And I go to work at nine
I got no time for livin'
Yes, I'm workin' all the time
It seems to me
I could live my life
A lot better than I think I am
I guess that's why they call me
They call me the workin' man
'Cause I get home at five o'clock
And I take myself out an ice cold beer
Always seem to be wondering'
Why there's nothin' goin' down here
I guess that's why they call me
They call me the workin' man
"Workin' Man" - Words & Music by Lee & Lifeson
Looking at this period of my employment, it's clear that some kind of tutorial on how to handle money should have been part of the selection process when contracting distributors. Distributors, like carriers, were independent contractors. We didn't pay them for their time, they earned a profit on the difference between the cost of the papers and what customers paid them. Generally when contracting a new one, we got them a list of carriers and customers and left them to it. This just about guaranteed that the papers were delivered, but that's about it.
In addition to the whole issue of cash flow that was covered in the previous installment, there was the fact that home delivered papers cost the distributor a different price than the "single copy" papers, i.e. those that were sold from vending machines. This became a problem once we had converted a distributorship to office billing. One particular distributor in Falls City was one of the few who understood the cash flow situation and had no problem making the transition to office billing. (i.e. he wasn't spending money that wasn't his) But this distributor, like many other who were now receiving a "profit check" every two weeks, viewed it as a "paycheck" and didn't understand when it varied according to the number of papers they ordered. In a typical distributorship the distributor received income from, not only the profit check, but from the cash in the form of quarters that they removed from the vending racks. There was a period of time when the number of subscriptions were dropping, but the number of papers sold in the vending machines was increasing. This caused the amount of the profit check to decrease, since in addition to the credit for what a customer paid for the paper, and the charge for the home delivery papers, there was also the charge for the papers going in to the racks. Of course this was balanced by an increased amount of money in cash, but it was hard to get them to understand. More math:
Let's say we have, like we did in Part VIII, 2000 papers in a city. 1500 of them are subscriptions and 500 are sold from racks. The subscriptions are billed at $1.00 each, and cost the customer $2.00 for $1.00/week in profit. The papers in the racks are billed at an average of $1.50/week, for a weekly profit of $1.25. In this example:
Net profit from subscriptions: $1,500
Charge for single copy: $750
Profit check: $750
Cash from racks: $1,375
Total profit: $2,125
But let's say the total numbers stay the same, but the ratio changes, say 1,250 subscriptions and 750 single copy
Net profit from subscriptions: $1,250
Charge for single copy: $1,125
Profit check: $125
Cash from racks: $2,062.50
Total profit: $2,187.50
The net profit has increased by $62.50, but since the check has decreased by the same amount, the illusion is that the distributor is making less money. My Falls City distributor was in a similar situation, and since he wasn't keeping track of the money he was collecting from racks, he thought he was making less money for the same amount of papers. It took a lot to convince him that he was actually ahead, but math is hard for some people.
[The numbers I am quoting are for illustration purposes, I have no clear memory of what the World-Herald was charging for papers back then, or what the profit per paper was]
So I was dropped into this culture of lack of understanding of simple math, let alone the economics of profit/loss and cash flow. It was bad enough when I was auditing a distributor who had been contracted for a number of years, but in some cases there was a succession of distributors, one after the other, often starting out in the financial hole because the previous distributor had failed to transfer over future payments and the sales rep hadn't caught it. It was a mess of unbelievable proportions. It didn't help that some of the sales reps, ostensibly representing the company, sympathized with the distributors and undermined me as I showed up to do audits. One of the worst was in Grand Island.
Grand Island was divided into two distributorships, and both of them saw a parade of distributors presiding over the chaos. The district also included Hastings, also divided into two distributorships. One of my more memorable meetings was with a distributor who was delinquent in her payments. When showing up for audits I always dressed in a suit and tie to impress upon them the seriousness of my visit, even though the usual dress code was a bit looser, more like business casual. (I also dressed this way for court, a coworker once called them my "ass-kicking clothes") Whenever I arrived at an audit, usually for a distributor whom I had never met, I always introduced myself as "Tom Joyce, World-Herald Collections". Jackie, the sales rep for this area, who would end up quitting shortly after this audit, had apparently been coaching the distributor. My introduction was met with the response of "You're not nobody, you're just a paper pushin', number crunchin' son of a bitch". It didn't get any better from there on in.
