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