Monday, February 23, 2009

Barry Bonds Trial Gets Under Way

After more than five years and the expenditure of tens of millions of taxpayer dollars, it’s show time for the government. The case known as the United States of America vs. Barry Lamar Bonds is coming to San Francisco on March 2 for what is estimated to be a four week run.


The feds will attempt to prove that Bonds committed perjury when he testified before a federal grand jury in December 2003 that he did not knowingly use steroids. In layman’s terms, perjury is lying under oath about a material fact when you know your statement is false.


Under questioning by prosecutors, Bonds admitted using two substances – the Cream and the Clear – that he later determined to be steroids. But he said he didn’t know they were steroids at the time he used them. Bonds insisted he thought his former trainer, Greg Anderson, gave him flaxseed oil and an arthritis balm to alleviate the aches and pains that come with the daily grind of playing professional baseball.


Most Americans, save, hopefully, the members of the jury who will hear evidence in the case and determine Bonds’ guilt or innocence, have made up their minds about Bonds. And polls suggest that in the court of public opinion, Bonds is guilty as charged. But fortunately for him, not to mention the rest of us, our system of justice requires that the government prove its case beyond a reasonable doubt in a court of law. And by all accounts, the government will have its work cut out for it. The case is more porous than the Yankees 2008 defense.


Judge Susan Illston’s pre-trial rulings have generally favored Bonds. The most recent government setback came last week when Judge Illston refused to allow evidence of three positive steroid tests and documents alleged to be doping calendars. Prosecutors will be allowed to enter evidence of one positive test, taken on a sample from the infamous 2003 survey testing of MLB players, the same test that tripped up A-Rod.


Those test results were supposed to be confidential and the samples destroyed. But the union, for some inexplicable reason save incompetence, failed to dispose of the evidence before the government seized it in a raid on several testing facilities in conjunction with the BALCO investigation.


The key to the government’s case against Bonds is and always has been Anderson. The trainer was among the BALCO defendants who plead guilty to conspiracy to distribute steroids and spent three months in prison. Upon his release, he was paraded before a grand jury investigating Bonds and refused to testify. He was sent back to prison on two separate occasions and served an additional year behind bars.


The feds tried to procure Anderson’s testimony by putting pressure on his wife and mother-in-law, threatening each with tax charges and staging a raid on the mother-in-law’s house. Prosecutors are determined to call Anderson as a witness against Bonds. But Anderson’s attorneys say he will never rat on Bonds and Judge Illston is on record as being loath to find him in contempt a third time.

Prosecutors intend to call several witnesses who claim Bonds discussed his use of steroids with them and another witness who claims she watched Anderson inject Bonds, with what, no one knows. Most of the witnesses are a defense attorney’s dream, including a jilted mistress and individuals who themselves engaged in criminal activity.


Judge Illston will allow the government to enter expert testimony concerning the effects steroid use can have on the male body, including back acne and shrunken testicles. The government’s only witness on the condition of Bonds’ private parts is his former mistress, Kimberly Bell, who seems all too eager to confirm the expert’s testimony as it relates to Bonds. This won’t be a trial so much as a pilot for a reality show on Fox.


The government is unlikely to prevail against Bonds, in spite of their vast resources and huge expenditures in time and money. Even if Bonds is convicted, Judge Illston is likely to give him probation instead of jail time. Regardless of the trial’s outcome, we all lose.


In comparison, the government throwing hundreds of billions of dollars at banks and auto companies doesn’t seem like such a bad deal.


UPDATE


The federal government has publicly admitted what many of us have known for years: Without the testimony of Greg Anderson, Barry Bonds’ former trainer and childhood friend, the game is over. The feds don’t stand a chance of convicting baseball’s home run king of charges that he committed perjury when he testified before a grand jury that he didn’t knowingly take steroids.

The government’s admission came on Friday afternoon in Federal District Court in San Francisco. Prosecutors told presiding Judge Susan Illston they would appeal her earlier ruling that without Anderson’s testimony, evidence of three positive drug tests, along with doping calendars and ledgers that allegedly relate to Bonds’ use of steroids, was inadmissible in her courtroom.

The appeal means the trial against Bonds - set to begin on March 2 – could be delayed for months, if not longer. The government has already spent more than five years and tens of millions of dollars preparing their case against Bonds. But when Anderson was asked in open court on Friday morning whether he would testify against Bonds, he replied in the negative. Shortly thereafter, the government effectively conceded defeat.

But rather than fold their house of cards and move on to prosecuting real crimes against the citizens of this country – Was the Bernie Madoff Ponzi scheme just a hoax? Are there no current or former bank officers at Citibank or Bank of America who committed crimes against the American taxpayer? – the government elected to throw (our) good money after bad.

