celebratory leap into the endzone.
Think of football greats like Terrell Owens and Chad OchoCinco. How many touchdowns would have been nullified if they were to have this rule enacted during their college days? The fact is that college players are in college; they are not professionals of the game and handle situations much differently. College sports are a way for student-athletes to have fun while playing the sport they love; for most, college is the end of the line. Taunting is a part of the game, and it is what psyches teams up to try and is a strategic choice. I believe that if you’re a player that just made an amazing grab and toasted the
The Stillman Exchange The Official Business Publication of Seton Hall University
Executive Board Managing Editors Lee Duan Margaret Reilly Assistant Managing Editor Rich Kimsey
Editorial Board Money and Investing Bryan Murawski Stillman News Ryan Garrity Ethics David Guzik Editorials Anthony Crisci Sports Business Travis Tosoni Domestic News Morgan Tornetta International News Kaitlin Tonti International Business Alex Cohen
Assistant Editors Money & Investing Jennifer Crowe Stillman News Beverly Makarios Sports Business Tony Bonkalski Domestic News Alina Fernandez International News Raphael Baseman International Business Alexandra Hauenstein
Faculty Advisers Michael Reuter, M.B.A. E-ma il stillmanexchange@shu.edu Website www.stillmanexchange.com Twitter stillmanXchange Fa cebook The Stillman Exchange
About The Stillman Exchange is the first undergraduate published business newspaper in the United States. The Stillman Exchange is published on a bi-weekly basis from the Center for Securities Trading and Analysis in the W. Paul Stillman School of Business at Seton Hall University.
defense, that if you want to high step, skip, point to the crowd or even lay down and make snow angels, that’s up to you as a player. If the other team or players are offended by it, let them prove it on the field. After all, isn’t competition what sports is all about? This brings another point to light as the new rule is enacted. Where can referees draw the line? They are already criticized for just about every decision they make on the field, and I can only imagine the hate mail they would receive for making a taunting call against a team that would have potentially won the game if the referee simply did not make the call. If they do not con-
sistently call certain taunting penalties, the players will not know what they can and cannot do. How can you blame players for being caught in the moment? It is understandable to penalize a player for destructive and excessive behavior such as throwing the football at an opponent, but not if he merely does a dance into the end zone. Fans love it and so do the players. This rule will definitely see some opposition by the players, coaches and fans. If called against, the players will likely be infuriated with the referees, which may cause even more flags to be thrown. If a coach is winning a game, only to be called back by a taunting penalty, this could mean the difference between keeping a job or losing it for something they had little control over. Finally, and most importantly, we must address the fans. As a fan, I believe that celebrations make the sport more entertaining, and, even though people watch football because of their love for the game, it is better when players row, row, row their boats after a touchdown. This rule is going to make the game worse for fans, but hopefully, the NCAA will come to its senses and reconsiders changing the rule. Contact Tony at antonio.bonkalski@student.shu.edu
Exploring the Benefits of Complementary-Branding By Meg Reilly, Managing Editor With those living in the metropolitan area exposed to over a thousand advertisements every day, the most innovative marketing is necessary to stand out. Businesses can explore various mediums to connect to consumers through print, television, radio, the internet and mobile, but if the messaging is not right, it can amount to a lot of wasted money. As the marketing environment has evolved, established brands have prevailed amongst an era of uncertainty. But while branding is a powerful tool to secure relationships and the future of the company, previous messaging can cloud consumer perceptions. Re-branding can be a drastic measure that makes loyal customers feel uneasy and can take a long time to reach new customers. As a part of the Leadership Development Honors Program, I had a unique opportunity to engage in a one-onone mentorship with Joe Sheridan, Executive Vice President of Wakefern (operator of ShopRite co-operative and brand). During this experience, I was able to assess ShopRite’s current marketing environment and, in turn, develop the concept of complementary-branding. Complementary-branding differs from co-branding, as the two partnering brands provide something that the other lacks. Not all brands can find a perfect complement, but looking beyond your industry can yield substantial relationships. The main objective is to secure a relationship that makes sense to both companies and the consumers. Complementary-branding can be an extremely powerful marketing tool if executed correctly. Both brands should benefit from the joint-campaign and also offer access to each other’s brand equity. This
concept allows each brand to continue with their traditional means of communicating with customers but also spark interest among consumers who regarded previous messaging as noise. In a way, both brands endorse the other but also offer a new element of service to their consumers. This way, either company does not abandon loyal customers by changing messaging; on the contrary, loyal customers of either brand can be shared. Complementary-brands can share these consumers because they are not in direct competition with each other. Above all, the shared assets should be quantifiable so that the effectiveness of a joint-campaign can be measured beyond the transformation of consumer perceptions. Of course, proper research needs to be done in order to ensure a successful relationship. Once it is determined that both brands have solid assets to offer, as well as a strong foreseeable future, a conversation between brands is worth initiating. The shared assets must be perceived as valuable to both sides while offering a new dimension for both brands to engage in relationships with consumers. By utilizing complementary-branding, the transition between the two brands will be seamless and consumers would not see the relationship as advertising. ShopRite is currently pursuing a relationship with a magazine that inspires its readers to indulge in food and life. While the magazine paints the picture, ShopRite provides the supplies and the consumer engages with both brands simultaneously. Although the current relationship between brands is in preliminary planning stages, look out this year in your local ShopRite for the first successful execution of a complementary-branding campaign. Contact Meg at margaret.reilly@student.shu.edu
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Sports Business
THE STILLMAN EXCHANGE
Pistachios Crack MLB Concessions Lineup By Anthony Crisci, Sports Business Writer Going to see a major league baseball game normally consist of consuming hot dogs, hamburgers, French fries, and peanuts before the game has concluded. As the 2011 season begins, more and more franchises are trying to make pistachios the future “nut of baseball”. Everyone knows that cracker jacks and peanuts are most popular and recognizable at baseball games. The pistachio nut has normally been seen as a household snack, but recently its popularity has skyrocketed. This popularity increase was started by the Paramount farms company who tagged its nuts with a brand name called Wonderful. After the Wonderful pistachios were introduced into the snack isle, the company has spent over $35 million in providing the nation with information about the gourmet nuts. Since this bold marketing campaign, the company has seen over a 250 percent increase in sales over the last two years and is now making its way into America’s favorite ballparks.
For the 2011 Major League Baseball season, eleven clubs put the “Wonderful” pistachio on the concessions stand menus. These teams include the San Diego Padres, Boston Red Sox, New York Mets, Cincinnati Reds, and Philadelphia Phillies. The first to take this venture into its concession stands was the Los Angeles Dodgers, who have been selling the product for three years now. “A baseball fan is used to having a nut in his or her hand,” stated Dominic Engels, vice president of global marketing for Paramount. “We’re presenting them with the pistachio, which they might not have thought of before, as a healthy alternative.” The Dodgers began the project with the pistachio nuts by selling over 50 bags a game, at a whopping $6 a bag. This revenue comes through at about $25,000, nothing close to the amount of money made on peanut sales in recent years. The year after this number was doubled when the team sold a total of 9,841 bags of pistachios at Dodger Stadium. On the other hand, the pistachios competitors are beginning to feel the heat. Peanut sales at the same stadium have declined by over 25 percent after the pista-
Photo courtesy of getcrackin.com
Keyboard Cat is one of the many creative marketing spots Wonderful Pistachios has used to gain the attention of consumers.
chio was introduced at the ball field. The pistachio is quickly becoming a hot commodity as its commercials, including one featuring reality TV star “Snooki,” are making customers curious as to what is so special about this little green snack. Paramount hopes to sell over 100,000 bags
of pistachios this season in the MLB, as it tries to become baseball’s new favorite snack. Contact Anthony at anthony.crisci@student.shu.edu
NHL Expecting Largest Media Rights Deal for Next Season By Robert Szeluga, Sports Business Writer The NHL is set to sign a major media rights deal within the next two months that is expected to push its annual rights fees well over $200 million. The deal will far surpass the current deal of $77.5 million per year that NBC/Versus has with the league. Expected bidders include ESPN, Turner, and NBC/Versus. ESPN is an intriguing option and is said to be favored by many league executives. The network offers an opportunity for a television package, both broadcast and cable
that would be aired on ESPN2. Analysis on shows such as “SportsCenter” would also supplement the broadcast of games. If the NHL were to sign with ESPN, the Stanley Cup finals would be aired on ABC as well. ESPN is no stranger to airing hockey games. ESPN owned the media rights to the league from 1999 to 2004, only to be halted by the lockout that ended the 2004-2005 season. ESPN’s contract with the NHL averaged $120 million per year, the most expensive media rights deal the NHL has had to date. Turner is a surprising option trying to integrate sports into its TruTV programing.
