Salary Cap 101 Podcast Transcription[00:00:13] AB: Hey welcome to another edition of the business of sports with Andrew Brandt. I’m getting a lot of questions this week with the start of the new league year upon us in the NFL, the business of football really coming strong. All these questions about the salary cap and how do you account for it, and what about room and everybody’s got room and $177 million, and what does that mean and how do they calculate that. And I just thought maybe it’s time for a little cap 101 on this podcast by popular demand. Let’s give the people what they want! You know I did this for ten years, I went up against it for 10 years as an agent, I’ll tell you a little bit about it. You know the salary cap was something that was invented if you will as part of a negotiation. The Reggie White versus NFL lawsuit back in 1993 was really codified into the first real, as I call it CBA, real collective bargaining agreement in sports that created the idea of free agency as a concept and it was a change and it was an exchange for the NFL between a salary cap and free agency. You boil the whole CBA down to four words, back then the NFL got a cap. In other words, an artificial restriction on what was going to be paid to these players or what did the players get, well they got a lot of things.
Basically, they had free agency for the first time in the history of the NFL. There was actually unfettered free agency after four years in the league and this was something that resulted as it always does at the beginning, in dramatically higher salaries. The first big free agent was a guy who went to Green Bay, Wisconsin of all places, Reggie White. And the standard fare from ownership’s certainly in all their litigation was “we can’t let Free Agency happen because all the best players will go to Miami and Los Angeles and New York and Dallas and all the hot markets and the little markets will be left behind.” Well look what happened, Reggie White, the ultimate free agent, the biggest one of all is like I’m going to Green Bay, Wisconsin and God told me. You know I talked to the agent Jimmy Sexton, and I knew Reggie well when he was alive, and God rest his soul. Maybe one of the best presences I’ve ever met. You know I met John Thompson the elder. That was a presence I’ll never forget. But Reggie White. Like wow. And Gene Upshaw, speaking of football same kind of thing just this presence, not only the girth of the man but his presence when he walked in the room and he had you.
But anyway, Reggie went to Green Bay. I asked Jimmy Sexton his agent. You know I read the stuff about god telling him and all that he goes, “Andrew, Green Bay offered the most money by far and it was pretty simple,” and that was what free agency was meant to accomplish and it did. So, all of a sudden, we have free agency in sports but the tradeoff, the exchange, that consideration for that was always a cap and the cap came into being back in 1993. Now in the early days of the Cap well not the early days probably all the way until 2011/2010, the calculation for the Caps- stay with me here, DGR. Designated Gross Revenues, and the way that would be calculated was this complicated formula. Basically, it took into account all the revenue coming in the NFL but only designated, which really came down to two sources, ticket revenue which was pretty good at the time, but mostly television revenue, broadcast revenue. That is the key source of revenue in the NFL, was then is now, and will always be in my opinion. Well now may not be television going forward, but it will be broadcast media if not television. So anyway. that was the way to calculate it and through negotiation the NFLPA was able to get up to 59 percent as the years went on of DGR, designated gross revenues.
So, in simplest terms by the time we got to the end of the deal before the present deal, we had Gene Upshaw leading the Union at 59 percent of DGR. It came out to about a net/net 50/50. A net/net where the NFL owners got 50 percent and the NFL players got 50 percent. And the big issue with sports, I always get this from people “these guys make so much money.” Here’s the issue with all sports there’s a lot of money coming in primarily as I said from broadcast. How do you split it up? That is the ultimate question, ask the guy in the street who thinks either owners make too much, or players make too much then ask the question “well how do you split it up?” You’ve got a pile of money being dropped from the sky for this sports league, and then you have to decide how to split it up. Well back in the day that 59 percent of DGR worked out to about 50 percent of all revenue. And Gene Upshaw before he passed was able to get that deal. I’ll never forget, he wanted more than DGR, he always did because he used to do his annual visits to Green Bay, and we would always have lunch he’d always sit in my office, and towards the later years when we had renovated the field and he sees the Packer pro shop and he sees the ice cream and he sees the restaurant he sees the tours, he’d just sort of look wistfully. I remember at that scene and he said “we got to get some of this. We got to get some of this. We can’t be denied shares of all this revenue coming into these teams.” So, he began it and by the time the new CBA and new leadership the NFL came about the standard move was from DGR to AR, and AR is all revenues.
