Coach, the energy out there felt different. What changed for the team today?
It was the new game day scratches from the California Lottery players. Everything. Those games sent the team's energy through the roof.
Are you saying it was the off field play that made the difference on the field.
Hey, little play makes your day, and today it made the game.
That's all for now, coach, one more question.
Play the new Los Angeles Chargers, San Francisco forty nine ers and Los Angeles Rams scratchers from the California Lottery. A little play can make your day. Peace made responsibily. Must be eighteen years or older to purchase late or claim.
All right, guys, welcome back episode ten. Time Fly, Time Flies. This is a monumental episode for us because it's on tenth one, tenth week. So first of all, we want to thank you guys. Our growth has been tremendous on all audio platforms, on YouTube, on Instagram ten weeks in and you know we're hitting the ground running. So that's only because you guys that are spreading the words. So thank you, thank.
You, thank you everybody who's been supporting, hitting our website up, getting the merged. We really appreciate it, Thank you so much.
All right, So we're going to jump into it this week with one of the biggest topics of discussion, which is a massive college cheating scandal Colle's admissions cheating scandal, and it reaches pretty broad reaching. It's the biggest one in American history FBI probe. So I put it on my Instagram, I put it on our Instagram, actually on your leisure page to see, you know, the reaction if
we should talk about it or not. And a lot of people wanted us to talk about it, and a lot of people really wasn't sure exactly the full dynamic, what happens, like, what it really encountered, and you know, all of that stuff. So with that being said, we want to jump into it and explain it in full, yeah, because it's more involved when people think.
Yeah, a lot of people like a really completely oblivious to what happened. They saw it on the news and the headlines. But there's so many layers to it, and hopefully we'll be able to explain that to you in a way that you can understand and digest.
All right, So you want to start it off.
Yeah, So we'll start with by the FBI finding this out by mistake, completely by mistake. It was just a happenstance. They were investigating this this man named uh Maury Tobin, who was a yell alone and he was on the investigation for a pump and dump scheme. So a pump and dump is when you put money into a stock and the stock rises and you sell it because you know that the stock's not gonna last long. So he
was on the investigation. They had all the evidence presented for him, and when they presented it, one of me was like, you know what, I'll cooperate you guys, if you give me linency, I'll cooperate. So what he does is say, you know what, I'm a yello lum. My daughter wants to go to Yea and play soccer. The coach there, Rudy Meredith, offered me to have my daughter come to school for four hundred and fifty thousand dollars.
So he says, you know what, if you pay four hundred and fifty thousand, your daughter could come to the school. FBI says, Okay, that's really good. Can you get that on tape. So Tobin does is he wears a wire and he goes to having meeting with Meredith, and he has them on tape saying it now. Once Meredith is caught, he says, you know what, I'll cooperate if you give me linency, I'll tell you where this money is going. And it comes up to this man named Rick Singer.
And if you don't know Rick Singer is, we're going to go to some death about who he is and his role in this story. But what he does is he starts singing ironically enough, so you want to talk about who Rick singers?
Yeah, So Rick Singer is a guy. He started a company called the Key, right, and the Key was a company that designed to have affluent parents paid to get their kids into college. Right. And it's a couple of different ways how you went about doing it, but they were all pretty much illegal ways. So the Key, it's all unfolded because of Lori Lochlin. So so she's I'm Becky from full House, full House that brings back memories. That's that's that's Selectee's crazy's all right. So now you
have I'm Becky from full House, right. And when he got put the pressure on as far as we're Singer, he starts to fold. So It's like it's like a domino fact. Right, one guy rats, another guy rats. So now he says, okay, well I'll open it up for you. Right, this is bigger than just me. So now you have all these Hollywood A List celebrities V List celebrities that are paying up to five hundre tred thousand in some case I heard even a million and a half to
get their kids into college. Right, So how they getting their kids into college is the interesting part. A lot of times people say, okay, well rich people paying to get their kids into school, that's nothing.
Yeah, we've seen before.
Who really kids? But this is how it all breaks down because the theme of this show is like the backstory behind sports and entertainment, right, so we want to give you the backstory behind sports and entertainment. So this all ties in. It's a very complicated situation. So they're
really using two avenues to get the kids into college. Right, So they're paying, they're using disability learning disabilities, right because now if you have a learning disability, when you take your sat or Act, you get longer time.
