Ex-Viking Peterson shows why professional athletes must be careful with their money
From the moment he arrived in Minnesota 12 years ago, former Vikings star Adrian Peterson was special. At times he made whichever National Football League team lined up to stop him look like the junior varsity.
Peterson was paid like he was special, too. No NFL running back has made more for his play, reaching the neighborhood of $100 million.
That’s what makes his apparent inability to make his loan payments, as alleged in a recent lawsuit, such a curious story. Sadly, though, stories of handsomely paid professional athletes outrunning their money are not rare.
Reckless spending was a big part of “Broke,” a 2012 ESPN film on the financial problems of retired pros. Peterson famously entered his 30th birthday party riding on the back of a camel. Not sure what one of those costs, but walking in would have been free.
But when stories of financial trouble surface, it’s fascinating how often the big issue is that one investment after another has burned to the waterline.
I’ve been puzzling over this for years, since meeting a couple of financial advisers to athletes who once dropped by the small investment bank in Minneapolis where I then worked.
They weren’t conventional investment advisers who happened to have money from a few athletes to manage. The athletes’ money was their business. Lots of businesses run on personal relationships, often by a referral, and that was certainly the case in this little niche.
They didn’t talk mainstream, institutional notions of capital preservation. Yet they sure liked talking deals.
Some corporate execs and wealthy entrepreneurs seem to think a little like this, too, piling into costly hedge funds and investing in startups in industries they don’t know.
Like the athletes they enjoy being taken through a private door, not the one used by the public. Stock mutual funds, municipal bonds and real estate investment trusts aren’t meant for them.
You can see a little of this in the story of retired basketball star Kevin Garnett. He’s the only Timberwolves player to ever be named the National Basketball Association’s most valuable player, and his career earnings swamped those of Adrian Peterson.
The Garnett financial story has one wrinkle, and that’s how he had once been a supporter of financial advisor Charles Augustus Banks IV in a high-profile criminal proceeding.
It was only after Banks got sentenced to four years in federal prison for defrauding former NBA star Tim Duncan that Garnett realized he might have a problem, too, as alleged in a lawsuit Garnett brought here against his Kentuckybased accountants.
A San Antonio ExpressNews reporter saw Duncan say something to Garnett on a break at a Banks court hearing.
Garnett claimed in his suit to be out $77 million, and the suit seems to have just been resolved. Yet the complaint, along with other court documents, provide a lot of rich details of how Banks allegedly operated.
When Banks induced Tim Duncan to put $7.5 million into something called Gameday Entertainment, Banks allegedly grabbed a $225,000 fee plus started collecting 20% of the money due Duncan in monthly payments. He then got Duncan to personally guarantee a $6 million line of credit.