Now it’s not that blanket but AR is basically all revenues coming in with some carve outs. The carve outs would be things like suite sales, suite money, club seats, premium seat revenue that sticks with ownership, that does not get shared by the players. Another thing that obviously doesn’t get shared by the players but has been $1B, $1.1B over the past couple of years a $1.5B actually if you count all three team’s relocation fees for Oakland for San Diego and for St. Louis. These are relocation fees, two teams going to L.A. one going to Vegas that’s $550 million for the two teams in L.A. about $350 million for the team going to Vegas. Giving out to the rest of the owners that’s a $1.1B that’s not shared. So, it is AR it is all revenue to be shared by. And that’s how they figure out the cap. But with the pot getting bigger in terms of AR vs. DGR the percentage went down in the new negotiation. So, the new negotiation by DeMaurice Smith and leadership at the Union with the NFL got a band, they come up with a band and it’s very complicated, but you take three buckets of revenue. You take sponsorships and licensing, you take broadcast, and you take local and you have different bands from each and you throw it into a big stew pot and anywhere between 46 and 48 percent is what the percentage of AR going to the players per year. And we’re closer to that 46-point number now. And that is unfortunate because it used to be really a 50/50 and now it’s a 46 of AR and AR of course is not truly all revenue. So, where we get the number now today $177.2M dollars is from this band. Now the cap has gone up $10M the year before it went up $12M. I know the union has been out there saying “Hey look it went up $10M a year for the fourth straight year” When you get up to $170M, and you’re only going up $10M, you know that’s about 5/6 percent. No, it’s not terrible, but it’s not great.
You know the NBA cap went up $24M for a quarter of the players the other year. It went from $70M to $94M a couple of years ago, and NFL the most it’s gone up is $12M, 1/2 that for four times the number of players. So, it’s not great to see these cap increases and surely, I think we would like some transparency. We’ll never get it. I don’t think we’ll ever get it certainly not from a league that doesn’t want to appear that their taking advantage of the players, and not from the players. Now we’ve heard that some money was thrown off into the player performance pool and that’s why the cap didn’t go up as much as expected. Well that’s great, player performance pool rewards players that play a lot and didn’t make a lot of money, came in under rookie contracts.
But that’s something the NFL would give every day of the week. I mean they would certainly give up non-negotiable dollars which is part of a benefit rather than negotiable dollars which is part of a cap.
So here we are. Now every team has $177M but I don’t think there’s any team that’s going into 2018 with only $177M dollars of cap room, of salary cap. Because here’s what happens with the new CBA, teams can roll over amounts from the previous year into the next year. And there’s no limit on that. There is no limit on how much you roll over. In other words, if somehow you end the year with $100M in cap room you could roll that over again and instead of your number being $177M it’s $277M. Sound preposterous. Well think again. You have the Cleveland Browns coming in at $236M meaning they’ve rolled over $60M. San Francisco 49ers they are at $233M, Tennessee Titans at $207M, $30M above the actual cap. So, to say these teams are dealing with $177M Cap – no, they’re dealing with a lot more than that because what happened was, at this time last year you had about $1B of available cap room and -and I’m predicting this will happen again, $300M of that $1B wasn’t used! Just sat there unused. And it’s not use it or lose it but it ends up being that way because they just roll it over and they will roll it over again. Look at the 49ers, they just put a $30M dollar cap number on Jimmy Garrapolo and they’re sitting there with $230M of cap room. They can’t spend it and they won’t spend it, and so what they’ll do is they’ll roll it over again and next year they’ll have $260M in cap room. Listen here’s the problem with the CBA. Everyone wants to talk about Commissioner discipline and franchise tag and this and that and safety blah blah blah.
Here’s the real problem. These teams are not held accountable for their players spending.
They’re not. Now someone could sit and say, “well don’t they have minimums, spending minimums.” Absolutely they have got spending minimums. It’s 89 percent of the cap over four years. And even though there were no accounting years one and two of the CBA in 2011 & 2012, but four years over 2013 to 2017 no team came under that amount. And now we’re in the 2017-2020 bucket where they analyze that in three years or two years. But here’s the problem here is the problem -the calculation on minimum spending is based on the actual cap- the actual cap.
It’s not based on the adjusted cap the adjusted cap for as I said for teams like Titans,49ers, Jaguars, Browns they’re all over $200M.
So whatever 89 percent of $177M, think about that percent when you apply it to $230M so take a number. I’ll do it right here on my calculator. OK hold on a second here I am$177.2M is your cap. That times 89 percent that’s $157.7M. OK. So, let’s take the Browns at $236M. $157.7M divided by $236M that’s 66.8 percent, let’s say give it benefit the doubt so let’s say 67 percent.
So, the effective minimum spending requirement for the Cleveland Browns in 2018 the effective spending requirement is 67 percent. 67 percent. OK. It’s not 89 percent. It’s 67 percent to meet there their capped minimums. They have to spend 67 percent of their cap. Think about that. This is how teams like are gaming the system. This is how the NFL is winning this CBA. It’s not all the other stuff. This is it.
Teams are not being held accountable to spend on players. They’re being held accountable to maybe be more attuned to safety. They may be more attuned to concussions we have a lot of people on the sidelines.
They’re being held accountable to not punish players for standing the anthem or we can talk more about that. Stephen Ross had a hiccup, the Texans maybe, I mean but they’re not being held accountable on what the business is all about, the bottom line. Now we’re going to see all these big contracts come up in the next few weeks and Kirk Cousins or whoever it is in free agency. But again, spending is down. The NFLPA pointed to spending that all team you know that half the teams are spending to the cap. Well they’re spending to the actual cap not their cap. Just the cap you put out there is the number because they’re rolling over unused cap and guess what? They’re going to roll over unused cap again. That is a fallacy. It’s a folly of this agreement.
