Saturday, September 16, 2006

Reggie Bush – The Unpaid Professional

Unless you have been living your life under a rock and are totally ignorant to the obvious – the news that Reggie Bush may have accepted more then $100,000 during the three years he played football for the University of Southern California Trojans shouldn’t be surprising to you.

If proven, Bush could lose the Heisman Trophy he was awarded in December and the Trojans could be stripped of their 2004 Orange Bowl win. The Trojans were awarded the mythical National Football Championship after winning the BCS title game where it was contested at the 2004 Orange Bowl game in Miami.

The issue may be simple on the surface and if the allegations that were raised in an investigative report published by Yahoo Sports are proven to be true. Bush will have violated several NCAA’s rules. An issue well worth considering; how much money did the University of Southern California generate during the three years Bush played for the football team as an unpaid professional.

According to a report published Thursday by Yahoo Sports Reggie Bush, the number two selection in April’s NFL draft and the most electrifying football player to emerge from the college ranks in more then a decade, may have accepted financial and additional benefits worth well over $100,000 while he played football at USC. Charles Robinson and Jason Cole based their allegations on the relationship Bush and his parents had with various ‘agents’, before and during the three years he played at USC, beginning with the 2003 season and ending with his Heisman Trophy 2005 junior year. Bush left USC for the NFL in January.

Reggie Bush first gained prominence at San Diego’s Helix Charter High School, which according to Wikipedia, the free encyclopedia, serves a low to mid-level socioeconomic community and has a body of approximately 2,350 students.

Bush’s high school career first gained notoriety when the New York Times reported that Helix’s athletic department had created an eight minute highlight videotape from Bush’s career high school highlights. The tape has become an urban legend, including suggestions USC didn’t decide to offer Bush a scholarship to USC until after they had seen the tape. The New York Times compared the tape to “Bob Dylan’s Basement Tapes”.

"You'll see some stuff on here," the Helix athletic director, Damon Chase, cautioned, "that is really pretty sickening."

Reggie would line up back there and make 22 people miss," said Kennedy Pola, the former U.S.C. running backs coach. "That's 11 twice."

Still, according to Pola, his colleagues at U.S.C. were not sold on Bush until they saw The Tape. It was hard not to feel sorry for the opposing players on the field. "That's the film that convinced the rest of the staff," said Pola, now an assistant with the Jacksonville Jaguars. "They popped it in and went, 'Wow, we've got to get this guy.' "

Comparing a high school football player to the legendary Dylan basement tapes that featured Dylan and The Band recording at The Band’s Woodstock, New York home, tells you a great deal about the life and times of Reggie Bush. Attending a high school with the demographic his high school is reported to include -- low to mid-level socioeconomic, suggests Reggie Bush learnt from his early years as a teenager he was going to be exploited on and off the football field for his exploits on the football field. It’s also clear Reggie Bush’s high school wasn’t similar to West Beverly Hills High School, the preppy affluent high school portrayed in the television series Beverly Hills 90210.

According to reports filed with the Department of Education, USC is not one of those huge-revenue football schools, despite a 34-game winning streak that highlighted Bush’s Trojan career, a streak that ended in their Rose Bowl game loss to Texas. USC had revenue of "only" $29.3 million during its 2004 championship season, (which ranked it 14th among 2005 bowl contenders) and a profit of $12.6 million (good enough for 13th).

USC's profit as a percentage of revenue is just 43 percent, below the average of 48 percent for all the reporting 2005 bowl teams, even when you include the 11 schools which lost money on their football programs. The top 20 football programs in terms of revenue have profit margins of about 60 percent, on average. Even the NFL would be envious of those numbers.

And what did Reggie Bush receive for being the economic catalyst at USC, creating hundreds of millions of dollars in financial and ancillary benefits – an annual athletic scholarship worth $25,000. If Reggie Bush learnt nothing else during his high school and college football career it was in what it was like to be exploited.

The Yahoo investigation included all of the usual innuendos accompanying similar reports. Documents and on-the-record interviews with sources close to the situation reveal that Bush and his family appear to have received financial benefits from Ornstein and a business associate. Those benefits include:

$595.20 in round-trip airfare from San Diego to Oakland in November 2005 for Bush's stepfather, LaMar Griffin, his mother, Denise Griffin and younger brother to attend the USC-California game at Berkeley. The fees were charged to the credit card of Jamie Fritz, an employee of Ornstein. The document detailing the charges was provided by Lee Pfeifer, an estranged business associate of Ornstein's.

$250.65 for limousine transportation from the Oakland airport to the Ritz-Carlton in San Francisco that November weekend for the Bush family, charged to Fritz, according to a document. Ornstein acknowledged both he and Bush's family stayed at the luxury hotel.

Additionally, New Jersey memorabilia dealer Bob DeMartino alleges that Ornstein provided:

Suits for Bush's stepfather and brother to wear during the Dec. 10, 2005 Heisman ceremony in New York, a makeover for his mother for the event and limousine transportation;
Weekly payments of at least $1,500 to the Bush family.

