The story be­hind the Su­per Bowl coin

The se­cret his­tory of the com­pany be­hind the Su­per Bowl coin toss

Bloomberg Businessweek (North America) - - Contents - By Caleb Han­nan

Just be­fore the start of Su­per Bowl XLII, as he stood on the 50-yard line of the Univer­sity of Phoenix Sta­dium in front of 70,101 im­pa­tient fans, head ref­eree Mike Carey was ner­vous. Not about reach­ing the high­est honor his pro­fes­sion has to of­fer. Not about blow­ing a call be­fore a TV au­di­ence of 100 mil­lion peo­ple. What wor­ried Carey on Feb. 3, 2008, was the coin toss.

Al­though he’d al­ready run through an NFL­man­dated dress re­hearsal of the flip the day be­fore, other ref­er­ees had told Carey that, of all pos­si­ble out­comes in the big game, the prospect of screw­ing up this short cer­e­mony haunted them the most. (In 2014, celebrity flip­per Joe Na­math would send the coin up be­fore play­ers even made their call.) “Ev­ery­thing else we’d trained for,” says Carey, now an an­a­lyst with CBS Sports. “But the toss is this sin­gu­lar mo­ment. The in­au­gu­ra­tion of the premier event in sports. There’s a lot of anx­i­ety.”

At least, Carey fig­ured, he’d come away with a col­lectible. Dur­ing his 26 years of of­fi­ci­at­ing, he’d made a habit of keep­ing the coins he flipped. But when the Su­per Bowl toss he over­saw went off with­out a hitch (for the record: coin tossed by four-time champ Ron­nie Lott, tails, New York Gi­ants ball), Carey didn’t even make it back to the side­line be­fore an NFL rep­re­sen­ta­tive took the coin from him, hus­tling it to­ward its ul­ti­mate desti­na­tion, the Pro Foot­ball Hall of Fame, where all such pieces are kept.

Flip­ping a metal disk to de­ter­mine which group of mus­cle-bound men gets to play with a foot­ball first may sound like a non­event. But like ev­ery­thing else about the Su­per Bowl, the sim­ple act has evolved into one of the rites of that pseu­dore­li­gious cer­e­mony. The first nine coin flips, like the first nine Su­per Bowls, fea­tured rel­a­tively lit­tle pomp, just a ref­eree and the com­pet­ing teams’ cap­tains. From there the stakes grew with the TV rat­ings, gain­ing hon­orary coin-flip­pers from sit­ting pres­i­dents (Ron­ald Rea­gan, via satel­lite) to mil­i­tary he­roes ( David Pe­traeus) and be­com­ing a pop­u­lar wa­ger for ca­sual gam­blers and junkies alike. The bet­ting site Bo­vada of­fers more than 500 bets on the Su­per Bowl—how long will the na­tional an­them last? What color Ga­torade will be dumped on the win­ning coach?—and says the coin toss is among the top five most ac­tive.

For all the at­ten­tion paid to the flip, what’s mostly un­known is the story of the com­pany that for 23 years has made the coin it­self—and will sell you a lim­ited-edi­tion replica, en­cased in acrylic along with a cer­tifi­cate of au­then­tic­ity, for $99.99. High­land Mint op­er­ates out of a palm tree-ringed ware­house in Mel­bourne, Fla., and has been owned by Michael Kott, 58, since 1993. That’s the same year the NFL de­cided it wanted to turn a profit off the cer­e­mony that started its big­gest game. High­land Mint, then a small mem­o­ra­bilia seller, bought the ex­clu­sive li­cense to cre­ate a col­lectible coin, and has since ac­quired li­censes for framed pho­tos and replica tick­ets for the other three ma­jor sports leagues, the NCAA, and events such as the Ken­tucky Derby. A tour of the mint in Jan­uary finds some 120 em­ploy­ees in room af­ter room, de­sign­ing and con­struct­ing col­lectibles that are sold on­line and at re­tail­ers such as Bed Bath & Be­yond and Neiman Mar­cus.

A month be­fore the Su­per Bowl 50 kick­off, and long be­fore it’s known the game will pit the Carolina Pan­thers against the Den­ver Bron­cos, High­land Mint has at least 20 Su­per Bowl 50-marked pieces of mem­o­ra­bilia for sale, rang­ing from a $9.99 coin key chain to a framed col­lec­tion of all 50 flip coins for $ 1,500. The com­pany melts its own steel on the premises, and Kott points out a hulk­ing ma­chine re­cently pur­chased from the U.S. Mint that work­ers have dubbed Dr. Doom. High­land Mint ap­pears to be a nifty small busi­ness with a piece of the big­gest game in Amer­ica, and that’s true. But when it comes to coins, there’s al­ways an­other side.

In April 1993, High­land Mint was owned by a man named James Mead­lock, and the com­pany’s only prod­ucts were li­censed Ma­jor League Base­ball mem­o­ra­bilia. Mead­lock re­ceived an un­so­licited call from Kott, who in­tro­duced him­self as the owner of a Mon­treal-based col­lectibles com­pany called Madi­son Av­enue Sports. Ac­cord­ing to a civil suit Mead­lock would later file, Kott told Mead­lock that he was in­ter­ested in be­com­ing High­land Mint’s sole Cana­dian dis­trib­u­tor.

