Follow Up: Flint Water Crisis – Officials Criminally Charged & The Fallout Ahead

In a follow up to previous articles on this tragedy, the Flint, Michigan water crisis is back in the mainstream news cycle. A total of five government employees have been charged with manslaughter including the head of the Michigan health department.

These charges stem from their role in the water crisis where lead contaminants left residents deathly ill. The residents got sick from Legionnaires disease, which is a respiratory condition and type of pneumonia that is caused by a few factors, but was connected to the lead contamination of the water supply in Flint.

The news media was speculating about who may be charged next in this investigation into one of the worst public health disasters in American history and whether those charges would reach the Governor of Michigan. It is not known how much the Governor knew, or when he was informed of certain developments surrounding the crisis with the water supply in that beleaguered city.

The water crisis in Flint represented a calamity on so many levels between the negligence being alleged, the lack of adequate training for local city water officials, and then the steps taken when the problems with the contamination were verified. The result is a massive problem with the water supply of an entire city and reports of illness across the demographics from the elderly, to women, teenagers, children, and babies.

It is a very public example of failure of public governance in the area of public health and safety. That is the key message behind the charges handed down to the five public officials accused of these serious offenses. The fact that the water from the Flint River supply source was not treated properly caused lead to be emitted from the older pipes in the system. The damage is costly with estimates running at around anywhere from $55 to $95 million to replace all of the pipes which provide drinking water to residents and other structures in Flint.

Most of that money is going to come from lawsuits filed by the residents against the EPA primarily and the state has pledged to replace the water lines that connect to the main distribution and pipe systems for 18,000 homes by 2020.

That is all well and good but the question remains: what will residents do in the interim? The water crisis has decimated an already depressed market for real estate in Flint. In essence, nobody wants to move there and the residents cannot sell their homes to relocate elsewhere. It is a total mess, with the fallout so far – reaching it is hard to fathom.

There have been accounts of government officials concealing evidence regarding the toxicity levels of the water, which is greatly concerning for obvious reasons. The entire situation has both frustrated and saddened Americans across the country as well as triggered the investigation into lead levels in other cities and counties.

The situation in Flint is tragic and heartbreaking and is unique to other public health issues that came before it for a variety of reasons. First, it was widespread and encompassed an entire American city which is rare for a public health issue which are usually confined to a specific area or neighborhood.

Second, it was so intricately covered up for years by different levels of government from the local, county, and state level as well as involving the EPA. The levels of lead and other toxins in the Flint River have now been well documented. The situation with that water supply was so bad that General Motors stopped using that water supply for their factory in Flint.

The final main component of this whole disastrous situation, at least in the scope of the general public, is that the damage is already done. The water supply has made many people sick with some unable to work, children have been so ill they have dropped out of school, and some people died in relation to the contaminated water supply.

The city and state level of government can issue all the statements they want about how the water supply has been changed back to the Detroit water supply which Flint used for decades before the cost-cutting switch to the local supply took place. The damage has already been done, just because the supply has changed, the pipes are still leaching chemicals and lead so they must be replaced.

The people who are sick and who have sick children or sick parents from tainted water cannot be cured by a switch in water supply or by issuing statements about correcting the problem three years from now. They are sick, that damage has been done, and there is no going back.

Some within the media have dubbed the situation in Flint as the “crisis with no end in sight” because of the sheer scope of the problems caused by the tainted water and the brazen way that the government tried to prevent the people from knowing about the problems which existed.

The attorney general for the State of Michigan has vowed that he is not done with the investigation they are conducting into this disaster. He stated after these first four arrests were announced that they will have more charges handed down to others involved in the coming months.

The federal government has taken no responsibility for helping the effort to be resolved, and some feel that they should provide some type of funding more than the band-aid funds sent about a year ago.

The “crisis with no end in sight” will continue on in a variety of levels in Flint between the government, the public health implications, and the restoration effort for their water supply pipe system. The investigation into this horrible tragedy has a long way to go before it is concluded. In the interim, thousands of American families have had their lives altered in terrible ways and also see no end in sight.

Flag Day and The Cost of Freedom

In marking the observance today, June 14, of Flag Day I join with my fellow Americans to commemorate the anniversary of the Second Continental Congress adopting our nation’s flag back in 1777. I put up the flag this morning outside the house here under sunny skies, grateful for another day of freedom living in America.

The events of this morning with the shooting in Northern Virginia as well as the workplace shooting this afternoon at a UPS site in San Francisco serve as stark reminders of the way that freedom can be used for evil in an open society.

I saw other acts of kindness today that also demonstrate that freedom can be used to achieve so many positive things, so much good in our world.

In addition, I am reminded always when I look at our American flag, of the cost of freedom. I think of all those who have served our country and have died defending that flag, both at home and abroad. I will forever be grateful for their service and their sacrifice.

