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INFORMATION AND INSIGHT FOR MEDIA FINANCE PROFESSIONALS
MAY/JUNE 2019
THE FINANCIAL MANAGER
THE
T N E C I F I MAGN
SEVEN
OUR 2019 AWARD WINNERS BRING PLENTY OF ENERGY AND STRENGTH TO MFM, BCCA AND THE COMPANIES THEY SERVE.
ALSO INSIDE
Workforce Of the Future
Managing Retailer Risk
The Esports Mega Wave
Journalists Under Attack
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INSIDE THIS ISSUE
The Financial Manager
FEATURES
The Official Publication of the Media Financial Management Association is published six times annually under the supervision of:
9 People to Watch TFM has begun the selection process for its People to Watch in 2020 special report and is seeking your ideas.
MARY M. COLLINS, President & CEO Mary.Collins@MediaFinance.org JANET STILSON, Editor TFMeditor@MediaFinance.org
10 A World of Change A diverse workforce and technology improvements are about to turn business organizations in completely new directions.
BILL KNIGHT, Art Director wknight5@nyc.rr.com
Limited commercial messages of interest to our membership and readers will be accepted. Rates and specifications on request to:
14 Retailers in Distress
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18 The Esports Explosion
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Copyright, 2019. All rights reserved.
What is MFM?
SPECIAL REPORT:
The Media Financial Management Association is a not-for-profit corporation organized in 1961. The MFM membership includes more than 1,200 of media’s top financial, IT and human resource personnel, station general managers and other media management personnel as well as associate members in the allied fields of auditing, tax, software, sales and the law. MFM sponsors telephone seminars and conferences, publishes special studies and surveys, files position papers with federal agencies on behalf of its members and its industry, cooperates with other media industry groups and helps its members grow and learn both personally and professionally. MFM also is involved in media industry credit matters through its wholly-owned subsidiary, BCCA, which provides members with a Credit Inquiry Service, an annual Conference, directory of Credit Personnel, credit reports accessed via bccacredit.com online credit search, Commercial Credit Reports and a credit and collections handbook. The information and recommendations contained in this publication have been compiled from sources believed reliable. However, no warranty, guarantee or representation is made by the Association as to the absolute correctness or sufficiency of any representation contained in this publication, and statements contained in advertising and articles submitted to the Association are the responsibility of the authors, not the Association or its officers, directors, staff or members. Moreover, this publication is provided with the understanding that the Association is not engaged in rendering professional services through its distribution. The views and opinions expressed are those of the author, and not necessarily the Association.
2019 award winners 27 Spinning Us Forward The 2019 honorees have led the charge to advance MFM, BCCA and the companies where they work into the future. Introduction...................................................... 27 Tonya Sorrells................................................... 27 Jenna Hardy........................................................ 28 Mike Lavey........................................................... 28 Aqueelah Traylor-Morgan........................... 28 Randy Bradford................................................. 29 Paul W. Rahmlow.............................................. 29 Joe Waring........................................................... 29
DEPARTMENTS 4 From the President More Than the Sum 6 Dear Expert Travel With Care 7 Human Factor Soft Skill Advice
8 Credit Where Due Working With Sales 30 Last Word Protecting Reporters
The Financial Manager • May/June 2019 3
FROM THE PRESIDENT
More Than the Sum
The overall impact of MFM’s members goes beyond what a simple addition of their actions might suggest.
I
love New Orleans, the host city for Media Finance Focus 2019. It’s a one-of-a-kind place forged by a unique mixture of culture and history, a city constantly growing and reinventing itself. In New Orleans, as in media itself, the whole is greater than the sum of its parts. It starts with people. New Orleans represents an historical mélange of cultural influences. For MFM and BCCA, the members’ efforts make the associations better for all of us. This issue of TFM includes our recognition of some of them. Rainmaker Award honorees’ contributions help increase MFM’s resources. Those being honored with Working Capital awards have given of their time to make MFM programs and publications better. Tonya Sorrells, our 2019 BCCA award winner, is being recognized for her contributions to our Media Credit Committee and educational programs. People include employees. Montclair State University’s Peter McAliney provides his vision of the workforce of the future. He sees it as driven by two separate trends: rapid technological advances and the most culturally diverse workforce we’ve ever seen. Not only is the U.S. on track to become majority minority, this is the first time in history that we will see a workforce With the U.S. on comprised of five generations. track to become Two of our columns also address issues related to majority minority, employees, specifically their health and security. “Ask the this is the first time Expert” begins with a question about the role of workers compensation for an employee injured while traveling. In his in history that we response, Chubb’s Tim Ehrhart points out that more can be will see a workdone to cover employees, beneficiaries or companies when force comprised of media staff must be on the road or in other countries to five generations. perform their jobs. In “Last Word,” Dan Shelley of the Radio Television Digital News Association considers the increasing instances of violence against news employees and decreasing public trust in their reports. His common sense questions are intended to help protect journalists and to improve their relationship with the public. “Human Factor,” our human resources column, discusses practices that can improve the performance of leaders and those who aspire to leadership roles. Sarah Levitt’s advice includes self-awareness; actions to ground mind and body, and a vision of how you want to perform. The question of when to grant credit is fundamental to the business of media. In “Credit Where Due,” Szabo Associates’ Robin Szabo writes that sound credit policies can provide balance between the sometimes-divergent efforts of sales and credit professionals. In a separate feature, Tribune Media’s Robert Smith takes on the question of managing retail risk. As Smith points out, even when a retailer appears to be in financial distress, it can be a long time before the worst happens. Finally, take a look at a new kid in media, esports. It’s “one of the fastest growing of the technology-based industries,” according to Kim Randolph and Mac Howard of Stout. Not only does it have growing and diverse revenue streams, esports is a way to reach the 21-to-34 demographic. Better yet, the business now appears to have predictable financials. As always, it’s people and their willingness to share that make MFM and BCCA so valuable. We appreciate your membership and encourage you to stay involved. You will always take away Mary Collins is president more than you invest; the whole is truly greater than the and CEO of MFM and BCCA; Mary.Collins@MediaFinance.org. sum of the parts.
4 The Financial Manager • May/June 2019
EDITORIAL ADVISORY BOARD MICHAEL DENSON Director, Credit Services NMCP Inc. JOHN SANDERS Principal Bond & Pecaro Inc. DAWN SCIARRINO Managing Member Sciarrino & Shubert PLLC MEREDITH SENTER Member Lerman Senter PLLC C. ROBIN SZABO President Szabo Associates Inc.
CONTRIBUTORS TIM EHRHART Chubb MAC HOLLAND Stout SARAH LEVITT Magnificent Leadership KIM RANDOLPH Stout DAN SHELLEY Radio Television Digital News Association ROBERT L. SMITH Tribune Publishing C. ROBIN SZABO Szabo Associates
CO N G RAT U L AT I O N S TO T H E
2019 Award Winners
BCCA CONTRIBUTOR AWARD TONYA SORRELLS, HEARST TELEVISION
MFM RAINMAKER AWARD
MFM WORKING CAPITAL AWARD
JOE WARING, EVENING POST INDUSTRIES
JENNA HARDY, GEARBOX SOFTWARE, LLC
PAUL RAHMLOW, MIDWEST COMMUNICATIONS
AQUEELAH TRAYLOR-MORGAN, TURNER
RANDY BRADFORD, NEXSTAR MEDIA GROUP, INC.