Documents and multiple sources also link Bush and his family to receiving benefits from New Era's financial backers, including:

$623.63 for a hotel stay by Bush at the Venetian Resort & Casino in Las Vegas from March 11-13, 2005, charged to Michaels, according to a document signed by Bush.

$1,574.86 for a stay by Bush at the Manchester Hyatt in San Diego from March 4-6, 2005, paid for by Michaels, according to a hotel document, a hotel employee and a source.

Approximately $13,000 to Bush from New Era to purchase and modify a car, three sources said.
As reported by Yahoo! Sports in April, $54,000 in rent-free living for a year at Michaels' $757,500 home in Spring Valley, Calif., according to Michaels and San Diego attorney Brian Watkins.

Also from previous Yahoo! reports, $28,000 from Michaels to help Bush's family settle pre-existing debt, according to Michaels and Watkins.

Thousands of dollars in spending money to both Bush and his family from the prospective agents, according to multiple sources.

There is no reason whatsoever to believe Yahoo’s sources aren’t who they claim they are, however its every important to note several of Yahoo’s key sources allegedly had every reason to do whatever they could to hurt Reggie Bush’s image and reputation.

Reggie Bush's stepfather, LaMar Griffin allegedly approached family friend Lloyd Lake about partnering in a sports and entertainment agency in September 2004 when Reggie was starting his sophomore year at USC, according to Yahoo. According to sources (here we go with using unnamed sources), Griffin suggested that Bush will be the agency's anchor client and that the agency may also partner with the Sycuan Indian tribe in the venture. Griffin and Lake approached a third man a month later – Sycuan business development officer Michael Michaels – in his luxury suite in Qualcomm Stadium after a San Diego Chargers football game about joining their venture to create – New Era Marketing.

The relationship between Reggie Bush and the soon to be incorporated New Era Marketing ended badly before the Rose Bowl game. A fair point to consider – if anyone associated with New Era served as a source for the Yahoo investigation its fair to say their opinions are tainted by their failed relationship. That’s not in anyway to suggest what they may have said isn’t true, just that it’s important to understand where the perspective of they’re view of Reggie Bush is coming from.

For this part, Reggie Bush released the following statement Friday following the Saints practice.

"I'm not worried about any of these allegations or anything like that," he said. "Because I know what the truth is, like I said from day one. Once the smoke clears, everybody's going to see we did nothing wrong."

"Obviously it does affect you just because it is out there," Bush said. "But at the same time I know there's nothing to worry about.

"It makes you want to go out there right away and tell your side of the story. Show everybody the facts, the truth. But you can't do that. That wouldn't be the right way to do it."

In a statement released by USC counsel Kelly Bendell, the school said it is cooperating with the probe but "cannot comment on any matter that is the subject of an ongoing NCAA and Pac-10 investigation."

The NCAA launched an investigation into Bush's eligibility in April after Yahoo reported that Bush's family had not paid rent after living for a year in a home owned by Michaels. The Pac 10 is currently conducing their own examination into what may or may not have taken place during Bush’s three years as a member of the Trojans.

NCAA by-law states that an athlete shall be deemed ineligible if he or she accepts benefits from agents or marketing representatives. The rule further states that student-athletes, their family or friends cannot receive benefits or loans from agents. Additionally, NCAA by-law states that athletes cannot receive preferential treatment, benefits or services because of the individual's athletics reputation or skill or pay-back potential as a professional athlete, unless such treatment, benefits or services are specifically permitted under NCAA legislation.

It remains to be seen if the allegations against Reggie Bush will be proven true. This isn’t the first time and nor will it be the last time college athletes from college athletic programs will be enticed by people waving dollars at them.

In 1992 Chris Webber, then in his sophomore year at Michigan, part of the legendary Fab Five (believed to be the greatest recruiting class in the history of college basketball) bemoaned the fact that when Michigan played a game at The Palace at Auburn Hills in December, a blue Michigan shirt with the yellow No. 44, which was worn by Webber, the most famous of the sophomore starters (the five started as sophomores), was listed at $65 at merchandise stands located throughout the facility. A similar shirt, through mail order, is even more expensive.

Webber’s concern was others (in this case the University of Michigan) earning money as a direct result of his basketball ability and the brand awareness he and his teammates brought to Michigan.

A decade after Webber left Michigan after his sophomore year for the NBA, a federal investigation revealed that former Michigan booster Ed Martin had given a total of $616,000 to Chris Webber and three other ex-Michigan players (Robert Traylor, Maurice Taylor or Louis Bullock). Only Webber was a member of the Fab Five, the others all played for Michigan after Webber had left the program.

The NCAA leveled a series of sanctions against the Michigan basketball program, including but not limited too:

Forfeiting all victories in which Chris Webber, Robert Traylor, Maurice Taylor or Louis Bullock participated after the point Ed Martin became a representative of the program in the eyes of the NCAA. Games forfeited include '92 Final Four games vs. Cincinnati and Duke, plus entire '92-93, '95-96, '96-97, '97-98 and '98-99 seasons.

