Maybe Madoff, a convicted con man, would’ve felt more comfortable somewhere in the National Football League, where the practice of obfuscation seems to be thriving.
We’ve heard countless stories about Madoff’s unwillingness to show interested parties just how he achieved, year-after- year-after-year, glowing investment returns. Trust me, he said.
There’s a similar message emanating from NFL owners in their labor battle with players, whose now-dissolved union demanded to see 10 years of audited team financials as a condition to their pursuing a path of negotiation over litigation.
Like Madoff the football owners said no, which sure makes you wonder what they don’t want the rest of us to see.
Owners in all sports leagues are fond of describing the management-labor dynamic as a partnership.
OK, then, ask yourself this: If you were a partner in a $9 billion a year enterprise, and the other party was clamoring for significant changes to your agreement, saying the status quo stifled their ability to reinvest in the business, wouldn’t you want to see as much information as possible before agreeing to make alterations?
That’s what’s happening here.
A la Madoff, NFL owners won’t embrace clarity and specificity. If we learned anything from Madoff and the financial crisis it’s this: transparency is good.
How to Share
“Any smart businessman would want to see full audited financials in the event that someone wanted you to write a check for a billion dollars,” said Kevin Mawae, president of the National Football League Players Association.
Owners under terms of the recently expired contract took $1 billion off the top for expenses like, say, stadium construction. Now they want another $1 billion before the sharing even starts, saying expenses are rising faster than revenue.
Before discussing givebacks and concessions, however, the players wanted proof that things really are that bad. They wanted to see the numbers. Trust me doesn’t work anymore. Nor should it.
Should the residents of South Florida trust the leadership of baseball’s Marlins, who trimmed payroll and sought taxpayer assistance for their new stadium while privileged financial statements obtained by the website Deadspin.com showed the team turned an operating profit of about $49 million for the combined 2008 and 2009 seasons?
Should players and fans trust George Shinn, who, the Charlotte Observer revealed, was underreporting attendance for the Hornets as it lobbied the National Basketball Association for a move to New Orleans? Here was a case of an owner fudging the numbers to get what he wants.
And then there’s Minnesota Timberwolves owner Glen Taylor, who knowingly violated the NBA’s labor agreement when in 1999 he entered into a secret contract with a player.
“What was done here was a fraud of major proportions,” NBA Commissioner David Stern said at the time. “The magnitude of this offense was shocking.”
It’s worth noting that league owners in 2008 elected Taylor chairman of their Board of Governors. Trust us.
NFL officials defend their position in part by pointing to the NBA, where they contend the league’s decision to disclose its audited financials hasn’t helped owners and players to reach agreement. Only I asked Billy Hunter, executive director of the basketball players union, if the financial information that he’s received is satisfactory.
He said no.
Perhaps the NFL is wary that full disclosure might prove embarrassing to some of its owners.
That’s precisely what happened to the owners of the Los Angeles Dodgers, Frank and Jamie McCourt, whose lavish lifestyle, disclosed in divorce papers, was the stuff of snickers. A Beverly Hills hair stylist, for instance, was paid more than $150,000 a year to primp both in their home.
Hard to plead poverty or justify a hike in ticket prices when you’re spending like that. Who knows what audited team financials would show about private jets, clothing allowances and grooming expenses for oh, say, Cowboys owner Jerry Jones.
“Maybe you should ask the owners if they trust each other to see each other’s books,” Mawae said.
Madoff would’ve loved this bunch.
(Scott Soshnick is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the editor responsible for this story: James Greiff at firstname.lastname@example.org