MIKE LAVEY, TRIBUNE PUBLISHING
90 YEARS
ABC-AMEGA.COM
NATIONALMEDIACREDIT.COM
DEAR EXPERT
Travel With Care
Media liability insurance specialist TIM EHRHART lays out the personal and corporate perils when employees are on the road. Dear Expert, An employee recently travelled to a shoot in Nevada by car. On the way, she was seriously injured. Our workers comp policy will respond, right? Hopeful in Hollywood, CA
Depending on the insurer, travel assistance services can be packaged with the business travel insurance program or the insurance carrier can work seamlessly to coordinate claims with the assistance comDear Hopeful, may extend coverage for longer assignments. pany selected by the employer. The short answer is “yes,” but there are However, there is still the same need to help Both in the U.S. and abroad, a business nuances to consider. Workers compensa- supplement the benefits provided under travel insurance policy can be extended to tion benefits apply to the cost of injuries to foreign voluntary compensation with a cover employees while working on company employees that happen in the “course and business travel insurance program. premises. In the event of a security event, scope” of employment. What if there is a serious illness (like a terrorist attack, natural disaster or felonious Your employee’s injury would qualify as heart attack or stroke) that is deemed not assault, the business travel policy would, compensable, given the business-related related to the “course and scope” of the em- again, be available to respond. travel reasons. The person would be insured ployee’s job? All companies are responsible for profor needed medical treatments, and your Some foreign voluntary workers com- viding a safe environment for their staff company would likely be free of liability pensation plans may include modest out- members, which is complicated by the types for the accident. of-country medical benefits, but a stroke of work many media companies engage in. However, for many companies, workers or heart attack could easily lead to over There are many reasons to purchase a compensation benefits are not sufbusiness travel insurance program. Employers need to be cognizant of the ficient to meet the benefits needs They can include the desire to of their employees. Take, for examreduce the chance of being sued gaps that exist in workers compensation ple, an employee who dies while where negligence may be involved, insurance in the context of business travel. travelling on business. Workers to protect a company’s reputation compensation will pay an annual death $100,000 in medical costs. These costs may and to ensure a competitive employee benbenefit based on a percentage of their salary. be reimbursable by the employee’s major efits package. Certainly, one of the most While a helpful benefit, this will not pro- medical insurance, but there can be addition- compelling reasons to purchase these insurvide financial security for many white-collar al costs, for example, if the employee needs ance products is the clear message it sends to employees – leaving the beneficiary with a to be medically evacuated for treatment. employees: “We truly care about your health financial hardship. A good business travel insurance program and well-being.” There are few better ways In the event of the death or serious in- includes out-of-country medical insurance, to strengthen an organization’s reputation. jury of an employee, the beneficiary may which provides short-term coverage (up have the need for immediate cash. For that to 365 days) for accidents or sickness for The claim scenarios described here are hypothetical reason, many major U.S. media companies employees traveling abroad. Typical limits and are offered solely to illustrate the types of situations have a business travel insurance program are up to $250,000 per insured per covered that may result in claims. These scenarios are not based on actual claims and should not be compared to with an accidental death and dismember- incident. This benefit is designed to fill gaps actual claims. The precise coverage afforded by any ment (AD&D) benefit. The business travel and supplement major medical, workers insurer is subject to the policy may also provide benefits for acciden- compensation insurance and foreign vol- terms and conditions of the policies as issued. Whether tal disabilities. untary workers compensation. Most U.S. workers compensation policies Most business travel policies also include or to what extent a particular loss is covered depends provide employees a basic level of protection travel assistance services that manage medi- on the facts and circumfor short-term travel overseas, and foreign cal care for traveling employees and typical- stances of the loss, the voluntary workers compensation insurance ly pay directly on behalf of the employer or terms and conditions of the insurance company. The leading assistance policy as issued and appliDo you have a professional puzzle that companies have medical staff located glob- cable law. MFM and BCCA experts might be able to ally and available 24/7 who can monitor the answer? We’ll mine the contact base and find Tim Ehrhart is senior vice president, industry medical situation abroad and communicate the right person to answer your question. practices at global insurer Chubb. He can be Just contact TFM editor Janet Stilson at reached at Tehrhart@chubb.com. with stakeholders at home. TFMeditor@mediafinance.org.
6 The Financial Manager • May/June 2019
HUMAN FACTOR
Soft Tools, Solid Results
The most essential leadership practices involve some actions and ways of thinking that might surprise you. BY SARAH LEVITT
O
ne of my clients – I’ll call him negativity. Instead, he was much better able A mantra that he knew to be true that would help him reframe difficulty to see a bigger Jim – was promoted to the el- to problem solve and respond rapidly. picture – He had a phrase about becoming evated leadership role of vice president about this time last A meditative practice of some kind that con- stronger and better no matter the challenge, year at the Fortune 100 where he’d steadi- nects him to calm, center and knowing – He and he relied on it whenever things got ly been building his career. Since then he pursued activities that helped him link to rough. It gave him a sense of purpose, calm and vision. And he kept it posted in has blown all performance measures his office where he could see it. and metrics out of the water. He’s regarded as an outstanding leader An awareness of his reactions so that and is poised for unlimited success. he could choose them rather than be This is not my evaluation of him; run by them – Jim became aware this is what his superiors are saying. of his go-to reaction, which could Recently, we were reviewing the sometimes be too accommodating tools he’s used to accelerate his learnwhen a situation called for bolder ing and trajectory. We might have leadership. We role played so that he discussed how he has positioned could gain practice in responding himself as a strategic leader who and developing language in advance. brings creative, nuanced thinking to It was so effective, and became so problem-solving and is brave enough natural, that colleagues and superiors to share his opinions even when took notice. dissenting. He’s also led, influenced and overseen key organizational iniA regular physical activity to drop tiatives; addressed difficult situations out of his head, clear his mind and and conversations, and is known as ground himself – He explored acthe person you’d want to send in to tivities that relieved the stress of his resolve just such matters. role, where he could let off steam As if that’s not enough, he has Jim pursued activities that helped him captured the attention and respect connect to the calmest part of himself, the and feel refreshed afterward. With schedule, he initially found of leadership at the highest levels of part that knew that he would weather the ait tight difficult to make the time, but he the organization; handled with dexsoon found that he was better for it. terity many, many unexpected fires, storms. So he scheduled it in. and has won both the hearts and the the calmest part of himself, the part that How do these seemingly soft tools creefforts of his team. However, these are not the things we dis- knew that he would weather the storms. ate hard results? They help leaders bring cussed. Instead, we reviewed the tools that Sometimes that meant listening to a medi- the best of themselves to the substantial I’d shared with him that would help him tation app on his phone, and sometimes that rigors of their roles. meant going for a walk outside. When someone rises lead himself. Here are six of them: to these levels, there is A keen observation of the narrative he was An abiding knowledge of his values and no doubt about their telling himself, particularly during chal- the leader he wanted to be – No matter how technical proficiency. lenge – Jim was able to notice what he was rocky the road, Jim remained connected And they’ve given themthinking about during difficult situations, to, and guided by, his internal compass of selves a launchpad for whether that was a conversation with a values. Fairness and being a genuine, honest leadership. direct report who wasn’t performing as and responsible leader were all very imSarah Levitt works with senior executives expected, or a company crisis that required portant to him. By identifying those essento elevate leadership performance and a quick pivot and skillful communication. tial values, it helped him not to waiver, even drive business outcomes. She is the author of He found that by watching his narrative, when the winds around him were picking the book Magnificent Leadership and can be he didn’t get overwhelmed, or stuck in up speed and strength. reached at www.sarah-levitt.com. The Financial Manager • May/June 2019 7
CREDIT WHERE DUE
Strike the Right Balance
The push-pull between credit and sales is tricky, especially during tough times. But there are ways to decrease the tension. BY C. ROBIN SZABO
C
an credit and collections units run smoothly while keeping sales departments happy at the same time? You bet. The magic formula is striking the right balance between what may seem like conflicting interests in order to reach everyone’s ultimate reward: increased sales and profits. Good credit policy allows everyone to “win.” Policy that fails to serve the interests of both credit and sales is itself a failure. The credit manager’s job is to promote profitable sales. So he or she should take an active part in developing policy objectives with the business/operations manager and the sales manager. Policy objectives should address the delicate and challenging balance between credit extension and collection requirements. Regardless of how your policy handles that, the objectives are generally the same: optimize sales, minimize past-due receivables, diminish bad debt losses and contain departmental costs. At the same time, you need to maintain effectiveness and efficiency. To meet these goals, Company A may choose to balance a rather “liberal” credit extension policy with “conservative” collection operations. Company B may choose to have a tighter credit extension policy, lessening the need for strict collection procedures. Company C may strive to achieve an equal balance between the two. Any of these approaches can be the best solution for a particular organization at a particular time. Changes in the industry, organizational culture and the economic climate can have a profound impact on the effectiveness of your credit policy. Most of us have witnessed the pendulum swing during difficult, highly competitive times. In that environment, aggressive sales are usually in order. Credit and collections staff members are required to do everything possible to approve credit for marginal customers while maximizing collections with limited personnel resources. Accomplishing both tasks requires strat-
8 The Financial Manager • May/June 2019
egies that help your staff “work smart” and use their efforts to best advantage. Here are a few ideas on how to do that:
determining what, if any, changes should be made in policy or procedures.
