In Business This Week: HEADLINER: GEORGE STEINBRENNER
Can George Steinbrenner say "team player?" Not likely--at least if it means leaving money on the table. On Mar. 3, his New York Yankees broke ranks with Major League Baseball, announcing a 10-year sponsorship deal with Adidas that is likely to bring in nearly $100 million.
Fellow owners aren't pleased. They have been pursuing MLB-wide endorsement contracts that would have big- and small-market teams sharing in the proceeds. Baseball says, in fact, that it has commitments from three companies to pay $150 million for sponsorships this year. But it's not clear whether MLB can block the Yankees deal.
Meanwhile, Steinbrenner's view is that sharing is O.K., but competition is better--at least for the Yanks. The Boss, associates say, was miffed at a now-scotched MLB deal with Nike and Reebok that would have brought each club just $100,000 annually. The Adidas deal, says Yankees attorney David Boies, "opens up an opportunity for other clubs to benefit much more than they would have under a process that, frankly, wasn't going anyplace."By Keith Hammonds EDITED BY KELLEY HOLLANDReturn to top
A SETBACK FOR CIGNA'S SPLIT-UP
NOT SO FAST. A PENNSYLVANIA state court has slapped down CIGNA's plan to split itself into two companies, one inactive unit to handle $4.5 billion in potential environmental and asbestos liabilities and another for its healthy businesses. The court on Mar. 5 vacated a 1996 approval of the plan by Pennsylvania's insurance commissioner, Linda Kaiser, and faulted the process that she followed in granting CIGNA's bid for a split. Judge Dan Pellegrini said opponents of the plan were not allowed to see relevant papers, couldn't cross-examine witnesses, and got insufficient time to argue their objections. He ordered the commissioner to convene another hearing on CIGNA's plan--and recuse herself from the new hearing. CIGNA, noting that the ruling doesn't fault the plan itself, plans to appeal and says it will continue doing business as if it were split in two.EDITED BY KELLEY HOLLANDReturn to top
STAPLES MAY SOON BAG ITS PREY
WILL STAPLES WIN APPROVAL to buy Office Depot, forming the world's largest office-supply chain? The smart money is saying yes. After repeated delays, the Federal Trade Commission's review of the $3.5 billion deal is now set to be completed by Mar. 13. Analysts are betting it will go through but figure Staples may have to unload 50 to 150 overlapping stores to satisfy the FTC. Even if it unloaded 150 stores, though, its remaining 840 office-supply outposts would let Staples outgun its nearest rival, OfficeMax, which has 574 stores. But Staples' edge would diminish if OfficeMax buys most of the stores Staples unloads--and OfficeMax has been prospering.EDITED BY KELLEY HOLLANDReturn to top
CNA: LET THE HEADS ROLL
CNA FINANCIAL APPARENTLY wants to insure itself against a potential sexual-harassment scandal. Within days of learning that the head of its life-insurance unit allegedly made "offensive comments" to two women and another senior exec failed to remedy the problem for about a month, CNA Financial announced the Mar. 1 resignation of the officials. CEO Dennis Chookaszian personally met with employees on Mar. 3 at the Nashville headquarters of CNA's life-insurance unit to tell them of the Mar. 1 resignations of CNA Life President Jack Kettler and Chief Administrative Officer Robert Teske.EDITED BY KELLEY HOLLANDReturn to top