Northern Trust under pressure...

[Adam Jeselnick]

http://www.msnbc.msn.com/id/29372930/

"Northern Trust Corp., a bank that received $1.6 billion in government funds, is facing scrutiny for hosting parties and other events connected to its sponsorship of a professional golf tournament... "

Wow, this could get ugly... the golf season has just begun and the clamoring from Washington could end golf tournament sponsorship as we know it.

How would you go about avoiding a repeat this scenario if you were in charge at Wachovia, Morgan Stanley, US Bank, Buick, etc...?  Any of these corporate sponsors might be reconsidering plans for business as usual at PGA Tour events this year.

Does anyone think this outcry is a good thing?  After all, as noted by many on this DG, all of that money goes to put somebody to work.  And the intangible value of the business relationships strengthened by these events is priceless, right?

And to think that these companies signed long-term contracts for marketing value and affiliation with charitable giving... 

[Ian Larson]

The report came from TMZ which is'nt the most credible source, but.....


The MSNBC article starts to bring some validity to it. Northern Trust can sponsor the tournament without flying people out to L.A., putting them up in some of the most expensive hotels, hosting huge parties and handing out gift bags.....after they laid off 4% of the staff.

If all of this is true, and I'm not sure it all is, Northern Trust should be under pressure. If this was another bank sponsored event I would be pissed. I'm not going to turn the other direction just because its golf and just because its Riviera. If this is valid its a real shame. Why could'nt they just use money to get that tournament played on the course and televised on TV?



"Does anyone think this outcry is a good thing?  After all, as noted by many on this DG, all of that money goes to put somebody to work.  And the intangible value of the business relationships strengthened by these events is priceless, right?"

...are you serious? The whistle should be blown on any bank wastefully spending. That one week didnt create sustainable jobs for all of the fringe benefits and events they paid for. They could have done without all the extras, especially now in times like these. Any business relationships should have been made up in the catered corporate tents watching the tournament.

[Bill_McBride]

Last year Northern Trust invited spouses of employees to enjoy the tournament.  Not so this year, they are aware of perception.  This was year 2 of a 5 year contract, might not be that easy to wriggle out.  We were guests of Northern Trust through Santa Barbara friends, and I have to say the whole thing was done with a lot of class.

Now attending a tournament as a prole is going to be sort of like flying coach after a few goes at first class! 

[Ian Larson]

Since my last post I have been in the truck on my commute home here in L.A. and this thing is all over the radio. It appears that what TMZ is reporting is pretty accurate as well as the MSNBC article attached to this thread. I hope all the other bank sponsors are seeing this and have the intelligence to cut back. The last thing I want is for golf to get this huge black cloud over it like baseball has right now. Its just sad.

[D_Malley]

many banks who were profitable were forced to take this bailout money, even though they did not want or need it.

[John Moore II]

This is ignorant. Companies have to advertise somehow. Are they going to make them take ads off the TV? If you tell these companies they can't sponsor golf tournaments, they'll just turn around and spend the $5+ million they spend on the tournament to buy more TV, print and radio ads. I see nothing wrong with them continuing to sponsor golf tournaments through this time period.

[JR Potts]

Northern Trust was ASKED to take the money.  They didn't need it.  And, pursuant to the TARP distribution to Northern, they were told to just do whatever with it - get it back into the system.  But now we have a different administration and a different breed of dopey political hacks (read, Frank and Kerry).

I, for one, think that the money will do a whole lot more for our economy being spent on hotels, meals, flights, goods and services than iit would be for it to be sitting in Northern's large vault on LaSalle Street...like the rest of the TARP funds held by banks.  Do we really want empty hotels and flights and food and drink without a consumer?

[D_Malley]

ryan
it is my understanding that some banks did not want any money but paulson said they did not have a choice. not sure what NT's specific position was.

[Ian Larson]

"many banks who were profitable were forced to take this bailout money, even though they did not want or need it."


Every bank was given money to be fair and to free up credit, but they're still not freeing up credit. Could you imagine if the feds handpicked banks they gave money too? There would be an uproar.