The events of today can serve to make some people lose hope. I will remind them that good always triumphs over evil, light always conquers the dark, and our American values and ideals will endure. Freedom will outlast tyranny.

May God bless you all and May God Bless the United States of America.

The Politics of Sports: The Seattle Arena

The politics of sports has been on display fully over the past week with the announced plans for the Seattle arena. The city decided that their best option at this point is to move forward with the proposal from Oak View Group (OVG) which involves a complete renovation of the old Key Arena at Seattle Center.

This option was chosen and recommended by the Mayor and other politicians involved over the proposal from Seattle Partners, which also had a plan to renovate “the Key”. However, their plan contained some elements that concerned some key people in the city government. They officially “withdrew” their proposal ahead of not being chosen just before the announcement was made late last week regarding the arena plan for Seattle to gain either an NBA or NHL franchise.

The other option on the table is the SoDo arena concept pushed by Chris Hansen and his group of investors, which he has spent huge sums of his own money obtaining land in that part of the downtown area with the goal of getting the Sonics NBA team back to the city. The plan involves the vacation of a roadway which is very unpopular with the politicians as well as a location that is close to the Port of Seattle and the major outdoor stadiums for their other professional sports teams.

This location coupled with the change to the roadway grid and the potential for traffic congestion near the Port, all are factors that are stacked against the SoDo arena concept. Those factors outweighed the amended proposal from that investment group that stated that they would develop the site and construct the arena completely with private funds.

The renovation of the Key Arena at Seattle Center will be a public/private partnership arrangement for the financing, which is admittedly unpopular with some Seattle residents. The OVG proposal involves keeping the iconic roof structure of the facility intact while essentially gutting and rebuilding the entire existing interior structure. It will reconstruct the entire seating bowl and their plan for the site involves digging below ground to expand the footprint of the building while maintaining structural integrity. It will also be an environmentally friendly building project, with LEED certification processes involved in the various aspects of the construction of the renovated facility.

NHL Response

The NHL was contacted almost immediately after the news that Seattle was moving forward with the OVG renovation project for an arena that would meet NHL standards. The NHL Commissioner, Gary Bettman, issued a statement that essentially stated that the NHL has had no contact with Seattle and has no plans to expand the league at this point.

The politics of sports on the professional stage was in full effect here as well. It is no secret that the NHL has interest in expanding to Seattle. The demographics of that market make so much sense for the league in several metrics, that they would be foolish not to explore the option. The OVG proposal added two partners that are keen on getting professional hockey to Seattle, which was noted in the press release of the announcement.

Bettman is playing his cards here because he does not want to discourage other markets interested in potential expansion from thinking that Seattle has any sort of inside track to what will probably be the last slot available in the NHL for a very long time. The NHL has a conference alignment issue with 16 teams in the East and 14 teams in the West. The league took one step toward correction of that imbalance with the addition of Las Vegas as an expansion franchise beginning next season.

The assumption is that they will add one more team in the West to balance the two conferences and the league for scheduling and other purposes in the somewhat near future. The OVG group stated that the proposal is still pending approval and they will need at least 2 years probably closer to 3 years to get the entire renovation at Key Arena completed.

Design Concerns

Some area residents are not happy because they did not want another major sports team or teams playing in that neighborhood. This is a very political issue and the design of the building and the mass transit plan for light rail access is part of the proposal from the city level to alleviate traffic concerns.

The design of the building was also a point of concern for residents of that neighborhood. Some concerned parties did not want a monstrous new arena going into that Seattle Center site. The trend in sports arenas is for larger footprint buildings packed with amenities for fans and concert attendees.

The OVG plan for Key Arena accomplished providing more amenities without dramatically increasing the overall footprint of the facility by proposing to dig below ground and implementing those amenities in areas below the current street level. The plan for the renovated facility also calls for improvements to the park area around the Seattle Center, which should be viewed favorably by the residents.

NBA: “Cutting the Pie”
The return of the NBA to Seattle is an entirely different situation. The topic of expansion for hockey has been an active one, with Las Vegas set to join the circuit and with the imbalance of teams alluded to earlier. The NBA is in a different stage in their life cycle as a league. The owners and the league office just agreed recently to a new TV and media rights deal that will reap them significant economic revenue which is divided up among each member franchise.

The NBA owners are currently not eager to “cut the pie” into more pieces by adding more franchises. The amount of the expansion fee would be offset by the amount that the new team gets as their portion of basketball related income. The NBA also has no franchises in a situation where relocation is being discussed.

These factors, when all are taken into account, amount to the fact that the Key Arena renovation, if approved, is going to take approximately three years to complete from the point that permission is given for renovation work to begin. The NBA is not planning to expand any time soon. The NHL has other interested cities in expansion, but they may never expand to Seattle for a variety of reasons.

