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Tag: Bear Stearns
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Cast of Characters in the Writers Strike
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Darwin Deason at Loggerheads With Acs Directors
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Scott Boras: The Ari Gold of baseball
Like any sport, baseball needs its villains.
And right now, there’s no better villain than Scott Boras, the California-based sports agent who has the audacity to seek and get really, really good contracts for his millionaire clients.
Boras, 55, is so hateful, it would seem, that he will even upstage the World Series.
While the last game between the Boston Red Sox and Colorado Rockies was being played last month, the word emerged that Boras client Alex Rodriguez was opting out of the last three years of his contract with the New York Yankees. In doing this, he was passing up $91 million to seek more money elsewhere.
The writers were appalled that Boras — the presumed leaker of the info — didn’t wait until after the World Series to let the opting-out be known.
“At the very least, the decision to announce Rodriguez’ decision violated baseball etiquette in the extreme,” wrote Jack Curry in the New York Times.
Casual observers might wonder how a game in which the players spit frequently and scratch themselves could have etiquette, but baseball does.
And there are lawyers who might argue that Boras, who is a lawyer and a former minor league player, was just doing his duty to his client.
Regardless, the fuss over Boras, sometimes called the most hated man in baseball, may obscure the fact that he is a business powerhouse.
His company, Boras Corp., has so many clients on so many baseball teams that he may be the best-connected person in the sport.
According to an Oct. 29 profile by Ben McGrath in the New Yorker, Boras Corp. represents 65 major-league players.
For its services, the company gets 5 percent of the major leaguer’s salaries.
Daisuke Matsuzaka, a star player in Japan who signed with the Boston Red Sox last December, is a Boras client.
To get Matsuzaka, Boston first won bidding rights by paying $51.1 million. Then the Red Sox agreed to pay Matsuzaka $52 million over six years, a figure that could reach $60 million if Matsuzaka reaches certain goals.
Boras also got pitcher Barry Zito $126 million for seven years from the San Francisco Giants in 2007.
And his bargaining brought outfielder Carlos Beltran $119 for seven years in 2005 from the New York Mets.
Many other Boras clients have done very well.
However, none has received the contract numbers Boras negotiated in 2000 for Rodriguez. The player signed a 10-year, $252 million contract with the Texas Rangers. (Rodriquez went to the Yankees in 2004 and the contract remained in force.)
According to reports, Boras now hopes to get Rodriguez, an extraordinary player who has had less than extraordinary results in the post-season, a new contract in the range of $350 million.
With the exception of Rodriguez, it’s usually Boras and not the players who are accused of greed after big contracts are signed.
And sometimes, too, it’s Boras, and not the team owners, who is blamed by fans for high ticket and hot dog prices.
Boras, though, would seem to be able to take the heat, believing he has a role to play. “There’s a clear need for someone to represent the athlete and to explain the athlete’s value,” he told the New Yorker. “If that person is characterized as a villain, well, so be it.”
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Linda Stein, celebrity real estate agent, found murdered
Update: On Nov. 9, police reported an arrest in the case. Natavia Lowery, 26, of Brooklyn, Stein’s personal assistant, was charged with second-degree murder and second-degree grand larceny. According to the New York Times, the assistant told police that Stein “kept yelling at her.” Our updated story is now here
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Linda Stein, punk rock band manager and real estate agent to the stars, was found dead Tuesday night in her apartment. Police said she had been bludgeoned to death.
Stein, 62, co-managed the Ramones, a band that recorded on Sire Records, a label founded by her ex-husband, Seymour Stein. She later represented Billy Joel, Sylvester Stallone, Debra Winger, Perry Ellis and other celebrities.
A powerful personality, Stein was the inspiration for Sylvia Miles, the aggressive real estate agent in the movie Wall Street.
Close friend Elton John issued a statement saying: “I’m absolutely shocked and upset. She’s been a friend for over 37 years. She was a godmother to my kids. She helped me with my AIDS foundation.”