The sole issue on appeal is Judge Illston’s ruling concerning the admissibility of the drug evidence. Regardless of the decision of the appellate judges, the government has nothing to lose. A win in the Court of Appeals, and the additional evidence could persuade a jury to convict Bonds. If the government loses the appeal, which is likely, the trial could still go forward but the result will almost certainly be a not guilty verdict for Bonds. In either case, the appeal represents an abuse of prosecutorial discretion and power reminiscent of the McCarthy era.

The case against Bonds long ago passed the demarcation line between prosecution and persecution, with each successive move by the government confirming the latter. The government has conducted a witch hunt against Bonds since December 2003, when he testified before the grand jury investigating the BALCO case involving steroid distribution to athletes in a number of sports.

A reading of the grand jury transcript suggests that Bonds – and only Bonds – was targeted for prosecution even though he wasn’t the only baseball player who testified to illegally using performance enhancing drugs. Thus began a five-year crusade that included sending Anderson to prison on two separate occasions for failing to cooperate with government investigators, and intimidating his wife and mother-in-law in an effort to loosen the trainer’s tongue.

The government’s actions in the Bonds case have been unconscionable. Despite the fact that Bonds is an admitted steroid user, and his testimony before the grand jury was less than forthright, the campaign against him exceeds all manner of perspective. The crime(s) Bonds committed, and the likely punishment in the event he is ever convicted, do not merit the time and expense the government has expended in his pursuit.

There’s a new administration in Washington. But the action taken by the Department of Justice in the Bonds case – they almost certainly would have had to approve an appeal of this nature - confirms that the new administration is hardly distinguishable from the old one. While the bombastic Barry Frank, Representative from Massachusetts, rails against the sports related marketing expenses of bailout recipients Citibank and Bank of America, he and others of his ilk turn a blind eye to the wasteful spending associated with the Bonds persecution.

If prosecutors had to make the money necessary to pursue a conviction, as Bonds did in order to fund his defense, it’s unlikely this case would have ever seen the light of day. Instead, the government gets to wield its abusive powers using our hard earned dollars.

Here’s hoping Anderson’s lips remain sealed, regardless of the next move taken by the wayward prosecution. In spite of his shady past, the trainer is clearly the only honorable person in this drama.


Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University, teaches the Business of Sports at the University of Wyoming, and is a contributing author to the Business of Sports Network. Jordan can be reached at jkobritz@mindspring.com.









Tuesday, February 3, 2009

Super Bowl Advertising

The Super Bowl game is history and most viewers not having an Arizona or Pittsburgh zip code will be hard pressed to remember the final score.  But the ads that aired on NBC - and some that didn’t make the cut - will be the subject of endless conversation. 

NBC sold 69 advertising spots for the game to 32 different advertisers, grossing a Super Bowl record $206 million.  Each in-game ad sold for between $2.4 million and $3 million per 30-second spot.  Given the state of the economy, the figures were nothing short of astounding.  Jeff Zucker, president and CEO of NBC Universal, told the AP, “The Super Bowl has become one of our country’s biggest holidays, a uniquely American day, and advertisers recognized the value in being a part of it.”  Not all advertisers. 

General Motors, a major advertiser during prior Super Bowls, took a pass on Super Bowl XLIII after receiving a $13.4 billion bailout from Congress.  The company is drowning in red ink in the midst of a precipitous decline in automobile sales.  Ditto for FedEx, another Super Bowl regular that sat on the sidelines this year for the first time in over a decade.   

NBC was able to offset those losses with revenue from new advertisers as well as additional commitments from advertising regulars such as PepsiCo. and Anheuser-Busch InBev.  But the final figure wasn’t achieved easily.  In past years, Super Bowl ads were sold out months in advance of the game.  Not this year.  NBC had to lower its original asking price of $3 million per 30-second spot - up 11% from what Fox charged for last year’s game - to sell its entire inventory.  The final two spots were sold literally hours prior to kickoff.   

But NBC didn’t have to wait that long.  While the network accepted sexually suggestive ads from a number of advertisers, including GoDaddy.com which featured Indy racing’s pin-up girl, Danica Patrick, it rejected an ad from PETA on grounds that it depicted “a level of sexuality” which exceeded the company’s standards.   

All potential ads must be submitted for review to Victoria Morgan, NBC’s Vice President for Advertising Standards.  The PETA ad, titled “Veggie Love,” showed scantily clad women, uh, cozying up to vegetables, and proclaimed that “Studies Show Vegetarians Have Better Sex.”  True or false, NBC declared the ad too risque for an audience that included children. 

