This post is a reprint of an article that recently appeared on my finance blog LongShortTrader.com. Former NY Met great Lenny Dykstra's a star in the financial media world, but his story is getting bleaker by the day...
ESPN wrote a pretty in-depth article on Lenny Dykstra’s life in the business world, coming to the conclusion that “either Lenny hates to pay his bills, or he's a financial train wreck.”
The ESPN article was incredibly revelatory, and I’m not talking about the lawsuits or what’s happening with Wayne Gretzky’s old house (which will never sell at a decent price because of the negative media attention).
Nope, I mean Lenny Dykstra’s Ties to AIG.
When you hear AIG (AIG), you may think mismanagement, bailouts, and corporate welfare, but that has no relevance here. For the purposes of this article, just think about AIG as if its a normal insurance company.
Let’s take a look at what ESPN said about Lenny’s connection to AIG:
Dykstra apparently hasn't handled any player investments yet, and it's difficult to determine whether any athletes seriously consider his financial advice, either in the magazine or through his subscription financial service. The early plan was for an athlete to invest at least $250,000 with professional money managers of Dykstra's choosing. Former employees say Dykstra made the rounds in New York trying to line up a financial partner, but the closest he came was with AIG, now a corporate poster child for outrageous greed.
An AIG executive and Dykstra offer conflicting opinions on who backed away from the deal. AIG spokesman Charles Armstrong says it was the company's decision not to go forward. But Dykstra produces a copy of a Dec. 10, 2007, letter from an AIG vice president reaffirming the company's interest in being an "exclusive strategic partner." An accompanying commission schedule proposed to pay The Players Club $90,000 per player recruited to both the AIG universal life insurance and income annuity programs in the first year. There was a caveat, though: Dykstra had to bring in at least 100 athletes.
So Lenny Dykstra would be paid $90,000 for every pro athlete he turned over to AIG?
That’s just not cool.