The politics of sports in this situation leaves the SoDo arena proposal in serious jeopardy. The time, effort, and money spent by that group is going to upset some powerful people in that city if that proposal is rejected by the political groups involved.

Up In Flames

The politics involved in the Seattle arena decision also could become a leverage play for another team: the Calgary Flames. The president of that hockey team, Brian Burke, commented to a group of business leaders at a team function recently that the franchise could move out of Calgary if it does not get a new arena.

He continued his comments reportedly by stating that the Flames had relocation cities under consideration if they were to ultimately decide to move the team out of Calgary. In that scenario, once relocation is brought up, Seattle is not very far behind. It is no secret that Seattle wants an NHL team, and the opportunities for relocating an existing franchise are very unique and infrequent.

The Calgary Flames have presented their vision and plan for a new arena and entertainment district with other real estate development around the new facility that has been deemed “unsustainable” by the political powers that be in that city. This is where the friction between the city and the team began.

The Flames play in the SaddleDome which was built when Calgary hosted the Olympics in 1988. It is among the oldest arenas in the league, a fact that supports the team ownership and their contention that it needs to be replaced. The Mayor and other politicians have stated that they do not support using taxpayer money to fund a new arena. This could get very sticky, and the speculation over the future of the team in that city will follow suit.

It is doubtful that Calgary will leave a city that they have an established fan base within and have over 30 plus years of history. It could be that Seattle is a leverage play, as I mentioned before, or it could become seriously considered for their future. The primary issue is that Seattle lacks a suitable arena for at least three years.

Another option to watch is the Flames using Quebec City as either a chip to secure their own new arena deal, or for a real alternative should the political situation with Calgary become untenable. Quebec is a whole different scenario because they have an NHL ready arena built and fully operational, they just lack a team.

It is all part of the politics of sports and it has played out in two places, Seattle and Calgary, in a week. Those two situations are just a drop in the bucket, wait until next week, and the next potential issue with politics and sports will be right around the next bend.

Follow Up: Honeybee Population Decreases In U.S.

In a follow up to a previous article, the news on Friday is not good regarding the honeybee population. In a report by USA Today about one third of the honeybee population in the United States died in the past year. This decline in the population levels can have far-reaching consequences for our domestic food supply.

The honeybee is responsible for an estimated one out of every three bites of food that the average American consumes each day. The combination of pesticides, environmental changes, and parasites have triggered a dramatic decrease in the population of this crucially important insect.

This survey does report that the winter seasonal losses were the lowest for American bees in a decade. The winter is a characteristically a period where honeybees will die in larger numbers due to the climate conditions. The experts analyzing this report stopped short of saying that the winter loss number was good news because the overall population numbers have declined so precipitously in recent years.

Some crops are almost completely dependent on the honeybee, and those shortages in supply levels are going to result in higher demand. This higher demand with smaller supply levels will result in higher prices that will passed along to the consumer. This includes items such as almonds, raspberries, and other fresh fruits or produce.

The rise in the growth of the organic and farm-to-table movements put a premium on beekeeping and balancing the protection of the bees from parasites against the utilization of harsh chemicals or pesticides. There are certain pesticides and herbicides that are widely used in agriculture that attack the central nervous system of bees causing them to die.

The greater emphasis should be placed on decreasing the chemicals and pesticides used in the production of certain crops. Some states have already initiated areas for honeybee preservation as well, so those areas have many restrictions as far as the use of pesticides and other airborne agents.

The honeybee is vitally important to our food supply and while the winter losses in 2016 were better than recent annual findings, the population is still depleted by one third. It is clear that steps need to be taken to preserve the honeybee colonies in the United States. It is unclear at this point what those steps will be moving forward.

Red Nose Day: Team Up To End Child Poverty

The third annual Red Nose Day takes place today, May 25th, focusing on raising both money and awareness to the devastating effects of child poverty. The event is sponsored by several companies, notably the ubiquitous American drug store chain, Walgreens.

The fundraising telethon and special program about Red Nose Day airs again this year on NBC. However, the network will take a different approach this year with a special celebrity edition of American Ninja Warrior (8 PM, EST) then a special Running Wild With Bear Grylls where Julia Roberts will join Grylls on a trek across Kenya to deliver vaccines to sick children (9 PM, EST) , and then will air the Red Nose Day Special hosted by Chris Hardwick which features appearances by several A-list comedians and musicians (10 PM, EST).

The first two editions of this event NBC have run a special 3-hour telethon type program with performances, comedians, and clips from the field in Developing World nations as well as economically depressed areas in the United States. This will be the first year that regular series programs have been dedicated as special features to raise money for this crucially important cause.