Prioritize your efforts – Know that you
that accounts allowed to age to 90 days are not slow-pay, but no-pay. These are “bad” customers who have no intention of paying, now or ever. It is usually unproductive and costly, both in time and recovery, to continue to pursue accounts beyond 120 days. By this time, the probability of collecting has already been reduced to less than 35%.
cannot do everything, so choose the most important first. New customers should be your first priority because this is your opportunity to lay positive groundwork for
Use outside collectors – Chances are good
Review policies regularly – Even a policy
moving forward successfully. Contact them in person or by telephone between 15 and 30 days from the invoice date. High-stakes accounts, with which you have the most to lose, should be your second priority. Because they have the greatest impact on days sales outstanding (DSO), contact them immediately if they fail to pay on time, and make every effort to prevent them from becoming habitual slow pays. Your third priority should be slow pays. Many times, these accounts need only a quick and simple reminder of their obligation. Contact them 40 days from the invoice date to keep them below 45 days or more. Gauge overall results – While some
measures have their shortcomings, they remain valuable tools to determine the effectiveness of your department. Well-defined metrics, such as average daily sales and DSO, are useful in identifying trends and
that has served your organization well for years should undergo periodic review. You may need to adjust its balance to accommodate industry, organizational and economic changes. This review process is critical not only for evaluating the policy’s effectiveness but also for monitoring the consistency of its application. If the policy comes up short in meeting your objectives, management must determine what went wrong and how it happened. Was the objective jreasonable? Did the measures effectively drive the organization to meet the objective? Were organizational restrictions overlooked or ignored? Did personnel lack the necessary tools or resources? Do procedures accurately reflect and support the policy? By periodically reviewing your credit policy, seeking support by well-defined metrics, amending the policy as necessary to improve its effectiveness and employing “work smart” strategies within your department, you can make everyone – and your bottom line – very happy indeed. C. Robin Szabo is president of Szabo Associates, media collection professionals, in Atlanta, GA. He can be contacted at (404) 266-2464 or robin@szabo.com .
people to watch 2020
The Greatness in the Stars TFM has begun the selection process for its People to Watch in 2020 special report and is seeking your ideas.
Who are the personal stars in your galaxy? He might be a direct report who’s changing the game. Maybe she’s a colleague at another company or your boss, someone who’s shouldering tasks that will make all the difference for your company or the business? The Financial Manager’s Editorial Advisory Board wants to know about all of them. We take pride in showcasing a handful of outstanding individuals in the annual People to Watch special report, which will run in the January/February 2020 issue. We are interested in learning about both established professionals and younger leaders. The deadline for nominations is fast approaching, and we welcome all suggestions. Those who make the nominations don’t need to be members of MFM or BCCA. Likewise, the nominees do not need to be members. There are just two main requirements. They must: ■ Be part of the media financial community; ■ Have a goal or responsibility that is likely to lead to improvements, either at the company where they work or within the media industry in general.
Download an application at mediafinance.org under TFM (People to Watch). Deadline: July 26th. You are welcome to nominate more than one person.
BOND & PECARO The Basis for Your Decisions
ApprAisAls FeAsibility studies expert testimony And relAted FinAnciAl services For the communicAtions industry
1990 M STREET, NW SUITE 400 WASHINGTON, DC 20036 (202) 775-8870 E-mail: BP@BondPecaro.com www.BondPecaro.com
The Financial Manager • May/June 2019 9
WORKPLACE DYNAMICS
A
World of Change A diverse workforce and technology improvements are about to spin business organizations into completely new directions. By PETER J. McALINEY
W
HAT WILL THE COMPANY YOU WORK FOR LOOK
like in the years to come? And what is the best way to become successful within that organization – or other places where you’d like to work? In order to understand the answers to those two questions, two converging trends need to be considered by both leaders of companies and the people they employ. The first trend is characterized by rapid changes and expansion in the way technology supports how work is being accomplished. The second pertains to a much more culturally and generationally diverse workplace. Both will influence how individuals think about their profes-
10 The Financial Manager • May/June 2019
sional development and the way organizations try to maximize the productivity of their human capital. Let’s look at each dynamic in turn. NEW TECHNOLOGY PARADIGM
Powerful emerging, and converging, technology is impacting the workforce evolution. Klaus Schwab, executive chairman of the World Economic Forum, has identified a disruptive shift in the way technology is being employed by businesses and organizations. He’s labeled it the Fourth Industrial Revolution. Technology is no longer simply supporting work, as in the prior three industrial revolutions. In the Fourth Revolution,
HEADER
participants in a real time, immutable (i.e., irreversible) manner. It is considered to be a “trustless” network, meaning there is no need for a third-party, “trusted” intermediary to make sure that all participants are behaving honestly and transparently with other members of the network. Blockchains do not actually eliminate trust, but rather they minimize the amount of trust required from any single participant in the system. This is accomplished by distributing trust among different participants in the system by way of a predetermined economic formula that incentivizes participants to cooperate with the rules defined by the protocol. Because of blockchain's potential to radically impact key relationships implicit in existing economic frameworks across many industries, some envision a next-generation economy – the blockchain-enabled economy. More aspects of blockchain are discussed further down in this article, as well as in an article within the January/February issue of TFM. DIVERSITY DYNAMICS
human, physical and software components are becoming deeply intertwined. Moving forward, our lives will be increasingly shaped by artificial intelligence, robotics, cloud computing, neurotechnologies, biotechnologies, the Internet of things, big data, virtual and augmented reality, energy technologies and other technological capabilities yet to be discovered. Blockchain has emerged as a possible candidate to become the underlying infrastructure to support these Fourth Industrial Revolution technologies. In the simplest of explanations, blockchain – also known as a distributed ledger technology – is an interrelated network that allows digital assets to be transacted between
As the world becomes more connected through technology, the workforce is becoming much more multicultural and multi-generational. The cultural diversity mirrors most organizations’ customer or service base. And as a result, it enables organizations to better compete globally. They can also boost their competitive advantage by improving employee retention rates, employee morale and their ability to attract new talent. Five generations are currently involved in the workplace, each with their own perspective on what they value in a job. This is the first period in recorded history when so many age groups are generating salaries. And each one is seeking different benefits from the companies where they work. (See table, page 12.) The three youngest generations – the ones who will be in the workforce the longest – count as a key benefit some aspect of support for their learning, according to a 2016 article in HRNews, which cited the white paper “8 Ways to Motivate the Five-Generation Workforce” by Kimberly Abel-Lanier. These younger staff members are likely to seek tuition reimbursement, continued learning or online training as well as certification programs. Because this multicultural, multi-generational workplace is complex, it will require organizational leaders, and those professionals working with them, to develop a highly refined set of interpersonal skills. It’s important not to dwell on differences. Instead, smart employers will build collaborative relationships, engage in multi-faceted mentoring relationships and be supportive of different life paths that individuals may choose. For example, when employees “stop out” of a career trajectory The Financial Manager • May/June 2019 11
