Growing Number Of Pro Athletes Starting Side Businesses
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Brand Part Of Growing Trend
Of Athletes With Side Businesses |
Clippers F ELTON BRAND, who co-founded Gibraltar Films, is part of a “growing trend among NBA players and other highly compensated pros who are using their millions to start high-risk businesses in areas such as music, film and real estate,” according to Thomas Heath of the WASHINGTON POST. Agents said that the trend toward “athletes as entrepreneurs ... picked up with” Basketball HOFer MAGIC JOHNSON, whose Johnson Development Corp. develops and operates franchises of Magic Johnson Theatres, Starbucks, T.G.I. Friday’s and Washington Mutual. Warriors G BARON DAVIS “considers Johnson a mentor” for his Verso Entertainment. Davis, who also runs a record label, said, “Anything that I invest in I want long-term value and long-term returns. ... I understand my financial situation and there are certain risks I allow myself to take.” Heat C SHAQUILLE O’NEAL’s portfolio includes a record label, an apparel company and real estate investment and development company the O’Neal Group.
WARNING SIGNS: Heath writes some financial advisers representing pro athletes “try to steer their clients away from high-risk ventures.” Agent MARK BARTELSTEIN said, “You are getting into areas that require a great deal of capital, and if you’re doing it as a hobby, you could have a lot of problems with it.” Kings F RON ARTEST said that he has “recouped a big chunk of the $1.5[M] he has spent so far on his own record label, TruWarier.” Artest: “The first year I put about $1[M] into it, and I made a million back.” But Heath notes Artest this year “has reduced his outlay in TruWarier to about $500,000, and he has yet to earn that back” (WASHINGTON POST, 10/24).
WHAT COULD GO WRONG: The SOUTH FLORIDA BUSINESS JOURNAL’s Brian Bandell reports Tigers 2B PLACIDO POLANCO has secured a $10.8M settlement against developer ROBERT THORNE’s Miami-based 1201 West LLC over a stalled condominium deal. In ’03, Polanco and Miami resident JORGE UNANUE invested $1.575M for a 50% stake in the development, but “there was no building permit and no construction was done.” Bandell notes Braves SS EDGAR RENTERIA and Twins 2B LUIS CASTILLO “also have no building to show for their [$1M] investment in Thorne’s Westside Lofts condo project” (SOUTH FLORIDA BUSINESS JOURNAL, 10/20 issue).
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