So that comes from him first paying school psychologists. So the first thing he gets on a payroll school psychologist and in two ways that they do with first ones ACT SAT test. So he gets school psychologists because he knows that they can create the paperwork that he needs to show that the kids have learning disabilities. So when they get that paperwork, it'll allow them to have extended time into the testing accommodation, either time and a half or double time. Once they get that, now the kids
have longer time to take the SAT. But it goes even deeper because after they take the test, right, sometimes he has another person on the payroll, the procter of the test. So they take the test and a lot of times the kids didn't know this, but the proctor was like some guy that they hired, like an SAT genius, and he would just change the answers for the students so that they would get higher scores. He wouldn't even further than that though, right, this is like one of
the illest things he did. We know, like when we take the ACT and set like way back when that those tests were at specific locations. So what he did is he knew that the parents had a lot of money, and he said, I need a different type of testing accommodation. I need the students to create a scenario where they have to leave. So parents would say, look, I'm going on a business trip, I have to take my children. Is any way that they can take this in a
different location? And they went to two places. They went to Houston and they went to West Hollywood. And when they were there, when it got there, obviously it was the practor was on the payroll, but sometimes they had people just go into those locations and take it for them. So like these kids never took some kids never took the test, some took it and answers were changed, and it's like, wait, what how did this happen?
Yeah, so that's the academic side, And now we're talking about the athletics side, right. So it's actually fitting that you spoke about the academic side because you work in school, you're educator, right, and I played sports my whole life, So now I'll talk about the academic side. So as a Division one former Division one athlete, I can speak about this first hand. Yeah, so when you are recruited
to go to the school. Now, each college has academic requirements right now, of academic requirements, most of the time, they have leniency for athletics athletes, right, So it's lower for an athlete to get the academic requirements are lower, right, because they're an athlete. So what happens is that you have big time college sports basket ball, football, everybody knows that, right, But there's a lot of college sports where we actually spoke about a few episodes ago, and nobody really knows
most of these sports, right. So you have teams like water polo, sailing, even soccer in some cases squash squash. Uh, nobody knows, no disrespect to these these teams, but nobody knows the players and it's not it's no big deal, right, So what happens is that the players on these teams, they have a way to get into college with lower SAT scores, lower ACT scores, lower you know, academic requirements.
So what they were doing is that now they were paying off the coaches, right, they paid the college coaches to put the kids on the team so they can get in on that avenue as well. So now the kids is on the squash team and he's never even played squash. So a couple of schools got USC was one of the schools, right, So USC, if a running back doesn't show up to practice, everybody's going to know what the running back like. That's you know, a big deal.
Nobody's checking to see if the rowing team shows up the practice or not. Right, So now they have and they was actually even photoshopping kids' faces on pictures to make them seem like they were actually real athletes. Right, So how does this all tie in? And so there's always a plot twist, right, So how does this all
tie into everyday people? Is because as we spoke about before, there's two sports that really fund the majority of every sport, all the sports in college, right, and those two sports are basketball and football. Right, So now you have basketball and football, and we all know the demographics most of the time of those sports, right, and those kids most of the time aren't coming from very affluent families. Some do, but most don't. Write middle class, low class, poor families.
So now you have those those two programs are funding the other programs like water, polo, squash, sailing, all those teams. Right, So now the funds that they're getting and it's helping them run their programs. The wealthy pa parents are paying those coaches to let their kids on the team, even though those kids aren't actually on the team, just to get into college. Right, So it all ties into the idea of America and the weird combination of sports and education.
It's not normal to have sports and education tied together in any part of the world other than America, right, So part of the cheating scandual also was IMG Academy in Florida.
You know that school?
Yes, So I am alumni of IMG Academy. So if anybody's not familiar, I give you a quick rundown. IMG Academy is one of the top prep schools in America, if not the top prep school in America. And they have a different approach whereas they build the academics around the sports. Right, So sports is your main focus. You go to school for whatever sports you're playing, and then they kind of tailor make your athletic your academic requirements
around your sports. So you train for most of the day and then you go to school for like part time almost so it's a unique situation. So they had the head of Academic Enrollment for Colleges or something. He had a title something like that, Monstoy short he was taking tests for kids to get him into college right at IMG. So now it all comes down to this is a billion dollar business. As we said before, the
NCAA and college sports. Right, so now college sports is all being tied in with wealthy parents paying for their kids to go to college, and they're using it on the back of athletics to get their kids in via one hundred thousand, five hundred thousand, seven hundred thousand dollars that's going to coaches. So not everybody's getting paid in this whole situation except except for the athletes that's making all this possible.
The tennis coach at Texas or University of Texas ninety thousand. He's a tennis coach. He got ninety thousand for a kid to get into the school. Who's ever watched a tennis match from Texas? Like you know what I'm saying, Like, it just doesn't make sense.
Yeah, yeah, so yeah, So it's it's it's a very it's a very complicated.
Yeah, I mean, it reeks of elitism and privilege. But the question like that I had was like the why why are they even doing this?
Right?
Because if you think about it, when you have families who come from affluent neighborhoods and they come from wealth, the college is kind of not even a necessity. Right, you've already accumulated, your family is already a cumulated wealth. Going to college won't guarantee that you accumulate anymore. Well, right, if you have five hundred thousand dollars that pay the coach, then why are you going to college? Right? Or you
could be learning the skills doing something else. Whereas every time a kid like that gets in, you have a kid who's busted their tail throughout their entire scholass of career to have the opportunity and now they don't you know what I'm saying. So it's like when a middle class or people from low socioeconomic environments, when they go to college, it's like that's our ticket to middle class, Like we have to go to college because it'll give us a good job and we can live in middle
class quote unquote life. And it's like, all right, well college is the key, Well you already have that, so like what's the why? Is like kind of puzzling to me.
