Futbol vs. Soccer: Comparing the American and European Transfer Market

May 8, 2014 by Amy Lopez Leave a Comment

Kaká has sadly been left out of Brazil’s roster for the upcoming 2014 World Cup but he still very much on the list of prospective players to move to the MLS later on this summer. Along with the AC Milan midfielder, Anderlecht midfielder Sacha Kljestan’s name was “tossed around the rumor mill” according to a Fox Sports article.

Many successful international players have migrated from the European league to Major League Soccer. David Beckham had a great run with the Los Angeles Galaxy. Theiry Henry is still enjoying his time with the New York Red Bulls.

The European soccer season is slowly coming to an end, and with the attention slowly turning to the American soccer league (leaving out the World Cup from this discussion), now is the best time to compare the two leagues and how both handle their transfer windows.

The European Transfer Market

The common rationality for any transfer window is that Team A offers a certain amount for a specific player, the player’s current team (Team B) negotiates the prices offered, negotiations reach a certain agreement and finally Team A obtains the player that they desired.

It’s simple, right? Not quite.

The European transfer market is one of the most expensive markets in the world, millions of Euros are exchanged every season. Speculations influence transfers; dozens of media stories being released on who might be sold, sports analysts doing multiple segments on the subject and now, social media users voice their opinions on which players are the best fit for their teams.

But aside from speculation is the freedom that the European leagues offer. For one, there is no salary cap. Teams can spend as much money as they want on the player and resources of their choice. Back in 2003, Roman Abramovich bought Chelsea and took over west London with his one billion euro investment. This sort of “big money” is not just seen in the English league, but in Spanish and Italian leagues as well.

The other factor is the contingency that allows players to leave their clubs at any time—before, during or after the transfer window—and the club is responsible for making those arrangements happen. The most recent example of this was when Juan Mata, unhappy with Chelsea, was able to leave and be traded to Manchester United for 37.1 million Euros.

While this trade still occurred during the time of the transfer window, it does prove a point when it comes to the freedom that players, even big commodities such as Juan Mata, have when it comes to playing for the teams of their choice.

But as previously mentioned, players are able to leave regardless of the “boundaries” that the transfer window claims to have.

As the English Premiere League website states:

There are two transfer windows in each Barclays Premier League season.

The first commences at midnight on the last day of the season and ends on 31 August if a working day – or, if not, on the first working day thereafter, at a time determined by the Board.

The second transfer window commences at midnight on the 31 December and ends on the 31 January if a working day, and again, if not, on the first working day thereafter, at a time determined by the Board.

Temporary transfers can be made permanent outside of the transfer windows. For further information please see the rules in the Premier League Handbook.

This, also, is the same framework used in other European soccer leagues.

The Dilemma

As the rule with materialistic items is “the more exotic, the more expensive” the same rule is somewhat used when it comes to soccer players. Soccer players prices are based on one thing more than anything: location, location, location—in this case, where they were born (or what country they decided to nationalize themselves in). Neymar is a great example of this. His performance as a player was impressive but him being Brazilian was what made him that much more valuable. South American players are a big commodity as well as European players, but there is hardly demand for players from Canada or even Russia.

Country of origin is not the only thing that defines a player’s value but there is also the factor of what club owns the player. Continuing with Neymar, he started his career off playing with Santos FC in Brazil. If he had decided to continue there, his value as a player would not have been as significant. The level he had and the competition he played against also play into this as well (performance being the third factor). So when Barcelona FC (one of the top teams in the Spanish league) purchased him, his value as a player soared through the roof.

While Neymar’s stories is a “Cinderella story” that is continuously seen not just in soccer, but in sports in general, these factors are what create a giant gap between different nations and clubs. The role that the transfer market plays creates a hierarchy of clubs that will always be at the top of the table that the “poorer” clubs will never be able to catch up to. Note: it is important to mention that performance for clubs has nothing to do with the system per se. Even though Manchester United did horrible doing this season in the Premiere League, they are still one of the richest teams in the EPL and will continue to stay in that position.

Continuing with the Neymar example, there is no regulation on the amount of money that is being spent. This led to Barcelona sparking a media frenzy regarding the purchase of Neymar.

American Soccer Transfer Market

The transfer window for Major League Soccer (MLS) works a bit differently than Europe’s.

