Budget Cuts, Corporate Welfare, Economic Development, ESPN, Malloy Budget cuts, Corporate Welfare, Economic Development, ESPN, Malloy
The Urban Dictionary defines “jive” as a “colorful form of speaking” that is “sometimes hard to follow.”
In the real world here is how it works;
On August 2, 2011 Governor Dannel P. Malloy announced that, in return for creating 200 new jobs over the next five years, the taxpayers of Connecticut would give ESPN $17.5 million toward the construction of a new building and at least $300,000 to train the new workers. Malloy explained, “ESPN’s needs are not going to be ignored.”
That corporate welfare package brought the total Connecticut taxpayer support for ESPN to over $100 million in state tax breaks and grants over the past twelve years.
Then yesterday, May 20, 2013, The Wall Street Journal reported that ESPN, “was in the process of laying off a few hundred workers… a sign that the hugely profitable sports cable-TV powerhouse is responding to the rising fees it pays to air games as well as other changes in the media industry…ESPN said some of the job cuts are coming through attrition, or unfilled open positions, and didn’t disclose the precise number or types of workers who are being let go.”
Associated Press added, “ESPN is cutting its workforce, the latest Disney division to reduce staff…’We are implementing changes across the company to enhance our continued growth while smartly managing costs,’ the sports media giant said in a statement Tuesday. ‘While difficult, we are confident that it will make us more competitive, innovative and productive.’”
The AP explained that the ESPN layoffs follow 300 layoffs that occurred at LucasArts and LucasFilms after Disney acquired the companies for $4.1 billion.
As AP noted, “Still, Disney has been on a roll financially, beating or matching earnings per share estimates for the last eight quarters. After it reported a 32 percent gain in net income for its fiscal second-quarter earnings two weeks ago, more than a dozen Wall Street analysts raised their price targets on Disney stock to an average of nearly $72.”
So in essence, despite being an extraordinarily financially successful subsidiarity of an extraordinarily, financially successful company that is doing extraordinarily financially well in this extraordinarily financially successful Wall Street market, ESPN accepted almost $20 million in scarce taxpayer funds and promised to create 200 jobs but is now intentionally keeping vacancies open and laying off Connecticut residents, so that it can appear even more extraordinarily financially successful.
Despite this development, according to the Hartford Courant, when asked about it, a spokesman for the Malloy administration said that ESPN will not be forced out of the First Five program as a result of its layoff plan because it is still intending to add at least 200 jobs during the period starting in August, 2011 when the Governor gave them the public funds.
Meanwhile, the Connecticut General Assembly continues to consider major cuts to some of the most significant and vital human and healthcare services.
Now if that jive is not a “colorful form of speaking” that is “sometimes hard to follow,” I don’t know what is.
Ben Barnes (OPM Secretary), Budget Cuts, Corporate Welfare, Economic Development, Healthcare, Human Services, Malloy, Mental Health Services, State Budget, State Deficit Budget cuts, Economic Development, Malloy, State Budget, State Deficit
Pick up any newspaper and you are bound to see at least one story about the impact of budget cuts and another about how state governments are giving money away to private companies in an attempt to convince them to create or retain jobs.
It is quite a commentary about our times. A lack of adequate funding means people who work for schools, hospitals and nonprofit providers of human services are or will be losing their jobs, while taxpayer continue to provide the money that is being used to try and persuade businesses to pledge that they will create or keep private sector jobs.
True, it may not be the notoriety that we want, but you certainly can’t say that Connecticut hasn’t become the epitome of this paradox.
For example, earlier this week, Wait What? readers were provided an opportunity to read two posts, one entitled Has it come to this…? and another entitled And while cutting essential services, Malloy gives $100,000 to a Stamford Brewery.
The first post reported on a recent Hartford Courant commentary piece by a father lamenting Governor Malloy’s cut to essential programs that help Connecticut’s developmentally disabled residents while the second was about the Governor’s visit to a brew pub in Stamford to celebrate a $100,000 taxpayer-funded grant that the Malloy Administration was giving to help the brew pub expand.
