Hi-Yo Silver, Away
NBA Commissioner Adam Silver placed a big bet on legalized sports gambling. He didn't anticipate the alleged corruption that came with it.
This Week In Business – Oct. 19-25
“You cannot beat a roulette table unless you steal money from it.” –Albert Einstein
NBA Commissioner Adam Silver argued that legalizing sports betting would make sports betting less corrupt. What he didn’t understand – until maybe just this week – is that it would make basketball more corrupt.
And it allegedly has.
Chauncey Billups, coach of the Portland Trail Blazers, and Terry Rozier, guard for the Miami Heat, were arrested Thursday in an illegal gambling and poker-rigging probe.
Billups, 49, allegedly played in Mafia-rigged poker games and was indicted among 30 others. Rozier, 31, is accused of leaking insider info to sports bettors and even throwing games. Others were indicted as well, including former NBA player Damon Jones.
Read More: There’s No Such Thing As A Green Bank Or A Fair Game (Business Blunders)
In a now-infamous 2014 Op-Ed piece in The New York Times, Silver put forth the ol’ everybody-else-is-doing-it-so-why-can’t-we? Here’s what he wrote:
“Gambling has increasingly become a popular and accepted form of entertainment in the United States. Most states offer lotteries. Over half of them have legal casinos. Three have approved some form of Internet gambling, with others poised to follow.”
It made so much sense that just about every major sports league has since followed Silver’s march into legalized sports betting. In the past seven years, sports fans have reportedly placed a half trillion worth of bets.
Silver was right that gaming can be regulated to a large extent, but what has he done to keep coaches, players and other insiders from leaking information and possibly even throwing games?
The NBA did its own investigation of Rozier, for instance, and it cleared him. Nothing to see here folks. … But the FBI didn’t buy it.
Here’s what else Silver wrote in 2014:
“Let me be clear: Any new approach must ensure the integrity of the game. One of my most important responsibilities as commissioner of the N.B.A. is to protect the integrity of professional basketball and preserve public confidence in the league and our sport.”
It’s almost always a bad sign when leaders use words like “integrity,” especially when they are making dodgy proposals about nabbing buckets of money from gamblers.
On Friday, Congressional leaders asked Silver for a briefing on the scandal. And for what it’s worth, fans are calling for his resignation on social media. Who wants to watch a rigged game? I mean, besides WWE Smackdown fans?
Indeed, the integrity of the game is what’s most important, and right now it looks like Silver failed to protect it.
Bots are eating at Cracker Barrel. Are you?
Stock of Cracker Barrel Old Country Store is still in the outhouse as right-wing outrage over its bungled rebranding efforts in August still simmers.
The chain’s stock is down about 50% since July, an activist investor keeps trying to oust CEO Julie Felss Masino, and The Wall Street Journal reported this week that the chain has been attacked online by bots.
When Cracker Barrel announced its rebranding everyone from Donald Trump Jr. to anti-DEI activist Robby Starbuck called it a brazen act of wokeness for booting “Uncle Hershel” from its logo and toning down its country charm.
Now consultants have discovered that 32% to 37% of social media posts bashing Cracker Barrel have come from fake accounts, amplifying the anger.
Activist investor Sardar Biglari isnt buying it. Here’s what he told the Journal:
“It’s a roulette wheel of excuses. The board has blamed its dismal performance on everything from demographics, gas prices and the pandemic to brand relevance and now bots.”
Biglari, who’s investment firm also owns Steak ‘n Shake, took out a billboard in Nashville that reads “FIRE THE CEO” across the Cracker Barrel logo. But he says he doesn’t know about the bots.
Bots or not, the Cracker Barrel crowd is indeed a testy bunch. In 2022, for instance, some of them freaked out when the chain introduced plant-based Impossible Sausage as an option. They could still get their greasy pork links, but what the hell were all these woke wieners doing on the menu?
By now, a $700 million rebranding effort has cost the company more than $550 million in market value, not to mention lost sales.
The lesson is clear: Know your customer. Even Uncle Hershel knows that.
Hall Of Shame recognizes an old penny-stock huckster
Please welcome Robert E. Brennen to the Business Blunders Hall of Shame where we remember the past so it doesn’t keep repeating itself in the present – yet somehow it always does.
Today, we’re going back to the deep past: The 1980s when penny stocks trading on analogue exchanges were the easiest way to dupe investors, whereas today we have crypto.
As Brennan declares with the title of his 2023 memoir, “The Record Stands.” It’s an amazing tale of parting suckers from their money.
The octogenarian ex-con lured unsuspecting investors with flashy TV commercials and connections to the nation’s elite, including President Ronald Reagan.
Brennan, a Seaton Hall University graduate, founded First Jersey Securities in 1974 with main offices in New York City and Red Bank, N.J. By the mid-1980s, it grew to about 36 branch offices nationwide. At its zenith, it boasted perhaps 2,000 employees and more than 500,000 accounts.
Many of First Jersey’s customers were seniors who lost their investments when the worthless stocks they were pressured into buying inevitably crashed.
By 1987, First Jersey filed bankruptcy. In 1994, Brennan lost a civil fraud lawsuit to the Securities and Exchange Commission and was ordered to pay $75 million to settle the claims. But only a portion of the ordered disgorgements and fines have been collected.
Instead, Brennan filed personal bankruptcy in 1995. And he was soon charged with hiding millions of assets from his creditors using offshore accounts, municipal bonds that he stashed in his basement and casino chips from Mirage Resorts in Las Vegas.
In 2001, he was sentenced to more than 9 years for money laundering and bankruptcy fraud. But oh what a run he had for a guy who started out in the boring profession of accounting.
Brennan invested much of his loot in horse racing. He founded publicly traded International Thoroughbred Breeders and financed the reconstruction of the fire-damaged Garden State Park race track in Cherry Hill, N.J. He also owned and raced Thoroughbreds under the prescient name, Due Process Stable.
Brennan hosted Reagan and President George H.W. Bush at charity events and golf outings. He mingled with many other political and business heavyweights, as well as NFL Hall of Fame coach Bill Parcells and College Basketball great Mike Krzyzewski.
Celebrity photos helped him craft the persona of a financial wizard with friends in high places. In a recent interview (attached below), he even touts a photo of himself with Pope John Paul II.
In 2001, Forbes magazine called him, “a swindler of a recognizable type: totally unscrupulous, with the nerve and audacity of a second-story man, but also with a touch of class that has always given him friends in high places.”
Brennan once ran commercials in which he flew a helicopter over the New York City skyline, patriotically promising opportunities and inviting viewers to “Come Grow With Us.”
He has lived a quieter life since his release from prison in 2011, though he’s worked hard to recast his life story.
He tells his tale without a hint of remorse in a January 2024 YouTube video, boasting of his many years of success followed by “a 10-year holiday in federal prison.”
His revisionist storytelling is an inspiration for white-collar criminals everywhere.
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