For one, MLS works as a close league and not the European open league. Players are not able to leave clubs when they please and to even the playing field more and avoid this gap of rich and poor clubs, there is a draft is held around the time of the two transfer windows that occur during mid-February and another that opens on July 8^th. Teams’ position in the draft is based on: their performance and what the standing was in the previous season.

As with other American sports, the highest pick goes to the worst performing team and the best teams find their slot at the very bottom. These teams draft in rounds, which goes from #1 to however many rounds indicated.

This allows for something that occurs in the MLS draft that does not appear in the European market at all—the role of trading draft picks. So, a team somewhere towards the bottom can trade their pick in the draft with a team that is a little higher up.

Another difference between the European transfer market and the MLS is the salary cap. As the MLS “Roster Rules and Regulations” states:

Players occupying roster spots 1-20 count against the club’s 2014 salary budget of $3,100,000, and are referred to collectively as the club’s Salary Budget Players.
Roster spots 19 and 20 are not required to be filled, and teams may spread their salary budget across only 18 Salary Budget Players. A minimum salary budget charge will be imputed against a team’s salary budget for each unfilled senior roster slot below 18.
The maximum budget charge for a single player is $387,500.*

* See section entitled Allocation Money below, under Player Acquisition Mechanisms, for details on buying down a player’s budget charge.

As one can see, there is a budget that is upheld within the MLS; there is accountability for each player and how much can go when it comes to salary. That is not seen in European (as is evidence with the large amount of money that soccer stars such as Messi and Cristiano Ronaldo are paid).

The MLS looks to have a more even playing field and does so by regulating all aspects of the transfer window. This also helps to create greater competition for teams, regardless of how much money they have, because they have a better chance of obtaining a good player.

The Dilemma

The dilemma with the American transfer window is the role of politics. Players are not given as much freedom as there is in the European market when it comes to where and when players want to play. Though there is a disparity in income with European players, American players have very strict contracts with their teams that are often too expensive for any team to simply pay off to get that specific player.

As is noted:

A Team may buy out one (1) guaranteed player (including a DP’s) contract during the off-season and free up the corresponding budget space. Such a buyout is at the particular MLS Team’s own expense.
A Team may not free up budget space with a buyout of a player’s salary budget charge during the season. Such a buyout will be conducted by the League and count on a Club’s budget in a manner consistent with current MLS guidelines.

As with anything, is a very strict, orderly procedure that takes place for the buyout to even occur.

Nothing happens outside the transfer window that is not seriously examined for a long time.

Conclusion

Both the European and the American soccer transfer markets have their flaws. One seems to have a very free and open place that creates disparity while the other seems too strict to even try to mention the word “freedom.” What is important to note though is the simple question about the love of the game. The American soccer league is very strict about making sure they make a profit or do not spend any more than they have to to avoid a deficit. However, what is important to note about the European market is this lack of salary cap that allows for people to waste so much without a worry; they simply do it for “the love of game.” Going back to Roman Abramovich and his purchase of Chelsea, economically it is seen as a bad investment. But from a pride standpoint, the investment was definitely worth it (it brought a Champions League Cup, two League Cups and two FA Cup wins).

So whether you enjoy soccer from an economic standpoint or for the love of the game, both have their flaws but both also have their benefits.

Putting the “Profit” in “Non-Profit”: A Love Story

May 8, 2014 by Amy Lopez Leave a Comment

March madness made be over but the madness surrounding the NCAA has anything but cooled down.

Ever since Shabazz Napier made a public statement about him going to sleep hungry on more than one occasion, questions began circulating about the treatment of athletes and the rules placed by the NCAA.

More important that was the question about who actually does all the work and who reaps the benefits?

The exploitation of college players and their companion organization is an evergreen story.

But what is interesting here is the way in which the NCAA reacted to players like Napier attempting to unionize in order to receive better aid for not just playing at a competitive level but also winning for the organization as well; an organization that is a non-profit.

Mark Emmert, NCAA President, is obviously against players unionizing.” The notion of using a union employee model to address the challenges that do exist in intercollegiate athletics is something that strikes most people as a grossly inappropriate solution to the problems. It would blow up everything about the collegiate model of athletics,” he stated in an ESPN article.

