Oracle CEO Larry Ellison is the fifth richest man in the world. And he hasn’t been shy about spending his fortune, estimated by Forbes to be $43 billion.
He’s bought a yacht that's five stories high, his own Hawaiian island, and a tennis tournament that’s going on right now in the Southern California desert near Palm Springs.
At first, the tennis world saw Ellison and his bank account as a boon.
The Indian Wells, Calif., tournament was on the verge of moving to Doha or Shanghai four years ago when Ellison bought the event and the 54-acre facility where it's played. Ellison was hailed as a savior, a hero...even Santa Claus with a tennis racquet.
Since then, the BNP Paribas Open has become so popular it’s now known as the “Fifth Grand Slam,” and attracts close to 400,000 fans to the desert. Players like Rafael Nadal lavish praise on the tournament -- and Ellison.
“It means a lot for me, and especially for tennis, to have somebody like Larry who is supporting our sport,” Nadal said this week. “The players can say thank you for all his support.”
Ellison’s support has been more than just shouts of encouragement from his courtside seat. He wanted to give players a raise, a $1.6 million bump in prize money.
The Women’s Tennis Association quickly approved the increase. But the men’s tour -- the Association of Tennis Professionals (ATP) -- didn’t. The board, made up of half players and half owners, deadlocked.
Players, like Britain’s Andy Murray, were stunned that an organization that's supposed to represent them would allow money to be left on the table.
“Obviously everyone was disappointed with the decision," Murray said. “My opinion is that if a tournament wants to increase its prize money, it should be allowed to. I don't see why we should be blocking that.”
After months of delay, the head of the ATP cast the tie-breaking vote, approving the prize increase before the start of the two-week tournament. That was despite opposition from other owners who look at Ellison’s seemingly unlimited bank account with a mix of envy and fear.
“No one can stop Larry Ellison,” said Neil Harman, who writes about tennis for The Times of London. “It makes people very nervous. In these times of austerity, there isn’t the money there, so they’re saying, ‘We’re going to be in trouble if we’re trying to live up to what Indian Wells is doing. We can’t afford it.'’’
But the CEO of Indian Wells’ tournament, Raymond Moore, says other events are just being stingy.
His event just announced a $70 million expansion that includes building a second stadium, with a Nobu sushi restaurant courtside.
“I can name eight other tournaments off the top off my head who have the financial ability to increase the prize money if they wanted to,” said Moore. “They just choose not to.”
Moore says he doesn’t have a blank check from Ellison.
“He didn’t get to be the fifth-richest man in the world by just throwing money out the window, said Moore. “These are calculated business decisions.”
Moore says the decision to increase prize money was made as a defensive measure.
There had been rumblings from players about wanting to shorten Indian Wells so they could play more tournaments, and pick up more paychecks.
“We’ve changed that conversation, said Moore. “The conversation is no longer about Indian Wells reducing the number of days. It’s ‘Why aren’t all the other tournaments like Indian Wells?’”
Exactly the conversation other tournaments feared.
Both the men’s and women’s winner of this weekend’s final will take home a million dollars. Ellison is considering making next year’s purse even bigger.
A British rail company says its archaeologists have discovered 13 skeletons they suspect died in the bubonic plague outbreak that killed millions of people, starting in 1347.
America runs on credit. We take out loans to buy expensive items like cars or houses. We borrow for little stuff using credit cards. And our credit history determines our ability to simply rent an apartment.
We often take credit for granted. You know who doesn’t? Immigrants. Especially undocumented immigrants living in the shadows. Without access to credit, undocumented immigrants are forced to get creative, even entrepreneurial.
In Alhambra, Calif., just east of Los Angeles, Mario Escobar, 35, juggles multiple jobs. With his two young daughters in tow, he comes to the post office every other day to mail books.
“This one is going to Lowell, Md. And this one is going to Milwaukee,” Escobar tells the postal clerk, handing him two packages.
Escobar runs a small business publishing other people’s books. Today he’s sending off copies of his own novel.
“It’s about the civil war in El Salvador. And the experience of migrating and carrying the personal traumas and how do you deal with it,” says Escobar.
Before he’s left the post office, Escobar gets a phone message related to his other job -- translating. He has two weeks to translate the work of an associate who has a potential book deal with Random House.
Escobar’s dexterity can be traced back to his experience as a student at UCLA.
“When I was an undergrad, I didn’t qualify for loans,” he says.
This was back before he was approved for political asylum, when he was still an undocumented immigrant.
“My grandpa used to say, ‘When people are hungry, they get creative,’” Escobar says.
Escobar was a starving student, but due to his undocumented immigration status, no bank would give him a loan. That forced him to get very creative.
“It went from being a janitor to cutting grass to tutoring,” Escobar says. “I was writing papers for people. People will say, ‘Wait a minute. Did you do that?’ Well, you know what? Unfortunately, we also had our own corner of Home Depot in academia. People didn’t want to write their papers. I needed money.”
