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An acquisition of the same size gets a paper, a hurdle rate, a committee and a name against it. The same money moved internally arrives as capex in one division, working capital in another and a funded loss in a third, so no single figure ever grows and nobody has ever had to defend it. This pack produces the two numbers a group already has the reporting to produce and almost never does: the cover, which is group operating profit recomputed at the payer's worst year in the last ten — not a scenario, a year that already happened — and the return on the transfer, which carries what the funded units consume forward at the group's own hurdle rate and sets it against what they are worth today. It stops on two conditions: what the funded units consume has never been separated, and no required return has been set. The objective is not to end a transfer. Most are defensible and the people running them know it. The objective is to make somebody decide one.
What is the Cross-Subsidy Strategy Pack
The Cross-Subsidy Strategy Pack is a complete decision-support kit for one question: which unit pays for the others, and what does the group earn in a year it does not? It is built around one organizing claim: a cross-subsidy is a capital allocation no one made. Sixteen files carry it: the foundations, a concept deck, a scored decision wizard, a payer model blank and worked, the moves at each position, nine sourced groups, a fit worksheet, a roadmap template, a practitioner manual, a field checklist, and an orientation page.
The test that runs through every file
An internal transfer, sized and tested against the rate you require of everything else. It is the argument in the deck, it becomes the wizard’s axes, it drives the model’s inputs, and it reappears as lines on the checklist. That is what makes 16 files a product rather than 16 documents.
The model resolves to one number you can negotiate with: The cover — group profit in the payer's worst year in ten. It ships blank and worked, and every input is a named cell rather than a figure buried inside a formula, so the number arrives with its assumptions attached rather than on its own authority.
Why a cross-subsidy escapes the scrutiny external money gets
Cash moves from the unit that earns it to the units that do not, every year, without a hurdle rate, without an alternative use, and without a review — because it arrives as budget rather than as a proposal. A group that would spend six months and a board paper on a $200m acquisition will move $200m internally every year for a decade and never write it up. The money is the same money. Only the form of the request is different.
This pack produces the numbers that follow: the payer's share of group profit; the cover, which is what the group earns in the payer's worst year in ten, a year that has already happened rather than a scenario; and the return on the transfer, carried at the rate the group requires of any other use of its money.
What is in the Cross-Subsidy Strategy Pack
- Foundations. The framework: why internal capital escapes the scrutiny external capital gets, the cover, the return on the transfer, and the two halts.
- Concept deck. Twenty-two slides for the board or strategy session, with nine sourced groups and what each does not establish.
- Decision wizard. Eight scored questions returning the band, the weakest answer, and either of the two halt conditions.
- Payer model. The concentration, the cover, the transfer carried at your own hurdle rate, what it has returned per dollar, and the two break-evens.
- Strategies and tactics. The moves when the cover is negative, when the transfer has not returned your rate, when concentration is what is left, and when neither binds — plus four ways to make a transfer visible without stopping it.
- Case studies. Nine sourced groups read through who pays, how much moves and what happens when the payer stops — including a year in which the payer lost money and the rest of the company barely stayed above zero.
- Fit worksheet. The single page of record: which unit pays, the cover, what the funded units consume, what the transfer has returned, and who reviews it.
- Roadmap template. Five phases with gates and owners, the assumptions register, a trigger and an annual reporting line.
- Practitioner manual. Finding the payer, separating what the funded units consume, computing the cover, the board paper, six failure modes and their indicators.
- Field checklist. The one-pager that survives outside the binder.
- About the package. What each file does and the order in which to run them.
Who the Cross-Subsidy Strategy Pack is for
A chief executive of a group whose result is really one division's result; a chief financial officer who suspects the internal transfer would never survive the diligence an acquisition gets; a board member looking at group profit and wondering what it would have been in a bad year for the one unit that matters; a divisional leader tired of being described as a passenger without anybody producing the number; a head of strategy whose portfolio review has no capital figure in it; and the adviser who would otherwise start from a blank page. It is worth buying when a real decision is in front of you. It is not worth buying to read.
An honest note on fit
This is a kit for running a decision, not a research report and not a course. Worked examples use an explicitly fictional company with numbers tuned to teach rather than to flatter. In the worked case one division is 90% of group operating profit; in its worst recorded year the whole group is $170m below zero; and the transfer, carried at the group's own hurdle rate over seven years, has returned twenty-seven cents on the dollar — an investment the same company would have rejected in an afternoon as an acquisition.
Two limits are stated on the page rather than worked around. The pack does not say the transfer should stop — several of these cases are deliberate, understood, and correct. And it does not value what the funded units protect: an option on a market, a capability you would otherwise buy, a hedge against the payer's own cycle. Those are real and specific to your portfolio. What the pack supplies is the number they have to be argued against, which at present is usually no number at all.
