Players' trust tested as business partners

Sales pitches occur every week in NFL locker rooms, as players dish their teammates the scoop on an easy dollar. But sometimes deals result in tragic consequences.

Originally Published: June 10, 2008
By Seth Wickersham | ESPN The Magazine

Only Steve Atwater knows how terrible it is to be at those Denver Broncos alumni events, when he has to look his friends in the eye ravaged by guilt, knowing the responsibility he bears.

The former safety did what a lot of players do: He had recruited his teammates to invest with him, this time in International Management Associates, a hedge fund operated by Kirk Wright, a Harvard-educated entrepreneur. Respected and admired, with a business and finance degree from Arkansas, Atwater had the locker-room credentials to get guys to open their wallets. He had invested $2.8 million of his own and even joined IMA as a client liaison after his playing days ended in 1999, helping six players -- including former teammates Terrell Davis, Ray Crockett and Rod Smith -- put in a total of $20 million.

Atwater didn't know then what everyone knows now: IMA was a scam. The players' money is gone with the rest of the $185 million that Wright bilked. IMA is gone too, collapsed in February 2006 after it sent out distribution checks that bounced, prompting investors to sue. And Wright is gone forever, having hung himself in jail on May 24, days after an Atlanta jury convicted him of 47 counts of mail fraud, securities fraud and money laundering, punishable by 710 years in prison.

Lawyers will determine what happens next, as the players have filed a civil suit against the Players Association and NFL, claiming the union endorsed IMA. The NFLPA denies the claim.

[+] EnlargeSteve Atwater
Al Pereira/Getty ImagesFormer Denver Broncos star Steve Atwater and several other NFL players reportedly lost millions of dollars in investments.

The IMA mess is unparalleled for pro football players in terms of magnitude and scope and loss, but the behavior that led them to do business together is common. Teammates co-invest all the time, sometimes dangerously. Most have no formal financial training. Advisers are poorly regulated. And scam artists, more than ever, target athletes. It's easier than ever to get screwed.

Teammates often put their financial faith in each other, just like on Sundays. The players trusted Wright, a world-class hustler. But they trusted Atwater more. He and the other players declined comment for this story, citing the ongoing legal case, but in 2006 Atwater told the Atlanta Journal-Constitution, "That's the worst part for me. I brought in my best friends. That hurts more than my loss."

Sales pitches occur every week in NFL locker rooms, where players dish their teammates the scoop on an easy dollar. "All the time guys are walking around saying how they have the best ideas to make money," says Cleveland Browns receiver Donte' Stallworth. "Everyone thinks their idea is the greatest. One teammate of mine wanted me to invest in funeral homes."

Stallworth passed on that prospect. He did invest with a former teammate, Saints DE Will Smith, in O Asian Grill, a South Beach restaurant partially financed by Minnesota Timberwolves forward Antoine Walker. Asked why, Stallworth says, "Because Antoine had invested in it, too. Seemed like a good idea."

If I lost money investing with a teammate, it would drive me crazy. I'd be trying to kill him in practice.

--Kelly Gregg, Baltimore Ravens lineman

Stallworth recently sold his share, and all he'll say is that he doesn't want to put money into restaurants anymore. Though some have successfully co-invested -- former Jacksonville Jaguars Tony Boselli and Mark Brunell own a chain of Whataburgers in Jacksonville -- it's inherently risky, and not just because millions are on the line.

"I'd hate to invest with another football player," says Baltimore Ravens defensive tackle Kelly Gregg, who adds with a laugh, "I know I'm not the smartest guy in the room. If I lost money investing with a teammate, it would drive me crazy. I'd be trying to kill him in practice."

Says Houston Texans right tackle Eric Winston, "It could easily strain a relationship pretty fast. Money can do that."

The NFL and Players Association try to educate rookies about financial planning at the annual rookie symposium. The league offers a four-year financial game plan composed of 16 sequential courses on everything from budgeting to 401(k) to credit management, which are offered at each team's headquarters.

The union, meanwhile, has links on its Web site where players can access financial education information and see a list of advisors, all of whom have been vetted. It even has three members in its financial services department whom players can call. "We see it as a way to provide an extra layer of scrutiny," says Dana Hammond, director of financial advisors.

But how much those services are accessed, and how much information sticks, is debatable. Nobody knows this better than Ravens kicker Matt Stover, who's dedicated most of his 19-year career to learning the financial world, most recently at the Wharton School as part of the NFL/NFLPA initiative to help players plan for their post-NFL lives.

He's alarmed at how few players follow their own finances and leave it all to a financial planner. "Most guys have no budget, no idea how much they spend," Stover says.

Stover was miserable when he heard how much money Atwater and his teammates lost, but he knows how easily it can happen. Most players are hungry for a quick buck, not 25-year flow charts. He knows that few players plan their long-term finances because they ask him for help doing it. Stover keeps a budget chart in his locker, available at all times for teammates who need a template for starting one.

But Stover's best advice also requires the most work: Learn the financial world on your own. Don't leave it to someone else. And cross-check everything. Stover typically shows the portfolio a financial adviser prepares for him to at least two other advisers, just to make sure it's sound. Before he invests in a company, he and his lawyer pore through its books.

Stover hopes that nobody else will be in Atwater's shoes, left alone with the fallout from his teammates. Atwater hopes the same, so that nobody gets scammed -- and so that nobody else has to feel that awful when he sees his teammates. "They may be upset at me," he said in 2006. "None of them have told me that. They've been real gracious."

He's lucky. Graciousness doesn't get their money back.

Seth Wickersham is a senior writer for ESPN The Magazine and a columnist for

Seth Wickersham | email

ESPN The Magazine senior writer
Seth Wickersham joined ESPN The Magazine after graduating from the University of Missouri. Although he primarily covers the NFL, his assignments also have taken him to the Athens Olympics, the World Series, the NCAA tournament and the NHL and NBA playoffs.