PeppercomBlog

The $16 Million Man

Posted by Matt Purdue

If you want to punk one of your PR colleagues, just tell him that he’s been assigned to the team for a new client: a professional athlete. Then watch as he runs screaming for the hills—or the nearest pub. From Stephon Marbury’s pouting to Plaxico Burress’ poor aim to Sean Avery’s love life, sports icons are having a bad week. It’s the kind of behavior that will add some gray hairs to even the most seasoned PR professional’s pate. 

And now along comes Andy Pettitte. The Yankees starting pitcher finds himself embroiled in a salary dispute, and just does not seem to understand good public relations. The New York Times reports that Pettitte is trying to avoid a big salary cut. He “earned” $16 million this year, making him one of the best-paid pitchers in baseball; he wants at least that much in 2009. His team, however, is offering something like $10 million. Andy, it’s time to wake up. 

First, let’s look at the facts that Pettitte refuses to address. He’s 36, far from spry, and suffered shoulder problems in 2008. He underachieved this year, going 14-14 with a 4.54 ERA, and won only two out of his last nine games as the Yankees missed the playoffs. Of course, we can’t expect a professional athlete to engage in a point-by-point debate over his stats. Arguing over details is never good PR.

Humanizing the Home Crunch – Sort of

Posted by Gene Colter

It’s journalism 101, and it’s a good thing: making a trend real by telling it through the anecdotes of real people. A variant – much iffier – is using celebrities to illustrate the trend: Hey, if the Hollywood crowd gets caught up in the trend, it’s really come home to roost! (Bonus: You get to run photos of celebrities just like the supermarket mags, and the visual ups your eyeball count.)

A Wall Street Journal article earlier this week features an example of the latter approach: “Ed McMahon May Lose Beverly Hills Home.”

The quality of the publication and the impeccable reputation behind the bylines on the article provide comfort. But, at the risk of jumping on the overly simplistic Murdoch-is-bad-for-WSJ bandwagon, I can’t help but wonder if this approach is something we wouldn’t have seen from the paper in years past.

To be fair, there’s another hook for the article that argues on behalf of running it: the lender threatening to foreclose is a unit of Countrywide Financial, the poster child for all that was wrong in the subprime cycle. And, according to a quote in the story from a McMahon spokesman, the celebrity and his wife “understand that they are in the same situation as hundreds of thousands of other hard-working Americans, and their hearts go out to them.”

Except there’s this little detail: His base loan amount was $4.8 million, and McMahon was “about $644,000 in arrears” on the loan in late February when the lender, ReconTrust, filed a default notice.

Leave aside for the moment that a February filing is only coming to light now; presumably this “news” broke now because of discussions between McMahon’s handlers and the lenders. The real question is: Would the average person be allowed to get that far behind on his loan before the hammer dropped?

It’s a fact that lenders do not like to become property owners and so are loathe to take over properties, but this loan really got a ride.

Another little tidbit: The home has been on the market for a couple of years and is currently listed on a Christie’s Web site at $5.75 million. That’s apparently too rich, but with a price drop and the canyon views and other amenities, one would think McMahon could really move the property if he wanted to.

Beverly Hills isn’t America. And although Ed McMahon may be an expert co-host and dealer of false dreams (“You may have already won $1 million!”), he’s not the average American.

This Industry is a Teardown Job

Posted by Gene Colter

As any sentient adult knows, real-estate brokers are way down the moral heirarchy ladder, near abusers and certain types of attorneys but maybe just a smidgen above mortgage brokers.

A Justice Department settlement with the National Association of Realtors -- don't call them realtors with a small "r" -- lets this industry off the hook for years of anticompetitve behavior and does nothing to dispel suspicions about the men and women who "help" you to get the best deal for home.

Under terms of the settlement, Realtors cannot discriminate against discount real-estate brokers who might want to put Realtor housing inventory up on their sites. Translation: The Establishment has to let the discounters show everyone's stuff.

But Realtors didn't have to admit any wrongdoing and will not pay a fine.

For years, home buyers/sellers have reported that the big brokers have tried to prevent them from working with discounters. This deal may make things better on the Web (though don't count on full compliance), but bad practices will continue. Some years ago when this blogger opted to list his New York apartment with a discount broker on the belief that the place would sell itself (it was the right time), an establishment broker told me point blank she'd do all that she could to make sure no one came to see the place.

Here is a market where the advent of technology and other competitors has yet to drive down commissons, which have held or even risen a little over the past few years. The Wall Street Journal cites industry executives as saying the Justice settlement won't have much influence overall on commissions.

It's a free market. Just not for the American Dream.