Repaying to the NCAA about $450,000 that Michigan received for postseason play with those ineligible players.

In 1986, Joe Paterno, already twenty years as head coach at Penn State, offered this to The New York Times.

''We've butchered a whole generation of kids that might have been professional people, business people,'' Paterno said of the freshman-eligibility rule, which took effect in 1972. Making freshmen eligible for varsity competition - instead of freshmen-only teams - was designed to save the universities money. Previously, freshmen on athletic scholarships had to sit out of varsity competition, costing the universities a year of tuition, books, room and board but producing no revenue.

''A lot of people wish to turn the clock back to where the game on Saturday was just a game between bona fide students,'' said John R. Davis, the president of the N.C.A.A told The New York Times 20 years ago. ''But it's a fact of life that we just can't support all of the sports without the gate receipts and television money we're getting.''

The NCAA reached an 11-year $6 billion media agreement with CBS 14 years after Davis then the President of the NCAA talked about how important revenue generation is to the NCAA.

The agreement announced by then NCAA President Cedric W. Dempsey and NCAA Executive Committee Chair Charles T. Wethington of the University of Kentucky on December 5, 1999, begian with the 2002-03 academic year and contained an average payout of $545 million per year. The agreement also contained financial-incentive opportunities for the NCAA and an option for the NCAA to renegotiate after eight years.

Annual payments to the NCAA under the new contract will start at approximately $360 million, a 20 percent increase over the last year of the existing contract. Payments throughout the remainder of the contract will increase by about 8 percent annually. The agreement also provides for the NCAA to receive $40 million up front.

"The NCAA Executive Committee soon will determine how these new resources will be used," said Wethington.

"The expectations for higher education and their athletics programs are broad and deep. We will have to be strategic and wise in how we use these funds to the best benefit of the more than 335,000 student-athletes in 973 member institutions across the country."

"The revenue from this agreement -- even if every cent went directly to institution coffers -- would not put all athletics programs in the black," Dempsey said. "It will, however, relieve some of the pressure so that member schools can concentrate on quality of programs, increased participation opportunities for all who want to play sports, and enhanced academic support for college sports."

In November 2004, FOX Sports and the Bowl Championship Series (BCS) announced an exclusive four-year agreement covering all media distribution and sponsorship rights for the Fiesta Bowl, Orange Bowl and Allstate Sugar Bowl from 2007 through 2010, and a new, stand-alone, BCS National Championship Game from 2007 through 2009. In addition to telecast rights, the contract also covers national terrestrial and satellite radio rights; Internet rights; all sponsorship rights, including naming rights, signage opportunities and in-game enhancements; ancillary programming on FOX and/or FSN; and a joint venture (FOX, BCS and Bowls) to identify and exploit merchandising opportunities.

"We are very pleased to have reached this agreement with FOX Sports," said Kevin Weiberg, Big 12 Commissioner and BCS Coordinator. "We very much look forward to the creative energy that the FOX team will bring to the Bowl Championship Series, and I am certain that college football fans will find that the presentation of the games will bring a new level of excitement and energy to these classic bowl contests."

"I am also pleased that we were able to successfully negotiate a television contract for the expanded BCS," added Weiberg. "The new model brings an enhanced opportunity for highly-rated teams to play in BCS games, including teams from conferences that have not had an automatic berth. This model will also showcase in a more distinct fashion the BCS National Championship Game in a unique telecast window after the BCS bowl games."

"Few sports boast the passion and pageantry of college football, and the BCS is the Mt. Everest of college football," said Peter Chernin, President & COO, News Corp. "The deal we’ve agreed to with the BCS will prove to be financially advantageous for all concerned."

According to Media Post Fox ponied up some $80 million a year, starting in 2007, for the rights to the Bowl Championship Series--which includes the Fiesta, Orange, and Sugar Bowls plus a new BCS national championship game. Fox will be able to sell the naming rights to the new BCS title game, which it will look to bundle with on-air and other sponsorships.

The NCAA is a system built to be corrupted. CBS and Fox are collectively paying the NCAA and the BCS $625 million a year for what amounts to five football games and the 63 games of the NCAA Men’s basketball tournament.

USC’s football program is an economic engine worth hundreds of millions of dollars in ticket sales, merchandise dollars, radio and television revenue and increased alumni donations. If the charges against Reggie Bush are indeed proven to be true, then Bush and the USC athletic department will be held accountable. But ask yourself this, who is right, who is wrong.

The NCAA has a problem; it’s evolved into a multi billion dollar business that isn’t paying those who are generating the dollars any of the revenue they’ve created. It’s a system created to corrupt itself.

For Sports Business News this is Howard Bloom. Sources cited in this Insider Report: Yahoo Sports, The New York Times and Media Post