(Reuters) - A U.S. bank regulator is planning to issue a formal action against JPMorgan Chase & Co , demanding that the bank fix lapses in risk controls that allowed some of its traders to build a risky bet that lost $6.2 billion, the Wall Street Journal reported on Thursday.
The Office of the Comptroller of the Currency, a division of the Treasury Department that oversees banks, is not expected to levy a fine, but it does plan to issue an enforcement action, the Journal reported, citing unnamed people familiar with the matter.
It would be the first regulatory sanction stemming from the high-profile trading debacle at JPMorgan, which happened in its London office. Bruno Iskil, a trader involved with the bet, earned the nickname "London Whale" because of the huge position he and his colleagues had been built using complex derivatives.
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ICE to buy NYSE Euronext for $8.2 billion
Labels: BusinessREUTERS - In October, Jeff Sprecher, chief executive of upstart IntercontinentalExchange , approached NYSE Euronext CEO Duncan Niederauer with a modest proposal to team up on clearing trades in London.
As the men continued talking, Sprecher grew bolder, instead suggesting that ICE buy NYSE in what became an $8.2 billion deal announced on Thursday.
The deal will link up two powerful derivatives exchange and clearing house operators, but threatens to further reduce the clout of the New York Stock Exchange. While the New York Stock Exchange has stood for 200 years as an iconic symbol of U.S. capitalism, it is almost an afterthought in this deal.
For ICE, the crown jewel of NYSE Euronext is Liffe, Europe's second-largest derivatives market, analysts said. Niederauer had long felt that NYSE's shareholders did not appreciate the true value of the London-based futures and options exchange, and had talked to bankers about how to improve NYSE's stock price, a person familiar with the matter said.
Liffe will help ICE compete against U.S.-based CME Group, owner of the Chicago Board of Trade. Derivatives trading remains highly profitable for the exchanges, and new rules next year will dramatically expand the demand for clearing over-the-counter contracts.
The stock market businesses are less valuable to ICE. The company said it will try to spin off the Euronext European stock market businesses in a public offering, generating speculation it may also have little interest in the NYSE trading floor. Profits from stock trading have been significantly eroded by new technology and the rise of other places for investors to trade, including venues known as "dark pools."
ICE's Sprecher will be CEO of the combined organization, and the NYSE Euronext CEO will be president, a ceremonial title at many U.S. companies. In an interview, Niederauer said he would remain at least through 2014 as an "important senior member" of Sprecher's management team.
Niederauer will also be CEO of the NYSE Group. The combined company will be based in New York and Atlanta, where ICE is headqurtered.
Sprecher and Niederauerhave been friends for years, but the two stopped talking for about six weeks in 2011 when ICE teamed up with Nasdaq OMX Group to make an unsolicited bid for NYSE Euronext. That bid came even as the New York Stock Exchange operator was trying to sell itself to Deutsche Bourse . Regulatory concerns killed both deals.
Without the Nasdaq or Deutsche Bourse's huge equity operations, ICE alone has far less overlapping business and should face easy approvals, antitrust lawyers said.
The deal values each NYSE Euronext share at $33.12, a 28 percent premium to the stock's closing price on Wednesday. NYSE Euronext stock rose 34 percent to end at $32.25 on Thursday. ICE's shares fell as much as 4 percent but finished regular trading at $127.60, up 1.4 percent on the day.
ICE said it would pay annual dividends of $300 million to the companies' shareholders once the deal closes, about what NYSE pays its shareholders now.
IN THE DOLDRUMS
The deal reflected Niederauer's inability to get his company's share price out of the doldrums. Before the latest ICE offer emerged, NYSE Euronext's shares had fallen by nearly a third since ICE and Nasdaq launched their thwarted joint bid.
Further consolidation of exchanges was "inevitable" and ICE was a "great partner," Niederauer said on a call with analysts, so continuing on alone did not make sense.
"We can sit here and keep slugging away and keep working hard, but the bottom line is we had not delivered, in my mind, sufficient returns to shareholders," Niederauer said. NYSE bought Euronext, including Liffe, for 8 billion euros in 2007.
Sprecher incorporated the stalled stock price - and the unrecognized value of Liffe - as part of his pitch.
"The reason that we were prepared to pay $33 a share for a company that was trading at $24 a share was that there is a $33 company in here and the market was just not either seeing it or willing to give credit for," he said in an interview. "We said, 'let's just force the credit.'"
The two sides negotiated in secret for about eight to 10 weeks, the two CEOs said. In options markets, there were some signs that word might have leaked out, with a sudden upswing in the demand for call options on NYSE, which perform well when a company's share price rises.
ICE started out as an online marketplace for energy trading before Sprecher initiated a string of acquisitions from the London-based International Petroleum Exchange in 2001, to the New York Board of Trade and, most recently, a handful of smaller deals, including a climate exchange and a stake in a Brazilian clearing house.
