Sympathy for Bob Gutkowski

or, Why Business Is Hard

As you may have read, a judge dismissed former Madison Square Garden exec Bob Gutkowski's suit alleging that the Yankees owed him money for his alleged role as "the architect of the YES Network." The YES Network, and the local media revenue it brings in, being the economic engine that drives the Yankees' financial empire, you'd think that whoever...architected? that engine would be swimming in giant vats of money, Scrooge McDuck-style. But Gutkowski wound up getting none of that filthy lucre--he just got a handful of consulting contracts from the new network, and, he says, a lot of promises that he'd get to build and/or run the network someday. And he got to do neither of those things. For this he sued, and now lost.

Because the law suit was dismissed, rather than going to trial, we have no basis to determine if Gutkowski's claims are true, or if they're more along the lines of those annoying "Windows 7 was my idea" commercials:



(By the way, this parody of those commercials was pretty funny, and only slightly NSFW.)


Anyway, after the YES Network case was dismissed, Gutkowski's attorney's comment to the New York Times was, “What’s interesting about the opinion is that the claims were dismissed on several legal technicalities, not because Steinbrenner didn’t take Gutkowski’s work product and make millions of dollars off it.” Most of those "legal technicalities" amounted to the fact that Gutkowski and Steinbrenner never had a contract, which is quite a troubling technicality when you're suing for breach of contract. The other technicality was that, even though Gutkowski allegedly first pitched the concept of a Yankees network in 1996, and the YES Network came online in 2002, Gutkowski waited until 2009 to sue, so his suit was late.

But beyond the legalities, should we feel bad for Bob Gutkowski? If what he claims is true, George Steinbrenner, a very, very, rich man, got much richer off his ideas and work, and didn't pay him what he was due. The fact that he's much less wealthy than Steinbrenner immediately makes him an object of sympathy, since the relationship was unequal. On the other hand, his claims also sound a bit like the outrage of a girl who's shocked--shocked!--that her date is trying to get to second base during the limo ride after the prom.

(Not a reference to personal events, by the way. It didn't help that my prom date had a boyfriend, and that a food allergy rendered me mute for most of the evening. Long story.)

This is how business works. Coming up with good ideas is not the hard part. This week's announcement of the iPad has experts coming out of the woodwork, all claiming that they could do Steve Jobs's job better than he did, by giving the device a better name, different features, whatever. The big difference, to them, is that Steve Jobs has Apple's considerable resources at his disposal, while they don't. How unlucky for Apple that that hack Jobs is still at the wheel!

Seriously, the hard part isn't getting the brilliant ideas, it's getting paid for them. People with brilliant ideas usually have to hook up with people with resources to make their idea a reality. From the point of view of the person with resources--if you've ever owned or created anything of value, you've probably experienced this--the world is full of people with bright ideas who want to share their ideas with you. Usually, their pitch amounts to some variation of "give me part/half/all of your money/assets/intellectual property, and with my knowhow and contacts, I'll make us a fortune!" These offers come with a differing levels of legitimacy--ranging from emails from a Nigerian prince to a phone call from Bill Gates's garage, circa 1976--and as the party risking more than their time and effort, the person with resources has to be very careful who they listen to. The flipside is also true. People with resources will often string people with ideas along with a lot of handshakes and "that sounds promising"s and vague promises, and if the idea people haven't taken steps to protect themselves, they'll find someone else executing (and, if it's good, profiting from) their idea.

That last scenario is what Bob Gutkowski's claims look like: he had a bright idea, an idea which, to work, required a resource he didn't have and couldn't buy (the Yankees). So he went to the Yankees' owner with his bright idea for a Yankees network, and in return he got a bucket of false promises and betrayals. Simple, right?

The part that makes it complicated is what, according to Gutkowski's complaint, happened in 1998. At that point, he formed a company to help the Yankees create their network, and they gave a presentation in which they laid out their whole strategy. They presented the Yankees with a contract, saying that to get started with their plan, it would take $25,000 a month, for a minimum of six months. The story Gutkowski tells is that Steinbrenner didn't sign, but directed them to go ahead with the plan anyway. He then paid only one month's worth of the contract, and nothing else.

