Sunday, February 8, 2004

Could Rose cash in on Hall?



By Allan Kreda
Bloomberg News

Pete Rose, banned from baseball because of gambling, might boost his annual income to as much as $1 million should he be reinstated by Major League Baseball and voted into the Hall of Fame, but companies wouldn't view him as a top endorser, experts say.

Receiving the game's highest honor could lift Rose's income by 25 percent to 50 percent on added memorabilia sales. Rose, the sport's all-time hits leader, now makes about $25,000 an appearance to sign bats and balls, said Brandon Steiner, president of Steiner Sports Marketing, a New York collectibles company for whom Rose makes several appearances a year.

Still, marketing specialists doubt that Rose, 62, can win lucrative product-endorsement contracts, even after he reversed 15 years of denials last month and apologized in a book for betting on baseball games while managing the Cincinnati Reds.

"Getting into the Hall is the linchpin to his future," Bob Williams, president of Burns Sports & Celebrities Inc. in Evanston, Ill., said in an interview. "Rose will have increased marketing potential, but he won't ever become a top-10 athlete endorser."

Jed Corenthal, former director of marketing for the National Football League, sees a limit to any bounce Rose might get on the prices of signed memorabilia.

"Introducing Hall of Famer Pete Rose alone would increase his fees, but I can't imagine it being dramatic - no more than 25 percent above what he makes now," Corenthal said in a telephone interview.

Reinstatement to the sport, the first step to joining Babe Ruth and Ty Cobb in the Hall of Fame, is no shoo-in.

'My Prison'

Major League Baseball hasn't commented on the reinstatement question and says it has no deadline to act. Rose said in his book, My Prison Without Bars, that he privately admitted his gambling to baseball Commissioner Bud Selig in November 2002.

Rose doesn't discuss his current finances in the book. He declined to comment at a recent Manhattan book signing. His lawyer, Roger Makley, and his agent, Warren Greene, didn't return repeated telephone calls. His accountant, David Stern, referred questions to Greene.

Rose is pulling in $300,000 to $500,000 a year on the memorabilia circuit, according to an estimate by Steiner.

In addition, Rose's pension from Major League Baseball pays him $165,000 a year. It wasn't revoked when he was banned, and the payouts began last year, according to the Major League Baseball Players Association.

"I'm able to survive with corporate appearances and memorabilia shows and things like that," Rose told a Sports Illustrated interviewer Jan. 8, adding that he no longer bets on sports outside of horse racing and doesn't have a casino credit line.

Federal tax lien

He might have recurring legal and accounting expenses. Rose, who spent five months in prison in 1990 for tax evasion, last year had to clear a new debt to federal tax authorities who placed a lien on his Los Angeles County home. The lien totaled $151,690, the Enquirer has reported.

In his book, Rose admitted that he bet on games while managing the Reds in the late 1980s. He was in the middle of a $1 million, two-year managerial contract when then-Commissioner Bart Giamatti banned him in August 1989 after an internal investigation by John Dowd, a Washington lawyer. The managerial contract was terminated.

"As out of control as I got with my gambling, I never bet against my own team - ever," Rose said in the book. "I reckon if I could have been tempted to fix a game, I would've been tempted way back in 1987, when I was down six figures to the bookmakers."

'He's an icon'

With a record 4,256 hits over 23 seasons, Rose has been successful hawking his autograph and image to fans on television and at memorabilia shows - even ones in Cooperstown, N.Y., the home of baseball's Hall of Fame.

"Pete Rose has never been and never will be one of the pack," Steiner said in a telephone interview. "He's an icon in the memorabilia world."

Rose also has a five-year agreement with Dreams Inc. to appear at signings across the U.S., according to the Plantation, Fla.-based memorabilia and collectibles company. Rose became a shareholder in Dreams in 2000 and agreed to make appearances on Comcast Corp.'s QVC home-shopping channel, Dreams said in a news release that year.

Jack Nicklaus, the winner of 18 major golf tournaments, also has signed with Dreams, which reported net income of $408,000 on sales of $17.8 million in its 2003 fiscal year.

On his Web site, peterose.com, a plain autographed baseball costs $89, a signed bat is $299 and a personalized copy of his book (which retails for $24.95) is $99.95.

Foxwoods visit

Rose has been signing books throughout the country, too, including one closed-door event Jan. 24 for "preferred players" at the Foxwoods casino in Connecticut, according to the New York Daily News.

Marketing experts such as Scott Becher, a sports consultant, estimate that Rose's memorabilia prices might increase as much as 50 percent with Hall of Fame status.