And also, I mean we talked about basketball and football funding these programs, but all about the kids that's actually trying to get into college via squash right, Like it's taking the spot from another kid right to get in because you got a kid on the team that's not even on the team.
Yeah, they didn't release the kids' names, but like the one of the students that you will see, when he went to the emissions office, they were like, oh, they looked at his transfer and said, oh, oh you're on the you run track and he was like, what, I don't know what you're talking about. So sometimes the kids
didn't know. In fact, they wake Forest one of the students who's in the investigation, they allowed her to stay at the school because they found no evidence that she knew that her parents had paid for her to be there. So it's like crazy, because like, what do you do? How do you reverse that? Because Stringing Singer's been doing it for twenty five years, He's had eight hundred clients, He's made twenty five million off of this scheme. What do you do you revoke those degrees to the kids
who got paid right? How do you do it?
And this is something like I said, that the average person isn't even thinking about right, And it just shows you the disparity in this country. In the world too, but especially in this country between the haves and the have nots. Right, this is something that you know, the average middle class, poor family, they're not even thinking about anything.
They don't even they're not even aware of this stuff, right, So the extent that people will go to have their kids succeed or sometimes, like you said, just to even be a status symbol, it's obvious that it's not a fair plane.
Like that said, like what you said, the status symbol, like my kid is in Yale, or my kid went to Harvard or he got into USC. It's like, really like this kid, there's kids who are really actually trying to get that done. We actually got a case in Ohio in twenty eleven. It's this young this woman named Kelly Williams Bowler, and she came back up in the news because of this this scandal where she was facing
five years in prison because of an address fraud. She lived in a part of Ohio where you know, poor neighborhood, and she wanted her daughters to have a better life or a better education, so she used her father's address, which was in an affluent white neighborhood, and the school district brought her up on charges for fraud. She was facing five years in prison just because she just thought, hey, a zoning issue. All right, I want to give my kids the best education. Now, she didn't go to prison
for five years. I think she did ten days, but even ten days, like, let's see how many of these parents actually go to jail.
Well, we'll see, we'll see. So yeah, there you have it. There you have it America. All right. So now we're going to go into a very hot topic. Another thing that we put on Instagram and see the reaction and is brick and martar debt. Right, So this is something that we try to talk about things that everybody can
relate to. And obviously everybody can relate to brick and martar, whether you're a customer or business on it, right, because most businesses are brick and more the businesses now, well it's starting to change, but traditionally most small businesses are brick and mortar. And everybody, you know, shops and brick and mortar at some point, you know, in time. So we're going to talk about brick and mortar dead right. So the post that I actually put on Instagram, it
had pay Less closing locations. It had Macy's Clothing location, Kmark Clothing location, see is clothing location. Radio shocks closed Toys r US closed, and then it had Uber, which is the biggest transportation company in the world, has no physical cars. Right, Netflix, which is the biggest movie company in the world, has no movie theaters. And Airbnb, which is the biggest hotel company in the world, has no physical hotels. So is Brick and Martar dead? And everything
transitioning to online virtually? We know that fifty one percent of all shopping is done online right now, so it's an interesting discussion to see is it dead or is it just transitioning?
Yeah. I think in twenty seventeen the United States had about eighty seven hundred stores closed and that was like a whole time high. And we're in March and we already have over five thousand store closings already in twenty nineteen, so this is probably a record year for that. So is it dead, I don't know. Is it adjusting? That's a better question, and I think we have some cases where we might see that it is adjusting.
Yeah, So all right, so Brick and Martin, right, in my opinion, we'll just jump right into it. Is it dead? No, I don't think it's dead, right, I think that the old way of doing business is dead, right, and those stores Macy's and Kmart and Sears. The reason why they're dead or they're dying is that they haven't adjusted, right.