I understand Northern Trust did not come begging for money, and that they actually made a profit last year. But so far banks have used the ignorance flag when they are accused of using bailout money. Saying they cant tell the difference between a bailout dollar and a profit dollar. How can Northern Trust suddenly tell the difference?

And if Northern Trust was in such a great position after making a profit last year to justify the recent spending at Riviera, why did they just lay off almost 500 employees in this economic enviornment?




....and this isnt about advertising on TV or marketing the tournament. Its about all the money spent hosting their employees in L.A. for a week. The items being criticized were not necessary for the success of that tournament.

Tournaments should continue as always and be sponsored by banks. But they should sponsor the TOURNAMENT and not all of their EMPLOYEES VACATIONS.

[Craig Sweet]

Barney Frank just said on MSNBC that there is a provision in the TARP for banks to give back money....he said Northern Trust did not ask for the money, did not want the money, in the first place....but during the Bush Admin. were told to take it....Frank said if they aren't going to lend it out, they should give it back...

[Craig Sweet]

SHIVAS..why must you pollute this discussion by calling people "dimwits" and "socialist"  and "high partisan"...and single out Democrats?

[PCCraig]

Since my last post I have been in the truck on my commute home here in L.A. and this thing is all over the radio. It appears that what TMZ is reporting is pretty accurate as well as the MSNBC article attached to this thread. I hope all the other bank sponsors are seeing this and have the intelligence to cut back. The last thing I want is for golf to get this huge black cloud over it like baseball has right now. Its just sad.

So let me get this straight:

A bipartisan bunch of dimwit socialists in Washington desperate to get re-elected, all of whom think the solution to everything is to throw federal money (ie, OUR money) at everything in sight, right before an election,  threw some money (on a no strings attached basis) at a very conservatively-run bank, the Northern Trust.

Not being dummies, the Northen Trust accepted the money on a no strings attached basis.

Then, months later, highly partisan dimwits within the larger pool of dimwits now demand than the recipient of their dimwitted waste of money now comply with their new dimwitted idea of what constitutes prudent use of money?

I sure hope John Kerry and the rest of his dimwitted buddies never, ever throw a cocktail party at their homes. And I sure as hell hope the President never, ever has the hubris to throw a state dinner under any circumstances, either. 

After all, last time I checked, 100 percent of that money is public funds to entertain fat cats, too.

And all that money should be returned immediately by those responsible for such waste of public funds.

I feel fairly confident that neither the Kerry reidence nor the White House is serving Two Buck Chuck...

TARP funds have strings attached. The cost of the funds when paid back is 5%.

[jeffwarne]

"many banks who were profitable were forced to take this bailout money, even though they did not want or need it."


Every bank was given money to be fair and to free up credit, but they're still not freeing up credit. Could you imagine if the feds handpicked banks they gave money too? There would be an uproar.

Ian,
aren't we "handpicking "citizens to receive money to reduce/renegotiate their mortgages?
The responsible person who made the decision to rent until he had saved enough for a downpayment and emergency funds will get no rewards from the individual bailouts and quite frankly is being screwed by not being allowed to take advantage of true market rates on distressed housing due to all the artificial propping up efforts going on.

I'd have less trouble with handpicking banks-at least the taxpayers are getting a (potential) return on the loans.

If the boneheads (bipartisan) in Washington attached no strings, why do they get so irate over how the money is spent?
Are companies that make decisions to cope with a shrinking economy (lay offs) also not allowed to advertise to reduce that shrinkage? (that's what sponsoring a tournament is--advertising)

[Ian Larson]

Ian: 

The reason why Northern Trust laid off a relatively small number of employees recently is that, not being fools, they recognized that BY NO FAULT OF THEIR OWN, their business is going to slow due to current economic circumstances and ...

... Again, not being fools, they are adjusting proactively and accordingly.

Uh, I think that is more than obvious. But if that is a action of strategy then why do they feel they can fly out management, put them up for a week at three of the most expensive hotels in town, give them Tiffanys gift bags and host huge parties for employees entertained by Chicago and Sheryl Crowe.