I seem to be the only one railing about it. Maybe I’m the only one who understands it, but it just seems pretty obvious to me. If you had a minimum spending on adjusted caps. Oh wow. Then the players are in business. But if you only have a minimum spending on the actual cap, screw it owners get over. Think about the Cleveland Browns, think about Jimmy Haslam. He is required to spend about 60 percent of his on players, 60 percent of the cap on players.
He’s got $236M sitting there in cap room. They are not going to spend it, not going to spend near it. 49ers- they are not going to spend it, Titans, Jaguars they’re not going to spend it.[00:15:05] Anyway, that’s a thought on the cap and sort of giving you a background of the salary cap. How do you calculate the cap number, that’s really based on this idea of proration. Signing bonuses are allowed to be prorated under the cap right away. I don’t like proration. I think if you’re managing a cap you try to pay as you go. As I said with the 49ers and Jimmy Garoppolo, they got a ton of cap room why not use it. You know, why give a signing bonus which is prorated which pushes out cap into future years when you can just pay it all right away. Match your cash and cap.
When I say match your cash and cap, if you want to pay a guy a five year $50M contract and say the first year is going to be $20M you can say, and I think in a non-prudent way you can make $15M of it in bonus in the first year and $5M in salary. So there your cap numbers $8M because you’re prorating the $15 over 5, that’s $3. But you’re pushing out $12M in cap room into future years if things go south with the player. Everything accelerates the year you cut him, or he retires. So, if a player, that player, plays only two years with that $15M bonus, you’re going to have $9M million accelerate right when you cut them. It’s going to have a hole in your cap for someone who is not there for $9M. The ultimate example are the big quarterbacks like Roethlisberger, like Tony Romo. (Romo) is the best example, he leaves the Cowboys, and here’s a guy who’s not on the team counting $19M on the cap. There’s a hole in their cap for 19 million dollars.
Think about what you can do with that money. And the reason is because they went to him all the time and they said hey let’s take your $10M in salary and we will give you $2M salary and $8M bonus. They push out the bonus if they got three years after that they then save $6M on the cap because they’re pushing out more and more. They did this multiple times, obviously to get a $19M number on a guy that is not earning any salary, you can see how screwed up that is cap wise. Some teams Steelers, Saints, continue to push the ball down the road on this, I think it’s unfortunate.
The real issue is trying to pay as you go, teams get ahead of the curve with their structure with their cap management. Teams can walk away with players with nothing to worry about. You know I think Tampa Bay is a team that’s had a lot of cap room and they pay as you go. I think they’re parting with a player they signed last year Chris Baker, they walk away.
They paid him a lot of money, but they have no cap acceleration and there’s nothing on that. So, I think if you want a calculated cap number, sure use a signing bonus proration and then you divide that out the number of years. But I think that’s really an unfortunate way and now teams with so much cap room, you know again the teams I talk about with a lot of cap room there’s no reason at all for them to give signing bonuses. Just give roster bonuses they’re not prorated or give guaranteed salary. Like the contract- I applauded the contract the Broncos gave Peyton Manning years ago, 0 proration in that contract, just straight salary, one year $19M, $20M, $19M, $18M. OK. Great. You’ve got cap room use it, don’t worry about proration, can only get you in trouble. So that’s a thought about cap room and proration.
The other thing coming up. Ignore the big number. You’re going to see this guy signed for $50M, $80M, the quarterback’s $100M, $120M, it’s worthless. It’s zero. It’s folly it’s just a number on a page because, and you know the reason why, because watch the waiver wire this last week and this next week. All these guys are being cut with existing contracts where future contract value is just dust in the wind. It just turns to dust. Look at the names Chris Ivory Jacksonville $20M turns to dust. Muhammad Wilkerson the Jets signed for $85M. It was reported $85M, it was splashy headlines…he made $35M. Now it’s no slouch to make $35 million from the Jets but that’s $50 million he’s not making, dust in the wind.
Hey there’s two players right there. $75M. Teams just hit, filed the league, gone. You can do that. Who else has been cut? Kurt Coleman from Carolina, Charles Johnson from Carolina. Players are going to get cut right and left the next few weeks. There’s going to be hundreds, hundreds of millions of dollars in quote unquote contract value that’s just going to go away.
So again, I just try to point this out when you see the big numbers. I know I know the media can’t help it, and I’m media but I don’t do it.
They just can’t help themselves. Why. Two reasons the editors want headlines. Headlines don’t come with $30M they come with $80M. And two the agents, the agents are giving them the numbers and the agents in return for giving them the numbers want the splashy deals. They want the numbers out there. They want or use it in recruiting. They want to use it for their client they want to show their friends.
I get it. So, it’s a game we play. And when I was with a team and the agent wanted to shout out the headline of the big number. I’m like hey listen whatever floats your boat. If that helps the deal gets done, the deal gets done, yeah, it’s ok. I knew in my mind we’re never going to pay that. But if they want to throw it out they’re fine. Just the game we play so take note of these deals.