The two stories served to enlighten readers about the reality of our times or the juxtaposition between an era where we are cutting vital services while providing private companies with what some would call economic development incentives and what others would refer to as corporate welfare.
What I failed to report was that, in addition to the brew pub, Governor Malloy and his Commissioner of the Department of Economic and Community Development (DECD), Catherine Smith, were actually visiting three other companies around the state that day. All four of the companies were receiving funds thanks to the State’s Small Business Express Program (EXP).
Over the past eighteen months, the Small Business Express Program has given out more than $80 million. According to state officials, the program has helped “create and retain more than 7,600 jobs.” The Legislature will soon be voting to give the Governor an additional $60 million for this program.
In addition to Stamford’s Half Full Brewery, Malloy was visiting Atlantic Canvas and Awning (a company that received a loan of $50,000 and a matching grant of $10,000); Automotive Core Recycling (a company that recycles and sells catalytic converters and other auto parts and received a $250,000 loan) and Katalina’s (a cup cake bakery that received a loan of $30,000 to add equipment and furnishings to their new retail shop).
According to the Department of Economic and Community Development, the $50,000 loan and $10,000 grant “support the creation of three new jobs and retained four,” the $250,000 loan translated into one new position and retained 8 jobs, while the $30,000 loan to the bakery “created one full time job and retained two full time and two part time jobs.”
The Governor’s press release that day announced that the Small Business Express Program has already created or retained more than 1400 jobs in 2013.
Meanwhile that distraught and frustrated father, along with the others who care for Connecticut’s developmentally disabled, try to cope with Governor Malloy’s $6 million cut to employment and day service programs.
Actually, that $6 million cut was part of a much bigger list of cuts Governor Malloy ordered last November 28, 2012. That day, back in November, Governor Malloy announced $170 million in budget rescissions.
The press release didn’t actually quote Governor Malloy. Instead the task of explaining the cuts was left to Ben Barnes, Malloy’s budget director. Barnes wrote, “Many of these cuts are very difficult to make, especially now when so many residents continue to struggle in a tough economy, But as painful as they are, cuts are necessary to keep this year’s budget in balance. State government needs to live within its means.”
The November list included a wide variety of reductions including a $53,000 cut to the Division of Criminal Justice’s Shooting Task Force; a $200,000 cut to the Jobs First Employment Service Program, a $488,000 cut to the state’s Environmental Quality Program; a $335,000 cut to the Department of Health’s Community Health Services Program and $41,000 cut to their Genetic Diseases Program; a $433,000 cut to the state’s Community Mental Health Centers, a $2.3 million cut to home care services that keep people out of more expensive nursing homes and hospitals and the list goes on and on.
More recently, the state budget plan that Governor Malloy proposed a month ago continued those cuts. In fact, his new budget makes even deeper cuts to a variety of vital and essential services.
So how is it possible that a Governor would be instituting record budget cuts while giving away record amounts of taxpayer funds to private businesses?
Truth be told, it is the difference between how the State operating budget works compared to the way the State Capital or Bond budget functions.
Even in the desperate times, the Capital budget continues to pump out cash.
The State’s operating budget is paid for with tax dollars. The State’s Capital Budget is funded via the state’s credit card.
Because we are borrowing the money and then paying the amount (plus interest) back over twenty years, the argument is that cutting the Capital Budget won’t help to balance this year’s operating budget. This year’s operating budget is still facing a $135 million plus deficit despite the terrible cuts instituted by the Governor and the additional cuts approved by the General Assembly.
Although Connecticut already has the highest per capita debt burden in the nation, since the word “deficit” applies to the operating budget and not the Capital Budget, we end up with a situation in which vital services are cut at the same time money is being handed out.
In fact, if Governor Malloy gets his way, we’ll see more cuts to essential services and more layoffs of hospital and human service workers in the coming months, and at the same time, the General Assembly will be allocating even more money for the Governor to hand out to the private sector.