This past spring, the network aired live games of the NCAA tournament along with CBS, TNT, and TBS. The network is also in preliminary talks about placing a bid for the NFL once its deal expires in 2013. TruTV is currently in 93 million homes. Though it will be tough for NBC/Versus to deliver a package that outweighs that of ESPN or Turner, it does have a significant advantage over the other two. The current contract is a revenue-sharing deal that does not include a rights fee. This current contract gives NBC/Versus an opportunity to match any deal that ESPN or Turner puts forward to the NHL. No other bidders will enjoy this
Pep s i R ef res h es S p on s ors h ip D ea l w it h Ma j o r Leagu e S o ccer By Travis Tosoni, Sports Business Editor Major League Soccer and Pepsi have come to a sponsorship agreement, which will see the soft drink giant be the official soft drink of the league for another four years. The deal comes just weeks after the MLS re-negotiated a sponsorship with another major sponsor in Anheuser-Busch. While Pepsi has been able to secure the rights of the MLS itself, the company has lost the exclusive local rights to the teams in the league. Pepsi, along with its other manufactured brands Gatorade and Aquafina, will still be the preferred beverages of the league itself. Pepsi, which has served as a major sponsor of the MLS since the league’s inaugural season back in 1996, has also renewed its contract with the United States national soccer team. With the new agreement, Pepsi plans to implement various new soccer-related campaigns for the current season. Firs, Pepsi will be the title sponsor for the World Football Challenge, a tournament that will run from July 14 to August 6 and boast MLS teams going up against top international clubs. Also, the company is creating the
Photo courtesy of Getty Images Pepsi sponsors the MLS All-Star Jerseys.
Pepsi Football Club, an ad campaign that will feature 11 of the top MLS and U.S. National players to air in various local markets. To reach out to Hispanic fans, Pepsi plans to launch another ad campaign tailored to target the demographic.
The deal between MLS and Pepsi is reported in the eight-figure range, and the company hopes to gain even more profit after negotiating deals with specific teams in the league. Currently, the company is pursuing contracts with numerous teams, including the Chicago Fire, Columbus Crew, D.C. United, New England Revolution, Real Salt Lake, and Sporting KC. Pepsi feels confident in securing agreements with these clubs specifically, since it already has stadium deals in place with the home venues of those clubs. Soccer United Marketing, the agency which helped negotiate the deal, confirmed the league’s contract with Pepsi ranks right with other major sponsorship deals the league has secured. Aside from Pepsi and Anheuser-Busch, MLS has major sponsors such as Allstate, AT&T, and Home Depot. Despite losing the exclusive local advertising rights with specific clubs, Pepsi is certainly content with its contract renewal with MLS and is looking forward to an even longer relationship with the league that it helped fund as a founding sponsor 15 years ago. Contact Travis at travis.tosoni@student.shu.edu
luxury. The NHL has also seen a tremendous rise in viewership over the past few years under the NBC/Versus contract. The first two rounds of last year’s playoffs received its highest Nielsen rating since 1994, when the rating system was first introduced. It will be interesting to see whether the league continues with its current streak of success on NBC and Versus, or switches over to other options instead. Contact Robert at robert.szeluga@student.shu.edu
LeBron Makes Splash with Liverpool Deal ...continued from page 1 “We’re not interested in talent or athlete representation but we think he is one of the most remarkable athletes of his time,” Tom Werner, an FSG owner, said in an interview. “We believe we can open doors for LeBron and LeBron can open doors for us.” David Stern, the NBA’s Commissioner, had his own opinion on the deal. “I think it is terrific that through this partnership and their newly acquired interest in Liverpool FC, LeBron and Maverick Carter will not only enhance their opportunities from the global sports marketplace but also gain a deeper understanding of all that is involved in the operation and valuation of sports franchises,” Stern said. The success of this high-profile merging of firms is yet to be determined. FSG has never taken on representation of an athlete in this way. Furthermore, this is James’ first move into international business. One thing is certain though; this move raises the bar for athletes and sports marketing companies worldwide to take steps toward globalization. Contact Anthony at anthony.holesworth@student.shu.edu
Sports Business
THE STILLMAN EXCHANGE
Kroenke Increases Ownership Stake in Arsenal By Brianna Young, Sports Business Writer Sports Tycoon and Businessman Stan Kroenke has decided to increase his stock in the Premier English Soccer team Arsenal, valued at $1.2 billion. Since Stan first bought a $9.99 stake in 2007, he has devoted an increasing amount of money towards the club. Before he came to his most recent decision to invest more into the team, he already owned 29.9 percent of the team, and now owns a whopping 62.89 percent. Kroenke desires to have a full takeover of Arsenal in the near future. Arsenal was founded in 1866 and now is world’s fifth largest soccer team in terms of revenue, which amounted to $336 million in 2009-10. Arsenal is also the second richest club in England behind Manchester United. Kroenke is not a man of many words so no one knows his real plans for the team and he even chose not speak at the club’s annual general meeting. Even though Kroenke is very quiet he remains an articulate man with effective strategies and Arsenal is hopeful that with new ownership, more money will be put towards the team. "As long as he gets us back on top, I don't care where he's from," Tariq Ahmed, an Arsenal season-ticket holder said. "Let's just hope he gives the manager a big pile of money to spend." Arsenal is a powerhouse in the league, but has not made the necessary steps needed to win a championship in recent years. The team is faithful that Kroenke taking full ownership of the club will bring them back to the championship. Arsenal has scored 62 goals this season (second most in the EPL) but they had 30 goals scored on them, which
Photo courtesy of ESPN Arsenal hopes Kroenke will help their championship hopes.
landed them fifth place in that category. Arsenal is not the only sports team that Kroenke owns. The other teams he owns include: the Denver Nuggets (NBA), the Colorado Avalanche (NHL), St. Louis Rams (NFL), and Colorado Rapids (MLS). Kroenke seems to prefer underdogs within their respective leagues. The Colorado Avalanche won the Stanley cup in 2001, shortly after Kroenke took ownership, but they are now one of the NHL’s worst teams and had the fifth lowest payroll this season. On the other hand this season the Nuggets traded two of its top players Carmelo Anthony and Chauncey Billups to the Knicks for draft picks, and not so good players, and since the trade the Nuggets have had a better record than the Knicks and have the fifth best record in the Western Conference. Kroenk seems to be completely satisfied with his decisions, and the results seem to be proving these critics wrong. Many fans of Arsenal are skeptical about the Kroenke takeover because of the history of the team’s last owner. But Kroenke believes he can silence this skepticism. Contact Brianna at brianna.young@student.shu.edu
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Under Armour Adds Depth to All-Star Roster with Outfielder Bryce Harper By Tony Bonkalski, Sports Business Writer Under Armour Inc. has announced a multi-year deal with yet another baseball star in alignment with the company’s takeover as Major League Baseball’s official footwear supplier. Bryce Harper, the Washington Nationals number one prospect, and also the number one pick in most recent MLB draft, is the latest player to sign a deal with the rising star company in the baseball industry. According to the deal, Harper will wear Under Armour apparel during various events and games. The college all-star will also be featured in Under Armour’s advertising campaigns. “I’m excited to join the Under Armour family, which has shown such a strong commitment to helping young baseball playersand elite athletes in multiple sports- elevate their game” Harper said. “I admire Under Armour’s dedication to training and their desire to be the best. Their apparel and footwear is second to none, which makes this partnership a great fit.” Harper is the second National’s player to be represented by the company, as third baseman Ryan Zimmerman is already signed with the company. “Bryce is an electrifying athlete, and we look forward to partnering with him as he
Photo Courtesy of AP
Bryce Harper hopes to bring more publicity to Under Armour.