Look for the guarantee and even the guarantee is not the guarantee. Some of these guarantees are not guarantees. You got to get to the second year. It’s only guaranteed for injury until it becomes guaranteed for skill if you get to the second year or you get to the third year or you get to the fourth year, that’s not a real guarantee. You have to be on the team at a certain level that’s not a guarantee and injury guarantees have little value. How many players end their career with injuries, very little. So, you know in terms of getting injured one year and can’t play the year after due to an injury in the previous year, very little risk for teams to do. Speaking of risk, the guarantees are usually in year one or year two where there’s low risk. If I’m negotiating and the guys, and the team says, “Well give it I’ll give you a five-year deal for $50M with $25M guaranteed.” I’m like great. Make the $25M guaranteed in the last half of the deal not the first. And the team will run so fast you don’t know what hit them because they don’t want to do that. Contracts are all about allocation of risk and if you want to allocate risk, you give guarantees early in the contract if you want to allocate risk to that player. If you want to allocate risk to the team, guarantees later in the contract.
Okay that’s a quick primer salary cap 101 contracts 101. My soapbox about guarantees about caps about minimum spending about the game teams play on the players, leave it at that for now.
I’ll have more as this goes on but that’s a primer salary cap 101 business of football. Thanks for listening follow me on Twitter @AndrewBrandt listen to the podcast on iTunes or Stitcher. Tune in give us good rating if you would. And I’ll be back next week with another edition of the business of sports with Andrew Brandt.
John Barr Podcast Transcription[00:00:59] AB: What is your blank canvas. First comment about what you’ve been covering. [00:01:35] JB: Well my first exposure to it and maybe that is a logical starting point was in the late summer of 2016.
I was working on a special at the time for ESPN on hazing, and you know what it’s like at ESPN when a story sort of coming in for a landing it gets a little crazy and it becomes all-consuming and you get this tunnel vision where everything else gets blocked out.
It just so happens that the law firm that had helped us with respect to getting access to a hazing victim was also the same law firm representing at the time a Jane Doe who was getting ready to file a lawsuit against USA Gymnastics and Larry Nassar- and we now know that that Jane Doe was Jamie Dantzscher who has since come forward and has made some very powerful victim impact statements in court. Jamie Dantzscher was a bronze medalist at the 2000 Sydney Olympics.
But at that time Jamie was the first one. The first national team gymnast, the first Olympian to sue Larry Nassar. And in that original Indianapolis Star article that helped blow this thing wide open. The Star article quoted Rachel Denhollander who is an attorney who lives in Louisville Kentucky and this unnamed former Olympian who we now know is Jamie Dantzscher. What I had no concept of at the time and I don’t think anybody else did was just how far reaching this was.
And once Rachel Denhollander publicly accused Larry Nassar of sexually assaulting her during a medical exam, first publicly in the Indianapolis Star, it just opened up the floodgates and women just came out in droves. And you know and now we’re at a point where more than 260 women have filed complaints about this guy criminal complaints and more than 200 women are now part of civil lawsuits suing Nassar, USA Gymnastics, and former officials there, Michigan State and others. So it’s taking on this field of just this sprawling legal case. The criminal part of it which recently wrapped up after a third sentencing for Nassar, but this civil case drags on.[00:04:05] AB: Rachel Denhollander a name that no one knew before mid-January. Describe…gratitude… [00:04:50] JB: I think so and rightfully so. She, so I don’t believe Rachel is a practicing attorney. But I but I do know that she has a law degree, and it shows. In the way she conducts herself in court just an incredibly bright woman and you know amazing results. She came forward at a time when many people still supported Larry Nasser and was the first to put herself out there you know using her own name and her backstory that she alleges she, well more than alleges. Larry Nassar has been convicted of criminal sexual conduct of Rachel Denhollander. She was one of the cases that wound up being charged in court and he was convicted and sentenced.
She was abused as a 15-year old club level gymnast and in Michigan, and most of his victims were club level gymnasts in Michigan. But they weren’t all. Some of them weren’t even athletes. He saw, her reporting you know took us back more than 25 years to this gym and in the East Lansing area known as Great Lakes gymnastics, and back then very Nassar was just an athletic trainer.
