Thursday, July 30, 2015

Hating on Ribbons in the Garden

As I have documented in the past, I am an avid college basketball fan. I have attended 34 consecutive Final Fours. Over the years, I have attended over twenty Big 8, Big 12 and Missouri Valley Conference tournaments. I have also attended many NCAA first and second round games and regional games.

I have followed college basketball across the country and have been fortunate to see many games in many different venues. I've had the opportunity to visit with fans from schools across the country.

Two years ago, when Creighton University joined the Big East Conference, we attended the mens basketball tournament as a family. When purchasing the tickets, we were told that the Big East used a "ribbon seating" format in Madison Square Garden. In all of my college basketball travels, I had never heard of "ribbon seating". In fact, a Google search does not reveal any results that are relevant to this definition.

When I inquired with the Creighton ticket office, I was told that rather than seating fans of different schools in a "block", where they all sit together, tickets are distributed in "ribbons" or strips of two to perhaps ten seats in a row. Fans sit with and among those from other Big East schools.

The goal of "ribbon seating" is to not have big blocks of empty seats appearing on television. But the “ribbon seating" is not fooling anyone. Madison Square Garden looks empty on Wednesday night of the tournament because it is empty. The four lowest seeds are playing. There is no seating configuration that will change that.

Treating the fans well and making their experience positive, however, will do more than anything else to resolve the issue of empty seats. There are dozens (hundreds?) of prime seats (lower level at mid-court) that were empty for the first four sessions of the tournament this year. How did "ribbon seating" fix that?

I offer a couple ideas for why the Big East Conference should consider traditional block seating for fans of the Big East tournament:

First, and most importantly, traditional block seating offers a better game experience for the fans who are paying the bills. I don't know any fans that wouldn't prefer to sit with other fans of the same team. I believe the conference would take some of the pressure off the member schools because fans are not as sensitive about their priority seating if they are seating with fans of the same school.

Secondly, if all fans from each institution sit together, they will not have to be bothered by other fans sitting in front of them who don't care about the game going on and are up and down to the rest rooms or concession areas. There is nothing more annoying when trying to watch my team's game than some fan that disrupts the entire row at the least opportune time because he doesn't care about the current game. I experienced that many times during the two Big East tournaments I have attended.

Third, you would prevent animosity between fans of different schools sitting in the same section when some fans want to stand and other want to sit. Block seating circumvents this issue because fans of the same team tend to stand as a group and sit as a group. My family has been called some very special names in the "heat of the moment" the past two years. We also had our view of the court obstructed by fans holding signs and flags in front of us. Why not avoid the conflict?

Finally, it would be nice if the conference did something that is good for the fans in the arena rather than letting television dictate their every decision. I recognize the importance of the television contract. Madison Square Garden is a unique arena in that the lighting contrast between the floor and the seating is dramatic (perhaps the most dramatic of any major venue). It is difficult to see the seats because they appear quite dark on television.

I can attest to the fact that the empty seats from losing teams will find their way into the hands of basketball fans. The experience of wading through oceans of ticket scalpers on the way in to the Garden ensures that. Those blocks of seats will fill in when a school loses. The tickets are expensive. If fans choose to go home after their team loses, they will sell their ticket prior to their departure. But when a team loses, there is a better chance fans will go to remaining tournament games if they can sit in the block of fellow supporters of their school rather than among fans of other schools.

This is not the old Big East where most schools were a short drive away. Five schools, Creighton (1,100 miles), Marquette (900 miles), DePaul (800 miles), Butler (700 miles) and Xavier (600 miles) all required air transportation to get to New York for a weekend tournament. Add the cost of four nights in the hotel and four days of meals in the city and you have a considerable investment by a fan of any of these schools to attend the tournament.

The fans in the arena are customers. Please treat us as such. Make our experience a better one. Let us sit with each other after we make that investment to support the Big East Conference.

C'mon Big East. I urge you to consider changing the seating for future Big East Men's Tournaments to a tradition block configuration. If the only reason you can give for utilizing "ribbon seating' is that "it is the way we've always done it", then it's time to re-think it.

P.S. I received a response to the letter I sent to the Big East commissioner.  "The BIG EAST Conference is always searching for ways to improve the fan experience and we are spending the summer working with MSG staff and our institutional ticket and marketing representatives to review our current ticketing practices and methods.  We will be certain to incorporate your thoughts into our discussions." It was copied and pasted very neatly into the email.