Mead­lock flew to Mon­treal to meet Kott and his father, Irv­ing. Ac­cord­ing to the suit, the Kotts al­most im­me­di­ately of­fered to buy the en­tire com­pany. Mead­lock agreed to a sim­ple deal. In ex­change for High­land Mint, he ac­cepted 120,000 shares in a

com­pany called Haris­ton, the par­ent of Madi­son Av­enue Sports. The Kotts por­trayed Haris­ton as a com­pany on the rise. They told Mead­lock that it owned a suc­cess­ful su­per­mar­ket chain in Poland that would soon make a killing by ex­pand­ing into other East­ern bloc coun­tries in the post-cold War gold rush. Even more en­tic­ing, ac­cord­ing to Mead­lock’s suit, was Haris­ton’s pro­pri­etary tech­nol­ogy, which the Kotts claimed could turn con­tam­i­nated ground­wa­ter into valu­able pre­cious me­tals, a process they said was al­ready em­ployed at a mine in Butte, Mont., and would even­tu­ally be used world­wide.

The law­suit Mead­lock filed in Bre­vard County, Fla., in 1996, al­leged that al­most ev­ery­thing the Kotts told him wasn’t quite true. There were a few Pol­ish gro­cery stores but no plans to ex­pand. The ground­wa­ter cleanup tech­nol­ogy was a bust in Butte. And Mead­lock al­leged that mer­chan­dise sold by Madi­son Av­enue Sports had been ar­ti­fi­cially over­val­ued by a fake news­let­ter pro­duced, in se­cret, by Madi­son Av­enue Sports it­self, and the com­pany had been forced to buy back the prod­ucts to pacify irate cus­tomers. (Irv­ing Kott died in 2009. A mo­tion to dis­miss Mead­lock’s suit was filed, but Michael Kott de­clined to com­ment on the mat­ter.)

Mead­lock dis­cov­ered that Irv­ing, a Mon­treal na­tive, was well-known to se­cu­ri­ties reg­u­la­tors around the world. By the time of their ini­tial meet­ing in Mon­treal, the el­der Kott had sur­vived two as­sas­si­na­tion at­tempts, in­clud­ing a pre­ma­turely det­o­nated car bomb, de­scribed in the Cana­dian press as mob-re­lated, and had re­ceived what was then the largest civil fine in Cana­dian his­tory, for stock fraud. Irv­ing had also run what Dutch au­thor­i­ties de­scribed as the most suc­cess­ful boiler room in the world.

Ac­cord­ing to FBI records, Irv­ing first caught the at­ten­tion of U.S. au­thor­i­ties in 1964, when he hosted a cock­tail party in New York City to im­press a mark who would later in­vest in a min­ing com­pany se­cretly run by Irv­ing. Thus be­gan a pat­tern that would con­tinue for the rest of Irv­ing’s life. Shares in highly spec­u­la­tive com­pa­nies sold by teams of bro­kers un­der his con­trol would see their stock price rise spec­tac­u­larly be­fore fall­ing off a cliff—clas­sic pump-and-dumps. Irv­ing ex­celled at the­atrics. His great­est tri­umph oc­curred in Am­s­ter­dam in the 1980s with a com­pany called First Com­merce Se­cu­ri­ties. Ac­cord­ing to Con­trepreneur­s, a book by Cana­dian jour­nal­ist Diane Fran­cis, Irv­ing em­ployed a mul­ti­cul­tural sales force that worked the phones in two shifts seven days a week, ev­ery day of the year. He hired for­eign na­tion­als to tar­get their coun­try­men; ac­cord­ing to Fran­cis, at one point he hired an en­tire the­ater troupe from Lon­don to sell worth­less stocks to their fel­low Brits. First Com­merce was an Am­s­ter­dam phone com­pany’s largest cus­tomer, run­ning up longdis­tance bills that ap­proached a halfmil­lion dol­lars per month. Dutch pros­e­cu­tors broke up the op­er­a­tion in 1986, al­leg­ing Irv­ing and his sales force had de­stroyed $4 bil­lion of in­vestors’ money. ( Time mag­a­zine es­ti­mated the amount was closer to $400 mil­lion.) Irv­ing, who had fled to Canada, never faced trial be­cause the Dutch had no ex­tra­di­tion treaty with Canada at the time. He set­tled the case against him with a $4 mil­lion fine.

Ac­cord­ing to Con­trepreneur­s, Michael Kott was a paid con­sul­tant to First Com­merce, and on the day Dutch au­thor­i­ties raided his father’s Am­s­ter­dam of fices, he met po­lice at the door hold­ing a news­pa­per that had al­ready run a story on the im­pend­ing in­ves­ti­ga­tion. “What took you so long?” Fran­cis quotes him as say­ing.

