Editorials

The uncertain futures and instability characterizing the careers of athletes can often lead to unique financial challenges athletes will need to overcome. A short earnings window, income fluctuations due to potential injuries and field performance, create the need for proactive financial planning. Financial struggles common to athletes may also stem from societal pressure and expectations of leading a lavish lifestyle and extravagant spending, among other things we will explore this month. Identifying the root of athletes’ financial struggles is the first step to dealing with them effectively, as well as acting proactively in the future, before they escalate.

When thinking about the characteristics of successful athletes, self-motivation comes to mind, since athletes are always working hard to overcome any obstacle that comes their way with resilience and perseverance, in order to achieve physical and mental excellence. However, their pursuit of greatness, requires them having high levels of confidence and low levels of self-doubt, to enhance their motivation and passion for their sport. Motivation and empowerment undoubtedly represent crucial components of the sport success equation. These can be affected not only by internal but also by external stimuli and influences, as we will explore.

It is quite common for professional athletes, as it is with other high profile public figures, to face a multitude of challenges when it comes to divorce and child support. Given their substantial earnings from sports and endorsements, their fame but also demanding sports schedules, divorce can become a very complicated matter for them, requiring expert help and guidance. As we have seen through numerous real-life examples of professional athletes, financial matters, asset division and child support can lead to disputes since there is a lot at stake. Heavy schedules and traveling can also negatively impact co-parenting arrangements, leading to strained relationships.

Athlete role models have a crucial role in the sports industry as well as in society in general, leading by example; being a source of inspiration to countless people all over the world. They are admired not only for their athletic skills but also for their character traits, personal values and ethical behavior. Through their great influence and power over crowds, they promote important social issues, making an impact that matters. As famous personas, they also have a major impact on fan engagement and consequently revenue generation for the sports industry, with sponsorship and endorsement deals. However, being an athlete role model does not come without challenges and pressure.

With successful professional athletes suddenly finding themselves making millions of dollars from one day to the next, it is only normal that their lifestyle changes. It is common for these athletes to be drawn to a more luxurious lifestyle, living for the moment. Moreover, their success may also lead to pressure from loved ones for financial support, causing them to question the intentions of the people close to them, whilst having a hard time setting boundaries. The extravagance of this new lifestyle and excessive spending habits can have disastrous financial effects, depleting this newfound wealth faster than the athlete may expect, if proper measures are not taken. Being able to enjoy fame and wealth responsibly, is key to maintaining a balanced and fulfilling life, as we will explore.

With a significant rise in female sports over the years, women have managed to defy all odds and thrive on what once seemed to be a male-dominated field. However, women still have to face a multitude of challenges in a wide range of fields in their everyday lives, due to the additional pressures and obstacles society and institutions heavily impose upon them. Female athletes have to juggle multiple roles, being athletes who need to succeed in their sport, being mothers who need to look after their children, being public personas who need to act as role-models, being wives and partners, as well as being financially healthy bread-winners.

A new year comes with new possibilities, opportunities as well as potential unexpected shortfalls. Therefore, athletes need to plan their finances ahead, organizing them proactively in order to stay on track with the goals and objectives they set for the new year and beyond. The only way athletes can reach their full potential is by turning these goals into reality. It all begins with identifying their current financial situation, as well as the financial position they would ideally want to be in, in order to come up with a structured plan on how to bridge this gap; fulfilling their financial goals and dreams in a way that adheres to their personal values. Organizing your finances can be simpler than you think, given that you have the discipline, dedication and flexibility required to follow through and be consistent.

Happy New Year to all of our Money Smart Athlete Blog readers. We will begin 2023 with an inspirational theme. When it comes to defining what it means for a person to be inspiring to you, there is no clear-cut answer. In the context of athletes, one can be considered inspirational due to their performance and athletic accomplishments; being able to set an athletic goal and do everything in their power to achieve it. Achieving their goals through hard work, perseverance, self-discipline and dedication, can truly empower those who follow and admire athletes.

