Ultralight version of complex story just would not fly

By DAVID MOON, Moon Capital Management
April 14, 2002

I seldom read USA Today; it reminds me of Weekly Reader for grownups or how an all-news television channel might look if it was run by MTV. Lots of color. Short stories. Very little substance. (I guess I can kiss that USA Today gig goodbye, now.)

This past week, I spent a rare four minutes reading a special USA Today section on the travel industry and had my long-held beliefs re-confirmed. One article described the airline industry decision to eliminate travel agency commissions and its especially onerous burden on minority-owned travel agencies. At first, I read through the comments without thinking. (Lots of color pictures and very short articles can do that to you.) Then it hit me; airlines are not discriminating on the basis of race. Airlines eliminated commissions for all travel agencies, not just those owned by minorities. But if that is the case, how can USA Today write that an elimination of commissions creates special challenges for minority owned agencies?

(Uh-oh. Trashing USA Today and discussing race in the same column. Here come the letters.)

The article features an African-American agency owner, Norma Pratt. She notes that, unlike years ago, most African-Americans now choose their travel agent based on issues other than race, so she has lost most of her minority business. The loss of airline commissions will cause many minority-owned agencies to close.

As tragic as that is, is it because the agencies are minority-owned? If all you read is USA Today, you would never really know. The article never asked or answered the question of why the commission elimination unduly affected minority-owned agencies. It merely stated it as fact.

The USA Today article notes that "most minority owned travel agencies do probably $1 million a year or less. The airlines have practically put a whole group of people out of business." The implication is that the airlines are hurting the minority owned businesses, when the reality is that the new commission structure hurts small agencies - whether they are owned by black, brown, white, purple or green people.

USA Today's intent may have been to explore why so many of minority-owned travel agencies are small. They might have described the plight of small business in an industry with falling prices and volumes. The paper could have discussed the great strides made by many minority business owners. Instead, the paper wrote a very short article stating that the elimination of airline commissions disproportionately affects minority-owned businesses, then never explained why. The simple fact is that the airline move most hurts small agencies ' and most small agencies are not minority-owned.

Ms. Pratt's agency generates $17 million in annual revenues - 17 times the admitted size of the typical minority-owned agency. (She noted that her survival plan includes more subcontracting opportunities with American Express. Presumably, this allows American Express to use minority-owned businesses in an attempt to meet certain government or other client imposed minority quotas. Interesting.)

I admit that I am often too quick to dismiss certain charges of racism. Many white people are, though few will admit it. There is an entire industry of people who cry 'wolf' so often that it is sometimes difficult for observers to distinguish between real racism and the concocted type.

One of the core challenges of race relations is the matter of distrust between certain groups of people, most of whom do not actually know each other. (I've found it more difficult to distrust someone you know and with whom you've shared a meal, regardless of his or her skin pigmentation.) When a national newspaper publishes an illogical and poorly reasoned story seeking sympathy for a group of people because of the color of their skin, the story has the opposite affect. It creates more distrust, resentment and it actually damages those whose plight the article purports to describe.

David Moon is president of Moon Capital Management, a Knoxville-based investment management firm. This article originally appeared in the News Sentinel (Knoxville, TN).

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