FINANCE TODAY | ISSUE NO.1
NETFLIX'S NEXT BIG INVESTMENT
Netflix has continued to perform well under the current global circumstances, reporting total cash and cash equivalents of $5.1 billion USD on its balance sheet for quarter 1 of 2020. Amidst the racially charged and heavily polarized political climate in the United States, Netflix has decided to give a helping hand to America’s Black communities as the Company announced they would be moving 2% of their current cash pile (approximately $100 million USD) to serve America’s communities (Vardi, 2020). The announcement also prompted Netflix to publically voice their opinion on the current situation in the United States. The streaming company stated, “systemic racism in America has sustained a large financial gap between Black and White families” and the new allocation of their cash flows could help narrow the current divide (Vardi, 2020). Of this $100 million, Netflix initially plans to move $25 million to the Black Economic Development Initiative, a New York-based non-profit organization that plans to invest these funds into financial institutions that support Black communities (Vardi, 2020).
THE ORIGINS OF NETFLIX'S PLAN TO SUPPORT BLACK COMMUNITIES
When announcements of similar nature are made by other major companies, it’s often inferred that these types of actions are created on very short notice simply to gain support from the Black community. While this holds somewhat true in Netflix’s current announcement since meetings regarding the issue only began in April, their efforts to support the Black community and the idea of diversity originated prior to today’s events. The initiative started with Aaron Mitchell, who joined Netflix’s recruiting division back in 2018 when the division had been shifting their focus towards creating more diversity within the company’s leadership groups as well as providing capital to the community banks (Vardi, 2020). Mitchell had originally pitched his idea of financially supporting Black-owned banks to the chief financial officer, Spencer Neumann, who encouraged him to follow through with the idea (Vardi, 2020). As Mitchell began to put the pieces together to form a proposal for the initiative, the death of George Floyd occurred. The event accelerated the process as industry players and the general public was more than ready to witness change.
SUPPORTING THE BLACK COMMUNITY AND BLACK-OWNED BUSINESSES IN CANADA
Netflix’s actions are very commendable and are exactly the kind of support the Black community deserves in this current economic climate. The only problem is that their contribution is only directly impacting the situation for Black communities in the United States. While Canada is very multicultural, Black-owned Canadian businesses also experience difficulties similar to the challenges faced by American businesses. The City of Toronto conducted a survey in 2015 where Black business owners were tasked with helping the city analyze areas in which the City of Toronto could aid them most. A graph highlighting the results of the survey has been included below.
Of the issues presented to the City of Toronto, the three largest areas of concern were accessing financing, marketing, and having ample networking and learning opportunities. All the issues brought up in this survey are relevant to the Black community who still encounter these in the present day. Even without the massive financial capital of a company such as Netflix, there are still many ways we students can support Black-owned businesses. There are several Black-owned restaurants currently open which could definitely use the additional revenue to help them survive the current pandemic.
Jerk King at Queen Street and University Avenue is one of many restaurants currently open and ready to embrace the support of the Ryerson community. The increased engagement could potentially create enough of a boost in financial health for these small businesses to continue to operate and cover their debts amidst current circumstances. Boosting marketing can be as simple as following their social media pages while sharing their posts. If empanadas are more your style, consider following @empanadaqueen.co on Instagram, a Colombian restaurant that takes pride in its air-fried empanadas. These two restaurants are just a small sample of the many Black-owned businesses in Toronto that we as Ryerson students can directly affect (For more information: https://www.blogto.com/city/2020/06/black-owned-businesses-toronto/). It’s important to remember that there is strength in numbers, therefore, through actively supporting Black-owned businesses it will spark growth within the community creating an everlasting impact.
Black-led Businesses In Toronto: Building Opportunities for Growth and Prosperity [PDF]. (2015). Toronto: City of Toronto.
Vardi, N. (2020, June 30). Netflix Shifts 2% Of Its Huge Cash Pile To Financial Institutions Serving Black Communities. Retrieved June 30, 2020, from https://www.forbes.com/sites/nathanvardi/2020/06/30/netflix-shifts-2-of-its-huge-cash-pile-to-financial-institutions-serving-black-communities/