– regardless of gender – they should no longer be disqualified from re-engaging at a later point in time, picking up where they left off. New attributes, such as empathy, are being identified as key components of a professional’s soft-skill portfolio. REDESIGNING THE WORKFORCE
The dual currents of technology and diversity are having an impact on job roles, both in large organizations or individuals who participate as independent contractors. New machine-human integrated processes require a shift from a focus on operational roles to insight-driven roles. This will impact single-skilled workers as well as multi-skilled workers, generalists and specialists, technology-oriented professionals and those who have well-developed creative capabilities. There are a number of general strategies that can be adopted to address the challenges associated with this new operating environment. According to Accenture, they include: Reimagining Work – Assess tasks, not jobs. Balance automation with work activities that are both technology dependent and non-technology dependent. Create new job roles and build agile, project-oriented teams. Map existing skills to new roles. Provide training or acquire new talent. Resetting Expectations – Support the
WHAT GENERATIONS WANT GENERATION
BORN …
Traditionalists
Before 1946
Long-term care insurance, catch-up retirement funding
Baby Boomers
Between 1946–1964
401(k) matching funds, sabbaticals, catch-up retirement funding
Gen X
Between 1965–1976
Telecommuting and tuition reimbursement
Gen Y (Millennials)
Between 1977–1997
Flexible schedules, continued learning
Gen Z
After 1997
Online training and certification programs
SOURCE: “8 Ways to Motivate the Five-Generation Workforce,” by Kimberly Abel-Lanier, HRNews
new way customers want to interact with your organization. Reinvest savings from automation into workforce learning. Develop flexible processes, with the ability to interchange and augment automated tasks with a human touch. Create a flexibility mindset at all levels. Strategic Upskilling – Prioritize and balance learning and development between technical and soft skills. Provide learning opportunities at all levels of the organization. Employ technology where applicable (such as virtual reality, augmented reality and simulations). The new work environment requires us to rethink how professionals learn and what they need to learn. A new balance needs to be struck. Linear-track K-12 and college education need to incorporate more informal learning. And at the same time, continuing
A STACKABLE LEARNING PLAN AWARENESS
CONVERSANT
JOB READY
Mentoring Formal Learning Digital Learning on Demand (e.g. MOOCs) Job Shadowing/Apprenticeship Simulation/Augmented Reality Hackathons/Experimentation Continuing Education Collaboration/Peer-to-Peer Learning Informal Affinity Group Participation (e.g., Meetups) Teaching Others (Formal) SOURCES: Accenture and Peter J. McAliney NOTE: MOOC refers to massively open online courses
12 The Financial Manager • May/June 2019
VALUED BENEFITS
EXPERT
and professional education needs to include more formal learning. Obtaining a traditional degree in as short a period of time as possible may not be relevant model moving forward. LEARNING LITERACY
So-called “learning literacy” is an emerging framework for one to think about educational and professional development. This model calls for individuals to be in a continual learning mindset. With such an approach, they can amass a portfolio of exhibited competencies – developed through both formal and informal means – that can be stacked. These competencies can be developed over the course of a career, allowing an individual to become more proficient in their first career choice or easily transition into a completely new career. This ensures that individuals stay current with skills that are required to support a successful and fulfilling career. And organizations are assured of having the right human capital to achieve their ends. Learning literacy can be broken down into three domains. As described in Joseph Aoun’s book Robot-Proof: Higher Education in the Age of Artificial Intelligence, they include data literacy (the ability to analyze data), human literacy (the ability to understand and connect with other human beings) and technological literacy (the ability to understand technology and interactions among technology). Addressing these literacies requires one to exercise both sides of the brain. Without getting too much into the neuroscience of learning, the left side of the brain controls reason, logic, mathematics, language and sense of time. On the right side of the brain are arts, music, color, creativity, intuition and emotions.
WORKPLACE DYNAMICS Focusing on human literacies (right brain) will develop competencies like teamwork, communication, perspective, critical thinking, global understanding, innovation and empathy. Developing data and technological literacies (left brain) will deepen a person’s analytical thinking, problem solving and the ability to understand how underlying technologies work. While this may seem overwhelming, it can easily be addressed by taking proactive steps to design your own learning plan. Job roles in the workplace are increasingly being defined by competencies. So it’s wise to create a portfolio of stackable skillsets. (See diagram, page 12.) After lower and higher education degrees are obtained, informal learning events need to be consciously incorporated into a learning plan. This may include digital on-demand learning (like massively open online courses – MOOCS), job shadowing/ apprenticeships, simulated/augmented reality, formal continuing education programs and certifications, collaborative peer-to-peer learning, informal affinity group participation and teaching others. 21ST CENTURY ORGANIZATIONS
Traditional, hierarchical organizations are not going away any time soon. However, there will be new structures that leverage the technological advances and increased diversity of the workforce. Managers will need to expand the skillset data points they use to hire new workers. Based on the required competencies, older workers may end up vying for entry level jobs. Similarly, younger workers may end up vying for senior level jobs. The hiring managers also will need to look at what potential employees have done to make sure their portfolio of competencies is up to date. At the same time, new organizational models will emerge. Among them is the decentralized autonomous organization (DAO), which is often built on a blockchain technology. A DAO has no leader or centralized management. It is operated through smart contracts – self-executing contractual states stored on the blockchain that are programmed and agreed to in advance by all parties to a transaction that will execute when the programmed conditions are met. In the DAO system, participants are rewarded in a currency called “tokens” to
STEPS TO CAREER SUCCESS Building a new educational and training plan involves a series of actions. ■■ Identify the aspects of the three literacies that you want to develop (data, human or technology). ■■ Conduct a skill-gap analysis. ■■ Identify specific goals that you want to achieve as it relates to context (i.e., use in existing career, expand career perspective, launch on a new career path). Also determine how deeply you want to learn (i.e., becoming aware, conversant, job ready or expert in a certain field).
provide group governance and support the transactions of the organization across the network. DAOs are becoming more popular as blockchain technology is being refined and more specialized work is being done by individuals who operate in what is called the gig economy. Needless to say, all of the broad changes impacting companies, and the actions they may require, take some time to digest. But
Establish a structured training and development approach, with formal and informal components. ■■ Record, track, share and celebrate individual achievement in each track. ■■ Revisit and build upon established skills or consciously focus on learning unrelated skills. ■■ Restart at step 1. A good rule of thumb is to develop a portfolio of competencies that are a mix of technological (left brain) and soft (right brain) skills, as described in the main section of this article. ■■
by carefully considering how the workplace and workforce are changing, both individuals and the companies they work for can better assure themselves of success ahead. Peter J. McAliney, Ph.D. is the executive director of Montclair State University’s Continuing and Professional Education unit. He can be reached at mcalineyp@mail.montclair.edu or on Twitter @pmcaliney.
Congratulations Paul Rahmlow on your MFM 2019 Rainmaker Award! from your friends and coworkers at
The Financial Manager • May/June 2019 13
14 The Financial Manager • May/June 2019
CREDIT AND COLLECTIONS
Retailers in Distress By ROBERT L. SMITH
T’S SAFE TO SAY THAT BRICK-AND-MORTAR
As an increasing number of store chains sink under, creditors need to employ the best “life boats” possible to manage the choppy waters.
