SBJ/February 20-26, 2012/People and Pop Culture

Point guard's a playmaker off the court

Twelve-year vet set for life after basketball with balanced portfolio and entertainment, digital media investments

Reviving the New York Knicks was supposed to be part of the plan for two-time NBA All-Star point guard Baron Davis. Instead, Jeremy Lin has taken the league by storm in leading the Knicks while Davis, whose injury-plagued season made way for Lin’s improbable story, finds himself in the later stages of his career.

Photo by: PATRICK E. MCCARTHY
Only time will tell whether Davis can overcome his injuries and salvage his playing career, but either way, Davis, the 12-year veteran now on his fifth NBA roster, has set himself up for life after basketball as he maintains an entrepreneurial approach to his life outside of the NBA. Whether it’s making a movie about gang life in Los Angeles or launching networks on YouTube, the single, 32-year-old Los Angeles native can afford such pursuits with a portfolio built to fund a variety of business interests ranging from movie production to digital media ventures to a TV show.

It’s a luxury that comes with earning about $150 million since Davis was selected by the then-Charlotte Hornets as the third pick of the 1999 NBA draft, according to his longtime agent Todd Ramasar.

While the engaging Davis is quick to put his immediate focus on recovering from a back injury and returning to the court, he complements that effort with a broad business vision that focuses on entertainment.

“I have always had the spirit for being an entrepreneur and I am willing to step out and manage my own business off the court,” Davis said, relaxing in the Knicks’ plush suburban New York training facility after a recent team practice.

Davis (at 1999 draft with David Stern) walked his checks to the teller in his rookie year.
Photo by: NBAE / GETTY IMAGES
Managing his financial life today is starkly different than when Davis was a 19-year-old rookie living in Charlotte after being raised by his grandmother in South Central Los Angeles and attending UCLA. On paydays his during his rookie year, Davis would drive down to the local bank and stand in line to personally deposit his hefty paychecks.

He made more than $2 million during his 1999-2000 rookie season, but he wasn’t about to squander his newfound wealth.

“I tell young guys now that when they give you the money, they don’t give you the instructions with it,” Davis said. “I’d heard of other athletes who had lost their money, so I’d go to the bank and cash those checks myself because I wanted to know that the money was mine. For a 19-year-old, these were huge checks, and it took the lady at the bank a few times to know who was this young guy cashing these checks.”

He says he saved most of his paychecks during that rookie year as he followed his one investment rule: Know where your money is.

“A fool and his money shall soon part,” Davis said. “You have to trust the right people and you have to respect money.”

Today, Davis takes a far more sophisticated approach to his finances. For the past five years, he has employed a cadre of advisers to help him preserve his wealth while also allowing him the financial freedom to pursue his outside business interests. The inner circle includes his contract agent Ramasar, who works for BDA Sports Management and who was also a teammate of Davis’ at UCLA. BDA also handles marketing and public relations for Davis.

In addition, Davis employs Chad Gordon, a high school friend and former Wall Street analyst, to manage his non-basketball business opportunities.

Davis’ financial portfolio is kept separate from BDA to prevent any conflicts, and Davis runs most of his non-basketball deals through Gordon.

“You don’t want your agent and business manager in the same boat,” Davis said, looking to avoid conflict between his agent and his money advisers.

Related story: Baron's portfolio and the 5 percent solution

Ramasar has negotiated most of Davis’ NBA contracts, including the five-year, $65 million free agent deal he signed with the Los Angeles Clippers in 2008. But maximum-contract days are likely over for the NBA veteran. The Cleveland Cavaliers, who acquired Davis through a trade last year, waived him before this season began as part of the NBA’s amnesty provision that allows teams to wipe off one player’s contract deemed to eat up too much salary cap space. (Though cut in December, he will still collect his remaining $25 million on the deal.) He was signed by the Knicks for the $1.4 million veteran league minimum.

Davis and his advisers, with an eye to the China market, did a deal with shoemaker Li-Ning.
Photo by: ICON SMI
Outside of his playing contracts, Davis has taken an aggressive, yet nontraditional, approach to his endorsement relationships, which Ramasar takes the lead on.

“Aside from negotiating [NBA] contracts, I also solicit endorsement deals for Baron,” Ramasar said.

One of those deals was an equity stake deal he helped Davis broker with Vitaminwater three years before it was sold to Coca-Cola in 2007 for $4.1 billion. Sensing an early opportunity with the company, Davis took an unconventional approach to landing the deal. He was familiar with Vitaminwater and used the product. Wanting a closer relationship, he invited company officials to his house in Las Vegas and pitched them on why they should include him in the company.

“I was a 23-year-old making a presentation to them on being an investor,” Davis said. “I wanted to participate on the back end and work with the company to create ideas. I had connections in the hip-hop community and in sports, and I wanted to explore being part of the brand.”

Davis cashed out after Vitaminwater’s sale to Coke. He declined to disclose his profits from the deal.

Currently, he has an endorsement deal with the Chinese shoe company Li-Ning and he has an equity deal with Colors Power, a Chinese sports beverage company.

