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 Post subject: Vick standing at financial precipice
PostPosted: Sat Aug 25, 2007 1:37 pm 
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Dogfighting's cost: Lost salary, endorsements, legal fees.

By TIM TUCKER
The Atlanta Journal-Constitution
Published on: 08/26/07

Falcons quarterback Michael Vick's guilty plea on federal dogfighting charges could wind up costing him well over $100 million.

Vick will lose $71 million in salary over the next seven years if the Falcons terminate his contract, which legal experts say the team has the right to do.

He also figures to lose as much as $50 million in endorsement income over the next decade, according to an estimate by the University of Oregon's Warsaw Sports Marketing Center.

Then add to Vick's costs the legal fees and other possible fallout from the case.

Paul Swangard, the Oregon sports marketing center's managing director, said he can think of no other athlete who has hurt himself financially as much as Vick has.

"He has created a new [height] of lost opportunity," Swangard said. "There's an inherent sadness in seeing someone with so much potential wave it all goodbye with poor decisions."

Vick's losses could go even higher if the Falcons sue him for some of the $37 million in bonuses already paid under his contract. The Falcons will soon begin pursuing some of the signing bonus money, a person with knowledge of the situation said Friday.

Then there will be the legal bills, which likely will run well into the hundreds of thousands of dollars, if not higher, legal experts said.

Vick's sentence also could include a fine of up to $250,000.

The NFL superstar's attorneys on Friday filed a plea agreement with prosecutors stemming from his indictment last month. Vick is scheduled to formally enter his plea at 10:30 a.m. Monday in U.S. District Court in Richmond. He will be sentenced later.

Also Friday, the NFL suspended Vick without pay indefinitely.

The Falcons signed Vick, a quarterback with a penchant for the spectacular, to a 10-year, $130 million contract in December 2004, one day after he was selected to the Pro Bowl for the second time. A month later, he led the team to the NFC championship game. Endorsement offers poured in.

"A Falcon for life," team owner Arthur Blank called Vick upon signing him to the largest contract in league history.

According to the NFL Players Association, that contract calls for Vick to receive a salary of $6 million this season, followed by $7.5 million in 2008, $9 million in 2009, $10.5 million in 2010, $12 million in 2011, $12.5 million in 2012 and $13.5 million in 2013, plus incentive bonuses.

Now, all of that money could be gone.

The only part of Vick's contract that might matter now is the clause that allows the Falcons to terminate it if he "has engaged in personal conduct reasonably judged by club to adversely affect or reflect on club."

Michael McCann, a Mississippi College School of Law professor who often writes on sports legal issues, said the Falcons clearly can terminate the contract, although legal and salary-cap tactics could drive the timing of such action.

McCann said the Falcons "can and probably will sue" Vick for some of the money they've already paid him.

"I think they're going to argue the signing bonus reflects an understanding Vick would play for the totality of the contract, and clearly he's not able to satisfy that," McCann said. "They're not going to get all of it back, but I think they have a pretty compelling argument to get some of it back."

How much is unclear, because of the creative way in which the Falcons structured Vick's bonuses for salary-cap management purposes.

The Falcons have declined to say how they'll deal with Vick's contract, beyond Blank's comment to The Atlanta Journal-Constitution on Aug. 17 that the team will "move very decisively." The NFL subsequently instructed the team to defer action until commissioner Roger Goodell acted, which he did Friday by suspending Vick.

If the Falcons cut Vick, it is unclear when or whether he could join another NFL team. That will depend on the lengths of his NFL suspension and his expected prison term. The maximum prison term is five years, although federal sentencing guidelines likely would suggest 12 to 18 months.

If Vick returns to the league, it likely would be at a drastically reduced salary.

Unlike Vick's football contract, the specifics of his endorsement deals with Nike, Rawlings and other companies have never been made public.

But in its ranking of America's highest-paid athletes last year, Sports Illustrated estimated Vick's endorsement income at $7 million annually. And Oregon's Swangard said that, if not for the dogfighting scandal, a "conservative" estimate of Vick's ongoing endorsement earnings over the next 10 years would have been an average of $5 million per year.

"There is $50 million on the marketing side that has disappeared," Swangard said.

Nike last month suspended Vick's endorsement contract without pay, and at least seven other deals have either been suspended or allowed to expire.

"There is no corporation that will touch Michael Vick again, ever," said Ronn Torossian, president and chief executive officer of New York-based 5W Public Relations, which has represented athletes and entertainers.

The federal indictment against Vick and his three co-defendants described the dog-fighting operation in chilling detail, including accounts of dogs being shot, drowned or electrocuted if they did not perform well. Animal rights groups launched protests.

"The best advice any PR person can give Vick is 'work out, lift weights and run a lot while in jail,' " Torossian said, "because the only money he has a chance to make in the future is on the football field, not off it."

Swangard said Vick perhaps could get a small endorsement deal from an upstart company seeking "awareness" for a product if he makes it back to the NFL. "But his ability to be a mainstream endorser is gone forever."

The guilty plea will save Vick money in one respect. The case, sparked by a police raid at Vick's rural Virginia property in April, has been resolved quickly.

"His [five] attorneys are high-profile, high-charging attorneys, but it really hasn't been that long a litigation," McCann said. "I would say [the legal fees are] at least in the hundreds of thousands, but if it went to trial, it would be in the millions."

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