Friday, July 24, 2015

Returning to the Cowboy State

Judy and I travelled to Jackson, WY in June for an National Automobile Dealers Association board of directors meeting. We went in a couple days early and were able to travel up to Yellowstone and the Tetons for a day and then spent a day in and around Jackson.

The Yellowstone National Park and Grand Teton National Park are such beautiful areas. I find the Grand Teton to be one of the most majestic sights I've ever seen. My eyes are drawn to it whenever it is in view.

I had not been to the Jackson area for 15 years. Judy and I took the kids to Yellowstone in the early 90's. Then in the summer of 2000, a friend, Craig Kirsch, and I rode in a bicycle ride called Ride Around Wyoming (RAW) which was sponsored by Three Peaks Christian School in Sheridan, WY, then a school of 31 students who supported the ride. I believe the school has now closed and the ride no longer exists.

Atop the Teton Pass el. 8,432 feet
June 30, 2000

I kept a journal during our ride and used a Sony Mavica camera to take some photos. This was at the onset of the digital photography age and the Mavica used removable disks (floppies) as the recording media. It was about the size of a brick and about as heavy as one.

I sent the journal and photos back home each day via email. The photos were downloaded from the floppies and inserted into the email message. I used a modem to email from my laptop computer. In a couple places, this was not even an option.

I wrote the journal in WordPerfect, which was among the major word processing programs at the time. I cannot find a program to translate that file to Word so I have scanned my printed copy (complete with typos) of the journal. digital version. I cannot even get Google docs to translate the .pdf so you will have to download it to view it.

Our six-day ride brought us south out of the mountains and onto the high plateau, into Utah, then Idaho and culminated in an ascent over Teton Pass on the final day. It was a great adventure at the time. But the memories have aged wonderfully - a great week with a great friend in truly spectacular country.

So here is my journal from 15 years ago. Craig and I have both had fun reminiscing.

Monday, July 20, 2015

July 2015 SDADA Column

But the bottom line would be that auto dealers would be exempt from direct supervision by the consumer financial protection bureau. The Senate auto dealer compromise, if accepted by House negotiators, would be one of Obama's most high profile losses in his efforts to overhaul Wall Street regulations. The main contours of the House and Senate bills generally match the administration's goals, but Obama has personally lobbied against efforts to carve auto dealers out of the consumer agency's jurisdiction.   - CBS Money Watch, June 23, 2010

In 2010, a Senate made up of 59 Democrats and 41 Republicans and a House made up of 233 Republicans and 200 Democrats passed a Dodd-Frank bill creating the Consumer Financial Protection Bureau (CFPB). Immediately concerns were raised since due to its unprecedented investigative and regulatory authority, its lack of accountability, and the unparalleled authority placed in its sole director, Richard Cordray.

Despite the above mentioned dealer exemption, the CFPB has made every effort possible to indirectly end the auto lending business model. Beginning with the Ally Bank settlement in December 2013 ($98 million) and recently the agreement by American Honda Finance Corp. to pay up to $25 million, the CFPB has bullied, intimidated and harassed automobile lenders in an attempt to end discretionary dealer markups.

The CFPB continues to have the dealer finance model squarely in its crosshairs. I don't think I need to mention to this audience that were it not for finance income, the new vehicle department would be largely unprofitable in most stores.

Though a couple of automotive lenders have embraced a flat fee model, most have remained committed (for now) to the current dealer discretion finance model. One has to wonder how long they (especially non-captives) will endure the CFPB's scrutiny.

NADA recently filed a Freedom of Information Act (FOIA) request to make public an agency memo that appears to plainly undermine the Bureau's long-standing claims that it is not targeting auto dealers through enforcement actions.

The Dodd-Frank Act specifically prohibits the CFPB from regulating auto dealers. Yet the Bureau's actions have caused many, including both Republican and Democratic members of Congress, to question whether the CFPB has attempted to skirt its jurisdictional boundary in an effort to regulate dealers.  -NADA News Release
Reps. Frank Guinta (R-N.H.) and Ed Perlmutter (D-Colo.) have introduced H.R. 1737, the Reforming CFPB Indirect Auto Financing Guidance Act of 2015. The legislation would repeal a CFPB bulletin from 2013 that was designed to pressure lending institutions into eliminating the availability of auto financing discounts.

Stay tuned. It would seem this issue is far from settled!

Blumenthal Wants to Ground Used Cars With Open Recalls

The Senate will soon vote on an amendment that would make it illegal to sell for dealers to sell any vehicle with an open recall. Though the Senate Commerce Committee (chaired by Senator Thune) shot down the Democratic amendment proposed by senators Ed Markey (D-Massachusetts), Bill Nelson (D-Florida) and Richard Blumenthal (D-Connecticut) that would ground vehicles with an open recall, it appears the amendment will be introduced on the Senate floor.