But if you look at like Amazon for instance, right, So Amazon is interesting because Amazon is actually obviously the giant of the virtual world, right, And we talked about amaz Amazon and jay Z probably get mentioned in every episode because it's just now it's unavoidable. But so Amazon built their business model virtually, right. And then now what they're doing is that they're transitioning into the brick and mortar business. Right. So they brought Whole Foods right, well,
I think twelve million dollars a few years ago. Then they have a bookstore, they have Amazon Bookstore, and now they actually Amazon Go. You heard of that. So Amazon Go is a cash list, a cashier list grocery store that I think is in the UK. And that's like their new forte into into grocery stores where no cashier is. Everything is virtual. So what they're actually doing that they combinding, right, So they combining their virtual dominance with the physical dominance
as well. And with Amazon, what they're really trying to do is that they're trying to actually corner the market in every way that you could possibly shop. Because everybody knows that they have the online game on smash right out. They have Amazon Echo, So Amazon Echo if anybody's not familiar, that's like Alexa, where it's like a voice thing, voice activated thing you speak to you can give orders and you can order stuff via that way. Then they have
dash button. A lot of people don't even know what dash button is. Dash button is only for Amazon Prime members. The best way I can describe it like a USB with a button on it, right, and they ship it to you with items that you buy a lot of them. So if you buy a lot of pop Tarts, then you'll get a dash button with your pop tarts And when your pop Tars is running low, when your pop Tars runs up, you just hit the dash button and more pop tost sent to you. Yeah, so it's the
same cereal hate that you can think of. So you don't even have to go online, you don't have to give a voice. All you have to do is just literally press a button now. And then they have the physical store, so they really those four things combined, they're going to corner the market with any way that a person could actually shop they're going to be involved. And then also they want to move into fashion, and that's.
An interesting cosmetics as well.
Yes, cosmetic as well. So people still like to feel the fabric and still try things on, even though a lot of times people shop online. Me personally, I do both. So with Amazon moving into the physical locations, that's going to help them out with fashion as well.
They said that you can they can send you to close, you can try them on, and if you don't like them, sending it back. I believe. I think they have that as part as the business.
Now that makes sense. I mean that's like most online.
Yeah, I mean that's dope. Yeah, you don't have to leave your own to do it.
So and then also what I like to do personally, I order stuff online that from a store that I know I can bring it back to if it doesn't fit. So if it doesn't fit, then I could just bring it back to the physical location as opposed to having to go through the hassle of bringing it to the So I think that there's still room for breaking Martin right. And you're gonna talk about an interesting story that a Brick and Martyr company that has actually got it right.
Yeah, they got it right, and they're actually like a case study in the Wall Street Journal. But a couple of ones that didn't work, you said, were like Mazie's closing store, JAG's, Penny's clothing store, Kmart. But TJ Max has actually got it right. So TJ Max they own a few companies. They owned Marshals, and they own home Goods, and they rely solely on Brick and Martin right, So their stores, I think they have about thirty hundred stores.
They were like all that revenue pretty much comes to that. They don't really do too much online advertising or trying to build their site. And when we see stores closing, they're saying no, they've seen for thirty three straight quarters up until twenty eighteen, I believe, well, their profits has increased, so thirty three straight quarters. They're seeing people coming in
their stores shopping, buying things. And if you've shopped at TJ Max for monstrels, you know that you're getting discounted prices on brands, high end brands, that discount of prices. But the brilliant strategy that they use is they turned it into a shopping hunt. It's like you go into these stores and it's like, hey, I found a bargain here, Whereas right whereas in like stores like JC Pennies, it's like, hey, this is the Polo section, this is the Nike section,
this is Tommy hill Finger section. TJ max is like, you know what, We're gonna call this active where and we're gonna put all those brands there and you go hunt for the deal. So sometimes you'll find things in there that's like, oh, this is sixty percent off. All right, that's a bargain now if I buy it and you go and you might not find it because it's like that's the part of the skyvage hind it's all right,
well I got it now, you gotta wait. The other thing that they do is they reinvent their They get new inventory like every twenty one days. So like stores like Macy's and J. C. Penny they don't have that type of turnover. So TJ max is like, the inventory's coming in, it's limited. People know that they're gonna get a bargain there, they get it. Twenty one days later, it's gone all of it, and then they get more in right, so like their sales have exceeded norsetrom and
J C. Penny's combined TJ Max. Nobody's even thinking about that, right, right, So like that's key. So if it's if it's dead, then how is this thriving? They've got it.
Right, TJ MaTx. You know what I thought to think about TJ Max. When I was young, they pine near the layaway system. Remember that. I don't know if you I don't know if you did that, but I did that before. I did that when I was a kid from I did that on clothes.
I say, yes, they had.
It lay away system where you can put clothes on lay away. Yeah, I don't know, but uh yeah, that's how important fashion was as a kid.
So there are some other companies that have that model of like we'll bring a bunch of brands into a store, like a SIMS which is out of business and Filing's basement. They're out of business. And if you look at that their strategy that their stores were so big and everything was everywhere whereas TJ Mass you can look up all right, that's a women's sestion, that's men's section. This is kids active where it's very concentrated and it's easy to find the things. So like like I said, That's.
One of the problems, especially like with Sears, is that it's hard to be a master of all trades. Right, So you go into seis, you can buy tires, you can buy swimming whear, you can buy and there's nobody to help you. You got to try to figure it out on your own, and it becomes difficult. It becomes very difficult.
So like that strategy like and like I said, that's an artible, Like they're trying to figure out how are they doing this right? If Breaking mart is dead, and how is TJ max thriving?
So TJ max is thriving? And I wanted to bring it.