Grossly inappropriate, especially considering the NCAA made somewhere along the lines of $750 billion in revenue from broadcasting contracts alone.

And how much of that goes to the athletes?

As the chart shows, not as much as they should.

But there are many more issues that come into this student athlete conversation.

1) The fact that most colleges don’t even take academics as seriously for athletes as they should.

2) The long line of racial disparities when it comes to the graduation rates from white student-athletes compared to black student athletes. It was recently reported that student-athletes at Columbia had a graduation rate of 85% compared to the overall school’s rate of 95% (even more disparity is seen with female athletes but that is another issue).

What is clear here is that there is an even distribution of wealth when it comes to student-athletes. Should they get paid? Do they deserve to considering they win the championships?

As Greg Johnson wrote in an op-ed article, “student athletes do not need salaries or monthly paychecks, even though the NCAA runs just like any other professional sports league. They should simply be allowed to operate within the free market like anyone else in America.”

The Future of America Rests on the Shoulders of Four-Year-Olds

May 8, 2014 by Amy Lopez Leave a Comment

President Obama’s State Union Address ignited a large (and pre-existing) conversation regarding universal preschool within the nation.

What has followed since is no longer a discussion of a better, earlier education for our nation’s toddlers, but a discussion about the benefits this will have for the whole nation.

To understand this we must first understand how it began. James Heckman, University of Chicago economist and winner of the Nobel Prize in 2000, was one of the first to advocate for a decrease in the “ability gap” in regards to college attendance amongst minorities when he was doing research on government jobs during the 1990s. What he discovered was that this gap was opened up strongly as early as children 3, 4 even 5 years of age.

Since then, there have been many articles as well as infographics that detail the educational benefits that preschool and early education provide to our children.

And while there is still a great emphasis on the educational standpoint that early childhood education advocates use as talking points, discussion is now gearing towards (and appealing to) the economic portion of the advocacy that comes from cultural optimism.

Even Heckman himself wrote a paper in 2004 of all the benefits “investing in young children” could bring forth for our country.

So how exactly do these toddlers become the heroes of our nation?

Taxes do not seem to be the answer to our nation’s search for preschool for all considering Obama’s proposition for this was to tax tobacco. A bit contradictory and also risky considering this implies people should be wasting more money in the tobacco industry; a majority of smokers are already part of the lower-income group (and counter intuitive if one mentions this universal preschool agenda seeks to benefit lower-income members of society).

No, the answer cannot stem from something entirely economic; the way of convincing people is the way it started—focus on the children (in order to secretly talk about everything else).

Putting the “Universal” in “Universal Preschool”

As Heckman mentioned in the 90’s, universal preschool begins by helping bridge the gap of “ability and access.

Universal preschool would mean that all four-year-old children would have access to a quality preschool regardless of income. This would then help children of all color get the education that they deserve, which would mean they would do better in school and have less of a chance of actually needing extra help as they continue through their educational career.

Children would then get older, but having gone to preschool, they would have less of a chance of being involved in crime, dropping out of high school or relying on government assistance as an adult.

Change helps create more change and by starting at the bottom and working our way up, can one appeal to a broader audience.

It is only then, after making the point culturally, that one can begin to talk about it economically again. As Dicken’s wrote in 2009, “well-educated individuals are more likely to be employed at all points in their lives and live longer than those who are less educated which in turn increases labor supply and influences long-term GDP.”

The benefits of preschool are with no question all positive ones. A majority of society is completely in favor of it.

But to depend on children to be the solution to an issue that has always existed is a cycle we continue to place in their hands.

Because after all, “children are the future.”

No pressure, kids.

How England’s Jersey Prices Come Back to FIFA’s Host Choices

April 5, 2014 by Amy Lopez Leave a Comment

Could jersey prices really be the issue? Or is there more at play?

Controversy arose earlier this week on Monday when England revealed their jerseys for the upcoming World Cup. The jerseys, it turned out, cost a surprising 90 pounds (150 US Dollars) and caused a frenzy from not just the English media, but for the British Prime Minister David Cameron as well.

Many have called the jerseys (which Nike manufactured) a rip off. Citizens of England are calling for boycotts and sports minister Helen Grant has asked Nike to lower the prices of the jerseys.