This decision, in two minutes
Short videos on companies that faced it, built from the casebooks this pack draws on.
Questions about the Cross-Subsidy Strategy Pack
- Is this only for conglomerates?
- No. It applies wherever one part of a business funds another: a division funding a division, a product line funding a platform, a geography funding an expansion, a regulated business funding an unregulated one. The nine sourced cases deliberately span all of those, and two of them are single-industry companies.
- What number does the model produce?
- Three. The payer's share of group operating profit; the cover, which is group profit recomputed at the payer's worst year in the last ten; and the return on the transfer, which carries what has gone across at the group's own hurdle rate and sets it against what the funded units are worth. The Model tab sweeps the payer's own profit rather than time, so both break-even points are visible on one page — where the group stops making money, and where it does after funding the units it carries.
- We think our cross-subsidy is justified. Is this still useful?
- Especially then. Two of the transfers in this pack's set were built deliberately over decades by people who could say exactly what they were for, and one funds patience rather than losses. The pack does not argue against transfers; it asks whether yours would survive being written down as a proposal — and a justified transfer that survives that is stronger afterward, not weaker.
- Are the case studies real companies?
- Yes. Nine sourced groups: Samsung, Alphabet, Amazon, GE, Berkshire Hathaway, Comcast, PepsiCo, NextEra, and United. Each is dated, read through who pays and what happens when the payer stops, and each states what its evidence does not establish. In four of the nine the payer is not the business the group is named after. The worked model, wizard, and worksheet use an explicitly fictional company, labeled as such on every file.
- What if no one can say what the funded units consume?
- Then the pack stops, and that is deliberate. It is the first of two halt conditions, and both the wizard and the model refuse to produce a headline number without it — because a transfer no one has sized cannot be judged, and sizing it is the single act that turns a habit into a decision. The manual sets out where the pieces hide, including the one almost every internal estimate misses.
- Is this a subscription?
- No. It is a one-time purchase of a single-organization license, with no seat limit inside your organization and nothing to cancel.
- What is the Cross-Subsidy Strategy Pack?
- The Cross-Subsidy Strategy Pack is a decision-support kit for one question: Which unit pays for the others, and has anybody ever approved it? It contains 16 files — foundations, concept deck, decision wizard, payer model, strategies and tactics, case studies, fit worksheet, roadmap template, practitioner manual, field checklist, about the package — built around a single organizing test: an internal transfer, sized and tested against the rate you require of everything else. It is what a leadership team uses to run the decision and leave a record of what they assumed, rather than a report about the topic.
- Who is the Cross-Subsidy Strategy Pack for?
- Anyone who has to make this call and answer for it: an operator or owner facing the decision, the executive team running it, the board or investor testing the reasoning, or an adviser who would otherwise build the framework from a blank page. It is worth buying when a real decision is in front of you. It is not worth buying to read.
- What is in the Cross-Subsidy Strategy Pack?
- 16 files in Word, PDF, PowerPoint and Excel: Foundations (Word + PDF) — The framework: why internal capital escapes the scrutiny external capital gets, the cover, the return on the transfer, and the two halts. Concept deck (PowerPoint + PDF) — Twenty-two slides for the board or strategy session, with nine sourced groups and what each does not establish. Decision wizard (Excel) — Eight scored questions returning the band, the weakest answer, and either of the two halt conditions. Payer model (Excel, blank and worked) — The concentration, the cover, the transfer carried at your own hurdle rate, what it has returned per dollar, and the two break-evens. Strategies and tactics (Word) — The moves when the cover is negative, when the transfer has not returned your rate, when concentration is what is left, and when neither binds — plus four ways to make a transfer visible without stopping it. Case studies (Word) — Nine sourced groups read through who pays, how much moves and what happens when the payer stops — including a year in which the payer lost money and the rest of the company barely stayed above zero. Fit worksheet (Word, blank and worked) — The single page of record: which unit pays, the cover, what the funded units consume, what the transfer has returned, and who reviews it. Roadmap template (Word) — Five phases with gates and owners, the assumptions register, a trigger and an annual reporting line. Practitioner manual (Word + PDF) — Finding the payer, separating what the funded units consume, computing the cover, the board paper, six failure modes and their indicators. Field checklist (PDF) — The one-pager that survives outside the binder. About the package (PDF) — What each file does and the order in which to run them.
- How is the Cross-Subsidy Strategy Pack delivered?
- As a single download of all 16 files, immediately after payment, with the same link sent by email. It can be downloaded 3 times and the link is valid for 30 days. There is nothing to install and no account to keep.