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Security closer to Because we try to relate to the everyday people, right and brick and martars so there's three types of brick and martar businesses that most entrepreneurs that's just getting started, especially you know in our community, they always want to start, right, And that is a restaurant. I know he's gonna say, that's a hair salon or barbershop and a clothing store.
Sound pretty right, pretty common, That's about right.
So all right, we've all seen how barbershops and hair salons are cash cows, right, especially hair salons. We have to do a whole thing about that.
But yeah, that's like personally, I know that.
No, especially black women's here. That is a billion dollar industry.
We have an episode on that. That's a fact.
And barbershops along staple in the community. Restaurants that's one of the hardest businesses to succeed, and we're gonna have we got a special situation about the restaurant. But everybody, for some reason, they still want to open restaurants. I don't know why. But you see one restaurant I succeed, you see hundred failed. And then the clothing store. Right, so clothing store. So I'm gonna tell a personal story
about the clothing store. So the people that don't know a financial advisor that's what I do for a living.
Right.
So I had a young lady coming to my office a few months ago, and she's a social media influencer. I won't say her name, but she's a social media influencer. She's real big on social media. She has around like, let's say, two point five million followers on Instagram. So she comes to me and she's having problems with her business. Right. So we're talking about the business and I'm getting the information. We're going over to numbers, and she's bleeding money on
her clothing store. She has a clothing store. Right, So she has a clothing store in the suburbs of New York, and she's paid saying twelve thousand dollars a month in RNT in them all, and her overhead she has, you know, overhead about total probably twenty thousand dollars a month. Right, And I'm telling her, like, well, why don't you just do it online? And she was saying how online? She used to make like eight thousand dollars a month online
right before she actually had the store. So you don't have to be a rocket scientist to figure this out. So I'm like, okay, you have two point five million followers on Instagram Right now, New York is probably your biggest market because you're from New York, but your store is not even in the city. It's in the suburbs, right, so probably let's say two percent of your followers can actually go to your physical location, right, So you're not
leveraging your social media power, right. Why don't you have online presence where any follower, no matter where they live, whether it's Germany, Australia, California, Connecticut, they can shop online twenty four hours a day, right a physical location. You're already limiting yourself geographically.
That's what we said, like this episode on can the consumer get the product?
Oh yeah, exactly, that's the biggest thing. Can it consumer get the product or you're already limiting yourself geographically right now, Not only are you limiting yourself geographically, you're spending a ton of money on overhead, right And that's the problem with brick and marts. So this is the real problem with brick and Martar is that the money that is being spent on overhead and you're not bringing up revenue in so now you have to see if it really
makes sense. And this is why a lot of restaurants. This is why most businesses fail regardless, but it's harder for brick and mortar businesses because now you have to pay your rent every month regardless, You got to pay your capabil of life bill. You got to pay your employees every month, whether you make money or not. Right, so you have a good month, Okay, if you have a bad month, nobody wants to hear you still got to pay money.
Right.
Where you have an online business, you have expenses, but nowhere near the brick and mortar. So, especially for something like clothes, we look at fashion Over. We talked about fashion Over before, but I don't I personally don't see how it makes sense for a brick and martar fashion
business to succeed. Not to say that they can't succeed, but it would have to be really tied in with online presence and just have like a flagship store like Fashion Over has like four stores, but those are more like flagship stores.
Right.
I don't personally see how it makes sense to have a brick and martar as your sole only store for something like fashion.
So what we're seeing now is that people are starting online. Like these small business they start online and when they generate enough revenue, then they'll create a store, a brick and martar store. Because it's like, all right now, and this is one of the keys that people are trying to adapt to, is like we have to create an experience for these customers for them to come. So like, yeah, that that young lady might have that store in New York.
But if they're having experiences in that store that they can only get there, then people might fly.
Yeah, you gotta have something. There's a donuts shop in New York and it's called its cro Nuts. Actually this is a combination between croissants and donuts. Long story short. People wait on line at like five o'clock in the morning. They only sell like one hundred per day. It's a limited You got to have some kind of gimmicks something like that. So people are coming from a low Oh,
but you also have to combine. Even if we look at the restaurant business, right, so now Uber Eats is killing it, right, So now you have a physical location where you're making food, but people can still go into app and order it. And now you have a delivery service that's delivering them food as well. And even if you look at the mail prep business, that's huge as far as even mailing people food. Like so, I think in order to survive in today's climate, you have to
at the very least combined both. You can't just be Bricking Martin adapting adjusts. You have to adapt and adjust. But I don't think Brick and Martin is totally dead, but I think in some industries it just doesn't make sense in my opinion.
