ATHLETE DEVELOPMENT

Money Ball – Financial management in the sports industry, the vital points to know how to successfully manage your finances

With professional sport becoming more and more lucrative it can be easy for industry professionals to spend your earnings in the moment and forget about the long-term. This raises the question of what the best and most efficient way to manage one’s finances is in order to maximise potential to get the best reward during and after their career.

Since the introduction of televised sport and the advertising revenue that followed; professional sport has never been more lucrative and together with an increase in lottery funding, the world of sport has become more specialised than ever before; In the 70’s a professional cricket player would look forward to a cup of tea at lunch, whilst their modern-day equivalent has a tailored meal plan and rehydration drink to ensure maximum performance and competitive edge.

Taking cycling as another example; Team Sky take their own mattresses, duvets, and pillows for their riders on the Tour De France to ensure best night’s sleep during the 3 and half weeks whilst the race is on. Teams ensure that no stone is left unturned in the pursuit of excellence and the success that comes with it. Successful athletes are meticulous in every element of their professional career to ensure they perform to the highest standard in every appearance. Alongside this, the final piece of the puzzle is to ensure financial care is as valued as player care so that players are not only looked after during their careers, but that they are also able to create financial freedom into retirement too – whenever that might be.

What do David James, John Daly, Boris Becker, and Chris Eubank Snr all have in common?

Despite a combined net worth of over £50million pounds, each of these athletes has been declared bankrupt during their careers. This means that despite staggering career earnings, they ran out of money at some point in their lives.

These sports stars are most definitely not alone, and every single sport has an array of examples of ex high profile professionals that have fallen on hard times through mismanagement of their money. There are a few reasons why this might happen more specifically in sport; take a professional football player as an example, the average football career length is 15 years, whilst the average career length of non-professional athlete is 45 years in the UK which means that there is a much more concentrated time for them to earn well.

Additionally, the average UK wage is £32,000 a year or £615 a week. For a league two footballer they can expect an average salary £2,000 a week or £104,000 each year during their playing career. For a league one pro, the average weekly salary is £5,000 a week or £260,000 per annum, in the championship this rises to £8,500 a week or £442,000 a year and a premier league player could expect £56,538 a week or £2,940,000 a year.

If a footballer’s career lasts 15 years and they are paid £104,000 as a league two professional for each year they play, they can expect total career earnings of £1,560,000. A non-professional athlete’s

career of 45 years, paid £32,000 a year, would give a career average of £1,440,000 –leaving a difference of “only” £120,000 –a bit closer than you may have first thought?

The main difference in the two careers is the age of retirement – for the nonathlete it might be 67 years old whereas for the professional footballer they might retire at 35. At this point no more money will be coming in and so they must live on their earnings built up during their playing career. £1.5 million might sound like a lot of money (and may buy you a Bugatti Veyron) but if it needs to provide you an income for the next 55 years, it on average would pay you £31,200 a year which equates to 4 months wages as a league two footballer.

This short example hopefully highlights the importance of implementing a robust financial plan during your sporting career. Financial planning should be approached in the same way in which you approach your training and development in your career as an athlete – maximising potential to get the best reward.

Of course, it’s also worth noting that all careers and earnings will be different, and athletes often go on to have successful second or third careers after sport. So, what can you do differently to make sure you do not join the same club as Messrs James, Daly, Becker, and Eubank?

Have a regular Team Talk

• Check in with yourself on a regular basis. Are you on track with your financial goals? Do you need to move the goal post if something unexpected happens? • Assess your income and outgoings. Do you know where your money goes each month? There are four main groups of outgoings:

• Essential Expenditure – Bills, food • Property – Mortgage Repayments, deposit, rent • Lifestyle – Holidays, clothes, entertainment • Save and grow it – Investing your money

As athletes’ careers are often shorter and income more variable than other occupations, have you considered your risk that strong earnings might not always be available?

Consider your long-term Goals

• You will be used to setting these in your professional environment • Consider what you want your lifestyle to look like in the long term and think about how your career will support this • Are you planning for the long term or spending in the moment? As highlighted above, its easy to get carried away whilst the money is there, but does this ensure financial security for the future?

Adapt and Change

• Think about what your future might look like. How long is your sporting career expected to last? What is the best/worst-case scenario? • Factoring in unexpected changes like injury, illness, or early retirement • Priorities may change and your financial plan should be robust enough withstand any bumps in the road

As with all professional sport there are many factors and influences that impact on performance and outcome. Your finances are no different and should be approached with the same dedication and professional attitude that you take onto the pitch, court, arena, or stadium. Its neither too early nor to late to start training your finances. The best tactics you can have early in your professional sporting career is to save some of your money and not spend all that comes into your bank account. This will undoubtedly make the biggest single change to your long-term financial picture. The earlier you start the bigger the positive change will be. ◆

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