Cameron himself pointed out the stigma that it will have on the parents. “Parents are under enormous pressure to buy the latest kit and we shouldn’t be taken advantage of,” he said in a Reuters article.

But amidst all the controversy and the media speculation, a few things stick out more than others.

For one, Nike is not doing anything new when it comes to the skyrocketing prices of jerseys. Soccer has grown popular with each passing year and more importantly, it is slowly becoming popular in the United States. The big demand of jerseys from fans all over the world calls for higher prices for the merchandise and with more call for the merchandise comes more demand for better quality.

Both elements go hand in hand. It is the same dilemma that other companies such as Adidas are also facing and competition just amps up the prices even more. That is how supply and demand works for items within the marketplace.

But it is not the prices of the jerseys that is the important subject.

Another important aspect of this controversy is Nike and England’s Football Association’s reasoning for the high prices. According to a comment made by both the FA and Nike, the jerseys have climacool ventilation holes designed in them to better accommodate the weather the players will face during their time in Brazil.

Once again, this becomes a discussion about FIFA’s choices when it comes to host nations. Joseph Blatter and company always make it a point to say that the choices made when it comes to host nations focuses on countries that deserve to have soccer impact their citizens.

“This is the development of football and don’t speak about money. This has nothing to do with money, as it had nothing to do with money here in Africa. It has to do with the development of the game,” he said back in 2010 during the host bids for the 2018 and 2022 World Cups in Qatar and Russia.

He went on to defend this by mentioning the great impact the World Cup had on South Africa earlier in 2010. About $100 million legacy fund went to South Africa and $20 million of that had already been used to build a new South African Football Association headquarters and stated the rest would go to “social and community projects.”

He failed to mention the $3.5 billion FIFA made that year as well.

Brazil’s weather condition is not the only thing players will have to look forward to when they arrive to host nation later this year.

Political and social conflicts are still taking place–much of it involving the unequal disparity of money within the society.

FIFA’s next two host nations, Russia and Qatar, are also facing their own crises at the moment. Russia with its very public situation about the Ukraine and Qatar with both its strict drinking and anti-homosexual laws has many people questioning the role of money when it comes to “the beautiful game.”

Even more worrisome is the fact that two migrant workers died in Qatar on the building sites of the 2022 stadiums there (the same situation that is going on in Brazil). The “little man” in society continues talked about but not focused on in these conversations.

Which brings us back to England’s World Cup jerseys. If so much speculation is about Nike’s jerseys because of the climacool adjustments made to it for Brazil, what about the World Cup being moved to the Winter because Qatar’s summers are known to rise as high as 104 degrees Fahrenheit?

How expensive will those jerseys be? Does that really matter? Or is “the beautiful game” just getting very ugly?

The Pixelated Screen: The Sudden Move of Entertainment and the disappearance of Movie Rental Shops

March 15, 2014 by Amy Lopez Leave a Comment

Sam Nguyen wakes up everyday at around 8 AM to drive to work at his movie rental shop, “Video Town,” located in the city of Hawthorne. Throughout the rest of the day, he is met with a string of long-time customers that are either returning a movie or asking him for help on what the best new release is to rent.

“Is this movie good, Sam?” one 5-year-old boy asks, holding up a DVD.

“It’s horrible,” replies Sam, with a little laugh.

Sam has been fortunate enough to be able to keep his shop open for more than 15 years.

Sam, of course, is the exception.

With the sudden business transaction between Time Warner Cable and Comcast that was followed by Netflix paying Comcast for better streaming access, it is safe to assume that a majority of viewership is shifting towards the internet.

And although the majority of the attention is about the relationship between television shows and broadcasting channels, others are also discussing what this new found partnership means for the movie industry and what it has at stake from a financial standpoint.

The movie industry has not exactly been on smooth land. While almost all of the Motion Picture Association of America (MPAA)’s theatrical market annual reports show consistent progress, there are some cautious points to take into account.

Both the numbers at the box office as well as the ticket prices continue to have consistent progress, increasing at a good rate for more than a decade. But what is important to note here is the number of people that are actually taking the time to go to the movie theater.

There has been no consistent increase when it comes to audience. In fact, the graph above shows that the number of audience going to movie theatres appears to have reached a plateau with no signs of progress for the future.