If we look at the number one company in the world, Apple, they keep building stores, so it's like, what you know what I mean, like this this isn't going anywhere. And Apple has a unique model, right they have this customer when they hire employees, they have this model. They live by the acronym app l E. So what that means is like, the first A is number one. We have
to approach the customers. So if you walk into an Apple store, you'll notice that there's a lot of employees in it, so there's enough for everybody to have a one on one relationship with the employee. The second thing is that they probe so they'll listen, Hey, why are you here today? Can we help you with something? The next thing is present after they hear what you come to the store for, then they'll say, all right, well, here are some things that can help you. Here's a
product that can help what you're trying to do. The next thing they do is they listen, right, They listen to say, all right, well you've told me the problem. I've given you a solution. What do you think about it? Right? Usually people buy the product or they'll say, you know what, I'll come back, and then that leads to the e. It's like the end. Hey, thanks for coming. I'd love to see you come back. And a lot of times
Apple customers are loyal. They'll come back just because of the customer service and while they wait, which is unique to Apple, they can use the products. Like how many times do you go in to the stores and kids are adults are using the products while they're waiting, or they're taking a class at the store while they're waiting. So you got to have these in store experiences that
are unique to your store to generate the customers. So it doesn't matter like if you have a great online presence, you can't get this experience anywhere else, but coming to the store.
That's pretty powerful. The acronym is pretty powerful for any business owner. But yeah, well, brick and mortar business. As I said, you know, I think that it's not dead, but you have to find a way to combine the two if you want to survive. And this is what this show is about. We want to teach entrepreneurship and help you out, help your business out.
So yeah, last note, like we had, we spoke about Tesla. Tesla one of the stories. They completely did away with all their stores, right, and we said that pay Lessons closing stores. That's closed, Jimbarea has closed, Charlot, A lot of the stores have closed because they couldn't adaptay pay Lesson is one of those that just didn't adapt. Online experience was terrible. They were still relying on print at they couldn't adapt. So you see what happened to them.
Yeah, well, it's a jungle out here.
Gott to survive, all right, ladies and gentlemen. It's our favorite time of the episode, storytelling.
Here's a little story that must be told.
Listen up, gangsters and honeys, with your head done, the best story tell us right, I'm gonna say if.
Pray down, it's gray down, it's pray down, it's gray down.
It's gray down.
All right, boys and girls, So we are going to tell a story. If you follow the show, you know that this is my favorite part of the show.
Every time.
The last segment is story time, and today we have a very special story, very interesting story, and we're going to talk about the best sports deal ever made.
Is said that when you say the word interesting, that means it's about to get real. That's a fact, It's about to get real.
So this this is the best sports deal ever made in history, the history of sports. Right. So in the nineteen seventies, there was a league called the.
ABA American Basketball Association. Right.
So there was the NBA, which everybody knows about the NBA, right, but then there was the ABA. So the best way I could really describe the ABA. If anybody's a football fan, remember the AFL.
Yeah, so even not an XFL, but.
The AFL, it was pretty big. At one point they had Herschel Walker thing.
Yeah in the eighties.
Yeah, so the NFL was a was a football league in the eighties and they was just wild, like they had the cheerleaders, just it was the whole vibe.
Was just like they wanted to be everything in the NFL. Wan.
Yeah, it was just more renegade, you know, it would.
Be better like w w F and w C W okay, you know that was for the kids.
Similar similar. So the a BA was like the NBA at the time was kind of boring. It was like the Celtics, you know, just blue collar. You know, it's just kind of boring. For the a BA. They had the striped basketball, they had the cheerleaders, they had the Duncan and they had good players too.
They had great play.
They had Doctor j they had Moses Malone, David Thompson, David Thompson, so they had like George Gervin Iceman. So the ABA was just like flails like street ball. That's that's that's the that's the comparison. A BA was like the an one street ball, like the Rucker stuff like that All.
Star game like that comes from the NBA. All the festivity, the All Star Game, all that contest.
Yeah, ABA exactly. So ABA was they was They was for excitement, right, but financially they it just wasn't working out for them, right. So what happened is that there was seven teams in the ABA and the NBA wanted to merge, right because it was just then made sense to just kind of compete with them, and the ABA was kind of one the last leg financially, so the
NBA went to them and they proposed the merger. Right, so the merger, the ABA accepted the merger, and it was seven teams at the time, so four teams were brought into the NBA. Those four teams were the Nets, the Nuggets, the Pacers, and the Spurs, which are still in the NBA today, right, And then so that was three more teams left. So one team Virginia. They they actually fizzled out and they didn't they didn't get brought in because they just didn't make it right. They bullied up.
So that that left two teams. Right, So you had Kentucky, the team from Ducky Kentucky, I think Colonels, Kentucky Colonels.
You know what crazy about them? The crazy thing about them is that they were owned by the owner of Kentucky Fried Chicken. Yes, which is crazy John Brown. Yeah. So the NBA buys him out for three million dollars at the time, nineteen seventy six. Like that's a lot of money, but this is like that's a side business for me, Like I got Kentucky Fried Chicken. So he takes the.
Deal, and he also was the own he became the governor of Kentucky.
Yeah, govern of Kentucky.
Two yeah, sor right. So they had the Kentucky Colonels and the Saint Louis Squire.
Spirits spirits, sake Lewis Spirits.