The district that included Grand Island had been part of the western Nebraska Zone, number 7, but had been moved to Zone 5, the southeastern Nebraska region, where Michelle, my old manager was still in charge. This district was such a mess, that after Jackie quit, management decided that I would be sent in to clean it up before they would hire a new sales rep. I had done this for another district not long before and they apparently thought that I was the guy to fix all the issues. Of the Grand Island and Hastings distributorships, three of the four were open, i.e. substitutes were delivering the papers to the carriers while I paid the carriers, collected from the vending machines and tried to get things in order before we hired new distributors. Before I took over the distributorships had been converted to office billing, but I had not been involved in the conversion. In theory all the advanced payments had been transferred to the corporate office, but we found out much later that only around 75% of the customers were actually being billed, and of that 75% around a third were in arrears. This problem was hidden for quite a while. The cash that had been transferred from the previous distributor to the company run "office distributorship" was large enough that the bi-weekly statement showed a credit balance for over a month, maybe two. Since that cash transfer only represented a portion of the customers who were receiving papers, and since the statement billed the office account for the full amount of papers delivered, pretty soon the office account, which I was responsible for, started showing a balance due. Each week I collected quarters from the racks and deposited the funds, but it wasn't enough to balance out the fact that half the customers weren't paying for the papers.
When I realized what was happening I tried to fix the problem. Many of the carriers couldn't produce route lists with names and addresses of customers. I suggested dropping the number of papers to match customers that we could verify and rebilling anyone who called to complain, but this idea was rejected. We had carriers hand deliver bills to all customers who we didn't have on our lists, and received only a trickle of payments. One of the things that I suspected was that the recently quit sales rep had artificially inflated sales number in order to earn a bonus. I'd seen this before. Before the days of office billing it was hard to verify whether a new customer was real or not. It was pretty clear by this juncture that a large percentage of papers were being delivered to people who didn't want them, or at least didn't want to pay for them. Again I explained to Michelle, the manager in charge of the Region, (Zones had been renamed Regions) the situation. She explained it to upper management, but we were still prevented from decreasing the number of papers.
The price paid by a subscriber for a paper doesn't come close to paying for the cost of producing that paper. Advertising is what paid the bills. But high circulation numbers served to justify higher advertising costs. The Audit Bureau of Circulation was an outside entity that confirmed circulation numbers so that the advertising sales reps wouldn't be tempted to inflate them. But if papers were being delivered and there was no evidence that they weren't being paid for, they counted toward your circulation numbers. Patrick D, the State Circulation Manager at the time, simply was unwilling to take a huge hit to the sales figures.
During all of this I was shielded somewhat from what was being discussed among the big dogs of Circulation. I informed Michelle of the problems, and I assumed that she was educating Patrick D about why it wasn't going to get better. I don't know if she was doing a poor job of communicating or Patrick just didn't want to hear it, but we both were summoned to Omaha for a meeting one afternoon. In the course of the conversation it became clear that Patrick thought that Michelle and I were mismanaging the district, or even possibly stealing money. He was adamant that the "missing" money was due to some malfeasance on the part of one or both of us. I tried to explain it was only missing on paper - that the balance due was there, and would only get larger because we were delivering more papers than we were getting paid for. He was not interested in anything I had to say, and made it clear that both mine and Michelle's jobs were on the line. I couldn't believe it, I couldn't believe that he would think that we would steal from the company and I couldn't believe that he couldn't understand simple math.
Here's where I shot myself in the foot. Not long before I had been out collecting quarters from the vending racks. I had around $300 in a bank bag - I don't recall why I put the bag on top of my car, but I did - and drove off, losing it. Already Patrick had been making noises about the shortfall in the distributorship, and I was afraid to admit that I lost $300, so I didn't say anything, figuring that with all the other losses, it would go unnoticed. And it did, up to that point. (By this time the on paper shortfall was several thousand dollars) Scared that Patrick would somehow find out about the lost bank bag, I took $300 of my own money, bought a money order and deposited it, claiming that I had "found" a money order that I misplaced and forgot to deposit. I didn't think Patrick would believe the true story. Well, he didn't believe the fake story either, and saw it as evidence that I was up to something shady. I was called into his office and confronted with the fact that the date on the money order was a few days old, refuting my story. I chose not to try and defend myself. Amazingly, I was not fired, but I was demoted back to my old job, which had just come back open - southeast Nebraska, District 55.
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