Pro Athletes Should Ensure They Have the Right Financial Team Around Them


Ben Simmons Talks to Maverick Carter

The #1 overall pick in 2016’s NBA draft, Ben Simmons, recently spoke with Maverick Carter on The Undefeated’s video series, Kneading Dough, which focuses on how athletes deal with money:

One exchange between Carter and Simmons was particularly interesting:

 

Carter: Is there one decision business-wise for you at a young age that stuck out to you that was “that was the best business decisions I made.”

Simmons: Probably firing my last advisor...financial advisor.

Carter: Your first advisor?

Simmons: Yeah.

Carter: Wasn’t the person you wanted around?

Simmons: No, and that was when I realized I really need to get this together before it gets worse.

 

I wish Carter and Simmons had dug deeper into how Simmons identified his problem with his financial advisor and what the problems were. Simmons or someone close to him must have identified some red flags by the financial advisor to cause him to fire him. Fortunately, he realized this as a second year pro instead of years later. Instead of blindly relying on an important member of his financial team, Simmons identified a problem early and took care of it.

Team Play

The Philadelphia Eagles just won a thrilling Super Bowl, one so wild that the quarterback who set the record for most pass yards in a Super Bowl lost the game! It was also the highest number of points a losing team has ever had in the Super Bowl.

 

The Eagles quarterback, Nick Foles, had quite a journey to win Super Bowl MVP. In 2013, he had an amazing season as the Eagles starting QB but later was waived by the Eagles, played for the Rams and Chiefs, and after considering retirement, made his way back to Philadelphia this year. Foles backed up Carson Wentz, who was having a career year and a favorite for League MVP until he tragically tore his ACL and missed the rest of the season. Many pundits said the Eagles season was over, but the Eagles trusted their team’s talent.

 

It’s easy to see why the Eagles trusted each other. They not only got to know each other personally, but they saw how well each other performed where it mattered: on the field. The Eagles knew they were a special team with Wentz. When he went down, the team had to trust in Foles, who ultimately verified their trust with one of the best postseasons a quarterback has had.

 

You also see how teams begin to distrust each other. Look at the Cleveland Cavaliers right now. Off the court, you have stories being planted by someone on the team to the media about Kevin Love not playing hard enough or Isaiah Thomas defending himself while seemingly burying the team. On the court, they’re not playing as a team, evidenced by their recent blowout losses to the Houston Rockets and Orlando Magic. It’s easy to verify the trust is gone within this team by watching their play on the court.

Your Other Team

Amidst all of this, a pro athlete still has another team to deal with off the field: his team of advisors, including his agent, business manager, financial advisor, and accountant. How does an athlete ensure he/she can trust his financial team? Can he follow his financial’s teams progress and performance in the same detail and scope that he follows his teammates?

 

Many athletes do not provide this level of oversight, and instead choose to blindly trust their financial team. Take Glenn Dorsey, the stud defensive lineman who came out of LSU, and was drafted fifth overall in 2008. Dorsey was contacted by Michael Rowan while still in college to offer to be his financial advisor and help with bill payment. Once Dorsey was drafted, Rowan entered into a verbal agreement with Dorsey to provide his financial services for an annual fee between $15,000 to $50,000. Rowan also directed Dorsey to provide him access to his bank accounts.

 

Dorsey, and a host of other pro athlete victims, were not vigilantly watching over their bank accounts, and over the course of four years, Rowan embezzled $2.9 million. He was ultimately caught, pled guilty, and sentenced to 65 months in prison. No indication was made that money had been returned.

 

This trust was not only abused, but Rowan also apparently lead his clients to another businessman, Bryce Kyle, who was later sued by a host of pro athletes for private investments in oil and gas and airplane hangars. These referral relationships should also be reviewed with a skeptical eye, and you should ensure it is in your best interests.

 

To understand why a case like Dorsey’s happens, consider again that teammates gain or lose trust of each other when they perform against opponents. A quarterback's confidence in the pocket rises and falls with the ability of his offensive line. When an athlete’s financial team has no oversight or checks and balances in place, there’s no competition to know how good or bad the athlete’s financial team is.

 

Athletes may presume their financial team is great based on personal feelings or recommendations by their teammates, rosy annual reviews, or more likely, advisors gain an athlete’s trust over the years and are no longer watched. Most of the frauds I’ve studied - by Charles Banks, Martin Louis Blazer, Ash Naryan, Jeremy Joseph Drake - occur many years after relationships are made. Further, a 2016 study of 2,400 cases of fraud by the Association of Certified Fraud Examiners showed that 88% of fraudsters are first-time offenders.

 

That 88% statistic is why I continually say “trust but verify” because no one knows when someone is going to defraud them. If they did, we’d be able to stop fraud before it occurred. “I put too much trust in this person” is a refrain all too common in frauds against athletes.  

 

So how do athletes know if they have the right financial team around them? As former NBA pro Adonal Foyle says, audit your team. You can only be sure of your financial team if you or an independent third party like BrightLights ensures that your advisors are not only saying the rights things, but doing the right things under the bright lights.