There are a lot of signs that show lack of progress when it comes to the “physical audience” in a physical space.

Even when those movies have left the theaters and begin their way to the land of renting and purchasing movies from specific local businesses, not as many people are racing to get there at midnight.

What caused this very gradual shift?

Back in the mid 1980’s, US citizens would rush to stores in order to access their favorite movies without having to depend on television broadcast schedules telling them when they were going to watch it. In the 90’s, as Blockbuster rose up, making $785 million in profits on $2.4 billion in revenues: a profit margin of over 30 percent in 1995. However, what is important about Blockbuster’s success was all the profit it made from overdue and late fees from customers who would forget to turn it their rentals as scheduled and the fact that people had no other method of viewing movies, aside from actually buying the movie.

But things have changed.

These “brick and mortar” shops are facing large competition from technological alternatives. Instead of going to a local rental store such as the once-upon-a-time giant Blockbuster, one can now quickly go to the grocery store and pay for their bread and then quickly rent out a movie from a Redbox machine all before leaving the store. It is important to note that a majority of Redbox success comes from the profits they make from late fees they acquire from their customers, allowing it to have a promising future.

redbox market share

Or if that is too much of a burden on people, the existence of Netflix and Amazon provide even more convenience by allowing consumers to access whichever movie they want from the comfort of their home. Netflix started their business model by showing commercials that focused on the fact that DVDs could be mailed to one’s house and one could mail it right back in the same envelope–and with no late fees.

Amazon also provides the same alternative to consumers, allowing them to both rent and buy movies from their website. Blockbuster attempted to compete with these emerging enterprises by creating its own website, but by 2007, it was tanking and going on the verge of bankruptcy (which it declared in 2010).

Even to those that are still seeking a physical space to purchase their product, the opposite is expected. Much like the way that Redbox is offered at grocery stores or outside convenience stores, the interior of the Redbox itself provides lots of options. One has the choice of DVDs, Blu-Ray discs and even video games when searching through the “Box”.

This abundance of product is why locations like Target or Best Buy seem to be struggling a bit when it comes to DVD and Blu-Ray sales. Joanna Cantu, manager at a Best Buy in Lawndale, CA, believes that Best Buy has been able to stay afloat for the moment because of the variety of products they sell when it comes to watching movies.

“Here, one can go into the DVD or Blu-Ray section and see something they like, want to buy it, and then decide they also need a laptop to watch it,” she said.

But the way that both DVD and Blu-ray sales are shifting towards that is hurting the Best Buy stores around the country. In a recent report by Zack.com, analysts reported that Best Buy’s ESP earnings had dropped for last year and were more than likely to drop for this year as well. Even their Zacks Industry Rating was 257 out of 265 (at the bottom 3% of all the companies that it ranks).

Best Buy might still get a majority of its profit from selling laptops, tablets and smart phones, but it is the movie purchases that are still going to stop it from surviving.

So what allows small exceptions like “Video Town” to survive when even big names like Best Buy are struggling?

For one, Nguyen receives a majority of his revenue from both customers wanting to rent the newest movie that is out but also those that wish to rent movies that are not available on Netflix or at their nearest Redbox. Amazon certainly gives Video Town a competitive run for its money but Sam Nguyen has always had a consistent price in his establishment.

Customers have a choice between renting one movie (regardless if it is a DVD, Blu-Ray or VHS) for $3 or purchasing three of them for $5. He rents out video games (he even has video games for Nintendo 64 available in his store) for $2 each and has a section for movie purchases for $5 each.

The other source of profit that Nguyen makes is from late fees. Video Town charges three dollars for every day that people do not return their rentals and the store owner notes that even though the town is relatively small, people will go days without returning their rentals.

“I always wait exactly one week before I have to call customers and remind them,” Nguyen said, “and you’d be surprised how many people I actually have to call.”

Still, there is no denying that movie rental shops are now talked about once in a blue moon. There are overwhelming different forms of getting a movie once it has stopped being shown in the movie theatres.

What is even more threatening is the emergence of taking out this fine line between movie theatres, movies at home, and access to the internet. Slowly, it is becoming all intertwined into one big thing.