He had worked with the gymnastics team in high school. He later went on to become an athletic trainer for the U.S. Olympic team at the Pan Am Games and at the Olympic trials back in 1988. And around that same time he started working at Great Lakes gymnastics with a head coach by the name of John Geddert who would go on to become the coach of the 2012 Olympic team that won gold in London. And, Cathy Klages was another one of the peers of Larry Nassar she was at Great Lakes as well and she later went on to become the head women’s gymnastics coach at Michigan State University. So, while Geddert and Klages coached gymnasts there at Great Lakes, Larry the trainer, would treat them for their injuries in a back room and parents would have had to walk across the entire workout floor to get to that back room and none of them ever did. So as a result you often you had Larry back there with young women alone constantly and it was there according to these women that he first started to digitally penetrate them. He would fondle their breasts. He would he would digitally penetrate them telling them that these pelvic treatments would help their injured backs or their injured hamstrings. He did so without parental consent.[00:07:48] AB – told to go by Geddert or Klages? [00:07:59] JB: Yea, injuries and gymnastics just go hand. The picture that many of these women we spoke with, and we didn’t just speak with former gymnasts from Great Lakes. We spoke with parents of gymnasts from Great Lakes, people who worked alongside Geddert at Great Lakes and then later at the gym that up until not long ago he was the head coach in a gym by the name of Twistarz. Right. Geddert’s coaching style was such that he broke these women down he broke them down mentally. And according to them he broke them down physically. He was so demanding even under the best of circumstances gymnasts get injured. We look at what they do to their bodies. It just goes with the sport. But according to these women Geddert pushed them to a point where injuries were commonplace. And so they would go back and they would see Larry for treatment, and it was during those treatments that he first started using this quote unquote procedure of intra-vaginal and intra-rectal you know massage and many of these, these weren’t women, these were young girls, and in many cases they’ve never had a sexual experience in their lives. Going back there along with this guy, and he convinced them that this was a legitimate medical procedure, and it wasn’t. It just wasn’t and it was abuse and it was abuse that went on for more than 25 years. [00:09:39] AB – Now is there any way, that what he did with these what seemed to be horrific ways of treating these girls had any medical value? [00:09:54] JB: Well it’s interesting. There’s a woman named Kristene Whitmore who is working the urology department at Drexel here in Philly, and she reported, her actually in an article we wrote back in October 2016, and she was referred to me by another osteopathic physician, Larry Nassar is an osteopathic physician, was, and Dr. Whitmore told me this pelvic massage actually is an accepted medical procedure and it can be used to treat something called pelvic floor dysfunction when the muscles in the pelvic area become taught. The only way to access them is the you know an intra-vaginal treatment. And there’s also something called interstitial cystitis which is a painful bladder condition and it also can be a useful treatment for that. But there are protocols, you always use gloves, because you don’t introduce pathogens if you don’t. You explain the procedure on the front end, you know you don’t just do it. You explain it. Explain the rationale behind it. You have a chaperone in the room you know because you’re dealing with a sensitive area. And I know my wife goes to get treatment for a shoulder, at PCOM, you know Philadelphia College of Osteopathic Medicine, and then she goes in there to get her shoulder treated with a shirt on. The doctor has somebody else in the room you now and in the case of a minor you get parental consent.
The idea that this guy would digitally penetrate a minor without speaking to the parents, you know as a parent that’s, that’s what really jumps out at you or something or you say oh my god this is not appropriate.[00:11:46] AB: Now was he also treating the injuries I mean if someone came back there with an ankle or knee or a shoulder or a calf or a hamstring, beyond his abusive treatments was he was he actually also treating the injured? [00:12:02] JB: There are there are women who talked about Larry being a quote unquote miracle worker, Jordyn Wieber when she went to the 2012 Olympics. Now she has since come out and joined with her teammates from that 2012 gold medal winning squad. McKayla Maroney Aly Raisman Gabby Douglas, she’s the fourth member of that team to now say Larry Nassar sexually assaulted her during medical exams.
But if you go back and look through that period of when they won the gold ,Jordan Wieber was quoted as saying Larry you know worked miracles. And there were women who did credit him with helping them get better, and what’s so, what’s so unusual about this, this abuse and this pattern of abuse is the fact that the women took so long to recognize it as abuse. You know it happened to so many of them when they were young, before they had a full understanding of what abuse really was. You know look this is happening, this is a doctor, right. So, part of it was they just couldn’t process that somebody in that position, would abuse them. We’re taught to respect the white coat, and he also was the doctor for the Olympic team. So, you had these club-level gymnast who idolized these Olympians and when they would go into his office on the campus of Michigan State University he had Olympic memorabilia all over the walls.
He groomed many of them by bringing them ribbons and posters from international competitions to gain favor with them. Their parents thought it was a big deal that their kid got to go see the Olympic doctor. So surely this guy couldn’t be abusing me. He’s got all these credentials, and many of them would go on to see him well into their 20s. There’s a woman who, who had some problems with her pregnancy when she spoke to us about them, and said that she continued to see Nassar Well into her 20s and so that’s that.
So then when Rachel Denhollander ultimately went in late 2016 and reported Nassar as abusing her. That was the moment when a lot of women had to look back and think to themselves well geez I guess he was abusing me too.[00:14:41] AB: That’s my question. And we’ll get to the stakeholders involved in a minute. Obviously USOC Michigan State USA G. But this question is not in any way to put any blame on the victims. But, before Denhollander no one’s complaining. No one’s going to their parents. No one’s going to authorities? [00:15:03]JB: Well that’s just it Andrew, and that’s what our report did reveal, people did. To raise warning signs and the warning signs were ignored.
You know in our initial reporting we found four women who went to people at Michigan State in the late 90’s, there in 1997 a woman named Larissa Boyce was a 16-year old gymnast. There’s something called Spartan youth which was a program for promise in East Lansing area a gymnast run by Cathy Klages Michigan State and said gymnastics coach.