The irony, if not the hypocrisy, of that position was brought home by an organization calling itself Common Sense Media.  During the week leading up to the Super Bowl, the group released a report titled “Broadcast Dysfunction:  Sex, Violence, Alcohol and the NFL.”   

The report looked at ads in more than 50 NFL games this season, and every game included ads depicting sex, violence or erectile dysfunction drugs, in addition to the omnipresent ads promoting alcohol consumption.  Common Sense Media founder and CEO James Steyer said the study determined that, “one in six of the ads shown during the broadcasts features content that’s wildly inappropriate for kids.”

 

According to the group’s website, 40 per cent of the games included ads for Viagra or Cialis; nearly 500 of the ads involved gun fights, explosions and murders; 80 of the ads featured significant levels of sexuality, including scenes featuring prostitution and strippers; and 300 of the ads were for alcohol.  Almost half of the violent or sexual ads were promos by the networks for their own programming.  And a sexy woman cavorting with a stick of broccoli is inappropriate?   

Professional sports and TV networks don’t have an exclusive on hypocrisy.  Last year, the NCAA turned down a full-page ad from Hooters which the restaurant chain sought to include in the Final Four program.  At the same time, the NCAA allows member institutions to accept advertising from gambling interests and permits networks to air alcohol ads during the broadcast of college sports.  No sport or network, it seems, can resist the temptation to accept ad revenue from gambling interests.   

Maybe NBC can rationalize its rejection of the PETA ad while allowing other ads depicting sex, alcohol consumption and violence during the Super Bowl.  But if using scantily clad women to market products is ever appropriate – a debate beyond the scope of this column – I prefer to have them promote veggies.


Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University, teaches the Business of Sports at the University of Wyoming, and is a contributing author to the Business of Sports Network. Jordan can be reached at jkobritz@mindspring.com.






Capitalism, Yes; Salary Cap, No!

The old adage, “Be careful what you wish for,” should be a siren call to Major League Baseball owners and executives calling for a salary cap in the wake of the Yankees’ off-season spending spree. 

Oakland A’s owner Lew Wolff, Milwaukee Brewers owner Mark Attanasio, Houston Astros owner Drayton McLane, and Pittsburgh Pirates President Frank Coonelly took turns lamenting baseball’s status as the only Major League team sport without a salary cap. All four suggested that a salary cap would be a panacea for both parity in MLB and preventing the Yankees from acquiring the best – and most expensive - free agent talent.  As my father used to say every time I made a suggestion he was loath to embrace, “It sounds good.”  

Indeed it does.  After all, in leagues with a salary cap, there is no equivalent of the Yankees, a team that can purchase any free agent it chooses regardless of the price.  And, so the theory goes, there is more parity in leagues with a salary cap, particularly the NFL which is the poster child for sharing revenues equitably.  Except it’s just not true.   

The NFL shares a higher percentage of revenue (approximately 70%) than the NBA, NHL and MLB.  But the revenue discrepancy between the richest and poorest teams in the NFL exceeds $100 million.  Because a salary cap in sports also includes a floor - a minimum amount each club must spend on payroll – the lower revenue clubs make significantly less money (they spend a higher percentage of their revenue on payroll) than the higher revenue clubs.  

The NFL does have parity - how else to explain the Arizona Cardinals in the Super Bowl?  Most teams, with the exception of Detroit and Cincinnati, begin each season with a reasonable chance of making the playoffs.  But that’s as much a function of the nature of the sport and the limited number of games in a season as it is a salary cap. 

The NBA’s salary cap would be laughable, except it’s no joke.  The intricacies of the salary cap are known to only a handful of humans, living or dead.  And the bottom line in constructing a team has nothing to do with talent and everything to do with the bottom line:  Making sure each team stays within the parameters of the salary cap/floor.   

As for parity, unless the Celtics decide to guard anyone other than LeBron James in their expected playoff matchup with the Cleveland Cavaliers, does anyone believe the two teams in the NBA finals will not be named the Lakers and the Celtics – again?   

In the NHL, clubs such as Nashville and Columbus are hemorrhaging millions thanks to the minimum salary requirements, while Phoenix will reportedly lose $30 million this year and teeters on the brink of bankruptcy.  The strongest teams in the salary cap era – Detroit, San Jose, New Jersey – were also dominant prior to the advent of a salary cap.  Can you say good management? 

A salary floor in MLB would require teams such as the Florida Marlins to increase payroll by as much as $50 million over last year’s figure. 

