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110 II. ON-GOING TEAM OPERATIONS IN TERMS OF PLAYER COMPENSATION
111 A. DIRECTLY RELATED TO PLAYER COMPENSATION
112 1. Change the traditional model from employer/employee or management/union to team/senior executives. Any in corporate America in this rarefied atmosphere are in a different category. Players need to be placed between the owners/coaches above them and the various staff and other operational positions, etc., which would be below them.
113 2. This follows practices common in American business, and is used as lures by executive recruiters. Its also common practice for the team of executives to interact, even while maintaining enough separateness so as to not micro manage.
NOTE: GEs Jack Welchs genius was to turn his managers loose and leave most of the day to day to them, although he set policy and met with them regarding strategies, unlike the parallel roles played by club owners such as Jerry Jones and Daniel Snyder, who are constantly interfering with their coaches or operations executives. As the old saying goes, you cant have a business if you dont run it like a business.
114 3. If there are multiple owners, they would serve as part of the Board of Directors, along with others who are not owners (investors, others appointed by the owners), which would hire a Chairman, CEO, and COO (one or more of which may or may not be an owner). The team would be run like a business.
NOTE: This avoids the kind of stalemating that has occurred with multiple owners, as seen in the case of the Devil Ray owners of MLB.
115 4. This model is recommended as the best way to maximize profits, maintain cost containment, and offer the fan an experience that will not be prohibitive due to cost, which would drive fans to other sports.
116 5. To get players to agree to this new model, first explain to them that they need to do more than just work for money; they need to make their money work for them, and then, secondly, show them how to make their money work for them by combining the two traditional salary categories and, then following the patterns of corporate America, add 10 new salary categories, 2 of which are non-tangible, non-material, which will make their money work for them. This makes a total of 12 categories. The 12 salary categories are:
117 1. Signing Bonuses
Unconditional: to offer players in exchange for the rest of the package: a graduated scale, with both a specified low and high, with the eventual amount to be negotiated with each player. Seek a league wide scale. Pay less than mega amounts current today.
118 2. Salary Cap:
Unconditional: maintain current system with whatever changes are negotiated. Establish with union a league wide minimum wage or floor (by all or by position).
119 3. Golden Handcuffs (Stay For Minimum Amount Of Years To Vest In Retirement Plan)
Conditional: a separate, potential income pool, with contributions made by team, which could be options in a separate tracking stock or a bonus or set of bonuses, to be paid at given out years. Forfeited if voluntarily leaves for another team. Not forfeited if cut or involuntarily traded.
120 4. .Golden Parachutes (1-2 Year Severance Pay If Receive Play Ending Injury, any time, or Are Cut after four years)
Conditional: a separate income pool, to be received if the player receives a career ending injury or is let go of by the team. Forfeited if players leave for another team before four years. For career end or career ending injury, package includes career transition consulting and support. This helps to reduce upfront signing bonuses.
121 5. Participation In Profit Pool (As Consulting Firm Partners And Law Firm Partners Do)
Conditional: team profits are placed into a separate pool, with specified percentages for the investors, the owner(s), the coaches, and the players, with the latter two percentages based on incentive contributions and years of playing for the team.
122 6. Player stock option pool: current discussions in various cities often overlook one of the easiest ways to finance debt and pay off the stadium: structure levels of stocks and options that would give to players a piece of the team later on when such options would be exercised, because with a new stadium, the team will be worth many millions more, which will happen regardless of whether the owners wish to sell or not. Adding players to the financial picture helps both: lower salaries and signing bonuses, with any difference put into the stadium, which could be publicly or privately owned and have publicly traded non-voting stock, with the players getting options which will be worth significantly more later on.
123 7. ESOP's: another option is to use Employee Stock Option Plans as invented by Louis Kelso and used in many corporations. This would reduce the need for as much up front dollars and provide back end dollars for athletes.
