Monday, October 22, 2007

POTW: Go Sox?

My good friend Craig is a rabid Red Sox fan, in addition to boisterously backing Michigan and the Vikes. (BTW, he grew up in Lodi, CA ... go figure.) Craig is also a quanthead finance pro. To wit, he'll get a chortle out of this week's timely -- given the Sox game-seven victory -- POTW courtesy of Freakonomics: Here’s Why Yankees Fans Aren’t the Only Ones Rooting Against the Red Sox.

The scoop: Earlier this year, a Massachusetts furniture chain unveiled a could-be-quite-costly marketing gimmick: if the Sox went on to win the 2007 World Series, all furniture sales made between March 7 and April 16 of this year would be refunded. No joke.

The chain, owned by Berkshire Hathaway, sensibly bought an insurance policy to cover the possibility (probability?) of a Sox victory. The full cost of the promotion -- total sales are somewhere in the $20 million ballpark -- reportedly amounted to the “license fee paid to the Red Sox to use their name, advertising spots, and a little bit of insurance.”

Talk about fanatical dissonance.

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