In retrospect, it looks like the CFL's decision to not allow D'Angelo to buy a franchise for Ottawa was the right one.
The story below is from today's Toronto Star.
An Argo-Cat fan
D'Angelo's fortunes fading fast
Steelback in 'liquidity crisis' Generic drug entrepreneur Barry Sherman has gained court protection for D'Angelo Brands and Steelback Breweries in efforts to save the two former high-flying beverage companies which together owe his family firm more than $120 million.
Nov 20, 2007 04:30 AM
`Holy s---, Jennifer, you're really beating the hell out of me. ... Will you leave me alone?"
That was Frank D'Angelo speaking – the last time we spoke, that is, when the sometime crooner turned beer impresario was singing that song about how his finances were in great shape and I was writing that his company smelled like a vast, over-leveraged, money-losing mess.
So let's just say we were not exactly struck dumb by the news that D'Angelo Brands (the juice company and such) and Steelback (the brewery enterprise) have filed for and been granted protection under the Companies' Creditors Arrangement Act.
We knew that D'Angelo's companies were indebted to Barry Sherman's Wasanda Enterprises Inc. to the tune of $100 million and that the debt had been collateralized by every asset Frank D'Angelo possessed, including his Forest Hill Rd. home. (The same home, by the by, that was previously inhabited by convicted fraudster Michael Holoday.)
Court filings now tell us that the total debt to Wasanda sits at $101,619,464.20 plus another 20 mil or so in accrued interest.
So there's the first non-surprise.
The second non-surprise is that the marketing and promotional costs for the beer lineup, from Copperhead ("a Bohemian style Pilsener") to Steelback Thunder (8 per cent alcohol), exceeded sales revenues.
Steelback's national ad buys on Hockey Night in Canada and D'Angelo's own admission that he planned to spend $15 million on marketing this year signalled as much. The brewery recorded a pre-tax loss of $11.6 million in its last fiscal year and a thunderous $5.9 million in the first four months of this year.
The latter number is all the more startling when you realize that the quarter ended Aug. 31, when beer sales are supposed to be at their highs. In what was, if I recall rightly, a lovely summer, it cost D'Angelo $5.4 million in sales and marketing costs to push $2.5 million worth of suds.
The cash-sucking sounds make the beer business appear to be little more than a vanity enterprise for Frank D'Angelo. But then again, the guy is a walking brand. Witness the black Corvette he would drive around town, promoting Steelback, or the bright blue '07 Toyota FJ Cruiser, promoting the Cheetah line of "power surge" drinks.
The Cheetah drinks fall under the D'Angelo Brands rubric, joining the Duh! line of old-fashioned sodas and the apple juice that made the early beginnings of the company.
In 2005 D'Angelo Brands lost more than $10 million. In 2006 it lost close to $14 million. The loss for the first four months of this year: $8.1 million. And here we were thinking that the juice side of the operation provided ballast for that nutty beer idea.
A mere three weeks ago, when Barry Sherman installed his son, Jonathon, in the chief executive's chair of both companies, D'Angelo made the transfer of power sound like a dream come true.
"This was a decision that I made," he said at the time. "It puts money in my designer pants, I just want to emphasize that."
I asked him whether the sexual assault charge he faces had anything to do with his departure. He said it absolutely did not. (The case is scheduled to be heard in June.)
He professed contentment with the corporate state of affairs. "I met a guy like Barry Sherman. I got a chance to create from zero, from nothing, an idea, right? A catalogue of beers that are selling across Canada. You don't know what that does for me."
Oh sure we do. What it did was feed Frank D'Angelo's ego.