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Old 05-02-2020, 04:44 PM
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Lindblad Expeditions and Government Bailout


A luxury cruiseline associated with National Geographic received 6.6 million under the Paycheck Protection Program. Washington Post and others reported on this cruiseline (market capitalization of $300 million)--and, under pressure from their wealthy clientele, gave the money back. The founder has an op-ed in the Washington Post, arguing that they shouldn't have to do so: they'd planned to keep all their employees on payroll, but will now have to furlough and fire workers.

I'm of mixed minds about this. On the one hand, I'm all in favor of keeping employees on payroll during tricky times. On the other hand, in terms of industries that need protection, luxury cruises* are pretty near the bottom of the list. On the third hand, I do wonder if Lindblad's ability to expose wealthy people to endangered natural setting may, as they suggest, encourage those people to support environmental initiatives.

What do y'all think?

* Complicating factor: while I could never afford one of their cruises, I've gotten to go on two of them, due to a family connection, and got to visit Antarctica and Baja, Mexico. I know that they hire pretty great naturalists, and that they have nightly lectures that heavily promote environmental issues. But I also know that these are at heart high-end luxury vacations for the elite, not exactly an essential service. I'm highly biased, in other words.
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Old 05-02-2020, 04:46 PM
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Screw this crap that let big companies empty the coffers for a program that was intended for actual small businesses. 6 Millions could keep how many actual small businesses afloat?
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Old 05-02-2020, 08:34 PM
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Looks like all their ships are registered in non-US countries, as far as I can tell. Fuck ‘em. Let the company die, if the Bahamas and Ecuador aren’t willing to bail them out.
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Old 05-03-2020, 02:33 AM
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Originally Posted by Left Hand of Dorkness View Post
A luxury cruiseline associated with National Geographic received 6.6 million under the Paycheck Protection Program.
Gosh, how could a link to NatGeo have political muscle? Controlling interest in [NatGeo] magazine has been held by The Walt Disney Company since 2019. Surprised? I guess Disney needs the money, what with parks, hotels, and cruises gone kablooey. Who owns Disney? A bunch of investment firms and banks. Poor billionaires! (Lauren Powell Jobs dropped from the top-10 owners list.)
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Old 05-04-2020, 09:19 AM
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Gosh, how could a link to NatGeo have political muscle? Controlling interest in [NatGeo] magazine has been held by The Walt Disney Company since 2019. Surprised? I guess Disney needs the money, what with parks, hotels, and cruises gone kablooey. Who owns Disney? A bunch of investment firms and banks. Poor billionaires! (Lauren Powell Jobs dropped from the top-10 owners list.)
NatGeo doesn't own Lindblad - it's a public company and I don't think anyone has a a controlling interest. They market some tours in association with National Geographic.

The other statement is awesomely, hilariously silly. Investment firms and banks don't own Disney - the millions of shareholders do. Hell, I own Disney - or at least a small slice of it. But it's all run through funds or banks, because that's the easiest way to own stock.
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Old 05-04-2020, 10:44 AM
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They're right at the somewhat arbitrary boundary between micro- and small-cap. The loan would have worked out to about $14k per American employee, assuming that's where it was all going.

I know I've heard complaints about cruise companies not using US-flagged ships or employees; I don't know if that applies here.
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Old 05-04-2020, 11:03 AM
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There was absolutely no need to bail out any cruise lines, they are the very definition of non-essential industries. Shouldn't have gotten a penny.
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Old 05-04-2020, 11:16 AM
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There was absolutely no need to bail out any cruise lines, they are the very definition of non-essential industries. Shouldn't have gotten a penny.
Got it. Employee paychecks should only be protected if they work in essential industries. Otherwise, furlough furlough furlough.
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Old 05-04-2020, 11:25 AM
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Got it. Employee paychecks should only be protected if they work in essential industries. Otherwise, furlough furlough furlough.
If the owners are avoiding US taxes, then they should figure out how to look out for their employees without actual US taxpayers becoming involved.

