The sports industry is one of the most profitable industries globally, and for good reason.
Our favorite teams and players inspire international loyalties, and their salaries reflect their status as global phenomena.
What is troubling here is that many sports players rise to high levels at a young age, missing out on crucial financial literacy training and instead being awarded high salaries with no end in sight.
An interview Forbes conducted with Morgan Stanley, the head of Global Sports, details the problem within this system and gives readers some alarming statistics regarding the lack of financial literacy training that professionals receive.
“Professional athletes are among the highest earners in the world, with most earnings coming from endorsements and other endeavors. The 2022 50 Highest Paid Athletes List reported, “The world’s 50 highest-paid athletes collected an astounding $2.97 billion before taxes and agents’ fees over the last 12 months”. These figures are just the tip of the iceberg as the professional and financial landscape expands, with the NCAA ruling that allows collegiate athletes to get paid and capitalize off their names, image, and likeness (NIL).
Although being a professional athlete can lead to a lucrative career, we must face the uncomfortable truth that 78% of athletes go bankrupt within three years of retirement. Women athletes face additional challenges. One is a substantial pay gap compared to their male counterparts. For example, The average NBA player earns $5.3 million per year while the average WNBA player earns on average $130,000 per year. This substantial wage gap leads many WNBA players to take their talents to international teams during the off-season. One such player is Brittany Griner, who is currently being detained in a Russian prison. Brittany has played for the UMC Ekaterinburg since 2014 during the WNBA off-season.
Morgan Stanley GSE and Columbia Business School have collaborated on an online course, The Business Of Sports. The course brings together leaders in the fields of sports, marketing, finance, media, and management, to provide participants with an inside view of the Global Sports and entertainment industry. Guest lecturers will include Salvatore Galatioto–President, Galatioto Sports Partners, among others.”
Read the interview with Morgan Stanley here.
What is most notable here is the fact that aside from the special cases, most professional athletes end their careers with a lot of money, but not enough to live off of for the rest of their lives. These athletes will likely want to maintain their “athlete” lifestyle without the funds coming in to support it.
These athletes have essentially been let go from the business that had supported them since high school. Left without a job title that had shaped their lives, these former professional athletes are left to their own devices.
This issue brings something to mind at the intersection of business and sports: preparedness.
The sporting world is a business, with the players serving as employees and products as well. The industry itself is so profitable that players likely have trouble seeing themselves as anything but professional athletes and looking past their own careers.
Like in sports, your business should always be prepared for the future.
When things are going well in your business, it is tempting to simply enjoy the success, but you should always be prepared for what comes next. Professional athletes too often enjoy the pleasures of their career without anticipating what their future holds.
Learn from where these athletes fall short, and be sure to emphasize preparedness throughout your business career.
Automating your lead flow with Cloud Kennect is a great way to begin preparing for the future of your business today.