Professor Elam

Chaos at SW Airlines, What Happened to LUV?

Tuesday Oct 12, 2021

SW Air has cancelled over one thousand flights the last few days.

After years of being perhaps the most on time, admired airline SW appears to have hit the wall.

I always thought it was a mistake to take a successful Texas based airline to the national status. If they did, SW woulld just become another American or Delta with all the attendant problems. Now it has happened.

What went wrong?  Lots of companies lose their way over time, see Polaroid, Sears, Kodak, Idoubt this will end SW Air but it will take a lot of PR fixing.

$32 M Spurs Subsidy, Where is the Outrage?

Helping the Spurs

We’re talking about the opportunity to have concerts and plays in the North Side

Manny Pelaez

Dear Manny

We will not be hearing a concert is via the Symphony at the Tobin or the Majestic. The musicians were being paid the same as a starting VIA bus driver, about $36,000 a year. But now they are offered half that as well as half the full time orchestra.

Positive social mood results in stock market manias and bigger than ever projects. Right on schedule we have we have the Spurs campus ($500M) and the Big Bore (too big to estimate) from the airport to the downtown.

Hard to imagine a group in less need of a government hand out than the spurs. Consider

For the last reporting year the spurs grossed $ 255 M and had net of $63 M, a tidy 24% return on sales.

Forbes rates the team value at $1.85 billion.

The least paid play for 2022 will make $1.2 million.

The highest makes $16.5 Million.

The article says the Spurs will invest $246 Million so the city county contribution is 32/246 or 13%. But the whole thing is estimated at

$ 500 m which makes the effort 32/500 = 6.4%.

Thousands of residents gladly advertise the Spurs with purchase of logo wear (hats, t shirts, etc). With gate receipts of $55 M it seems logo sales are well more than the $ 32 M requested.

So why do the Spurs needs such a small contribution? With interest rates near all time lows, it might be reasonable to allow the Spurs to issue $250 M of municipal bonds, and why not, they would certainly have an investment grade rating.

The location could hardly be worse.   I 10 and NW 1604 are a parking lot not a highway by Friday Afternoon. The last thing we need is more traffic congestion here. How about south Zarzamora below south 410? There is plenty of space and little traffic.

So the city and county ignore a single digit million dollar problem The Symphony had a $ 2 M deficit for its last pre covid season. Why not create an endowment for the Symphony of this $ 32 M? The Symphony needs it the Spurs, not so much.

Or how about a group that cannot speak for themselves? We have yet to reach the worthwhile no kill dog shelter goal   Every week these homeless dogs are put to death through no fault of their own. Instead we are rewarding millionaire basketball players.

I won’t be gushing over Mayor Ron or Judge Nelson as the SA EN did today. This is a misuse of taxpayer money. Where is the outrage?

Robots on the Rise

Monday Oct 4 2021

The combination of higher minimum wage, not wanting to work, The Great Resignation, and low interest rates, we have

an ideal atmosphere for more automation and use of robots.

The link takes you to a robot jewsletter you can subscribe to for free, interesting stuff.

 

Symphony Musicians Plan Strike

Tuesday Sept 28 2021

we have been following the misfortunes of the SA Symphony.  Now the Board proposes

halving the size of the orchestra, using part time substitutes, and cutting full time pay.

It ran a $2 M deficit in its last year before the Pandemic revenue of $6 M and expense of $8 M. Only $5 M in revenue is expected this season.

As noted here, it is amazing $190  was spent on the Tobin Center but nothing was done to fix the long standing problems of the Symphony.

Looks like a combination of county, city, and corporate money could solve this problem. But with interest in classical music continuing to decrease, will the symphony go the way of another former mainstay of American life - the cafeteria?

SA Convention Group to Spend over $5 M to attract One Convention in 2023

tuesday Sept  21 2021

SA Convention Group plans to go all out for one convewntion in 2023

Is that really wise?

this would involve people coming from other countries. The problem is that most cannot fly direct to SA, you would have to stop in Dallas or Houston, I would guess. That makes larger cities with more direct flights a better bet to win the convention bid.