Red Nose Day began originally in the United Kingdom, and has spread to include events throughout the world which have raised $1 billion so far for children’s poverty. The funds are funneled to trusted partner organizations, some of the most recognizable and trusted non-profit charities in the world.

The money raised in the American version of this fundraising event has benefitted children in every state in our country as well as children in about 25 other countries throughout the globe. The American event has raised $60 million since it began in 2015.
Walgreens is a prominent sponsor of the event along with their subsidiary Duane Reade pharmacies, which have a huge presence in major East Coast cities especially New York City. Those retail pharmacy locations in both chains sell red noses for $1 and offer at point of sale the ability for the customer to donate to the effort.

The difference can be made without a huge donation, any amount will help children who are living in poverty both in America and throughout the world. I have covered Red Nose Day for the past three years, it is an amazing event that makes a huge impact. I have worked in the non-profit sector and I have worked as an independent writer with non-profit organizations, and this type of event will instantly help them to have the funding capability to help so many children in need.

A donation as small as $10 can help fund after school programs. A donation of $30 could help bring water to a village in the Developing World. It is in the small steps that a journey is completed.

Some of you may recall the excursion that actor Jack Black took for Red Nose Day to Africa, where the young boy there asks him to bring him back to America with him. That was a poignant scene, the boy was in poor health and malnourished. Then last year, the viewers got the update that the boy had been adopted and sponsored by an American family and was in school and well cared for, it is an incredible testimonial to the power of this event to change lives.

In a world marked lately by some terrible and terrifying events, this is one way where we can join together and change the narrative. This is one way where we can make a difference and do something positive to lift the spirits of the most vulnerable in our society, children living in poverty. I hope you will consider a donation to Red Nose Day.

Please visit https://rednoseday.org/donate-splash to learn more about this remarkable event that helps so many children. Please tune in to NBC tonight for all the special programs they have starting at 8 PM (Eastern). Please consider helping this cause to change and save the lives of those children in need. Thank you for your support and attention. May God bless you.

Recapping The Upfronts: TV Networks – Fall Lineups

The major television networks met with all of the major advertising companies this week in an annual event in the industry known as the “upfronts”. The tradition holds that NBC has the first meeting, followed usually by ABC, CBS had their turn on Wednesday, the end of the week featured FOX and The CW getting their respective meetings.

The upfront meeting is where each network will officially unveil their fall lineups and try to generate interest and energy around their programming. These presentations have always been intriguing to me because each network has a strategy for capturing viewers and each one is different in that approach.

Some networks try to reinvent themselves more often than others do, and right now the changes to the television landscape have pushed the major networks and their subsidiaries into recalibrating their offerings. The scramble for ad dollars is characteristically a highly competitive situation, and this week was no different.

First, NBC entered the upfront meetings with the top-rated show on TV (“This Is Us”) and the top ranking for the coveted advertising demographic of 18-25 year old viewers. The network had to just make some small lineup tweaks and they should be set up to have another strong year. They moved their top show to Thursday nights, which is what NBC does, when a program goes well, they change the time slot instead of leaving it alone. It remains to be seen whether this will have a positive or negative ratings effect.

The “Peacock” is bringing back a former hit show from the ‘90s, “Will & Grace” for a limited run, and it will be very interesting to see how they tie this show to a new fan base as well as appeal to the fans who remember the show from the first run. The network is trying to inject excitement back into Thursday nights, which used to be called Must See TV by their marketing team. However, the reality is that “appointment TV” where people looked forward to a program with anticipation and were there every week to watch it, is long gone. I am interested to see how the viewers react to the new Thursday lineup, and whether NBC put their eggs in the right basket.

The last bastion for viewing trends similar to the old glory days of television remains live events such as award shows as well as live sports programming. NBC will have the return of NFL football games on Thursday nights (split package with CBS) and on Sunday nights (the entire NFL season). The Sunday night primetime game is consistently a ratings winner for NBC as well as a robust advertising revenue driver for the network.

The NFL ratings dropped for the first time in several years in 2016, but it still garners tremendous viewership and appeals to key advertising demographics, so the live game broadcasts will still command large committed ad spending.

NBC has very few new show concepts that I read in the reviews from media/TV critics that are worth mentioning. They will focus their marketing and promotional efforts on a special series they produced on the Menendez brothers case. That limited run special will air in the 10 PM slot (Eastern) for set number of weeks.

The executives at ABC will attempt to address sagging ratings overall from the 2016 television programming year by cancelling underperforming shows. They will look to reinvigorate their lineup with new series concepts of all kinds, from comedies to procedural dramas. The trick up the sleeve for this network was a surprise announcement at their upfront that they had given the approval for a straight to series new concept from Shonda Rhymes (Grey’s Anatomy founder) which focuses on a group of Seattle firefighters.