Larissa was digitally penetrated by Larry Nassar over multiple exams. She decided to tell Klages about it and did in 1997. In late 1997 she was very clear with her she says. She says she told her he was penetrating her during medical exams. A second gymnast’s was in the room when that conversation between Klages and Larissa was occurring. The second gym confirms what Larissa told Klages, and said she too told Klages she was being digitally penetrated by Larry Nassar. Klages did not according to the women, and we found nothing to suggest otherwise. Klages did not report that incident, she didn’t report it to anybody at Michigan State. She didn’t report it even to their parents. Fast forward a year. 1998 a softball player, full scholarship Tiffany Thomas Lopez, went to see Dr. Nassar for an injured back. She too is digitally penetrated she told three Athletic trainers including a supervisor who still at the school a woman named Destiny Teachnor-Hauk, complained about the nature of the treatments was very clear about what he was doing. I’ve spoken with her boyfriend at the time and he you know remembers listening to her and encouraging her to tell somebody. Nothing happened. Larry Nassar was never reported. They told her she had to continue to see him if she wanted to keep playing. She wouldn’t. So, they ultimately declared him medically inactive and she dropped out of school. So that’s three women. 1999 a woman named Christie Achenbach cross-country runner went to Nassar once and one time only she was 21 at the time.
She was a distance runner at Michigan State. She complained to her coach Kelly Beart who has since left the school. Nothing happened. These women were they, they were not believed. They were told things like “Oh he’s a doctor for the Olympic team you must you must be misunderstanding.”
You know Destiny Teachnor-Hauk tried to pass it off as a legitimate medical procedure. Fast forward to 2014. A former student files a complaint to police about Nassar after going to see him. He didn’t even penetrate her according to the woman, he massaged her and her badging malaria and touched her breast. This is according to her she told another doctor at the clinic. She told the receptionist that same day that she felt violated, they launched a police investigation and a Title IX investigation. Well during the course of the Title IX investigation they talked to four medical experts. They were all people who knew Nassar. One of them was his protege and good friend and one of them low and behold was Destiny Teachnor-Hauk, who Tiffany Thomas Lopez the soccer player had complained to back in 1998. When they asked Destiny Teachnor-Hauk about Larry Nasser, she said I’ve never received a complaint about him in 17 years you know. So there were all these missed warning signs, and then fast forward, rewind a little bit, during the victim impact statements that came out during his first sentencing hearing, two more Michigan State athletes came out.
One was a rower. One was a volleyball player, and they said they too tried to tell coaches and they weren’t believed. So that’s at least a half-dozen examples that we’re aware of in the late to late 90s and early 2000s where women did come forward and try to report this guy. And they just weren’t taken seriously. And it was kept in-house. And he was allowed to continue to see patients.[00:19:42] AB: This is maddening. And when you start bringing up dates like 1997 1998 99 that is 20 years ago, and you start thinking as I’m sure you have many times about how many women could have been spared this abuse over 20 years, if someone had taken this seriously. [00:20:02 JB: it’s brutal, brutal. And look I mentioned that 2014 case where the woman went to police and there was a Title IX investigation. You know Nassar was briefly suspended from seeing patients at Michigan State after that when that Title IX investigation was going on. But he was ultimately allowed after they interviewed these four quote unquote medical experts who knew him. He was allowed to go back to work. Even though he was still being investigated by police ultimately, they never filed charges against the guy. But you know the guy was allowed to continue to see patients. And during that time, we now know at least a dozen patients say he sexually assaulted them during medical exams.
So you know it’s amazing. It’s amazing how many times there was either a lack of communication or women were not taken seriously. The number of times this guy could have been stopped. It’s mind boggling. And that doesn’t even begin to touch on the USA Gymnastics stuff. I mean this guy was reported to USA gymnastics in the summer of 2015. And he continued to see patients[00:21:25] AB: So with Michigan State was it the same setup as in the early days, where somehow some way he would be in a backroom with no one else around.[00:21:37] JB: No in Michigan State he had an office. He had an office at the Sports Medicine Facility. But you know everybody talked about would have, put a big feather in your cap that would be to see Larry Nassar. The reality is Larry Nassar was everywhere. Larry Nassar was in a back room at Great Lakes in the 80’s. He was then in a back room at a gym called Twistarz starting in 1996. In 1997 when Cathy Klages, had Spartan youth on the campus of Michigan State University, he had, he saw, in a training room in the basement of Jennison Field House on the campus of Michigan State University but he was treating clinician at a sports medicine facility at Michigan State.
But Andrew he had he had the parents of so many of these young women so convinced that they could trust him that a lot of them would drop their kids off at his house. He had a training table in his basement.
There’s a young woman who’s made a number of public appearances and she’s been interviewed by ESPN repeatedly. Now her name’s Lindssy Lemke.