Why not spread the $5 M around seeking groups in and around Texas who could fly direct or just drive?  Betting all on one roulette numbers seems unwise.

Luby's Sells to Chicago Caterer

Wed Sept 15, 2021

Several Luby's cafeterias sold to a Chicago caterer for $30 M.

The cafeteria format was going great guns in the  21970 - 1980s. It was particularly popular among seniors, most of whom are now gone.

The brand has slowly fallen on harder times and been looking for a sale or way out

The buyer has also assumed operating other locations he did not buy.

Should be interesting to see if he can turn this around.

Symphony Woes

Wednesday Sept 15, 2021

https://sanantonioreport.org/san-antonio-symphony-orchestra-cuts/?utm_campaign=newsletter&utm_medium=email&utm_source=newsletter-daily&utm_content=editorial&utm_term=artculture&mc_cid=e31c9a370d&mc_eid=b3fa08cd6c

 

Classical music is in remission everywhere, the love of classical music has not passed onto the current generation. The irony of this to me is that the town spent $190 M re doing the Tobin Center but not a dime to make sure the symphony and ballet could perform there

 

I don't want to suggest a hopeless mission but volunteering to study the problem might be an interesting accounting project. My dissertation topic was fund raising and I have never had the opportunity to put it to use.

 

Might be an interesting way for a student group to show community involvement, and there might be a published paper potential

 

what do you think

 

Dennis Elam

Statewide IMA Meet in SA Oct 1-2

Monday Sept 13 2021

San Antonio Chapter

Quick reminder:  There is NOT an IMA SA chapter meeting this week - Thursday, Sept 16th - nor will we meet Thursday, October 21st.   We WILL be back Thursday, November 18th (meeting in person and virtually.)

 

Instead, please plan to attend 1 or both days of the Texas Annual Conference (hosted by your chapter!) on Friday, October 1st (8 hours) and Saturday, October 2nd (4 hours) at the scenic Hyatt Hill Country Resort across from SeaWorld.  This event is open to non members as well.  This is a family-friendly event.  Feel free to have them stay overnight with you to enjoy the venue while we hear from great speakers.

 

I'm attaching the event brochure as well as the presentation / speaker schedule.

We have had great response from IMA members and friends and have only a few slots left.

 

If you have already registered, thank you!  We appreciate it. Invite a friend. 

 

If you haven't yet registered, you can still register before the price goes up at midnight Central Time on Saturday, Sept 18th at the event website:  https://sanantonioima.wixsite.com/imasa2021.

 

You have until Wednesday, September 15th (or until the rooms are all gone), to take advantage of the heavily discounted guest room rates.  Select the Location tab at the top right of the event website and click the link to Hyatt.

 

If you have questions, contact reply to this message.

 

 

- Mike

Mike Lovelace, MBA, CMA, CPA, CISA
VP of Engagement, San Antonio Chapter of IMA

 

50 Million Toyota Corollas and Counting

Weekend Sept  11, 2021

Amy Plemmons tests the latest Corolla Hybrid.

She notes Toyota introduced the Corolla in the  1960s and has sold over 50 M world wide.

The Japanese have a word for evolution - Kaizen, meaning small changes.

I recall seeing my first Corolla in about 1970. It had an AM FM radio, reclining seats, tinted glass, all standard, back when American makes charged extra for all those things. The Americans did everything but benchmark the obvious asking for import quotas from other countries and certainly not re engineering their products.   The Americans lave lost market share ever since.

Notice hos American manufacturers have to change the name oftheir small cars with every model change, no one wants the last model.Toyota though has stuck with Corolla and Camry from the get go. Like Ford's Model T they fill a niche.

This is what managerial accounting is all about. Getting it right the first time and staying on point building in quaality.

20,000 Franchises Close in 2020

Weekend Sept 6, 2021

This article indicates franchises are just as vulnerable to shutdown and independents.

And a franchise is likely to have way more debt than an independent given the many site requirements.

Those with a drive  in window have probably been better able to weather this t=storm

Here is an example of the need for mangerial accounting in action.