Supermodels Might Help Jocks With Labor Fights: Scott Soshnick
Professional athletes are surrounded by publicists, agents, lawyers and advisers.
Yet, financially speaking, the confidants they need most are the supermodels. Gisele Bundchen, wife of New England Patriots quarterback Tom Brady, and her genetically blessed co- workers are the only folks on the planet who can, on matters of money and retirement, be compared with well-paid jocks.
Both have a short period to 1) make as much money as they can and 2) make it last a lifetime.
And, as Chris Dudley, a former National Basketball Association player with an economics degree from Yale wondered aloud not long ago: Unlike the all-too-common tale of the lost- it-all athlete, when was the last time you heard some sad story about a supermodel spending her way to insolvency?
“You can’t compare athletes to any other profession except a runway model,” said Dudley, a partner in Filigree Advisors, which the former Oregon gubernatorial candidate describes as a wealth design and management company in Lake Oswego, Oregon.
Until professional athletes, as supermodels seem to have learned, understand and embrace the basics of personal finance they will never stand a chance to win one of these routine and long-running labor disputes with owners.
The owners -- management, really -- not only have the money, they know how it works. Simple things like compound interest, liquidity and cash flow. Try asking some teenage or 20-something jock to explain those.
Too many professional athletes still haven’t devoted enough time to understanding the fundamentals of their financial future, even though they know well the history of labor acrimony and predecessors who have ended up broke.
That goes a long way toward explaining why unions representing National Football League and NBA players simply don’t have the resources to weather long work lockouts. Advantage owners.
The players need the money because too many haven’t heeded the warnings of their unions, which have urged their members for more than a year to stockpile a work-stoppage emergency fund.
Don’t forget what Patrick Ewing, president of the National Basketball Players Association at the time, said during the 1998-99 lockout that resulted in lost regular-season games for the first time.
“Sure, we make a lot of money,” Ewing said, “but we spend a lot, too.”
Ewing was lambasted for the remark, which critics pointed to as another example of athletes being out-of-touch with the lives of paycheck-to-paycheck customers.
Speaking the Truth
Ewing should have been lauded. He spoke the truth. The comment might have served as a warning siren, a wake-up call for athletes to change their behavior. Spenders to savers.
It’s hard to persuade your average young adult to save, say, 10 percent of each paycheck, let alone a professional athlete whose vision of personal invincibility is one of the reasons he reached the pinnacle of the profession.
Show me the pro sports franchise that makes financial literacy an integral part of its program for new players. It will be the first. Teams provide countless coaches to tutor a teenager on his drop-step, but no one to discuss direct deposit.
Both the NFL and NBA unions have distributed lockout preparedness playbooks to its members. The NBA’s 56-page booklet urges players to prepare for a work stoppage by swearing off big-ticket items like homes, cars or jewelry. It recommends grounding the private jet, and giving up the presidential suite when staying in a hotel.
The NFL’s booklet even suggests that players turn down the thermostat to save on home heating costs.
When Paychecks Stop
Dudley says players, especially those in their early 20s, just don’t seem to understand the need to plan for a retirement that might span 60 years. They don’t foresee the day when the paychecks stop. Every player’s goal, wealth managers say, should be to plan so that there is no change in lifestyle once the games end.
Both the NFL and NBA unions have a lockout fund that can be distributed to players. But that’s giving a man a fish, not, as the adage says, teaching him to fish.
Jim McIlvaine, a retired basketball player and former treasurer of the union, says no matter how much warning players get there’ll always be those who ignore the advice.
Maybe the supermodels can get their attention.
Scott Soshnick is a Bloomberg News columnist. The opinions expressed are his own.)
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