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Play to Win

Who says an options trader can't drop everything to be a sports agent?



In the vast, dead space of the Allstate Arena last March, a few hundred people turned out to watch the Chicago Skyliners, the city's representative in the minor-league American Basketball Association. The announcer confused the team with the new XFL football franchise--referring to them as "the Enforcers"--and a pregame rendition of the national anthem sounded like a dirge. But Mike Naiditch, sitting courtside on a folding chair, looked like the happiest man alive.

Last fall the 36-year-old options trader sold his interest in the company he founded a decade ago and liquidated virtually all of his assets to become a full-time sports agent, focusing on basketball players with Chicago connections. "I was burnt-out," he says. "Being in that business, there is no gratification other than making money. There's so much more gratification in sports."

So far all of Naiditch's clients have been minor-league athletes: Antwon Hall plays for the Skyliners, Terrence Shannon was recently drafted by the United States Basketball League's Maryland Mustangs, and Malik Dixon plays for Limoges, a leading club team in France. In order to make a name for himself, Naiditch will have to sign someone good enough to play in the NBA, but his former career has taught him the value of patience. "They're investments," he says of his current clients. "They allow me to practice being an agent....It's not going to happen overnight. I'm willing to take my time and do things the right way."

Back in 1991 Naiditch went to a high school game in the western suburbs and ended up sitting next to Steve Yoder, coach of the the University of Wisconsin Badgers. Yoder was in the process of recruiting Michael Finley, a promising player at Proviso East and an honor student who intended to study business at UW. When Yoder introduced Finley after the game, Naiditch offered the young athlete a summer internship at the Chicago Stock Exchange, and Finley spent the next three summers working for him.

By June 1995, Finley had blossomed into a potential first-round choice in the NBA draft, and he asked Naiditch to advise him in choosing an agent. "I saw the pain and agony of all the losing agents," Naiditch recalls, "and I said there is no way I would ever do that, especially seeing the good people who were trying to get Mike. I sympathized with them."

In the fall of 1994 Naiditch volunteered his services as an assistant coach to George Stanton, the basketball coach at Whitney Young High School. Stanton was transforming Young into a city powerhouse: in 1997 it won the local championship, and the following year it claimed the Class AA state championship. Naiditch served as a technical specialist, punching out statistics during each game on his laptop computer. During time-outs, Stanton would point to the shooting charts Naiditch had compiled on the spot and urge his players to work for higher-percentage shots. Naiditch calls it one of the most satisfying experiences of his life.

After Stanton retired, Naiditch followed Whitney Young assistant coach Cyrus McGinnis to Lincoln Park High School. By then he had a three-year-old son, and the options-trading business was beginning to get to him. He'd witnessed the physical and psychological aftershocks of the October 1987 stock market crash among his colleagues. Some of his friends abandoned the profession. "One guy I knew down in the pits, his acronym was SIX--that's because he went broke six times and started over again. Once I had my son, I thought, What if I get unlucky? I make one trade, I hedge one day, and then boom, I might lose the mortgage. With my style of trading, that was bound to happen."

"Mike was very gifted at it," says Jeff Davis, a New York investment banker who grew up with Naiditch in suburban Minneapolis. "But it was not his passion. It's like the casino: you should only stay in it for so long."

The last straw came after Naiditch bet on a Canadian mining company called Bre-X Minerals Ltd., which claimed to have found 200 million ounces of gold in Indonesia. "There was all of this speculation," recalls Naiditch, "and they were saying the stock price was worth $90 a share. At the time it was trading in the teens. With the speculation and price movement, there was tons of volume, and it was our secret. I told the people on the stock exchange, and they gave me the option."

At one point the stock was valued at $270 a share, but in March 1997 Michael de Guzman, a Filipino geologist employed by the company, allegedly committed suicide by jumping out of a helicopter over the jungles of Borneo, and nine days later reports that there was no gold sent the stock plummeting. "It turned out the company was a total sham," says Naiditch. "They bought some gold and buried it underground and had this guy dig it up. The stock went from $20 to one penny. We were on the verge of having to shut down the business."

With the intervention of his father and a friend, Naiditch recovered and rebuilt his portfolio, but he also began contemplating his exit strategy. In February 1999 he was certified as an agent by the NBA, and though his company, Naiditch Entertainment, operates out of his office at the stock exchange, he's severed his ties with the past.

"I have no regrets," he says. "What I'm doing now is more entrepreneurial than anything. I have to figure out how to make the business worth something. The venue is basketball. It's about understanding the market, knowing who the players are, and putting them together."

In that regard his days as a volunteer assistant coach have served him well. At Whitney Young, Naiditch befriended shooting guard Dennis Gates, who currently plays for the University of California, and Naiditch recently interviewed one of his teammates there, Sean Lampley, who played ball at Saint Francis De Sales on the southeast side. Quentin Richardson, who transferred to Whitney Young from Brother Rice in 1996, just finished his rookie season with the Los Angeles Clippers. Naiditch interviewed Richardson last year when he was drafted by the Clippers in the first round, though the athlete ultimately signed with NBA power broker David Falk.

"Trading prepared me for this," says Naiditch. "One day I win, the next day I lose. I know that when you get on a winning streak, the minute you get excited or cocky, you get whacked. Not getting Quentin, I was disappointed--I really wanted him as a client. I had very positive feedback from him and the people around him. He told me, 'You did everything right. It is just a question of timing.'"

Naiditch thinks he might have found an NBA-caliber player in Darrell Johns, a senior at Chicago State. A native of Kokomo, Indiana, the seven-foot-one Johns played basketball in junior college and briefly at Iowa State before transferring to Chicago State. Naiditch attended the school's home games and made sure Johns was aware of him; he contacted coach "Bo" Ellis and prepared a dossier that outlined his business strategy. Johns had more established agents courting him, but in late March he signed with Naiditch.

"Some other agents offered me money," says Johns. "Mike never came at me like that. He came at me very clean and honest, and I respect him for that."

Cedrick McCullough, an aspiring player who works for Naiditch, was instrumental in helping him land Johns. If Johns makes it into the NBA, McCullough says, "he could be a great coup for Mike--that would make recruiting a little easier." McCullough and Naiditch work well together, and while McCullough is hopeful about his own playing career he's committed to helping his boss. "Every agent who is in this business has to start from somewhere," he says. "It's Mike's turn to be one of those guys who is going to get into the business."

Naiditch hasn't made much money--he claims one French team stiffed him on a commission--but he's willing to bide his time. "I'm not afraid," he says. "In the past I've been able to set a goal and achieve it. It's just a matter of when, not if. If it fails, I'll know soon enough.

Art accompanying story in printed newspaper (not available in this archive): photo/Robert Drea.

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