She is a former Michigan Staet University gymnast, and Lindsey alleges in her lawsuit, her civil lawsuit, she was abused hundreds of times by Larry Nassar. And her mom Christie Lemke-Akao who is just wrought with guilt. Now talks about how Larry would hold the side door of the sports medicine facility open after hours and she because the building would be locked and she’d drop Lindsey off and she’d go off and do some grocery shopping for an hour while Lindsay got treated by Larry. She dropped Lindsey off at Larry’s house because they lived in kind of the same area. now of course she’s just killing herself because she trusted this man so much with her daughter.[00:23:40] AB: Angry father rushes nassar, parent angle. [00:24:20] JB: Big time. Yeah, I don’t ,it was pretty gut wrenching at the first sentencing hearing.
The thing that, so many things hang with me, but this woman, Donna Markham who got up and talked about her daughter Chelsea. Her daughter Chelsea took her own life. And you know ultimately, she believes that it was largely because of the spiral that the sexual abuse you know started her. She just couldn’t deal with it. And the very first woman to speak, a woman named Kyle Stephens, she spoke about how she was abused as a 6 year old.
She wasn’t a gymnast she wasn’t an athlete, she was 6, she was the daughter of family friends. Her mom and dad would go over to the Nassar’s and they cook Sunday dinner together and she’d be down in the basement with her brother and Larry Nassar’s kids.
And that’s where she says Larry Nassar started to first expose himself to her, and later fondle her digitally penetrate her, and she said it wasn’t until she was 12 that she understood it as abuse and told her parents. But her dad didn’t believe her. And it became kind of a bone of contention between the two and it wasn’t until she was 18 and going off to college that she had this kind of knockdown drag out argument with her father, and the subject came up again and she said, you know I’m paraphrasing, but she effectively said you know Larry really did abuse me and he grabbed her and wouldn’t believe her and she looked him in the eye and said he did this to me, and her dad just crumbled.
And it finally sunk in that she wasn’t lying. The father wound up taking his own life as a direct result of this. Well look he had some other issues going on but she’s convinced this contributed to it.
So when you start hearing the stories, you realize that the ripple effect of what this man did is something that we’re never going to completely understand.
They waited five weeks. They did an internal investigation first. And what’s really curious is they finally reported it to the FBI in late July of 2015. Right. Then they allow Nassar to resign. He wasn’t fired. He basically put out this lengthy Facebook post in September saying that he was stepping down from his position as national medical coordinator. He continued to work at Michigan State as a doctor, treating gymnasts, treating other athletes, really treating anybody walked in his door and USA Gymnastics even though they had three national team members saying, no this guy’s abusing us during these medical exams. They never picked up the phone and called Michigan State. Now similarly in 2014 when Michigan State was investigating the guy, and when he was reported to police they never called USA gymnastics. So, the two large institutions are not communicating with one another. And then the bizarre thing about the FBI case is, even though it was reported to the FBI in late July of 2015, they didn’t reach out to Maggie Nichols or Aly Raisman until well into 2016, and Aly Raisman is convinced that the reason that Steve Penny the CEO and president of USA Gymnastics put off her interview with the FBI is because they didn’t want a scandal before the RIO Olympics.
She’s convinced that they just wanted to have a good Olympics and they didn’t want to anything get tainted. Penny won’t comment about that, but that’s what Raisman believes.
AB: and you mentioned some of these Olympic gymnast like Aly Raisman and others who are getting more attention than others because of their stature in bringing these allegations or these charges of abuse, but, you mentioned McKayla Maroney she had a confidentiality agreement correct? And one that she obviously broke but is it or was it even enforceable?[00:31:57] JB: Well it’s pretty clear USA Gymnastics isn’t going to go after her for the money and it would be, you know the optics of doing that would be horrible right. But, yeah in late 2000, I believe it was in November of 2016, when the Nassar scandal was starting to percolate. And when this is that point Rachel Denhollander had come forward Jamie Dantzscher then known only as Jane Doe had come forward and other women were coming forward to Michigan State Police, right around that time, McKayla Maroney entered into a confidentiality agreement with USA gymnastics, and her attorney at that time was Gloria Allred. She is the one who negotiated the deal for McKayla, and McKayla is now represented by the attorney named John Manley, who is an Irvine, California based attorney and he along with two other Michigan based attorneys they formed this troika of attorneys who are representing the most women. They represent more than 120 women, who are suing Larry Nassar, Michigan State, USAG, and others.
But yea, McKayla Maroney signed a confidentiality agreement, but Manley her current attorney told me that those agreements are flat out illegal in California. You can’t sign, you can’t make a victim of child sex abuse, make the false choice of remaining silent. So, whether that agreement would even stand up in a California court is absurd. You know that’s an issue for a judge there to decide but Manley is of the opinion that it wouldn’t stand up and it’s not worth the paper it’s printed on.
But just the fact that U.S.A.G. would do that is pretty telling, because it, because at that point in the in the reporting cycle we were wondering well heck if he did this to these, if what these women are saying is true and he did this to all of these club level gymnasts in the Michigan area.
