As the National Football League and the players union continue contract talks, Walt Disney Co. Chief Financial Officer Jay Rasulo was pressed Tuesday to answer questions about how a potential strike or lockout would impact sports juggernaut ESPN. Rasulo expressed confidence that Disney’s lucrative sports network, which has the rights to “Monday Night Football,” could weather the loss of games, telling the audience at Credit Suisse’s Global Media and Communications Convergence Conference that “we’re not that concerned.” [LAT]
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Renegotiate Everything NOW
Editor’s Note: Chad Cohen is a licensed CPA in California and currently serves as a Senior Director of Finance and Corporate Controller for Zillow.com in Seattle, WA. He has over 13 years of experience in corporate finance, audit and accounting; primarily in the technology and entertainment sectors. He has also functioned in financial planning and Sarbanes Oxley compliance efforts. Previously he also worked as a Big 4 auditor of high technology clients both domestically and abroad. Chad spent the first 12 years of his life in Hong Kong and as such enjoys eating dimsum in Chinatown and practicing Kung Fu in his free time. You can follow him on Twitter @cfolounge.
Unemployment is over 10%, the US dollar is going through the floor as interest rates continue to tank and Congress wants to push through a 2,000 page, $1 trillion health care bill. It might appear that our country is coming apart at the seams but if you are riding out this tidal wave, now is the perfect time to take advantage of the crappy macro conditions and start turning the screws to your vendors.
I don’t care if you’re an accounting manager, a senior buyer, AP clerk or CFO; everyone in the finance department should have a part in looking for ways to save the company some coin and NOW is the perfect time.
Here are a few ideas off the top of my head:
Commercial real estate is in the crapper &mdash Talk to your landlord about extending your lease and locking in or lowering your rents for the next 3 to 5 years. Get concessions, push for free TIs, get a couple more parking spaces, etc.
Strong Arm Your Outside Accountants &mdash Accounting firms have been laying off employees left, right, and center so lock in a long term contract and negotiate a steep discount on standard audit rates and other services like taxes. OR have a bake off with other accounting firms. This will get your auditors attention and encourage them to drop their rates to be competitive with these other firms. BDO, Moss Adams, RSM, etc. also audit public clients (it’s not just the Big 4 firms, folks) and their fee structure is 20 – 30% less than the Big 4. Don’t be afraid to switch firms or give parts of your accounting business (tax compliance, SALT, audit, etc.) to other firms.
Contracts &mdash If you find yourself in the middle to end of a contract term, try to extend your subscription, maintenance or service contract for multiple years in exchange for steeply dropping prices. Mandate that your IT, sales or marketing departments bid out services to multiple businesses when deciding who to give your precious business to. Find a free service that can do what your paid service does &mdash these do exist (they’re usually crappier but you may not need the “Cadillac”).
Price out hardware purchase orders with new vendors &mdash You’ll be surprised what others are willing to do now to get your business. You can usually negotiate better at quarter-ends as sales departments have quotas and targets to meet.
I could go on and on but I think you catch the drift.
I read a book on negotiations a couple years ago that encouraged its readers to negotiate “fearlessly”. I couldn’t agree more.
Thoughts?
NFL CFO Sick of Working for a Shrewd, Egotistical Organization; Returning to Goldman Sachs
Two years working for Roger Goodell must have been pure hell, compared to reporting to Lloyd.
Chief Financial Officer Anthony Noto is leaving the NFL after two years to return to Goldman Sachs.
Tony will be slumming it in IBD as the co-head of the Global Media Group. The NFL is cool with it though; they understand that not everyone is cut out for the big leagues. The good news is they’ve still got a Team Jehovah alum heading up the Finance Department:
The league said Monday that Eric Grubman will oversee the finance group at least until the end of collective bargaining negotiations with the NFL Players Association. Grubman is executive vice president of business operations and led the league’s finance operations when he joined the NFL in 2004.
Trend of CFOs Transitioning to CEO Likely to Continue As Companies Refocus on Strategy
This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.
The need for a chief executive to work with boards and communicate with Wall Street has never been greater, and CFOs have experience in both those areas–making them excellent candidates for the top spot in an organization.
Companies are increasingly recognizing the value of this internal asset and promoting their CFOs to CEO, according to executive search firm Russell Reynolds’ Chief Financial Officer Moves North America, Q1 2010.
Currently there are some 50 CEOs in the Fortune 500 who were previously CFOs for the same company. Their numbers recently increased, at least on an interim basis, as Marcel Smits, the CFO at Sara Lee, was promoted to the CEO slot.
CFOs have been promoted to CEO typically in organizations that are heavy on logistics or analytics, says Christopher Langhoff, who specializes in financial officer assignments for Russell Reynolds. He offers the example of Clarence Otis, Jr. at food services firm Darden–which owns and operates restaurants such as the Olive Garden and Red Lobster.
Otis started with the company in 1995 as vice president and treasurer and progressed to CFO. He was appointed CEO in 2004. Similarly, David West joined the Hershey Company in 2001 as vice president of business planning and development and worked his way up to CFO, where he served from 2005-2007. He was promoted to CEO in 2007.
It’s rare, however, to see a move from CFO to CEO in the tech industry, says Langhoff.
The ascension of CFO to CEO is not likely to slow down any time soon. “We have more and more clients that are coming to us asking for a world class CFO that will likely be ready to be CEO in two to three years,” says Langhoff. “That’s a tall order. We looked back and many times prior to the appointment of a CEO, the person had served, on average 16 years at the company.”
The first quarter also showed a continued, robust turnover of CFOs in the middle market. “The lifespan of a CFO can be shorter than an NFL career,” says Langhoff. As for the rest of the year, Langhoff predicts more turnover. Over the past four months, Russell Reynolds reported a dramatic increase in search activity in the United States, Europe and Asia that spans industries.
The spike has been most pronounced within the financial services sector. Companies like Bank of America, Morgan Stanley, Neuberger Berman, Kellogg, PepsiCo, Walt Disney, Dow Chemical and CVS/Caremark all named new CFOs.
Says Langhoff: “When Sox was in full gear there was a need for a CFO who was a CPA. Now, companies are looking for a strategic CFO, a business partner. There could be a big shift.”