Bull Bear Report May 03 2011

Former Pro Athletes Look to Wall Street for Real Riches

By daniel edward rosen

Andrew Kline devoted nearly all of his high school and college days training for the rigors of football. He spent nights before games foregoing social plans, instead icing his legs and watching hours of games on tape.

"I'd meditate and visualize and do everything I could to be a better football player," said Kline, 34, who played right guard for San Diego State University.

The work paid off. The St. Louis Rams chose him in the seventh round of the 2000 National Football League Draft. Then, an unlucky string of concussions forced him to retire early in 2003.

Kline went into business, eventually starting Park Lane, a Los Angeles-based investment bank that advises sports teams and sports-related businesses. As Park Lane's managing director, Kline said that his new career demands the same intense preparation of his playing days.

"You really need to prep yourself for certain meetings or certain interactions the same way you'd prep yourself to go out and play," said Kline. "This business is so competitive that if you don't show up ready to play, you're going to get beat."

Pro athletes who endure the great physical and emotional toil necessary to succeed in professional sports have the work ethic and drive to make them attractive candidates to Wall Street. When their playing days are over, athletes often turn to new careers in finance.

"You can't be a professional athlete and not have dedication, drive, motivation and competitiveness. Those traits translate very well into roles in any company," said Adam Zoia, the CEO of Glocap, an executive search firm that recruits for hedge funds and private equity funds. "Our clients definitely value someone who has striven and driven themselves to perform at that level."

Former professional athletes also understand how to be an integral member of a team, how to develop a strategy, and how to execute a game plan -- all important for working in finance, said Chris Smith, CEO of Career Athletes, a group that provides career guidance and development for students and professional athletes.

"We just find that constant drive to succeed and [ability] to operate in a high-pressure environment correlates right into the financial industry," said Smith.

Goldman Sachs, which promoted Penn State University's 1986 National Championship quarterback John Shaffer to managing director in 2010, said that the bank has had a "positive" history of hiring intercollegiate athletes.

"Our recruits look for candidates who demonstrate: discipline, teamwork, balance, focus and commitment. These qualities are crucial when one is a part of a team," said a spokesperson for Goldman Sachs.



Post-Playing Days

When the structure of daily practices and weekly games suddenly disappears, retired players are left with the unfamiliar reality of not needing to perform on a daily basis.

"When you're playing, you never think about waking up in the morning and saying to yourself 'what am I going do today?'" said Mark Madsen, 35, who spent nine years playing the Los Angeles Lakers and Minnesota Timberwolves and is now in his first year at the Stanford Graduate School of Business.

Athletes who often retire before turning 40 are too young to cease being competitive, said Mike Karp, Managing Director of Options Group, an executive search adviser.

"These guys still have a career ahead of themselves," said Karp.

There may also be a financial pressure to work in finance. About three-quarters of former NFL players who have been retired from football for two years are bankrupt or dealing with financial difficulties because of unemployment, according to a 2009 Sports Illustrated report. After five years of retirement, 60% of former players for the National Basketball Association are under financial strain.

For other athletes, the sting that comes from not having accomplished their own personal goals during their athletic careers motivates them to succeed in finance. Dave Brown was a back-up quarterback for the New York Giants and the Arizona Cardinals for much of his ten-year NFL career. After retiring from football in 2001, Brown played golf in his downtime and appeared on a Comcast pre-game show for the Philadelphia Eagles. But Brown missed being immersed in a highly competitive atmosphere.

"Most athletes have trouble adjusting to life after sports because they do not find something that satisfies their need for competition," said Brown, 41.

He went to work in the institutional sales division of New York Life, passed his Series 7 examination, then worked as a senior vice president of the private fund marketing group at Lehman Brothers. Brown is now a partner at Greenhill & Co., an investment bank in New York City.

"Some people may lose their drive because they believe they achieved their goals. I sort of feel like I haven't yet," said Brown.



Right For the Job?

As a member of the University of Michigan's "Fab Five" basketball team, Jimmy King reached the NCAA Men's Division I Basketball Championship game in his first two years of college and appeared to be headed for a solid NBA career. But his stint with the NBA's Toronto Raptors was short-lived, and after playing briefly in the Continental Basketball Association and overseas, King retired from the game in 2005.