retail advertisers have suffered more economic hardship in recent years than any other industry segment that advertises in media. Same-store sales continue to erode year over year, and extensive store closures have become commonplace as competition from online retailers continues to gain momentum. Given the current environment and what is undoubtedly a new normal, it’s important to understand the risk/reward proposition of granting unsecured trade credit and plan for the likelihood that media companies will incur losses in this sector moving forward. With that in mind, I’d like to walk you through the process of what we do at Tribune Publishing in dealing with retailers under distress. Our credit and collections department relies on several different types of specialists and informational sources in order to mitigate the risks, working in conjunction with managers within other departments to come up with the best decisions. Before I get into the nitty gritty, let’s take a step back and look at the landscape. In recent years, numerous name brand retailers have sought protection in bankruptcy. Among them are Sears and its corporate sibling Kmart, hhgregg, RadioShack, Sports Authority, Toys“R”Us, The Limited, Wet Seal, Gander Mountain, Payless Shoesource, Gymboree, Mattress Firm, Bon Ton, Claire’s, David’s Bridal and Brookstone. While some of these retailers filed for Chapter 11 reorganization and emerged with reduced debt and lease obligations, others filed for Chapter 7 and ultimately liquidated, leaving unsecured creditors – including many media companies – with little or no
distribution on their unsecured debt. It’s easy to understand why the retailers wound up in such dire straits. Online shopping’s ease, selection, pricing and – in many instances – lack of sales tax and shipping charges are hard to compete against. While most brickand-mortar retailers have attempted to improve sales by offering online solutions, many have been unable to offset the overhead cost of their physical locations and experienced significant operating losses. LEGAL BIG GUNS
In some instances, retailers try to claw back payments they made to media companies and other creditors that took place 90 days prior to filing for bankruptcy. They do so by launching a preference action. When that is expected to take place, a strong bankruptcy attorney is a key form of protection. Tribune Publishing retains the services of Cohen & Grigsby, P.C. of Pittsburgh, PA to defend such actions. There are many other firms that provide this type of service. Bankruptcy attorneys file proofs of claim, review document filings of debtors, monitor dockets, provide counsel on creditor’s committee activity and review contract terms. They also put together strategies in anticipation of potential bankruptcy filings and claims. Needless to say, the benefits of having attorneys litigate and/or negotiate claims need to outweigh the legal costs. I know from my own experience that the preparation of legal plans related to strong ordinary-course-of-business and new-value defenses can significantly drive down preference risk and result in favorable settlements. Early preference analysis can also be helpful
The Financial Manager • May/June 2019 15
CREDIT AND COLLECTIONS when we’re considering the idea of changing a retailer’s payment terms prior to bankruptcy. Some altered terms might weaken an ordinary-course-of-business defense and have a negative impact on a media company’s ability to defend the preference claim. Another legal dynamic involves the agencies that many retailers use to negotiate and purchase media opportunities. When an advertiser files for bankruptcy, these contracted agencies can represent additional credit risk, especially if they claim sequential liability. Under sequential liability terms, an agency is not responsible for paying a media company if the agency is not paid by the advertiser. Most agencies that claim sequential liability include wording in their contract or in the individual insertion orders that attempts to limit their liability. Making matters more complex, a retailer’s bankruptcy filing may cause a domino effect, forcing agencies into bankruptcy. That, in turn, can increase the bad-debt risk to a media creditor. Once a retailer has filed for bankruptcy protection, they or their agency typically approach the media company for post-petition credit on business-as-usual terms as a means of placing more advertising orders. They utilize their debtor in possession (DIP) financing to pay post-petition accounts receivable as administrative expenses. This is critical for many distressed retailers because they rely heavily on advertising media to produce new sales or for store-closure sales. In some cases, the retailers are given approval by the bankruptcy court to designate the media company as a critical supplier, allowing the retailer to pay all or part of the media pre-petition debt in exchange for granting new post-petition credit. INTERNAL PROCESSES
Given all of the complications that arise from distressed creditors, Tribune Publishing relies on a shared service environment, based in Lewisville, TX, to make the best decisions. The unit manages (among other things) credit and collections, cash application and customer service. It’s responsible for developing, monitoring and enforcing the effectiveness of policies and procedures that promote revenue growth while mitigating excess credit and collections risk across all business units. The policies and procedures that the 16 The Financial Manager • May/June 2019
shared services team develops – along with internal standard operating procedures – provide our credit and collections team with a high-level view of accounts receivable across all business units and the tools to manage total risk. Our efforts to analyze risk don’t stop there. When we determine if a change in sales terms or credit limit is justified, we rely on Security and Exchange Commission (SEC) filings, trade credit and aging reports, media reports as well as the observations of sales and operations personnel
MEASURING
THE RISK
O
FTEN A MEDIA COMPANY
recognizes that a retailer is in financial distress, but it may be months or years before the customer seeks bankruptcy protection. Because the downward trajectory takes so long, immediately walking away from significant sales revenue is often not in media’s best interest. Recognizing, measuring and assuming risk are part of the business-decision process. At the same time, preparing for potential bad-debt loss is a key consideration. Most companies establish bad-debt reserves to accommodate inevitable losses. While the methodology for reserve calculation can vary greatly, it typically includes a general reserve that utilizes a lookback analysis measuring a bad-debt experience over a period of time. The data is used to book reserves, which may include a specific component to accommodate known high-risk accounts. There are other potential risk factors that need to be considered as well. In addition to loss of open-trade receivables – in other words, debts that were never paid by a distressed creditor – media companies need to evaluate the risk to receivables that were paid in the 90 days prior to the bankruptcy filing. The creditor’s trustee or “debtor in possession” may launch a preference action to reclaim that revenue.
and even word on the street. Rarely do we make decisions that impact large retail revenue customers without engaging senior finance and sales management. When necessary, credit personnel make presentations to these managers on a retailer’s current accounts receivable balance and aging. The reports also include current credit data supporting a risk assessment and a recommendation on how to handle the retailer’s current and future business. Once the assessment and recommendations are vetted, the company may decide to maintain status quo, reduce or eliminate the credit limit, reduce the payment terms or increase bad-debt reserves to accommodate a potential bankruptcy filing. OUTSIDE PARTNER
In addition to internal resources, Tribune utilizes an external service partner, The Receivable Management Services (RMS). It’s one of several companies that can assist in the credit and collection effort with advertising customer accounts. It also provides customer service to our internal and external customers, cash application and customer master-data management. RMS works as an extension of our internal resources and provides Tribune with daily, weekly and monthly reporting. It uses a combination of domestic and offshore services. Stateside, the company performs credit and collections, customer service and master data services. The cash application function is performed by their offshore team, but it is managed domestically. Tribunes’ partnership with RMS continues to produce improved accounts receivable quality by holding monthly performance reviews, a quarterly business review and roadmap sessions that focus on process improvement designed to gain efficiency and service quality while reducing outsource expense. There is no doubt that media support is as critical to retailers’ survival as the inventory they sell. But they can rock the boat dramatically. Proactive management and strategic outside services are critical as credit and collections managers navigate the choppy waters. Robert L. Smith is director of advertising accounts receivable at Tribune Publishing Co. He can be reached at (469) 528-9350 or rlsmith@tribpub.com.
The
ESPORTS EXPLOSION Competitive gaming has some big hurdles, like turning a profit. But its longterm health appears bright.
League of Legends Spring Playoffs 2019 Photo by Tina Jo/Riot Games.
18 The Financial Manager • May/June 2019
CONTENT TRENDS
T’S DIFFICULT TO SCROLL VERY
far in your preferred news source these days without coming across an esports headline. Many prominent individuals and investment funds are making waves by investing in esports, also known as multiplayer video games. Among those sprinkling some investor stardust on the industry are former baseball player Alex Rodriguez, Ted Leonsis (the National Basketball Association and National Hockey League franchise owner) and the venture capital firm Accel Partners. That’s drawn significant attention to this expanding subculture. Profitability remains an afterthought, and challenges abound – not the least of which are viable wages for a growing player base. But our outlook for the longterm health of the industry is increasingly bright as revenue streams become more diverse, league formation takes shape and esports awareness compounds. Consider that in 2018, there were 737 major esports events across titles such as League of Legends, Counter-Strike: Global Offensive and Dota 2, according to Newzoo, an esports analytics firm. While they have been hosted in traditional sports stadium atmospheres, most are commonly viewed online and occasionally on network television. Some of the most popular have sold out venues like Madison Square Garden and the Staples Center. The demand has prompted the construction of stadiums built specifically for esports, including a $10 million, 1,000-seat stadium in Arlington, TX. It wasn’t always that way. In years past, esports leagues and events lacked
the organization and structure necessary for the industry’s revenue streams to take root. Some big impetuses for change came in 2017, when two of the industry’s most established games, Overwatch and League of Legends, formed league structures and franchise systems designed to promote stability – encouraging steps that could prove to be a landmark inflection point. Furthering the franchising momentum, in early 2019 word leaked that the Call of Duty World League plans to rollout a franchise system. The global esports audience is expected to reach 453.8 million in 2019, and the number of esports enthusiasts (those who watch esports content more than once a month) will grow to approximately 201 million in 2019, up 16.3% from 2018, according to Newzoo. The majority of participants watch esports online, primarily via Twitch, a streaming website predominantly used for video gaming. However, Twitch is 200
not a niche platform. The company was purchased by Amazon for $970 million in 2014. And in 2016 Twitch boasted that its average viewer watched more programming per month than the typical YouTube user (421.6 minutes per month versus 291 minutes), according to TechCrunch. Furthermore, Twitch has a larger audience than many other competing sources of entertainment. (See chart below.) And the worldwide esports industry claims a comparable audience size to domestic traditional sports leagues, which have predominantly U.S.-based audiences. (See chart on page 20.) According to Newzoo, esports revenue is expected to reach $1.1 billion in 2019, representing a 26.7% year-over-year increase. By 2022, industry revenue is expected to near $1.8 billion, reflecting an annual growth rate of 22% from 2017 levels. Strong industry revenue growth is expected to be primarily driven by media rights and sponsorship revenues
Audience Size of
185
150 Audience (mm; 2016A)
I
By KIM RANDOLPH & MAC HOLLAND
Entertainment Options 130
120 95
100
93
88
81
50
12 0
Twitch
HBO
Spotify iHeartRadio Netflix
ESPN
Pandora
Hulu
SOURCE: Stout research.
