Paying College Athletes, Forever 21 Bankruptcy

Grind for October 6th
FIRST SIP:
“Play the game far more than you can afford to lose…only then will you learn the game.” – Winston Churchill



Play Ball

The Headline

California wants to pay college athletes

The Grind

California Governor Gavin Newsom this week signed a bill that allows college athletes to sign endorsement deals and hire agents.The new law is “the beginning of a national movement,” proclaimed Newsom on Monday.

“Collegiate student athletes put everything on the line – their physical health, future career prospects, and years of their lives to compete. Colleges reap billions from these student athletes’ sacrifices and success but, in the same breath, block them from earning a single dollar,” argues Newsom. “That’s a bankrupt model – one that puts institutions ahead of the students they are supposed to serve.”

The Details

Critics say free or reduced tuition is more than adequate compensation, while supporters of the law say athletes deserve more.

“All throughout the athletic department, people are making six-figure salaries. It does not go to the players, what I call the unpaid workforce,” says former NYT journalist Michael Sokolove.

California’s Fair Play to Pay Act contradicts NCAA rules that ban student athletes from accepting money for “the use of his/her name or picture to advertise, recommend, or promote directly the sale or use of a commercial product or service of any kind.”

In a statement released Monday, the NCAA Board of Governors said that changes affecting student athletes should be made on a national level through the NCAA’s processes.

“Right now, nearly half a million student athletes in all 50 states compete under the same rules…This bill would remove that essential element of fairness and equal treatment that forms the bedrock of college sports,” said the NCAA, adding that much of its annual revenue is already used to provide scholarships and other opportunities for students.

Unless it is blocked by the courts, California’s law will take effect starting January 1st, 2023.



Its All Good

The Headline

Forever 21 files for bankruptcy, exits Asia and Europe

The Grind

California-based clothing store Forever 21 filed for bankruptcy protection in the United States this week.

The fashion retailer plans to close most of its stores in Asia, Europe, and Canada and will shut down 178 of its stores in the US.

In total, the chain expects to close up to 500 of its 800 stores.

“This does not mean that we are going out of business,” wrote Forever 21 in a public letter. “On the contrary, filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future.”

The Background

Forever 21, founded in 1984, is known for trendy clothing and accessories at low prices. The chain has been involved in multiple controversies including labor practice issues, copyright infringement, and religion.

According to Forbes, Forever 21 has faced 50 copyright violation lawsuits.

In 2011, the retailer paid $1 million to settle a lawsuit after its jewelry was found to contain toxic levels of cadmium. The store has also been accused of promoting Christianity, fat-shaming customers, and giving out incorrect change.

“Over the past few years, the brand has lost much of the excitement and oomph which is critical to driving footfall and sales and is now something of an also-ran which is too early overlooked,” said Neil Saunders, managing director of GlobalData Retail.

“Store standards have also been sliding and consumer ratings for the quality of displays, merchandise, and the amount of inspiration in shops have dipped considerably over the past year.”

As part of the bankruptcy filing, Forever 21 says it has obtained $275 million in financing from existing and new lenders.




GOOD TO THE LAST DROP:
Did you know… Chop-suey is not a native Chinese dish, it was created in California by Chinese immigrants.