So they offer the Kentucky team and the Saint Louis team three million dollars as a buyout. Kentucky takes it, right, Saint Louis says, it's not so fast, not interested, not interested.
Well, they said no because they had the vision. They were like, look, well, before you go to that, before you go to that. So they said no, right, But they had good talent. Yeah, they had Moses Malone a few other players, right, yeah, I think that was his rookie year in nineteen seventy six. He's the first man.
Child first, he's the first person to come from high school.
He's the first man to professional. Right.
So they rejected it, right, And the owners of the team they had it was two brothers, Ozzie and Dan and what's the last.
Name Silna Silna.
And Dan Silna. So what they negotiated was a two million dollar buyout and a part of the four teams that were going into the NBA TV rights. So they got one seventh of the TV rights of those four teams that went to the NBA. Right, So, at the time TV wasn't really big. It was like black and white and things with the wire or stuff like that. They was the seventies barely, but nobody was making nobody was making money on team yet, so they say, okay, one seventh of four teams TV rights. They were so
eager to get the deal. The NBA just wanted to get the deal done, right, say so, give them two million and give them one seventh and let it, you know, let them go on their way.
At that time, I think the biggest start in the NBA. You have Oscar Robinson, Kareem Abdul Jabbar, and doctor Jay is right there on that line was becoming superstar. Bill Russell probably is one of the big stars. No, Bill Russell, Bill Walton, Bill Walton.
Okay, so all right, so now this is nineteen seventy six, seventy six, nineteen seventy six, so a few years past in the eighties, come and Larry Bird and Maggie Johnson coming to the league, right, yeah, And the NBA changes fever. Right. And then a few years after Larry Bird and Magic Johnson coming to the league, is this guy Michael.
Jordan, Michael Jeffrey Jordan.
And then the league changes even more forever far.
Yeah, obviously landscape and now TV.
So now television television comes into play, right, and you have a network called ESPN, and now sports is just American television staple. Right, everybody watching sports on TV now in the eighties nineties, So now what happened as nobody would ever watch sports on TV. Let's just give these guys one seventh. They ended up as the league rule to the league for the thirty teams, right, So their TV revenue, those the two brothers equal two percent of
the total TV revenue for the NBA. Right, So every year they got two percent of TV revenue in perpetuity. That was the best part of the deal. It was in perpetuite. It's no end dates forever.
They's so you want to just tell them what perpetuities People don't even know.
Yeah, perpetuity means forever, continuous, that's the easy answer, continuous answer. So so now they have two percent of all NBA TV revenue forever. Right, So this thing is one of the most embarrassing things that the NBA has ever dealt with, right, because they end up paying these guys three hundred million dollars right from they started from nineteen seventy six to twenty fourteen.
The crazy part is that from seventy six to seventy nine they didn't make a dollar, but from eighty to ninety seven or eighty to like two thousands to two thousand, three hundred million.
Three hundred million, twenty fourteen eight it was three hundred million.
Right.
So finally twenty fourteen, the NBA they're going to reap.
On the TV deal right right, so like they're about to They had a few TV deals prior. They had one with NBC and then they had one with ESPN, and right, like you said, sports were built over there, Like that's a twenty four to seven sports network, so you could imagine like people are going to be consuming sports at all time. I But in twenty fourteen they re upp with Turner Sports and ESPN a nine year deal for twenty four billion dollars.
Right, so right before't do that, they said, Okay, we have to get away from this deal because we've been bleeding money for thirty years and it's only going to get worse as we continue to grow. And now they see that, Okay, the TV deals is going to keep getting bigger and bigger, right, and we're not going to keep paying these guys two percent forever, right, So we got to get away from this. So they agree on a deal in twenty fourteen for a lump sum buy
out of five hundred million dollars. Right. So now you added three hundred million that they got up into two thousand for that number, up, you add the five hundred million, so they got eight hundred million dollars. They got eight hundred million dollars on a three million dollar deal, three million dollar buyout originally that they turned down. They ended up getting eight hundred million.
The NBA didn't even have to have this problem. They didn't even have to Like they wanted to buy teams, They wanted to buy Detroit in the late seventies, They wanted to buy New Jersey nets at that time in the nineties, they would have had been owners in two thousand and two. Out of twenty ten, they had to accumulate almost one hundred million. They were worth more than the Indiana Pacers were no.
But the best part about the story is that, so they make eight hundred million dollars from the NBA without any overhead, a team that nobody's heard of, a phantom team that nobody's heard of, no players, no roster, no overhead, no building, nothing. They literally made almost a billion dollars just cause forever. So that people say, okay, well, why
did they take the buyout? They could have just kept this going forever, right, So the guy, one of the guys died rest in peace a couple of years ago, so I think, you know, he probably gets to the point where it's like, Okay, I'm about to die soon, so I might just get five hundred million up front. Yeah, you know, right. And then also it was a headache
for them because they hired lawyers. They kept going back and forth because they felt like the NBA was kind of cheating them with the numbers and it wasn't correct. So they that was kind of and then their name was always associated with that. They didn't really want to be associated with that forever.
