Monday, March 08, 2010

UPDATED: Is Rock Racing the latest Noble House?

While not a tragedy, the disintegration of the dream of Rock Racing is nonetheless a bitter, disappointing moment. For a US-squad that employed a roster of riders and support staff drawn at times from some of the best teams in the world to be denied a professional license in 2010 is earth-shattering. We're talking about a team that at one time or another counted the likes of Mario Cipollini, Tyler Hamilton, Ivan Dominguez, Fred Rodriguez, Victor Hugo Peña, Baden Cooke, Francisco Mancebo, Oscar Sevilla, José Enrique Gutiérrez, Frankie Andreu, Rudy Pevenage, Laurenzo LaPage, and even me as riders and staff! Michael Ball might cry out that, "Rock's Not Dead!" but those who've seen it all before might have a different perspective. In fact, if your knowledge of US domestic professional cycling team scandals goes back this far, ask if Rock Racing might not be a more evolved version of the Noble House stillborn team-that-never-was.

I've mocked Rock many times since my first profoundly negative experience with them, when, after a very successful Redlands Classic (where Kayle Leogrande won the sprint competition) Kayle and I got a phone call as he was driving me into LA to sign my contract that informed us that there was in fact no contract nor had there ever been one. While previously Ball had been only too eager to discuss with me Redlands and possible off-the-bike strategies and tactics for enhancing the team's performance, after the riders delivered the goods (results - the validity of I leave for others to discuss) with me behind the wheel of the team Cadillac,  he adopted the tactics of Stalinist Russia and had some underling on the line repeating a set of stock phrases thanking me for my efforts and wishing me safe travels - and this is while Kayle, one of the team's most high-profile riders at the time, is driving the car in which the guy he'd invited to rent space from him when in LA is being told that he basically doesn't exist any longer. I doubt I was the first, and I certainly wasn't the last...

But I digress. Noble House. Rock Racing. There are grounds to analyze and compare the situations (though we'll save that for a later-post). Please take the time to read this recent Neil Browne interview with Michael Ball "No Apologies, No Regrets," and then come back and read John Foster's exposé of the Pennsylvania Pro Team that never was - but which snagged its own all-star cast in a web of lies and deceit built on the hopes and dreams of respected, established pro's and eager-beaver rookies.

One of the many "insiders" with whom I regularly discuss the state of the sport and what goes on in public and behind closed doors wants to emphasize that both Rock Racing, and Noble House before it, were overstated pipe dreams created by narcissistic megalomaniacs. But that in and of itself is less interesting and compelling that the fact that in both cases, the fraud being perpetrated upon the cycling community - everyone from the professional who found out they held worthless contracts to fanboys who'd dropped $300 on race-day team replica kit - was painfully obvious to anyone who bothered to look, but so uninteresting to major media that   the fraud continued. When these fraud were being committed, guys in the position of Tyler, with little employ-ability elsewhere, would be welcomed; same in the case of Noble House and some local cat 2) having no other option and nothing to lose...sure, why not, "Where do I sign?" It's not that behavior that is telling. Rather, it's the decisions made by guys like Michael Creed, who had multiple options to race elsewhere, but stared transfixed at the salary figures promised by Ball to his Rockers and said, "Of course I'll sign."
"There's a weird desperation about the sport from some of its most accomplished competitors." = Flickstong


Too Good To Be True?
The story behind the Noble House Cycling Team
By John Foster, for cyclingnews.com

Since the first rumors of a new US-based pro cycling team called Noble House began swirling in the summer of 2000, the most repeated remark was that the team sounded too good to be true. A brand-new organization, a multi-million dollar, multi-year contract, health insurance for team personnel, and signing bonuses for the riders were all assured by the team's management. The team's first press release said that it was "sponsored by Noble House International, a financial firm that facilitates major monetary projects world-wide" and that the team was the "centrepiece of a five-year, multi-million dollar cycling program that is aiming at a ride in the Tour de France in 2005 – and at revolutionizing the way teams are run along the way."

