MoreOnPoliticsMediaAndBusiness.doc March 5, 2004
More On Politics, Media and Business—It’s about Power
Introduction
I tell my students in Entrepreneurialist Culture at
I have never been a big believer in Marketing Studies. A
well respected marketing research firm produced a report for us that said we
could sell 100,000 season tickets for NHL hockey in
Common sense told me then (circa 1990) that we could probably sell about 10,000 season tickets in this market. That takes a few seconds thought from someone with a lot of experience with the Way the World Works and costs nothing (except the years of hard work and trial and (expensive) error that preceded it).
I wrote this essay for my students—it’s not about marketing studies and it’s not about formulating business models, per se. But it is about finding your way in a tough, competitive world, especially as your enterprise gets bigger and you start bumping into larger competitors and entrenched interests.
Politics, Media and
Business
I have often cited the equation my wife, Dawn first made me aware of:
P = M = B = $.
That is, Politics and Big Business and mega-Media form an identity at the elite levels of our society and one can not tell where one sector ends and the other begins, so intertwined are the tentacles of each.
I believe that for these elites, preservation of their power
is their number one goal. In
For many entrepreneurs then, they face entrenched interests, who in most cases do not want them to succeed. It might be OK for them to sweep up the crumbs around the edges of the sociopolitical economy but penetrating to its core is … difficult.
Want to know the best business to be in? The government business. Why? Because if your costs increase, you just put up your prices (called ‘taxes’) and people have no choice but to pay since: a) it is a monopoly service and b) if they don’t you can take away their income (called garnishee), their assets or, at gun point if necessary, their freedom by sending in your enforcers (called ‘lawyers’ or ‘district attorneys’ or ‘crown attorneys’ or ‘prosecutors’ or ‘bailiffs’ or ‘police’). And even better, you get to keep all the most profitable businesses like gambling and alcohol for yourself. If anyone sets himself or herself up in a competing entertainment business, like for example selling marijuana or prostitution, you just make their activities illegal and declare ‘war’ on them.
I teach Urban Economics and Design at Carleton University amongst other subjects and I often get asked by my Architecture students why I am such a strong opponent of our current love-affair with zoning by-laws that control everything from the colour you can paint your garage door to whether you can have a French fryer in your bakery too. Most civic-minded citizens think that zoning by-laws are there to protect them. No, that’s what the building code and fire code are there to do.
Zoning codes, in my view, protect elite developers from competition. Only sophisticated developers with deep pockets can circumnavigate the arcane world of planning approvals—that is why you find that most cities only have a handful of large-scale landowners who have lands approved and ready for development. They have enough lawyers, planners, lobbyists and pull to get City Councils to approve their lands for urban use. Tough luck for everyone else.
Think about regulatory commissions like the CRTC in
Think rent control is for the benefit of renters? Think
again. One large landlord told me
that the day that Bill Davis (Conservative Premier of
Most entrepreneurs don’t realize what they are in for because almost by definition they start off small. But as they grow, they bump into entrenched interests, then, watch out.
When IBM got so big (and later Microsoft) it appeared to be a threat to the power of the US Government itself, they got hit with anti-trust suits that sought to penalize them for their success.
So your choice as an entrepreneur is to either stay small and out of the limelight or learn the media and political game. Bill Gates learned this too late.
The only way to join the elites is to play their game, to learn their game—to be able to use ‘second order’ thinking to manipulate the media and play a political game. But it is a dangerous, double-edged sword. The media love to build up entrepreneurs on the rise, only to tear them down later.
Now mind you, favorable press can help an entrepreneur a lot. When the ‘good news’ story of your latest startup gets picked up by the media, you have just earned yourself a ton of free media (this is called, naturally, ‘earned media’). This causes the phone to ring (other media outlets are calling you for interviews—they like to hunt in packs and, hopefully, a few customers are calling too), web site traffic to jump and your credibility to increase with your employees, your suppliers, your existing clients, your banker, your partners, your shareholders, your community. It (good press) makes it much easier to raise financing and to achieve your goals. But the reverse is also true—bad press can sink you.
