THE CHERRY ON TOP
You don't have to be an accountant to get through the sports pages these days, but it helps. Take the confusion over the contract that former Brigham Young quarterback Steve Young signed two weeks ago with the USFL's Los Angeles Express. It was ballyhooed as a 43-year, $40 million deal, and, viewed one way, that's an accurate description. Seen another way, however, those figures—both years and dollars—are inflated.
Strictly speaking, Young's contract with the Express is only a four-year deal—that's the length of time he's committed to play for the team—guaranteeing him salaries, bonuses and an interest-free loan during that period totaling $5.9 million. In addition, the Express agreed to buy an annuity that will give Young deferred payments totaling a princely $34.5 million by 2027. The payments will start at $200,000 in 1990, remain at that level until 1999, then escalate to a $3.173 million payout in the final year. By adding the $34.5 million to the compensation Young will receive during the next four years, you come up with the $40 million figure that made the headlines. (SI's story on Young in the March 12 issue said he received a $36 million package, including $30 million in deferred payments; those figures were provided by Young's lawyer, Leigh Steinberg, who later revised them upward.)
Payouts from the annuity are indeed a form of deferred compensation from the Express. But the annuity might just as easily be thought of as a long-term investment the club has made for Young. Financial experts say that the Express would have had to pay only $50,000 or so in 1984 to produce the $3,173 million that Young's annuity will yield in 2027; the team paid about $2.5 million for the entire annuity. This outlay—but not the revenue it will generate—is part of the Express's investment in Young.
March 19, 1984
It might be safest to say that Young has a four-year, $8.4 million contract—$5.9 million in direct compensation plus a $2.5 million annuity. How does this compare with the four-year, $6 million contract extension the New Jersey Generals have given Herschel Walker? In announcing that deal last week, Generals owner Donald Trump claimed that it was actually superior to Young's. His reasoning: Walker's compensation, if astutely invested, could yield more than Young's deferred payments.
Whether up-front income is preferable to deferred income is a matter of opinion. Chris Neubert, a Boston financial consultant who handles investment planning for the clients of sports agent Bob Woolf, asks, "Is it better to get money over a short period of time or stretch it out? I'd rather have the money now, because I think I can get more out of it." Of Young's so-called $40 million contract, Neubert says, "I might have said that Larry Bird [a Woolf client with a seven-year, $15 million contract] had a contract worth $30 million, if I'd projected all the investments it would realize. But that isn't a fair thing to say. He signed for x amount of money. Who really knows how much money he will realize in his investments with that amount?"
Other financial experts look a bit more kindly on deferred income, especially when it takes the form of annuities. "One possible reason to use deferred compensation is that young people can't handle a lot of money," says Herman M. Schneider, a senior tax partner of the national accounting firm of Coopers & Lybrand. "And annuities are very conservative investments. They pay a guaranteed rate." Richard Bass, first vice-president of Walter Kaye Associates, Inc., New York insurance brokers, says, "Athletes are used up and thrown out. You hear many horror stories about their finances. It's important that they have guaranteed income. Annuities are a prudent strategy."
Ironically, Steinberg, Young's lawyer, says that he ordinarily prefers his clients to take as much money as possible up front "and go ahead and invest it." But he also says the Express's offer of an annuity to Young was one he couldn't refuse. "The deal was predicated on upfront dollars, and the Express added the annuity on top of it," says Steinberg. "The annuity was the cherry on top."
JOHN LAW, OLYMPIAN
No sooner did TV comic David Letter-man arrange to make his late-night program the official talk show of the U.S. Virgin Islands Olympic team (SCORECARD, Jan. 9) than everybody seemed to want to get in on the act. A bunch of school kids in Germantown, Wis. subsequently designated themselves as the official fifth grade of the 1984 Winter Olympics, and, almost as improbable, a recently posted sign on an automobile lot in Savannah identifies the proprietor as the official used-car dealer of the L.A. Games. Sometime real soon this particular joke will grow stale, but not before proper note is taken of the T shirts and sweat shirts that the Los Angeles Police Academy store is selling, for $6 and $13.25, respectively, to cops, their families and friends. Across the chest is the inscription LAPD, OFFICIAL POLICE DEPARTMENT OF THE 1984 SUMMER GAMES.
ON THE RUN
In 1975, Dennis Banks, the co-founder of the American Indian Movement, was convicted of assault and rioting for his part in a demonstration in Custer, S. Dak. to protest police handling of the shooting death of an Indian. While awaiting sentence, Banks jumped bail and fled to California, where Governor Jerry Brown gave him sanctuary by refusing to extradite him to South Dakota. Last year, after newly elected Gov. George Deukmejian indicated he might allow Banks's extradition, the Indian leader took off again, this time finding asylum on the Onondaga reservation, 7,300 acres of wooded, rolling hills about five miles south of Syracuse, N.Y.