begins his professional career and as he helps carry the torch for the next generation of Under Armour athletes” said Matt Mirchin, senior vice president of sports marketing for Under Armour. Bryce has yet to prove himself professionally, but his resume would line him up to be a potential all-star. He has yet to be called up to the majors, but he plays for the Nationals’ Class A affiliate, the Hagerstown Suns. The Baltimore-based company is slated to have about 100 MLB players under contract for the 2011 season. “We always look brand first when we do anything, bus associating with leagues
like the MLB just adds that Good Housekeeping seal.” Mirchin said. “There’s a great opportunity for us in baseball, but we think consumers are already seeing us as more than a football brand.” Under Armour is certainly climbing their way up the industry, and due to their edgy brand positioning, they seem to be on their way higher. This acquisition with the MLB comes after Under Armour acquired a piece of NFL rights. Not only has the company signed many athletes, but to top the cake off, they signed pro football superstar Tom Brady last year. Contact Tony at antonio.bonkalski@student.shu.edu
Reebok Plans to Boost Sales with EasyTone, ZigTech Fitness Focused Trainer Product Lines By Travis Tosoni, Sports Business Editor Reebok, a major brand division under Adidas Group, is looking to boost their sales number to perform better within the industry. Since being acquired by Adidas back in 2006, Reebok has posted only one year of revenue increases, which came in 2010. To increase profits, Reebok is looking towards two of its major product lines, EasyTone and ZigTech. The EasyTone line of sneakers was introduced in 2009, followed by the ZigTech’s in 2010. Both products are designed to better improve posture of their wearers, as well as promote better health. Uli Becker, President of Reebok, has acknowledged that the process of increasing numbers will take time, but he hopes to see significant progress within five years. With the brand’s gross margin increasing to 35.9 percent, along with the 47.8 percent figure posted by Adidas, it is clear that the turnaround is underway.
Another reason Reebok is optimistic for the future is the upcoming release of another line of products, the RealFlex brand. RealFlex sneakers are set to be introduced this month, and will be available world-wide in 2012. The RealFlex sneakers are also designed with the health of its wearers in mind, as they are crafted to improve foot strength and develop a more natural running motion. A RealFlex clothing line is also slated to be introduced along with the sneakers. Reebok is also partnering with gyms in both the United States and Germany in hopes that sponsorship deals will increase recognition of the brand. Fitness First, a German gym chain with over 280,000 members, has signed an agreement with Reebok that will see all 4,800 Fitness First employees fully outfitted in Reebok apparel. Promotional events will also be held at various Fitness First locations to make members aware of new Reebok products. The pressure to increase sales is selfimposed, as Reebok’s efforts to boosts numbers are so its parent company Adidas AG
can close the gap with its major competitor, Nike. Last year, Nike posted an astonishing $19 billion euros in revenue compared to the $11.9 billion euros of Adidas AG. The fiveyear turnaround plan of Reebok, along with the sales increases proposed by Adidas brand, make the company’s target profit value to be $17 billion euros by 2015. As Reebok continues to further increase the success of its training brands, it currently has a couple of factors working in its favor. Currently, Reebok-CCM Hockey is the exclusive merchandise provider for the National Hockey League, and the company’s “Edge” line produces the jerseys and socks for all 30 NHL teams. Reebok-CCM is the leading provider of hockey merchandise and equipment, and is endorsed by superstars such as Sidney Crosby and Pavel Datsyuk. Contact Travis at travis.tosoni@student.shu.edu
N ik e Ex t en d s ‘ Go ld Med a l’ S p on s o rs h ip D eal w it h t h e U . S . Olym p ic C o m m it ee By Tony Cramond, Sports Business Writer The United States Olympic Committee has extended its sponsorship with Nike, now set to last through 2016. This means that American Olympic and Paralympic athletes will be sporting the Nike swoosh in the London 2012 and Rio de Janiero 2016 Summer Games, and the 2014 Winter Olympics in Sochi. Nike first became an official sponsor of the USOC in 2005, and has provided the footwear, apparel and headwear for all of the Olympic Games since then. This contract comes after last month’s widespread reports that a preliminary contract agreement was reached between the two sides. Although there is no exact financial valuation for the deal, it is believed that the contract is worth around $20 million in
total. This is more than the amount that Nike paid in the previous arrangement, which was reported as worth around $15 million over four years. Nike will also produce the uniforms that will be worn by the athletes at the medal ceremonies at these events. Nike will also produce the uniforms for the competitors at the 2014 and 2016 U.S. Youth Olympics. In a report to Sports Pro Media, USOC chief executive Scott Blackmun said of the deal: “We are proud to extend our partnership with Nike through 2016, a company that brings innovation to athletes the world over. Nike’s skill at developing performance-driven apparel and footwear has been instrumental in equipping US Olympians and Paralympians as they strive to reach the pinnacle in athletic excellence.” “The Olympic Games represent Nike’s core DNA – to provide innovation and inspi-
ration to athletes at the highest level,” added Nike’s general manager of North America, Elliott Hill. “We are proud to support our US athletes and are excited to continue Nike’s partnership with the US Olympic Committee.” In addition to sponsoring USOC, Nike is already the official partner of USA Basketball, the US Soccer Federation, and USA Track and Field. The USOC has now signed 3 multimillion-dollar deals with blockbuster companies: Nike, Citigroup and TD Ameritrade. This all is happening ss it looks to restructure its sponsorship portfolio that was temporarily hurt by the recession after the Beijing Olympics. Contact Tony at anthony.cramond@student.shu.edu
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S o ccer is Ba ck in Van cou ver, Fan s are Lou d er an d Prou d er By Scott Kim, Sports Business Writer Soccer is back in Vancouver. Just a couple weeks ago on a Saturday at Empire Field the Vancouver Whitecaps made a return in soccer and won 4-2. Fans in Vancouver hope that this time around the franchise will last more than 11 years. The sellout crowd of 22,582 set out to that it was a mistake to pull the plug on a Vancouver franchise last time and hope this win can carry over and turn this season into a magical one. Head coach Teitur Thordarson took notice of the crowd. “It was absolutely electric. I couldn't have imagined that it would be like this,” said Thordarson. “I want to thank everybody who came out here today and made this day so special for us. The supporters were … like a team, it looked like they'd been training for a long time. That surprised me a lot, I didn't expect that.” They were not just an idle crowd either; they really were into the game and were singing and chanting throughout. Everyone expected the hardcore fans to show but to get a sellout crowd of fans who were all into the game was definitely an unexpected surprise. President Bobby Lenarduzzi also took notice. “I actually think that after the [NASL] Whitecaps, we were like triple-A
Photo courtesy of Darryl Dyck Fans of the new MLS franchise in Vancouver are very eager to support a winning soccer club.