Televisions are now being turned into Smart TVs, where you can access your cable channels and switch onto Netflix with the click of a button.

But if that is not enough for consumers, particularly to the younger demographic, Microsoft’s newly released Xbox One now has an update coming up later in March that will allow players to watch video, play games and chat with friends all on one screen. Video includes movies which players can purchase and save in their Xbox One hard drive to watch whenever they want.

There has not been any speculation about Comcast going into the video game console industry, but considering the way that this lure into the Internet spectrum is flowing, one can only assume that Comcast is patiently waiting for the appropriate opportunity to do this.

What is important to note is that both big and small stores, and even vending machines are relying on one thing: customers going to those place consume their products; products, which is important to note, that have to be made.

The music industry has been fortunate enough to see a rise in vinyl sales, but can the same be said for the movie industry?

What happens when DVDs and Blu-Rays are no longer being made?

There is already evidence of these products being hurt by those that simply pirate movies and shows from websites. An 11-employee Independent U.S. film distributor, Wolfe Video, an independent American film distributor had its profits halved due to piracy and costs to mitigate damages from piracy in 2013, according to The Wall Street Journal.

DVD sales have not been having the great track record these past couple of years and there were not many releases for Blu-Rays.

Even Netflix is showing a gradual shift away from their once marketing strategy of DVD shipments to the home.

It is all about accessibility and convenience when it comes to consuming movies or shows and having one product to do that. Everything is a bundle and DVD players or Blu Ray players being sold as sole products (not combined with anything) has not been consistent.

There is only a matter of time before the streaming becomes the only form of consumption and neither Best Buys or even exceptions like “Video Town” will be able to hold on.

The Pixelated Screen: The Sudden Move of Entertainment and the disappearance of Movie Rental Shops

February 28, 2014 by Amy Lopez Leave a Comment

Sam Nguyen wakes up everyday at around 8 AM to drive to work at his movie rental shop, “Video Town,” located in the city Hawthorne, to open up at exactly 10 AM. Throughout the rest of the day, he is met with a majority of long-time customers–who have been going for years–that are either returning a movie or asking him for help on what the best new release is to rent.

“Is this movie good, Sam?” one 5-year-old boy asks, holding up a DVD.

“It’s horrible,” replies Sam, with a little laugh.

Sam has been fortunate enough to be able to open his shop for more than 15 years, welcoming all those that want to rent movies from his establishment.

Sam, of course, is the exception.

And while most of this discussion revolves around the relationship between television shows and broadcasting channels, the discussion should start to include movies and the financial stake when it comes to certain businesses for that particular industry.

The movie industry has always been fortunate to leave an economic “car accident” scene virtually without a scratch. Almost all of the Motion Picture Association of America (MPAA)’s theatrical market annual reports show consistent progress, proving that no matter what the cost, consumers will still line up at midnight to see the latest blockbuster film.

However, once those movies have left the theatres and begin their way to the land of renting and purchasing movies from specific local businesses, not as many people are racing to get there at midnight.

What caused this very gradual shift?

Back in the 1970’s and 1980’s, US citizens would rush to stores in order to access their favorite movies without having to depend on television broadcast schedules telling them when they were going to watch it. In the 90’s, as Blockbuster rose up, making $785 million in profits on $2.4 billion in revenues: a profit margin of over 30 percent. However, what is important about Blockbuster’s success was all the profit they made from overdue and late fees from customers who would forget to turn it their rentals as scheduled and the fact that people had no other method of viewing movies, aside from actually buying the movie.

But things have changed.

This abundance of product is why locations like Target or Best Buy are able to have such success. Joanna Cantu, manager at a Best Buy in Lawndale, CA, believes that Best Buy is the best of both worlds.

“Here, one can go into the DVD or Blu-Ray section and see something they like, want to buy it, and then decide they also need a laptop to watch it,” she said.

Although Best Buy gets a majority of its profit from its laptops, tablets and large high definition televisions, Cantu says the store still recognizes that watching movies will never go out of style.

“Movies are extended shows in a sense–they are a form of escape and the way that people like going to bookstores because they still get excited purchasing a book or even just being inside of a bookstore, I believe people have the same feeling when they buy a movie they really wanted,” she said.

