by William Bruce
The captain of the cruise ship, Costa Concordia, is accused of running the ship aground off the coast of Italy on Jan. 13 and then abandoning the sinking vessel. He is in police custody in Italy, where he is charged with manslaughter and abandoning ship.
Witnesses say the captain was among the first to take a lifeboat to safety, effectively leaving the passengers and crew of 4,000 to fend for themselves. The Costa Concordia is owned by Carnival Cruise Lines. The shipwreck disaster has prompted us to take a closer look at the company.
Carnival Corp. and PLC (its sister corporation) comprise eleven individual cruise line brands, operating a combined fleet of 96 ships. Brands include Carnival, Cunard, Holland America, Princess, Seabourn and four others.
Carnival Corp. was initially formed in 1972. After achieving its position as one of the world’s most popular cruise lines, the company made an initial public offering of 20% of its common stock in 1987. This provided an influx of capital that allowed the company to begin its expansion through acquisitions. In 1989 its first acquisition was the premium operator Holland America Line. Others quickly followed.
The CEO and owner of controlling interest in Carnival is Micky Arison, son of the founder. Arison was born in Israel of Romanian ancestry and now lives in Miami as an American citizen. Forbes lists him as one of the world’s wealthiest individuals. His compensation from Carnival in 2009 was over $7 million.
In 1988, Carnival Cruise Lines expanded into airlines with the purchase of Pacific Interstate Airlines, which was subsequently renamed Carnival Air Lines. This venture ended ten years later in bankruptcy court with creditors holding the bag. Carnival owner, Micky Arison, also owns the professional basketball team, the Miami Heat. Miami area governments built Arison a $250 million dollar waterfront stadium 10 years ago in exchange for a rental agreement. Now 10 years into the rental contract, thanks to creative accounting by Arison, Miami has received no rent from the Heat or Arison, according to Miami New Times reporter Gus Garcia-Roberts .
And by now, you may know the story of Carnival Cruise Lines shafting the City of Mobile, Alabama for $20 million. After enticing the city to spend over $20 million for a cruise ship terminal facility, Carnival left town without even the good manners of a courtesy notice to local leaders. It was a “Wham bam, thank you m’am” without the “thank you.”
At the website RipoffReport.com, over a hundred individuals have filed reports of being ripped off by Carnival. I can believe that.
I suspect that the lawsuits following the disastrous shipwreck of the Costa Concordia might lighten the owner’s deep pockets. However, if it gets too financially painful for him, he’ll probably throw the company into bankruptcy court and just walk away.
It’s his modus operandi.
William Bruce is a blogger at http://williambruce.wordpress.com. He also is a business broker, appraiser and an Accredited Business Intermediary (ABI) with Sunbelt Business Brokers. His website is www.WilliamBruce.net