Literally everyone seems to be playing games at the moment (ker-ching!), so I thought that the Friday Blog would play one too this week. Like that chap from the Welsh Assembly who swore at the end of a Zoom call, I’m mindful that I’m running the risk of getting the metaphorical sack as the toy industry’s leading weekly blogger by using fruity language, so with a suitably-placed asterisk, let’s play ‘D*ck or no d*ck.’
The premise is simple and harks back to a popular Blog theme from a few weeks ago: we examine the behaviour of a selection of well-known companies and individuals during the current crisis, and you decide whether they are being a d*ck.
Let’s start with an easy one: the retailer who wrote to suppliers this week promising to pay all outstanding invoices. Straightforward answer, right? How about if the email contained a caveat: that the invoice would be paid, minus 20% – does that change your answer? Yep, not deducting an extra point or two for settlement, but an additional 20%. They really must need a lot of cash to invest in even greater supply of over-sized mugs with their logo emblazoned across them…
They’re certainly not the only retailer playing ‘games’ with suppliers: I heard about one major US retailer that owes a toy company $100k from stock shipped last year which is not responding to any requests to even discuss the situation, yet alone settle the outstanding payment. The buyer has passed on a generic ‘complaints’ email address and said there is nothing more that he can do. In this case, I’m not sure it is even worth asking the d*ck or no d*ck question of the buyer’s bosses (it’s certainly not the buyer’s fault).
Next up we have my old friends at Disney, which has furloughed 100,000 of its employees in the US, making them reliant on state benefits (bear in mind that the US furlough arrangements are nowhere near as generous as the UK’s system). At the same time, Disney is going ahead with eye-watering executive bonus schemes (Bob Iger took $47m last year, while his successor Bob Chapek could potentially earn an annual bonus “of not less than 300%” of salary, in addition to a long-term incentive award of “not less than $15m”). That’s not all – there is also the small matter of $1.5b dividend payments due in July, while Disney has $20b resources to draw on. So, is it fair and reasonable to ask ordinary US taxpayers to bail them out…. what is the $20b reserve for if not for situations like this? So, the Disney board, d*ck or no d*ck?
Next up, we arrive at my old friends Amazon…although with a twist (and not just because the Amazon legal team are avid readers of the Blog and probably have a bit of time on their hands right now). So rather than nominating Amazon, I am going to nominate the tax officials of EU countries for deciding that Amazon Europe is entitled to tax credits to the tune of 295m Euros because – and I quote – “Amazon made a loss last year because of the competitive retail environment.” Yes, that’s what they said – poor lambs, I do feel for them, really I do (even though revenues actually rose by 15% to 32b Euros last year). Following that logic, as Amazon’s turnover will clearly rise even further this year, does that mean they will lose even more money and require even bigger tax credits next year? To cap it all, last week, industry lobby group TechUK – which represents firms including Apple, Amazon, Facebook and Google – helpfully suggested that the government should scrap the proposed 2% digital services tax for a year to give these firms some “breathing space”. So, European governments and tax officials, are you going to be d*cks or no d*cks?
Now it’s the turn of Richard Branson, who has reiterated his request for a £500m bailout from the UK government, despite having based his UK-based company’s tax affairs in the Virgin Islands for the past 14 years because of his love of sun and kitesurfing (his defence, not mine) and not at all because it has allowed him to pay no UK tax for the past 14 years. This week, France, Denmark and Poland have made all bailouts conditional on the companies not being based in tax havens, which seems entirely reasonable request – so how about it Mr Branson, deal or no deal? Please say yes – I have already booked my flight to Hong Kong next January with Virgin and would very much appreciate the opportunity to travel should conditions allow that to happen.
I appreciate that looking that far ahead isn’t particularly realistic – we’re all managing day to day, taking things as they come. We’ve seen San Diego Comic Con and Toy & Edu China cancelled this week, while the Tokyo Toy Fair will surely not take place – we’re now into the second wave of cancellations, which are impacting events planned for the early part of the summer. Organisers of events in August, September and beyond will be watching developments closely, as some will soon have to make calls as to whether they can go ahead as scheduled. I have spoken off the record to numerous event organisers, exhibitors and attendees, and let’s just say there are some optimists (nothing wrong with that), some realists and some who one might gently refer to as ‘somewhat disconnected from reality.’
One thing I can reassure you of – Toy World will continue to bring you all the latest news and developments as they happen. None of our staff have been furloughed; we are all still working to bring you the most interesting and relevant content to keep you informed and entertained for however long this thing takes to run its course. We are very much here for the long haul – we won’t be hibernating until it blows over, then miraculously reappear asking for your money. We’re right here with you, working through it, supporting the industry in the best way we can. Our May print issue will be coming through your doors at the end of next week – the team has worked incredibly hard to create a wealth of original content, the vast majority of which hasn’t previously appeared on our website.
I’d also like to thank all those fantastic toy and media companies which are continuing to support us in these challenging times by maintaining advertising commitments, or even just settling outstanding invoices, which allows us to carry on doing what we do.
So please keep us up to date with what you are doing to navigate these challenging times: we want to share your news and developments with the toy community as we all try to find a way through to the other side….together.