By Constantinos Massonos, Contributor
There is no doubt that the COVID-19 pandemic has deeply impacted all stakeholders in the sports industry. The response of most national and international decision-makers was to shut down sport competitions at all levels, including the Olympics. Professional and amateur athletes, sports organizations, sports-related companies, and employees all had to face significant financial distress during the pandemic.
Loss of Income
For athletes, cancelled or suspended competitions and the inability to secure money or financial support caused an inevitable loss of income. With life returning to normality, athletes should reflect on how to be better prepared for such career-altering situations. The pandemic has exacerbated the unique financial challenges athletes face during their professional careers, making preparation even more crucial.
High Competition
Athletes are already part of a highly competitive and risky industry, where income can fluctuate due to injury or poor performances. This fluctuation threatens an athlete’s lifestyle, making it essential to have a financial plan in place. A financial plan should accommodate the athlete’s dreams, goals, and circumstances, facilitating budgeting, saving, and investing to maintain a secure financial future.
”Force Majeure”
Another threat to an athlete’s income is the presence of a “force majeure” clause in sports contracts. This clause allows the other party, such as a sports team or sponsor, to stop performing contractual obligations due to uncontrollable circumstances like the COVID-19 pandemic. It emphasizes the importance of having a trusted legal advisor to assist in navigating legal options and income-related matters.
Lack of Financial Literacy
The lack of financial literacy among athletes has been a major topic in discussions about financial literacy programs for athletes. Athletes don’t usually develop financial knowledge through formal education, unlike other parts of the population. The pandemic has forced athletes to re-examine their financial management, but many may struggle due to the lack of financial literacy.
Supporting others financially
Athletes not only support themselves but often support friends and family as well. The pandemic added extra financial burdens, leading to increased requests for financial support. Athletes should consult their financial advisors to assess the needs of family and friends and determine who truly requires financial assistance.
Finally, the pandemic has highlighted the importance of creating alternative income sources for athletes. This planning should occur long before an athlete’s career ends to accommodate situations where their main income source is disrupted.
For more information on understanding the lessons the pandemic should teach us, please send an e-mail at [email protected]