After a hectic winter – where some riders received offers from Noble House that were double that of other squads – a 15 rider team and 7 person staff were announced on December 6 with a press release to the cycling media from team managers Dennis Penny and Russell Blake, both residents of Lancaster, PA. On paper the squad was a strong one, with seasoned European racing veterans like Marty Jemison and Jonathan Hall alongside fresh talent like Dominique Perras and Erik Saunders. Most in US cycling were pleased that so many deserving riders were given jobs and an opportunity to race. But exactly the opposite has occurred: no riders have received paychecks, travel plans or anything from the team. The team (and its non-existence) has been a sad joke within the circles of US cycling. It would be easy to laugh at were it not for the riders and staff whose lives were flipped upside down by the experience.

I: "Oh yeah, without a problem."

This team's problems began in January, when riders did not receive their first paychecks from management. Those paychecks were supposed to be large – the team made no secret of the fact that they intended to pay riders a living wage, and that no one would receive less than $20,000 per year. Penny and Blake discouraged the team's newly signed riders from working over the winter, so their training would be more effective for spring races. When the first paychecks did not arrive, riders were told that the checks were just a bit late, and that they would be send via FedEx within days.

In February, team member Aaron Olson left Noble House and signed with Prime Alliance. "After a month and a half of broken promises about getting paid, no equipment from the team and watching the team morale go down, I have signed a new contract with another new team for 2001, Prime Alliance," wrote Olson in an e-mail. "Now, I can concentrate on doing what I do, helping the team win races, no more details to work out behind the scenes, thanks to Kirk and Roy's belief in me as a rider. Best of luck to everyone on Noble House who has had to deal with the run around."

In February Penny claimed that all was well and that the team finally had finances in place to take care of its months-late UCI registration. "Oh yeah, without a problem," he said. "We have forged through those money problems, which was something between the sponsor and one of his money holders. It was all Bush's doing – he came in and all the interest rates plummeted so you can thank Mr. Bush for all of those problems."

When asked about the possibility of the team's funding not coming through, Penny replied "Our sponsor is 100 percent behind it. He has given his word that he will do it [fund the team] and he is legally bound to do so." Penny was also asked about rumors of the team's imminent demise. "The rumors about this team have been started by people in the Lancaster area who don't want to see Russ and I succeed. Some of that does go back to last year to some of the young kids who rode for us." (Penny has not made himself available to me for a second interview)

II: The rockets' red glare.

The 2000 team Penny refers to is the Red Glare Cycling Team out of Pennsylvania. The team was an amateur one founded by Penny and Blake with the promise of a $50,000-plus budget from Noble House International. In an interview with the mid-Atlantic region website Velospeed, a team manager (it is not clear who was interviewed, Penny or Blake) was asked: "Are the allegations true that the Red Glare team was supposed to have a large budget (by amateur terms) in 2000 but the money never came?" The response: "Yes, those allegations are partially true. We had been working with (Mike) an associate of Gary [Coleman], from Noble House International, who is no longer with the company… So as a result, we indeed ran into a hiccup for the 2000 season. Everything has been straightened out and now we're dealing with Gary, the CEO."

I interviewed four riders from the 2000 Red Glare team and in separate interviews done via phone and e-mail, each rider described the same incident that occurred in March 2000.

The team held a weekend training camp, staying at Penny's house. On one of the days they rode to a country club, where the riders met Gary Coleman and had an opportunity to thank him for sponsoring the team. "He called it 'My cycling team'," said former Red Glare rider Elliot Faulkner.

"We met Gary Coleman and I'm positive he knew that he was sponsoring the team," said another former team member, Fred Billett. "The day after we met him at the country club, Gary Coleman was supposed to come over and give us an oversized check and it was supposed to be televised. We were told that the team would be receiving around $60,000 from Noble House, plus funds from other sponsors totalling an additional 10 grand," wrote Billett in a follow-up e-mail.

