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CSMG sells stake in scouting firm that raised questions of conflict
Published November 18, 2002
CSMG Inc., holding company of an agency that represents about 50 MLB players, has sold its interest in an international scouting service that has contracts with four major league teams in order to quell any concerns about a potential or perceived conflict of interest.
Alan Nero, chairman of CSMG and a prominent baseball agent, said he had always planned eventually to sell International Scouts, but a SportsBusiness Journal story about the company's ties to MLB clubs and a resulting inquiry by the MLB Players Association "expedited" those plans.
SportsBusiness Journal reported in August that International Scouts had contracts totaling about $400,000 with the four MLB clubs.
"We felt it wasn't worth the potential of any perception of a conflict, even though to this day we don't think there was a conflict," Nero said.
CSMG sold its interest to Mike Pagliarulo and Willie Fraser, former MLB players who were former clients of Nero's and who have run the scouting service since it was created about five years ago. Nero would not reveal financial details of the sale but said, "We sold it back to the employees at a very small fraction of what we invested [in it]."
CSMG Inc. provided most of the start-up funding and owned about 25 percent of International Scouts. Nero owns the largest stake — 30 percent — in CSMG Inc., holding company for CSMG Sports, an agency that represents MLB players, including five-time Cy Young winner Randy Johnson, as well as clients from the NFL, the NBA and professional golf.
MLBPA officials were not immediately available for comment.
In August, Gene Orza, associate general counsel of the MLBPA, told SportsBusiness Journal that he was concerned about the scouting service and its relationship with MLB clubs.
Since then, CSMG officials have submitted numerous documents to the union about the scouting company.
Agents are required to tell the union of business dealings that could be seen as potential conflicts. The union then determines whether a conflict exists.
MLBPA regulations contain several prohibitions against agents' having financial interests in the league or its clubs as well as rules against agents' having any "actual or potential conflict of interest" in their duty to serve their player clients.
Nero said he has no conflict, because his role in the service was that of an outside investor. He doesn't think the union will have a problem with the situation, especially since CSMG has sold its interest in the company.
The baseball players union did not tell him to sell CSMG's interest in the service, Nero said. "[The MLBPA] wanted to know what is going on. I am sure we will hear from them when they have time to get to it."
CANTER OPENS COMPANY: NFL agent David Canter has opened a new firm called IMTeam, an Orlando-based management and marketing firm for models, entertainers, actors and athletes.
Canter said he has nonexclusive marketing representation agreements with numerous athletes. Among the athlete clients he has listed on his Web site, imteam.com, are NFL players Stephen Davis, Mike Anderson, Shawn Wooden, Travis Carroll and Andra Davis; NBA player Steven Hunter; and NFL hall of famers Tony Dorsett and Mel Renfro.
IMTeam has several investors, said Canter, who is president of the company. He wouldn't name them.
Canter said he is completing legal documents to register a uniform franchise offering circular with the Federal Trade Commission in order to sell franchises of the company throughout the country. Canter said franchise prices for different regions have not been set.
Canter was formerly a partner in a company called Total Entertainer and Athlete Management with NFL agent Steve Weinberg, but that partnership dissolved in March 2001 after about two years.
Canter filed grievances against about a dozen NFL players who he says owed him fees under the partnership with Weinberg. Weinberg did not return phone calls.
Canter said he asked the NFLPA to resolve his differences with Weinberg and was told that he first must file grievances against the players.
A hearing date for the grievances has not been set.
SPORTRUST SIGNS SVOBODA: Sportrust Associates International has signed Carolina Hurricanes winger Jaroslav Svoboda. Svoboda will be represented by agents Ron Del Duca and Petr Svoboda, who is no relation to the player.
Contact Liz Mullen with agent and labor news at email@example.com.