So obviously, they took him to court over the $125,000 the Yankees owed, right? Apparently, no. Instead, Gutkowski signed a short-term consulting agreement with the Yankees, based, he says, on smooth talking and promises from the Boss himself. OK, so that sounds reasonable, kinda, but still: 125 grand!

Maybe that just wasn't enough money to go to war over, but surely things must've changed in 2002. That's when the Yankees started the YES Network, without Gutkowski's participation. According to him, they stole his idea! But did he sue? No, he signed another short-term consulting contract, and then another one in 2004. Why would someone hire on to work for a guy who stole his ideas, not once but multiple times? Again, the answer offered is that the Boss and his lackeys persuaded Gutkowski with false promises that never actually included concrete discussion of salary figures or percentages of ownership in the YES Network Gutkowski would get. In the complaint, it sounds like George Steinbrenner is the most persuasive person ever born, with near-magical powers of mesmerism to make Gutkowski keep playing Charlie Brown to his Lucy van Pelt.

(A quasi-theological corollary to this: if the Boss had magical persuasion powers, why wouldn't he have used them to talk the Red Sox out of winning the 2004 ALCS?)

Back to Gutkowski, given his admitted actions, it just doesn't make sense that he really thought that anyone had anything other than a moral obligation to do right by him. And sadly, in the worlds of business and law, moral obligations ain't worth much, probably much less than he netted from the consulting contracts he kept signing.

(Huge hat tip to Ben Kabak, whose post over at River Avenue Blues inspired this rant.)

Required Reading

Anyone who's read this blog knows that I'm a huge fan of Bronx Banter. I was lucky enough to spend a bit of time with Alex Belth on Monday, as well as his fellow Banterer extraordinaire, Emma Span, my Baseball Prospectus friends Joe Sheehan, Jay Jaffe and Steve Goldman, and Kevin Baker, who is one of the contributors to the Anatomy of Baseball compilation.

It was a great joy being at a table where I was clearly the worst-read person there. At one point we basically became a baseball version of the McLoughlin Group, going around the table for opinions on books, the end of Yankee Stadium, Joe Girardi's shaky start as Yankee manager, Will Leitch (and sports blogging along with him) getting pilloried on Bob Costas Now.

Speaking of books (and Bronx Banter), I got to participate in Alex's Essential Baseball Books project, nominating my top ten books. I restricted myself to non-fiction works, and worked off the top of my head (sadly, my apartment doesn't have space for all my books, so there were a few favorites, like Ball Four, that I missed solely because they're in storage rather than on my bookshelf). You can find the Essentials series at these links: Part I, Part II, and Part III.

From Part III, here's my tardy list:

Bill James, Politics of Glory -- Wonderful exercise in applied sabermetrics: James takes a dash of numbers, a huge dollop of historical research, and systematically ticks off the problems with baseball's most revered institution.

Steve Goldman, Forging Genius -- Has all the things you'd expect in a bio--fun anecdotes, character sketches, historical details--and throws in a strong dose of logic on top of it, to explain how Casey Stengel became the guy that led the Yankees to all those pennants. I suspect it would be interesting to read this back-to-back with the next book, because the authors' styles are so different.

David Halberstam, Summer of '49 -- It's like the movie Apollo 13: even if you know exactly how the 1949 pennant race ended, you still probably won't be immune to the suspense that Halberstam builds up in this book. Essential read for Yankee fans.

Alan Schwarz, The Numbers Game -- Great history of the game, told through the eyes of statheads from era to era.

Bill James, Historical Baseball Abstract -- It's a bit like Disneyland, huge and easy to get lost in. There are maybe three great books' worth of work in there.

Baseball Prospectus, Baseball Between the Numbers -- Excellent primer on a broad range of stathead topics.

Michael Lewis, Moneyball -- Cliche? Maybe. A bit dated, just five years after it was published? Sure. Doesn't matter. Moneyball drags you into the collective mind of a MLB front office better than any book I've ever read.

Peter Gollenbock and Sparky Lyle, The Bronx Zoo -- Sentimental pick. I was still a kid with illusions to shatter when I read Gollenbock's story of what really happened with the 1978 World Champs. You never get your innocence back.

William Goldman and Mike Lupica, Wait Till Next Year -- Can you remember when Mike Lupica actually liked baseball? I think this book was the beginning of the end of that. The NFL and NBA, peek in here, but Goldman (of Princess Bride fame) and Lupica mainly focus on the 1987 Mets with a decent side helping of Yankees stories. The essential parts for baseball fans are Goldman's humor, and Lupica's glimpses into how sports journalism works.