ICE's current main operations are in energy futures trading and, it has steered clear of stocks and stock-options trading, key businesses for NYSE Euronext.
"This deal is probably not going to generate a lot of concern from an antitrust perspective," said Warren Rosborough, a veteran of the U.S. Justice Department's antitrust division who is now with the law firm McDermott Will & Emery.
In clearing, ICE has a popular U.S. over-the-counter and listed business, while Liffe's operation is strong in futures and based in Europe.
Concerns over a small amount of competing derivatives business could be addressed with straightforward divestitures, Rosborough said. "It's an open question about whether it will generate questions," he added. "If there is a fix, it will be relatively easy fix."
Sprecher said the deal had been "well received" by regulators after he and Niederauer completed a "whirlwind tour" in the United States and Europe ahead of Thursday's announcement. Officials at the European Commission, the Department of Justice and Securities and Exchange Commission declined to comment.
Last year, Justice Department objections blocked ICE and Nasdaq OMX's $11 billion bid on concerns the tie-up would dominate U.S. stock listings. The rival $9.3 billion bid by Deutsche Boerse fell afoul of European regulators.
A combined ICE-NYSE Euronext would leap-frog Deutsche Boerse to become the world's third-largest exchange group with a combined market value of $15.2 billion. CME Group has a market value of $17.5 billion, Thomson Reuters data shows.
Hong Kong Exchanges and Clearing is the world's largest exchange group with a market cap of $19.5 billion.
ICE said it expected to achieve $450 million in cost savings from the takeover. In the first year after the deal closes, additional earnings of 15 percent are expected.
Long-time Wall Street traders saw the potential takeover of the venerable stock exchange by a 12-year-old derivatives upstart as fraught with symbolism.
"It's the end of an era," said a director on the board of a rival exchange who did not have clearance to speak to the press and asked not to be named. "I think ultimately the floor will be closed, because Jeff (Sprecher) has shut every floor he's ever had," the person said.
With the deal still a long way from completed, Sprecher and Niederauer said they planned to keep the high-profile NYSE trading floor running. "The floor has value and in particular, it has a lot of brand value," Niederauer said. "So we are committed. Jeff is committed."
The exchange was prepared to shut down the floor temporarily during superstorm Sandy and trade completely electronically, Wall Street executives said.
Shareholders will have the option of accepting $33.12 in cash per NYSE Euronext share or 0.2581 ICE share or a mix of $11.27 in cash and 0.1703 ICE share, subject to a maximum cash consideration of $2.7 billion.
Morgan Stanley was the lead financial adviser to ICE, with assistance from BMO Capital Markets Corp, Broadhaven Capital Partners, JPMorgan Chase & Co , Lazard Group LLC , Societe Generale Corporate & Investment Banking, and Wells Fargo Securities LLC . ICE legal advisers are Sullivan & Cromwell LLP and Shearman & Sterling LLP.
The main financial advisers to NYSE Euronext are Perella Weinberg Partners and BNP Paribas. Further financial advice to NYSE Euronext was provided by Blackstone Advisory Partners, Citigroup , Goldman Sachs & Co. and Moelis & Co. Legal advisers to NYSE Euronext are Wachtell, Lipton, Rosen & Katz, Slaughter & May, and Stibbe NV.
(Additional reporting by Luke Jeffs and David Brough in London, Jessica Toonkel, Jed Horowitz, Jonathan Spicer, David Gaffen and Karen Brettell in New York, Sarah N. Lynch and Diane Bartz in Washington and Ann Saphir in Chicago; writing by Carmel Crimmins and Aaron Pressman; Editing by
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Trafigura 2012 earnings fall below $1 bln - FT
Labels: BusinessSINGAPORE, Dec 21 (Reuters) - Commodities trader Trafigura
earned about $1 billion for the second straight year
in 2012, but down from a record achieved last year due to higher
staff costs and new investments, the Financial Times reported.
The privately-held company, based in Geneva and Singapore,
made a profit of $991.9 million in the year to September, down
11 percent from last year's record $1.11 billion, the FT said,
citing data from Trafigura's annual report.
The commodities trader's profits show that the profitability
of the world's top houses that dominate raw materials trade is
strong despite slower economic growth in top consumer China.
The drop from 2011 was due to higher staff costs and
expenses related to new investments and business purchases, the
FT reported.
Gross profit, a rough measure of underlying profitability,
was up on the year. Revenues fell 1.6 percent to $120 billion,
it said. The company does not release its accounts publicly.
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ICE to acquire NYSE in $8.2bn deal
Labels: BusinessLondon, Dec. 21 (ANI): IntercontinentalExchange (ICE), the 12-yr old firm dealing in contracts tied to energy and commodity prices, has agreed to buy NYSE Euronext for cash and stock in a deal worth 8.2 billion dollars.