"The only glitch was that according to the representatives from Noble House (and Denny himself) we had to wait 'until a deal was done in Europe' for the team to receive the funding. Finally after a couple of months, we got word from Denny that he "saw the check" and it would be presented at our mini-training camp in front of local TV cameras," said Billett. "Well, the team showed up… but, no check. According to Denny and the Noble House representative we wouldn't be getting the check that day because an even bigger local station was going to cover the 'handing over of the money'. "

Billett continued: "Denny reiterated that we had the money – that night the team even had a champagne toast in Denny's basement to celebrate the "real" beginning of the team. The next day there was a huge campus fire at a central PA university, so all the local news stations were there covering it. According to Denny, we couldn't get the check that day because of the lack of media coverage. Once again, however, Denny stated that he saw the money with his own eyes."

The money never came despite year-long promises to the contrary, and that hit team member Ron Zurinskas the hardest. When a pre-season clothing order had to be paid, Zurinskas shelled out $5000 of his own money to cover the cost, having been promised that the team's budget would soon arrive. Over a year later he has still not been paid. "I've always been promised my money back," wrote Zurinskas in an e-mail. "Otherwise Denny tells me I'll be getting reimbursed this week, but then again I've seen that movie before."

III: The house with an unstable foundation.

But where is the sponsor in all of this? What of the Noble House name that is stickered on helmets still used by team members from last season who have removed the "u?" Despite repeated attempts at contacting Mike Schivone, I was only able to confirm that he no longer works with Gary Coleman or Noble House. According to Bill Laudien (a US Cycling Federation board member), Schivone was a driving force behind Pennsylvania cycling throughout the nineties, before he went to work for Noble House and tried to help put together a cycling program with that company as the sponsor. Despite repeated requests through friends, Schivone never made himself available for an interview. Two different sources claim that Schivone left Noble House when the budget for a cycling program never materialized, and said that Schivone warned others that it never would.

Six months ago I was able to speak at length with Gary Coleman. A self-proclaimed former national-level gymnast and martial arts expert, Coleman has felt the pressure from his company's involvement in cycling. "My Board of Directors looks at me like I'm not right in the head for doing it," he said back in February. When asked about the team's late funding, Coleman replied, "Unfortunately, when you are dealing with a large corporation there is a lot of stuff to overcome. But we're ready to start moving with it. We've been scrambling to cross all the "t"s and dot all the "i"s, but we've got a lot of surprises ahead. We're ready to blitzkrieg."

One of the drawbacks to such late funding is the dire financial situation of the riders – one rider missed the first mortgage payment on his new home. Coleman claimed to have no knowledge of the financial bind his late funding had caused team riders, and seemed shocked by the idea. "If any rider had come to our offices we could have made other arrangements," he said. "We are not a heartless corporation. Our riders are going to be the happiest out there."

Riders on the Noble House roster were surprised by Coleman's surprise. Many of them claim to have spoken to Coleman, inquiring about the team's late funding, only to be given the same promises that it would arrive "soon". Those riders claim that Coleman absolutely knew about the financial difficulties his lack of sponsorship had caused riders.

Coleman claims that Noble House is an international lending source that specializes in loaning money to corporations that have exhausted traditional lines of bank credit. In press releases, interviews and negotiations with riders, Noble House has been portrayed as a large, international corporation. When a multi-day, detailed search of financial magazines and the web failed to turn up a single mention of Noble House International, (other than a web site for the company that offers little more than the logo) I sent an e-mail inquiry to Tim Mekeel, the business editor for the Lancaster New Era Newspaper. He had never heard of Coleman or Noble House, and a search of his paper's records found little: The only reference to Noble House International was in April 2000, when it was included in a list of companies with recent business filings. The only reference to Gary Coleman in the New Era (other than the former child actor) was a listing of members of the Manheim Township Republican Committee in January 1995.

