Wednesday, June 27, 2012

Now What? Part II

Erving "Magic" Johnson co-owner of the LA Dodgers 
In the first installment of the "Now What?" three part series, I explored the problems many professional athletes encounter in their post-sports careers.  Professional athletes usually retire with large sums of money that they must then put to some use.  As was previously discussed, athletes like Curt Schilling and Allen Iverson chose paths that inexorably led them towards bankruptcy and humiliation.  In part II, I will delve into the lives of those professional athletes who have experienced financial success following productive and lucrative careers in sports.

Michael Jordan was the greatest basketball player the world has ever seen.  Few people would truly disagree with that statement.  What is the answer to this question: "Who was the greatest point guard ever?"  Not everyone (Celtics fans), would say Magic Johnson, but I would.  Johnson won 5 NBA championships, 3 league MVP trophies, and 3 Finals MVP trophies, and those are only a few of his accolades.  Magic Johnson, by all accounts, had one of the most prolific NBA careers of all time, but it was cut short when he discovered he was HIV positive.

For many professional athletes at the height of a hall-of-fame career, this news would cause them to become recluse.  Instead, Johnson decided to begin his second career, as a businessman.  Not long after retiring from the NBA in 1995, Johnson began searching for investors for an urban rebuilding project he predicted would become a money maker.  Most rejected his proposal, but friends urged Johnson to use his considerable wealth for the venture.  Johnson's proposal was to put in place food, retail, and entertainment stores into predominantly poor, black, and hispanic neighborhoods in Los Angeles.  He believed he understood what the people in these communities wanted.  Where most saw dilapidated  shopping centers, Johnson saw a business opportunity, one in which he could dually profit and supply desired demands to lower-class citizens of Los Angeles.

He showed his business acuity by meeting with gang leaders, the California Public Employees' Retirement System, and other community leaders in order to perfect his investment plans for urban Los Angeles.  He instituted different food and beverage options in the blacker area movie theaters, switching from the usual options to sweeter drinks, spicier hot dogs, and buffalo wings.  Johnson racked up business success after business success, eventually leading him to create Magic Johnson Enterprises, a company Forbes estimates to be worth over $700 million.  He owns 5% of the Los Angeles Lakers and recently joined Guggenheim Partners and Stan Kasten in buying the Los Angeles Dodgers.  Success after a professional sports career doesn't even begin to describe Magic Johnson, he is a  tycoon.  

Mo Vaughn, MVP turned Businessman
If Magic Johnson represents one end of the spectrum and Allen Iverson the other, Mo Vaughn sits comfortably between them.  Maurice "Mo" Vaughn played professional baseball for 13 seasons, accumulating just over $100 million in the process.  He made 3 All-Star teams and was crowned the 1995 American League Most Valuable Player.  Two events, one negative and the other positive, happened in Vaughn's post-MLB career.  First, the Mitchell Report demonstrated that he knowingly took performance enhancing drugs supplied by Kurt Radomski.  Second, he decided to invest in creating better living spaces for poorer New York City residents.  

Towards the end of his MLB career, the Anaheim Angels traded Mo Vaughn and his $70+ million contract to the New York Mets.  Once in New York, Vaughn experienced debilitating injuries that forced him to retire in 2003.  After retirement, Vaughn, the child of a high school teacher and principal, decided to give back to the city he felt he had failed.  Instead of donating money to non-profit charities, Vaughn decided to assist New York City and simultaneously begin his second career.  The former Red Sox 1st baseman created OMNI New York LLC., a company whose main goal is to invest in and repair low-income-housing.  Vaughn partnered with savvy businessmen and others more experienced in the world of low-income housing in order to create a juggernaut of a company that has bought and rehabilitated 1,142 housing units in New York City.  The company has been a success, and in 2009 Vaughn moved to purchase and recondition low-income housing near Boston, another city in which he played Major League Baseball.  

Good deeds can include profit
While former athletes like Curt Schilling and Allen Iverson squander their millions by investing poorly and spending like a teenage girl at Coach with daddy's Mastercard, others like Johnson and Vaughn became successful businessmen in their post-sports careers.  So, why did it work out for Mo Vaughn and not Curt Schilling?  Vaughn found a niche market, diligently researched the venture, and then asked for help from those with more experience than he.  Johnson utilized his knowledge of the day-to-day lives of low-income minorities to eventually provide them with products they desired.  Somehow, both Johnson and Vaughn were able to help communities, as many former professional athletes do, while simultaneously finding a way to make a profit.  Building your own video game studio, so cleverly named 38 Studios, depicts a self-centered man who wanted to first have fun and secondly run a business.  Johnson and Vaughn saw their ventures not as fun, but money-making opportunities that would both benefit the community and create new careers for themselves.  

If professional sports leagues were to write a manual for how to succeed after retirement, Magic Johnson and Mo Vaughn should be included.  In addition to businessmen, former pro athletes have successfully run non-profits (Dikembe Mutombo), become broadcasters, or chose to remain in sports as coaches (Robin Ventura) and administrators (John Elway).  The end of an illustrious sports career does not imply success after the fact, but with so many positive examples, there must be hope for all of them.  
Next time you watch a former profession athlete receive a community service award, provide play-by-play analysis, or buy/rehabilitate low-income housing, remember the numerous ways in which that person could have selfishly slapped the American Dream in the face by squandering their millions, but instead decided to take the opposite path.

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