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Torre Should Have Looked Over the Fence
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‘Free’ tutoring is big business for Sylvan
The No Child Left Behind act is a bonanza for private tutoring firms, including Sylvan Learning.
Under the act’s provisions, students enrolled in schools judged to be failing are entitled to free tutoring, paid for by taxpayers. The costs total $2.5 billion annually, according to U.S. News and World Report.
Tutoring companies contract with individual states and school districts. Sylvan provides such tutoring at about half of its 1,200 U.S. locations, according to Tabatha Sweeney-Gehrt, Sylvan’s director of new business development. At some centers, she says, business has doubled because of the service.
Earlier this year at a Sylvan location in West Hartford, Conn., the number of tutored students more than tripled, according to Kathleen Keenan, the center’s director at the time. She estimates 250 kids came to the center specifically for the free tutoring. Keenan is now director of education at a Sylvan center in East Hartford.
In 1993, two Baltimore businessmen, Christopher Hoehn-Saric and Douglas Becker, gained ownership of Sylvan and first took the company public.
A decade later, Sylvan sold its tutoring business to New York-based, private equity firm Apollo Advisors, founded by Leon Black. At that point, Sylvan became part of Educate, Inc., an Apollo-owned company that went public in 2004. Educate’s holdings include the Hooked on Phonics grammar/language training system.
In a $535 million deal completed in June, Hoehn-Saric and Becker, working with Citigroup Capital Partners, took Educate private under a new entity, Edge Acquisition, LLC.
Hoehn-Saric is still CEO of Educate (and senior managing director at Sterling Capital), while Becker is CEO of Laureate Education Inc.
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Bear’s Cayne holds cards close to vest
In a classic fiddling-while-Rome-burns story, the Wall Street Journal traced the activities of James Cayne, the CEO of Bear Stearns Cos. this summer.
While units of Bear Stearns, an investment and banking powerhouse, were collapsing because of the crisis in the subprime mortgage market, Cayne was out of the office on several occasions, according to a story in the Journal on Thursday.
Not surprisingly — he’s a CEO after all — Cayne was incommunicado at times on the golf course, the Journal said.
But at other times he was, hold on to your hats, playing bridge.
(He might also have been puffing on a joint, the Journal implies, but that’s a whole other issue.)
Cayne shot back at the Journal, saying in a memo to employees that the article “alleges I engaged in inappropriate behavior and includes a number of other inaccuracies and personal slurs.”
Regardless, he is an avid bridge player, though his devotion to the demanding card game may sound a bit old-fashioned.
But other moguls are drawn to bridge, as well.
Bill Gates, the richest man in America, according to Forbes magazine, loves bridge, as does Warren Buffett, the second richest man.
But Cayne, who didn’t make the list of America’s 400 richest people this year but was 384th in 2005, is at a much higher level in the card-playing world than Gates or Buffett.
He’s ranked 611th the world and has been a top bridge player in the U.S. for years.
For sure, bridge opened doors for Cayne at Bear Stearns.
Alan “Ace” Greenberg, the head of Bear Stearns when Cayne was rising through the ranks at the company, also played bridge, as the Journal noted.
The club at 15 East 67th St. in New York City was described this year by New York Times bridge columnist Phillip Alder as having “the highest standard of play in any club in the world, certainly more than a century ago.”
While skill at bridge would appear to be advancement plus at Bear Stearns it may not trump concern about work habits.
Warren Spector, who until this summer was co-president of Bear Stearns, is also a competitive bridge player, ranking 10th in the U.S.
Both he and Cayne were at the same bridge tournament in Nashville this summer when all hell was breaking loose at Bear Stearns.
Cayne went back to New York before Spector and he later asked for, and received, Spector’s resignation.
“Mr. Cayne was annoyed that Mr. Spector was away from the office during the fund crisis,” the Journal reported.