A check with the Pennsylvania Department of State – Bureau of Corporations found two listings for Noble House. One was for an incorporated business with Gary Coleman listed as vice president and a man named William Lavan listed as CEO. In Pennsylvania, an incorporated company operates as its own entity, as though it were a person, thus making such companies less manoeuvrable by their owners. Noble House International, INC filed its articles of incorporation with the state on March 16, 2000 – many months after the company first agreed to sponsor the Red Glare cycling club. I was never able to contact the same William Lavan as identified on the articles of incorporation.

The second listing with the Bureau of Corporations is a limited liability company, this time called Noble House International Limited. The only officer listed is Gary Coleman. Such a corporation provides some advantages over a regular corporation, providing the same liability protection while having the flexibility of a simple partnership. The only curious thing about this company was the date on its articles of incorporation: February 20, 2001. That date is months after the team was supposed to receive its money, but just two days after my only interview with Gary Coleman.


IV: Who is standing guard?

The problems of the team and its sponsor have made for a strained relationship with USA Cycling. Tara Morris is the pro team liaison for USAC, and helps teams register with the UCI. As of Wednesday, February 23, USAC had received a $5000 check from the Noble House team to cover the cost of their UCI registration, but had not received the required bank statement guaranteeing 10 percent of total salaries in case of team insolvency.

In an e-mail sent to me on February 17, Russ Blake wrote, "We sent the registration fee via overnight on Thursday night with USPS. They didn't receive it due to bad weather, but Tara Morris has a copy of the registration check as well as the tracking numbers for the package, so that was done in good faith and will arrive there on USA Cycling's next business day. The bank guarantee was sent yesterday via fax right at the close of business hours. Gary Coleman, the sponsor informed us that he got the bank guarantee and faxed it to them at our time 6:30, which was right at the close of business. Tara Morris is going in to the office tomorrow to make sure that the account numbers arrived. The UCI will update their site next week with us involved."

Morris confirmed that no bank guarantee was sent that week, nor was it sent in the first days of the following week, or any week. She said that the registration check had not been cashed and would be returned. Regardless of whether the Noble House team ever turns a single pedal stroke, the entire situation raises serious questions about how professional cycling teams are formed.

"Maybe we should crack down," says Morris. "But if we are cracking down, are we going to limit the number of teams? We've talked about what we can do and it would mean intervening between the teams and sponsors – however, we're definitely looking in that direction. We've never before said that we need to see an actual contract between the team and the sponsor."

Not actually seeing the contracts between team and sponsor – and between team and rider – makes national federations powerless when it comes to enforcement. Tara Morris told me recently "If they [the Noble House Team] have been known to go back on their word then we'll have to consider some kind of sanction. But it seems like they just had some bad luck with the sponsor."

The aforementioned Bill Laudien wrote multiple messages to USA Cycling, telling them about past history with the team and the sponsor. "Listen, I know that if USA Cycling were very strict there would be half as many pro teams," says Laudien. "They are very accommodating and rightly so. But they knew from early October what was going on with this particular team."

Should teams be allowed to sign riders before they have a budget in place? Should registration deadlines be extended, as has been done for the Noble House team numerous times in the past months? Should UCI and USAC be more restrictive in who can run teams, who can found them and which companies can sponsor them? "If we restrict it," says Morris, "That could be even worse for riders."

Bill Laudien finds that outlook frustrating. "If anything, USA Cycling has helped prolong this problem. Someone in the office needed to step up and say 'This isn't going to happen.' Maybe that responsibility isn't in the bylaws but they still failed. It's disappointing to me."

And it's disappointing to the riders because they have to choose between two things: never signing a contract, or signing a contract for money that never comes. As one of the Noble House riders said, "It sucks, because my whole life for the last four months has revolved around what this one guy [Gary Coleman] wants to do."

What is most telling is how many of the riders and staff remained (and remain) convinced that the money is still coming through. "Denny's heart was in the right place," said the team's would-be manager, former US professional Skip Spangenberg. "I don't think he could have been more meticulous – he just chose the wrong sponsor." Spangenberg said that even up to August 2001, Penny and Blake were promising the riders full funding for the team. "Supposedly we were waiting on two projects that were based on unbankable loans Gary was putting together – something to do with the IMF," he says. "They kept saying 'The money is coming, the money is coming.' I heard a whole multitude of excuses. I don't really know what they were doing but something wasn't right.

