What to do with that pro sports fortune . . .
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TEXT OF INTERVIEW
MARK AUSTIN THOMAS: Professional athletes are more than just sports figures. With high salaries and lucrative endorsements, many are also millionaires. They're searching for ways to invest their money. What kinds of businesses should they be looking for? David Carter is the Director of the USC Sports Business Institute. I asked him if this push for business investments is a fad or a trend?
DAVID CARTER: I think clearly it's a trend, but I think you have to keep in mind that very few athletes have the sustained and the required earning power beyond the likes of Shaquille O'Neal or Andre Agassi who we've heard about in the last week or so, to really make real estate one of their core opportunities. I mean many athletes have real estate as do others in their investment portfolios, but for some of these athletes, they're making real estate a core business of theirs after their playing careers
THOMAS: What does it take for these athletes to be successful when pursuing other business opportunities?
CARTER: There are a few things. I think first and foremost they really have to surround themselves with the right kind of management team, advisors that are going to teach them, counsel them on some of the nuances and some of the intricacies of getting involved in finance, in business, especially in real estate as we've seen. And I think also, fairly rapidly they have to develop some real credibility. They've got to develop the same kind of street sense in business as they have in similar ways in sports with figuring out how to play the game. So I think those things are very, very important because they really can't just rely on their name as novelty because when it's all said and done, businesspeople are much more concerned with making money than they are with brush with celebrity for instance.
THOMAS: How do they do that? How do they get this street cred? How do they get the street smarts to know how to make the right business calls?
CARTER: I think they've gotta take the same discipline, the same mindset to business as they do in sports. You think about how they've perfected their craft. If they can take that, learn from coaching, in this case maybe from financial advisors or other real estate magnates, we've seen that here in Southern California with Magic Johnson. We've seen it also with Oscar de la Hoya. You apply that same hard work ethic, you learn, you teach and so forth and pretty soon you do have that credibility. But again it can't just be novelty. These athletes can't just license their names and expect to make a lot of money. People want to know that they're aware of what they're talking about.
THOMAS: What are some other areas of business we might see athletes become involved in?
CARTER: One of the areas I think is really near and dear to them is sports franchise ownership and if you think about it, there's a real comfort level here for these athletes. The fans know them, the communities revere them and they sort of understand how that business operates. Now they may not have seen it from the management side, but from the labor side I think they understand that. You know, Wayne Gretzky in Phoenix, Mario Lemieux in Pittsburgh, John Elway in Denver with arena football league team. And so these guys are great examples of that trend, but once again, fans like that, they want to see that great athletes are involved in their franchises, but what are they looking for? They're looking for wins and losses. To sports fans, that's their return on investment, not making money. They want to see that these athletes are credibly building these organizations or they too will fail in undertakings like franchise ownership.
THOMAS: David Carter is the Director of the USC Sports Business Institute. And in Los Angeles, I'm Mark Austin Thomas. Thanks for joining us. Have a great day.