Thrown For Some Big Losses
There is one good thing about all my financial problems," Cowboy running back Tony Dorsett was saying on Saturday as he rode along the Pacific Coast Highway in Los Angeles, admiring the scenery. "Nobody asks me to loan them money anymore." He laughed, adjusted his sunglasses and returned his gaze to the passing scene.
It was one of the few light moments Dorsett has had lately. Indeed, seemingly everything in the life of America's hero (1976 Heisman winner at Pitt, where he led the Panthers to the national championship), who plays for America's Team (rookie of the year, All-Pro, and a perennial 1,000-yard rusher), is in shambles. His personal finances are in a bog. His marriage to Julie Ann Dorsett ended last year. As of Sunday, he was still a holdout from the Dallas training camp. Still, the other day he called Karen Casterlow, the mother of his son, Anthony Jr., 11, in Decatur, Ga. and said, "You know I'm a fighter. I'll survive it."
Dorsett is a gutty guy, with huge, see-everywhere eyes, who has employed his speed and agility to make it in a big man's game. But off the field he has not been nearly as swift. Last September the IRS garnisheed his Cowboy paycheck and soon thereafter placed liens on two houses in the Dallas area that he owns. This was done in order to satisfy $414,247.91 he owed in back taxes because a tax shelter in which he had invested was disallowed. Last week Dorsett reached an agreement with the IRS. A source told SI that Dorsett paid about $200,000 and will have a year to pay off the rest.
The tax problems came on the heels of his divorce, which cost him $250,000 (he borrowed the money from the Cowboys) and a 1981 Mercedes. He also blew at least $520,000 on a speculative oil-and-gas deal that went pffft. And just the other day, the First City Bank of Richardson, Texas filed suit against him for $175,000, plus interest of more than $6,000, for repayment of an outstanding loan. Then there's an estimated $240,000 more that Dorsett borrowed from the Cowboys recently in order to get himself through the troubled times while the IRS was glomming on to his paychecks.
"I've just got to keep on keeping on," says Dorsett, "Tony Dorsett has not died. The IRS can't keep me down. I'm a realist, and I know life has its ups and downs. It's a new day every day."
It certainly is for the Cowboys down at their Thousand Oaks, Calif. training camp. They started out by saying they were disappointed at Dorsett's holdout, then concerned, then miffed and, finally, irate. Even Tom Landry was growing exasperated, grousing, "His job and his responsibility is to be here." Finally it was as if Landry couldn't even bear to let the name Dorsett pass from his lips. "I have done everything I can for the running back," he said.
Dorsett's salary for 1985 is $450,000, going to $550,000 in 1987. He wants his contract renegotiated but insists, "I'm not shootin' for any pie in the sky." What Dorsett is primarily interested in is a big deferred-money package, involving an annuity and real estate—precisely $6.4 million, to be paid over 20 years, just like the Cowboys' deal last year with defensive tackle Randy White. "Tex talks about wanting to help me be able to see the light," says Dorsett, referring to Cowboy president Tex Schramm. "What light does he have in mind? Neon lights, bright lights, dim lights, Randy White lights? I want to know."
At the moment, Dorsett is belligerent. He has hired Howard Slusher to represent him in contract talks, and Slusher is notorious for holding his athletes out, even for a whole season; he represented White last year and held him out until just before the opening game. "My mind is made up," says Dorsett. "There is a possibility I may not be playing football this year. In fact, I probably won't." These are just words, of course, and likely don't mean much because moments later Dorsett is leaning back with his eyes shut, saying, "Last night I dreamed about playing football."
What does mean something, however, is that Dorsett—in spite of the club's loans to him—is furious with the Cowboys for what he says is their public airing of his private life. He complains, for example, that his tax problems would have remained confidential had the Cowboys not started a whispering campaign to get reporters to check up on him with the IRS.
Schramm says he mentioned that Tony had "personal financial problems" on his KLRD radio show in explaining why Dorsett had failed to report to camp. But Schramm denies that any information about Dorsett's difficulties with the IRS "came from me or my organization. I can certainly understand Tony thinking that it did. But if this hurts his image, that's the last thing the Cowboys want to do."
Dorsett claims the Cowboys have been promising since 1982 to renegotiate his contract, but have reneged. Another Dorsett adviser, Witt Stewart, an agent who lives in Austin and L.A., says he was told by Cowboy vice-president Gil Brandt last summer that Dorsett would get a "Randy White deal." Schramm denies that anyone in the Cowboy organization had said the team would renegotiate with Dorsett.
Dorsett feels he is being trifled with by Cowboy management. And Stewart admits he probably was wrong to tell the Cowboys about some of Dorsett's financial worries. "They realized," laments Stewart, "that we were some weak puppies."
The situation is taking a toll on Dorsett's image. A Dallas newspaper columnist, Randy Galloway, reported that there's a perception that "Dorsett has failed himself, failed the Cowboys, failed the black community, failed America, failed." Another columnist, Skip Bayless, referred to the former Crown Prince of Dallas as "His Indebtedness."
If ever a guy needed steady work, it's Dorsett. But his pride is clearly hurt that he, a running back who is 475 yards away from becoming just the sixth NFL rusher to gain 10,000 yards, is making less money than a defensive tackle. And he complains, "I kept quiet because I thought the Cowboys would cease talking. They did not cease."
Just how did Dorsett get in this mess? How did he squander so much money?
•Because of the "incompetent people around him," says Brandt. Even Dorsett confesses, "They might have done fine things for other people. But they were not doing things in the best interest of Tony Dorsett." A friend says sadly, "Tony listens to everyone, and everyone has a better idea."