Learn from immigrants... and test your knowlege There's a lot Americans can learn from immigrants to the U.S. That includes good personal finance behavior. Plus, test your knowledge about immigration with our quiz.
His experiences mirror those of other immigrants, like 25-year-old Jose Luis Zelaya.
“It’s been a very difficult journey,” says Zelaya. “Being homeless in Honduras and not being able to survive in my home country. Seeing my brother pass away because we didn’t have money to take him to the hospital.”
Living on the streets of Honduras, Zelaya saw an old woman doing crochet. He asked her to teach him. But she refused, telling him that it’s "woman’s work." Undeterred, he taught himself to crochet.
Zelaya kept at it even after he moved to Houston when he was 14.
“I had a crazy idea that I wanted to go to college, but I was faced with the obstacle of not being able to work, and being too afraid to work with fake documentation," says Zelaya. "I have never had a loan from a bank. I was not able to apply due to my immigration status. So I relied on crocheting and I started making a lot of beanies and scarves and headbands."
Zelaya sold his crochet beanies at flea markets.
Now he’s a grad student at Texas A&M.
And even though he’s been given a legal work permit through the Deferred Action program, he still sells his crochet online.
“It made life a bit more difficult, not being able to pay for school through loans. Or not being able to apply for a credit card," says Zelaya. "Through crocheting, I have been able to pay for my books. It has also paid for my rent. It has paid for my food. But it has also paid for my sister’s tuition, and all of her books.”
In Los Angeles, Miguel Carvente paid for his education at UCLA by holding raffles and throwing parties with a cover charge.
At the time, he was jealous of friends who got student loans. But now they owe as much as $60,000.
“Now I find myself in the very privileged position of having very close to a Master’s degree and have zero debt,” says Carvente.
Others get around the lack of formal credit by participating in savings clubs. In Mexico, it’s known as a "tanda." In El Salvador, it’s called a "cundina." Either way, it’s the same idea. A group of people agree to contribute a certain amount of money to the collective pool every month. And over the course of a year, they take turns taking home that pool of cash.
Mario Escobar remembers his uncle buying a new pick-up truck for his gardening business. His uncle paid $8,000.
Escobar asked if he paid with credit. His uncle replied, “No, no, no. I paid in full. Now I only need to repay my friends in the ‘cundina.’”
Sometimes, undocumented immigrants get around restrictions on credit through, shall we say, "creative financing."
University of Southern California sociology professor Jody Agius Vallejo studies the Mexican-American middle class.
“They often times take out loans in their own names on behalf of their relatives, so that their relatives -- their parents, for example -- can purchase a car. So their parents can have money to fund their businesses,” says Vallejo.
But it carries big risks for the person borrowing on behalf of an undocumented relative.
“If that person fails to make that payment, or fails to pay you that car payment or the rent, then that is in your name and your credit rating can go down,” says Vallejo. “Your credit is ruined. You may not be able to buy another car. You may not be able to obtain any type of credit at all.”
Some who have survived without credit find it less attractive once it’s finally available.
“I simply want to take it back to the old-school. You have what you earn. And that’s it,” says Escobar.
He doesn’t believe in credit. Or handouts. He even says he’s proud to pay taxes.
“I personally do not believe in the welfare system,” says Escobar.
Welfare for him is similar to credit; he says they both drain a person of creativity. Escobar sees the need to pay the rent as a chance to kick-start inspiration.
The economic expansion of the so-called "Global South" is being driven by new trade and technology partnerships, according to a United Nations report. The UN predicts that over the next two decades, economic and political power will shift away from Europe and North America.
The new pope says Benedict's prayers fuel the church and calls on the prelates to find new ways to evangelize "to the ends of the Earth."
President Obama wants cars and trucks that don’t need oil to run. Today he proposed a fund to help make that happen, a fund with a $2 billion price tag. Which sounds like a lot, at least until you put it in context.
For one, it’s spread out over the next decade, so we’re talking about $200 million each year. And, the pool it’d be pulled from, the royalty revenue from offshore oil and gas drilling, was more than $5 billion last year. So, less than 4 percent.
The White House estimates those revenues will increase over the next several years. Which, Andy Radford, from the American Petroleum Institute, believes is likely. For one, he says, you’ve got rising prices. And, says Radford, “we’ve had some major discoveries in offshore that have been coming on line.” The more oil and gas that gets pumped, and the more it costs, the more the government takes in through the royalty program.
But why spend that extra cash on creating cleaner cars and trucks? Everyone in D.C. is talking about deficit reduction. Why not use it for that?
William Galston from the Brookings Institution says developing alternatives to oil is a public good, and “economists agree that there are certain kinds of what they call public goods that the market left to its own devices won’t supply enough of.”