Intrigued by the world of banking and finance, King reached out to Dugan Fife, a former Michigan teammate then working in finance, about a possible career transition. Fife thought King would be a great candidate for a career in finance, "not only as a minority, but as a financial advisor," said King, 37.

King eventually interviewed with Merrill Lynch, where he worked for two years as a financial advisor in New York City.

"The process of learning the business, learning the craft, was very tedious," said King, 37. He spent his days advising small businesses while spending nights studying for the Series 7 and Series 66 examinations, both of which he passed.

King now runs J King Solar Technologies, a Michigan-based company that designs and installs solar energy systems in commercial and industrial construction projects. He said that the disappointing experience of trying out for -- and being cut from -- numerous NBA training camps helped instill in him the wherewithal to be a tenacious businessman.

"It's just as competitive, you're not going to get every job that you go after, and you have to keep grinding, and you have to keep busting your hump to build your business," said King.

Madsen, the ex-NBA player, is all too aware that most of his Stanford classmates have spent a bulk of their young careers working alongside financial analysts, not next to NBA stars Kevin Garnett or Shaquille O'Neal. But as he spends long days and nights acclimating himself to building financial models and using Microsoft PowerPoint, Madsen takes comfort in a piece of advice given to him by a classmate who was once a member of the USA Water Polo team.

"Maybe we don't have the same relevant experience to someone that had been a consultant for five years," Madsen recalled his classmate saying, "But you know you can get up at 5 A.M. and crank it out for seven hours and just bring that get-it-done type attitude."



The Pro Network

Belonging to a network of fellow former pro athletes -- especially those who have handled their mutli-million dollar earnings with care -- gives other former athletes an opportunity to pursue potential business opportunities.

"I have accessed the NFL family to help with business development, providing access for clients, and finding investors for our projects," said Kline, who declined to specify which deals he's used NFL connections for.

Brown said that he has used the "NFL family" to explore business opportunities with Northgate Capital, a Calif.-based private equity firm that is managed by former San Francisco 49ers tight end Brent Jones and former Detroit Lions fullback Tommy Vardell.

"These guys are serious guys," said Brown of Northgate Capital, which in 2010 had $3 billion in assets under management prior to its high-profile merger with Religare Enterprises.

"I haven't won any business from them, but certainly it was an easier call to make just to introduce myself, and obviously we have a lot of common," Brown added.

And these contacts are not just limited to the pro athlete world, said Karp.

"It could be owners of teams, business owners that they develop relationships with, [corporate] relationships, they have friends from college that make it big," he added.



NBA MBAs

With hopes of making it in the world of business and finance, several NBA players have earned an MBA, like former New Jersey Nets guard Kerry Kittles and former New York Knick Charles Smith, who received their MBAs from Villanova University and Seton Hall University, respectively.

Pat Garrity, who played ten seasons for the Phoenix Suns and the Orlando Magic, is set to complete his MBA at Duke University's Fuqua School of Business. Boston Celtic Shaquille O'Neal earned his MBA from the University of Phoenix while playing for the Miami Heat in 2005.

Kittles currently works as an associate for Ledgemont Capital Group, a boutique merchant bank in New York City, and Garrity is set to work at a hedge fund in Connecticut after he graduates in May.

But an athlete does not have to get an MBA to break into finance, said Zoia of Glocap.

Athletes may appeal to banks and private equity firms, but they are hired more so for business development roles than for technical ones, said Zoia.

"They're not doing detailed financial models and really advising the nitty gritty of the deal structure," said Zoia.

Madsen is not sure what he will do with his MBA once he graduates in 2012. He may work in Silicon Valley, he may coach basketball, or he may work in finance. But what he wants most out of his post-playing career is to be challenged.

"I just want to be able to continue to have challenges throughout my whole life," said Madsen. "It is nice to be able to push yourself and stretch yourself and stretch your mind and try to grow as a person."

Write to Daniel Edward Rosen here.




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