Corporate Welfare, Economic Development, Economy, Malloy, State Budget, State Deficit Bridgewater Associates, Corporate Welfare, Economic Development, Malloy, Ray Dalio
Don’t let the residue of the Great Recession get you down.
While it is true that America’s middle-class is on the ropes, unemployment remains high, sending a kid to college costs more than most people save in their entire lives, child poverty in Connecticut has gone up 50% in the last decade and the state is facing a $1 billion dollar budget deficit next year, Connecticut’s taxpayers managed to dig deep and find the money to provide one of the world’s biggest hedge fund owners, Ray Dalio, with $115 million in state funds. Meanwhile Stamford’s taxpayers learned this week that they were helping to put the whole deal together thanks to their Mayor’s decision granting a private developer access to some of the most valuable publicly owned waterfront property left in Connecticut.
In return for all this generosity, Dalio, the founder and CEO of Bridgewater Associates, and a man who was paid $3.9 billion last year will move his offices from Westport to a new $750 million office complex on Stamford’s waterfront.
The deal began with Governor Malloy’s decision to give Dalio a taxpayer-funded corporate welfare package that included a $25 million forgivable loan, $5 million in grant funds for job training, $5 million for an alternative energy system and $80 Million in tax credits.
Now, under Part II of the effort, Stamford’s Mayor Mike Pavia has signed a “letter of intent” granting the developer of Stamford’s Harbor Point the right to use city-owned property as part of overall effort to clear the way for Bridgewater Associates’ headquarters.
The mayor’s action will allow the developer to move the South End boatyard to a different location. Never mind that boaters say the alternative site doesn’t accommodate their needs, we’re talking about pleasing a billionaire – and that is billion with a B – so what he wants is what he gets.
Just to make the whole situation as absurd as possible and to add insult to injury, while the letter of intent was signed back in December, it was only made public this week.
According to reports in the Stamford Advocate, “Mayor Michael Pavia said the goal of the document was simply to allow the zoning review process to commence so as to give the city a chance to assess the plan…Pavia said the city has not yet negotiated a price for the land in question. According to the letter of intent, should the boatyard plan be approved by the Zoning Board, the city and BLT [the private developer] will determine the price as part of a final agreement granting the developer property rights.”
Oh, and for those who are into reading the fine print, although initially Mayor Malloy and then Mayor Pavia pledged that no development project would go forward without all of the appropriate approvals, the letter of intent includes special language that reads, “The Applicant shall obtain final approval of such grant by City of Stamford Boards and Commissions as may be required by City Charter, state law or as the Mayor of the City of Stamford, in his sole discretion deems necessary or appropriate.”
The new wording certainly suggests that if Stamford’s various public boards and commissions didn’t act in an appropriately way, the mayor might have to intervene to move the project along without such approvals.
It is nice to note though that when confronted about this latest addition, the Pavia administration claimed that the language is being misunderstood and the letter of intent does nothing more than allow the process to start moving forward.
So here we are.
On the long list of challenges facing Connecticut, we can put a check mark next to the task that reads – “Help the world’s biggest hedge fund and the highest paid CEO in the country pay for a great new office with a great waterfront view.”
More on these latest developments can be found in the Stamford Advocate: http://www.stamfordadvocate.com/news/article/Setting-table-for-Bridgewater-city-paves-the-way-4177724.php#ixzz2HgLY6z9H and http://www.stamfordadvocate.com/news/article/Boatyard-plan-agreement-defended-4184605.php#ixzz2HgLH7Uac
Connecticut State Government, Economic Development, Economy, Layoffs, Malloy Corporate Welfare, Malloy, The Economy, Unemployment
The latest data from the Connecticut Department of Labor reveals that the state is making little progress when it comes to re-bounding from the Great Recession.