baseball, and in some instances, maybe single-A baseball,” Lenarduzzi said. “We still got the support when we were in the smaller venue [SFU's Swangard Stadium], but we weren't relevant. So you go up to MLS, and now we're major league again, and it resonated with people.” It was also a good sign to see star player, striker Eric Hassli, have a great game. It would have been hard for the fans to get behind the team if they weren’t to play well but two goals from Hassli gave them something to cheer for. CEO Paul Barber, who left Tottenham Hotspur to come to the Whitecaps, was another who did not expect such a response from the fans after a strong game from his
players. “It's something we can build on, something to give the players confidence, and importantly, something that will give the fans confidence,” said Barber. “We said from the start we wanted the atmosphere to evolve organically, and it did. We did our little bit at the start, and then the people of Vancouver took over and just made a party – and what a party it was.” Hopefully this passionate atmosphere continues and proves that soccer has had a place in Vancouver all along. Contact Scott at william.kim@student.shu.edu
Panthers “Ice” New Sponsorship Deal with Lexus By Brittany Hammer, Sports Business Writer In a spring season which has brought about many firsts in the world of sponsorship and marketing, the Florida Panthers and the NHL have decided to take part in the recent whirlwind. Luxury car manufacturer Lexus will team up with the Miami-based ice hockey organization for a historic naming rights deal. Starting with the 2011 season, the Florida Panthers will skate on the freshly named Lexus Rink at BankAtlantic Center. Oddly enough, however, the contract does not include any on-ice advertising for Lexus. The only four on-ice advertising slots have been previously sold to Bud Light, Dex Imaging, Ford and Gulfstream Park. Once one of these on-ice positions becomes available for purchase, Lexus will have the first opportunity to secure it, according to the agreement. Lexus Rink will also see its brand permanently represented on the Panther scoreboard, but only during the team’s home contests, and not during other
events at the center. The multi-year deal could bring in a grand sum ranging anywhere from $500,000 and up annually. This unique arrangement is the first of its kind for ice hockey, and only the second for professional sports in general. The dynamic partnership between Lexus and the NHL club has existed for some time now. Since 1998, the renowned automaker has served as the primary sponsor for the arena’s suite and club level. Lexus has also been dubbed the official luxury ride of the Florida Panthers. This most recent naming rights deal serves as a renewal, as the well-built relationship was set to expire with the end of this year’s season. Even with an arena already packed with plenty of advertisements from numerous sponsors, Panthers President Michael Yormark still hints at several more marketing possibilities – including potentially placing ads on his players’ jerseys, which would be another first in the NHL. The organization knows no limits when it comes to marketing and promotions, as it still seeks to score a loyal and larger fan
base. The Florida Panthers wrapped up a disappointing season with a loss to a division rival Washington Capitals on April 9. The organization hopes the newly named ice surface will lead to the ultimate hat trick next season – more fans, more revenue, and more wins. Contact Brittany at brittany.hammer@student.shu.edu
A ll C las s A A A Bas eb all Gam es t o Be Broad ca s t On lin e in 2011 By Anna Negron, Sports Business Writer Minor league baseball fans will now get the opportunity to watch their favorite players and teams online. A recent expansion by Baseball Internet Rights,Co. has given MiLB.TV the chance to broadcast all Class AAA baseball games. The idea came after a long stretch of development by Minor League Baseball and Major League Baseball Advanced Media. One major concern of the organization was the market size. As compared to Major League Baseball, Minor League Baseball lacked the audience and revenue to advance viewing options.
However, popularity grew after the launch of web pages for over 150 affiliated teams and web products, assuring that broadcasting games would be an undeniable success. Art Martin, chief executive of Mandalay Baseball Properties commented on the topic. “Having all the Triple A games bundled together is a big step forward for us,” said Martin. “It’s perhaps taken a little while, but we’re seeing big momentum coming out of this agreement, not only from the video content, but also sponsorship, ticketing and several other key areas.” The game package is set to be sold at
$29.99 for the season, or $6.99 per month. Customers who already subscribe to MLB TV can add this to their package for an additional $10. The MLB Advanced Media, along with Minor League Baseball hope to create a MiLB mobile app, similar to the already established MLB At Bat mobile application. It is set to be released later this season. The broadcasting of Class AAA baseball games is already underway. With the newly founded success of its mobile based operations, a new line of sports may be brought to the forefront of the industry. Contact Anna at anna.negron@student.shu.edu
ESPN Ready to Launch Streaming Television Application By Matt Bartel, Sports Business Writer Is there a game you cannot miss? Are you at a prior engagement with no end in sight? Thanks to ESPN, owners of Apple devices with an internet connection can make this a problem of the past. Owners of the Apple IPad, IPhone, or IPod touch with internet access have made the “Watch ESPN” app currently one of the top downloaded applications from the Apple “App” Store. The free download grants live and commercial free access to ESPN, ESPN2, ESPN3.com and ESPNU to anyone who has Time Warner Cable, Verizon Communications, or Bright House Networks as their current cable service provider. With competitors like Netflix costing consumers only a small monthly fee to instantly download and stream television and movies commercial free, as well as a large amount of free video being available on the web as it is, ESPN saw the need to respond to their changing consumer market. ESPN’s vice president of sales and marketing Sean Bratches had this to say in an interview with Nat Warden of the Wall Street Journal, “We’re always innovating at ESPN…This is where the marketplace is heading,” said Bratches. This action is made in response to a recent influx of apps that allow access to live television from your cable service provider. Time Warner Cable is operating one that allows access to certain channels, while Cablevision’s app allows viewing of all the channels the consumer is paying for. With other options available the consumer must now be given a reason to stay with traditional cable, and apps may play a vital role in this decision. ESPN’s action of creating its own app may have incited some legal action against Time Warner Cable. They have received threats of legal action including cease and desist letters from certain networks who feel cut out of the app portion of business by being offered under the umbrella of Time Warner Cable in their application. Bratches expressed no worry in his interview about the ESPN app, stating that ESPN has all the rights required to offer their application. After decades of static activity between cable companies and the consumer being a victim of circumstance due to a lack of options, the threat of competition from other sources for the same entertainment has ignited a fire of initiative. The current app battle with further fuel this fire as competitors will be forced to come up with the best offer for consumers, now with applications included in the package they choose to purchase. The consumer will undoubtedly benefit from all of the new innovations and essentially limitless access to numerous cable television networks, including ESPN. Look for many other major television networks to continue making the move towards streaming applications, in hopes to attract more consumers. Contact Matt at matthew.bartel@student.shu.edu
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Domestic News
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St u d e n t L o a n D e b t To p s C r e d i t C a r d D e b t By Padma Sonti and Amanda Genabith, Domestic News Writers If you are a student with loans out and you are scared--you are not alone. Last year, student loan debt topped credit card debt in the United States, and it shows no signs of slowing down. Economists project that loan totals could reach $1 trillion this year. According to FinAid.org, a website that offers students financial aid guidance, loan debt increases $2,853.88 every second. The total student debt loans have reached $833 billion while credit card debt has hit $826.5 billion. Two-thirds of 2008’s bachelor’s degree recipients had student loan debt. In 1993, only half of graduates had student loan debt. Students who graduated last year averaged $24,000 in student loan debt. FinAid.org’s student debt clock estimated that the total outstanding student loan debt is more than $900 billion. The website’s publisher, Mark Kantrowitz, told Marketplace Morning Report, “The key problem is that student loan debt tends to be repaid over a 20 year term now, which means more and more students are going to still be repaying their own student loans when their children enroll in college.” Budget cuts may further impact student debt as the number of Pell grants for lowincome students drop and tuition rises. Even President Obama said that he and the First Lady had each accumulated at least $60 thousand in student loan debt when they had finished school and that they had
Photo courtesy of the Fiscal Times Student loan debt has reached a new high and threatens to get higher, leaving students in fear of painful post-graduation debt.
