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Thread: Entourage Economics - WSJ

  1. #1

    Default Entourage Economics - WSJ

    Not sure if this has been posted. Read the last 5-6 paragraphs for details on Ron Artest's entourage. I enjoyed the snake eggs story.
    http://online.wsj.com/article/SB120787358981806577.html

    Entourage Economics

    Wall Street Journal
    By HANNAH KARP


    As welterweight boxing champion Floyd Mayweather showered fans with fistfuls of $100 bills two weeks ago at the Hard Rock Cafe in Times Square, seven men, some in sunglasses, shadowed his every move. But this wasn't the stereotypical athlete posse, best known for freeloading and waking up at noon.
    Mr. Mayweather's right-hand man, Leonard Ellerbe, is chief executive of a $140 million company, Mayweather Promotions, and starts his days at 5:15 a.m. Underperforming security guards, personal assistants and coordinators can be fired for offenses like ogling women or falling out of shape. "It's no different than working for Xerox," Mr. Ellerbe says.

    Troublemakers, sycophants and hangers-on, your days are numbered. Athletes are turning the entourage -- once a big punch line in sports -- from liability to asset. Taking a page from veterans who have learned the hard way and from peers like 23-year-old LeBron James, whose self-started marketing company employs his three friends, players across the sports world are using a range of management tactics to eke the most profit and productivity out of their support systems.

    Carmelo Anthony, the 23-year-old small forward for the Denver Nuggets, has a flowchart and presides over biannual meetings of the 10 members of "Team Melo." Skier Bode Miller, 30, chalks up his World Cup victory this year to his new, hand-picked group of coaches, agents, trainers and family he calls "Team America." (It includes his best friend as his personal chef.) Oscar de la Hoya is saving nearly $400,000 a year in food, housing and travel expenses after dropping 10 entourage members, mostly good friends. One charged an additional $2,500 every time they went to a public event, with as many as 30 events a year.

    "It was a waste of time and a waste of money," says Mr. de la Hoya, who still employs some 50 people but keeps only his CEO, COO and vice president by his side. He does miss the fashion tips. "Sometimes my friends tell me, 'Man, you don't look so good.'"

    Entourages have gotten a bad reputation. Cornerback Adam "Pacman" Jones was suspended from football last year after a series of incidents; in one, at a Las Vegas strip club, a man witnesses assumed to be in Mr. Jones's entourage fired shots that left another man paralyzed below the waist. Mr. Jones's lawyer, Robert Langford, says the shooter was not with his client. "If you're a famous person and you show up with two friends and then 10 people start hanging around you, all of a sudden it's your 'entourage,'" he says. Indiana Pacers point guard Jamaal Tinsley and his six-man, three-car crew were shot at in December on their way from a nightclub by a group that was harassing them about how much money they had, according to police. And in baseball, entourages have come under scrutiny for administering performance-enhancing drugs. Commissioner Bud Selig banned personal trainers from the clubhouse and other team facilities in 2002, and he stepped up enforcement in 2004.
    Outside of sports, M.C. Hammer filed for bankruptcy in 1996 after his 200-person entourage squandered the better part of his $30 million fortune.

    Yet athletes and agents say a support system can be a necessity. Athletes are constantly asked for money. Some have grown wary of doing business with strangers, after bad experiences. Even mundane tasks, such as going to the supermarket, can be a challenge.

    Sports agent Leigh Steinberg advises his younger clients to surround themselves with friends, if not security, in any place where alcohol is served. "While 90% of people are friendly and benign, 10% will be at some point of intoxication and may become belligerent and decide they can take on a gifted athlete," he says. Cellphone cameras have turned every outing into potential tabloid event. "Every time someone is approached by a female, it can become a picture anywhere and become a questionable situation. Having people around to fend off unwanted advances is helpful," he says.