Then, ABC announced that they will also ride the trend of bringing back old shows for limited run type reboots. The network will bring in Roseanne which at one point in the original run was the top-rated show in America. I am fascinated to see how this concept will connect with new fans and younger age groups.

The network also will bring back another former ratings institution, American Idol which has been given mixed reactions from both media analysts and fans of the program alike. It remains to be seen whether the singing contest style can recapture its former glory. The details on the show remain limited with the only piece of news considered significant is that pop singing star, Katy Perry, has signed on to be a judge on the rebooted version of the once stalwart hit program.

It remains to be seen whether Ryan Seacrest will return to host Idol which films primarily in Los Angeles. Seacrest has recently joined the ABC morning talk hit show Live as Kelly Ripa’s new co-host, and that show films in New York. The logistics could be worked out, but it merits watching which path those negotiations could take.

CBS opened their upfront meeting with a performance from Stephen Colbert, who now has the top rated late night slot in the industry. The decision making by CBS and the other networks as well, as far as cancelled and returning shows are concerned was all studio/content rights driven.

The revenues in television have changed with production costs still rising and other revenue falling due to changes in the way the viewer engages with content (i.e. streaming, video on demand). In that regard, CBS proposed changes to the advertising packages which were originally structured around a 3-day window (Live+3) to a (Live +7) cycle or a 7-day window for the ads to run in association with a specific advertising “buy”.

I have covered in the past the decisions on cancelled and renewed programs, and it mainly comes down to rights fees, licensing, and ownership of the content. In short, each respective network tends to renew content that is made in their own studio compared to an outside studio. This is due to the fact that the network owns the backend rights to that content, which has become more valuable than the frontend rights to the program at this point.

CBS used this rationale to explain the cancellation of 2 Broke Girls (produced by Warner Brothers) and the renewal of Elementary (produced by CBS Studios) even though the former had slightly better ratings than Johnny Lee Miller’s turn at the iconic role of Sherlock Holmes. This same rationale was used to explain the cancellation of Person of Interest (Warner Brothers studios) and keeping Elementary because CBS could make more money on the backend rights.

ABC took some heat for cancelling Last Man Standing but it was produced by an outside studio, and they would rather renew and promote a comedy series produced in their own studio because of the enhanced revenue streams it would provide to offset the production costs and licensing fees.

The major networks are also pursuing a trend where they will change the terms of a licensing agreement on a show from an outside studio production company. The networks have been seeking larger pieces of the revenue pie before agreeing to renew a program. That trend will continue as the viewership habits continue to evolve away from live viewing and into watching the content after it originally airs.

CBS has very few new shows and will juggle a lineup of hit shows as well as NFL football and the top-rated shows in several categories will return to a largely unchanged lineup from last year. They will also introduce a rebooted version of S.W.A.T. (originally aired in the 1970s) and the highly anticipated spinoff from The Big Bang Theory entitled: Young Sheldon.

Fox ordered just six new shows for the Fall, and have moved around most of the returning shows in their lineup, keeping just Sunday night’s lineup intact from last year. They will also feature rebooted series from the past with The X Files returning for a limited series run, Prison Break returning for an undetermined amount of new shows, and a revival of Showtime at The Apollo hosted by Steve Harvey.

The CW announced both new concepts for series programming and a new focus on being a multi-channel partner rather than just a television network. They are taking a more forward thinking approach with partnerships with Apple TV, Roku, Amazon, and other streaming video content providers. This is to capitalize on the revenue for the back-end rights to the programming. This traditionally fifth place network also announced a rebooted series concept of their own, Dynasty, which has earned some industry buzz already.

The upfronts represented a continuation of declining advertising revenue in the form of ad buys as the cost/benefit analysis of that form of advertising is being weighed against the changing trends in the way that viewers obtain content. It is always interesting to see which strategies the networks employ to promote their programming, and which of those programs will make the cut when the first sweeps period is considered.

The ways of viewing television have changed and the ways that networks are approaching the production and promotion of their programming has followed suit. These trends will continue as we enter the 2017-18 television calendar, stay tuned.

Fired Up: Pepsi To Launch Cinnamon Pepsi Fire Concept

PepsiCo, the parent company of Pepsi, announced on Thursday the newest line extension concept for the cola giant. The summer launch will feature a cinnamon flavored Pepsi product called “Pepsi Fire”. It will be available in both cans and bottles starting on May 22nd and running for an eight week period through mid-July.

The limited edition soft drink will be a part of a summer promotional campaign across the entire Pepsi lineup that will give away prizes called “Snap-Unlock-Win” which will integrate the promotional giveaways through the popular social media platform, SnapChat.

