Who’s Dollars Do You Want?

The profit motive should be job one in any business, part and parcel of this axiom is that the more customers you have the better business (and profits) will be. So picking sides in controversies can not only be dicey (Am I picking the right side?) but usually your strategy takes a while to play out. We saw Mr. Cathy and his chicken business inadvertently get thrown onto the stage by comments made on a radio show. So far he has handled the controversy well, reiterating not only that all are welcome in his restaurants (and his business) but that he respects opinions that deviate from his own. It is still unclear whether these public statements will hurt his business, but most people have a pretty good bullshit meter and can weigh the probative value of most controversies.

Another business boss (this time with a publicly traded company involving shareholders) made a business decision, aligning himself willingly with a specific side of an issue, but he didn’t pick so well, profits are down and the shareholders are not pleased:

Carbonite famously dropped Rush Limbaugh on a Saturday Night at the height of the Sandra Fluke controversy. Carbonite became the poster child for the Rush boycott movement organized by Media Matters, which coordinated the effort with so-called independent groups.

At the time I examined Carbonite’s SEC filings, and how Carbonite had built its business model based on high growth driven, in significant part, by the promotion of Carbonite by Limbaugh. I predicted that Carbonite had shot itself in the foot, and put political correctness before the interests of its shareholders.
On August 1 Carbonite released its 2d Quarter 2012 results, the first full quarter after dropping Limbaugh in March. The results shocked Wall Street, as Carbonite did not meet its growth targets, causing multiple analysts to drop the target price. The stock dropped 15% in a day. (h/t reader W)

Most important, in a conference call held on August 1, the CEO David Friend admitted that dropping Limbaugh damaged Carbonite’s growth, and is likely to do so for at least one or two more quarters.

Yes, he did. Advertising on the biggest radio show in the country, seems like a smart move, and the bottom line proved it a savvy business decision, all the way up until he decided to turn scaredycat. Aligning yourself with the squeaky wheel, the bullies, is rarely a good strategy. And since most people are a good a judge of BS controversies, Rush’s show has never been more popular and Carbonite is going the way of the betamax.

A few years back when prop. 8 was on the ballot I wrote a post about a Chinese restaurant in Berkeley who got itself into the crosshairs of the militant gay community. Somehow it got leaked to the press (kinda like James Vandersloot, a small business owner that made the unforgivable sin of donating to the Romney campaign, the Obama thugs found out, they outed him with all his customers then turned him over to the IRS for an anal pounding) that the owners made a small ( a couple hundred bucks)donation to the prop 8 campaign. Although they were very small contributors, they were low hanging fruit and easily accessible, so they were basically run out of town, the building vandalized, protesters outside picketing and scaring all the customers away, thuggery at its most basic and vile.

I bring this up because intolerance comes in many flavors:

The owner of a cake shop in Lakewood, Colorado said that, following a refusal to provide a wedding cake for a homosexual couple his business has more than doubled.

Jack Phillips, the owner of Masterpiece Cakeshop, told local media that this wasn’t the first time he had turned away homosexuals seeking wedding cakes, but it is the first time his stand for Christian principles has resulted in so much media attention and some death threats.

We got the trifecta here, a knuckelheaded owner that does not know/care that he is breaking the law, an apparent groundswell of support stemming from the illegal act, and even more criminal conduct in the form of death threats, they all look bad.

The right of public accommodation is protected under the Federal Civil Rights Act, as well as the American Disability Act. Some wiggle room has been granted through the judiciary allowing for individual acts of refusal; the errant drunk, the smelly homeless guy, or the gang brandishing colors, but whole cloth refusal due to sexual preference, not good.

I remember reading several stories in the last few years of establishments declining to serve gays (flower shops, bed and breakfast inns) and got sued for their troubles. These businesses can’t hide under that church/state separation blanket (like say a church who by policy does not do gay weddings) they have to abide by the law and they break that law when they refuse to serve gay people.

“If gays come in and want to order birthday cakes or any cakes for any occasion, graduations, or whatever, I have no prejudice against that whatsoever,” Phillips said. “It’s just the wedding cake, not the people, not their lifestyle.”

An interesting distinction, hopefully he has a good lawyer.

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