Turn on the TV - “Bail Out,” radio- “Bail Out,” internet- “Bail Out.” It's all we hear lately. We are constantly bombarded with stories of corporate bailout funds while we are nickel and dimed at the checkout. To add insult to injury, in a seeming act of nose-thumbing, we learn they spend that money on jets, parties, and lavish conferences.
 
The outraged tone, exaggerated looks of disgust from anchors and news writers describing these events is obvious and pointed.

From the $440,000 AIG retreat in Sept of 2008 to recent purchases of a $50M Jet by Citi, the $10M Superbowl sponsorship by Bank of America, the mood expressed by the media seems to be one of universal anger that these entities are taking tax money with one hand while spending lavishly with the other.

At face value we accept the reports. It certainly pushes all of our buttons. The media has painted a picture of corporate "fat cats" and "big wigs" laughing at the peons, while puffing away on expensive cigars...the classic image of the class wars.
Is it all fair? Are these all true portrayals? Perhaps not.

Let’s look a little more closely at a couple of these stories and their ramifications.

One week after the $85 billion dollar emergency loan to AIG, a corporate retreat was held at the St. Regis Monarch Beach Resort in Dana Point, California costing $440,000. Howls of indignation arose, but no one in any of the news outlets seemed to do the slightest bit of investigative work to uncover anything other than the fact that the event occurred, saving their energy instead for scandalized reporting styles.

Interesting facts were completely overlooked in this rush to judgment. Primarily, the fact that this retreat was booked over a year prior was never mentioned.

All large corporate events are put under contract upwards of 5 years in advance. Three years is the most common figure, and these contracts include cancellation clauses as high as 80 percent. In the case of the recent Merrill Lynch event that was just canceled (due to media pressure), at the Breakers Hotel in Palm Beach Florida, the penalty was 100%. That’s right 100%.

Now you have a situation where a large percentage of the monies are STILL being spent, with absolutely no long-term benefit in terms of networking or tangible benefit within the company structure.

People are apt to scoff over the idea of any business benefiting from events like these, when they do not have all the facts.
In the case of the AIG retreat for example, the event was actually held by one of AIG’s insurance subsidiaries, not AIG itself. The attendees were independent life insurance agents who were top business producers for AIG. Only about 10% of the attendees were AIG American General employees, and no corporate executives from AIG headquarters attended the meeting.

This event was held as both an incentive for these top profit makers to stay on as independent agents for AIG, as well as a way to enable them to further increase their productivity by exchanging marketing concepts, strategies and to network.
These were not the hated executives of the company. They were the independent sales people on the cutting edge - the people who actually create profit and positive cash flow for the company. These events are the industry norm. A necessity. Without them many of these agents won't perform as well as they could, and could even be tempted to move to greener pastures. Either results in exacerbating AIG’s already precarious state.

There are still other factors to be considered.

In canceling these pre-planned events, the corporations being lambasted not only have to pay most or all of the contracted fees, but those monies do NOT go to the staff that would have been working these events. The money does end up in the hotel's coffers, but conference staff is not scheduled, banquet waiters are not booked, housekeeping gets less hours since the hotel is not full. Furthermore, with all the negative publicity surrounding these events, corporations are fearful of booking these events for the future. The long-term results for the hospitality industry are going to be severe and are already being felt.

The same factors hold true for the much-despised corporate jet issue. These aircraft have been ordered an average of 3 years in advance, well before the bailouts were even envisaged. Also ignored is that these new aircraft are very efficient, offering companies a more cost-effective way to get vital employees from meeting to meeting with less cost per mile than a last minute booking on a commercial airline would cost. Indeed the order was designed to replaced aged less efficient aircraft. The average corporate jet costs $1,200 per hour to fly and holds 6 people. With a flight time of 4 hours from New York to Los Angeles that's a cost of $9,600 round trip. Booking next-day flights on a commercial airline can easily cost more than $20,000 round trip for 6 to fly business class.

This doesn't even take into account the availability of flights when needed, the unique time-saving ability to hold a business meeting while flying. Nor does it account for the time lost waiting at airports for employees whose time in offices, or in meetings, is often expensive and crucial.

We can all recognize from these examples the fact that "News Reporting" and "Journalism," as a collection and dissemination of facts and events, is a thing of the past. Clearly lines have been drawn in the reporting of almost every item of news out there. From the political to the social, from the environmental to the financial, news reporters, writers, agencies and outlets are all now injecting their own bias, spin and agendas into every story that they cover, edit, or even deliberately fail to cover at all.

In the case of the skewering of these corporations by the news media, with no regard to the underlying facts, their self-important news readers are doing a great disservice both to the corporations that they attack, as well as the industries that would normally rely on those corporation's business.

Whether one agrees or disagrees with the business needs for these types of so-called perks, shouldn’t it be up to the news media to report ALL the facts of a story, and allow us to make an informed opinion, rather than force feeding their own opinions on us?