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CNN10 2019-10-03

CNN 10

Debate Over Paying College Athletes Flares Up; Popular U.S. Retailer Files for Bankruptcy; Exploring the Calculation and Creativity in Branding

Aired October 3, 2019 - 04:00:00 聽 ET


CARL AZUZ, CNN 10 ANCHOR: Hi, I'm Carl Azuz. We're happy to have you watching CNN 10. Today's show starts with a debate. Should America's college athletes get paid? This has been a controversy for a while, what's new this time around is that the state of California has just passed a law called the Fair Pay to Play Act. It would allow college athletes to sign endorsement deals and earn money from their names or images. The law doesn't take effect until 2023 which allows time for legal challenges to play out and it goes directly against rules set by the National Collegiate Athletic Association. The NCAA oversees student athletes from across the country. It also organizes athletic programs for American and Canadian college and the NCAA brings in roughly $1 billion per year in revenue, but it's a not for profit organization.

It says it gives 96 percent of the money it takes in back to schools. Still, the schools themselves profit from sports and the NCAA doesn't allow college players to sell autographs or make money off their You Tube channels. California's new law would change that. The state says that scholarships or free college attendance, which many top athletes receive, doesn't count as pay. But the NCAA says that if California allows athletes to profit and other states don't, it will remove equality in college sports and give California an unfair advantage in recruiting players from across America. Critics also say the law will blur the line between pro-sports which pay and amateur sports which don't. California's governor says the only college students who can't profit off their own images are athletes.


ANDY SCHOLES, CNN SPORTS ANCHOR: What does this new law mean? Well starting 2023, college athletes in California will be able to profit from the use of their name, image and likeness. That means star quarterbacks can make money from their jerseys. College basketball stars can sign shoe deals and every college athlete could use their status to make money hosting camps or by doing ads. Now the NCAA says that this law is unconstitutional and in a statement said, as a membership organization NCAA agrees changes are needed to continue to support student athletes, but improvement needs to happen on a national level through the NCAA's rules making process.

But Governor Newsom calls the NCAA system a bankrupt model. The NCAA makes more than $1 billion in revenue each year but colleges and universities athletic programs bring in far more money and outside of scholarships and stipends, student athletes don't see any of it. Now critics of the bill which include the PAC-12 Conference contend there will be unintended consequences as a result of the law like advantages for recruiting due to the current system. Now the NCAA claims a patchwork approach will only create problems and confusion for the more than 1,100 campuses and nearly half a million student athletes nationwide. Now NCAA has appointed a working committee to examine this issue and it is expected to release its findings in October. While California is the first state to pass such a bill, several others could join them and allow student athletes to cash in off their name, image and likeness but the NCAA believes this will only make things worse.

Saying, it is clear that a patchwork of different laws from different states will make unattainable the goal of providing a fair and level playing field. Now Washington, Colorado, New York, Florida and South Carolina are in varying stages of exploring similar legislation. Now the big question is, what happens next? Well many experts think the law and subsequent deadline will force the NCAA's hand and that if anything it will result in making the organization put forward a national level solution of its own. Now there's still a lot of time and many different scenarios that could play out between now and 2023 when the first college player would be eligible to cash a check. Andy Scholes, CNN.


AZUZ: 10 Second Trivia. Which of these clothing retailers was founded the most recently? H&M, Forever 21, Lane Bryant, or Zara. When Forever 21 first opened its doors in California, the year was 1984.

And this week Forever 21 announced it was closing the doors of as many of 350 stores worldwide including 178 in the United States, that's about a third of the stores that operates in America. The company has filed for bankruptcy. This doesn't mean that Forever 21 has gone out of business.

People can still shop in the open stores and online. But what its trying to do is reorganize itself, to cut costs and reduce debt so it can be a money making business once again. Four years ago, Forever 21 made $4.4 billion in sales. How did it go from that to bankruptcy? Market analysts say blame the internet. People are shopping more online which strains the finances of companies that have hundreds of physical stores.

And though Forever 21 has a website, its sales only account for 16 percent of Forever 21's revenue. The company's closures are a small part of more than 8,200 store closings that have been announced so far this year. It's a new record and it's happening at a time when the economy is strong, unemployment is low and people are still spending money. They're just doing less of it at shopping malls where so many of these stores are found.

One thing you might not have known about Forever 21 is that its original name was Fashion 21. Its founder once told CNN that its older customers wanted to be 21 again and its younger ones wanted to be 21 forever. As any marketing expert will tell you branding is a major part of the business.


DAVID PLACEK, FOUNDER AND PRESIDENT OF LEXICON BRANDING: I had to fight really hard to just to keep my BlackBerry. One of the executives asked me, why are you confident this will work, you know. My answer was because none of your large competitors would ever take Blackberry and the rest is history. I'm David Placek. I'm the founder and president of Lexicon Branding. Our company has come up with some of the world's most well recognized names. So there's an area of linguistics called sound symbolism which really says the individual letters of the alphabet. The sound of those letters evokes their (inaudible). So Swiffer's a cleaning product. We said, well what is the sound of cleaning products. We describe things as sweeping and swiping and mopping. So we started to mimic those sounds and you go from sweep to swife, that's not that attractive. So then we put an f on there and then it - - then it becomes swiff. Then we look at legal situations and trademark clutter and we put an e on it and finally moved to an er.

UNIDENTIFIED FEMALE: Stop cleaning. Start Swiffering.

PLACEK: They're five types. There is real words. The next block over would be real words that stem from Greek, Latin and Sanskrit. Then there's compressions like taking a word and shrinking it down. Then there's constructed words and then finally coin solutions. The first thing we do is we try to understand what the story is. We are as humans hard-wired for story. We don't have to describe it. We don't have to tell people what the product is but we do have to tell the people, hey, listen to us. Blackberry's an interesting story. They had tried for a number of weeks to develop, really what were descriptive names with things like easy mail and pro-mail. They were rejected from a trademark standpoint.

We did some research and what we noticed about email and messaging and texting was that people's blood pressure went up. Let's create some names that decrease it. We started pursuing things that relax you. Someone wrote strawberry for summit (ph). Our head linguist, he wrote a little note saying this is too slow, too long and underneath it he wrote blackberry. Coca-Cola's Dasani, Coke came to us under a lot of pressure.

They weren't in the bottled water business. So we were able to identify between Mexico and Canada over 900 brands of bottled water. Most of them descriptive, Poland Springs, Aquafina, things like that. So we had a tremendous trademark barrier to overcome because everyone is trying to be descriptive. Let's create a coin solution.

We put san, the Latin root for health, right in the middle of the word, not in the beginning because that would lead to sanitary and sanitation and things like that. And then we built letters around that and now it's Dasani right? So its easy to pronounce, has a great pattern, ends with a nice slim I because people drinking water want to be healthy. We're all about being distinctive, being rememberable (ph)


AZUZ: For Cade Level (ph), a nine year old from Minnesota it was just another 5 kilometer race until it wasn't. A volunteer told him to go the wrong way and the 4th grader soon found himself on a 10K course surrounded by adults, but he made up his mind to complete the race and though his mother was waiting at the 5K finish was worried sick. Her fear turned to pride when Cade (ph) not only finished the longer course, he actually won the 10K race. His "Nikeys" to victory, to be a champion you've got to get "Reeboked" to "Asics", "Pumaraking" the best effort "Ms. Younohow" even if that means finding a "New Balance" or having a "Sketcher" out a new route. You got to make an "Adidosh" for the finish. Even when you don't "Fila" like it. I'm Carl Azuz making "Converse-ation" on CNN 10. END