Fol­low­ing the dis­so­lu­tion of First Com­merce, Michael be­came the head of a Florida- based bro­ker- dealer called Green­tree Se­cu­ri­ties, and Irv­ing moved to Los An­ge­les, where he be­gan rent­ing a $22,000a-month Bev­erly Hills home once owned by Cary Grant and run­ning a bro­ker­age called J.B. Ox­ford Hold­ings. One of his clients in­cluded a then-un­known New York bro­ker named Jor­dan Belfort, who needed some­one to process trades re­lated to his soon-tobe-leg­endary stock frauds. “With­out Kott, The Wolf of Wall Street never gets

made,” says re­tired FBI agent Michael Swit­lyk, whose in­ves­ti­ga­tion of J.B. Ox­ford led to a 48-count in­dict­ment of Irv­ing from the U.S. Depart­ment of Jus­tice. All the claims were dis­missed ex­cept for two, for in­ac­cu­rate re­port­ing to the Se­cu­ri­ties and Ex­change Com­mis­sion, and Irv­ing agreed to pay a $250,000 fine and make $750,000 in char­i­ta­ble do­na­tions.

In 2004, Mark Cuban, the bil­lion­aire owner of the Dal­las Mav­er­icks, in­vested in a promis­ing Cana­dian In­ter­net com­pany called Mamma. com. Shortly af­ter, Swit­lyk and oth­ers told Cuban that Mamma was se­cretly con­trolled by Irv­ing. Cuban sold his stock—a trade that led to his be­ing ac­cused of in­sider trad­ing by the SEC in 2008. By the time Cuban won his case in 2013, Irv­ing had died peace­fully in his Mon­treal man­sion. In­spired by his ex­pe­ri­ence with Irv­ing, Cuban started a fraud-fo­cused web­site called Sharesleut­h that re­cently made Michael’s High­land Mint a tar­get, ac­cus­ing the com­pany in an ar­ti­cle of sell­ing foot­balls and hel­mets with forged sig­na­tures, in­clud­ing those of Seat­tle Sea­hawks quar­ter­back Rus­sell Wil­son, for as much as $ 2,500 apiece. Michael Kott, as well as Michael Goldfarb, the pres­i­dent of Who’s Who Pro­duc­tions, a com­pany that sup­plied the goods, say they’re le­git­i­mate.

It can’t have been easy to run a small busi­ness for two decades with Kott for a last name. While his father was mak­ing en­e­mies with the U. S. At­tor­ney’s of­fice and a bil­lion­aire re­al­ity TV star, Michael spent his time ex­pand­ing High­land Mint from nearly noth­ing into a leader in a mar­ket where au­then­tic­ity is es­sen­tial. So it’s un­der­stand­able that Kott seems slightly un­com­fort­able with the idea of a visit from a reporter. “Is there any rea­son why you didn’t just call?” he says when I show up at the mint in Jan­uary.

Kott re­laxes a bit once he starts an­swer­ing ques­tions about his com­pany, its flag­ship prod­uct, and the Su­per Bowl. The com­pany was on the verge of fail­ure when he bought it, he says, with just 20 em­ploy­ees. This year he ex­pects to pro­duce 10,000 Su­per Bowl coins, and he’s root­ing for Den­ver, un­sen­ti­men­tally, be­cause he thinks Bron­cos fans will buy the most coins. This is also the first year in the game’s half-cen­tury his­tory that the of­fi­cial logo, fea­tured on the coin’s ob­verse, will fea­ture stan­dard num­bers. “The Ro­man nu­meral for 50 is L,” he says, “and L con­notes loser.”

It isn’t un­til af­ter a tour of High­land Mint’s deaf­en­ing fac­tory floor that I men­tion Irv­ing Kott. “I don’t re­ally want to dis­cuss that,” he says. When asked about his own pres­ence at First Com­merce in Am­s­ter­dam dur­ing the raid, he sug­gests the Con­trepreneur­s au­thor has “watched too many movies.”

Me ad lock with­drew his suit against the Kotts in 1996. He now owns a bar­be­cue restau­rant in nearby Port Canaveral, Fla. Reached by phone, he’s re­luc­tant to talk about his re­la­tion­ship with Michael Kott. When asked whether he dropped his law­suit af­ter re­ceiv­ing a set­tle­ment, Mead­lock says, “I can’t talk about this,” then hangs up. The NFL did not re­spond to a re­quest for com­ment on the Kotts. Kott presents him­self as sim­ply a busi­ness owner who’s con­stantly rein­vent­ing his com­pany. Un­der Mead­lock, he says, High­land Mint’s main prod­ucts were replica trad­ing cards sold via “lit­tle ma-and-pop stores.” Now it’s his hunk of metal that will be tossed sky­ward for a global TV au­di­ence on Feb. 7. As far as Kott is con­cerned, there are coins to be made, a Su­per Bowl to at­tend, and a past to leave right there, in the past. Or, as he frames it be­fore putting an abrupt end to the con­ver­sa­tion, “The sins of the father have noth­ing to do with the son, right?” <BW>

Michael KottIrv­ing Kott

Mark Cuban has clashed with the Kotts

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