As we dealers know, many recalls have almost nothing to do with vehicle safety. We have recently seen recalls for items as trivial as a printing error in the owner’s manual. General Motors recalled Camaros because the air bag warning label on the sun visor may peel off.

Senator Thune recognized the logistical issues that go with such a policy when interviewed in the New York Times earlier. Imagine a South Dakota dealer taking an Infiniti or Porsche with an open recall on trade. The dealer would have to load that vehicle on a trailer and haul it to Minneapolis or Omaha. That would not lead to  favorable treatment for a consumer either.

Keep your eye on this issue as well.

ICYMI (In Case You Missed It…)

Subaru dealership employee chastises manufacturers for offering more lucrative car deals through Costco than through their own dealer network.

NHTSA blocks former chief from testifying in a class-action lawsuit against Toyota.

Despite some main stream media reports to the contrary, more than one industry expert says there is no bubble in automobile lending.

And finally…

Obama's overtime plan might impact auto dealers

Thursday, July 2, 2015

June 2015 SDADA Column

The world hates change, yet it is the only thing that has brought progress. -Charles Kettering

The past 12 months have brought some of the most significant change in NADA’s history. For nearly a century, NADA has pioneered some of the most valuable services in the industry for its growing membership, right under its roof. These services include the NADA Used Car Guide, which has been part of NADA's heritage for more than 80 years, and NADART, founded in 1957.

No one ever imagined we would part with either one, and we would not have unless we firmly believed doing so would benefit our dealer members and advance NADA's core mission.

This was the case when J.D. Power made an unsolicited offer to purchase the Used Car Guide business. With a difficult decision at hand but unanimous consensus, the NADA board of directors, the Guide board of advisors and NADA's finance and executive committees, all agreed that the best course of action was to sell the Guide to J.D. Power.

This decision, which was not reached easily or without careful consideration, will benefit our dealer members and the Guide's current and future customers. The Guide business will continue to grow and become an even stronger industry resource under J.D. Power.  As part of its agreement with NADA, J.D. Power will continue to provide NADA members with a complimentary Guide subscription as a membership benefit.

In a move unrelated to Guide, after conducting an in-depth review of various retirement plan providers, NADA made a decision to enter into a relationship with Empower Retirement, a division of Great-West Life and Annuity Insurance Company, to offer retirement plans to NADA members.  Empower Retirement is the second-largest retirement plan provider in the United States with nearly 7 million participants. The new NADA Retirement Program from Empower will go live in October of 2015, as the long-standing NADART program is retired.

NADA Retirement Program participants can expect to see many enhanced benefits, including a nearly 50-percent reduction in program fees, a state-of-the-art website designed to make it easier for participants to track their progress in saving for retirement, and fiduciary support services at a level higher than those offered by other retirement service providers, which is a service already familiar to NADART plan sponsors. NADART has been working closely with Empower to ensure a streamlined transition process for plans transferring to Empower.

While it's difficult to see these long-time services, built over NADA's history, leave the NADA family, we look to the future with optimism and renewed vigor. And, as always, we will continue to guard the interests of the franchised dealers we are privileged to serve, while remaining steadfast to NADA's mission that began nearly 100 years ago.

Most importantly, these moves will allow NADA to become more mission-focused, centering on core member services, which include protecting and strengthening the dealer franchise system, advocating on behalf of new-car dealers with Congress, the regulatory agencies in Washington, manufacturers, the media and the public, providing education and training resources for dealers and their employees, and providing dealers with better tools to enhance profitability.

ICYMI (In Case You Missed It…)

Retiring General Motors director Neville Isdell says GM has come a long way since the bankruptcy and is in capable hands, but he sees the turnaround taking 10 years.

David Robertson, Executive Director of the Association of Finance & Insurance Professionals, calls out Senator Elizabeth Warren’s disdain for dealers.

While a former dealership employee says he doesn’t think auto dealers are half as bad as many consumers seem to think they are, the July/August issue of Popular Mechanics carries an article a bit more cynical about the dealership experience.

In a pilot program, Ford dealers’ will use beacons, which will broadcast key information to the customer’s smartphone that might help close a sale, on models featured in their showrooms.

GM dealers are concerned as EBE 2.0 looms ahead. GM’s Dealer-Succession Bulletin causes consternation as well.

And finally…

NADA responds to inaccurate and irresponsible New York Times editorial.