As part of the deal, ICE also gains control of the Liffe (London International Financial Futures and Options Exchange) and stock exchanges in Paris, Lisbon, Brussels and Amsterdam. However, Liffe, an exchange through which investors can make bets on the future level of interest rates, is estimated to generate about 40pc of profits at NYSE, The Telegraph reports.
According to the paper, ICE said it would merge Liffe with ICE Clear Europe, its London-based business that clears derivatives trades once they are agreed.
"Liffe is the crown jewel in NYSE Euronext. It is a sign that exchanges are very interested in expanding in London," said Richard Perrott, an analyst at Berenberg Bank.
The deal will see ICE pay NYSE investors 33.12 dollars for each of their shares, 38pc higher than the price they closed at on Wall Street on Wednesday night, the paper said.
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NHL lockout has chilling effect on business
Labels: SportsBUFFALO, N.Y. (AP) — Most everywhere Lou Billittier turns these days, the Buffalo restaurateur is reminded of the NHL lockout, and its impact on his blue-collar, sports-mad town where Dominik Hasek became a star and the French Connection is still revered.
Billittier misses the familiar faces of Sabres players having their traditional game-day lunch at his restaurant, Chef's. He recalled a recent conversation he had with his seafood supplier, who's struggling because he also provides salmon and chicken wings to the Sabres arena, the First Niagara Center.
And then there are the arena's idled, part-time employees who stop in looking for work. With his own business down 15 percent, Billittier can only turn them away because he's concerned whether there's enough work for his staff.
"It's amazing the trickle-down effect," Billittier said, standing in his lobby, not far from Chef's "The French Connection" room, honoring the famed former Sabres line of Gilbert Perreault, Rene Robert and Rick Martin. "It bothers me, not only because we're down, but it affects everything. Our community out-reach, we can't donate to the people we normally donate to. It's brutal."
From south Florida to Vancouver, Montreal to Anaheim, a wide array of businesses located in the NHL's 30 markets have taken a significant hit because of the lockout, which is now in its fourth month and has wiped away 625 games. On Thursday, the league canceled all games through Jan. 14.
Joe Kasel, owner of the Eagle Street Grille in St. Paul, Minn., last month wrote a letter expressing his concerns to NHL Commissioner Gary Bettman.
"I had to look 32 of 48 employees in the eyes and inform them that I no longer can afford to keep them on staff," Kasel wrote. "The impact on our lives is immeasurable. One city's devastation may not seem like a powerful incentive to end the lockout; but I know this is happening in other cities around the nation."
Chris Ray, manager of the Brewhouse Downtown in Nashville, said his establishment is losing an estimated $5,000 for every canceled Predators' home game. That's already a $90,000 hit, given 18 Predators' home games have been wiped out.
It's no different at Wayne Gretzky's sports bar in Toronto, where much of the Great One's memorabilia is on display.
"Yes, it's been very slow," said a bartender, who wouldn't give her name. "I'm scared about January."
The Hockey Hall of Fame in Toronto is feeling the pinch. Hall of Fame spokeswoman Kelly Masse said they've made "adjustments" to staff because gate and retail revenues are down significantly.
And so's Hockeytown, aka, Detroit.
The downtown three-level Hockeytown Cafe, operated by Red Wings owner Mike Ilitch, was nearly empty on Monday.
"If there's not a show at the Fox, this is what it's like in here," bartender Molly Brown said, referring to the Fox Theatre next door. "We haven't fired anyone, but everyone has had their days and hours cut because the Red Wings aren't playing. We're all suffering."
The effect goes beyond bars, restaurants and tourism.
In Chicago, Gunzo's Hockey Headquarters, a four-store chain that sells hockey equipment and jerseys, is losing business.
"It's been a huge impact. Huge, huge, huge. People don't see the games and it's out of sight, out of mind," owner Keith Jackson said. "It's kind of a double-whammy for us. We're losing out on equipment sales and we're losing out on the jerseys and licensed apparel sales."
With the Christmas shopping season nearly over, Jackson worries those are sales he'll never get back even if the NHL resumes playing soon. Mid-January will be a critical time, since Bettman has said the league doesn't want to play a season shorter than 48 games per team.
With an entire season wiped out in 2004-05, outsiders are wondering whether the two sides — rich owners and well-paid players — are indifferent to the effects their labor disputes create.
"People are disgusted," said Tom Woolsey, owner of Andrews On the Corner in Detroit. He estimates his business is down 75 percent on nights the Red Wings are playing.
"It's incomprehensible to me that after four or five prosperous years in the NHL, that they can't figure out how to split $3.2 billion (in revenue)," Woolsey said.
It's mind-boggling to John Heidinger, chairman of the Service Employees International Local 200 in Buffalo, who represents about 225 ushers at First Niagara Center.
"When you're making 12 bucks an hour working at an arena, and these guys are haggling over hundreds of millions of dollars, I think for a lot of people it's a hard reality to understand," Heidinger said. "It really frustrates you."