Credibility and trust is everything in life; trust is my big new word for the 21st Century. If you can’t trust your clients (like say to pay for your products or services), what do you have exactly? A liability, for sure. Can’t trust your partner, your employees, your bank, your suppliers, your spouse—you’re in big trouble.
But if you can manage to get consistently good press over a long period of time (something I couldn’t manage to do), it can be a real plus for your business.
Owning the Senators
I would think that the same is true of my career. There is a saying in the professional sports ownership world that the second happiest day of your business life is the day you buy your franchise. The happiest day of your business life is … the day you sell it.
As a former owner of the Ottawa Senators, I was totally unprepared for the intense media focus that such ownership brings and I made a hash of my relationship with the media. The next owner, Rod Bryden was much more adept.
Owning the Sens was a trial for me in every way. I didn’t like the fact that the players were indentured serfs—highly paid mind you but still indentured to the team and traded like prize horses and cattle. I didn’t like the fact that we got intensely bad press, which depressed my friends, colleagues and family much more than it did me.
Think about the newest owner of the team—Eugene Melnyk, a
nice man who has had a lot of success with his pharma company (Biovail), his
horses and much else beside. He certainly seems to have an idyllic life, based
in
Dealing with the Media
The media have a saying: “Comfort the Afflicted and Afflict the Comfortable.”
Well dealing with the media is complex and not meant for amateurs (like me).
Dealing with the media means:
a) never surprise them—they hate that;
b) they like to think they know everything;
c) they are skeptical and suspicious;
d) they make their careers out of embarrassing people;
e) they get promoted for that;
f) they get raises for that;
g) they get Pulitzers for that;
h) they like square pegs in square holes;
i) they respect power and money only if it can hurt their careers.
People usually look first for things that divide us before they look for the things that might unite us and the media often reflect this awful human trait. They tend to pander to their audience’s envy, greed, anger, pride and just about every other deadly sin that humans are capable of.
So you need to:
1. hire good PR people;
2. get some media training yourself;
3. keep your profile down;
4. hire a tough law firm;
5. network amongst the elites;
6. sponsor charities and other good works;
7. never
expect fairness—there are
8. remember money talks and BS walks;
9. learn to use trial balloons and plausible deniability;
10. tell the smart truth (I give an example of what this is later when I deal with the Ottawa Palladium OMB hearing).
I don’t think I am afraid of many things—I have tested myself many times, having, for example, flown hang gliders when I lived in Australia and done other foolish but exciting things. But I must admit there are two things that scare me—journalists and lawyers—and both can ruin your life. For me the Bonfire of the Vanities is a very real thing. Once you fall into the media maw and the legal system’s jungle, you can be there ‘forever’.
It’s Kafkaesque.
And the two groups are often in cahoots—the media dish the dirt, sometimes these days without two independent sources or, even worse, simply taken, holus bolus, from gossip rags like Frank Magazine and the lawyers profit from it by launching ‘shareholder rights’, class action or other types of lawsuits.
When we were trying to get the Ottawa Palladium approved (now known as the Corel Centre), I took the stand in defense of the project—I was on the stand for two and a half days. I believed, and still do, that if you are under legal and media attack, you need to be prepared to stand up for yourself. You need to look your accusers in the eye, need to tell the judge or jury why the project is important to you and to put your case directly to the world beyond the courtroom with a minimum of distortion by the media.
That’s why when I gave media interviews, which I don’t anymore; I preferred live Radio or Television to tape because you can put your thoughts directly across to the viewers.
Think about O.J. Simpson taking the stand and Martha Stewart not doing so—and look who was found guilty and who was found not guilty. One guy is out there on the golf course looking for the ‘real’ killer(s) and the other is probably headed to jail at the time of this writing, not for actually committing an insider trading offence but for apparently lying to the FBI and SEC. Sheesh.