According to the more conservative unemployment measurement, 171,100 Connecticut residents are presently unemployed. However, using the federal government’s U-6 rate, which measures both the unemployed and those who are in a part-time job but actively looking for full-time employment, more than 15% of Connecticut’s workforce is without the jobs they need.
In addition, of the 117,500 jobs lost since the “recessionary downturn” began, Connecticut has only recovered about 30,000 jobs (25% of all jobs lost).
Despite the claim that the recovery began in February 2010, Connecticut’s government, financial, construction and manufacturing sectors have yet to even begin regaining jobs.
Still on the downside, Connecticut’s government sector remains down 11,100 jobs, while the number in the financial sector is down 4,200 positions, construction and mining is down 1,200 jobs and manufacturing is down 800 jobs.
Since much of the federal Stimulus Funds were not used to supplement government activity, but instead were used to substitute for existing spending, elected officials have failed to help those who lost their jobs in two of the sectors that leaders could actually have had an impact over – government and construction.
Since Governor Malloy took office, government positions have been further eliminated and despite his predilection for the Financial Sector, his First Five Corporate Welfare Program has yet to have any impact. Although considering those favored business need only create 200 jobs, and have five to ten years to do so, whatever impact the corporate welfare program does have will be limited in nature.
A related problem for Connecticut businesses is that as a result of the lengthy recession, the State of Connecticut has already borrowed more than $635 million from the Federal Government to help pay unemployment benefits. Borrowing was necessary because the amount of funds collected from employee unemployment taxes wasn’t enough to cover the costs associated with payments to the unemployed. Since these funds will need to be paid back, Connecticut businesses will be facing high unemployment taxes on an ongoing basis.
Corporate Welfare, Economic Development, Economy, Malloy, Pelto, Wait What? Corporate Welfare, Malloy, Pelto, Wait What?
An 18-month old company, incorporated in Delaware, with an office in Westport, but its chief financial officer and chief operations officers in California, landed $750,000 in Connecticut taxpayer funding this week, thanks to Connecticut Innovations, a quasi-state agency that works to support the Connecticut economy by investing public funds in private companies.
deets, inc., who has had no sales to date, is developing a “productivity App” that, “facilities message sharing for a specific group of workers, parents of Little League players or other small groups, getting them information cleanly and quickly. It also provides smooth contact synchronization.”
A version of the App is now available at the Apple App Store. According to an article written by the Hartford Courant’s Mara Lee, “The writers of the free app, which has nearly 10,000 users since its launch in August, are hoping to capitalize on the “’anti-social sentiment that’s out there.’”
The company plans to use the new funding to hire 5 employees in Connecticut.
In addition to the Apple version of the app, deets reports that an Android version will be out in January and the plan, according to the Courant, will be to “launch paid versions for businesses. The businesses could use deets to send messages to customers or to help teams communicate internally.”
The news that scarce public funds are being given to a company with limited connections to Connecticut, but who are engaged in an effort to break into a growth field, led Jonathan Pelto, whose blog, Wait, What? seeks to bring transparency and accountability to the Malloy Administration and Connecticut State Government, in general, to consider submitting an application for funding.
“We are definitely considering submitting an application to one of these agencies,” Pelto said, “Attempting to bring transparency to the Malloy Administration is definitely a growth market and we’ve literally had hundreds of thousands of visits to Wait What?,” Pelto noted.
“While our sales have been limited to date, with $750,000 we’d hire, not five, but at least ten Connecticut residents to be researchers and writers, and with that, we’re convinced we could turn the blog into a money-making venture over the next two years,” added Pelto.
However, when asked whether he or his Blog, Wait, What? might be blacklisted from getting state aid, Pelto failed to return multiple phone calls, and referred any further questions to his lawyers.
For the Courant Story see: http://www.courant.com/business/hc-ci-deets-inc-relocation-20121113,0,281750.story
Corporate Welfare, Economic Development, Malloy, State Budget Corporate Welfare, Economic Development, Malloy
But since there are still a few days until Election Day, I’d like to re-post a comment that I made earlier this week on Facebook, thanks to the generator at the local community center.