The Financial Manager • May/June 2019 19
or greater, according to Audience Size of Newzoo. Esports & Top Leagues But the demo attraction is even more expansive 300 270 DISTRIBUTION DEALS that that: 38% of esports That outlook has sparked large distribution fans are women, and 58% 250 231 transactions. Last year Twitch agreed to pay of fans that are aged 25 or more than $90 million for two years of Over- older live with children in 200 167 watch League distribution rights, and Face- their household, accordbook inked a deal to stream Counter-Strike: ing to the media agency 150 Global Offensive content, although the Mindshare. What’s more, 114 amount it paid remains unknown. esports is expected to reach 100 Also in 2018, ESPN announced that its an audience of approxi65 premium streaming service, ESPN+, will mately 645 million people 50 broadcast the North American League of by 2022, representing an Legends Championship Series, voiding annual growth rate of 14% 0 BAMTech’s seven-year, $300 million deal from 2017 levels, accordEsports NFL NBA MLB NHL for the rights. ing to Mindshare, a global SOURCE: Goldman Sachs Esports Report (June 2018). Lastly, for the second straight year, the media and marketing serOverwatch league will air across the Disney vices company. Walmart announced a partnership with platform, with select programming schedThe extreme popularity of Fortnite, esports venue and production company uled to air on ABC. PlayerUnknown’s Battlegrounds and Apex Esports Arena last November. The retailLegends have helped diversify audiences er is hosting live, in-store events and has DEMO DYNAMICS and break negative social stigmas associat- launched a new line of gaming hardware. There’s a reason for all the deal-making ed with video gaming. Both the industry’s And more than 300 collegiate esports excitement: access to the elusive 21 to 34 strong Millennial viewership and widening teams have formed, including more than year-old demographic, whose traditional demographic reach provide leverage in ne- 30 programs offering scholarships to esports TV viewership has declined. They make up gotiating lucrative media rights, sponsor- athletes, according to the Big Ten Network. 65% of esports fans. And another eye candy ship and advertising deals for the esports CAPITAL TAKES NOTICE statistic for advertisers: 43% of fans have industry. an annual household income of $75,000 Given all that, it’s not surprising that Little wonder that the esports industry is attracting significant investment from private equity and venture capital firms as well as technology and media companies, traditional sports teams and wealthy individuals. Goldman Sachs reports that S GLOBAL MEDIA COMPANIES FEEL THE PRESSURE TO ACQUIRE AND during the first six months of curate content that keeps them relevant, they have turned to esports to expand 2018, $1.4 billion of venture and diversify. In addition to distribution deals, like the agreement by premium capital has been invested in streaming service ESPN+ to broadcast the North American League of Legends esports start-ups. It includes Championship Series, there have been several other developments: Tencent’s two investments in ■■ Comcast owns the Philadelphia Fusion, a team in the Overwatch League. Chinese streaming platforms ■■ The regional sports channel MSG Networks, which airs New York Knicks Douyu and Huya, totaling games, has created a TV show that follows the esports team Knicks Gaming. $1.1 billion. That represents ■■ The Big Ten Network announced a two-year partnership with Riot Games, approximately 90% growth the creator of League of Legends, to air collegiate League of Legends over the total amount of fundcompetitions. ing in 2017. Over the five and a half years ■■ Theater chain Cinemark and television network Nickelodeon have backed esports startup Super League Gaming, which hosts amateur esports prior to June 2018, nearly $3.3 competitions in movie theaters during down times. billion had been invested in the esports industry, according to ■■ Turner Sports is partnered with entertainment holding company Endeavor on Goldman Sachs. a professional video gaming league and broadcasting operation. Last year, the network hosted six tournaments across an array of games and aired both live action Institutional investors recognize that and supplementary, documentary-style content on TBS. the industry still has a long runway ahead. Crunchbase reports that 79% of all equity ■■ Google and Apple have both announced subscription game services, although it was investments in 2016 were Angel or Series A. unclear, at press time, if they would include esports, or to what extent. Professional sports franchises and wealthy Audience (mm; 2017A)
– although esports companies also benefit from advertising, merchandise and ticket sales.
MEDIA JUMPS ON THE BANDWAGON
A
20 The Financial Manager • May/June 2019
CONTENT TRENDS
THE VALUE DRIVERS
As revenues grow, esports valuations should continue to rise, and as revenues become more predictable and the industry approaches profitability, traditional valuation methods may become appropriate for esports teams. Stout research suggests that the esports industry may be further along this progression than originally believed. Two of the industry’s primary income sources, media rights and sponsorship revenues – which collectively represent 64.6% of projected 2019 revenues – are also its fastest growing, expected to grow 41.8% and 34.3% in 2019, respectively, according to Newzoo. Currently, most esports sponsorships have come from companies whose products are used in the industry – for example, Turtle Beach, a gaming headset manufacturer. In fact, European Sponsorship Association’s analysis of the sponsors of the most popular esports teams and events shows that approximately 88% of teams and 65% of events are sponsored by this sort of endemic brand. But brands that have no direct association with esports are likely to join the fold. By cracking the sponsorship budgets of a broader set of companies and increasing exposure on linear and over-the-top media platforms, teams will broaden their fan bases and increase their intrinsic value. Despite the tremendous inroads, esports still faces significant challenges. Primarily, the industry must better monetize its audience. Although audience growth rates far outpace those of traditional professional
Esports
Venture Capital Investment
$1600
300%
Total Esports Funding
$1400
250%
Growth Rate
$1200
200%
$1000
150%
$800 100%
$600
50%
$400
0%
$200 $0
Growth Rate
Total Esports Funding
individuals are among the esport-team investors. In 2016, the Philadelphia 76ers were the first team to jump in, acquiring two esports teams – Team Dignitas and Apex Gaming – for a sum rumored to be between $7 million and $15 million. The 76ers have utilized existing staff to manage the operations of their esports franchises, which operate under the Team Dignitas banner. And, according to Forbes, it has leveraged relationships with the 76ers’ sponsors and may potentially use its arena to host esports events. Additionally, sports moguls Robert Kraft (New England Patriots), Stan Kroenke (Los Angeles Rams) and Jeff Wilpon (New York Mets) have gotten into the esports act – as have retired basketball players Shaquille O’Neal and Magic Johnson.
2013
2014
2015
2016
2017
2018 YTD
-50%
SOURCE: Goldman Sachs Esports Report (June 2018).
sports, the typical NBA fan spends over four times more than the average esports fan does on merchandise, tickets and subscriptions, according to Newzoo. There’s one significant reason for that: nearly all esports competitions are available to watch for free online, discouraging paid participation. However, esports 2014 2015 fans are willing to spend money for the
entertainment. Esports news website Kotaku reports that video game enthusiasts subscribe to and often donate to (or tip) their favorite streamers on Twitch. (Streamers are people who stream esports games live online.) In 2017, U.S. esports fans tipped approximately million according 2016 $1292017 2018 YTD to research Continued on page 22
The Financial Manager • May/June 2019 21
CONTENT TRENDS ESPORTS—Continued from page 21
from Streamlabs and Goldman Sachs, who project that the worldwide tipping market will grow to $372 million by 2022. PATHWAY TO VIABILITY?