Sabres president Ted Black can understand the frustration.
"We are disappointed the NHL and NHLPA have not been able to negotiate a new collective bargaining agreement," Black said. "Our fans are extremely disappointed, and we know the lack of NHL hockey is having a negative impact on many local businesses. At the same time, we want to play hockey under the right circumstances that the NHL will negotiate on our behalf. ... The league has our full confidence."
The impact of another lost season would be high.
In Buffalo alone, the city's tourism bureau, Visit Buffalo Niagara, estimates local hotels that host visiting NHL teams will lose between $850,000 and $1 million if there's no season.
City transit is affected. Douglas Hartmayer, spokesman for the Niagara Frontier Transportations Authority, says up to 1,700 riders use Metro Rail to attend each Sabres home game.
There's even a psychological cost, especially in a place like Buffalo, where the winters are already long, and the Sabres provide an entertaining outlet, particularly when the Buffalo Bills are struggling, as they are once again are this year.
"Especially with Pegula, you had some hope," said Joe Allman, bartender at the Swannie House, referring to Sabres owner Terry Pegula, who's raised expectations since purchasing the team two years ago. "They probably are our best chance to win."
With no hockey, and the Bills out of playoff contention for a 13th straight season, there's little for Buffalonians to fall back on.
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Billittier misses the familiar faces of Sabres players having their traditional game-day lunch at his restaurant, Chef's. He recalled a recent conversation he had with his seafood supplier, who's struggling because he also provides salmon and chicken wings to the Sabres arena, the First Niagara Center.
And then there are the arena's idled, part-time employees who stop in looking for work. With his own business down 15 percent, Billittier can only turn them away because he's concerned whether there's enough work for his staff.
"It's amazing the trickle-down effect," Billittier said, standing in his lobby, not far from Chef's "The French Connection" room, honoring the famed former Sabres line of Gilbert Perreault, Rene Robert and Rick Martin. "It bothers me, not only because we're down, but it affects everything. Our community out-reach, we can't donate to the people we normally donate to. It's brutal."
From south Florida to Vancouver, Montreal to Anaheim, a wide array of businesses located in the NHL's 30 markets have taken a significant hit because of the lockout, which is now in its fourth month and has wiped away 625 games. On Thursday, the league canceled all games through Jan. 14.
Joe Kasel, owner of the Eagle Street Grille in St. Paul, Minn., last month wrote a letter expressing his concerns to NHL Commissioner Gary Bettman.
"I had to look 32 of 48 employees in the eyes and inform them that I no longer can afford to keep them on staff," Kasel wrote. "The impact on our lives is immeasurable. One city's devastation may not seem like a powerful incentive to end the lockout; but I know this is happening in other cities around the nation."
Chris Ray, manager of the Brewhouse Downtown in Nashville, said his establishment is losing an estimated $5,000 for every canceled Predators' home game. That's already a $90,000 hit, given 18 Predators' home games have been wiped out.
It's no different at Wayne Gretzky's sports bar in Toronto, where much of the Great One's memorabilia is on display.
"Yes, it's been very slow," said a bartender, who wouldn't give her name. "I'm scared about January."
The Hockey Hall of Fame in Toronto is feeling the pinch. Hall of Fame spokeswoman Kelly Masse said they've made "adjustments" to staff because gate and retail revenues are down significantly.
And so's Hockeytown, aka, Detroit.
The downtown three-level Hockeytown Cafe, operated by Red Wings owner Mike Ilitch, was nearly empty on Monday.
"If there's not a show at the Fox, this is what it's like in here," bartender Molly Brown said, referring to the Fox Theatre next door. "We haven't fired anyone, but everyone has had their days and hours cut because the Red Wings aren't playing. We're all suffering."
The effect goes beyond bars, restaurants and tourism.
In Chicago, Gunzo's Hockey Headquarters, a four-store chain that sells hockey equipment and jerseys, is losing business.
"It's been a huge impact. Huge, huge, huge. People don't see the games and it's out of sight, out of mind," owner Keith Jackson said. "It's kind of a double-whammy for us. We're losing out on equipment sales and we're losing out on the jerseys and licensed apparel sales."
With the Christmas shopping season nearly over, Jackson worries those are sales he'll never get back even if the NHL resumes playing soon. Mid-January will be a critical time, since Bettman has said the league doesn't want to play a season shorter than 48 games per team.
With an entire season wiped out in 2004-05, outsiders are wondering whether the two sides — rich owners and well-paid players — are indifferent to the effects their labor disputes create.
"People are disgusted," said Tom Woolsey, owner of Andrews On the Corner in Detroit. He estimates his business is down 75 percent on nights the Red Wings are playing.
"It's incomprehensible to me that after four or five prosperous years in the NHL, that they can't figure out how to split $3.2 billion (in revenue)," Woolsey said.
It's mind-boggling to John Heidinger, chairman of the Service Employees International Local 200 in Buffalo, who represents about 225 ushers at First Niagara Center.