The summer cinnamon flavored “Pepsi Fire” will also be integrated into the 7-Eleven convenience store chain’s Slurpee lineup which the executives at Pepsi are touting as a drink experience that will be both hot and cold. The Slurpee and summer time are ubiquitous, and Pepsi is banking on the popularity of that frozen drink delivery system to create further buzz around the Fire product.

The product reviews I read have described the beverage as Pepsi meets Hot Tamales, those artificial cinnamon candies, and that the Slurpee was very spicy. I am sure it will appeal to some consumers, especially those who have an affinity for all things cinnamon.

In recent years, Pepsi has had varying levels of success with limited edition products. They have relaunched several product variations recently with real sugar added to the formula to offset the public perception regarding high fructose corn syrup and artificial sweeteners. The brand has also focused their efforts on a few different tweaks around the Cherry Vanilla Pepsi concept, most recently with a limited run around Valentine’s Day in 2016.
The summer line extensions have had success at times on a regional basis, the Pepsi Summer Mix concept with all the mixed fruit flavors included with the mainstream cola flavor was very successful in the northeast United States back in 2007. I remember purchasing that beverage when I travelled for my job at that time throughout the region.

PepsiCo also agreed to join an initiative with the Partnership for a Healthy America, where across all their brand lines they have agreed to limit the amount of calories, sodium, and sugars contained within many different products. PepsiCo has 22 brands that produce more than $1 billion or more in sales per year, so this represents a major contribution toward healthier snack options for the American consumer.

The company will also be reviewing their formulations to determine methods to incorporate more protein into their brand portfolio. They will also look at moving toward more non-GMO containing ingredients for their huge stable of product offerings, according to trade industry reports. This is not surprising news given the trend lines of both of those areas within the current consumer environment.

The inclusion of protein is a hot button trend within the current consumer climate with people leading more active as well as very busy “eat and run” lifestyles. The non-GMO trend has been steadily more relevant with the average American consumer and is a topic I have written about extensively in the past. The consumer interest in GMO containing ingredients is significant, and the major players in the industry are taking notice.

The seasonal launch concept is nothing new in the beverage industry, and it is a way that brands can rejuvenate interest as well as maximize sales. The limited nature of the product concept usually creates a sense of urgency for the consumer. The summer season is one of obvious increased sales of carbonated soft drinks. This new concept should be interesting for sure. The inclusion of social media into the promotional contest portion is also an interesting aspect of this launch.

The utilization of social media could well represent the future of the promotional campaigns that brands will roll out to engage consumers on a more personalized level. That could either represent a great innovation or be a complete disaster which will remain to be seen. The beverage industry is poised now to enter the summer season which should give us all hope that the long sunny days are waiting just around the corner.

Follow Up: Anthem Merger Bid For Cigna Is Scuttled

A federal appeals court upheld the earlier decision of a lower court regarding the proposed merger of two of the largest healthcare insurance providers: Anthem and Cigna. The court opinion cited concerns about cost impacts to the consumer and the lack of competition in the healthcare insurance marketplace as the main issues with the proposed deal.

The backlash against this proposed marriage of two of the top three largest insurance providers had reached a critical mass in recent days. The pressure came from a variety of interested parties within the healthcare industry as well as from consumer interest groups.

The situation is further complicated because Anthem and Cigna are currently in a lawsuit against one another regarding that “breakup fee” clause that I detailed in my earlier coverage of this proposed mega-deal. The clause entails that Anthem pays Cigna $1.85 billion if this merger was to be derailed and not come to fruition.

Cigna is suing Anthem demanding payment of the fee. Anthem is counter-suing trying to force Cigna to stay in the merger deal. The resistance from several states and the federal government caused Cigna to look for ways to exit the deal. This situation has grown ugly very quickly, and the legal team for Anthem seems undeterred by this ruling. They are insisting they are going to find a way to gain approval for this merger.

Anthem and their legal team can spin this any way they would like, and they have 1.8 billion reasons why they are looking to pursue this merger. The reality is that the proposal is all but scuttled. The appeals court decision today affirms that and should be viewed as an indication that this proposal should be abandoned.
The lawsuits are another whole matter that is entirely separate and could take several different routes throughout that convoluted process. The regulatory reviews from the different government agencies ultimately had concerns about pricing and the monopolistic impact that the merger would have on consumer choice.

The combined Anthem/Cigna also would have been a major player in the provision of healthcare insurance to the business community. The potential influence on pricing and the subsequent effect that would have on the employee/employer splits on cost sharing for company provided healthcare coverage was a huge issue for certain states as well as the U.S. Court of Appeals.

This development comes just a few months after the Aetna – Humana proposed merger also collapsed during the review process. These mergers are the direct result of the consolidation route to optimize efficiency and maintain profitability during healthcare market changes due to the Affordable Care Act.

