Author: muckety

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This post was archived from createpositivechange.org/. View the original on the Wayback Machine.

This post was archived from createpositivechange.org/. View the original on the Wayback Machine.

This post was archived from createpositivechange.org/. View the original on the Wayback Machine.

This post was archived from createpositivechange.org/. View the original on the Wayback Machine.

Talk about a firm for all seasons.

We’ve already shown that investment bank Goldman Sachs is a power in politics and in finance, sending its executives off to presidential cabinets and elective offices and to lead other companies.

And now there’s proof that Goldman can hit home runs in baseball as well.

Word is out that two of Goldman’s managing directors, John Mallory and Gerald J. Cardinale, helped bring the New York Yankees and superstar Alex “A Rod” Rodriguez back into contract talks.

It would seem they did what Scott Boras, Rodriguez’s agent and one of the most powerful and vilified men in sports, couldn’t do. Though, reports say he is still involved.

Rodriguez and Boras had earlier opted out of the last three years of his contract, passing up $91 million and apparently severing his ties with the Yankees.

The new deal with the Yankees is said to be a 10-year, $270 million pact, tops for a U.S. athlete. With incentives, it could reach $300 million.

(Though the Yankees don’t want to use the word “incentives.” Rather, they’re calling them “historic achievements.”)

The Goldman connection to the Rodriguez negotiations began, it seems, with a friend doing a friend a favor.

Rodriguez reached out to Mallory, who had been his neighbor in Miami, and asked him if there was some way he could get back to the Yankees.

Mallory contacted Cardinale, his colleague at Goldman who is a board member of the extraordinarily lucrative YES Network.

Goldman has a partial ownership in YES, which broadcasts Yankees games.

According to the Times, the network’s revenues exceed $300 million and the network’s value may be two or three times the value of the team itself.

What’s good for the Yankees is good for the YES network and Goldman, so it’s no surprise that Cardinale joined the effort to bring back the team’s star third baseman.

Cardinale told Randy Levine, the Yankees president that Rodriguez wanted to reopen talks.

Rodriguez and his wife Cynthia then met with the Hal and Hank Steinbrenner, the Yankees’ senior vice presidents, and the talks got started.

Significantly, Boras was not said to have been part of these conversations.

The agent’s vast influence in baseball has been documented here. He represents 65 Major League players and nearly that many minor league players.

He also negotiated Rodriguez’s first mammoth contract, getting the Texas Rangers to come up with $252 million for 10 years in 2000.

Sports columnists and many fans love to hate Boras, despising his hard-nosed style.

But even though Goldman’s guys stole some of his thunder, Boras hasn’t gone away.

The agent is involved in hammering out the final details of the Rodriguez contract, reports say.

Typically, his company gets five percent of an athlete’s salary. So it stands to make $13.5 million on the deal over 10 years and more, too, if Rodriguez hits a lot of home runs.

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The appointment of John Thain to head troubled Merrill Lynch demonstrates, yet again, the long reach of Goldman Sachs.

Thain, currently CEO of the New York Stock Exchange, began his career as an investment banker at Goldman. He went on to become co-president and co-chief operating officer.

As the New York Times reports, Thain was chosen not only for his success at the exchange, but also for his background at Goldman.

The idea that Merrill would seek a leader from a rival rankled some. “It’s shocking [they picked] someone from a Goldman Sachs background,” former Merrill CEO Dan Tully told the Wall Street Journal, observing that Thain didn’t seem to be a “people person” who would fit easily into Merrill’s culture. “I understand he’s very cerebral,” Tully said.

Yet the Merrill culture is one of the factors that has led the company into so much trouble. Former CEO Stanley O’Neal was forced to resign two weeks ago after he approached Wachovia CEO G. Kennedy Thompson to discuss a possible merger. The move had followed announcement of a $8.4 billion writedown, largely due to subprime mortgage losses.

Goldman, on the other hand, has been able to avoid many of the ills faced by Merrill and other firms. It’s also a frequent source of talent for both government and industry. Henry M. Paulson Jr. and former Treasury Secretary Robert E. Rubin, now chairman of Citigroup. Former Goldman co-chairman John Whitehead has served as deputy secretary of state and head of the Federal Reserve Bank of New York. New Jersey Gov. Jon S. Corzine was a Goldman chairman & CEO.

Not surprisingly, Thain’s successor at the New York Stock Exchange will be another Goldman Sachs alumnus. Duncan Niederauer, a former Goldman managing director and most recently president and co-COO of the exchange, will become CEO.

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