Monday, October 02, 2006

Where's the money?

Does Landis have the money to defend himself, and if not, where's he getting it?


Here's a topic I'd been avoiding because it didn't seem particularly germane to the facts and resolution of the doping case. You have to draw a line somewhere, and this seemed one side of it. However, since I have talked about the motivations of the various ADAs, including their desire for continued funding, I have gotten complaints that not talking about Landis's financing is hypocritical. Not wanting to be one sided, I'll try to take it on.

The defense that Tyler Hamilton ran seems to have cost him personally at least $700,000, and he's sold two of three properties he owned to cover it. Tyler had a few more years of high earnings before it started to drain away. Where is Floyd likely to stand?

Before signing with Postal, he was essentially broke living on credit cards waiting for his Mercury salary to (not) show up. We're given to understand his Phonak salary is at least double his Postal salary, and one credible report said the Phonak contract was $700,000 over three years, or $233,000 a year, of which he's gotten two years worth. That says that his years at Postal were somewhere between $100k and say $150k. Therefore, his gross salary since he's been making real money is somewhere between $600,000 and maybe a little over $1,000,000. He almost certainly hasn't made $2,000,000 on salary alone.

He has also had endorsement income, and appearance fees, and prize money, but all told that doesn't seem likely to add up to more than his salary over the period. It's a pretty safe bet he didn't collect the $2.5M bonus for winning Le Tour. I'd guess a gross income of 1.5 to 2.5 million, so let's say $2,000,000.

On the expense side, his home in California cost somewhere between $550k and $700k. He'd be carrying a mortgage of $500k-$600k. Property taxes would be about $6k a year, $200/month association fees, and a mortgage payment of maybe $3000. Round up and call it $4000/month. He hasn't got two other houses, a yacht, or five cars. He's known to be frugal.

Over 2 years at Phonak and 3 at Postal, his home has cost about $240,000 out of his $2,000,000 gross leaving $1.75m. With US Federal and California taxes at maybe 30% over the same period, he's paid $550k in taxes, leaving him with $1.25m. I'd guess he has around $1,000,000 in the bank, possibly more. That seems kind of marginal for an all-out defense.

On the other hand, he's got a lot of friends, some of whom have money. There is no shortage of people in Southern California with lots of money and no love lost for the French or any World organization. He lives in Riverside, but the Orange County is right next door, folks. I'd guess there could be more than one Daddy Warbucks who can be tapped for a defense without dipping too much into the personal account.

There has also been speculation about folks in cycling who might want to pony up. There have been suggestions about a great Lance conspiracy, and how Armstrong might cough up to keep a lid on something from way back. If that were so, it seems like he would have done more to help Heras, who could have been a lot closer to the epicenter. Perhaps Lance is giving him money because he's a swell guy with no ulterior motive, and maybe he just thinks Landis is being railroaded. Maybe Discovery, the team or the company want to prop up their investment in some way. Maybe some of the sponsors, like CycleOps, are doubling down. Maybe there is another potential team that is coming up with some "carrot" money.

The key point is that as a TdF winner, he has a lot more clout, impact and credibility than Tyler had, in lots of ways. I'd be surprised to see him holding a bake sale. Some people have asked me about a defense fund, and I've heard no suggestions that he's interested in having one formed.

Probably at this point there isn't a lot of case expense either -- some number of $500 hours of legal time, but not hundreds of them. There's no self-funded science happening that we know about. The big expense will be coming up in preparation for the hearing.

If we knew where money was coming from, we might wonder about motivations. It would be pushing "transparency" pretty far to want Landis to lay his funding out, but I'm sure some people will make the request. I'm on the fence. I can see the point about wanting to judge motivation, and Deep Throat said, "follow the money", but it seems like a pretty big and unwarranted (literally) violation of his privacy to me.

Anyway, the ADA side probably can't just run him out of money.


Anonymous said...

Landis and his good buddy Zabriske have some friends on Wall Street too. Tom Weisel of Montgomery securities is a big backer of Discovery. Landis would be a free agent is acquitted and a good fit for them.

Tommy had his private plane outfitted with a trainer so he could "warm up" on the daily flight from San Fransciso to San Diego to ride with his personal coach.

David "Tiger" Williams of Williams trading makes $10 to $15 million a year and competes in the Iron Man. He trains on Zabriske's TT bike and counts Lance as a personal friend.

These guys have the wherewithall and interest to fund Landis. Besides $300 to $500 a peice from them (and others like them) is a lot more interesting than another Chagall.

Biker Bob said...

Don't forget that he had a fairly successful 2006 season that would have a positive effect on his income:

Major Results
1st, Overall Tour of Georgia
1st, Individual Time Trial, Tour de Georgia
1st, Overall Paris Nice
1st, Overall Tour of California
1st, Individual Time Trial, Tour of California

chris t said...

dbrower, I thought you were a spot on resource?

FL said on DP forums, he was on a salary of 600 in 2005 and 450 this year. Not sure if the decrease this yar is because they stopped paying him late July. Ask him.

I think he might have said how much he was on at USPS, and it was not much. Less than 100 salary. Much less.

Ofcourse, with bonuses and prizemoney his gross would be well over 100.

He is not minted.

But I don't think Weisel, or Armstrong are gonna cough up. Did they lend Hamilton a hand? Ofcourse Hamilton never won the tour, but I have not heard of them stumping up for li'l Tyler. Poor Tyler. said...


This article was written on 10/2, before Landis started saying anything on DPF. It hasn't been updated since. It still sounds like if necessary, he could cough up the $500k himself, but it would be painful, especially in the event of a loss.