"Here's a guy vividly recognized for being untruthful, yet he sells himself in spite of that," Becher, president of Coral Gables, Fla.-based Sports & Sponsorships, said in a telephone interview. "His appeal really defies logic."

There are limits to his appeal.

In a January survey, after the publication of Rose's book, the market research firm Knowledge Networks found that 91 percent of respondents believed that, even before his public confession, Rose had gambled on baseball. While 56 percent said he should be admitted to the Hall of Fame, 61 percent said he shouldn't be allowed to manage a team, and 68 percent said his endorsement of a product would be meaningless to them.

Endorsements potential

Because he's been banned from baseball, Rose isn't among the ex-stars who endorse high-profile products, though that might change.

"Once he gets into the Hall, it's 'Pete Rose, Hall of Famer,' and it'll make a world of difference," said D.J. Allen, president of Imagine Marketing of Nevada Inc. "If he does get in, the sky's the limit financially. It would be like a victory tour."

Former baseball players such as Nolan Ryan and Cal Ripken Jr. are fixtures in television advertising. Ryan has an endorsement contract for Wyeth's Advil painkiller and Ripken's endorsements include such brands as Coca-Cola and Quaker State motor oil, and companies such as electronics retailer RadioShack Corp., cable operator Comcast and MBNA America Bank.

Current stars such as Derek Jeter, the New York Yankees shortstop, make as much as $10 million a year on endorsements, said Doug Shabelman, senior vice president at Burns Sports. Tiger Woods, the world's No. 1 ranked golfer, made $77 million in endorsements, royalties and appearance fees last year, according to Golf Digest magazine.

Hidden income

Rose's handling of his finances continues to leave a mark.

After he was banned, Rose went to prison in 1990 for hiding more than $300,000 in income from gambling and memorabilia shows in the 1980s. In addition to serving a five-month term, he paid $366,043 to the Internal Revenue Service in back taxes and penalties.

More recently, tax liens have entered the picture.

Rose told a Cincinnati radio interviewer Jan. 9 that he would have been reinstated by baseball had the Enquirer not published an article last year about the tax lien.

"When Bud (Selig) read about that, he put it on hold," Rose was quoted as saying about his reinstatement. "He wants to know if there are any more skeletons out there."

California home

A year ago, the Enquirer reported that Rose owed the IRS $151,690 from his 1998 tax filing and cited the lien. The debt was cleared up in July, and Rose confirmed on the radio show that he had resolved the matter with the government.

In 1999, Rose and his wife, Carol, bought a six-bedroom, $913,500 home with a pool in Sherman Oaks, California, taking out a mortgage of $685,125, according to property records. Last year, four months after the Enquirer's tax lien article appeared, he took out a second mortgage of $229,221 on the home, the records show.

Rose also owns a three-bedroom condominium in Boca Raton, Fla. He paid $168,000 for it in 1996 after selling a nearby home for $625,000, property records show.

He also has an interest in a Boynton Beach, Fla., restaurant, Pete Rose Ballpark Cafe. And he told Sports Illustrated that he owns "a couple of race horses."

Soon, there may be money from a film. Joel Gotler, a Hollywood literary agent who last year sold the authorized biography of Neil Armstrong, the astronaut, to Warner Brothers Pictures, said in an interview that he is trying to sell the film rights to Rose's book.

With his admission now public, Rose says he thinks that Selig will reinstate him sometime this year.

No obligation

Selig has no deadline or obligation to rule on Rose's future, baseball spokesman Pat Courtney said.

If reinstated, Rose may be on the Hall of Fame ballot for the first time later this year. Because he retired as a player in 1986, and the Hall has a 20-year maximum eligibility window, Rose only has two more chances to be selected by a vote of baseball writers. After 20 years, the Veterans' Committee can vote an ex-player into the Hall.

While he waits, Rose has the advance on his book, published by Emmaus, Pa.-based Rodale Inc. He told USA Today that he and co-author Rick Hill will share a $1 million advance.

The 322-page book had an initial run of 500,000 copies, an unusually high number for a sports biography, Jim Milliot, senior editor for business and news for Publishers Weekly, said.

Susan Lietz, a Rodale spokeswoman, wouldn't comment on the advance amount.

Although the book rose to No. 1 on the New York Times non-fiction best-seller list last week and ranked No. 3 last week, Milliot doesn't foresee much staying power.

"I'd be shocked if Rose makes more than the advance," Milliot said.




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