Let us take a moment to IMAGINE a world in which instead of giving $115 million in taxpayer funds to hedge fund criminals, or tens of millions to UBS who then lay-off 10,000 people or giving scarce public funds to the carrion-birds called “ticket-re-sellers,” all the while postponing vital transportation projects so the money could be shifted to the transportation fund to cover up the deficit in the General Fund, we actually invested in real infrastructure upgrades like burying key electric lines or creating these so-called micro-grids.
Yes, there would still be many people who would have lost power. There might even be many still without power, but we’d have created thousands of jobs for the workers and crews and suppliers burying those lines or creating those grids and tens of thousands of people would have been able to have spent their week at their jobs, making money and paying taxes.
Instead, we have a $3.9 billion dollar hedge fund CEO and insurance and corporate CEOs collecting extra bonuses, for their ability to make even more money, thanks to our corporate welfare.
And I’m pretty sure none of those CEOs sat in dark houses and lamented the few hundred dollars of food that was rotting in their refrigerators.
If you come across a candidate in the next few days – ask them, tell them, order them – that if they win, they need to place a moratorium on the distribution of corporate welfare and, instead, demand that public funds to be used to create and enhance public benefits.
That is not to say that government should never play a role in helping leverage capital, but Malloy’s list of corporate welfare is monstrous and growing, and in many cases will lead to little or no longer-term public benefit. Malloy’s list includes;
Alexion: $51 million
Bridgewater Associates: $115 million
CareCentrix: $24 million
Cigna: $71 million
ESPN: $25 million
Jackson Labs $291 million
NBC Sports: $20 million
Sustainable Building Systems/Steel Buildings Systems International: $19 million
TicketMaster: ($ 6 million, removed itself after CEO arrested)
UBS AG $20 million
Blue Sky Studios $3 million
Created a variety of smaller corporate grant programs totaling over $150 million and expanded the Urban and Industrial Site Reinvestment Tax Credit program from $500 million to $750 million.
** More than $800 million of these “investments” are being financed by borrowing the money, meaning taxpayers will be on the hook for about $400 million more in interest payments.
Corporate Welfare, Economic Development, Malloy, UConn Corporate Welfare, Economic, Jackson Laboratory, Malloy
Yesterday’s New Haven Register included an editorial lauding State Senator Len Suzio, R-Meriden for forcing the Malloy Administration to back down on a decision to “count 10, state-paid jobs at the University of Connecticut as part of the 300 jobs The Jackson Laboratory has promised to create in exchange for up to $291 million in aid.”
The Register’s editorial noted that, “At nearly $1 million in state aid per job, the biotech company can afford to hire and pay for its workers.”
But before we take a collective sigh of relief, and bask in the knowledge that sanity has prevailed, at least on this one, readers should know that the New Haven Register’s editorial is wrong. Apparently they didn’t catch that the Malloy Administration had reversed the position it had previously reversed itself on.
In fact, the Malloy Administration will credit Jackson Labs with the 10 state funded UConn faculty positions, and Jackson Labs need only create 290 jobs in order to qualify for its entire taxpayer funded subsidy.
According to the Associated Press, in round one, Catherine Smith, Malloy’s Commissioner of Economic and Community Development defended their decision to count the jobs by saying, “It is true that 10 employees will count toward Jackson Lab’s job creation goals, but I would argue this is a small cost relative to the long-term financial benefits this project will generate.’’
While the Governor’s office began by defending Smith, it later announced that “there had been a misunderstanding,” and the 10 faculty positions would be on top of the 300 jobs that will be created by the Jackson Laboratory
It was with that news that the New Haven Register entered the fray, editorializing that some degree of sanity had returned to the publicly funded “economic development” project.