Rob Neyer and Bill James, The Neyer/James Guide to Pitchers -- Probably the most unique baseball reference book out there--I mean, how many times do you think of a pitcher, but can't quite remember all the pitches he threw, or what his best pitch was?

More book talk later, I hope

Sabado Gigante!

A quick breakdown of the Yankees' Arbitration asked/offered, and some notes. In reverse order of how interesting they are:

Brian Bruney: Asks: $845,000, Offered: $640,000

In the bigger scheme of things, $205,000 doesn't seem like a lot of money in Yankeeland, so this should settle. But, looked at another way, the Yankees are offering about 24% less than Bruney's asking--so in his world, this is pretty big. A bigger question is whether there's any room for Bruney in the Yankee bullpen, regardless of what pricepoint he receives.

Chien Ming Wang -- Asks: $4.6MM, Offered: $4MM

This settles. Has to. I'd think that the Yanks would be well-served to try to make a long-term deal here, but if not, they're still only $600,000 away on a bargain of a contract.

Robinson Cano -- Asks: $4.55MM, Offered: $3.2MM

Now, at $1.35 million, these folks are far enough apart that you don't just say "split the difference." The Yanks' figure seems criminally low for a player who might be the best-hitting second baseman in the AL, over the last two years; but it's important to remember that Cano, like Wang, is a "Super Two" arbitration-eligible player, who has less than 3 full years' playing time. As such, he's at a lower level of arbitration than a player with more playing time--still, it's hard to see the Yanks winning this arbitration, or the settlement turning out closer to their figure. Still, it's worth a second look.

NOTES:

Nice profile of Humberto Sanchez over at the MiLB.com site. Prospects tend to drop off the radar after they've had surgery, and the Yanks seem to have more pitching prospects recently under the knife than anyone else. Good to keep up.

Wilson Betemit is back with the club, with a $1.15MM contract. It's been a while since the team had a useful, legitimate four-position utility infielder, and Betemit gives them that. Like a number of other Yankees, he's vulnerable against lefthanded pitching--that's why the team is dishing out minor league contracts to guys like Jason Lane, and should consider approaching Chris Shelton, if he makes it through waivers.

This year, Time Warner Cable has finally given me my ESPN Deportes, which means that I'm mainlining winter league ball. Right now, my ancestral team, Licey, is getting rolled by their arch-rivals, las Agulas del Cibao, in the Dominican League finals. The Aguilas are up 3-0 in a best of nine, on the strength of an offensive explosion. Yankee Edwar Ramirez is with Licey and he took a whupping in the first game of the series; former Yankees playing in the series include Luis Polonia patrolling the outfield and Randy Choate coming out of the bullpen for the Aguilas, Wil Nieves playing behind the plate and D'Angelo Jimenez backing up in the infield for Licey. Check it out, if you have the chance.

Proof of Life

My head's been wrapped so deep in work that it's starting to feel like a hostage situation. I feel the need to post here more as proof to the proud few of you that still read this space that I'm still alive, and relatively well. If any of you need further proof, I can post a picture of myself with today's newspaper (the Times, sadly, which is La Chiquita's subscription).

Since the last time we posted:

Jorge Posada Signs for 4 Years, $52 Million -- The rise of H&H Steinbrenner means that we're shifting from IOGM (It's Only George's Money) paradigm to the slightly more generic IOSM (It's Only Steinbrenner's Money). One way to look at it is, is paying $26 Million for Jorge Posada's age 38 and 39 seasons really a good idea? That's a daunting question, to which I can only answer: IOSM. But the real question is, what was the alternative? Yorvit Torrealba? Michael Barrett? Paul Lo Freakin' Duca? You've got to tip your hat to Hip, Hip Jorge! for having an A+ season in his walk year, at a time when there wasn't another viable soul on the market.

