The Olympics are now over. The joy of a nation will be ringing in the ears of each and every one of our present crop of returning Olympians. Usain Bolt has been crowned “the world’s fastest man”. Many of our athletes have been recognized for their participation and achievements and will see an exponential improvement in their earning capability. Now what lies ahead?
It is important to note that, during the same week in which our athletes were making their historic mark in Beijing, there was a news item on one of our local television stations about a former national representative, a footballer, who had lived and died in very poor conditions.
It is true that many athletes of yesteryear who participated in sports did so for the love of the sport and for the great honor of representing their country, rather than for money, which by today’s standards, was not much.
There are legions of examples of sports and entertainment superstars who, at the apex of their careers, gained vast sums of income and then spiraled out of control into abject poverty. Those who went the way of a “Vegas-type” lifestyle at least had the memory of the roller coaster ride down.
It’s those who trusted their affairs to others and did not keep a discerning eye on their finances who are often hardest hit, as they only realize their disastrous situation when, suddenly, the Black American Express card gets canceled!
Athletes are the opposite of blue-collar workers. Not only are the hours, as well as work schedule, different but retirement looms at a much earlier age - that is, around age 30 - for most unless they participate in equestrian sports.
What this means is that retirement could last up to 45 years, except for those athletes who are able to move into commentating, or to become coaches and assist the development of young athletes.
However, if the majority of them are to survive their protracted retirement period, they will have to ensure that they do two things during their heyday: MAKE as much as they can and MANAGE what they have efficiently. Sounds simple enough, yes? Well these are the two hardest things to do.
Take the case of the world’s fastest man. Quickly he has become a global icon...someone young, fresh and charming - in short, a marketer’s dream! His challenge to make as much as he can revolves around negotiating his new appearance fees, winning purse, and bonuses that motivate further record breaking times.
He can also take advantage of the huge potential of wealth to be gained from product advertising and endorsements - activities that will involve contracts and patent licensing, as well as lawyers. Folks who are painfully in the know will always quip that “there are lawyers and then there are lawyers”.
Judging from the many buttons, T-shirts and other merchandise which are already carrying various images of Bolt, he has already established himself as a valuable brand. If he does not already have one, he needs now to align himself with a reputable international sports marketing and management company - such as IMG, which also manages the likes of a Tiger Woods - to allow him to maximize the benefits to be gained from his brand.
It is interesting to note that in the hip hop world, artiste 50 CENT pulled in the most revenue last year. According to FORBES magazine in reviewing the breakdown of his income stream, ADVERTISING AND MERCHANDISING of his trademarked 50CENT and G-UNIT label contributed the largest percentage to his income. In an interview, he stated that with his first advance from his music label he spent US$300,000.00 registering those names, rather than initially going out and getting lost buying into the “bling blitz”.
Athletes must have responsible and reputable accountants and investment advisors. It would be nigh impossible for athletes to keep track of all investments and expenses while globe trotting from meet to meet; therefore, they need trusted accountants, and trusted and savvy financial advisors.
As an investment advisor, Sterling Asset Management believes, for example, that athlete’s investment portfolios should be heavily skewed toward diverse long-term structures of a fixed income nature such as bonds, as well as toward unitized funds weighted in blue chip equities. This would place the emphasis on asset growth now - that is, the building of a sizeable nest egg - for use as a future income stream.
We would recommend, also, that such investments should be global in scope and should be led by the recognition that a simple savings account is not an efficient option. Finding an investment firm with the requisite global knowledge and experience is, therefore, critical.
Once this is done, there should be a set time for both parties to sit at regular intervals to discuss the client’s total financial portfolio and its performance. Lodging and leaving is the worst thing to do. Frequently scheduled meetings allow an opportunity for probing questions by the client, for the financial advisor to provide updates on new products available...and for a lessening of the likelihood of any grave surprises by either client or service provider.
Additionally, the need for adequate life and health insurance coverage should never be overlooked. A top athlete will often require consultation with some of the world’s best sports surgeons; such consultations will require adequate financial support.
At the end of the day the managers of athletes must instill in their charges the importance of seeking proper financial mentoring so that, at the end of their careers, they will be able to reap the rewards of have invested wisely. This will allow athletes to enjoy a decent standard of living as they transition into another phase of their lives.
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This post guest-blogged by David Weir…
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