And we know that he’s been treating Olympic gymnast as a trainer since 1986, and as national medical coordinator since 1996. Well did he do it to national team members and Olympians? And if and if he did well where are they? Why aren’t they coming forward? Well now we know and in McKayla Maroney’s case that the reason she didn’t come forward back then is because they paid to keep her quiet.[00:34:45] AB: the allowances made – [00:35:05] JB: Well and there’s been accountability right. You know you look at what happened. You know Steve Penny, he stepped down in February as the president and CEO of USA Gymnastics but many people believe that wasn’t enough.
So you know in recent weeks we saw the entire board of USA gymnastics resign. You know and then the fall out at Michigan State, the president resigned, the athletic director resigned. Cathy Klages, the gymnastics coach who missed warning signs way back in 1997, she, she resigned back in February, last year. So, you know people have lost jobs and there has been accountability. But you know when it comes to the liability, that’s what still is yet to be determined and that’s, that’s a complicated issue in and of itself just determining how much Michigan… Michigan State was Larry Nasser’s full time employer.
Everything he did for USA gymnastics or at Twistarz Gym was on a volunteer basis. There were kind of three prongs to his employment agreement at Michigan State. He was a treating clinician. He was a faculty member, and then the third prong is he had to do outreach, and as part of his outreach he was national medical coordinator for USA Gymnastics, but he was also like this volunteer who treated gymnast’s at Twistarz, at Holt High School the High School where he lives or lived. So in terms of the entity that’s really holding the bag here from a monetary standpoint it’s Michigan State University.[00:36:55] AB: So, what happens John. We know that Larry Nassar will never see the light of day, these sentences from three different trials as you mentioned go into the hundreds of years. All the lawsuits against him. What will happen there? I mean we assume that he doesn’t have much money. [00:37:27] JB: You know he blew his entire,his entire retirement savings in legal fees just in his federal case. Right. And two state cases. So, he’s broke, that we know. The judge presiding over the civil cases ordered, decides, to go into mediation late last year and they did so I think it was for initially for a period of six weeks and there was a bit of an extension, but the bottom line is they couldn’t come to an agreement.
So now we’re back in that phase of discovery where multiple law firms representing more than 200 women are going to be trying to figure out who knew what and when at Michigan State. You know whether they come to some sort of an agreement or not remains to be seen. But it’s you know I hesitate to make that comparison because people sort of resist the comparison. I know you’re familiar with the Penn State outcome, where more than 30 men, God I believe was 93 million dollars in settlements. Well this is this is more than 200 women.
So, and how do you assign a monetary value to what happened to them? You know when you hear these stories of how their lives have been shattered have people committed suicide, loved ones have committed suicide. And, you know now we hear the stories about just what they’re dealing with in their day to day lives and how this has impacted them. I don’t know how you assign a value to that.[00:39:08] AB: And like you said the ripple effects with family and back to those two words the human carnage. I mean we know about those suicides you mentioned but think about these, these women’s friends, family, boyfriends, significant others, spouses that are dealing with the effects.
I mean it’s, I mean the ripples you know. [00:39:41] JB: The thing that the thing I was most encouraged by though if you could kind of look for a hopeful sign. It is just it is just the idea that so many women who were going to remain anonymous were empowered by seeing other women speak, that they decided to shed their anonymity. And I think every time a young woman does that it just further feeds down this notion that there should be some stigma. You know. I don’t know if that helps the women as a collective group deal with it. It’s certainly the women I spoke with we’re empowered by what happened in those Michigan courtrooms. I hope that helps. You would hope that would help them deal as they move forward. But you would also hope that it would inspire a young woman who’s being abused to come forward and to speak up. [00:40:43] AB: I think that’s exactly right. And I think you know I think that’s a great way to wrap on a hopeful note, of something that’s been tragic and you know we have talked about the doom and gloom in this. But yeah these are shining stars. We go back to where I started with. You mentioned her first Rachel Denhollander, the first to sort of shine a light into the darkness. [00:41:10] JB: She’s a rock star and she really is a remarkable lady. She’s got three kids her husband Jacob is somebody who I’ve connected with on social media. Now this is a lady who not only was the first, she’s met with legislators in Michigan to try to change the reporting laws in Michigan. You know she’s become an agent for change. And that’s pretty remarkable that she could take this horrible situation and actually you know contribute to the greater good. You know just the just isn’t one of the more impressive people I’ve ever come across. [00:41:53] AB: And John you’re a rock star too. No. Because you’ve done, you know again that you haven’t done what Rachel’s done but you have shined a light into this to, where I mean I think that’s the value of investigative reporting that it just contributes so much that now we’ve seen this and maybe there will be another Nassar down the road. But maybe there won’t. And part of it is people like yourself exposing this unseemliness out there. [00:42:29]JB: Well I appreciate it. I do. I think we both are. Look neither of us are naïve. We know there are pedophiles out there, we know there will be others. But we would hope certainly somebody in that position there would be, and thus controls put in place so that this will never happen again. You know maybe that’s the hopeful way to end it too. [00:42:52] AB: It is indeed John Barr ESPN Outside The Lines. Tremendous work on this Larry Nassar case that we’ve just delved into. Thanks for being part of the business of sports podcast. [00:43:05] JB: Thank you my friend. Thank you my friend.