As more esports franchises form, industry growth is likely to accelerate. Fan bases will develop around specific teams without fear that their team will be sidelined by a league organizer. As revenue streams grow and become more predictable, the industry will be able to offer a sustainable salary to a larger proportion of professional gamers. Two of the most established esports titles, League of Legends and Overwatch, have set up franchise systems with permanent league spots. League of Legends teams reportedly feature a revenue-sharing agreement dependent upon team success, split between players (35.0%), teams (32.5%) and the game’s intellectual property owner, Riot Games (32.5%). Although few gamers earn enough to make a career out of esports today, it is becoming more common. The Wall Street Journal reported that players on the 12 teams in Activision Blizzard’s Overwatch league earn at least $50,000 annually. That excludes health insurance and retirement benefits, as well as tournament winnings, which can raise salaries well into six figures. In contrast with traditional sports team ownership, the economics supporting esports team ownership are far more grounded in economic opportunity. The synergies that exist between revenue streams will continue to entice investors into the speculative but viable esports industry. Although profitability is not in the nearterm, the economics are beginning to fall into place to facilitate the application of traditional valuation approaches to the esports industry. At a time when the primary professional sports leagues in the U.S. are dealing with headaches over National Anthem protests, athlete safety, reduced competitiveness due to so-called superteams, pace of play initiatives and aging fan demographics, esports may be burgeoning at just the right time. Kim Randolph is a managing director and Mac Holland is a former analyst at the financial advisory firm Stout. Randolph can be reached at krandolph@stout.com or (646) 810-4305.
22 The Financial Manager • May/June 2019
CONGRATULATIONS! Working Capital Award Jenna Hardy CFO Gearbox Software
Mike Lavey
CAO/Controller Tribune Publishing
Aqueelah Traylor-Morgan Assistant Controller Turner
Rainmaker Award Randy Bradford
VP, Financial Operations Nexstar Media Group
Paul Rahmlow
CFO Midwest Communications
Joe Waring
CFO Evening Post Industries
BCCA Contributor Award Tonya Sorrells
Sr. Manager, Credit & Collections Hearst Television
BOND & PECARO
CONGRATULATIONS
JENNA HARDY
ON WINNING THE WORKING CAPITAL AWARD
FROM YOUR FRIENDS,
CONGRATULATIONS TONYA SORRELLS Senior Manager, Credit & Collections
2019 BCCA Contributor Award Winner
The Financial Manager • May/June 2019 25
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26 The Financial Manager • May/June 2019
2019 award winners
SPINNING US FORWARD
The 2019 honorees have led the charge to advance MFM, BCCA and the companies where they work into the future. In the annals of MFM and BCCA award giving, 2019 certainly stands out as an unusual year. While the MFM Board is extremely pleased to honor several individuals for their remarkable contributions, some of its most esteemed awards will not be bestowed. There’s no Distinguished CFO or Avatar Award winner this year – and no Peter F. Szabo Award recipient either. “We really go for quality, not quantity,” explains Mary Collins, MFM’s president and CEO. “We don’t want to just honor someone to honor someone. We’re not filling a slot. We’re recognizing people who give up their time and resources to help us to continue and evolve MFM and BCCA.” The profiles that follow explain why those selected this year are deserved of our applause at Media Finance Focus 2019 in New Orleans, May 20-22.
BCCA Contributor Award Those who receive this accolade have helped the credit and collections community in a variety of different ways. TONYA SORRELLS Hearst Television Tonya Sorrells says that one of the keys to her success has been building and balancing relationships while focusing on results. But relationship building got turned on her when Jeana Stanley coaxed Sorrells to move from Florida and take on a new role within Hearst TV’s Charlotte, NC, centralized hub back in 2015. “I was like, ‘No way,’” recalls Sorrells, who’s now Hearst’s senior manager of credit and collections. “I’d been in the same home for 17 years. I was very comfortable.” Stanley gave Sorrells and her son Fitbits to push them over the edge, and it worked. “I’m proud that I got through it and have molded out a team when I had so much fear and reservation. I took that leap of faith,” says Sorrells, in speaking of the move.
It’s easy to understand why Stanley twisted her arm a little. “She’s very tenacious and very well known in the industry. Agencies and
advertisers know that when they’re hearing from Tonya Sorrells, they’ve gotten to the top of the food chain,” says Stanley, who’s vice president of finance for Hearst Corp. Sorrells’ job certainly comes with some brainteasers. “There’s a new challenge every morning. It just takes one thing to derail you, and then you have to think, ‘Now what?’” she says. Her ability to find solutions to problems is one reason why she’s picking up the BCCA honor. “She’s one of BCCA’s unsung heroes. When the BCCA Committee – which we now call the Media Credit Committee – needs something, Tonya is the person that we talk to,” explains Mary Collins, president and CEO of MFM. Sorrells has also helped the organization succeed through her participation in conference panels and the BCCA Credit Seminar. And she’s championed Media Whys – a resource for better and faster credit decisions. The Financial Manager • May/June 2019 27
Working Capital Recipients This award honors members who help MFM and BCCA achieve their goals.
JENNA HARDY Gearbox Software
MIKE LAVEY Tribune Publishing
AQUEELAH TRAYLOR-MORGAN Turner
When MFM expanded its mandate to include the games business, Jenna Hardy became the first chair of the committee devoted to that sector. She proved to be so effective that she’s about to become a member of the MFM Board. “The games industry is in a position that other media segments were in 20 years ago, when there were a lot of different players in a lot of different sizes. Everybody’s reinventing the wheel all the time. And they’re really hungry for information. But they need a leader, and Jenna has stepped up as that leader,” says Mary Collins, president and CEO of MFM. Hardy has broken new ground at Gearbox Software, an independent game developer. In her role as vice president of finance, she developed the company’s enterprise accounting system. As a result, Gearbox dramatically improved forecasting, cut costs, managed cash flow and improved its return on investment. Before joining Gearbox in 2016, Hardy moved up through the ranks of Warner Bros. and became director, broadband accounting and deal analysis within its home entertainment digital distribution unit. Before Warner Bros. she was at Walt Disney Co., rising to senior manager, financial reporting within the consumer products group.
There’s been so much activity in recent years at Tribune Publishing, as the company considered various deals to buy assets or potentially be sold, that Mike Lavey had to drop off the MFM Board. But the controller and chief accounting officer of Tribune certainly made his mark over his five-year board tenure, and even before then. “He led the Newspaper Committee, when we brought the newspaper industry into the fold. It took some time and Mike’s leadership to do that,” recalls MFM’s Mary Collins. “In addition, he started the Newspaper Revenue Recognition Group, which has really helped us to provide value for newspaper members.” The whole issue of how to make the newspaper industry vital in the face of monumental business-model quandaries has been at the heart of his work for MFM. Newspaper “ink” has been in Lavey’s blood for some time. Before Tribune Publishing, he was vice president and corporate controller at A.H. Belo Corp., and he was also controller of the Dallas Morning News. Previously, he held financial management positions at imc2, Alliance Data Systems, Lighting Science Group, MetroPCS, Excel Communications, BancTec and NAC. He began his career in the audit function at Arthur Andersen.
Local events have become an important hallmark for MFM over the years as it seeks to provide members with more value in their home markets. And one of the members who’s made them successful is Aqueelah Traylor-Morgan, who is Turner’s assistant controller, accounting business services, global subscription revenue. As a member of the Atlanta Localism Committee, she’s been very active in organizing two annual gatherings. “She stepped up and took on the challenge. She has been really, really successful,” says MFM’s Mary Collins. “I went to the event she was responsible for in the fall, which was about robotic process automation and the workforce of the future. She worked with the Turner group to get speakers; she set up the location. And she worked on the social event this spring.” At Turner, Traylor-Morgan provides accounting support for the global distribution of Turner’s 10 linear networks and leads a team of more than 10 professionals. Previously, she was Turner’s manager of subscription revenue, with responsibilities for both Canadian and small affiliates and then, more recently, top domestic affiliates. Traylor-Morgan began her career at PricewaterhouseCoopers as an assurance professional. And she was an accounting manager at Xerox/Georgia Pacific.