It’s sort of like me going to State Farm to ask for money to repair my house that was leveled in a tornado. Sure, I stopped paying premiums long ago... but I’m an American!!!!
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Old 05-04-2020, 11:27 AM
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The other statement is awesomely, hilariously silly. Investment firms and banks don't own Disney - the millions of shareholders do. Hell, I own Disney - or at least a small slice of it. But it's all run through funds or banks, because that's the easiest way to own stock.
Sure, it’s like how Elon Musk has rights to something like 40% of Tesla stock, but miiiiiiiilllllllllions of people divide up the remaining part among themselves! America owns Tesla, yay!
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Old 05-04-2020, 11:34 AM
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Let them furlough their employees. The American employees will be eligible for unemployment, plus the additional $600 per period. I don't see what the problem is there?? That way, we know that the money is going directly to needy American taxpayers, rather than either management or their foreign employees. Their foreign employees can apply for unemployment in their home country.

To the broader question, I don't think cruise companies should get a dime. First of all, that industry might be permanently dead, so it's throwing good money after bad. Second, their ships are flagged in other countries to avoid taxes and US labor laws. Third, most of their employees aren't American anyway. Fourth, I have my doubts that much of the bailout money would actually make it to their employees, who tend to be severely underpaid relative to American workers.

So, screw them and the ship they sailed in on.
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Old 05-04-2020, 11:38 AM
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Originally Posted by Ruken View Post
They're right at the somewhat arbitrary boundary between micro- and small-cap. The loan would have worked out to about $14k per American employee, assuming that's where it was all going.

I know I've heard complaints about cruise companies not using US-flagged ships or employees; I don't know if that applies here.
Ravenman already stated that their ships are flagged in other countries. He didn't provide a cite, but do you have reason to doubt that?

Second, why would you think that all the money would be exactly evenly distributed among the American employees? That seems like a bizarre assumption. More likely, management would get lots and the employees, including their non-American employees, would get much less.

ETA: Here's their ship Orion which is flagged in the Bahamas, just as an example: https://en.wikipedia.org/wiki/National_Geographic_Orion

Last edited by RitterSport; 05-04-2020 at 11:42 AM.
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Old 05-04-2020, 11:39 AM
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Sure, it’s like how Elon Musk has rights to something like 40% of Tesla stock, but miiiiiiiilllllllllions of people divide up the remaining part among themselves! America owns Tesla, yay!
No. The largest stockholder is actually Steve Jobs' widow with 7.5% (am not sure, but believe that was part of the Dreamworks deal). The company is mostly owned by relatively small shareholders rather than big "name" investors. The owners-of-record like Vanguard and Blackrock don't really hold stock for themselves; they buy on behalf on their own customers who really "own" the shares.


That being said, it's a side topic. Cruise lines are very low on the priority list of anybody who should be getting bailouts, but the PPP was about helping employees, not employers. Your mileage may vary on whether Lindblad should be an acceptable recipient of the funds. I personally am of the opinion that the program should have exclusively targeted small businesses, at least initially, so I do not think they should have benefited but only because it would be the wrong program. They qualified under the actual law as written. Though one can also blame Congress for being lazy, stupid, and eager more for grandstanding than actually trying to make good public policy, a habit which I think will not stop no matter which party claims power.
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Old 05-04-2020, 11:48 AM
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Third, most of their employees aren't American anyway.
The PPP required that the majority of the money taken be spent on employee payroll in order to be eligible for loan forgiveness, but was there any requirement that the employees be US citizens, residents, or nationals?
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Old 05-04-2020, 12:27 PM
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Thanks for the input, y'all. Like I said, I have some pretty serious bias here; but I don't find much to argue with in what y'all are saying about avoidance of US taxes. I'm curious if anyone knows how to dig up what a corporation pays in US taxes?

As for the nationality of their employees, I think they tended to have a lot of the client-facing employees be American or European or Australian, while a lot of the service staff (laundry, maintenance, kitchen, etc.) were Filipino and other nationalities. But I don't have a source for that.

Last edited by Left Hand of Dorkness; 05-04-2020 at 12:28 PM.
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Old 05-04-2020, 12:35 PM
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Thanks for the input, y'all. Like I said, I have some pretty serious bias here; but I don't find much to argue with in what y'all are saying about avoidance of US taxes. I'm curious if anyone knows how to dig up what a corporation pays in US taxes?