This stuff isnt advertising or marketing and anyone with half a brain that knows wrong from right knows that this is wrong.

[Ian Larson]

"many banks who were profitable were forced to take this bailout money, even though they did not want or need it."


Every bank was given money to be fair and to free up credit, but they're still not freeing up credit. Could you imagine if the feds handpicked banks they gave money too? There would be an uproar.

Ian,
aren't we "handpicking "citizens to receive money to reduce/renegotiate their mortgages?
The responsible person who made the decision to rent until he had saved enough for a downpayment and emergency funds will get no rewards from the individual bailouts and quite frankly is being screwed by not being allowed to take advantage of true market rates on distressed housing due to all the artificial propping up efforts going on.

I'd have less trouble with handpicking banks-at least the taxpayers are getting a (potential) return on the loans.

If the boneheads (bipartisan) in Washington attached no strings, why do they get so irate over how the money is spent?
Are companies that make decisions to cope with a shrinking economy (lay offs) also not allowed to advertise to reduce that shrinkage? (that's what sponsoring a tournament is--advertising)

There are strings attached. There is a penalty for a bank returning the money because the governmnet wants them to use it to free up credit. Northern Trust is getting hammered for taking the money. Not returning it and paying the penalty. Not using it to free up credit. And then turning around and spending money on employee vacations in L.A.


500 layoffs may seem small in the full scope of things but that could be 500 families that will really really struggle. Thats not small to me. And I think its a slap in the face to these families when they turn on the TV and see what Northern Trust has decided to rather invest their money in. Entertaining the employees who kept their job with Casa Del Mar, Beverly Wilshire, Ritz Carlton, Sheryl Crowe, Chicago and Tiffany gift bags. What exactly are they advertising and marketing with this crap? Not the tournament.

[Eric Olsen]

I think this group is much more interesting talking about golf than politics and policy, but that may just be my perspective sitting here in DC.....

[jeffwarne]

"many banks who were profitable were forced to take this bailout money, even though they did not want or need it."


Every bank was given money to be fair and to free up credit, but they're still not freeing up credit. Could you imagine if the feds handpicked banks they gave money too? There would be an uproar.

Ian,
aren't we "handpicking "citizens to receive money to reduce/renegotiate their mortgages?
The responsible person who made the decision to rent until he had saved enough for a downpayment and emergency funds will get no rewards from the individual bailouts and quite frankly is being screwed by not being allowed to take advantage of true market rates on distressed housing due to all the artificial propping up efforts going on.

I'd have less trouble with handpicking banks-at least the taxpayers are getting a (potential) return on the loans.

If the boneheads (bipartisan) in Washington attached no strings, why do they get so irate over how the money is spent?
Are companies that make decisions to cope with a shrinking economy (lay offs) also not allowed to advertise to reduce that shrinkage? (that's what sponsoring a tournament is--advertising)

There are strings attached. There is a penalty for a bank returning the money because the governmnet wants them to use it to free up credit. Northern Trust is getting hammered for taking the money. Not returning it and paying the penalty. Not using it to free up credit. And then turning around and spending money on employee vacations in L.A.

So you invite hundreds of clients and potential clients TO GROW YOUR BUSINESS, but no employees to escort/entertain them.
That makes no sense.

It's marketing-that's like compalining that the Club Car employees are not working at the PGA show-they are.
I just read the article- Iused to think Barney frank was the biggest boob in Congress-now I know it.
AS soon as the government returns the funds used IN THE MOST EXPENSIVE INAGURATION ever to the taxpayers ,Northern Trust should follow suit.

I wish Obama well.
he's what this country need-dynamic,energetic,willing to push the envelope with his ideas. And he's dead right about the financial lead weight of Iraq around our necks. (despite the recent successes there that get no mention)
Sadly though he is surrounded and inevitably occasionally influenced by boobs.  (not the kind that distracted Clinton )
I still think he's doing an admirable job and I can put politics aside to support him out of respect for this country and the office.
I cannot support boobs like Barney Frank (who never misses a chance to grandstand with a stupid question/comment) and Pelosi.
Fortunately,I think Obama can look past them and make enough of the right choices-and charasmatic enough to pull it off.