been married at least eight years before they paid the debts off. In the midst of balancing academics, extracurricular activities, and everything in between, many students at Seton Hall are experiencing the enormous pressures of student debt. “If I could think of one thing in my college career that has made me the most anxious and stressed out, it would have to be dealing with my student loans,” said Nicholas Carrico, 21, a junior majoring in Occupational Therapy through Seton Hall’s Social and Behavioral Sciences program. During his freshman year, Carrico took out a loan through Sallie Mae and switched
News Briefs Arizona Passes Birth Certificate Bill Arizona Governor Jan Brewer has the option of signing a bill that would require presidential candidates to submit birth certificates if they wish to be included in the state’s election ballot. According to the bill’s supporters, the motivation for this bill does not have to do with the “birther” conspiracy, which claims President Obama is not eligible to be president. Parties would have to submit a long form birth certificate, which lists the name of the hospital in which the candidate was born as well as the attending physician. Baptismal or circumcision certificates, hospital birth records, or a mother’s post-partum medical record could substitute for this document if it is not available. Ads Appearing on School Buses In a rush for revenue, states and municipalities are selling space on their own property to be used for advertising. One such space is school buses. Supporters say that though the income is little compared to the size of their deficits, every little bit counts. Opponents argue that exposing children to more commercialism may not be appropriate. Utah is the most recent state to allow school bus advertising, but Colorado, Texas, Arizona, Tennessee and Massachusetts already allow it. Eight other states are considering similar legislation, including New Jersey. Chicago School Bans Lunch from Home A Chicago area public school is mandating that its students eat food served in the school cafeteria. Unless students have a medical excuse, they are not allowed to bring bag lunches from home. The school’s principal argues that it is nutritionally better for the students to eat cafeteria because they will not have access to junk food. The Chicago Tribune reported, however, that students threw away most of the food uneaten, because according to students it “tastes bad.” Other schools allow students to bring lunch from home, but will examine the students’ meals to assure they do not have any junk food.
lenders, which has left him in limbo ever since. Looking ahead, he fears that his student loans will become an added burden upon him and his family. “I dread entering graduate school on student loans,” Carrico said. “I hope I can find a GA position or else I will be drowning in these loans. Our country really needs to make a priority in education and figure out ways to make it more accessible to everyone.” Due to the rising costs of education, many students find themselves taking out multiple loans. Jessica Handwerger, 20, a sophomore majoring in Elementary/ Special Education,
is primarily funding her education through New Jersey Class Loans. “Going to college is stressful enough and taking out loans adds even more stress.” Freshman Jamie Law, 18 , is just beginning to realize the responsibilities associated with student debt. “As a student with an already sizeable debt for school, I sometimes wonder if all of the effort I am putting into my studies is worth all the money I’m paying,” said Law, who eventually dreams of attending dental school. “ With the way the economy is fluctuating, it is difficult to guarantee that I would even be able to land an immediate job to pay my debts.” Junior accounting student Jeff Degelmann, 20, has his theories about the loan totals: “Student loan debt is higher than credit card debt due to the fact that student loans acquire a higher interest and are repeatedly being beaten by the interest.” Finance student Andrea Alarcon, said “I find it rather ironic that I can go to any store and apply for a credit card and receive it in the mail almost a week later. On the other hand, when it comes to endeavoring to pursue my educational goals, I get stuck with either no help at all or interest rates that will have me in debt for years to come.” Though experts believe student debt should be seen as an investment, students still worry while shouldering the burden. Contact Padma at padmavathy.sonti@student.shu.edu Contact Amanda at amanda.genabith@student.shu.edu
Napping on the Job: Sleeping Air Traffic Controllers Wake Up FAA
Photo courtesy of Reuters Air traffic controllers have been falling asleep on the job nationwide.
By Liam Brereton, Domestic News Writer After a recent wave of air traffic controllers falling asleep while on duty, Hank Krakowski, the Federal Aviation Administration’s Air Traffic Organizer has resigned his office and officials are looking for solutions to the problem. In April there have been several notable incidents of air traffic controllers either accidentally or purposefully sleeping on the job. In the most recent event on April 13, an airplane transporting a sick patient attempted to land at a Nevada airport but the pilot was unable to make contact with the sleeping controller. The pilot was, however, able to contact a radar base in neighboring California, which helped guide the plane to a safe landing. The controller, who records show was asleep for 16 minutes, has been suspended. Randy Babbitt, director of the FAA, released a statement about the sleeping controllers. In it he said, “Over the last few weeks, we have seen examples of unprofessional conduct on the part of a few individuals that have rightly caused the travelling public to question our ability to ensure their safety, this conduct must stop immediately.” In order to alleviate the situation, the FAA mandated
that 27 airports, which have encountered these problems, place two air traffic controllers on duty at the same time during the midnight shift. That solution has faced some criticism. “Only in the federal government would you double up on workers, averaging $161,000 per year in salary and benefits, that aren’t doing their job, this staffing increase misdirects our resources and focus away from congested air traffic control facilities,” Congressman John Mica (D-Fla.) told the Associated Press. An investigative team composed of members from the FAA, the controllers’ union, NASA and the Mitre Corp. has found that the best solution for dealing with sleeping controllers may be to allow them to sleep at work under certain conditions. That system, which is already employed in countries such as France and Germany, would allow controllers to sleep for two hours during a midnight shift. The experts on this team suggest that allowing controllers to sleep for a controlled period of time will prevent those controllers from feeling fatigued during the rest of their shift. Currently, controllers are forbidden from sleeping at any time during their shift, including breaks. The team also suggested that controllers should have nine hours between their shifts, rather than the current eight. The arrangement of shifts—generally one week of day shifts then one week of night shifts—interrupts sleep patterns, officials say. In the same article, the Associated Press quotes the president of the Flight Safety Foundation, Bill Voss. Voss thinks that building time for controllers to sleep into their shift is a good idea, pointing out that emergency workers are usually afforded that time. “What is crazy,” Voss said, “is putting two people onto a shift in a dark room with no noise and telling them to stare out a window and do nothing for eight hours, but to never fall asleep.” Contact Liam at liam.brereton@student.shu.edu
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Domestic News
THE STILLMAN EXCHANGE
Congress Removes Gray Wolf NY Lawmaker Highlights from Endangered Species List Police Radio Troubles By Fred DeRitis, Domestic News Writer The nation is experiencing widespread effects as a result of the budget debate, some of which are unexpected. An adjustment to the endangered species list has been attached to the budget and is stirring up some issues. It states that one thousand six hundred gray wolves will be taken off of the endangered species list. This marks the first time that Congress has directly influenced and taken a species off of the endangered species list. The danger of this new precedent is that it opens the door to other governmental intervention on the endangered species list in the future. Keiran Suckling, a representative from the Center for Biological Diversity, said “We are having the worst attack on the Endangered Species Act in 30 years while we have a Democratic Senate and a Democratic White House. They are trying to shut citizens and scientists out of the endangered species process.” The prevention act has been traditionally seen by some politicians as an obstacle to economic progress, by preventing certain areas from being developed. According to legal experts, the precedent being set is that even those animals that the United States wants to protect are negotiable. As Patrick Parenteau, professor of environmental law at Vermont Law School, explains, “The message to the environmental community is, don’t count on the administration to be there” when it comes to protecting endangered species. In addition to the gray wolf issue the Obama administration faces other environmental problems. In 2012, a budget request from the Department of Interior seems to have a severe cap on spending for a program that permits citizens to advocate for species to be added to the endangered list. Politicians in Washington believe that the wolf issue is a very specific and unique
Photo courtesy of U.S. Fish and Wildlife
Ihe gray wolf has been removed from the endangered species list by Congress.
