Broadcasters and cable programmers need to take a hard look at Anheuser-Busch’s new policy of not paying for spots until 120 days after it has received an undisputed invoice. Under the policy, five or more months could elapse between the time a spot runs and when A-B cuts a check. Also today: a bow to the MFM’s 2009 award winners.
More people seem to be using the expression “desperate times call for desperate measures” these days. However, I’m not sure that we should be giving carte blanche to actions rooted in the concept that a “desperate disease requires a dangerous remedy,” especially when the cure could unnecessarily kill the patient.
This concern about being too willing to embrace desperate actions hit home as the board of directors for MFM and its BCCA subsidiary discussed an announcement from Anheuser-Busch that it was planning to adopt new owner InBev’s corporate payment policy and begin paying all of its vendors and suppliers 120 days after receipt of an undisputed invoice. While credit and collections managers would be quick to point out the dangers of ad-supported businesses agreeing to these terms, I could see station management panicking over any contemplation about saying no to the King of Beers.
It is understandable that a company would want to postpone the accounts payable process, especially in these difficult economic times. However, the industry leadership on MFM’s board, which is also addressing the same issues as A-B, cannot condone this approach. MFM perceives this as an egregious use of power being wielded in a difficult economic climate. Moreover, companies that agree to this policy could find it hard to limit its adoption by others or to reverse it when times get better.
So it was with that in mind that MFM issued a member advisory about the AÃ¢â‚¬â€˜B/InBev proposal. We encouraged our members to examine and respond to the issue before the mandated deadline of Feb. 28. The ad sales agreements used by most media companies take into account the reality that ads have been running four or more weeks before an invoice is sent. Even then, the invoice first goes to an ad agency that reviews and validates it for payment.
While e-initiatives are helping to accelerate the process for approving an invoice, tacking another 120 days onto the end of that process would mean that five or more months could have lapsed from the first ad placement to when the advertiser cuts the check. Imagine what that scenario would do to a company’s Day Sales Outstanding (DSO) ratio.
In a larger sense, this situation with A-B is a great wake-up call to look at the interrelationships that exist in the marketplace and examine our own actions. All companies both provide and purchase services. Any company’s unilateral decision can have a far-reaching impact that includes all the businesses that supply its suppliers. It would seem that the most expedient path to a better economy is by following the Golden Rule, and I’m not referring to the version that says “he who has the gold, rules,” which some would argue is how we wound up in the current situation.
The impact of myopic or desperate measures on our businesses will be one of the topics covered in “Managing Credit in a Difficult Economy,” the February Distance Learning Seminar that will be hosted by MFM next Tuesday, Feb. 24, from 4 to 5:15 p.m.
Moderated by John Sloan, director of corporate credit services for Turner Broadcasting System, and C. Robin Szabo, president, Szabo Associates, and a member of MFM’s board, the seminar’s topics will also include:
- A best practices case study of internal credit management processes.
- A discussion about credit scoring models.
- Changes and differences in credit and collections practices that are in response to the current economy.
- A third-party perspective on what is happening in the economy and what collections managers can do to help their companies get paid from slow paying customers.
- Tips on credit and collections that are designed to work during a difficult economy.
My guess is that there will be plenty of talk about the A-B/InBev decision during the question and answer session at the end of the seminar.
Additional information about the seminar and an online registration form may be found on MFM’s Web site at http://www.mediafinance.org/index.aspx?PageID=444
2009 Award Winners
I am reminded daily that MFM and BCCA’s role as an educational resource for the industry on matters such as credit and collections issues depends upon the commitment of our members to that mission.
The response to the A-B/InBev Member Advisory, upcoming Distance Learning Seminars, annual conference sessions and all of the other services we provide would not be possible without the work of members who donate their time and expertise to help all of our members.
We are very pleased to announce that some of these members are being recognized by the MFM board for their extraordinary support of MFM and BCCA:
MFM Rainmaker Award Winners:
- Neil Johnston, Cox Media
- Tony Vasconcellos, Regent Communications
- John Kampfe, Turner Broadcasting System
- Trila Bumstead, New Northwest Broadcasters
All four of these members have helped MFM expand its value with their contributions, which include new programs, new members, new sponsors and new benefits.
MFM Working Capital Award Winners:
- Keith Piper, Media General
- Richard Bonsignore, WLS/ABC-Disney
- Pam Manor, WNEM/Meredith Broadcasting
- Gray Fontenot, PricewaterhouseCoopers
These four very active MFM members have given extensively of their time to help us produce educational sessions and materials including conference sessions, new membership recruitment; MFM publications; TFM articles; and distance learning seminars.
BCCA Member Contributor Award — The Univision Credit Department credit managers are being recognized for their overall contribution to BCCA and to media’s credit and collections profession.
Peter F. Szabo Career Achievement Award — Connie Allcorn, business manager with WSB and WSB.com, Atlanta, is being recognized with the Peter F. Szabo Career Achievement Award for her contributions to the growth of BCCA and the industries we serve.
These awards will be presented at the annual conference for MFM, BCCA and INFE, the Interactive & Newsmedia Financial Executives. Themed “Responding to Change,” the conference will be held May 12-14 at the Westin Peachtree Plaza in Atlanta.
In addition to recognizing our Award Winners, the conference will be packed with accredited (CPE) sessions that are designed to assist industry professionals in the fields of finance, accounting and auditing, credit and collections, human resources management and information technology.
The sessions and our lineup of keynote speakers, which includes syndicated talk show host, Neal Boortz; Pulitzer Prize-winning political cartoonist Mike Luckovich; and Robert A. Eisenbeis, chief monetary economist at Cumberland Advisors. They will assist attendees in understanding the technological and market-driven challenges that are affecting their businesses and identifying the most effective strategies for addressing them.
If you are interested in joining us this year, you can take advantage of our “Non-Leap Year” $28 discount by registering for the conference online during the month of February.
MFM is also is giving away two free registrations to the conference. The registration sweepstakes will run until Feb. 28. To register go to www.mediafinance.org.Two full conference registrations, one for existing MFM members and the other for a non-member, will be awarded. The retail value of the conference registration prize is $1,050 for a non-member and $850.00 for an MFM or BCCA member.
We’ve written and talked so much about the rules for online contests that I know enough to make sure we have all the rules spelled out. These are also available on our website at www.mediafinance.org. Winners will be selected in a random drawing on March 3 and announced publicly on or before March 6.
While our attendees consistently report that they more than recoup the cost of participating in our annual conferences with the value of the information that they bring back to their companies, I know that this is going to be a particularly tough year for making that investment.
Co-locating this year’s conference with INFE and offering these discounts and prizes allow us to add to the value of the conference while also helping to ensure we address the needs of our members and our association during a difficult time.
As I said to a friend of mine the other day, the registration fee for the three days of the conference is less than two hours of an accountant’s or attorney’s time and you will end up with much more information.
This is not the time for desperate measures, it’s the time to size up the situation and react in ways that help us grow as we preserve our core businesses. At MFM, our business is to address our members’ needs and we try never to loose sight of that.
Mary Collins is the president and CEO of the Media Financial Management Association, a professional society addressing the diverse needs of the industry’s financial and business professionals. Her column appears here every other Friday.