On Saturday, I wrote about the problems at the new sports talk radio venture in Chicago - Chicagosportswebio.com. At the time I wrote that column, the financial backer of the venture - Chicago area businessman David Hernandez - fired Mike North and two others after they questioned why he was bouncing checks to employees.
The situation has only gotten worse. North and Hernandez went at each other through the media over the weekend. The FBI is investigating Hernandez' business practices. The SEC is involved. It's a mess.
And then, this morning, the other shoe dropped. According to Ed Sherman of Chicagobusiness.com, it's over for webio.
I'm not surprised that Chet Coppock is doing one last show to close it down. The guy is a pro. And, he's a better man than I am - I wouldn't do what he's doing today. But that's what a pro does - and I told him so in an email earlier today.
I feel bad for the people who are losing their jobs because of the shady business that Hernandez was allegedly operating. Most of those guys left good jobs at either The Score in Chicago or ESPN 1000 - jobs they could have kept if they so desired - to make a go at what they thought was a better opportunity.
Part of the reason most of these guys jumped was because they were recruited by North. North is a veteran radio guy who has had big success - ratings-wise - in the past. Unfortunately for him, that success did not extend to his time doing morning drive at The Score. That's one of the reasons he was let go last summer (the other was his refusal to take a pay cut).
North is also a guy who has made money for the people that advertised on his show. He always has. That's why many clients followed him to the internet venture when it launched in April.
But, unfortunately, North didn't do his homework on this one. He has claimed in reports that he did a background check on Hernandez. But it must not have been a thorough one, because if it had been, it would have turned up a felony conviction on fraud charges and three bankruptcy filings in three years. This is not someone most people would want to do business with.
But, North took a chance on Hernandez (for reasons that could only be speculation, and I won't do that right now - though keep in mind that North's leaving The Score was not a mutual parting of the ways; you can take it from there). He personally recruited talent to his website. Now that talent is out of work because North seemingly failed to practice due diligence.
Unless North can convince another investor to back him financially - which he'll try to do - the venture he started just two months ago is dead. I have serious doubts that North can find someone to bail him out. It's a bad situation, and when the FBI and SEC are involved, not many people would be willing to take a financial risk.
So, a bunch of good people are out of work. There is a lesson to be learned here, and I'm sure it's something that everyone at webio is saying this afternoon. If it sounds too good to be true, it probably is.
From everything I have read in recent days - including a blog by one of webio's daily talents - there was thought - for just a second - that it might be too good to be true. But at the end of the day, they took a chance because the money was good, and because it was a better opportunity than what they had before North, Hernandez, and webio came along.
As for North, I don't think this will affect him very much. Even though Hernandez was a main sponsor to his television program on Comcast Sportsnet in Chicago, I would think there are other sponsors lined up. Television is a better bet for people who want to advertise as opposed to the internet. And, like I said before, North has a bunch of clients he's always made money for. I'm sure they'll help him out now.
So, he will probably keep doing his television show and not miss a beat. Meanwhile, the people he recruited to jump on board with him are wondering how they are going to make ends meet.
Somehow it doesn't seem fair, does it?
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