•A tax-shelter straddle, popular in the late '70s and outlawed in 1981, that was recommended to him. Dorsett says he doesn't recall the details, but when the IRS overruled it, Dorsett was hit with an additional 1979 tax liability of $156,085. That was followed by an increased 1980 liability, for the same shelter, of $172,656, according to Stewart.
•Problems with deferred money. Dorsett signed his first contract with the Cowboys in 1977 for $1,127,000, a five-year deal worked out by agent Mike Trope. Trope refuses to discuss his dealings with Dorsett. By 1980 Dorsett was very unhappy with what he has called his "crappy contract" and sought to get a new one. Then he retained a Pittsburgh attorney, Stephen Sokol, who says Dorsett asked him to do a new contract.
Sokol says he had most of the deal done when Dorsett suddenly and inexplicably turned again to Trope and signed a seven-year contract. "I thought then I wanted to be a Cowboy the rest of my life," Dorsett says, explaining why he went for a long-term deal. "But maybe it's not the place for me to be." Sokol has sued Dorsett, claiming he is owed some $70,000 for his work. He says, "I think Tony is an exceptional athlete who has listened to people who could care less about him as a person."
The new Cowboy contract was worth $2,725,000, with about $1.1 million deferred. Stewart happened on the scene and convinced Dorsett that rather than waiting for all this money—he was to be paid it between 1987 and 1996 at a rate of $100,000 to $125,000 a year—he should get it immediately and invest it. Dorsett agreed and received $238,000 from the team, the up-front cash value of the deferrals.
A year or so later, Stewart met the late Ken Tureaud, a Tulsa businessman who was trying to serve as an intermediary in bringing Dorsett to the Los Angeles Express of the USFL. Stewart says that Tureaud offered stock options in an oil exploration deal. "I went crazy," concedes Stewart. "I was a charging bull. I didn't see the sword. I was blinded. He told me we were going to make $3 million to $4 million in 90 days." Dorsett got up his money—the $238,000 from his deferred pay settlement, $175,000 from the bank in Richardson and $107,000 cash he had on hand.
"If this don't work," he told Stewart, "I'm gonna kick your ass because this is all of my money."
Said Stewart, "It will work. But if it doesn't, I'll pay you back." It flopped dreadfully. But true to his word, in a business where words don't count for much, Stewart is reimbursing Dorsett slowly. "He said he would pay me back," says Dorsett, "and I believe him." Stewart says he has already returned some $200,000. "I feel so responsible," he says. "I made a poor judgment. However, I will get him out clean."
But Dorsett is, for now, cash poor. His predicament wasn't eased when another IRS lien—this to cover unpaid 1983 taxes—was slapped on Dorsett's Dallas houses (one is worth $800,000; the other, which he is trying to sell, is listed for $280,000) for $167,448.
•Poor results on commercial endorsements. Poor, that is, by superstar standards. Dorsett has a six-year, $500,000 Converse shoe deal, signed in 1982, that Stewart negotiated. But he doesn't have much else. Unproved but widely circulated rumors about possible cocaine use by Dorsett and several other Cowboys, fueled by a federal investigation in 1983, didn't help him get endorsements.
•Other questionable business deals. For example, he recently cosigned a lease on a computer store for a friend. The friend went bust. The settlement cost Dorsett $48,000 and 15 autographed footballs. Even today, he is looking into deals involving vitamins, sweatsuits, hotel thermostats, burglar- and fire-alarm system (for a second time) and insurance. All perfectly legitimate, of course, but do Dorsett and his advisers have the savvy to make a go of them? Dorsett sounds almost fatalistic about his investments, saying, "You don't invest to lose. I would have liked to have done better. But the probability is that these are not the last investments I'll lose money on."
Johnny Majors, Dorsett's coach at Pitt, says, "The shame of all this is Tony could have put all his money in nine percent savings and never had to work another day in his life. I'm just guessing he got the wrong advice."
Musing about his situation, Dorsett said, "The important thing is to surround yourself with a good team, people you can trust. But I can tell you they are hard to find. I've always said the only two things you have to do are pay taxes and die. I sure do know about them taxes."
Larry Wansley, an ex-FBI agent and the Cowboys' director of counseling, says he talked to Dorsett last season and was told, "I don't have a need for financial planning." Other players understand. Former Cowboy Butch Johnson, now with the Denver Broncos, says, "We make these mistakes because we're young, not dumb." And Dallas quarterback Danny White is pensive about Dorsett's plight: "It strikes close to home for all of us. By the time an athlete learns how to invest, it's too late."
Larry Hercules, a Dallas tax attorney who works with athletes, says, "The athlete thinks of himself as absolutely rich. And time moves slowly when you're young. You don't think you're going to be old somewhere down the road, so you don't plan."
Dorsett, who should know, says, "Be careful out there. Be real careful." So, having dispensed that advice and with his long history of receiving questionable advice from others, who is Dorsett now mainly listening to? "I am," he says softly, "listening mainly to myself."
PHOTO
CRAIG MOLENHOUSE
When it comes to the important decisions, Dorsett is now "looking mainly to myself."
PHOTO
CRAIG MOLENHOUSE
Landry is miffed that Dorsett has been a no-show in camp; he needs Tony at his best if the Cowboys are to make a run.
PHOTO
JERRY WACHTER
[See caption above.]
PHOTO
CRAIG MOLENHOUSE
Stewart (right) admits that he is partially responsible for Dorsett's financial woes.
PHOTO
CRAIG MOLENHOUSE
Schramm says the Cowboys didn't spread the word of Tony's plight.
PHOTO
PHIL HUBER
The IRS had liens against two of Dorsett's posh homes, including this one in North Dallas.