Investing in Querrey: High-risk or safe returns?

Updated: March 17, 2009

Calculated risk

Finding investors to slap down hard-earned cash to bankroll the future of promising tennis players has long been a big part of the game. Rising talents have received free coaching and/or earned tennis academy scholarships, and wealthy patrons have augmented bank accounts of tour newbies.

Sam Querrey, a good-natured 21-year-old, is no stranger to raising money from outside sources. However, the 6-foot-6 American with a serve designed to knock the socks off opponents has put a unique spin on financial sponsorship.

Using an enterprising blueprint designed by his father, Mike, a mortgage banker, Querrey invited investors to gamble on his future success: Put money down now to receive a guaranteed percentage of his gross annual prize money, paid in quarterly installments, for a set number of years.

Paul Crock/AFP/Getty Images

Querrey's "shareholders" must be delighted with the American's success and rise in the rankings.

Horse racing is a comparable investment: Investors will buy into shared ownership of a race horse for an interest in the purse.

Of course, as in buying stocks or dabbling on horses, the Querrey deal is speculative. However, if Querrey can match last year's standards -- he finished 2008 ranked No. 39 and earned $546,835 -- his so-called shareholders are in a sterling position to not only recoup their stake, but to see a profit.

When ESPN.com reached him by phone, Querrey was uncomfortable discussing the details of the business plan, believing it to be a private financial deal between his investors and himself. But the plan calls for him to turn over at least 10 percent of his yearly prize money.

California attorney Kent Seton, a former ATP player who is the founder and CEO of 123EZcorp, said the Querreys asked him to set up the legal documentation around the investment plan when Sam was 19 years old.

"It's a clever idea because it gives him some extra guaranteed income today," Seton said. "It's a way of raising money to essentially get the most opportunity out of a career playing tennis. It's definitely a smart, thinking-outside-the-box idea."

Traditionally, most tennis investors provide money and resources invaluable to the development of many young players. Arthur Ashe and Althea Gibson couldn't have emerged as eventual Grand Slam champions if not for the guidance and financial support of Dr. Walter Johnson. James Annenberg Levee, an heir to the Annenberg publishing fortune, helped Monica Seles, Steffi Graf, Arantxa Sanchez-Vicario and Jana Novotna, among others. And even after they became millionaires, he would still give the players expensive presents. Levee was a rare tennis philanthropist in that he wasn't all that interested in a return on his money -- he was happy for the tax deduction, acceptance and front-row seats at the world's best arenas.

Most benefactors, however, are hopeful for some amount of payback from their endowment, although that doesn't always happen.

Larry Stefanki, who won two titles before becoming a coach, most recently for Andy Roddick, would have had difficulty becoming a pro without a financial backer. "I had zero money when I left Berkeley," Stefanki said. "I remember I had $35 in my Bank of America account the day I graduated. I was like, 'Now what do I do?' but I knew I wanted to play."

Stefanki's future father-in-law, former San Francisco 49er John Brodie, arranged for his agent, George Saxe, to become Stefanki's sponsor. Saxe deposited money into Stefanki's bank account and every six months the two would meet -- Stefanki bearing a detailed accounting report with receipts -- when it would be determined if the business venture was still viable. But Saxe was no quiet partner: Stefanki remembers Saxe questioning whether Stefanki could make it playing against the likes of Jimmy Connors, Guillermo Vilas and John McEnroe.

As beneficial and amicable as the arrangement was, Stefanki was delighted when after 3½ years, he was able to write Saxe a check with interest. Knowing how he felt, Stefanki was curious as to why Querrey, who is doing well financially, would want to be tied to investors.

"It was kind of like going to the school principal," said Stefanki, who stills visits with Saxe. "He was a super guy, but I wanted to get out of the deal because I didn't want to have George looking over my shoulder."

Though many would gravitate to Stefanki's view, Querrey believes his partnership with investors is a win-win situation for all concerned.

Sandra Harwitt is a freelance tennis writer for ESPN.com.


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