because federal judges have impeded the removal of the wolves from the Endangered Species List several times over the last ten years and because most biologist believe the population to be thriving. J.B. Ruhl, an expert on the Endangered Species Act at Florida State University warns that now is not the time to be panicking over the government’s actions. Ruhl said, “It seems to me the planets had to be aligned just right to make this happen.” “There might be a wing of the Republican party that would love to see the Endangered Species Act reformed,” he continued, “but I don’t think they are going to be able to ram that through anytime soon.” The Obama administration has listed 59 species as endangered. The Center for Biological Diversity estimates that the administration adds about 30 animals a year. The same group notes the increase from approximately eight additions annually in the Bush administration, but also pays attention to the decrease from the estimated 65 annual additions in the Clinton years. Contact Fred at fred.deritis@student.shu.edu
By Tuananh Pham, Domestic News Writer Some New York Police officers are still not able to communicate with each other with their police radios, due to lack of access to quality equipment. Sen. Greg Ball hopes to change that. As chairman of the New York State Homeland Security Committee, Ball brought up the issue during a homeland security hearing last week. A New York labor safety board urged the transit police department to resolve the radio issues but the issues were not resolved, according to Ball. In addition to sending a letter to President Barack Obama compelling him to resolve the situation, Ball said he will also send a letter to all members of Congress. Police radio communication issues first came to light in the September 11, 2001 terrorist attacks in New York, and emergency responders are still fighting them today. The problems officers have with their radios sometimes force them to use their cell phones or even payphones in order to contact each other. Coordination problems during the September 11, 2001 attacks highlight the importance of resolving the radio issue. When the attacks started, radio traffic increased significantly and continued to increase steadily. Dispatch personnel were
overloaded, causing delays in responding to radio calls. The National Institute of Standards and Technology calculated that approximately one-third of radio messages transmitted during the surge of communications were either not complete messages or were not understandable. Signals were noisy, interfering signals were present, some transmissions had choppy audio, and some receive sites had equalization differences. The Port Authority repeater, intended to allow communication within the towers, did not work as intended during the attacks. Ball told CNN that in the time from the September 11, 2001 attacks, the members of the New York Police Department “Still, in far too many instances, do not have proper interoperability they need, and in some cases, cannot communicate at all.” Robert Morris, a police union official, said regarding the severity of the radio problem, “The officer carries a radio on his belt but he might as well be wearing a brick.” Officers from the Metropolitan Transit Authority are also plagued by issues with faulty radios. The MTA worries about this inability to communicate since public transportation is a prime target for terrorist acts. Contact Tuananh at tuananh.pham@student.shu.edu
Massive radio traffic on 9/11 forced emergency responders to use cell and pay phones to make calls. Ten years later, the troubles are still unfixed.
St eep Ed u cat ion C u t s C au s e D is con t en t in PA By Alina Ivette Fernandez, Domestic News Assistant Editor Pennsylvania is in turmoil as Governor Corbett announced the new state budget will dramatically cut funding to public health and welfare programs, but what has most of the state in an uproar are the budget cuts to education. The cuts, in what the Governor calls a “reality-based budget,” will reduce basic education funding by ten percent, or $550 million. Corbett also proposed cutting $259 million in block grants to school districts. These grants fund programs like all-day kindergarten. Financial adjustments like these would affect every school district in central Pennsylvania, and result in spending cuts of approximately ten percent of Midstate districts’ budgets. Corbett is also asking all school employees to consent to a wage freeze, which is estimated to save another $400 million. Corbett’s official intent is to focus on the core of education, with a specific review of early childhood programs to maximize funding impact and create school choice educational opportunities. He notes that although funding has been cut, the budget implements initiative will provide schools with increased flexibility and tools to improve student performance. The governor also emphasized the role
of voter approval in the change, asking school districts to seek approval on budgets that would raise taxes on property above the level of inflation. Among other changes in the budget, Corbett announced that teachers would need to become subject to removal for economic purposes, a measure that is prohibited by state law. James Testerman, president of the Pennsylvania State Education Association, the state’s largest teachers’ union, said “We can’t slash school spending, cut programs that work and still expect our students’ success to continue.” Other areas of education are also affected by the new budget. State owned and state related schools are set to lose an additional $650 million dollars. Four state-related and state owned universities, including Temple University and Lincoln University will lose more than half of their state funding. Although the proposed budget is ruffling a few feathers, several weeks of budget hearings have concluded and leaders from both the State House and Senate predict that the spending plan will be approved on schedule. William Adolph, Delaware County (R.), the chairman of the House Appropriations Committee believes lawmakers will consent to a spending plan before the June 30 deadline. In reference to
the proposed budget, Adolph said “I think we’re all adults here, and we’re going to work this out.” During hearings, Adolph said he felt Charles Zogby, Budget Secretary, showed an inclination towards negotiation between himself and lawmakers on the final adjustments to the spending plan. Zogby referenced this inclination during testimony he gave two weeks ago. He said, “I think the governor expects that we’ll be engaged with both the House and the Senate on what the final budget would look like, and we’ll see where those discussions lead us.” Many of these discussions will focus on the allocation of funding to higher education and finding other places in the budget to remove these funds from. Majority Leader Mike Turzai said House Republicans are going to propose a state budget that would cut additional welfare spending in order to restore some higher education funding that Governor Corbett had suggested cutting. Turzai said the budget plan they will draft will attempt to make the basic education funding formula more fair, claiming that as it stands it favors Philadelphia. House Minority Leader Frank Dermody, (D-Oakmont), said he would wait to pass judgment on the House Republican’s proposal “until we see the bill.” Turzai said his caucus’ proposal for the
higher education budget proposed “will still be somewhat of a decrease from last year,” but highlighted that it would still allocate more funds to the institutions and their programming than the current proposal. In response, Corbett said that he would consider any budgetary proposals the Legislature makes. Turzai, in a gesture of cooperation responded that his caucus would adhere to the current limit on spending that was implemented by Corbett, a limit that the Governor has said is “nonnegotiable.” During a news conference Turzai said the Special Allowance program in the Department of Public Welfare would likely see a reduction in their $200 million budget. This comes after a 2009 audit conducted by General Jack Wagner (D) found potential welfare fraud and abuse totaling tens of millions of dollars. With the legislature poised to act, Pennsylvanians are paying close attention. A recent poll conducted by Susquehanna Polling and Research survey placed education at the top of voters’ list of concerns, followed closely by the state budget. This is the first time since 2007 that voters did not place the economy at the top of their list of concerns. Contact Alina at alina.fernandez@student.shu.edu
THE STILLMAN EXCHANGE
TUESDAY, APRIL 19, 2011
International News
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I n t ern a t io n al BRICS Nations Hold Conference in Sanya lenge for world economy recovery. The Fadesola Ojeikere, N ew s Ed it o r ByInternational leaders believe they should concentrate News Writer efforts should made to extend production capacity as well as increase communication Last Thursday, April 14, the third Bid s Fa rew ell BRICS Summit took place in Sanya, China. between consumers and producers to balPhoto courtesy of Reuters
By Kaitlin Tonti, International News Editor As I sit here writing the last article I will ever write for The Stillman Exchange, at my very last editing weekend, all the memories from the past two years come back clearer than I ever imagined possible. When I visited Seton Hall a few months prior to transferring here in the fall of 2009, I was impressed by the professionalism of The Stillman Exchange, but never thought of writing for them because how would an English major work for a business newspaper? However, I was soon proven wrong after meeting Maggie Dewane, managing editor at the time, and finding out the Domestic News section was looking for new writers. Danielle Storm, the International News Editor at the time, taught me everything I needed to know in order to become a great editor for the following year. More importantly we became great friends. One aspect of becoming an editor that I never anticipated was making great friends. I feel as though I belong to a small family of people who are all working toward producing a paper that is truly unique. The Stillman Exchange represents the courage to break away from the norm, and provide for Seton Hall a newspaper that reaches out to all students who appreciate the pursuit of knowledge in a world outside of South Orange, New Jersey. I want to say thank you to the many people who have been a part of this journey with me. First, thank you to the former managing editors, Maggie Dewane, Jerry Pecoraro, and Ian Mehok who had faith in an English major to work on a business paper, and inspired me with their unending devotion to their jobs. Again, thank you Danielle Storm for your encouragement, kindness, and guidance in helping me become an editor. Thank you to Morgan Tornetta, Domestic News Editor, and Raphael Baseman, Assistant International News Editor. Morgan, you made some of the hardest days more bearable, and for our friendship I will always be grateful. Raph, the same goes for you as well. The work you have put toward making the International News section great is invaluable, and I know you will do fabulous as editor next year. Contact Kaitlin at kaitlin.tonti@student.shu.edu
The leaders of the world’s largest emerging economies convened to discuss prevalent global economic and social issues. The term BRIC was created in 2001 by Goldman Sachs economist Jim O’Neil. The term itself represents the emerging economies of Brazil, Russia, India and China. South Africa was recently invited to join in 2010 and the acronym has since been called BRICS. The team as a whole is a competitive force in the global market. With the addition of South Africa to its ranks, the bloc accounts for 40 percent of the global population, 18 percent of the global GDP as of 2010 and an estimated 45 percent of current economic growth. BRICS explosive growth is predicted to make them a formidable contender against other developed economies. The day long summit included Prime Minister of India Manmohan Singh, China’s Hu Jintao, Brazilian President Dilma Rousseff, and Russian President Dmitry Medvedev. The leaders agreed upon a declaration calling for greater influence in global financial decision-making. “We call for a quick achievement of the targets for the reform of the International Monetary Fund agreed to at previous G20 Summits and reiterate that
Brazilian President Dilma Rousseff and South African President Jacob Zuma.
