Over the past few weeks, there have been a number of phone calls and communications from industry types eager to discuss the scandal around a former employee at Velocity Sports & Entertainment.
For those of you who don’t know, David Chass, a Velocity employee for more than 11 years, was recently sentenced to a year in prison after being convicted of persuading client Home Depot to remodel his New York City apartment at a cost of more than $360,000 and subsequently convincing both a bedding and a lighting supplier to give free merchandise for the refurbished apartment.
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Harlan Stone (left) and Mike Reisman are two
of Velocity’s stand-up guys. |
There have been sports business scandals before, notably a 1994 trading card scam that involved the ouster of former NFL Properties President
John Flood (“Flood Sacked: Cards Up Sleeve” read one memorable headline). But with that case, we weren’t especially surprised. NFL Properties was then a separate, and less supervised, unit of the league. Since both licensing and corporate sponsorships were both coming into their own as businesses, if there was a mantra at NFL Properties back then, it was “Stack ‘Em High and Let It Fly.”
However, anyone who knows the principals at Connecticut-based Velocity Sports & Entertainment knows that they are principled. So in terms of collateral damage to the agency, it should be minimal.
“They are probably the most principled agency I know,’’ said Rick Singer, director of worldwide sponsorship marketing at IBM, a client of Velocity and its predecessor agencies for more than 15 years, who had Chass working on his business at various times. “This does nothing to change that opinion. This doesn’t change our relationship with them, and we still highly value their contributions to IBM.”
Mike Reisman, a founder of Velocity, said this was a case of a “rogue employee, acting independently.” Velocity fired Chass in December when the facts of the case came to light. The agency also assisted the Manhattan district attorney’s office in its investigation. As for the immediate impact on the agency? “You spend your whole career building integrity and trust,” Reisman said. “You can crisis-manage all you want, but the best crisis management in the world is being able to rely on that. This had nothing to do with Velocity or any of our processes.”
Among Velocity’s clients are FedEx, Motorola, Toyota and Cingular Wireless, and, of course, client testimonials are a lot more convincing. “These were actions of one employee at Velocity and I’m satisfied it didn’t have anything to do with our account,’’ said Dave Garver, executive director of sponsorships and segment marketing at Cingular, a client since 2001. “We’re very satisfied with the work Velocity has done for us and expect our relationship will continue.’’
On the properties side, there’s also support. “This is less than a blip on the radar,’’ said NHL sponsorship chief Andrew Judelson, who worked for the agency when it was Clarion, and was a client while he was at Sprint. “Anyone who knows this group — and that includes me, obviously — will still feel comfortable working with them because they are among the best in the business.”
Pierce O’Neil, chief business officer for the USTA, echoed that sentiment. “This is an unfortunate incident for all involved,” he said, “but we have complete confidence in the team at Velocity and look forward in continuing to work together.”
In the small world of sports agencies, there are even some competitors vouching for Velocity. “I’ve known (agency principal) Harlan Stone for more than 10 years, and nothing that’s happened would change my opinion of him or Velocity,’’ said Mike Levine, president of Van Wagner Sports Group. “They’re a class act.”
Scott Becher, another former agency employee, who now heads his own firm, Hollywood, Fla.-based Sports & Sponsorships, added, “I see this as less an agency blemish and more of an error in judgment by one individual. The quality of Velocity’s work has been so good for so long that this will soon be a non-issue.’’
Frankly, since the apartment refurbishment, totaling more than $360,000, sailed through Home Depot seemingly unquestioned, that organization may have more to answer to in terms of its internal processes than does Velocity. Home Depot did not comment on the case.
The affair did not catch the attention of the authorities until well after Home Depot’s involvement, when further and similar activity led to a complaint being made to the district attorney.
Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.