Attack lawyers comb through the media, your published sayings, your notes, anything you’ve written looking for inconsistencies. And it is getting worse—every email you’ve ever written can and will be used against you.
We seem to be looking for perfection in our corporate leadership—tolerance for mistakes is way too low. I mean how do you get a better Map of the Way the World Works? From experience. And how do you get experience? From mistakes. Most of us can only learn one way—that is by actually doing stuff and that means mistakes will be made.
When I was on the stand, the Ontario Government had hired the Perry Mason of OMB (Ontario Municipal Board) lawyers—Tom Lederer. Tom was a nattily dressed guy, terribly bright, aggressive, ambitious and, frankly, scary. When you give testimony under British Common Law practice, you are out there alone. During your cross-examination, you are not allowed to ask anyone for help, not even your own lawyer. During a break, you are not allowed to confer with anyone. You’re on your own, kid.
The Stockholm Syndrome is a very real force—if someone like Tom Lederer tells you often enough for long enough that you are a bad person and your project is a bad project, you might get to a point where you just want the badgering to stop badly enough to agree with him. And remember—you only do it once (or hopefully never) but they do this all the time—they are experts.
It’s also called brain washing.
The fight over the Palladium had nothing to do with the
relative land use planning merits of the actual location of the building. It
had more to do with the fact that
If the NDP and Tom Lederer had succeeded in the summer of 1991 in defeating the zoning amendment for the construction of the Palladium, there would be no Corel Centre today or Sens for that matter.
I employed the ‘Turtle’ defense while I was on the stand—I made Tom repeat a lot of his questions, took my time answering him and never agreed with anything he said. I made him work for his masters.
At one point, I made a public offer to stop the hearing with what I called a win-win-win proposal. We would freeze development on 500 acres (of so-called prime agricultural land, which BTW had grown nothing but weeds for at least a decade) for a generation (25 years), in return for which we would get 100 acres rezoned for our building. In this way, hockey fans would win, agricultural preservationists would win and unionized construction workers (supposedly the core of NDP support) would win because they would get to build the thing. Lederer and the NDP turned the offer down flat and that was a turning point in the hearing because the three panel members who sat in judgment could now plainly see that this was a political hatchet job and had nothing to do with the upholding the Ontario Planning Act.
On the last day of testimony, Tom opened a copy of our Application to the NHL for Membership. He turned to a page which showed our plan for West Terrace—our 600 acre new town.
West Terrace—a Plan for a New Town, circa 1991
One of the things you must do in these types of situations is to be able to look one or two moves ahead and when I saw Tom open our book to that page, I froze inside.
I thought for a moment that Tom might ask me about West Terrace. He might ask: “Mr. Firestone doesn’t West Terrace look a lot like a downtown kind of place? Isn’t it possible that you could have put the palladium downtown instead of on these precious agricultural lands? Isn’t it true that this is really all about land speculation and nothing about hockey?”
I think I had already proved that this was about hockey
first by making the offer to freeze the additional lands for 25 years. But what
about Tom’s (imaginary) comparison of West Terrace to say the Glebe or Lebreton
Flats (downtown areas of
I could see Tom thinking the question but it never came—he was tired and he rested his case before asking the question. I had nightmares about it for months.
And then it came to me—at 3 am three months after the end of the trial. The answer was simple—West Terrace was nothing like the Glebe or Lebreton Flats (remember the Turtle Defense—never agree to anything. Now this wasn’t the Truth, it was the Smart Truth. Politicians are experts at telling the Smart truth and the Media expect it. It’s also called spinning a story.)
The difference was that, in the case of West Terrace, anyone who came to live there would do so knowing that the Palladium was already there—they would self-select for a location in proximity to a major entertainment facility precisely (for many of them) because the building was there. In the case of the Glebe or Lebreton Flats, by building there, we would be imposing 1.7 million additional visits per year into their existing neighborhoods.