"When you're making 12 bucks an hour working at an arena, and these guys are haggling over hundreds of millions of dollars, I think for a lot of people it's a hard reality to understand," Heidinger said. "It really frustrates you."
Sabres president Ted Black can understand the frustration.
"We are disappointed the NHL and NHLPA have not been able to negotiate a new collective bargaining agreement," Black said. "Our fans are extremely disappointed, and we know the lack of NHL hockey is having a negative impact on many local businesses. At the same time, we want to play hockey under the right circumstances that the NHL will negotiate on our behalf. ... The league has our full confidence."
The impact of another lost season would be high.
In Buffalo alone, the city's tourism bureau, Visit Buffalo Niagara, estimates local hotels that host visiting NHL teams will lose between $850,000 and $1 million if there's no season.
City transit is affected. Douglas Hartmayer, spokesman for the Niagara Frontier Transportations Authority, says up to 1,700 riders use Metro Rail to attend each Sabres home game.
There's even a psychological cost, especially in a place like Buffalo, where the winters are already long, and the Sabres provide an entertaining outlet, particularly when the Buffalo Bills are struggling, as they are once again are this year.
"Especially with Pegula, you had some hope," said Joe Allman, bartender at the Swannie House, referring to Sabres owner Terry Pegula, who's raised expectations since purchasing the team two years ago. "They probably are our best chance to win."
With no hockey, and the Bills out of playoff contention for a 13th straight season, there's little for Buffalonians to fall back on.
Barring setback, Redskins' RG3 looks good to go
Labels: Sports *
Kirk Cousins will start in place of Griffin wgho is sitting out with a sprained knee. (AP Photo/Rick Osentoski) less
ASHBURN, Va. (AP) — Robert Griffin III looks good to go.
The Washington Redskins rookie had a full practice Thursday for the second straight day as the team prepares for this week's game against the Philadelphia Eagles.
"I like what I see," coach Mike Shanahan said. "If there is no setback, he should be ready to go."
Griffin missed Sunday's win over the Cleveland Browns with a sprained right knee. On Wednesday, he had his first full practice since the injury, and coaches and doctors were eager to see how the knee would respond.
"There wasn't a setback today, so that's a good sign," Shanahan said.
Also Thursday, right tackle Tyler Polumbus remained unable to practice as he recovers from a concussion. Linebacker London Fletcher (sprained left ankle), linebacker Lorenzo Alexander (right shoulder) and defensive end Stephen Bowen (torn biceps) were limited, and linebacker Rob Jackson returned to practice after the birth of his baby girl.
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Kirk Cousins will start in place of Griffin wgho is sitting out with a sprained knee. (AP Photo/Rick Osentoski) less
ASHBURN, Va. (AP) — Robert Griffin III looks good to go.
The Washington Redskins rookie had a full practice Thursday for the second straight day as the team prepares for this week's game against the Philadelphia Eagles.
"I like what I see," coach Mike Shanahan said. "If there is no setback, he should be ready to go."
Griffin missed Sunday's win over the Cleveland Browns with a sprained right knee. On Wednesday, he had his first full practice since the injury, and coaches and doctors were eager to see how the knee would respond.
"There wasn't a setback today, so that's a good sign," Shanahan said.
Also Thursday, right tackle Tyler Polumbus remained unable to practice as he recovers from a concussion. Linebacker London Fletcher (sprained left ankle), linebacker Lorenzo Alexander (right shoulder) and defensive end Stephen Bowen (torn biceps) were limited, and linebacker Rob Jackson returned to practice after the birth of his baby girl.
AP IMPACT: Steroids loom in major-college football
Labels: SportsWASHINGTON (AP) — With steroids easy to buy, testing weak and punishments inconsistent, college football players are packing on significant weight — 30 pounds or more in a single year, sometimes — without drawing much attention from their schools or the NCAA in a sport that earns tens of billions of dollars for teams.
Rules vary so widely that, on any given game day, a team with a strict no-steroid policy can face a team whose players have repeatedly tested positive.
An investigation by The Associated Press — based on interviews with players, testers, dealers and experts and an analysis of weight records for more than 61,000 players — revealed that while those running the multibillion-dollar sport say they believe the problem is under control, that control is hardly evident.
The sport's near-zero rate of positive steroids tests isn't an accurate gauge among college athletes. Random tests provide weak deterrence and, by design, fail to catch every player using steroids. Colleges also are reluctant to spend money on expensive steroid testing when cheaper ones for drugs like marijuana allow them to say they're doing everything they can to keep drugs out of football.
"It's nothing like what's going on in reality," said Don Catlin, an anti-doping pioneer who spent years conducting the NCAA's laboratory tests at UCLA. He became so frustrated with the college system that it was part of the reason he left the testing industry to focus on anti-doping research.
___
EDITOR'S NOTE — Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the first of a two-part series.
