It’s fun to focus on the little guys when writing “This Week in Financial Blunders.” Combing the news for weird robberies, frauds and other mistakes by small-town oddballs is always a hoot, but it’s even more interesting when giant companies or corporations take a fall. How can so many people make such great mistakes? Let’s see some examples in “This Week in Financial Blunders.”
In a contract dispute worthy of gossipy middle school students, DirecTV has dropped the Weather Channel from their channel distribution list. CNNMoney reports that the basis of this argument is entirely about money – the Weather Channel wants more from DirecTV – but what’s unclear is just how much more they were asking for. The pricing is based on how many cents on the dollar the channel will cost the customer, an estimated 13 cents in the case of the Weather Channel, and they claim they were only asking for an additional one cent in the negotiations. DirecTV’s chief content officer Dan York wouldn’t specify how much the Weather Channel was asking for, but he did say it was “substantially more than [one cent].”
The corporate cattiness only escalated from there; with the channel blackout looming, the Weather Channel took to the Internet, creating KeepTheWeatherChannel.com, a website which encourages DirecTV users to protest the blackout via phone, email or social media, and includes directions on how to drop the cable provider. The Weather Channel even went so far as to say that blacking out the channel during the recent winter storm was dangerous because the channel is a “critical life-saving community resource.” York of DirecTV shot back, saying, “When information is readily available everywhere, it’s no longer necessary for people to have to pay a premium,” implying that the channel is far past its usefulness in the age of high-speed Internet and smartphones. In addition to that compelling point, he added that 40% of the Weather Channel’s programs are reality shows, which is unfortunately the case for most networks today.
The holidays were not so happy for Best Buy. The electronics chain struggled over the big retail season, and as a result saw their shares drop 30%, with overall revenue dropping 2.6%. The issue is that Best Buy was looking to cut costs wherever they could while still overpricing their products. Matthew Yglesias of Slate describes it best in his article, “Best Buy Is Finally Collapsing and I Couldn’t Be Happier.” “Friends don’t let friends buy $59.99 ‘high speed’ Monster HDMI cables from Best Buy,” said Yglesias. While the article’s title is a little crass considering innocent employees could be the first to suffer, Yglesias explains that this tumble in the stock market might motivate Best Buy into lowering their product prices to make it a better store for the customers instead of the higher-ups.
That’s all the blunders fit to tear asunder, but if we missed anything worth mentioning, please comment below.