Nevertheless, I am glad Tom never asked that question on the day because on that day, I had no answer.
Perpetuating the
System—What’s the Alternative?
The only problem with all this is that it perpetuates the system. I am teaching entrepreneurs to be more successful, not to change the system. The problem with the latter is changing it to what? No one has invented a better system than the crappy one we already have.
If you look at the future in terms of what television offers
us, like say Star Trek’s the Federation; it looks like they have a great big
institution making just about all their decisions for them. There is no money
on board Jean Luc Picard’s
I had some good discussions when I was Vice-Chair of CIRA (the Canadian Internet Registry Authority) about ICANN (Internet Corporation for Assigned Names and Numbers) governance. Basically, ICANN runs the DNS system for the entire Internet—how you find your way around the place. It’s a pretty important, but not well-known, organization.
ICANN wanted badly to not only control the 13 root servers that support the Internet but also to own the servers. The DOC (US Department of Commerce) actually owns the root servers.
I never felt it was likely that the DOC would turn effective control over the Internet to anyone even before 9/11 and certainly not afterward. I mean what exactly is ICANN? And why should anyone trust an International Corporation any more than say the DOC?
Effective control of the Internet rests with the US Government and they will never, in my opinion, relinquish that. Would the UN be better? I don’t know but somehow I doubt it.
ICANN has looked at dozens of governance models and they are all problematic. Who has jurisdiction over an International Company; which nation’s laws apply?
Let’s say you decide you are going to elect the BOD of ICANN by giving every domain name holder the world over one vote, which is what ICANN has already tried. “One ‘person’, one vote.” Sounds very democratic to me. But only about 100,000 domain name holders world-wide out of hundreds of millions of Internet users and 60 million domain name holders actually bother to vote in any ICANN election.
What if an unscrupulous dictator decided to register a couple of hundred thousand domains names (chump change to most of them since you can now buy dot-COMs for less than ten bucks) and elect all the members of the Board himself?
Creating sound, long-term governance of an international company is at least as difficult as say writing the US Constitution. I think the problem may be intractable and without solution. If it is this difficult to find a solution for governance of just one Corporation, imagine trying to find ways that are better than the ones we already have for governing ourselves.
It has taken 1,000 years since the Magna Carta to get to a system where at least some nations and some of their people can live together and interact with each other in ways that don’t involve settling accounts using violent means—humans are after all just about ungovernable. So maybe rule-by-elites within the context of some type of rule-of-law is the best we can do.
I raise these issues because I am a bit conflicted about teaching young people to be more successful by successfully manipulating the existing system, which we all do to some extent some of the time. It’s just that I can’t think of any better alternative, either to the system itself or the process of getting ahead and creating new ventures.
Entrepreneurship and
Economic Development
It is (almost) impossible to get rich by working at a J.O.B. You need to first own your own business and then you have a real opportunity to make a better life for yourself and your family.
I do believe that entrepreneurship is one of the keys to a better
world. Surely, the nation-states of India and China and the citizens of those
places are far better off today after they unleashed the creativity and hard
work of their entrepreneur class a decade or so ago. Those people were always
there; it’s just that, in the case of
It wasn’t state-sponsored enterprise or the ruling elites
that created those two incredible dynamos of the 21st Century—it was
the entrepreneurs. And one can be quite sure that the elites in those nations
have benefited tremendously by ‘permitting’ the entrepreneur class to
flourish—to do their ‘thing’ which we refer to at
A good friend of mine by the name of Hal Kendig once told me when I was a young man living in Australia that to him, human beings had some influence over their lives but not too much. He saw us as little creatures with gossamer wings being swept along in a fast current. Our little wings let us move a bit up or down or to the left or to the right in the fast moving waters of life but that’s all we are given to do. My wife says it differently—you can stray from the beaten path, but not too far.
Dr.
Bruce M. Firestone,
p.s. in 2003, the City of
