By Constantinos Massonos, Contributor
The Coronavirus pandemic beyond being a threat against human lives, it is considered the biggest disaster to hit the sports world in many decades; it is not only causing the suspension of already running competitions such as the NBA and the majority of Europe’s soccer leagues but also causing future competitions to be postponed such as the Tokyo 2020 Olympic Games, Euro 2020 championships and Copa América.
Experts believe that it’s too early to calculate the damage to the sports industry. Broadcasters are revising the value of current deals; sponsors are reducing spending, and matchday revenue is expected to be close to zero, bringing some European clubs in the verge of bankruptcy. Many clubs have already responded by cutting costs including players’ wages, with two of the world’s highest paid athletes, Lionel Messi and Cristiano Ronaldo accepting pay cuts.
Revenue streams are not drying up just for sports clubs and their athletes but also for athletes competing in individual sports. The suspension of competitions means no prize money and minimized sponsorship income which brings athletes having to depend on their emergency funds to cover basic expenses such as bills, rent or mortgage.
This financial disruption and uncertainty about the future requires athletes to take steps towards financially protecting themselves and their loved ones. Their first step should be preparing a roadmap, a short-term financial plan, having the following in mind:
- Your financial goals should be in line with the current health and economic war we are fighting, hence your priority should be having a roof over your head, putting food on the table for your family and paying for the essential bills.
- Figure out your current financial situation, adding up your emergency fund and other assets. Of course in the short term you will only be able to use your most liquid assets, those that you can turn into cash easily, such as your bank accounts and certificates of deposit. During the current crisis banking institutions might allow you to use your fixed term or notice saving accounts with no penalties.
- Add up your income, if any, from wages, appearance fees, sponsorships or product endorsements. Don’t forget to include any Government help you are eligible to receive such as stimulus checks or unemployment insurance. Government programs vary in their offerings to help those financially impacted by the coronavirus.
- Write down every single bill that has to be paid for the next months, cancel all automatic payments and then decide which of them are essential. You need to cut back as much as possible to get through the next weeks or months. If your income will be close to zero then I don’t think ordering expensive, luxury items online would be wise. As for the rest of your standard monthly expenses automatic payments, you should go through them and decide which expenses are absolutely necessary and which are discretionary. Discretionary expenses will have to be kept at an absolute minimum!
- If you will be late with rent, you should explain the situation to your landlord immediately. You will still have to pay rent but, they might give you more time to pay. Some governments have taken measures to suspend new evictions during the crisis.
- Check whether you can take a repayment holiday on your mortgage and capitalize on the flexibility offered by banks during the pandemic, to stretch your liquidity.
- Write your income and expenses on a table and balance them. If your income is greater than your expenses, you should save any money left at the end of each month in your emergency fund for later use. If your expenses are greater than your income, you need to try and cut back more on your expenses. If that’s not possible you will need to use money from your emergency fund and as a last resort you should use any credit lines or bank overdraft facilities that are available to you.
These are tough times, but we will get through them by staying strong emotionally, physically and financially. Having our finances under control can relieve some of the stress all of us are currently feeling. You can contact us for further assistance and recommended actions you can take to alleviate the financial impact of Covid-19 at [email protected]