Since the crisis, Bear Stearns has laid off 800 people, though 15,000 remain, the paper reported.
Cayne, who is 73, remains on the job, presumably analyzing his hand and deciding which card to play next.
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Linda Stein, celebrity real estate agent, found murdered
Linda Stein, punk rock band manager and real estate agent to the stars, was found dead Tuesday night in her apartment on Manhattan’s Upper East Side.
Police said she had been bludgeoned to death.
Stein, 62, co-managed the Ramones, a band that recorded on Sire Records, a label founded by her ex-husband, Seymour Stein. She later represented Billy Joel, Sylvester Stallone, Debra Winger, Perry Ellis and other celebrities.
A powerful personality, Stein was the inspiration for Sylvia Miles, the aggressive real estate agent in the movie Wall Street.
Close friend Elton John issued a statement saying: “I’m absolutely shocked and upset. She’s been a friend for over 37 years and she was a huge supporter of the Elton John AIDS foundation.”
Police, who had not announced an arrest by Thursday morning, said there were no signs of forced entry.
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Soft landings for Merrill’s O’Neal and other ex-chiefs
The cushioned exit of Stan O’Neal as CEO of Merrill Lynch & Co. this week was proof again that nothing succeeds at the top levels of business like not succeeding.
O’Neal is to receive a reported $161.5 million in stock options and retirement benefits. He was ushered out because he had lost favor with his board after announcing that the company had a $2.24 billion quarterly loss.
While $161.5 million seems like enough to get by on, it doesn’t equal amounts received by other dismissed executives.
In January of this year, Robert Nardelli, CEO of Home Depot, was given a $210 million severance package. That figure, according to the New York Times, “quickly made him the standard-bearer for failure-based pay.”
Nardelli, like O’Neal, was said to have a harsh management style, a style that might have been tolerated if Home Depot’s stock hadn’t been in the doldrums.
However, it may be a style that’s in demand. Nardelli became chairman and CEO of Chrysler in August.
In 2006, Hank McKinnell, CEO and chairman of Pfizer Inc., exited his job ahead of schedule. He received close to $200 million in severance.
McKinnell was certainly not alone. Citing a report by James F. Reda and Associates, the New York Times reported that 35 dismissed CEOs took away a total of $799 million in 2006.
Among that year’s golden parachuters was Jay S. Sidhu, chairman and chief executive of Sovereign Bancorp Inc. He received a package worth $73.56 million when he resigned in 2006.
The terms of these severance packages simply reflect the realities of the market place, analysts say.
CEOs are in demand. Therefore, they can negotiate the plush terms of their firings at the times of their hirings.
But, not surprisingly, the resignation packages do prompt criticism from the public, from shareholders and from politicians.
That happened after Walt Disney Co. dismissed its president, Michael Ovitz, in 1996.
Ovitz, who had been on the job for 14 months, was given $140 million in severance pay. Shareholders filed suit, but a judge ruled in 2005 that Disney had not violated its fiduciary duty.
A severance package given to Carly Fiorina, CEO and Chairman of the Board, Hewlett-Packard Co. drew a shareholder suit that is yet to be settled.
Her company dismissed Fiorina in February 2005. She received $21.4 million.
Shareholders have pointed out that should the company’s stock improve, Fiorina also stands to make millions more by exercising stock options.
Fiorina’s severance had other perks, including $50,000 in financial counseling. She also got to keep her personal computer equipment and receive free tech support for three years.
Jill Barad, chief executive of Mattel Inc., received $37 million when she resigned in 2000 after the company reported a loss.
As a part of her package, the company forgave a $3 million home loan and sold her a company car at “a nominal price.”
Like some of the other executives who lost their jobs in the most public of fashions, Barad and Fiorina have landed on their feet.
A website lists Barad’s speaking fee at $50,001 and above. Fiorina has signed on with the soon-to-air Fox News business news channel.