the governing structure of the international financial institutions should reflect the changes in the world economy, increasing the voice and representation of emerging economies and developing countries,” they said in the declaration. “BRICS are going to be the dominant force,” said Bronwyn Curtis, the HSBC global head of research. “These countries are on a huge growth trajectory. They want more influence and the IMF is a good place to start.” BRICS listed several goals they wish to achieve in their Sanya Declaration. “The 21st century should be marked by peace, harmony, cooperation and scientific development,” they said. “Under the theme ‘Broad Vision, Shared Prosperity,’ we conducted candid and in-depth discussions and reached broad consensus on strengthening BRICS cooperation as well as on promoting coordination on international and regional issues of common interest.” Leaders also stressed the volatility in global commodity prices, particularly grain and energy, which is considered a new chal-
ance supply and demand. BRICS also supports the use and development of alternative energy sources. In the declaration, BRICS agrees to recognize the important role of renewable energy as a means to address climate change. The five nations also voiced their support for the U.N., but at the same time urged for Security Council Reformation. “The five countries also vowed continuous cooperation in the UN Security Council on the issue on Libya and urged party concerns to resolve through peaceful means and dialogue,” said a reporter for CNTV. “The countries also reaffirmed the needs for a comprehensive reform for the UN especially the Security Council to make it more effective, efficient, and representative.” The growth of BRICS plans to ultimately create a new sphere of influence, one that is multilateral instead of any prevalent hegemony. Bheki Langa, South Africa’s ambassador to Beijing, believes the formation of these emerging economies to play a very influential role in rebalancing the balance of forces on the world stage. The bloc plans to hold another conference in 2013 in Russia. Contact Fadesola at fadesola.ojeikere@student.shu.edu
China Reports First Trade Deficit in Seven Years By Douglas Tatz, International News Writer For the first time since 2004, the giant of exports, China, has recorded a trade deficit. Although the month of February had only a 7.3 billion dollar deficit, even a small trade deficit has important implications. For the past 7 years, China has maintained a trade profit by exporting more goods than they import. Although China consumes a large amount of goods simply due to the size of the population, it has trade markets all over the world. Besides the United States, which is China’s largest export market, many other countries rely upon China for essential goods. Some experts say there are simple causes for the trade deficit. The costs of several important imports drastically increased, imposing a much greater burden upon China. The cost of inbound crude oil shipments in the first quarter rose by 39 percent to a value of $43.7 billion and the cost of iron ore imports jumped 82.5 percent to $27.7 billion, according to current customs data, as recorded by Bloomberg. Without the rise in prices, it is estimated
that China would make a profit from their exports. Furthermore, China’s trade balance is usually the narrowest at the beginning of the year and can be erratic due to the celebration of the lunar New Year. China’s trade deficit may have important implications for the future of the yuan. For years, China has received criticism from other countries, especially from the United States about the artificial weakness of the yuan. There is great incentive to keep the yuan weak because manufactures can pay their workers less, which keeps the price of their products low and in turn provides incentive for other countries to purchase their goods. Some countries believe that China purposely keeps the yuan weak, which gives them an unfair advantage over other countries. In October, U.S. Secretary of the Treasury, Timothy Geithner, demanded that the International Monetary Fund, which is primarily backed by the U.S., apply pressure on China to continue allowing the value of the yuan to gradually appreciate. The U.S. argues that this would make it fairer for other countries who already allow their currencies to naturally appreciate.