___
While other major sports have been beset by revelations of steroid use, college football has operated with barely a whiff of scandal. Between 1996 and 2010 — the era of Barry Bonds, Mark McGwire, Marion Jones and Lance Armstrong — the failure rate for NCAA steroid tests fell even closer to zero from an already low rate of less than 1 percent.
The AP's investigation, drawing upon more than a decade of official rosters from all 120 Football Bowl Subdivision teams, found thousands of players quickly putting on significant weight, even more than their fellow players. The information compiled by the AP included players who appeared for multiple years on the same teams.
For decades, scientific studies have shown that anabolic steroid use leads to an increase in body weight. Weight gain alone doesn't prove steroid use, but very rapid weight gain is one factor that would be deemed suspicious, said Kathy Turpin, senior director of sport drug testing for the National Center for Drug Free Sport, which conducts tests for the NCAA and more than 300 schools.
Yet the NCAA has never studied weight gain or considered it in regard to its steroid testing policies, said Mary Wilfert, the NCAA's associate director of health and safety.
The NCAA attributes the decline in positive tests to its year-round drug testing program, combined with anti-drug education and testing conducted by schools.
The AP's analysis found that, regardless of school, conference and won-loss record, many players gained weight at exceptional rates compared with their fellow athletes and while accounting for their heights.
Adding more than 20 or 25 pounds of lean muscle in a year is nearly impossible through diet and exercise alone, said Dan Benardot, director of the Laboratory for Elite Athlete Performance at Georgia State University.
In nearly all the rarest cases of weight gain in the AP study, players were offensive or defensive linemen, hulking giants who tower above 6-foot-3 and weigh 300 pounds or more. Four of those players interviewed by the AP said that they never used steroids and gained weight through dramatic increases in eating, up to six meals a day. Two said they were aware of other players using steroids.
"I ate 5-6 times a day," said Clint Oldenburg, who played for Colorado State starting in 2002 and for five years in the NFL. Oldenburg's weight increased over four years from 212 to 290.
Oldenburg told the AP he was surprised at the scope of steroid use in college football, even in Colorado State's locker room. "There were a lot of guys even on my team that were using." He declined to identify any of them.
The AP found more than 4,700 players — or about 7 percent of all players — who gained more than 20 pounds overall in a single year. It was common for the athletes to gain 10, 15 and up to 20 pounds in their first year under a rigorous regimen of weightlifting and diet. Others gained 25, 35 and 40 pounds in a season. In roughly 100 cases, players packed on as much 80 pounds in a single year.
In at least 11 instances, players that AP identified as packing on significant weight in college went on to fail NFL drug tests. But pro football's confidentiality rules make it impossible to know for certain which drugs were used and how many others failed tests that never became public.
Even though testers consider rapid weight gain suspicious, in practice it doesn't result in testing. Ben Lamaak, who arrived at Iowa State in 2006, said he weighed 225 pounds in high school. He graduated as a 320-pound offensive lineman and said he did it all naturally.
"I was just a young kid at that time, and I was still growing into my body," he said. "It really wasn't that hard for me to gain the weight. I love to eat."
In addition to random drug testing, Iowa State is one of many schools that have "reasonable suspicion" testing. That means players can be tested when their behavior or physical symptoms suggest drug use. Despite gaining 81 pounds in a year, Lamaak said he was never singled out for testing.
The associate athletics director for athletic training at Iowa State, Mark Coberley, said coaches and trainers use body composition, strength data and other factors to spot suspected cheaters. Lamaak, he said, was not suspicious because he gained a lot of "non-lean" weight.
But looking solely at the most significant weight gainers also ignores players like Bryan Maneafaiga.
In the summer of 2004, Bryan Maneafaiga was an undersized 180-pound running back trying to make the University of Hawaii football team. Twice — once in pre-season and once in the fall — he failed school drug tests, showing up positive for marijuana use but not steroids.
He'd started injecting stanozolol, a steroid, in the summer to help bulk up to a roster weight of 200 pounds. Once on the team, he'd occasionally inject the milky liquid into his buttocks the day before games.
"Food and good training will only get you so far," he told the AP recently.
Maneafaiga's former coach, June Jones, said it was news to him that one of his players had used steroids. Jones, who now coaches at Southern Methodist University, believes the NCAA does a good job rooting out steroid use.
On paper, college football has a strong drug policy. The NCAA conducts random, unannounced drug testing and the penalties for failure are severe. Players lose an entire year of eligibility after a first positive test. A second offense means permanent ineligibility for sports.
In practice, though, the NCAA's roughly 11,000 annual tests amount to a fraction of all athletes in Division I and II schools. Exactly how many tests are conducted each year on football players is unclear because the NCAA hasn't published its data for two years. And when it did, it periodically changed the formats, making it impossible to compare one year of football to the next.