Yanks Offer Mariano $45 Million for 3 Years -- I'm less than overjoyed with the Yankees new policy of sharing their every negotiating thought with the press; divulging their contract offers to Joe Torre, Alex Rodriguez and now Mariano Rivera with a plaintive cry of "Look! We're offering these folks top dollar!" seems like some backstepping toward the bad old days when George Steinbrenner and Billy Martin used reporters the way other people used telephones. Still, this is a great deal for Rivera. Look at it this way: over the last five years, Mariano's averaged just under 75 innings per season. Paying him $15 million a year would likely be over $200,000 per inning, which is a pretty world-beating return for anyone this side of Carl Pavano. By way of comparison, Roger Clemens received $189K/inning this season, on his absurd contract. That's some nice coin.

Barry Bonds Indicted -- This is today's news. Obstruction of justice and perjury are the reported charges, which leaves out the most serious charge leveled against him, for tax evasion. Expect a number of articles tomorrow about how this is the worst thing to happen in baseball history. Fay Vincent has already gone on the record claiming that this is worse than Pete Rose's gambling and tax evasion, and possibly worse than the Black Sox scandal. That's crazy talk.

Barry Bonds's getting indicted--after three or four years' worth of grand juries to toll the statute of limitations for perjury--is a sad thing. But it's something distinct from baseball's (or Bonds's) steroids problem, in the same way that Rose's tax evasion conviction was distinct from his permanent suspension from baseball for gambling. If Rose's suspension had been for failing to pay his taxes--a serious legal offense, and one that no one could justify--then I'm 99% certain he'd be in the Hall of Fame today. Sports and the law work in parallel worlds; in the sports world, his biggest offense (betting on baseball, and on the Reds) could have been carried out legally, but it was more serious than his violation of the law. In the baseball world, it's established that gambling is a more serious offense than PED use--the proof is in the respective punishments (lifetime ban for gambling vs. 50 games for the first steroid offense, less for amphetamines) and the basic "shrug and nod" response that the whole thing is given in other sports, like football.

A side note: The thing I like about Mr. Vincent is how, even 15 years after being ousted as Commissioner of Baseball by Bud Selig, he still acts as if he were the Commissioner in Exile rather than just some guy who got fired. Rather than just publishing his memoirs and going away, he's establishing a shadow government. And until the tyranny of the Selig regime collapses, and Vincent is restored to his rightful place in MLB's Madison Avenue offices, he's available to talk the media--at all times--and second-guess everything that happens in the game from the sidelines. It's a pretty sweet gig, if you can get it.

Alex Rodriguez Resumes Negotiations with Yankees -- In the time that it took me to write the foregoing, the Yanks and A-Rod have reportedly come to terms on a 10-year $275 million contract. The story's not mature, involving more than a little rumor-mongering that's keeping me from commenting at this time.

...to be continued.

There Goes the Future...

I saw this one first at Pete Abraham's LoHud Blog, which is my first priority to add to this site's links the next time I decide to wade into this site's HTML:

Steinbrenner’s son-in-law and designated successor, Steve Swindal, has been sued for divorce. Jennifer Steinbrenner filed papers in the Hillsborough County Circuit Court’s family law department on Tuesday. She cited “irreconcilable differences.”

The divorce proceedings came 40 days after Swindal was arrested for driving under the influence and speeding in an unsavory section of St. Petersburg. Swindal is expected to lose his position as general partner.

In some ways, we've been expecting this since Swindal was busted for DUI earlier in Spring Training, but it's still a shocking fall from grace. Swindal's divorce effectively leaves the Yankees organization decapitated. George Steinbrenner's been in seclusion, and despite his claims to the contrary, it's widely-reported that he's in bad health and not really up to the day-to-day job of running the ballclub, anymore. The jockeying to fill this vacuum could be a King Lear-type melodrama--or not, if, as some believe, none of Steinbrenner's children has much interest in being a baseball team owner. With Swindal, we had someone who was fairly a lock to be interested in running the club in the future; now, when the Boss is no longer with us, it's no longer unthinkable that the Steinbrenner family will want to unload the franchise. And as we know from past experience, that means that our beloved baseball franchise could soon be in the hands of mental incompetents and/or cronies of Bud Selig's (and there's a lot of overlap in these groups).

As someone who was until recently in the marital strife industry, I'm sensitive toward what Steve Swindal and Jennifer Steinbrenner must be going through. The end of a marriage is a real human tragedy, also something truly private and really not the business of anyone outside of the couple and perhaps their immediate family, friends, and business partners.