    Just fielding ticket requests can get tricky. The NBA allows players four tickets per home game and two per away game, while the NFL grants two free tickets per home game and none away. John McCareins, father and financial adviser to the Tennessee Titans' wide receiver Justin McCareins, says relatives often show up out of nowhere, announce they'd like to come to the game and that "'oh, there'll be 14 of us.' These tickets are $80 a piece, and that comes out of his paycheck," Mr. McCareins says. "Now all ticket requests go through me."

    The rise of the entourage is fairly recent. Allen Sack, director of the Institute for Sport Management at the University of New Haven, recalls that after defensive tackle Alan Page was drafted to the Minnesota Vikings in 1967, he worked in a car dealership for a summer. That year, the average salary for football, basketball, baseball and hockey combined was $20,000. In 1980 players in all four sports were making just over $100,000, on average, and it wasn't until 1995 that the average NBA salary cracked $1 million. Now, players make an average of $5.4 million in basketball, $3 million in baseball and $1.4 million in football.

    The economics vary widely. Veteran sports attorney Fallasha Erwin says he's seen athletes give their friends lump-sum payments of as much as $100,000. But as athletes discover those types of payments can't easily be written off their taxes, more are putting their qualified friends on professional payrolls. Salaried entourage members doing personal-assistant work typically earn $30,000 to $50,000 a year, plus a percentage of any deals they put together. Indiana Pacers forward Danny Granger, 24, has an economical one-man team -- his former college roommate -- who pays his own rent and will make $40,000 this year.

    One cost-cutting strategy: recruiting freelancers as needed. Raiders linebacker Thomas Howard says he financially supports only his mother but likes to have at least two guys with him when he goes to nightclubs to provide security, get a table and make sure the ratio of women to men is satisfactory before he walks in the door. Once there, Mr. Howard pays for the table and bottle service and for small favors. One night last month, he gave one of his freelancers $5 to fetch him a Snickers bar.

    Mike Bibby of the Atlanta Hawks, who calls his 20-member clan "Team Dime," says his "family first" policy fosters loyalty. He lets one member, 30-year-old Matt Nielsen, commute from Sacramento, Calif., in order to spend time with his 3-year-old son and girlfriend, who couldn't quit her job when Mr. Bibby was traded to the Hawks midseason. "I take my job seriously, and I feel guilty for not being here," says Mr. Nielsen.

    Childhood friend Jeremiah Johnson's job includes coaching Mr. Bibby's 10-year-old son, making sure Mr. Bibby gets to appearances on time and taking orders from Mr. Bibby's mother, Virginia, who runs the show from her home in Phoenix. "We're not here to hang out and party, we're here to make him go," he says.

    One of the keys to successful management, athletes say, is designating a supervisor. For a fight in May, Mr. de la Hoya assigned his longtime friend and vice president Raul Jaimes "to do the dirty work," which includes renting homes for the nutritionist, trainers and makeup artists, coordinating transportation and making sure the chef has all his equipment. "I'm glad it's not my job," Mr. de la Hoya says.

    Ron Artest, small forward for the Sacramento Kings, recently asked his publicist and executive assistant to set up a summer basketball camp in Beijing and find the best kidney-tumor specialist in the world for his 4-year-old daughter, Diamond. Mr. Artest's personal assistant, who grew up with him in the projects but is paid by Mr. Artest's management company, fields late-night requests for organic cookies, is developing Mr. Artest's line of athletic wear and was asked recently to remove what Mr. Artest thought were giant snake eggs in his backyard. They turned out to be mushrooms.

    "There are so many people that have figured out how to get money from athletes legally that when you have friends that you think might be capable of doing something, your first instinct is to give them a shot," says Mr. Artest, 28, who taught himself to do his own taxes and accounting several years ago using Quicken, after a series of bad experiences with professionals. (His business-management agency now handles his accounting.)