Sadly, I don't think Bush was able to ignore some of the horrendous advice he received, and was a bit dogmatic in some of his convictions which were at best misguided.

[Ian Larson]

"So you invite hundreds of clients and potential clients TO GROW YOUR BUSINESS, but no employees to escort/entertain them.
That makes no sense."


They cant accomplish this in the already expensive catered corporate tents at the venues? I understand growing your business and networking but the crap they spent money on would NEVER persuade me to become a client. Seriously? It takes Sheryl Crowe and Chicago at a swankey event for me to say to myself...."wow, wasnt sure Id do business before but CHICAGO!, Im all in."

Whats so hard about keeping these tournaments about the tournaments and the PGA TOUR while getting all the advertising and marketing you need all over the commercials and scoreboards while the country is suffering?

Spare me Jeff, if you cant see the wrong in it during this economic enviornment then you are as stupid as the guys running these banks and signing off on crap while not fulfilling your fiscal responsibility with bailout money, then laying off 500 employees.

[Ian Larson]

"AS soon as the government returns the funds used IN THE MOST EXPENSIVE INAGURATION ever to the taxpayers ,Northern Trust should follow suit."


...look it up. It only appears more expensive because this inauguration security and transportation costs were included in the price tag.

[John Moore II]

You know, I am fine with politics and I have contributed to this thread as well. But how many political threads do we need at one time? One on sales tax that has gone down hill. Now this one and maybe some more that I didn't notice. How about we just get rid of them and flush the topics down the shitter?

[jeffwarne]

Well I certainly hope Big Brother takes a hard look at past and future spending habits of individuals who participate in government assisted mortgage bailout programs.

Ian, you've convinced me.
Northern Trust should immediately return the money to the federal govt.--
so they can waste it

[Mike Benham]

After all, last time I checked, 100 percent of that money is public funds to entertain fat cats, too.

I am pretty sure that the phrase "fact-finding mission" was invented by the Washington politicos to do the same type of thing that is now objectionable. 

[W.H. Cosgrove]

Northern Trust has sent a letter to "Stakeholders."

It points out that Northern has a contract to support the tournament. 

Northern was and is profitable.

And Northern has raised $3million for charity over the last two years .

This tournament is good for golf, its good for Los Angeles and its good for Northerns Clients, shareholders. 

This whole thing has gotten out of hand.  We are in a recession but that doesn't mean that commerce stops.  It means we try that much harder to make things work.  Afterall this wasn't a huge boondoggle for incompetent management for a weekend of golf.  This is a bank that is well run and makes money.

Oh and by the way, Northern is paying $78.8 million interest annually on the loan from treasury.  As a taxpayer, I appreciate that.

 

[Bob_Huntley]

On a different note, a kid in one of the concession stands at Pebble Beach asked the man buying a hot-dog for nine dollars. The man turned to his wife and "Geez, I could have bought three shares of Bank of America for the same price."


Bob

[Adam Jeselnick]

John K - the political "pollution" was inevitable, but not my primary intention when starting this thread (or the golf sales tax discussion, for that matter).  This is not some O/T critique of Phil Mickelson's shirts... these are critical issues facing the PGA Tour and golf industry as a whole. 

For anyone who is passionate about the game, I think the subject deserves some attention on this DG-although as a relative newbie I'm open to the suggestion that maybe this is not the right venue.

For my part, I tend to align more with the views expressed by Craig and Ian... though not necessarily with some of our self-promoting legislators in DC.  While no one expects the corporate "schmoozing" to end, the reality of the current economic climate should give CEOs and executives pause before committing to luxury expenditures. 

450 jobs were cut at Northern Trust to achieve $50 million in savings...could any of these jobs have been saved by scaling back the tournament expenses?  Would this have had any impact on the success of the tournament?