See editorial at: http://nhregister.com/articles/2012/10/22/opinion/doc5085d6942929c570382976.txt
But alas, the editorial writer at the New Haven Register missed a later Associated Press story, written by veteran Connecticut reporter, Pat Eaton-Robb, that began with, “Gov. Dannel P. Malloy’s administration reversed itself for the third time in two days Thursday, and said a bio-science firm will get credit for creating jobs that will be funded by the University of Connecticut.”
Malloy’s Economic Development Commissioner announced that the jobs would count and that it was she who had provided the Governor’s Office with the wrong information.
Smith told the AP, ”I was less worried about who is paying for these jobs, and am much more concerned in making sure these jobs are created and not just the 300, but a long-term partnership that is being established and will create many more ancillary positions.”
Malloy’s spokesperson summed up their decision by saying, “That’s 10 new jobs, in addition to the 290 other new jobs that will be created for a total of 300 jobs.”
The good news is that observers can now say with confidence that Connecticut’s $291 million investment will create 290 jobs, or exactly $1 million per job, as opposed to the more awkward phraseology of “nearly $1 million in state aid per job.”
Achievement First/ConnCAN, Charter Schools, Economic Development, Education Reform, Malloy, Stefan Pryor Achievement First, Charter Schools, Education Reform, Stefan Pryor
Stephanie Simon, of Reuters News, has written extensively about the “education reform” movement, including articles about Connecticut’s new “reform” law.
Today, the news is that wealthy individuals from China and other countries are, “spending tens of millions of dollars to build classrooms, libraries, basketball courts and science labs for American charter schools.”
Simon provides a number of examples, including a new charter school in Buffalo, New York, a sixth campus for an Arizona charter school chain and a foreign investment program in Florida charter schools that is attracting up to $90 million dollars a year.
For half a million dollars, foreign investors can buy themselves and their families a set of “EB-5” visas.
The federal “economic development” program provides permanent visas to foreign investors who are willing to invest in a company that “creates or preserves at least 10 jobs in two years.”
Between January and September of 2012, the Department of Homeland Security reports that the number of people applying for EB-5 visas was about 3,000, “nearly twice as many as were approved all last year.”
There is even a new investment niche to link foreign investors with charter schools. A company called the Education Fund of America has already put together investment packages for 11 charter schools in North Carolina, Utah and Arizona. The head of the fund says he has, “four more deals in the works.”
An Arizona charter school company, that already runs three charter schools, told Reuters that they “couldn’t believe how easy it was to secure $4.5 million in funding from abroad.”
Simon explains that, “Well-established and successful chains of charter schools, such as KIPP, Green Dot or Achievement First, receive hefty support from philanthropic foundations and private donors. The chains can also tap into financing provided by an array of for-profit and non-profit investment funds created for that purpose.”
Achievement First, Inc., of course, is the charter school management company that was co-founded by Connecticut’s Commissioner of Education, Stefan Pryor. After serving as a Director for Achievement First, Inc., for eight years, Pryor resigned to accept to position of Education Commissioner in Governor Malloy’s administration.
With 20 charter schools already in place in Connecticut and New York, the Connecticut Board of Education has now granted Achievement First permission to expand their schools in New Haven, Hartford and Bridgeport.
The story does not indicate whether foreign investment dollars have made their way into Connecticut, but ironically, as Reuters reports, “Fitch Ratings warned it was likely to downgrade bonds backed by charter schools because the sector is volatile and the schools are highly leveraged. Such risks mean charter-school debt is typically considered speculative, rather than investment grade…”
Simon’s national story can be found via the Hartford Courant website at: http://www.courant.com/news/nation-world/sns-rt-us-usa-education-charter-visasbre89b07k-20121011,0,3974014,full.story
Corporate Welfare, Economic Development, Malloy Corporate Welfare, DECD, Economic Development, Malloy
Earlier this week, Charter Communications, Inc., “a Fortune 500 company and the fourth-largest cable operator in the United States,” became Governor Malloy’s ‘Next Five’ Corporate Welfare recipients. With revenue of $1.9 billion during the last financial quarter, the company did lose $83 million, but that was an improvement over the same quarter the year before, when Charter lost $107 million.
