Friday, October 22, 2010

TV Wars

I want to watch the World Series and the Giants and other Fox stuff. But right now I am out of luck. Fox and Cablevision are arguing about how much Cablevision should pay Fox to broadcast the station over their cable network. Cablevision’s customers are not happy and both corporations are issuing statements that it the other guy’s fault. Local politicians are jumping in – including US Senators – calling for Binding Arbitration. Sounds fair to many people but look closer.
One company (Fox) is willing to sell its product; Cablevision wants to buy it. They just don’t agree on the price.
In a rational world when the seller and buyer don’t agree on a price, the sale doesn’t happen. If you don’t want to buy the widget because you don’t want to spend the money, you don’t buy it.
In our current bizarre world, there are calls for Binding Arbitration. That means, some other guy listens to both sides and decides what price Fox should pay cablevision. Back to the real world, suppose you are selling you widgets and a potential buyer does not want to meet your price. The options are that you (and the potential buyer) either make a deal or walk away. What are the chances you would let a stranger set the price for selling (or buying) your product? In that situation, who is running your business? Mr. Stranger is determining how much you “should” sell your product for; he is determining how much is a “fair” profit – if he believes in profits; and telling the buyer how much he should be spending. And Mr. Stranger bases his decision on what? - Other profits for the seller? How much money the buyer has? Whim? Bribes? His desire to see the Giants play?
This is absurd. People should buy or sell things based upon the value they put on the product and not what some other guy says is “fair”.

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