How the general public, and especially fans and supporters, view and perceive a professional athlete as a sports personality but also as a public figure can undoubtedly affect not only their brand’s strength but also their mental wellbeing and consequently their sports performance. A positive public perception can elevate an athlete in all aspects, leading to an upward spiral, whilst a negative public perception can lead to a vicious cycle of failure, which can be very difficult yet not impossible to get out of. An athlete who acts recklessly in their athletic and personal life may end up putting their reputation on the line, risking losing everything they worked so hard for in a split second. However, with proper branding and marketing efforts perceptions can change to a certain extent, and an athlete’s positive public image can be recovered.

With professional athletes having a relatively short-lived career playing sports, relative to other professions, it is crucial for them to find ways to diversify their earnings streams outside of the playing field, during and after their sports career. A great way to do that is by taking advantage of the great influence they have on their fans and the general public; using their Name, Image and Likeness (NIL) to build and commercialize their brand image and therefore capitalize on it through sponsorships, endorsements and partnerships. This can be achieved through the creation of personal marketing strategies with well-defined branding activities, which are in line with the athlete’s personal values and what they want to represent.

When it comes to athletes and the challenges they face in their sports career, most people do not make the distinction between solo sports and team sports. However, the differences are significant, with solo-sport athletes facing a completely different set of obstacles relative to athletes in team sports, with loneliness being a great struggle. In individual sports, athletes only have themselves to rely on and when they fail to achieve their goals, the effect can be demoralizing; putting a strain on their emotional and mental health and well-being. This in turn can have a major impact on their personal life as a whole- not just on their sports performance.

In an ever-changing business environment, the conventional traditions of business are being redefined, with start-ups and entrepreneurs revolutionizing the economy. Elite athletes are no exception to this entrepreneurial transition. Notable sports names including David Beckham, Magic Johnson and Venus Williams have chosen to shift their focus to the world of business, with successful business careers as startup founders and innovators, safeguarding their financial stability after retirement from sports. There is no doubt that throughout their sports career, athletes cultivate various transferable skills and traits which could be applied to the business world, allowing them to become successful entrepreneurs.

Student-athletes are predominantly an American concept. Becoming a professional athlete through college sports is considered the conventional and “right” way. Talented high school seniors are scouted and courted by colleges. They then have to prove that they are pro material in order to be offered a professional contract; at least some of them. In fact, fewer than 2% of them end up turning pro. Nonetheless, student-athletes are considered some of the most privileged people on campus. In some aspects they are. They become recognizable, popular and people line up to watch them compete. But how “privileged” are they, really?

Athletes are in a mostly lucrative, albeit peculiar profession. Many receive astronomical salaries to compete, and make more in a year than the average person in their entire working life. Nonetheless, with retirement coming at a rather young age there is an abrupt...

Regarded as a taboo until recently, discussions on mental health have certainly become mainstream in the past few years. Several high-profile athletes have opened up about their struggles including the much-debated Osaka saga. It’s hard to persuade people that athletes with their celebrity status and millions of dollars deserve sympathy, but the reality is that neither talent nor money guarantee mental stability.

Financial literacy lies at the core of our mission here at the Sports Financial Literacy Academy. We define financial literacy as the ability to understand basic financial concepts and utilize a plethora of financial tools and skills in order to make informed and effective choices. Years ago, the Money Smart Athlete Blog was created when we identified a critical shortcoming of sportspersons around the globe; the ability to make prudent financial decisions and ensure their long-term financial well-being. We are glad to see that in recent years, more and more people are starting to appreciate the importance of financial literacy, both in the context of sports and outside of it.

The developments in female sports are rapid and incessant. Although, gender inequality in salaries, investment, TV rights and even participation still exists, no one can doubt that the gap is briskly closing. Just last week, the US Women Soccer team won $24mn payout and guarantees regarding the future of the industry after a six-year legal battle over equal pay. In the spirt of women’s day which is in a week from now, we have decided to dedicate March to female sports.