For most of us, not enough revenue to cover expenses poses a problem. As I can attest, banks seem to frown on giving, or even loaning money to people whose income is deemed inadequate or insufficient.
But we don’t call our economic system “advanced capitalism” for nothing.
In return for promising to create 200 jobs, Charter will receive a taxpayer-funded 10-year loan of $6.5 million with an interest rate of 2 percent. Even better, the Connecticut Department of Economic Development will defer principal payments for the first three years. If the company does create the jobs, the entire loan will be forgiven.
The St. Louis Business Journal wrote a detailed article following the announcement. The good news for them is that the company has said that moving its corporate headquarters will not lead to any lay-offs. In fact, apparently without any state funds, Charter’s social media specialist explained that the company will be adding 300 new jobs in their St. Louis offices.
Ten years ago, Charter purchased their present St, Louis headquarters for $43.5 million. With approximately 16,800 employees nationwide, about 3,000 of Charter’s employees are now working in St. Louis.
According to Governor Malloy’s press release, Charter is the ninth company to participate in the “Next Five” Corporate Welfare program, which is one of a number of economic development programs administered by the Connecticut Department of Economic and Community Development (DECD).
The press release explains that the $6.5 million will go toward Charter’s costs for tenant improvements and the purchase of furnishings and office equipment. Considering the company will start with about 100 employees at the site, those keeping track will realize that our taxpayer subsidy equates to about $65,000 worth of furniture and improvements per employee.
The Stamford location must come as especially good news to Charter’s new chief executive officer, chief operating officer and chief marketing officer. All three left Cablevision Systems Corporation in Bethpage, New York, earlier this year, but never moved their homes to St. Louis.
As an aside, the final sentence of the Governor’s press release states that the package, “also includes funding provisions for future job growth,” but for some unknown reason, it doesn’t quite get to explaining what that might mean.
Corporate Welfare, Economic Development, Malloy Corporate Welfare, First Five, Malloy, TicketNetwork
And now for something completely different…
Tickets TLD LLC, a subsidiary of TicketNetwork Inc., has applied to purchase the “Top-Level Domain” name; .tickets. Tickets TLD LLC, a Delaware company, was registered in Connecticut on April 10, 2012. Tickets TLD LLC uses the TicketNetwork’s headquarters as its business address. TicketNetwork Inc., which is also a Delaware company, was registered, in Connecticut, by Don Vaccaro in 1996,
Internet Corporation for Assigned Names and Numbers (ICANN), who controls all domain names (i.e. .com, .org, .net), is in the process of selling off additional domain endings.
Tickets TLD LLC is one of five companies angling for control of the domain ending; .tickets
Although ICANN allows the public to comments on applications such as the one put in by TicketNetwork, and the period for making such comments was extended, the period ends tomorrow, September 26, 2012. The link to make comments is: https://gtldcomment.icann.org/comments-feedback/applicationcomment/viewcomments
For many Connecticut residents, TicketNetwork is known as Governor Malloy’s “First Five #2.”
In July 2011, Governor Malloy and Department of Economic and Community Development Commissioner Catherine Smith traveled to South Windsor to give TicketNetwork a $6 million dollar publicly funded economic development package in return for agreeing to create a least 250 jobs.”
Malloy used the event as opportunity to call Don Vaccaro, TicketNetwork’s CEO, a “serial entrepreneur” and claimed Connecticut needed more people like Vaccaro because, “in their very fiber, their very bone marrow, have the ability to come up with great ideas, great concepts, bring to the market place, prove them and grow them.”
The “love fest” would have gone off smoothly, if Hugh McQuaid, of CT Newsjunkie, hadn’t asked Malloy and handlers about the fact that Vaccaro and TicketNetwork were suing the Bushnell’s CEO David Fay because Fay, speaking at a legislative hearing, had referred to TicketNetwork as ticket scalpers. Apparently they prefer to be called ticket resellers, and so they sued the Bushnell for slander.
