SBJ/October 17 - 23, 2005/SBJ In Depth

One athlete’s strategy

When Alge Crumpler signed his first NFL contract in 2001, after being drafted in the second round by the Atlanta Falcons, he put nearly all of what was left of his $1.4 million signing bonus after taxes into investments.

It’s a strategy his financial adviser, Wilson Hoyle of CapTrust Financial Advisors in Raleigh, N.C., recommends for his young NFL clients. With only the bonus portion of NFL contracts guaranteed and careers lasting on average slightly more than three years, Hoyle preaches the importance of fiscal restraint and long-term planning.

“Most people can make a bad financial decision and have 20 or 30 years to recover from it,” Hoyle said. “With NFL careers so short, one bad financial mistake can ruin a player financially.”

Though some athletes try to maintain an “MTV Cribs” lifestyle, Hoyle finds pro clients generally willing to sacrifice for long-term security. Crumpler, who has played in the last two Pro Bowls, has stayed the course, even after markets were pummeled on Sept. 11, 2001, shortly after his pro career began.

“Every day I was reading about huge percentage drops in the market,” said Crumpler, 27. “I’d hear of people losing 60 percent of their portfolio, and I was down only 3 to 5 percent.”

Hoyle and his partners advise their clients, which include about 75 NFL players, to diversify and spread the risk. The company charges an annual fee of roughly 1 percent of assets under management. Much of Crumpler’s portfolio is spread across seven different fund managers.

About 60 percent of the portfolio is in fixed income investments such as municipal and corporate bonds, and treasury bills. Approximately 20 percent is in real estate, either through private investments or through hedge funds. Five percent is in international stocks and another 5 percent in alternative investments. The remaining 10 percent is a mix of small cap and large cap growth stocks and small cap and large cap value stocks.

“My goal is to protect my wealth,” Crumpler said. “Ninety percent of the guys I talk to want to grow it at rates that are almost impossible to do. Everyone is looking for the next condo project that will triple in value in the next six months.”

Hoyle, 37, a former Wake Forest place-kicker, puts together a financial forecast for each of his clients. The long-term goal is for the player’s portfolio to provide enough income to maintain a comfortable lifestyle for life, especially until age 59, when the NFL’s pension and retirement benefits kick in. A portfolio of, say, $5 million could generate $250,000 a year in income annually after taxes.

After signing a six-year contract extension with the Falcons last November worth $26 million, with about $9.5 million guaranteed, Crumpler has cleared the $5 million portfolio mark.

“He has enough money set aside that if he never plays another down of football, he’ll be fine,” Hoyle said. “Not many top-10 picks his age can say that, let alone second-round picks.”

Crumpler said he’s lived conservatively. He’s refrained from trying to compete in the locker room with flashy cars and other toys. His father and a brother played in the NFL and warned him of the pitfalls.

“We’ve got guys on our team that take their cars back if someone else gets the same car,” Crumpler said. “If a guy has dreamed about a certain car, fine, go out and get it. Just realize that making those kinds of decisions consistently has an impact down the road. I’d rather invest in my future.”

Pete Williams is a writer in Florida.

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