    But last year, he realized that six of his friends, who were living in a four-bedroom house he was leasing for them at $2,500 a month, could jeopardize his career if any trouble occurred at the house. While the six -- all producers and artists on his record label -- also did odd jobs from time to time for Mr. Artest, "their level of helpfulness was 50%," says his publicist, Heidi Buech. He sent home four of them in March 2007 and dismissed the last two in July, after the house was broken into while he was doing charity work in Africa.

    Mr. Artest's friends say they have no hard feelings. "If there was a time it was real hard for me, I know I could ask him for help, but it's all about growing up," says Lamont Mena, 26, who goes by "Challace" and now works for John Deere in Indianapolis.

    Naquan White, known as "Ruc," now has a job at an accessories company and still works with Mr. Artest on his music career. "Ron has always been there for me," he says. "Ron lives in a fantasy world, but you've got to come back to reality."

    Mr. Artest says he doesn't regret the opportunities he was able to give his friends. However, he adds, he did learn one lesson: "I wasn't running it as a business, as it should have been run."



    The only reason I pasted the link in here is because you are new, next time the article goes, see the rules. (A)

  2. #2
    Wasting Light Hicks's Avatar
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    Default Re: Entourage Economics - WSJ

    You need to list a link to the article or I will have to take this down. Thanks.

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    Default Re: Entourage Economics - WSJ


  4. #4

    Default Re: Entourage Economics - WSJ

    granger might be teh smartest athlete lol. do these guys really need to hand around 20 people???

  5. #5
    NaptownSeth is all feel Naptown_Seth's Avatar
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    Default Re: Entourage Economics - WSJ

    was asked recently to remove what Mr. Artest thought were giant snake eggs in his backyard. They turned out to be mushrooms.
    Remember that skit Chappelle did about Cribs where he was cooking rare dino eggs?

    Also the shrooms would explain quite a lot.

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    Headband and Rec Specs rexnom's Avatar
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    Default Re: Entourage Economics - WSJ

    I almost feel bad for Danny. One guy? He makes 40K? Jesus. We're talking about a kid who will in all likelihood sign a 60mil contract this summer (probably more).

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    Administrator Unclebuck's Avatar
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    Default Re: Entourage Economics - WSJ

    I think Granger needs to give him a raise

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    Headband and Rec Specs rexnom's Avatar
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    Default Re: Entourage Economics - WSJ

    Quote Originally Posted by Unclebuck View Post
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    I think Granger needs to give him a raise
    Considering Danny's looming ten million dollar raise, I think you will see his buddy get a raise soon enough.

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    Member idioteque's Avatar
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    Default Re: Entourage Economics - WSJ

    I can understand Granger only needing one person at this point in his career. For one thing he is a guy that seems to lay low anyway, for another thing with interest in the Pacers at an all time low I bet he doesn't get harassed too, too much in public. He's not really an NBA superstar yet and I bet he doesn't get recognized too much outside of Indy.

    Dude will get his raise in the offseason, I'm sure. Danny's still on his rookie deal, after all.

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    Pacer Junky Will Galen's Avatar
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    Default Re: Entourage Economics - WSJ

    Quote Originally Posted by rexnom View Post
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    I almost feel bad for Danny. One guy? He makes 40K? Jesus. We're talking about a kid who will in all likelihood sign a 60mil contract this summer (probably more).
    Danny has another year yet before that happens.

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    Default Re: Entourage Economics - WSJ

    Let's not overlook the fact that Mike Bibby has a friend named Jeremiah Johnson.

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    Boom Baby'er ABADays's Avatar
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    Default Re: Entourage Economics - WSJ

    Giant snake eggs? I've been looking for some of those. Have Ron give me a call.
    The best exercise of the human heart is reaching down and picking someone else up.

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    You Did It Joseph!!!! AesopRockOn's Avatar
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    Default Re: Entourage Economics - WSJ

    I thought this was going to be about Jeremy Piven describing the miraculousness of the playoffs again.

    Meanwhile, someone in the NBA has got to have a Wu Tang Clan.

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