Money Players

Article on Curt Flood

Book brings Flood's contribution to game out of the shadows

By Marc Isenberg
Published May 14, 2007: Page 25

Although Jackie Robinson suffered many indignities when he broke Major League Baseball’s color barrier in 1947, his legacy is enshrined. Curt Flood’s historic contribution to baseball and society, however, remains in the shadows. His decision to challenge the power of the baseball establishment is still largely misunderstood. Thanks to "A Well-Paid Slave: Curt Flood's Fight for Free Agency in Professional Sports," by Brad Snyder, we get a new look at Flood’s life and times. Snyder’s book illuminates Flood’s challenge of the reserve clause through the events that shaped Flood, including his childhood in desegregated Oakland, playing minor league baseball in the racist, segregated South, his participation in the civil rights movement, and his troubles with alcohol. <Continue reading article>

Postscript: MLB commissioner Bud Selig was honored in Boston at the Sports Lawyers Association conference, which I attended. In his speech Selig made an interesting apology. The reserve clause, Selig said, "should have been modified decades before someone like me came into the sport. Change was long overdue, and some balance to the relationship was necessary." He added, "So much of our success has been made possible because of our improved relationship with the players."

I expect The Onion or some other faux news organization to suggest something like, "Former players sue for well-paid slave reparations." Hmmm.

 

The Devil made them do it

By Preetom Bhattacharya

The Tampa Bay Devils Rays have one of the lowest attendance figures in Major League Baseball for several years now. Rather than investing money in better players, the team has decided to take its act to nearby Orlando for a three game series with the Texas Rangers.

In a marketing ploy to increase the visibility of his franchise, owner Stuart Sternberg is hoping to make fans appear in the Magical Kingdom. "We're looking to build a regional power," Sternberg told the Ft. Worth Star-Telegram. "If we include Orlando in our region, we enjoy 4 to 5 million people as potential fans. Changing the culture doesn't happen overnight."

If successful, the series in Orlando could lead to increased television ratings in Central Florida and might convince Orlando residents to make the almost-100 mile sojourn to St. Petersburg, where the Devil Rays play in the over-ripened Tropicana Field. (The Juice Box has undergone a $35-million renovation over the last two years).

In addition to spending money on the stadium, the team provides free parking and allows fans to bring outside food into the stadium, acts that scream "revenue hemorrhaging." Unfortunately, an updated stadium can't help the Devil Rays squeeze more victories (just ask the Pirates). In the Devil Rays' nine-year existence, they have averaged just 65 wins per season.

The Devil Rays' business model is clear - profit is more important than winning. By keeping their payroll low, getting however many fans they can, and cashing in with MLB's revenue-sharing plan, the team is going to operate in the green almost every year. With all the revenue streams being split equally amongst the franchises in baseball, there is little motivation for Sternberg to field a winner.

That idea goes directly against the athlete's oath to preserve the integrity of the game by giving it their all. Owners like Sternberg who win money by losing are violating the basic trust between a franchise and its fans - albeit a dwindling number in the case of the Devil Rays.

Sternberg isn't completely at fault here, as the system that MLB has put together has hindered the competitive balance the owners and players hoped to achieve in 2001 with monumental revenue-sharing and luxury tax impositions. Money was handed out to teams with smaller revenue, but there weren't any requirements to spend that money on players. Small-market teams like the Devil Rays, Kansas City Royals, and Pittsburgh Pirates have owners who are resigned to the reality that lack of money makes difficult, if not impossible, to compete for pennants.

Their reasons are simple enough - the luxury tax hasn't deterred the Yankees, Red Sox, Dodgers, and Cubs from freely spending money in the free-agent market. So why bother trying to win when you can turn a profit by feeding on MLB handouts?

If giving one's all is a fundamental tenant of sports, MLB owners should realize that the current economic system cheats fans, as much as a player taking illegal performance-enhancing drugs. And steroid use is far more difficult to prove than objective measures such as wins, losses and payroll.

5/18 UPDATE
Devil Rays sweep Rangers, draw decent crowds.

Financial end-arounds (updated)

On Febuary 12, 2006 Kirk Wright was ordered to pay nearly $20 million as part of a default judgment by the U.S. District Court in Atlanta. This would be great news if Kirk Wright had this kind of money in his accounts. Wright fraudulently provided investors with reports claiming his International Management Associates funds had over $180 million in assets. But when he was finally busted, there was less than $500,000 accounted for.

Here's an I wrote last year in the Sports Business Journal on personal finance and professional athletes.

Pro athletes must use caution to avoid financial runaround

By Marc Isenberg
Published August 28, 2006: Page 13

When the infamous Willie Sutton was asked why he robbed banks, he said, “Because that’s where the money is.” If Sutton were alive today, perhaps he’d target professional athletes. Instead of his risk-taker’s bravado, he could steal millions from unsuspecting pro athletes with simple razzle-dazzle and lies.

While professional athletes are among the most financially fortunate members of society, they are also among the most vulnerable. Young, financially inexperienced and often surrounded by yes-men, professional athletes are magnets for scam artists.

Kirk Wright, founder of hedge fund International Management Associates, is the latest to be accused of defrauding current and former pro athletes. From 1998 to 2005, which The Wall Street Journal points out included the worst bear market since the Great Depression, Wright reported average annual returns of more than 27 percent. The returns apparently were fabricated. The Securities and Exchange Commission estimates that Wright, who was arrested by FBI agents in Miami on May 17 and faces 21 counts of federal mail fraud and three counts of securities fraud, bilked investors out of at least $115 million. <Read full article in PDF file> 

NCAA article: Educational steps combat gambling

Here's a link to an article on gambling Rick Rhoads and I wrote for The NCAA News.

It wasn't so long ago when the NCAA wouldn't print anything I wrote, so I am glad to see a new era in this relationship.