28 The Financial Manager • May/June 2019
2019 award winners
Rainmaker Award Honorees MFM and BCCA applaud those who support their financial well-being with these accolades.
RANDY BRADFORD Nexstar Media Group
PAUL W. RAHMLOW Midwest Communications and WRIG
JOE WARING Evening Post Industries
Randy Bradford has been in the thick of the action at Nexstar Media Group as the company acquired over 25 broadcast and digital companies in eight years. As vice president of financial operations, he’s key to the due diligence process and planned the purchased companies’ integration into the Nexstar fold. Love is a two-way street between Bradford and MFM. “For me, the most valuable part of MFM is the networking opportunities,” he says. “Randy is our liaison into the larger Nexstar organization, but he’s more than that,” says Mary Collins, president and CEO of MFM. “You might imagine with all of Nexstar’s priorities, an organization like MFM might get shuttled to the side. Randy makes sure that doesn’t happen.” Nexstar is both a sponsor of the annual conference’s opening reception and a corporate member of MFM. When Bradford first joined Nexstar in 2009, he was in charge of the station group Four Points Media, which had a management services agreement with Nexstar. Previously, he served as a CFO at the radio group Independence Media. He was also a controller at Healthvision, a medical records provider. And he was director of finance for Chase Medical, which manufactured products used in open heart surgery.
A few years back, Paul Rahmlow started attending MFM’s annual CFO Summit. And he valued it so much that he volunteered to co-chair the summit that was held earlier this year. “Paul and his co-chair, Joe Waring, were just incredible. We had a record number of attendees. The topics were excellent. And they helped us bring in sponsors,” says MFM’s Collins. “Paul really stepped up and took a leadership role, which we so appreciate,” Collins adds. He’s also on the MFM Board ballot for the coming year. Rahmlow has plenty on his plate already, in addition to championing MFM. He is CFO, secretary and treasurer of both Midwest Communications and the company’s first radio station “building block,” WRIG in Wausau, WI. Midwest has 75 radio outlets in 16 markets. That’s up from 17 stations in three markets at the time when Rahmlow joined the company as director of accounting in 1999. In addition to MFM, Rahmlow gives back in several other ways. He has seats on several local boards in Wausau, including the Boys and Girls Club, Junior Achievement and the Women’s Community, a domestic abuse shelter. Rahmlow also serves on the Radio Music License Committee Board.
It only takes Joe Waring a split second to explain what gives him an extra spring in his step, working as CFO of Evening Post Industries. “I have the privilege of working for a family-owned company. I have a lot of ability to work across several different subject areas. I love the breadth of the role, and I love the people I work for,” he says. Evening Post was founded by a rice planter named Arthur Manigault in 1896. And it’s been in the Manigault family ever since, growing to include newspaper, interactive, healthcare, real estate and forestry investments. At press time, the company was in the process of selling off its Cordillera Communications TV station group and is exiting that media sector. Waring’s work co-chairing the CFO Summit really captured the MFM Board’s attention, and that’s a key reason why he’s being honored. “Joe was really focused on sessions about employee law and contracts. We had a speaker who talked about employment issues in the 21st century, and Joe was completely responsible for that. He also was looking at big data issues and helped us bring in speakers on the TV side of the business,” explains MFM’s Mary Collins. The Financial Manager • May/June 2019 29
LAST WORD
Guarding the Messengers
Violence against journalists has become an epidemic. Media companies must protect and advocate for their news teams. BY DAN SHELLEY
O
n Feb. 24, San Francisco reporter Joe Vazquez and photojournalist John Anglin were covering a routine news story – an Oakland teachers strike – when they were robbed of their camera at gunpoint. Vazquez and Anglin, who work for CBSowned station KPIX-TV, were accompanied by an armed security guard, a retired police officer. The guard exchanged gunfire with one of the robbers; both were wounded. The gunmen, and several alleged accomplices, were later arrested. The camera was recovered. This incident is but one indication of an alarming trend. According to the U.S. Press Freedom Tracker, the archive of record for threats to journalists in our country, 48 reporters and photographers were assaulted in 2017. The number was slightly lower in 2018, 43. At press time, nine have been attacked so far this year. While robbery was the motive of the KPIX attack, an increasing number of others were ideologically motivated. This comes during a period when Americans are more politically polarized, and as elected leaders and others have decried the press as the “enemy of the American people.” In June of last year, a Florida man whose van was covered with pro-Trump and anti-news media bumper stickers was arrested and charged with sending several pipe bombs through the mail. At least three bombs were sent to news organizations in New York City. Fortunately, none ignited. In February of this year, at a Trump rally in El Paso, Texas, a BBC photojournalist was assaulted by an attendee wearing one of those infamous red baseball caps. The president’s mass events have become particularly precarious for journalists. It’s essential for news organizations to enhance security for journalists. But that just addresses the most egregious symptoms of a larger disease – the public’s lack of trust with the news media. A January Pew Research Center survey
30 The Financial Manager • May/June 2019
showed that “a majority of Americans believe the news media do not understand people like them.” Nearly three-quarters of Republicans held such beliefs. On June 27, 2018, an AXIOS/Survey Monkey poll was released, showing that more than 90 percent of Republicans thought the “media intentionally reports fake news.” The very next day, a gunman stormed into the offices of the Capital Gazette in Annapolis,
Do you send one-person multi-media journalist crews into dangerous areas, or insist they do live shots late at night? If so, stop. Md., and opened fire, killing four journalists and an administrative assistant. In part because of the mass shooting’s proximity to the AXIOS poll, some people jumped to the conclusion that the attacker was politically or ideologically motivated. As it turns out, he had a long-running personal vendetta against the paper after it had covered a court case in which he’d been involved years earlier. But that didn’t make the crime any less tragic. As I speak to journalists and journalism executives, I ask them the following questions as a means of trying to help them protect themselves and rebuild trust with consumers:
Is your newsroom reporting stories that expose problems in your community, and then following up with stories about potential solutions? ■ Has your company taken steps to protect your reporters and photojournalists – safety courses, self-defense training and extra physical security precautions in your newsroom, your station or your office? ■ Do you send one-person multi-media journalist crews into dangerous areas, or insist they do live shots late at night? If so, stop. ■ Do your company’s leaders make an effort to speak to the public – on air, in print, online, during speeches and during conversations with influencers in your community – about the public service your news organization regularly provides? ■ Do your news anchors and reporters explain on the air, and/or on your station’s website and social media channels, the process they go through in order to report news stories? ■ Do you publicly discuss the ethical dilemmas you face when reporting particular stories and the process through which you’ve gone to resolve them? ■ Do you air public service announcements that explain the importance of responsible journalism to your community? ■ Do you do on-air editorials in which you explain your station’s newsgathering philosophy and commitment to serve your community? By taking such actions, you’ll be surprised how much goodwill you will earn, with journalists and the public. ■
Dan Shelley is executive director of the Radio Television Digital News Association, which advocates on behalf of broadcast, cable and digital journalists. Its Voice of the First Amendment Task Force fights threats to press freedom and works to help the public better understand why journalism is essential. He can be reached at dans@rtdna.org or (212) 246-3872.
Recovering less money is not the same as recovering MORE.
A lot has changed in the media collections industry over the years. As the very first media collections company, we ought to know. Lately, we’ve noticed a disturbing trend. There are a lot of collection companies promising quick receivable recoveries. The problem is they are getting quick recoveries of a lot less money than what was owed. Pennies on the dollar. What kind of a deal is that? At Szabo, we follow one simple rule when collecting accounts receivable. Collect MORE.
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Szabo Associates, Inc. 404-266-2464 www.szabo.com info@szabo.com
MORE is better than less.