At the front of the room Ed Butowsky also does a bobblehead nod. Stout, besuited and silver-haired, Butowsky, 47, is a managing partner at Chapwood and a former senior vice president at Morgan Stanley. His bailiwick as a money manager has long been billionaires, hundred-millionaires and CEOs—a club that, the Steinbrenners’ pen be damned, still doesn’t include many athletes. But one afternoon six years ago Butowsky was chatting with Tubbs, his neighbor in the Dallas suburb of Plano, and the onetime Pro Bowl player casually described how money spills through athletes’ fingers. Tubbs explained how and when they begin earning income (often in school, through illicit payments from agents); how their pro salaries are invested (blindly); and when the millions evaporate (before they know it).
“The details were mind-boggling,” recalls Butowsky, who would later hire Tubbs to work in business development at Chapwood. “I couldn’t believe what I was hearing.”
I have to admit I have absolutely no sympathy for these guys whatsoever. Call me callous if you want. I actually find it kind of amusing.
Easy come, easy go – never fails.
The latest *can’t lose* proposition is forever changing , but the script is the same.
Snake oil. Rolex watches. Florida real estate. A mine. NASDAQ dotcomers. Windmills. An ethanol plant…..
Do you have no sympathy for Madoff’s victims too, Gord?
Boxers are especially prone to losing their money because right from the get-go they have managers “taking care of” the money issues, after taking a substantial cut, of course. One of the saddest stories is that of the great welterweight champion Wilfredo Benitez, a good-natured, trusting, happy-go-lucky fellow who by some accounts was borderline retarded – and yes, that was before he ever got into the ring. His manager would use Benitez’s innumeracy (and illiteracy) by shaving one or two of the extra zeros off of his cheques.
There’s a special place in hell for people like that.
Great article Kate. Thanks. It’s older but well worth the read.
Butowsky stands to make a lot of dough. 🙂
EBD. If you’ve got a few million dollars in the bank and lose it all you’re an idiot. You were either greedy or stupid. Right along with the people who win the lottery and then declare bankruptcy 10 years later.
None of the people they are talking about in the article are retarded so Benitez’s story doesn’t apply here. These are people who for the most part had college educations and were given financial advise which they ignored to pursue pie in the sky schemes. Think of the good these guys could have done with that money.
Gord said: “Think of the good these guys could have done with that money.”
The description of many of the companies described in the article did show they were thinking of the good they could do. I’m pretty sure the snake oil salesmen would have included bits about the jobs being created in your old neighbourhood. So many of those investments were in small towns and cities, I’m sure that was part of the pitch.
Michael Jordan’s companies were all urban, bringing work to areas that need jobs as so many flee to the suburbs. If I was pitching to someone, I’d use Jordan as an example of how his money gave him return and did good.
Gord said: “Think of the good these guys could have done with that money.”
These guys did do good – indirectly. All that money went back into the economy relatively quickly!
CanadianKate said “If I was pitching to someone, I’d use Jordan as an example..”
He did things smarter than most. Probably had several people giving him advice and he sat down and did some research himself. I bet he kept some money aside in case all his projects went bust. Investing is a gamble. Why would you gamble all your money? I find it strange that none of these guys stuck a million in some account somewhere to fall back on in case things went wrong.
Financial problems are the least of it.
The suicide rates among ex athletes is astounding.
Further, not only are they surrounded by vultures and parasites for most of their careers, but their own union tries to screw them when they retire.
http://www.youtube.com/watch?v=2hFDfv5H1sc
I’m with Gord, I’m rolling in schadenfreude right now. Maybe we’re both callous eh? Why should anyone feel sorry for them? It’s not like they didn’t have a spectacular run while playing for teams. What’s that saying? “Better to burn out than fade away”?
Being scammed seems like only part of the problem. Divorce is mostly preventable, not buying into ridiculous schemes is also preventable which should be probably categorized as distinct from a scam. Youth is wasted on the young as they say, and money is wasted on the old. Life is ironic like that. You can never win haha.
Guess it just goes to show, its really easy to blow a million bucks and have nothing to show for it. Same thing happens to most lottery winners I’m told. Buy the car, buy the house, eat out every night for two years and SHAZAM! Bankruptcy.
There’s a reason not to let your kids be jocks in high school. Repeated blows to the head make you -stupid-.
I’m trying to squeeze out a tear for these goofs, but I just can’t seem to get one going. Maybe if I snort some wasabi…
The New Yorker ran an article a few months detailing what happens to NFL players after they retire. And let’s remember that the average NFL player has a career lasting 3.5 seasons, and that gets skewed by long lasting guys like Favre; there are dozens of guys who play one season or two, get hurt, and that’s it.
But the article explained that within a few years of leaving the league, many of these players exhibit early signs of dementia, which doctors speculate is the result of repeated blows to the head. Given the league’s macho nature, many players reported receiving blows to the head that left them seeing double, unable to remember where they are, etc., and they refused to miss a single play.
It doesn’t surprise me at all that some of these players will become, shall we say, confused, and easily manipulated after the big cheques stop rolling in. I’m sure that once the six-figure salaries stop, the “legitimate sports agents” (there’s an oxymoron if ever I wrote one) find a reason to drop these guys from their roster, and the ex-players become carrion for the vultures.
Besides their battered knees and backs, damaged kidneys, etc., these guys also suffer serious brain injury. How anyone can sneer at them is beyond me.
Yeah well it’s sorta like the mutual fund scam…it’s called “churning”.
The fund managers get a commision on every trade they make…..and trade constantly…technically they are making money and performing well but the commisions eat up not just the profuits but the equity as well.
I had an RSP mutual fund at a Bank (un-identified) with an input equity of $27,000. After 3 years the units had tripled..based on the alleged profits but it’s cash value was just north of $23,000. The smart young bank-type couldn’t understand why I would abandon such a profitable investment—“just look at the growth”.
I refused to believe he was that dense—and told him so—loudly.
Everywhere you look there are such rip-offs.
It starts earlier than that… Seriously, with a few exceptions, most althletes I’ve met are not in the top 1/2, or even top 1/2 of their academic competitors.
That’s not a criticism, but how do they compared to their similar IQ compatriots with similar non-sports related skills…
For MOST of these guys, it’s like winning the lottery and, like winning the lottery for most winners, it’s easy come, easy go, and by the by, the sports guys get laid more than the average bear by pretty cute ( If vapid and grasping)girls.
I feel a little bad for them, but for MOST of them, it’s frankly BETTER than they wold have done in life if they hadn’t been sports stars.
Now frankly, I think the pro-leagues might be more pro-active to encourage them to sign up with a nice conservative annuity programme, but these guy are theorhtically adults and you can only lead the horses to water.
sasquatch They are out there. The good ones aren’t that easy to find. The two companies I have mutuals with have no sales reps, no commissions no loads,no switch or redemption fees except in protective situations. Like someone dumping a ton of money in money market the day before the payout and selling the day after.
The MERs are about 1% for a mix of funds and pretty good ratings over the years. They offer advice although I have never used it. You do the buying,selling and trading by dealing directly.
I’ve been friends with many ex professional athletes. They either retired early or work in very good jobs. Got educations married their sweethearts etc. Doing nicely. As opposed to the ones who did tons of coke hung out at strip clubs bought expensive cars and grabbed trophy brides. A lot of these guys made their beds and now they lie in them. In this day and age there are too many honest hard working people getting screwed over that deserve sympathy. I’m not going to shed a tear for someone who made then blew millions. They made their own choices.