Wednesday, November 26, 2008
The Agent's Perspective
Can Vick turn to anyone for help?
Alan Nero has seen many, many an athlete get rich, but he's also seen them crash and burn. At least with the checkbook.
"I feel bad about it, because I started out as a financial planner, and you think you can save everyone," he says. "But you see the carnage sometimes."
Nero is the founder of Chicago-based CSMG Sports, a global sports management and media firm that represents a diverse collection of active athletes such as Dwyane Wade, Chris Bosh, Felix Rodriguez and Randy Johnson as well as managing types like Lou Piniella and Joe Maddon. He's been at it for 30 years and has seen it all. As a guy whose had to walk into contracts with a player only to see the guy blow it later, he has a unique view.
Guys Lose Perspective …
"It's really difficult to have universal success. If you've ever bought a lottery ticket, you tend to do it when the stakes are running highest, right? When you see that $250 million, that's when you're in. That's because you can already see what you want to do with it. A lot of athletes are at this point, and there's time to fantasize about all they can do. Psychologically, it's a lot harder than it looks from that standpoint to maintain perfect control."
Give It Away Now …
"There's a misconception that guys blow all this on stuff they want. A lot of the time, it happens for everybody else. Take $50 million. To start, you just hand at least 20 of that immediately to Uncle Sam. It's gone. Then you get set up. But then there's all those things you said you'd do. You pay off Mom's mortgage and Dad's mortgage and get cars and such for siblings and friends, and they all see what others got. And it's not just the one-time payments, it's the liabilities, the recurring bills and payments on stuff that you bought as gifts. It adds up and your money goes incredibly fast."
We Really Do Try to Advise, but …
"A lot of agents are attorneys, and know how to make sure they aren't liable for a guy's errors. But we try to have a cradle to the grave approach where we help guys make the right choices, choose financial advisers they can trust, and think about what their lives will be like in twenty years. I think that's a mis-conception that we just step in and negotiate the deals. Of course we want guys to be smart and to take care of their money, it'll have an affect on our ability to work with them. Think about it. it's irresponsible not to try to help a guy do the right thing."
You Can Lose Someone …
"Oh yeah. I've been in a situation where it was to the point I felt I had to get out of a relationship. I could see it coming. There was no control. I can't name him, but it was a deal where we had to terminate our relationship. Sure enough, years later the guy has the IRS on him, bankruptcy, everything you can imagine."
Because It's Easier Than It Looks …and Harder
"It's easier than it looks to lose all the money you think you ever need, and it's harder than it looks for guys to say no."
Can You Rescue Someone?
"Again, most agents are attorneys. It's not like you just enter into an agreement with a guy like you're partners at that point. If he's liable, he's liable. It's his money earned, and his lost."