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By Linda F. Jarrett
Few will overly-sympathize with the plight of professional athletes who, by virtue of lucrative contracts, are blessed with instantaneous wealth. But Stan Royer—who was in a similar situation 16 years ago with the St. Louis Cardinals—knows how confusing it can be.
A gifted baseball player from Charleston, Ill., Royer was drafted out of high school by the Atlanta Braves. He chose not to sign, however, and attended Eastern Illinois University, graduating with a degree in economics.
But baseball still called, and in 1988 he went to the Oakland A’s as a first-round draft pick. A 1990 trade for Willie McGee sent Royer to the St. Louis Cardinals, where he spent four years as a backup first and third baseman. Ozzie Smith, Ray Lankford, Jose Oquendo, Tom Pagnozzi and Todd Zeile were among his teammates.
The 1994 baseball strike (he was with the Boston Red Sox by then), prompted him to find a new career. Today, as president of St. Louis-based AMD Financial Services, he guides professional athletes through financial minefields, helping them make difficult and often unfamiliar choices.
“Many of today’s players are multimillionaires before they even suit up,” Royer says. “That can cause terrific problems, especially for young kids.”
While the professional athlete only makes up about five percent of Royer’s business, he finds the work rewarding. “I thought a good way to give back...to the game which I still enjoy would be to take my profession now and implement it into the game,” he says.
Royer believes his personal experiences give him an edge over other financial advisors. “There are tons of people doing (financial planning)—it’s not like I’ve come up with some novel idea,” he says. “But are they doing it right? You have to know how to relate to the players.”
When he played baseball, Royer says people appeared out of nowhere to give him financial advice. While they may have been knowledgeable and ethical, he felt they did not understand the personal situations and pressures of his profession.
“(The professional athlete) is not like your average client—even a wealthy one,” Royer says. “If he’s having a bad day or bad week...all he cares about is getting back on track. The last thing on his mind is talking about financial planning, or signing some document.”
Many times, players rely on teammates and coaches for financial advice. In other instances, they may push the decisions onto an agent. To get a player’s attention, Royer uses various approaches. “First, we’ve started getting our name out in a more prominent way with agents,” he says. “We also approach the guys in the minor leagues. While that may not be the most profitable way, I enjoy talking to those kids about what they need to be aware of.”
Student athletes, in particular, can be susceptible to advice that might not be in their best interest. Royer notes that some of these youngsters become wealthy overnight and face mind-boggling decisions.
Mort Meisner, an agent from the Detroit region, represents a varied group of news and sports announcers, managers and writers. He agrees that young athletes coming into multi-million dollar contracts need solid direction and advice.
“(Picking an adviser) is contingent on how qualified the person is, how smart they are, (and) how much common sense they have,” Meisner says. “Like anything else, there are going to be potential benefits and potential disadvantages.”
Royer says investing for the professional athlete is challenging because of the short career window. “They get a lot of money up front, but it could be over tomorrow,” he says. “They need to find an amount that they can live on, (and) put the rest away.”
In terms of risk, today’s ballplayers have little reason to gamble. “If you sign a contract for $40 or $50 million over four to 10 years, do you really need to have that money make more?” Royer says. “No, you just need to be conservative.”
Craig Albers, of A.G. Edwards in Jacksonville, Ill., worked with Royer after his playing days. “We worked together on a couple of ballplayers...and that’s when he began molding the program that he now uses with athletes,” Albers says. “I was lucky enough to be with him when he first began that process.”
Albers says he feels like an “outsider” watching Royer talk to an athlete. “It’s a world they both understand, which people who are not on the inside just can’t really grasp.” |
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