Even when players are tested by the NCAA, experts like Catlin say it's easy enough to anticipate the test and develop a doping routine that results in a clean test by the time it occurs. NCAA rules say players can be notified up to two days in advance of a test, which Catlin says is plenty of time to beat a test if players have designed the right doping regimen. By comparison, Olympic athletes are given no notice.
Most schools that use Drug Free Sport do not test for anabolic steroids, Turpin said. Some are worried about the cost. Others don't think they have a problem. And others believe that since the NCAA tests for steroids their money is best spent testing for street drugs, she said.
Doping is a bigger deal at some schools than others.
At Notre Dame and Alabama, the teams that will soon compete for the national championship, players don't automatically miss games for testing positive for steroids. At Alabama, coaches have wide discretion. Notre Dame's student-athlete handbook says a player who fails a test can return to the field once the steroids are out of his system.
The University of North Carolina kicks players off the team after a single positive test for steroids. Auburn's student-athlete handbook calls for a half-season suspension for any athlete caught using performance-enhancing drugs.
At UCLA, home of the laboratory that for years set the standard for cutting-edge steroid testing, athletes can fail three drug tests before being suspended. At Bowling Green, testing is voluntary.
At the University of Maryland, students must get counseling after testing positive, but school officials are prohibited from disciplining first-time steroid users.
Only about half the student athletes in a 2009 NCAA survey said they believed school testing deterred drug use. As an association of colleges and universities, the NCAA could not unilaterally force schools to institute uniform testing policies and sanctions, Wilfert said.
"We can't tell them what to do, but if went through a membership process where they determined that this is what should be done, then it could happen," she said.
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Associated Press writers Ryan Foley in Cedar Rapids, Iowa; David Brandt in Jackson, Miss.; David Skretta in Lawrence, Kan.; Don Thompson in Sacramento, Calif., and Alexa Olesen in Shanghai, China, and researchers Susan James in New York and Monika Mathur in Washington contributed to this report.
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Contact the Washington investigative team at DCinvestigations (at) ap.org.
Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the first of a two-part series.
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Rules vary so widely that, on any given game day, a team with a strict no-steroid policy can face a team whose players have repeatedly tested positive.
An investigation by The Associated Press — based on interviews with players, testers, dealers and experts and an analysis of weight records for more than 61,000 players — revealed that while those running the multibillion-dollar sport say they believe the problem is under control, that control is hardly evident.
The sport's near-zero rate of positive steroids tests isn't an accurate gauge among college athletes. Random tests provide weak deterrence and, by design, fail to catch every player using steroids. Colleges also are reluctant to spend money on expensive steroid testing when cheaper ones for drugs like marijuana allow them to say they're doing everything they can to keep drugs out of football.
"It's nothing like what's going on in reality," said Don Catlin, an anti-doping pioneer who spent years conducting the NCAA's laboratory tests at UCLA. He became so frustrated with the college system that it was part of the reason he left the testing industry to focus on anti-doping research.
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EDITOR'S NOTE — Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the first of a two-part series.
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While other major sports have been beset by revelations of steroid use, college football has operated with barely a whiff of scandal. Between 1996 and 2010 — the era of Barry Bonds, Mark McGwire, Marion Jones and Lance Armstrong — the failure rate for NCAA steroid tests fell even closer to zero from an already low rate of less than 1 percent.
The AP's investigation, drawing upon more than a decade of official rosters from all 120 Football Bowl Subdivision teams, found thousands of players quickly putting on significant weight, even more than their fellow players. The information compiled by the AP included players who appeared for multiple years on the same teams.
For decades, scientific studies have shown that anabolic steroid use leads to an increase in body weight. Weight gain alone doesn't prove steroid use, but very rapid weight gain is one factor that would be deemed suspicious, said Kathy Turpin, senior director of sport drug testing for the National Center for Drug Free Sport, which conducts tests for the NCAA and more than 300 schools.
Yet the NCAA has never studied weight gain or considered it in regard to its steroid testing policies, said Mary Wilfert, the NCAA's associate director of health and safety.
The NCAA attributes the decline in positive tests to its year-round drug testing program, combined with anti-drug education and testing conducted by schools.
The AP's analysis found that, regardless of school, conference and won-loss record, many players gained weight at exceptional rates compared with their fellow athletes and while accounting for their heights.
Adding more than 20 or 25 pounds of lean muscle in a year is nearly impossible through diet and exercise alone, said Dan Benardot, director of the Laboratory for Elite Athlete Performance at Georgia State University.
In nearly all the rarest cases of weight gain in the AP study, players were offensive or defensive linemen, hulking giants who tower above 6-foot-3 and weigh 300 pounds or more. Four of those players interviewed by the AP said that they never used steroids and gained weight through dramatic increases in eating, up to six meals a day. Two said they were aware of other players using steroids.
"I ate 5-6 times a day," said Clint Oldenburg, who played for Colorado State starting in 2002 and for five years in the NFL. Oldenburg's weight increased over four years from 212 to 290.