As for the nationality of their employees, I think they tended to have a lot of the client-facing employees be American or European or Australian, while a lot of the service staff (laundry, maintenance, kitchen, etc.) were Filipino and other nationalities. But I don't have a source for that.
When I've been on cruises, many, many of the client facing people (waiters, for example) were from countries outside of the Western world, but I didn't take a poll.

According to their latest 10-K, they paid $2.2 million on $21 million in income in 2019, $616k on $12.2 million in 2018, and $10mm on $2.4 million in 2017.

I don't know what happened in 2017 that they had tax expense well in excess of their income before taxes, and I don't really feel like researching it.
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Old 05-04-2020, 12:39 PM
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The PPP required that the majority of the money taken be spent on employee payroll in order to be eligible for loan forgiveness, but was there any requirement that the employees be US citizens, residents, or nationals?
The applicant is asked whether he is a US citizen or permanent resident, and I believe the application asks whether the employees are based in the US.

But to the other point raised earlier about how Congress should have written the law better, I agree; but nobody is forcing businesses to apply. What is legal (applying for a taxpayer subsidy) is not always ethical (fuck you, tax avoiding companies).
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Old 05-04-2020, 12:45 PM
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It’s just another example of the inconsistent messaging and incompetent response coming out of the federal government.

If the intent of this law was to help the kind of business that most people consider a small business, the law should’ve been written differently. Writing the law to allow these companies to access help and then shaming and threatening them when they try to take advantage of it is bad governance.

Like many of these hastily written laws to help people and companies affected by the shutdown, it’s manifestly unfair to lots of people. The lottery aspect of these programs is bothering me a lot. Frankly, the law should’ve been structured as an entitlement and not dependent on the size of the money pool. If your business meets the requirements, they get money based on a formula. And those requirements and formulas needto take into account the actual impact of the virus upon each individual business.

There are businesses that aren’t hurt that are eligible for this money. They can use it to maintain a payroll they would’ve largely maintained anyway, and they can use their other money for stuff they wouldn’t have been able to afford otherwise.

Similarly with the stimulus, it should’ve been targeted to people affected by the virus.

I understand that they had to get this legislation done fast, BUT IT DIDN’T HAVE TO BE THAT WAY.

Just imagine, if back in February, our government had addressed the possibility of a shutdown. The could’ve began to craft a better, more surgical relief bill that would’ve given us more bang for our bucks. It would still be bad, but the impact would’ve been so much less if we had prepared. If we had competent leadership it would’ve been really different.

Last edited by Ann Hedonia; 05-04-2020 at 12:45 PM.
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Old 05-04-2020, 01:08 PM
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Originally Posted by smiling bandit View Post
The other statement is awesomely, hilariously silly. Investment firms and banks don't own Disney - the millions of shareholders do. Hell, I own Disney - or at least a small slice of it. But it's all run through funds or banks, because that's the easiest way to own stock.

This reminds me of Milo Minderbinder, whose contracting out the Germans to bomb of his own base was justified by the fact that, all the residents of the base were share holders of his syndicate and so being bombed was in their own best interest.

Last edited by Buck Godot; 05-04-2020 at 01:12 PM.
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Old 05-04-2020, 01:30 PM
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The other statement is awesomely, hilariously silly. Investment firms and banks don't own Disney - the millions of shareholders do. Hell, I own Disney - or at least a small slice of it. But it's all run through funds or banks, because that's the easiest way to own stock.
Uh... okay, that's not how brokerages work. The majority of Disney (and really, virtually Everything) is owned by one entity, Cede & Co. If you have stocks in a brokerage, you don't own them. They are not in your name, and you cannot use them to vote.

What you do own is a "beneficial claim" to the stock. This obligates the brokerage to vote as you request (but even the brokerage doesn't own the stock, and only passes this vote along down the chain of claims until the actual owner votes). You can "sell" the stock, but that's not a transfer of ownership, it just transfers your beneficial claim to someone else.