The only realistic source for that money would be increased revenue sharing -  taking more money from the Yankees to distribute to other clubs.  Which is what all the crying and grandstanding is about.  Clubs want to reduce the Yankees’ spending power; but owners can’t increase revenue sharing or implement a salary cap without the consent of the union.  Peace will come to the Middle East before MLB negotiators convince the union to agree to a salary cap.    

What the whiners fail to acknowledge is that parity in MLB doesn’t take a backseat to any league, including the NFL.  In the last eight years, 13 different MLB teams have played in the World Series – the Yankees only twice and they lost both times - compared to 12 different NFL teams that played in the Super Bowl.       

A salary cap in MLB is merely a pipe dream.  It’s also a convenient crutch for incompetence on the part of team management.  If the Pirates had drafted as well as Tampa Bay over the past 12 years, they - not the Phillies - would have played the Rays in last year’s World Series.  Now that’s something for Coonelly to focus on.



Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University, teaches the Business of Sports at the University of Wyoming, and is a contributing author to the Business of Sports Network. Jordan can be reached at jkobritz@mindspring.com.






Boston College AD Gene DeFilippo Drops Ball

Boston College athletic director Gene DeFilippo gets no sympathy in this corner.

DeFilippo is the type of person who believes a commitment is a commitment – at least, when he’s on the receiving end. But if he’s the one making the commitment, well, that’s a different story.

DeFilippo fired his football coach, Jeff Jagodzinski last week for interviewing with the New York Jets. There was nothing in his contract, which had three years remaining at an annual salary of $1 million, which prevented Jags from exploring coaching options with the Jets or anyone else. It’s also standard practice for successful coaches like Jags, who lead BC to a 20-8 record and successive bowl appearances in two years at the helm, to cast about for better opportunities, something DeFilippo, as AD at BC for the past 11 years, should have known better than anyone.
But DeFilippo maintains that Jags verbally assured him at the time he was hired that he would remain at BC for the length of his contract. Never mind that oral commitments at the time a contract is signed are rarely enforceable in a court of law. And never mind that BC isn’t exactly the most desirable coaching position in college football. DeFilippo was furious nonetheless.
To be fair, DeFilippo issued a public warning to his coach that he would be terminated if he interviewed with the Jets. But Jags was so determined to return to the NFL – where he had been an assistant coach for several teams prior to taking his first head coaching position with BC – he went ahead with the interview in spite of DeFilippo’s threat.
There’s no doubt Jags could have handled the situation better. DeFilippo first heard about the interview with the Jets from the media. When DeFilippo sought confirmation from Jags, the coach failed to return his call until after the interview took place. That’s no way to treat a superior, even if you don’t value your job. The fact that BC would still be on the hook for the $3 million remaining on his contract if he was fired may have influenced Jags’ course of action.
Jags’ repudiation of his verbal commitment to DeFilippo is unlikely to affect his ability to obtain another coaching position. In the coaching profession, contracts are meaningless and your word takes a back seat to your record. Win and you get to stay, unless a better offer comes along, in which case you leave. Lose and you get fired. If only the financial markets were that simple to understand.

In the real world, contracts set forth the obligations of the parties, and all parties expect those obligations to be fulfilled. In the event of a breach, parties often become litigants on opposite sides of a courtroom.
Coaching contracts, on the other hand, aren’t really contracts in the literal sense. They merely serve as a reference during the inevitable termination. Litigation between schools and coaches is rare – West Virginia vs. Rich Rodriquez is the exception - if for no other reason than a litigious coach may find himself with a paucity of offers and a litigious school with few applicants. So the “system” is self-regulating. A coach is free to leave with no impediments and a school can fire a coach, as long as they pay him the balance of his contract.
DeFilippo’s holier than thou stance with Jags rings hollow. Sure, he’ll get a few slaps on the back from his compatriots at the next AD convention. But those backslappers will be secretly pleased that DeFilippo has effectively prevented most of the better coaches in the country from ever applying at the Chestnut Hill school. Who wants to take a position where the AD expects you to stay the length of your contract?  

And then there’s the matter of DeFilippo’s word. On DeFilippo’s watch, BC abandoned its long term affiliation with the Big East Conference for the supposedly greener pastures of the Atlantic Coast Conference. During private negotiations with the ACC, while rumors circulated in the media, DeFilippo repeatedly denied any interest in moving to a new conference. When the move became public, DeFilippo was forced to retract his earlier denials. In short, he did what he accuses Jags of doing: Going back on his word.

At least Jags never lied about his interest in the Jets



Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University, teaches the Business of Sports at the University of Wyoming, and is a contributing author to the Business of Sports Network. Jordan can be reached at jkobritz@mindspring.com.