What is even more threatening is the emergence of taking out this fine line between movie theatres, movies at home, and access of the internet. Slowly, it is becoming all intertwined into one big thing.

Televisions are now being turned into Smart TVs, where you can access your cable channels and switch onto Netflix with the click of a button.

There has not been any speculation about Comcast going into the video game console industry, but considering the way that this lure into the internet spectrum is flowing, one can only assume that Comcast is patiently waiting for the appropriate opportunity to do this.

And yet, as companies and technology are racing to the top of the cultural universe, it is the simple and once rental shops that are being left at the bottom without a ladder.

However, for successful people like Sam Nguyen who have managed to stay alive, the advice provided by them to those that believe all hope is lost is the simple realization that never goes away: the gift of family.

“What people are looking for is an experience with entertainment. And in order to appreciate an experience, it has to be shared with someone,” he said. “If you are able to provide that aspect of family to people, and you can do it from a shop that is not even suppose to exist anymore, you have done a good job.”

Accurate Staging: Building Steady Ground For More Than A Decade

February 5, 2014 by Amy Lopez Leave a Comment

This day and age it is not enough to just want to start a business. You have to want to do something with that business. When Angel Cantu and two other partners decided to open Accurate Staging in 2001, they saw an evergreen approach to their business.

The company is in charge of creating stages and sets for different concerts and television shows. Most recently they have taken on creating sets for “The Biggest Loser” such as stages where they handle the judging and “background sets” that to the audience, must look like it has been there forever.

“We built a gym for them and the set and that’s usually a long-term agreement–about six to eight weeks every year. So that ends up being most of the season,” he said. “Then when the season is over, we go out and take it down.”

They use the same method for different artists and groups that Accurate Staging creates stages for concerts. Recently, the company created the entire performance stage for Linkin Park while they were out on tour. The agreement was about six to 12 weeks, where the band buys about 40 percent custom-made parts and rent out 60 percent of the rest of the gear.

“We have a variety of groups that come to us,” he explained. “We have people like Linkin Park that need our stages for about four to six months, then stop for a few months because they go back to the record studio to create more music. With the older bands, like U2, they need stages year-long because they are always performing at different venues with the same material; they don’t require any breaks.”

The business has run for almost 14 years, and Cantu stated that for the first seven years of its existence, business was pretty steady–increasing at a rate of five percent every year. When it the recession came about and the economic turmoil that faced most small (and young) businesses, Accurate Staging was not hit as strongly as others.

“The things about this business is that it’s wrapped up with entertainment. There’s less pressure on this industry because it’s not too hard on people’s pockets and people are always looking to get entertained. That fact is always consistent no matter what the conditions of the economy may be.”

In fact, Cantu shared that most of the obstacles facing the business were more of internal problems than external.

The company faced a hard time a few years ago when he was forced to buy out one of the original partners due to embezzlement problems.

“It wasn’t something that we wanted to do, but trust is a big part of the company. It’s probably the most important thing.”

Being seen as a “family business,” Cantu recognizes that 50 percent of the business involves dealing with the employees.

“One of the key things about us is that we don’t lay off people. We like to have a consistent amount of employees working for us all throughout the year. Because of that, I’ve come to realize that I have to deal my employees the way a parent deals with multiple children: each one has different personalities and different expectations when it comes to what they do,” he explained. “At times their expectations are unrealistic or their attitudes need adjusting so it’s a process that requires a large amount of effort from me.”

Wherever Cantu puts his effort, it is working for him. And coming into the new year, Cantu has high hopes for his company.

“We’re actually hoping to see a 10 to 15% growth within our business because there seems to be this willingness from people to spend more money on tours and concerts,” he said, “and we’re happy to be able to entertain people and make them feel good.”

MMM

Money Marks & Media - Spring 2014

Futbol vs. Soccer: Comparing the American and European Transfer Market

Putting the “Profit” in “Non-Profit”: A Love Story

The Future of America Rests on the Shoulders of Four-Year-Olds

How England’s Jersey Prices Come Back to FIFA’s Host Choices

The Pixelated Screen: The Sudden Move of Entertainment and the disappearance of Movie Rental Shops

The Pixelated Screen: The Sudden Move of Entertainment and the disappearance of Movie Rental Shops

Accurate Staging: Building Steady Ground For More Than A Decade