But as a Yankee fan, I just gotta look at Swindal and say "You jerk! We were counting on you! You had it all in the palm of your hand and you blew it, just completely and totally blew it!"

***

In other ways you can destroy your future, you could simply emulate Ugueth U. Urbina, and get sentenced to 14 years in a Venezuelan prison for attempted murder. The other day, hanging out with the Prospectus gang at the Yogi, we were talking about relief pitching and I wondered aloud whatever happened to Uggie's criminal case, thinking that perhaps he'd be like a number of beisbolistas who've skated on charges ranging from rape, to drug dealing (who can forget the Pedro Guerrerro "I'm too stupid to be a drug dealer" defense?) and murder/manslaughter. Well, now we have an answer. Nothing can quite kill a career like being in lock-up from your age 33 to 47 seasons. Vaya con dios, Triple-U.

Notes from a Backlog of Newspapers

* I missed his appearance tonight, but Kei Igawa's walkitudinous ways are a bit scary. More interesting was watching Tyler Clippard throw a few innings after ol' Dr. Kei exhausted his pitch count with four walks and five strikeouts in three scoreless innings. Clippard allowed one run in two and a third pitched, the run coming on a solo shot Chipper Jones absolutely nuked over the rightfield fence. The homer aside, Clippard looked impressive, throwing his 91 MPH heat up and over the plate as if he were Roger Clemens, and featuring a nice changeup (well, nice changeups aside from the one Chipper hit halfway to Miami).

* Clippard was demoted after the game, which is less a reflection of his performance than a reflection that there are only two weeks of Grapefruit action left, and the Yanks have a ton of righthanded pitchers vying for only a couple of slots. With Jeff Karstens tossing zeroes, there was simply no room for Clippard in the inn.

* A-Rod talks to the New York media so much, I actually worry about his health and safety. Alex should heed the Errol Morris axiom, "Let someone talk for long enough, and eventually they'll hang themselves." He's said he sucked. He's talked about his relationship with Jeter, or lack thereof. Now he's saying that it's "Do or die." Whatever. It's all so much noise.

I mean, we all get the points that Rodriguez is trying to make: 1) he's not forswearing his right to opt out of his contract after this season (he'd be an absolute and total sucker to do so) and 2) just because he's keeping his option(s) open, doesn't mean he doesn't want to stay in New York, with the Yankees. Everything else he says is a reiteration, repetition, or rephrasing of those two points, with a few variations. Enough, already!

* Sadly, Richard Jeni made his own health and safety a moot issue, committing suicide last week. Jeni was one of my favorite standups of the late 80s and 90s, I'll miss him for that. Another one of my favorites from that era, Elayne Boosler, remembers him as a friend in the Huffington Post; Scott Long, whose act I've never seen, but whose blog I read regularly, has a much less sentimental take (at some point in the comments section, it kinda becomes Please Explain: Suicide).

* So far, the biggest non-A-Rod stirs at Yankee Camp happened because Roger Clemens decided to attend a game--as a spectator, mind you--and because Carl Pavano's girlfriend had an unspecified health situation. I think that can speak for itself.

* Best at bat of the spring: Jose Tabata's opposite field dinger on Sunday. Just a really nice flash of strength, to give us something to think about while we wait for him to be ready for the Show.

* Pete Rose used to say he never bet on baseball. Then he admitted he bet on baseball. Now he claims he bet on the Reds, every day. I suppose it's a form of justice that by now Rose has told so many lies (and the truth is so underwhelming) that no one really gives a damn anymore. Used to be that every year, around HoF election time, a dedicated and noisy group would gnash their teeth about the big injustice being done to the Hit King. Haven't really heard a peep from that crowd since Rose's book came out a couple of years ago (and as an added bonus, they seem to have taken the "Free Shoeless Joe!" lobby down with them).

Over the next few years, I think what we'll get from Rose is a series of increasingly desperate confessions in the hope that one of them will finally trigger the American public's forgiveness, until eventually he's confessing to stuff like the Kennedy assassination, the murders of Ron Goldman and Nicole Brown, and fixing Ali-Liston II. Not that anyone will care about that, either.

* The wonderful, synergistic relationship between MLB and Viagra appears to be over, which I think is just the kind of victory over artificial performance enhancers that the league needs. This relationship was doomed from the beginning, given that MLB's first Viagra pitchman was Raffy Palmeiro.