It should be noted that the proposed new healthcare plan changes are not fully known at this time, so the exact impact on the market is also unclear. The relentless pursuit of greed by these corporations in the healthcare industry is at the center of this particular situation.

The future of the Anthem/ Cigna proposed merger from the judicial perspective is either a “challenge” ruling on this verdict, which means that they can re-appeal this decision from the federal court. The other option is to attempt to take the case to the U.S. Supreme Court and see if they are granted a writ of certiorari to move that proceeding forward.

Some industry analysts and media types feel that a writ of certiorari is unlikely in this situation. The component that makes a Supreme Court review possible is the money involved with two companies of this size and the high powered legal representation that is involved in this case. It should be interesting to see how Anthem plans to move forward because they have the most at stake with the breakup clause taken under consideration.

The merger, for all intents and purposes, is opposed by about a dozen states and the federal court system as well as the regulatory bodies involved. This creates conditions where it is unlikely that it moves forward. The court ruling today cited this decision under the framework that it is a victory for the consumer because of the potential impact on pricing the combined entity could have exerted.

In my view, from covering mergers, I am not a proponent of monopolies. I also have learned that the bigger the merger in size, the more combustible it is when it becomes unraveled. This proposal is setback significantly, but it is not over yet. Anthem will not go quietly into the night paying a fee to Cigna, and Cigna is going to want the money from Anthem based on the agreement they had in place. It is going to get ugly in the weeks ahead, but most likely these two companies will be going toe-to-toe and not on their way to a monopoly styled merger.

Call Waiting: Verizon Back Peddles On Merger Rumors

The news out of Verizon on Thursday is that the comments made by their CEO, Lowell McAdam, were taken out of context regarding a potential merger involving the telecommunications giant.

The CFO of Verizon, Matthew Ellis, attempted on Thursday to clarify earlier remarks made by Mr. McAdam to the media. Those comments alluded to a potential merger of Verizon with Disney, Comcast, or CBS.

However, Mr. Ellis today offered a different explanation in stating that Mr. McAdam was answering a question about whether or not he would “take a call” from Disney, Comcast, or CBS. The comments are now being walked back by Verizon, today they clarified that they would be open to strategic partnerships with those entities and not an actual merger.

This clarifying statement from Verizon comes after several financial news sources ran with a story that Verizon was exploring a merger, and the stock prices of those three entities involved: Disney, Comcast, and CBS all saw increased trading activity.

It is no secret that Verizon is looking to grow certain aspects of their business, the acquisition recently of Yahoo is proof of that strategy. The senior management at Verizon have steered away from obtaining other large media companies, which is unlike their other competitors in this space. The deal between AT&T and DirecTV jumps to mind as the type of avenue to growth that Verizon has repeatedly avoided.

The earnings call with Mr. Ellis today described what Verizon calls “organic growth” of the company. The exact definition of that strategy is not completely defined, but like any other communications provider and internet service provider, Verizon is consistently looking for content. The old “content is king” mantra is still paramount in this industry space.

In an increasingly visual world, the demand for video content is at the core of what Verizon needs to fill within their own content pipeline. It is in this vein that a strategic partnership or some sort of partnership agreement with Disney, Comcast, or CBS would make sense for Verizon. Those entities have their own exclusive content or partnerships to provide content for other entities such as Major League Baseball, the National Football League, and the National Hockey League.

The demand for sports content is always robust and the demand for other types of entertainment in digital platforms is a demand curve that Verizon is going to be relentless in trying to meet over the next several months. The earnings call also came on Thursday amidst reports that the Verizon FIOS television service has lost over thirteen thousand subscribers in a short amount of time.

The streaming media services and the growth of other platforms to watch content is causing many Americans to “cut the cord” on cable, telco, and satellite TV services. The “on demand” culture and the binge watching patterns of the new ways that consumers expect has caused the drop off in the FIOS subscriptions.

This could create conditions where FIOS, AT&T/DirecTV, and Comcast are forced to reinvent themselves and provide more value to the consumer for the service. The advent of the DirecTV service that allows the viewer to watch at home or on a tablet or smart phone is a step into the future of the television trends to follow.

The question of whether or not Verizon is exploring a merger is a complicated one. It would make some degree of sense on one hand given the complexities facing the industry and the changing dynamics of digital content consumption.

Verizon is also prepared to face rather significant anti-trust regulatory reviews especially if they were to merge with Comcast, which would absolutely create a monopoly in the industry. That merger would have far-reaching implications for both private homes and small businesses as the internet is needed for doing really everything today from shopping, to watching movies, and to work related functions.

It remains to be seen whether Mr. McAdam was taken out of context, or whether there is more than meets the eye with this story. The ambitions of Verizon will come into focus in the near future. The company should, at the very least, consider some kind of partnership with another media company to fill the video content gaps that exist currently.