I would Yeah, it's not a bad thing.
They kind of wanted to just get it over with, h But in life is ups and downs, right, So they make almost eight hundred million dollars doing nothing. But then they lose a substantial amount.
Of money from connect with this notorious, notorious one, Bernie made.
Off, Bernie Madoff. Bernie Madoff. So Bernie Madoff burns him pretty bad. Yeah, man, Bernie Madoff person pretty bad. And they lose a lot of money with Bernie made Off.
Yeah, they said, thank god, they didn't lose it at all because they were they had diversified their portfolio, which is good, but they did lose a substantial amount with Bernie.
They lost a lot.
Yeah, he's doing fifty years.
Yeah, he's doing a lot. He's doing a lot of time. Bernie Mado plays a part in mets as well.
Yeah, the will Palm family lost a lot of money.
We'll talk about some we'll talk about that sometimes. But so yeah, so by day they won. Even though they lost a lot of money with Bernie made Off, they still won in the grand scheme of things. And it's a good story. And how we bring it back to the everyday person is that we always talk about equity, right, and the power of equity and the power of delayed gratification, not taking everything up front. So they still got two million dollars up front. But that TV deal that they
struck was brilliant, right, and almost a billion dollars. So the guy from KFC, I mean, he's filthy rich. I'm sure you know, it's not the end of the world, but he has to be kicking himself or his family. I mean, you took three million dollars and the other guys.
About the owners of the Virginia Squires, they left before they could even get the three million, the two million dollar offer to be bought out. They were the owners Virginia Squires. Virginia Squires folded before they can get They folded.
It wasn't their fault. They folded. Well all right, Well, before we end, we want to talk about a few initiatives that we're started. So we talk about Patreon a lot, but I don't think you guys fully understand, so we want to to give you the backstory on it. So me and Troy, we have a financial literacy program that we run in the summertime, and that's what we help kids learn about finance and stocks and stuff like that. And then also we try we're trying to take the
financial literacy program like nationwide. And also we want to write a book about financial literacy as well, and then also just kind of spread the word of you know, outside of the podcast of financial literacy, go to different towns, cities, you know, workshops, stuff like that, because you know, good thing about the Internet and now is that we have a global reach, but we want to reach the people in person. It help as many people as we possibly can, right,
that's not help the goals to help. So obviously, you know,
finances are important when it comes to helping. So Patreon is an avenue that we put together to kind of help financially fund these different initiatives that we have, right, and also we are putting together a goal, right, so our goal is to have one hundred people, one hundred patrons, and ultimate goal is a thousand, but we want to break it up into smaller goals, so one hundred patrons, and there's different levels of our Patreon, right.
So the Patreon, like rachhad said, is it's for creators, and I know some people are not familiar with it, but it's for creators and it's to help fund some of their initiatives and their plans. And so what we're doing is once we reach one hundred patrons. We're going to reach out to five of them and have them talk to us for or have the ability to talk to us for hours, so they can pick our brain. A lot of times on the earn your Leisure pagent, your page, people want you to mentor them or can
they pick your brain, So this is that opportunity. So after we get to one hundred, we're going to take five of those people and we're going to reach out and we're going to have those conversations because it's important. And when you go there, you'll see that there's different tiers. We have five tiers, so you can join at any tear that you like. But yeah, just to help the support and help us get out some of these visions that we have, we've created that avenue yep.
So that's on the website early Legion dot com. And also on the website is our merch that me and Troy wearing. If you're a subscribe to our YouTube, which subscribe to our YouTube and Lisia is the YouTube page. You see. We have the I have my shirt which is hustle for your last name. Troy has the liability and that is on our merch. We have new merch that we rolled out as well.
So yeah, yeah, people asking for colors, so we got every color.
We got every color we got, we got the v next for the ladies, you know, we got we got a full we got a full array of things. And then also the book before before I leave, So I promised you every episode I'm going to mention a book that I think is good for business, uh or just you know, just in general. So Phil Knight Shoe Dog is an interesting book. I recommend anybody that's interested in business. Nike for anybody that's not familiar. Phil Knight is the
owner and all the CEO. I don't know if he's still CEO, but he started Nike, the founder of Nike, right, So he tells the story of Nike, and it's his story and it's how Nike, And it's for any entrepreneur because there's no easy path to entrepreneurship and it talks about a lot of the ups and downs in different battles. So I highly recommend that book. Phil Knight Shoot Up.
Yeah. So, like, like the final message I'll give that out man is struggle another sign that God loves you. So like that's part of the stories too. Perseverance, preparation.
Man.
You gotta keep follow your dream, never be discouraged, and don't take immediate gratification like we told them the story man. Sometimes the late gratification has its benefits. So that's my final word.
Yeah, so that's it. Peace.
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