In addition, Vaccaro was facing a very serious sexual harassment lawsuit from a former employee.
But the Malloy Administration dismissed the concerns, claiming that they weren’t aware of these publicly known lawsuits. Malloy’s spokesperson went so far as dismissing the sexual harassment issue saying it was irrelevant.
Fast-forward to February 2012, and TicketNetwork’s CEO is back in the news, this time for getting himself arrested and charged with a hate crime, threatening, breach of peace, first-degree criminal trespass and interfering with a police officer at an Oscar party at the Real Art Ways in Hartford.
At that point, the Malloy Administration apparently had enough. TicketNetwork announced that it was withdrawing its application for economic development funds and giving up the $6 million in state grants, and Governor Malloy directed Economic Development Commissioner Catherine Smith, “along with Consumer Protection Commissioner William Rubenstein and his top legal adviser, Andrew McDonald, to examine the state’s relationship with TicketNetwork.”
Commissioner Smith told reporters that “After this occasion, if we do another deal with a privately held company, I think, yeah, you’ll probably see us do a little bit more due diligence around both the CEO and potentially other members of the staff.”
Now, comes the late news that TicketNetwork is reaching for world-domination, by purchasing the rights to control the domain name ending, “.tickets”
In their application to control the .tickets domain, Tickets TLD LLC writes, “The .TICKETS TLD would create an easily identifiable Internet space where venues, performers, performances, and booking agents can create websites dedicated to ticketing for any given event, and Internet users know they can go to find precisely the tickets they are seeking. This creates value for registrants in that they can streamline the ticket sales process, offering greater diversity and more targeted value to ticket seekers. Ticket seekers would save time and gain greater access to tickets for events and performances they were seeking.”
By owning the rights to .tickets, Tickets TLD LLC would not only be able to control and sell any domain that ends with the words .tickets, but would be able to, “designate a set of premium domain names” that would be, “set aside for distribution via special mechanisms.”
Public comments to date include endorsements from former New Jersey Attorney General Peter Harvey, Rufus Edmisten, North Carolina’s former Attorney General and former Secretary of the State, and Connecticut’s own State Representative Tim Larson. Larson writes, “Today I want to add my name to the list of supporters for Tickets TLD LLC to administer .tickets web site requests…The creativity and drive that the employees and leadership of TicketNetwork possess have always been a great source of new innovation and leading-edge technologies in their industry.”
Meanwhile, opposition to the application submitted by Tickets TLD LLC comes from the Featured Artists Coalition (FAC). FAC writes, “We would like to draw the evaluators’ attention to the fact that Tickets TLD LLC, through its parent, Ticket Network, or subsidiaries of Ticket Network or affiliated companies of Ticket Network, has registered 100s of domain names that include artist, sports teams or venue names.”
Another critical comment comes from the group that represents Broadway venues. They claim that, “The parent company of Tickets TLD, LLC is TicketNetwork, Inc., a well-known operator of ticket resale sites. TicketNetwork and its affiliates have registered over 3000 domain names.” The group continues, “We are concerned that TicketNetwork has a long history of registering domains that incorporate the names of Broadway shows. Incorporating the names of well-known Broadway shows and other brands into domain name registrations evidences a disregard for the rights of the owners of these brands. We are of the opinion that the practices of TicketNetwork with regard to domain name registrations make the applicant unfit to be the registry operator of .Tickets.
As noted above, public Comments on the request by the TicketNetwork group to control the domain, .tickets, can only be made through tomorrow, September 26, 2012. The site to make comments is: https://gtldcomment.icann.org/comments-feedback/applicationcomment/viewcomments
A special thanks to a Wait, What reader who sent in this tip.
A search on the word TicketNetwork will bring up earlier Wait, What? posts on this company, its CEO and the their relationship with Malloy Administration.