Verizon also knows that mergers or acquisitions are a complicated process and that ties up time and resources from being able to grow the company in other ways. In the end, only time will tell which direction they choose to grow their business in an increasingly competitive, evolving, and cost driven environment.

United Airlines: An Exercise in Public Relations Futility

The disastrous handling of an overbooked flight on United Airlines has made national headlines and has devolved into a social media siege against everything having to do with the world’s third largest airline. United sold too many seats for a plane bound for Louisville, and they needed to get four crew members on that plane so that another flight departing from Louisville could proceed as scheduled.

The airline offered money ($800) to any passenger willing to leave on a later flight. The passengers were not motivated by that incentive, and one man, a doctor in Louisville who had patient appointments the next morning refused to leave the back of the plane.

The crew called in the police and the man was “re-accommodated” as United later termed it. The mainstream news reports from witnesses allege that the man was physically dragged from the plane and was seen with blood coming from his face. The reports state that several children aboard became very frightened. The situation is totally inexcusable, and the actions of the airline crew were totally out of line.

Then, United bumbled the whole public relations response to the situation and made a bad incident, worse for themselves. The airline tried to deny the incident, then tried to distort the facts by saying that the passenger “fell” when struggling with police and crew members. They finally, “came clean”, and issued an apology for their role in the incident.

United Airlines, became the source of all types of jokes and negative reactions on social media platforms such as Twitter and Facebook. The stock shares of the company have sunk in trading activity on Tuesday, as the public backlash continues and seems to be gaining strength.
There is a public petition signed by over fifty thousand people so far, the petition seeks to launch a federal investigation into what transpired on the Louisville bound plane. The prospect of a federal investigation is never a good thing for a publicly traded company, especially one with a public safety obligation such as a major airline.

United handled this situation and the aftermath of the situation just about as badly as a company could possibly have dealt with such a terrible scenario. The public image of their brand has definitely taken a setback and it is significant enough that it could damage their business outlook for the year.

The other seemingly obvious by product of this debacle is that a lawsuit for damages is most certainly forthcoming by the passenger involved. The financial settlement from the one legal action will not be enough to harm United Airlines, but the negative media coverage of an ongoing, protracted case will hurt their business from a brand image perspective.

The company has been destroyed on social media, with people from all sides taking shots at United and their terrible handling of the situation. In my days of media relations and communications work for companies, the first rule is to get out ahead of the situation before it becomes a story. The best policy is to be honest, admit mistakes were made, and move forward.

The general public, especially Americans, are “second chance” people and they are very willing to give a person or a company another opportunity if something goes wrong and the mistake was admitted. Conversely, they are far less likely to provide that same forgiveness or latitude if the perception is that someone is lying, or trying to cover up the real situation.

This is where United really compromised themselves, they should have just all come clean. They should have been honest, and the police involved are culpable too because that was an outrageous reaction to a situation with a passenger who had not violated any rules and was doing nothing wrong. The passenger was sitting in the spot he paid for, and was removed from the plane, that is huge problem for a consumer based transportation company.

The root of the issue is greed, which is why many people are so upset. In this case, the passengers stated that United could have provided more incentive for them to give up their seats for a later flight. United could have provided a complementary meal or two, or provided a hotel room for the night to lessen the inconvenience caused by the greed driven activity that got them into this mess in the first place: an overbooked plane.

United sold more tickets than they had seats available, which can be a somewhat common practice for airlines, so they are not left with a less than full capacity flight on that particular route. They underestimated the demand, and did little to try to help the passengers that had paid for seats. The four people they asked to move, also held the cheapest tickets on the plane, which many people have now taken issue with that part of the scenario.

United was moving these people to get their own employees on the flight, and in no way could they come out of this situation looking good. They should have issued an immediate apology for the actions taken on that flight and offered to compensate every passenger involved in some way. They did none of those things and are now in a media and social media barrage, and their corporate image is going to be damaged badly.

In the fast paced world of today with everyone having a forum on social media for their opinions, social media relations is a huge component of corporate branding strategy, and an area where United failed in this situation. Their response was not above board and their protocols and procedures for handling oversold planes must be evaluated.

In the end, United Airlines could have made alternative arrangements for getting those four crew members to Louisville. The airlines should reevaluate that component of this situation. The cost of the potential legal settlement coupled with the negative news and consumer perception backlash far exceeds the cost of the solution I had in mind. United should have chartered a private plane to get those employees to Louisville, in the end that would have been far more cost effective, and would not have involved a national media incident.

The United Airlines public relations response in this situation has become a case study: in what not to do when running one of the largest airlines in the world. United will now learn the hard way that honesty is the best policy, and greed never wins.