In order to actually own a stock, you must speak directly with their transfer agent and enroll in Direct Stock Ownership. That doesn't happen through brokerages.

You don't own Disney. You own a claim against E-Trade or whomever.
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Old 05-04-2020, 02:22 PM
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Ravenman already stated that their ships are flagged in other countries. He didn't provide a cite, but do you have reason to doubt that?
Since I hadn't found a list, I was curious if anyone else had.
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Second, why would you think that all the money would be exactly evenly distributed among the American employees? That seems like a bizarre assumption.
Your response is what's bizarre. If we assume A, then B. If we assume X, then Y. That says nothing about whether the assumption is likely, at least not in the English I use. I neutrally posted a boundary condition so others didn't have to do the math.
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More likely, management would get lots and the employees, including their non-American employees, would get much less.
That's certainly a possibility. If you have evidence to support your assessment, I'm sure everyone would love to read it.
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Old 05-04-2020, 02:22 PM
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Uh... okay, that's not how brokerages work. The majority of Disney (and really, virtually Everything) is owned by one entity, Cede & Co. If you have stocks in a brokerage, you don't own them. They are not in your name, and you cannot use them to vote.
I am an incredible stickler for precision and even I think going into that explanation is irrelevant. In every way, shape, and form that it matters, I can be said to "own" the stock although, yes, you are correct that it's all technically placed into a meaningless black-box of a shell. I can buy it, I can sell it, I get to decide stock votes, and I receive dividends.
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Old 05-04-2020, 02:27 PM
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The lottery aspect of these programs is bothering me a lot.
I agree with most everyone else you wrote that I snipped out, but this one really bugs me too. There's the lottery aspect of getting PPP money, then there's the whole weirdness where we have the unemployment supplement vs PPP money, both coming from the feds, but often leaving people in very different situations.

I know other countries have payroll retention plans as part of their unemployment system. So it's not like we needed to reinvent the wheel here. But that would have required foresight.

Last edited by Ruken; 05-04-2020 at 02:29 PM.
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Old 05-04-2020, 02:29 PM
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Since I hadn't found a list, I was curious if anyone else had.
Your response is what's bizarre. If we assume A, then B. If we assume X, then Y. That says nothing about whether the assumption is likely, at least not in the English I use. I neutrally posted a boundary condition so others didn't have to do the math.
That's certainly a possibility. If you have evidence to support your assessment, I'm sure everyone would love to read it.
I can't cite a hypothetical, since they returned the money.

What do you think about letting them furlough their employees so they can get unemployment plus the $600 bonus -- doesn't that seem to be a more effective way to get money into the hands of the people that need it? It certainly eliminates any possibility that management decides to use any bailout money to pay themselves or their foreign workers, right?
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Old 05-04-2020, 03:20 PM
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Since I hadn't found a list, I was curious if anyone else had.
I never found a comprehensive list. Obviously, National Geographic nor Lindblad advertise it. But if one googles the names of the ships of their fleet, you can find them. Seemed like most of their ships are registered in the Bahamas and one or two in Ecuador. But I didn’t look up all of them.
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Old 05-04-2020, 08:16 PM
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No. The largest stockholder is actually Steve Jobs' widow with 7.5% (am not sure, but believe that was part of the Dreamworks deal). The company is mostly owned by relatively small shareholders rather than big "name" investors. The owners-of-record like Vanguard and Blackrock don't really hold stock for themselves; they buy on behalf on their own customers who really "own" the shares.
Lauren Jobs cut her share in half and so is not in the top 10 of Disney owners. I'll get a cite if you wish. Small investors in big funds don't dictate a firm's actions - the big-fund managers do. Do you see any smallholders on Disney's board of directors?

Quote:
That being said, it's a side topic. Cruise lines are very low on the priority list of anybody who should be getting bailouts, but the PPP was about helping employees, not employers.
Employees can't usually buy legislators; employers do. And US pols are fairly cheap in the global market. Bribes Campaign contributions show a good ROI. And I'm wary of "should". Government should aim at helping those in need. Right. "Need" can be strangely defined.
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