Tuesday 15 November 2011

Investment advisor expands on why we should Occupy the Bell Centre

When I picked up a copy of La Presse recently and saw Montreal investment dealer David Ipperciel’s proposal to “Occupy the Bell Centre” I was really intrigued.  I have found the salaries being paid to professional athletes revolting for some time. In the case of the Canadiens, I was shocked to see former GM Bob Gainey trade for  past his prime $7.3 million a year  forward Scott Gomez and then give Mike Cammalari ($6 milllion) and Brian  Gionta ($5 million) annual contracts beyond their worth. Yes, as my good friend Abe Hefter from CJAD always reminds me, “Gainey got Gomez in order to attract free agents like Cammalari and Gionta.”
David Ipperciel

Even if Gomez scored 30 goals, I’d have a problem with the salary he is making. Pierre Gauthier, Gainey’s successor and the man most likely truly responsible for us being saddled with Gomez, gave defenceman André Markov a three year $17 million contract last summer when there was no clear indication if his bad knee could  hold out. As of today, he has yet to play a game all season.

True, this is owner Geoff Molson’s money.  He spent $500 million to buy the Habs. It is a business. Nobody is forced to  buy tickets or souvenirs or watch the team play on television. Professional sports is entertainment. People do not complain about Daniel Radcliffe or Julia Roberts making $20 million per movie.

Here is a translation Ipperciel sent me of his piece in La Presse:

I work in the financial sector in Montreal and feel that much attention is directed towards our industry following the Occupy Wall Street movement.  Being of a generous nature, I would like to share this attention with others.

I propose a new movement: Occupy Bell Centre. People complain about the high level of salaries in the financial sector, far above the average pay.  However, the income of professional athletes is clearly higher than those of my peers.  How dare they extract such compensation!  After all, they only play a game, often in an unruly way...  Worse yet, half the teams perform below the median of their league!  How can they justify their astronomical salaries in those conditions?

Many will quickly point out than the financial sector of Wall Street had to be bailed out (not in Canada, but who’s noticing).  To those, I must recall that every penny paid out by the US government to the financial sector through the TARP program was reimbursed.  At the end, the program did not take away money from the American taxpayer.

On the other hand, professional sport teams are able to build arenas with the help of public funds, and often benefit from tax rebates or exemptions.  In contrast, the financial sector is one of the biggest contributors to government tax receipts, through corporate or personal tax, topped by a special payroll tax targeted specifically to them.

We can also expect to see new financial regulations implemented soon (Bâle, Volkner Rule).  In the hockey world, the legitimacy of violence is still being debated.  In this context, Occupy Bell Center is probably not a bad idea. 

Or why not Occupy Capitol Hill?  The governments have been important contributors of the financial crisis.  In the US, minimal targets for low income families were imposed by Congress to Fannie Mae and other agencies, in order to boost home ownership.  This helped develop the subprime market which led to the debacle.  The Chinese government manipulated the yuan’s exchange rate, which encouraged over-consumption all over the world, and launched the risk-seeking frenzy that followed because of the lower rates that it generated.  The Federal Reserve contributed by keeping rates too low for too long.  And more important, European governments exacerbated the crisis with their unrestrained accumulation of debt, threatening our social democracy.  Let us join in this popular indignation by occupying all these places!

I spoke to Ipperciel some more about his article. He agreed his tongue was planted firmly in cheek.

“No, I don’t think an Occupy Bell Centre would work,” he conceded.  “The whole ‘Occupy’  movement attracts sympathy because of its vagueness, so that everybody can relate.  An Occupy   Bell  Centre would have a more specific demand ( such as lower salaries which would bring a more polarized debate.  In any case, I was being facetious.  People are quick to denounce the big salaries of financiers.  If the salaries are too big, then why not criticize anybody else with a huge salary, like professional athletes?

“I really have no problem in principal against the high salaries of professional athletes.  I say in principal, because in practice, professional teams have become experts in blackmailing governments for handouts, whether for building a new amphitheater, or tax credits.  I’m sure you can come up with examples in hockey or Formula One. Would the salaries of these professionals be as high without government aid?  Probably not.  What they attract  -or extract- from their talent or the perceived attractiveness of their product, they entirely deserve.  They are not putting a gun to anyone’s head to buy their tickets or watch them on TV.  They deserve what they get from fans. 

"I just have a problem with what they get from government.  From what I understand, the Montreal Canadiens have paid for the Bell Centre without government aid, and they pay full taxes every year on it.  So whatever salary they pay to their team is their business, as they must remain competitive.  As for Scott Gomez, they made a bet, and do not seem to have gotten a good return on their investment.  As a citizen, I have no problem.  As a fan, I can’t be too happy.  But that  is the nature of the game.  Regarding the whole pro hockey scene, we should all be outraged as long as there is government involvement, using our tax money to make millionaires even richer? Come on!  The funny thing is that the Americans - supposedly capitalists - seem more prone to this than Canadians - supposedly socialists. Go figure."

Bravo David!   

Here is a look at Occupy Wallstreet Montreal.


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