"Coming from a sports angle," continued Spangenberg, "it would be a good thing for the team to come through. But after being in the sport long enough I've seen these kind of people. They beat their chest and think they will change the world. The local scene is the extent of their lives. If they had received that money it would have been like the fat girl at the prom."

The entire situation and its ramifications are best critiqued in an e-mail from Noble House assistant manager Russ Blake, that was posted on the website ProCycling.com in February 2001:

In response to your request for opinions on the UCI and the Linda McCartney situation, my opinion is that the UCI did enough within their confines of their regulations as is. Through our own situation of dealing with registering for the 2001 cycling season, Alain Rumpf has always been helpful and understanding of the demands and setbacks that occur during the formation of a professional cycling team.

… When did Linda McCartney foods inform Julian Clark that they were not going to give funds for the 2001 year? If this was done at a proper time, Clark should have been selling the team to other sponsors, while at the same time keeping the riders informed. It is not any wonder that Kevin Livingston went elsewhere, something wasn't right in the money situation there. Who has ever heard of having a sponsor's logo put on a jersey, doing a press release on it, and yet not even having a contract with that sponsor, especially for a professional team? It is a tragic situation, but one that could have been alleviated if the Linda McCartney riders, other management, and people in British Cycling would have known about the situation. Now, established professionals like Max Sciandri, Dave McKenzie, Inigo Cuesta, among others are scrambling for a ride, while former junior world champion Mark Scanlon is wondering if his pro career will ever get off of the ground. What is called for is complete honesty. Did the riders know that they were not an officially registered team for 2001? Probably not.…

In this case, [the UCI] did almost everything that they could do. Their flexibility on the registration is appreciated by newly formed teams such as our own, but with an established team such as Linda McCartney, well Mr. Clark should have known the true regulations and been more forthcoming with his employees. Just my two cents.

Russell Blake
Team Manager
Noble House Pro Cycling Team
USA


V: Past history IS indicative of future results.

What's most unfortunate is that this is not the first time this has happened in US racing. US teams that ran out of money (or that never had it in the first place) were the very reason for the UCI's rules about funding and bank guarantees. And despite those guarantees, riders are still powerless. Division one team Mercury/Viatel stopped paying riders earlier in the summer and those riders had no choice but to wait it out, since multiple riders tapping into the bank guarantee would have meant the end of the team and no possibility of a contract for the next season. Noble House riders were told that if they left their contract to sign for another team, they would forfeit any rights to whatever money came later, including money from a lawsuit.

Riders are not the only ones so easily bullied in such situations. Bill Laudien has been very vocal and public in his criticism of Penny, Blake and Coleman. They responded by repeatedly threatening Laudien with lawsuits, and at one point attempted to have him sanctioned by USA Cycling and removed from his position on the USCF Board.

Threats of lawsuits have been thrown back and forth throughout the last year, but the latest threats are coming from the team's riders. Marty Jemison has retained a lawyer for a possible suit. In an e-mail to an involved party, Penny wrote that he didn't have the $2500 needed to file a class-action lawsuit against Coleman and Noble House on behalf of the riders.

For most people involved, there is nothing that can be done. "Who are you going to sue, Monster Sports [Penny's company] or Noble House?" asked Spangenberg. "I don't see any apparent wealth. Who are we going to sue?"

The person who puts it best is Ron Zurinskas, still without his $5000 for clothing he paid for that advertises the Noble House logo. He writes: "In hindsight, albeit I'm a victim, I am also guilty of believing in something that had no economic reality. What does a company that operates on the business model of the Money Store [a US lending company] gain from sponsoring a cycling team?"

"I also spoke to Russ," writes Zurinskas. "And he's not riding at all, something about not wanting to until this whole thing is sorted out."

Related story - Noble House's Original Unveiling

UPDATED: Related Document -Desist and Refrain Order (for violations of California Corporations Code)

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