Some experts believe China’s deficit may reduce outside pressure to increase the value of the yuan. Critics initially demanded increases on yuans value to balance China’s trading practices, but the deficit demonstrates that even with a weak yuan China isn’t necessarily making a profit. China has allowed the yuan to appreciate a small amount, though by no means enough to meet critics’ satisfaction. However, this small amount may be the only appreciation the yuan will see. On Friday, China’s commerce minister said the country may reconsider its policy towards yuan appreciation, but only if the appreciation led to a deficit. Whether China will continue to run a trade deficit in the upcoming quarters is yet to be seen. Critics still advocate for a very gradual appreciation of the yuan, which could allow the market to adjust to the changed in exports and job allocation. However, without a trade surplus, China may be able to defeat its enemy’s arguments and keep the yuan cheaper, therefore continuing their dependence upon exports. Contact Doug at douglas.tatz@student.shu.edu
A Cry for Help from the Democratic Republic of Congo ...continued from page 1 Musavuli, the liason I spoke to, believes the war was a front used to cover the exploitation of the Congo for its abundant natural resources. “It all began with King Leapold in 1885” Musavuli says, “At the Berlin conference, the Congo was divided for its resources, its people became slaves. The same has happened throughout the history of the Congo”. Although the proxy war officially ended in 2003, the conflict continues and is
especially concentrated in the east of the country. Here, the liquid border with Rwanda remains a battle ground between the Hutu and Tutsi ethnic groups. The largest peacekeeping force ever dispatched in the Congo consisted of 20,000 troops, which were charged with the duty of maintaining security. The people of this nation feel that number is insufficient, citing that it pales in comparison to the 100,000 troops the United States maintains in the much smaller country of Afghanistan. Contributing to the discontent with the
international response is a 2009 report concluded that the U.N. has done little to end the continuing conflict in the DR Congo. The rebels continue to kill and plunder the resource rich country to support their international crime ring that spans not only Africa, but Europe as well. The Congolese feel that international intervention has failed them, and want the U.N. out of the country by the end of this year in time for the November presidential and parliamentary elections. Musavuli has faith that the younger
generation of Congolese can lay the foundation for a stable nation in the future; he also encourages American students to help the Congolese people reclaim their country. Musavuli said the best way for the American student to help the people of the Congo is by interacting with them. “Connect with Congolese youth. They need cameras, platforms to share what is happening.” Contact Wesley at wesley.satterwhite@student.shu.edu
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International Business
Poland Struggles with Rising Inflation and Climbing Prices By Alina Bykovtseva-Mora, International Business Writer Consumer prices in Poland grew by 4.3 percent in March compared to the market’s expected rate of 3.8 percent and the Central Bank’s target of 2.5 percent. The main drivers of inflation were mainly growing food and fuel prices, which grew by 7.3 and 13.9 percent respectively. One of the biggest issues on the national level was the price of sugar, which rose by 40 percent during last year. On the regional level even higher price hikes could be found. For example, in Krakow the price on obwarzanek (bagel-like break rings) rose by more than 50 percent, according to Warsaw Business Journal, over the last 12 month. However, the core inflation rate, which
excludes food and energy prices, remains flat at 2.1 percent. The accelerating inflation, the highest during the last two years, increases the likelihood of rising interest rates. Note that Poland’s Central Bank has already raised its benchmark interest rate by 25 basis points in January for the first time since mid-2008. In April, Poland’s rate-setting Monetary Policy Council decided to raise the rates again for another 25 basis points. The interest rate today totals at 4 percent. Marek Belka, president of the National Bank of Poland, encouraged the public not to panic over inflation and interest rate hikes. In his interview for TVN CNBC on April 14, Mr. Belka said that rising prices do not mean interest rates must be raised also. He mentioned that the decisions
regarding changes in interest rates are not based on statistical data from the previous month and because the biggest trigger of inflation – food and fuel prices – tends to increase on a global scale, the hikes in interest rates are not likely to help. Marek Belka tried to persuade the audience that the currently rising inflation, calculated on a month-on-month basis, will ultimately fall. However, Polish Economy Minister believes that “food prices should grow at a slower rate than last month, although their growth will still be high” and transportation prices are expected to grow further. Mateusz Szczurek, chief economist at ING Bank Slaski SA in Warsaw, commented that “the 4 percent year-on-year threshold has gained significance of late, with two Monetary Policy Council members
openly speaking of a ‘bigger move’ to contain inflationary expectations.” He believes that growing inflation makes the May central-bank rate increase more likely, but “one word of caution: so far, we have a situation similar to March this year, when after the shock January CPI jump, Governor Marek Belka managed to successfully dampen rate-hike expectations.” As of today, the higher-than-expected inflation data increases the likelihood of another interest rate hike in May especially taking into considerations the fact that net interest rates are already negative. Contact Alina at alina.bykovtsevamora@student.shu.edu
EU Busts Chinese Investors Look to Argentina P&G and Unilever for Detergent Cartel By Earlene Cruz, International Business Writer
...continued from page 1 Investigation began in 2008 after disclosure by Henkel and concluded with the acknowledgement of liability for the infringement in January of this year. According to the report issued by the Commission, the scheme emerged under an arrangement by the companies to collectively meet environmental objectives. Their trade association was meant to reduce the waste put out from their products by decreasing the size of packaging. The cartel originally arranged to reduce the size of the packaging used in their products and keeping prices unchanged but later agreed to cooperatively raise prices. Vice-president of the Commission, Joaquín Almunia stated, “Companies should be under no illusion that the Commission will pursue its relentless fight against cartels, which extract higher prices from consumers than companies that compete fairly and on the merits.” According to Maria Barker, a representative from P&G, the severity of the fines was anticipated and accounted for with “appropriate financial reserve” and also noted that potential settlements had been budgeted. An explanation within the Commission’s report detailed the means by which the severity of the fines was determined. It stated that the fines were levied according to the relevant sales of the companies involved in the eight concerned countries, the serious nature of the infringement, as well as their combined market share. This case was resolved under the European Commission’s settlement procedures and constitutes the third cartel investigation to issue fines in the last year. Contact William at william.suggs@student.shu.edu
Argentina, a nation rich in iron ore, gold, soya, fertilizers, and electronics, has become of particular interest to foreign investors, specifically to China, a nation that has increasingly become involved with Argentine investments. In 2010 alone, China invested approximately $1.6 billion in energy plants, fertilization, automobiles, agriculture, and the building of the underground metro system in Córdoba, which will be mainly built by a Chinese company. Most recently, the increase in the overall Chinese interest in Argentinean investment has extended to banking. The Industrial Commerce Bank of China (ICBC), one of the largest financial institutions in the world, began its internationalization in 2007 by acquiring a 20 percent stake in South Africa’s Standard Bank and now wishes to acquire the Argentine Standard Bank unit. Since establishing a relationship with Standard Bank in 2007,
ICBC has been a very strong financial and structural partner for Standard Bank. The benefits for both parties if an agreement is reached are evident: Standard Bank’s financial profits would help it to achieve its goal of once again dominating the market of its origin, which is being threatened by NEDBank, and ICBC would further promote the business that China has already advanced in Argentina. Ernesto Fernández Taboada, executive director of the Argentine-Chinese Chamber of Commerce, claims that increasing Chinese banking in Argentina would provide a helpful channel to fund Chinese investments in Argentina. However, although ICBC executives have visited Buenos Aires in the past couple of years, the transaction is not final: “The two banks have not come to an agreement yet, but ICBC holds a strong interest in the transaction, and they do not seem to have any financial problems to acquire what they desire,” stated the head of one of Standard Bank’s central office. Finalizing the acquisition of Standard
Photo courtesy of Financial Times
Argentine President Cristina Kirchner meets with China’s Wen Jiabao.
Bank in Argentina would made China the tenth largest financial institution in South America with over 100 locations throughout the region, which may be a logical step to take, as it reflects China’s increasing interest in Argentina and South America in general. ICBC’s final report should shed more light on the issue. Contact Earlene at earlene.cruz@student.shu.edu
Indian Government Scandal Damages Telecom Investment Outlook
By Tristan Hugo-Webb, International Business Writer As India’s middle class has grown exponentially in the past few decades, the demand for mobile phone technology has increased in the world’s largest democracy at a similar rate, and foreign companies have invested heavily in the Indian subcontinent as a result. Today, India has over 700 million mobile phone users, which is more than double five years ago and in major cities like Delhi, there are more phones than people. However a recent government scandal has caused foreign investors to rethink their outlook on the Indian market and adjust their policies. At the end of 2004, the ruling United Progressive Alliance coalition government led by the current Prime Minister Manmohan Singh announced that in a move of general privatization, the Indian Government was prepared to allow foreign investors to hold as much as 74 percent in Indian telecom companies, up from the previous law that only allowed for foreigners to hold 26 percent in telecom firms.
Photo courtesy of News of AP
Former communication minister Andimuthu Raja has been charged with embezzlement.
Earlier this month, the former federal communication minister, Andimuthu Raja was charged by the Government’s official corruption watchdog, CAG (or Comptroller and Auditor General), for not
disclosing $39 billion, which should have gone to the Indian Government but supposedly ended up in the hands of Mr. Raja and other leaders in the Indian telecom market. Police have also charged executives of Telecom giants Telenor of Norway and Etisalat of the United Arab Emirates. While the scandal is currently unfolding, the indirect impact on foreign direct investment (FDI) to the telecom sector has been dramatic. Between 2009 and 2010, FDI into India’s telecom market reached $2.55 billion dollars whereas last year’s and this year’s estimates will only reach $1.05 billion dollars. One representative of a major international telecoms group told the BBC on the condition of anonymity that the decline is due to market uncertainty, “We are scared as hell and can do nothing but wait and watch.” While India’s pursuit to match the growing economic power and technology of China is well documented, this scandal could potentially hold India’s telecom market back for years. Contact Tristan at tristan.hugowebb@student.shu.edu