“Given that China is such a growing market, the deals made sense,” Gordon said. “Opportunities come in, and we put the traditional analysis to it to determine what makes sense and what doesn’t. I vet the opportunities and we go back and forth. But Baron is like flypaper. He is very well-connected and brings in people.”

In addition to Ramasar and Gordon, Davis has partnered on some projects with Cash Warren, a classmate from the prestigious private Crossroads School in Santa Monica, Calif., who is also the son of former UCLA basketball great and actor Mike Warren, best known for starring in the critically acclaimed cop drama “Hill Street Blues.”

Much of Davis’ off-the-court focus revolves around the film and Web content industry under his Verso Entertainment venture. Davis created Verso in 2004 as a way to operate within the film industry and is the company’s primary investor. He picked the name Verso, which means the reverse side of a page, to reflect the duality of content in telling stories to inform and entertain.

Under the Verso flag, Davis has five movie production credits to his name, most notably “Crips & Bloods: Made in America,” a documentary that chronicles gang life in Los Angeles. The documentary premiered at the Sundance Film Festival in 2008, but it failed to receive widespread distribution and has not been a major moneymaker.

To learn more about the film industry, Davis interned during the offseason at the well-known entertainment law firm Ziffren Brittenham in Los Angeles. But it’s been a slow, and costly, learning process. His biggest mistake was believing that his success as an NBA player would simply transfer to his efforts in the movie industry.

“I did some gap financing for a movie, and the gap financing went from three months to 2 1/2 years,” Davis said, declining to reveal the total losses. “I was too headstrong without doing enough due diligence. It was a tough lesson.”

Davis produced the documentary “Crips & Bloods: Made in America” and took it to Sundance in 2008. With him are (from left) director and co-producer Stacy Peralta; co-producer Cash Warren and wife, actress Jessica Alba; and executive producer Quincy Jones III.
Photo by: GETTY IMAGES
Davis has been able to offset the losses by establishing what has proved to be an effective multipronged approach in managing his financial portfolio. Cornelius, N.C.-based Cornerstone Financial Partners leads his money management along with Convergent Wealth Advisors in Los Angeles, which handles the portfolio’s international investments. UBS Financial Services in New York manages Davis’ traditional investments, like stocks and bonds (see related story).

Cornerstone has been quarterbacking the portfolio since 2008, and Davis has been with UBS since 2004. Convergent was brought on board within the past year. In addition to the three financial advisers, Santa Monica, Calif.-based Savitsky, Satin & Bacon works as the portfolio’s accounting firm.

Each year, Davis holds an annual meeting with his advisers to set the strategy, and then he has quarterly conference calls to keep track of his financial performance.

“What we have created for Baron is a little unique,” said Jeff Carbone, founding partner of Cornerstone Financial Partners, which also counts NFL players and NASCAR drivers as clients. “We all work together as his investment team, and for Baron, it is not trying to be rich anymore. It is trying to preserve the wealth.”

The three portfolio advisers hold regular calls to review account performance. While Davis takes a more hands-off approach during the NBA season, Gordon always is involved.

These days, the placements are increasingly targeted in digital media, a reflection of Davis’ growing interest in that sector. Davis invested an undisclosed amount in a website called ibeatyou.com, which allows users to compete in a variety of contests and quizzes. In April, he is launching the YouOffendMeYouOffendMyFamily (YOMYOMF) network on YouTube. The channel is aimed at Asian pop culture, with content overseen by film director Justin Lin of “Fast & Furious” fame. Davis also has invested in the recently launched Network of Champions channel, also on YouTube, which Davis touts as a premium entertainment showcase for other athletes.

Ramasar said Davis and his partners are paid by YouTube to deliver original content but would not disclose specific terms.

“The strategy is to provide and explore digital media outlets,” Davis said. “Digital media, viral content and channel programming is where today’s connectivity is.”

Not surprisingly, Davis is a voracious consumer of digital and social media as he invests in startup digital networks.

“I am all over the place when it comes to the sites I visit,” he said. “It is everything from The Wall Street Journal to Wired magazine to Bleacher Report.”

It is up to Gordon to help assess options and protect Davis from overspending in any new venture.

“Baron sees those media properties as a platform for marketing and branding to the direct face of the consumer,” Gordon said. “There is a lot of opportunity in social media, and no one has perfected how to monetize it. But for him, it is about providing content to fans.”

Not all of Davis’ broad business interests are going digital, though. His latest project is a pilot he is creating to be pitched later this year to various television networks called “I Love Boom,” a reality-based sitcom about the life of an NBA player.

“The show will be pitched in the offseason,” Gordon said. “It is not certain whether that will go under the Verso umbrella or in partnership with another company.”

Davis also is shopping a series of children’s books to publishers. The first book, titled “Trading Card Genius,” is co-authored by Davis’ seventh-grade teacher and loosely mirrors Davis’ own experience in school of learning math by using facts and figures off the back of player trading cards.

Both projects meet Davis’ desire for creative outlets outside of basketball and speak to his post-career plans of being focused on various media ventures.

“When it came to basketball, I have always had a great imagination,” Davis said. “I’ve always wanted to dabble in different areas. Tapping into my creative side and writing side is something I’ve wanted to develop on my own.”

This is the second in an occasional series on the investment strategies of athletes. The first one was on golfer Luke Donald.


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