Oldenburg told the AP he was surprised at the scope of steroid use in college football, even in Colorado State's locker room. "There were a lot of guys even on my team that were using." He declined to identify any of them.
The AP found more than 4,700 players — or about 7 percent of all players — who gained more than 20 pounds overall in a single year. It was common for the athletes to gain 10, 15 and up to 20 pounds in their first year under a rigorous regimen of weightlifting and diet. Others gained 25, 35 and 40 pounds in a season. In roughly 100 cases, players packed on as much 80 pounds in a single year.
In at least 11 instances, players that AP identified as packing on significant weight in college went on to fail NFL drug tests. But pro football's confidentiality rules make it impossible to know for certain which drugs were used and how many others failed tests that never became public.
Even though testers consider rapid weight gain suspicious, in practice it doesn't result in testing. Ben Lamaak, who arrived at Iowa State in 2006, said he weighed 225 pounds in high school. He graduated as a 320-pound offensive lineman and said he did it all naturally.
"I was just a young kid at that time, and I was still growing into my body," he said. "It really wasn't that hard for me to gain the weight. I love to eat."
In addition to random drug testing, Iowa State is one of many schools that have "reasonable suspicion" testing. That means players can be tested when their behavior or physical symptoms suggest drug use. Despite gaining 81 pounds in a year, Lamaak said he was never singled out for testing.
The associate athletics director for athletic training at Iowa State, Mark Coberley, said coaches and trainers use body composition, strength data and other factors to spot suspected cheaters. Lamaak, he said, was not suspicious because he gained a lot of "non-lean" weight.
But looking solely at the most significant weight gainers also ignores players like Bryan Maneafaiga.
In the summer of 2004, Bryan Maneafaiga was an undersized 180-pound running back trying to make the University of Hawaii football team. Twice — once in pre-season and once in the fall — he failed school drug tests, showing up positive for marijuana use but not steroids.
He'd started injecting stanozolol, a steroid, in the summer to help bulk up to a roster weight of 200 pounds. Once on the team, he'd occasionally inject the milky liquid into his buttocks the day before games.
"Food and good training will only get you so far," he told the AP recently.
Maneafaiga's former coach, June Jones, said it was news to him that one of his players had used steroids. Jones, who now coaches at Southern Methodist University, believes the NCAA does a good job rooting out steroid use.
On paper, college football has a strong drug policy. The NCAA conducts random, unannounced drug testing and the penalties for failure are severe. Players lose an entire year of eligibility after a first positive test. A second offense means permanent ineligibility for sports.
In practice, though, the NCAA's roughly 11,000 annual tests amount to a fraction of all athletes in Division I and II schools. Exactly how many tests are conducted each year on football players is unclear because the NCAA hasn't published its data for two years. And when it did, it periodically changed the formats, making it impossible to compare one year of football to the next.
Even when players are tested by the NCAA, experts like Catlin say it's easy enough to anticipate the test and develop a doping routine that results in a clean test by the time it occurs. NCAA rules say players can be notified up to two days in advance of a test, which Catlin says is plenty of time to beat a test if players have designed the right doping regimen. By comparison, Olympic athletes are given no notice.
Most schools that use Drug Free Sport do not test for anabolic steroids, Turpin said. Some are worried about the cost. Others don't think they have a problem. And others believe that since the NCAA tests for steroids their money is best spent testing for street drugs, she said.
Doping is a bigger deal at some schools than others.
At Notre Dame and Alabama, the teams that will soon compete for the national championship, players don't automatically miss games for testing positive for steroids. At Alabama, coaches have wide discretion. Notre Dame's student-athlete handbook says a player who fails a test can return to the field once the steroids are out of his system.
The University of North Carolina kicks players off the team after a single positive test for steroids. Auburn's student-athlete handbook calls for a half-season suspension for any athlete caught using performance-enhancing drugs.
At UCLA, home of the laboratory that for years set the standard for cutting-edge steroid testing, athletes can fail three drug tests before being suspended. At Bowling Green, testing is voluntary.
At the University of Maryland, students must get counseling after testing positive, but school officials are prohibited from disciplining first-time steroid users.
Only about half the student athletes in a 2009 NCAA survey said they believed school testing deterred drug use. As an association of colleges and universities, the NCAA could not unilaterally force schools to institute uniform testing policies and sanctions, Wilfert said.
"We can't tell them what to do, but if went through a membership process where they determined that this is what should be done, then it could happen," she said.
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Associated Press writers Ryan Foley in Cedar Rapids, Iowa; David Brandt in Jackson, Miss.; David Skretta in Lawrence, Kan.; Don Thompson in Sacramento, Calif., and Alexa Olesen in Shanghai, China, and researchers Susan James in New York and Monika Mathur in Washington contributed to this report.
___
Contact the Washington investigative team at DCinvestigations (at) ap.org.
Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the first of a two-part series.
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