124 8. Retirement Plans
Conditional: contributions from both players and team, to begin at dates complimentary to retirement plan law; requires specified time period to vest (3-5 years); amount is lost if voluntarily leave under free agency auspices.
125 9. Personal Affairs Assistance And/Or Management.
Conditional: financial planning, with bookkeeper to pay bills and other areas to cover not handled by agent; assistance in planning post- professional future after playing days.
126 10. Tangible and Intangible Perks: Special Events For Players And/Or Families (Spouse And/Or Kids)
Unconditional: intangible includes such events as the annual cookout during Training Camp; holiday celebrations within two weeks after the teams last game of the season. A player social handbook listing all of the organizations that meet player interest, compiled after surveying team, on their interests, like and dislikes, and desire parts of their new beginnings, for both married and single. Provide an environment that emphasizes the positive side of life and living, love, and relationships. Included in the intangible is the inclusion of a higher percentage of Black coaches and Black office/support staff. As reported in USA Today, December 11, 2000, p. 2C, quoting Chris Colinsworth: The fact that you only have three African-American coaches in the league really shows how far removed these white owners are from their predominantly African-American locker rooms. Tangible includes specific revenue generating projects. One such project could be an exercise video/DVD, starring players and coaches' wives and daughters, as well as wives and daughters of key friends of the team. The members of the family would share in the profits. They could designate a portion to a favorite charity of the team in the community. We have a complete program and proposal for doing so as well. A second one is to provide writers to write the autobiography of any player wishing to have one written. We can also provide that A third is to provide an identification web site for the player, on which is the players record, stats, pictures, etc.,, as well as items for sale, including autobiography and memorabilia, with links to companies with which the players has endorsements. Net Intrust can provide that.
127 11. Internal Recruitment
Unconditional: Provide FYI packets for players: covers all of the above, which serve to continually recruit the player for staying with the team as long as the team desires them, to add to the above to make them feel special, even if the team feels it is in the teams best interest to trade or release a player.
Special off-season breakfast or lunch or dinner as a team
Regular special C.O.AC.H. inspirational breakfasts (weekly or bi-weekly).
Pre-season kick-off for players and families hosted by the owner, plus one at mid-season and post-season.
A luxury box suite for their families at home games (note: even at Supreme Court sessions, a front row is reserved for the spouses of the Justices).
128 12. Newsletter Reporting
Unconditional: provide comparisons of current or past negative and positive experiences of players who put themselves up for free agency (players who wind up earning less), and financial status at careers end (the number that go bankrupt, and have not prepared for post-playing days life). Use a calibration showing what has happened to other players: exposure to not coming back, not getting as much, playing on a worse team, causing stars and non-stars to earn less, worse environment for family, and a coach or system that doesnt take advantage of their skills, etc. Each departed player could be diagramed in that way. Also: baseball a couple of years ago saw many free agents drop from significant 7 figures to low and middle 6 figures. Outline both tangible and intangible reasons for staying. Salaries cant continue to increase at the front end. The trend will eventually kill the goose that lays the golden eggs. Players wanting more money for ego reasons, be it to be highest position player or highest player of all, poisons the goose, is not in the best interest of the business, makes for poor entertainment, drops in TV ratings, fans leaving for other sports, etc. Players as partners would be paid on a partnership basis: as a percentage of profits, fluctuating with the market based on their performance which often determines whether fans will buy tickets or watch on TV.
129 6. Two old movies give us two famous song questions: Whats it all about? and Is that all there is? This Compensation Package Plan helps players transcend the dollars to find meaning in all of the adulation and attention they will receive in order to put it in perspective such that it becomes a source of power to achieve good and not just a distraction nor a road to some kind of personal destruction. And with the 12 part compensation package, players and owners can better exercise stewardship of their responsibilities, the first of which is to the game, and then to their fans, their team, and then to themselves.
130 7. Bottom line: its about league/team/individual survival. The key to survival: the Fan