Just because you’re really good at something doesn’t mean you’re any good at something else. The examples of this axiom are endless: Shaq’s movies, Eddie Murphy’s albums, and Roseanne Barr’s political campaigns are just the first three that spring to mind.
Similarly, just because you make good money doing one thing doesn’t mean you’ll make it doing something else. Stay in your lane. In this spirit, here are 7 celebrity investments gone bad.
The Go-Big Real Estate Buyer
Nic Cage is a good actor whose career started to get into trouble as he started to take on bigger and more lucrative rolls. He was an art house phenom until he started to get cocky and look for blockbusters. Remember Raising Arizona?
And that’s kinda the same trajectory his career as a real estate buyer followed. He made some creative, low-budget bets early on. But after procuring some early hits in Malibu and Paradise Island, Cage jumped the shark when he “bought” Schloss Neidstein, the medieval castle in Bavaria. From there his losses continued to compound until his Bel Air home, which had 6 “outstanding” loans totaling $18 million, was forced into foreclosure.
The Attempt at Hotel Ownership
A lot of things about Jay Z are cool: he makes hits, he owns part of the Brooklyn Nets, he’s boys with Bobby DeNiro, and of course he co-habitates with Beyonce.
The guy’s clearly a media mogul, but a hotel baron he is not. In 2007, Jay’s company purchased a property in the Chelsea neighborhood of NYC, with plans to develop a 150,000-square-foot luxury hotel. But then the international financial calamity hit and plans were tabled due to a lack of capital. The properties were returned to the lenders, with all the legal jujitsu (and fees) such a transactions entails.
An Icy Purchase
Dot Hamill captured the hearts of Americans across this great land by bringing home the gold medal in figure skating at the 1976 Winter Olympics. She then leveraged that popularity to sign with the Ice Capades, becoming the first female athlete to ink a contract worth $1 million dollars per year, replacing an aging Donna Atwood.
More than 17 years later, as the Capades’ popularity began to wane, Hamill and her husband stepped forth to buy the traveling ice show, with the hopes of returning it to prominence. The experiment lasted only two tumultuous years before Hamill filed for bankruptcy.
Among other things, Twitter has shown us that athletes love the Internet — and, judging from the huge crowds at AT&T Park south of Market in San Francisco, the Internet loves sports back.
But that doesn’t mean that former athletes should become CEOs of large, self-funded Internet ventures. Leave that to the professionals. Last time we checked, Mark Zuckerberg never won the CY Young award.
Schilling sunk dozens of millions of dollars of his own money (not to mention the state of Rhode Island’s) into founding 38 Studios, a gaming startup. The company hired too many employees too quickly and eventually put out only a single (mediocre) game before blowing through all of its capital.
A Rocky Restaurant Establishment
The Brat Pack of the early 1990s decided to make one of the more surprising celebrity investments by branching out and entering the restaurant business. Rocky shorts next to the bar? The Terminator suit by the desert tray? Sure, and why not call it Planet Hollywood?
Stallone, Willis, and Schwarzenegger were considered “founding celebrities” and 20 percent of the company’s stock was set aside for these self-satisfied investors.
The company raised $196 millions in its IPO and invested the proceeds into expansion. Once the company opened more restaurants in London and Edmonton, Alberta, the celebrity status couldn’t retain its status as a major draw. In October 1999 the chain, which peaked at 95 restaurants, filed for Chapter 11. The company exited bankruptcy in 2000 but shortly after that had to file for Chapter 22.
Technology that Never Took Off
Perhaps the greatest writer in American history, Mark Twain was not our greatest businessman. In 1880, Twain poured more than $300,000 ($5.2 million by today’s standards), constituting the majority of his book-selling fortune and his wife’s inheritance, on the Paige Compositor, a large monstrosity that was supposed to usurp the printing press.
Needless to say, the printing press won and Twain lost, leading the ironist to quip that he learned “not to invest when you can’t afford to, and not to invest when you can.”
Not-So-Hot Off the Press
The poster child for athletes-turned-bad-businessmen, mister Dykstra is currently behind bars. After retiring from the Philadelphia Phillies, Dykstra launched Player’s Club, a magazine intended to help athletes with their finances after retiring. But the bigger issue was that Dykstra’s own finances were a mess, as the entrepreneur began to engage in credit card fraud, skip rent, bounce checks, and refuse to pay bills.
A few years later, the judge presiding over Dykstra’s bankruptcy charged that the former lead-off hitter had lied under oath, sold assets for cash, and obstructed justice. He’s currently serving 6.5 months in prison.