Today the 52-year-old Banks, a hero to many Indian youths, who consider him a victim of white oppression, is the reservation's cross-country coach. He's currently organizing the Jim Thorpe Longest Run, a cross-continent relay commemorating Thorpe's life and the Thorpe family's success, in 1983, in regaining the gold medals he was forced to surrender after the 1912 Olympics.
The eight-week run will begin on the Onondaga reservation on May 28 and end in Los Angeles County a week before the Summer Olympics. The culmination of the run will coincide with the start of the first Jim Thorpe Games, a sort of mini-Olympics for Native Americans. About 40 Onondagas will run opening legs before giving way to Tuscaroras, Utes, Piutes, Western Shoshones, Winnebagos, Arapahoes, Sioux, Lakotas, Oneidas and members of Banks's own tribe, the Chippewas. Instead of a torch, they'll hold aloft medicine bags and belts of wampum beads.
Banks himself will run the first three miles. That's the entire length of the Onondaga reservation. If he were to run any farther, he would be subject to arrest.
HE REALLY PARKED ONE
When Pittsburgh Pirates third baseman Jim Morrison suffered a jammed thumb before a March 7 spring training game against the Mets in Bradenton, Fla., the club told Jim Opie, a 22-year-old non-roster player, to hop in his car and hurry over from an auxiliary diamond to replace him. Trouble was, Opie's name hadn't been put on the list of players entitled to free parking at McKechnie Field. He had to pay $2 to get in the lot.
In the third inning Opie hit a 375-foot home run to help the Bucs win 4-3. Though Opie had 20 home runs and hit .294 for Alexandria in the Class A Carolina League last year, he had virtually no hope of getting to the majors this spring. He still is only a long shot, but that homer and some further batting heroics in the following days—he was hitting .667 after four games—earned him a longer look. It also got him a $2 refund from the Pirates for his parking fee.
RUNNING FOR SHELTER
To celebrate the passing of the April 16 income tax deadline, the Georgia Society of CPAs will stage a big to-do for runners in Atlanta the next weekend. One event will be on a 10-km course lengthened by 40 yards to create what the promoters call the 1040K road race. Another event is a one-mile fun run called the Short Form. Also scheduled is a two-mile race walk called the W-2. Proceeds from the big day will go for college scholarships for budding accountants. Entry fees are tax deductible, naturally.
THEY THOUGHT THEY COULD...AND THEY DID!
When the basketball season opened last November in Hedrick, Iowa (pop. 847), something was missing. Hedrick High School had a girls' as well as a boys' team, and because so many of the school's 23 girls preferred playing hoops to eliciting rah-rahs, there were no cheer' leaders. To fill the void, Jim Clingman, a drugstore employee, organized the Granny Squad. Ranging in age from 57 to 74 and boasting some 40 grandchildren and one great-grandchild among them, the six women (including Clingman's mother, Mary Faye) were an immediate hit. "At first we thought the kids would laugh, but they didn't," Clingman says. "In fact, they were more supportive than the adults. But even the adults liked it."
The Grannies performed a lot of old standards, like Locomotive ("We think we can, we think we can, we think we can...we know we can"), but they were also sufficiently with it to exchange high fives with the players at courtside. The Grannies didn't build pyramids and didn't do tumbles ("At least not deliberately," says Clingman) but they did have some show-stopping routines. For example, when the high school girl who played the school's fox mascot began peeling off her costume as the band played The Stripper, the horrified Grannies rushed to cover her with their pompons.
But now the season is over—Hedrick's boys' and girls' teams were both eliminated in the first round of the Class I-A state tournaments, finishing with 14-7 and 12-8 records, respectively—and the Granny Squad's fate is uncertain. Next season, high school girls will again get first crack at forming a cheerleading squad. But if not enough of them are interested, the Granny Squad has agreed to return, cookies and all. Cookies? Oh yes, the Grannies handed them out at halftime to other teams' cheerleaders.
THEY SAID IT
•Jerry Tarkanian, UNLV basketball coach, discussing the Rebels' nine seniors: "We probably won't feel the loss of them until they're gone."
•Ted Hendricks, Los Angeles Raider linebacker, on the team's villainous reputation: "Because of us there's the no-clothesline rule, the no-spearing rule, the no-hitting-out-of-bounds rule, the no-fumbling-forward-in-the-last-two-minutes-of-the-game rule, the no-throwing-helmets rule and the no-Stickum rule. So you see, we're not all bad."
•Greg Foster, world champion hurdler, explaining why he gave up being a wide receiver in high school: "I got tired of running down the field and having the ball land 30 yards behind me."