Owning high profile sports teams when you’re losing money hand over fist would seem like a poor choice to most, but apparently Mazda doesn’t count itself among the masses.
Raising controversy and more than a few sets of eyebrows, the only Japanese automaker that is currently losing money has considerable and some would say frivolous assets.
Believe it or not, those assets aren’t things like extra corporate jets or padded expense accounts. Think bigger, like owning professional baseball and soccer teams, a hospital and $5 billion in land. More surprising than that, the company still offered to sponsor July’s All-Star baseball game despite selling $1.8 billion in new stock to recover lost capital.
“This comes at the worst time,” said Kazuyuki Terao, chief investment officer at Allianz unit RCM Japan to Automotive News . “People might think if they don’t cut spending on baseball, they may also not worry about other expenses.”
Those expenses are starting to look serious too considering Mazda forecasted this year to be it’s biggest annual loss in 11 years.
Serious as they may be, things can get a while lot worse, and quickly if the automaker isn’t careful. A tumultuous stock market combined with irresponsible spending might be enough to scare people away from putting money into the company.
A series of unfortunate events starting in 2008, when Ford dumped its stake in the company from 33 percent to 3.5 percent to deal with its own money problems, lead to financial suffering in the company.
Other companies in similar positions have been quick to dump cut fat, but Mazda seems reluctant, which could ultimately hurt the company and those invested in it.
[Source: Automotive News]