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Entrepreneurial Game-plan
Old-style entrepreneurs counsel NFL players on post-football careers.
Most NFL fans wouldn't expect Ahman Green, Brian Dawkins and Drew Brees to share their playbooks. But their mutual interest in identifying long-term business opportunities brought them together for a strategy session with a panel of entrepreneurial experts at the Wharton School this spring. The panel was part of a special three-day executive-education program organized by the Wharton Sports Business Initiative and co-sponsored by the NFL and the league's players union. All tolled 35 players from around the league attended.
The entrepreneurship panel, which Prof. Eric Bradlow and others at the Wharton Small Business Development Center arranged, was designed to help players make the transition from pro athlete to full-time entrepreneur or investor. The panelists pointed out that, sure, some sorts of businesses require specialized knowledge of computers and software or an advanced degree in engineering or biochemistry. But plenty don't. Instead, they demand hard work and common sense.
Take real estate, said David Marshall (W'61), chairman and chief executive of Amerimar Realty Co. in Philadelphia. "It isn't rocket science," he said. "You do your homework, and you travel around and look at properties. I've never bought a piece of property without looking at it." And Marshall has purchased quite a few. His firm, known for turning around troubled properties, developed the Rittenhouse Hotel, one of Philadelphia's most expensive, and Denver Place, a Colorado complex that incorporates residences, stores and a hotel. When Marshall undertook the Rittenhouse, the hotel had been languishing, unfinished, for a decade. "It was just a bunch of rebar sticking out the ground," he said.
Joining Marshall
on the panel were Ron Jaworski, the former Philadelphia Eagles quarterback
who is a TV commentator and investor; Avram Hornik, a
Philadelphia
bar-owner and restaurateur; and Jeffrey Kent, a consultant who has advised
professional athletes.
By Marshall's way of thinking, real-estate development in some ways
parallels playing pro football. First, a player has to take time to learn
the playbook.
In real estate, that means studying markets and product lines, finance,
insurance, leasing, zoning and taxes. Then he has to apply what he has
learned either in
games or, in real estate, particular markets.
If someone decides that he wants to specialize in turnarounds, he'll also need to develop expertise in the legal and financial challenges unique to troubled properties, Marshall said. And he'll need to hone his instincts about whether a property is salvageable. "There's no formula for saying, ‘This is a good deal for everybody,'" he explained. "But you have to be able to differentiate dandruff from cancer. I'm good at curing dandruff, not cancer."
For Marshall, curing dandruff means devising ways to solve a property's problems. "At Denver Place, we couldn't attract name-brand tenants. So we had to figure out what we could do differently. We built the nicest health club in town. We put in a daycare center."
Plunging into an unfamiliar city's real-estate market can seem intimidating, but every place has local gurus and, chances are, they'll likely be willing to team up with former pro football player, Marshall said. If joining them means giving up part of your dream deal, so what? "You're never going to go broke having a smaller piece of a deal."
Like Marshall, Avram Hornik, owner of six eateries and bars in Center City Philadelphia, said a lot of folks overcomplicate commerce. "Business," he said, "is just about resources — connections, ability, employees and capital." For former pro football players, the ability category can be expanded to include their celebrity. They often can give a new business a boost by lending their name to it. That may free them from having to contribute much, if any, money, he said.
Hornik, for his part, was unknown and inexperienced when he started his first venture in 1994. He'd just graduated from Vasser College and had received a $6,000 settlement from his renter's insurance policy after a burst pipe soaked his apartment. He and a friend decided to plow the money into a coffee house in Philadelphia's then-gentrifying Old City neighborhood. That was all the cash they had. Once they'd leased a former flower shop, they were broke. They had to figure out how to renovate the space themselves. They therefore headed to the library and checked out an armload of Time-Life how-to books on wiring and plumbing.
"Trial and error has been essential for me," he said. "I've made a lot of errors. But if you start small enough, you have a bigger margin of error. The bigger your operation, the higher the fixed cost. So my advice is to start small."
One player raised his hand to ask whether he and his colleagues should even consider the restaurant business in the first place. A Wharton professor had told them never to invest in bars and restaurants, he pointed out.
" If you're looking to make a lot of money, go into another business," Hornik said. "Restaurants are a lifestyle choice." Hornik's ventures have tracked the arc of his maturation and the evolution of his interests. In his early 20s, he started a coffee house and a café, both of which he subsequently sold. Next came a series of bars, including Lucy's Hat Shop and Tom Drinker's Tavern. Lately, he has turned to upscale dining with a restaurant in Philly's elegant Rittenhouse Square neighborhood. For him, part of the thrill of entrepreneurship has been creating places where he'd enjoy hanging out, he said.
No matter what sort of venture a person chooses to start, he needs some basic, but essential, business savvy, Hornik said. He has to read and comprehend any contract that he signs. "A contract is a formal handshake, a what-if-things-go-wrong document," he said. "Understand what each paragraph, each what-if, means."
Entrepreneurs also have to accept the prospect of failure and devise contingencies for dealing with it. Most new businesses die within their first five years. If yours does, you'll want to have an "exit strategy" with an aim to preserving at least some of your initial investment. "In a worst-case scenario, how are you going to get your money out?" he asked. One way is by owning the building in which you operate, giving you real estate to sell. Another way is entering into a long-term lease with the right to sublease.
Most important, he said, entrepreneurs must be flexible. "A good opportunity can play out in a lot of different ways. Like poker, there are a lot of ways you can win."
Ron Jaworski's post-football career suggests that he's lived by that maxim; he has diversified his business interests. Besides doing television commentary for ESPN, he has invested in golf courses, hotels and, lately, the Philadelphia Soul arena-football team.
Jaworski, who led the Eagles to Super Bowl XV in 1981, bought his first golf course more than 20 years ago. He enjoyed the game, but he also surmised that golf-course operations might provide recurring revenue. Gradually, he accumulated 12 courses. Along the way, he learned their operations weren't as lucrative as he'd expected — mainly because of the high costs of maintaining and running them. But the land itself turned out to be an excellent investment when golf's popularity surged beginning in the late 1980s. Demand for high-end homes on courses grew simultaneously. Jaworski therefore was able to cash out with a tidy profit. Today, he owns two courses.
One commonality among Jaworski's investments has been their proximity to his home in the Philadelphia area. "I've done active and passive investments, but they've all been within 90 miles of my house because, when invest in something, I want to be able to see it and touch it," he said.
Like Hornik, Jaworski also offered some all-purpose business advice to the players. He told them that they should make moves early in their post-football careers to assemble a team of business advisers — an attorney, an accountant and a tax expert.
" And remember that all business is local," he said. "The local guy is connected, and you're going to need favors from everybody."
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