I guess I was a little naive, or maybe it’s just that my national sports leagues don’t have it, but after reading this article it makes sense [Pensions in Pro Sports].
Most jobs have a retirement savings plan, whether it be Superannuation, 401k etc. so why shouldn’t professional sports?
An athletes career can be short lived, so it’s comforting to know that some protocols are in place to protect them through retirement.
Reading through the article, you can see that the compensation is minimal for major leagues such as the NFL and NBA. The PGA Tour clearly stands out as the most lucrative, as it rewards players based on how well they actually do on the tour.
Australian Leagues, such as the AFL do not offer financial compensation to retired players, instead using the money to help athletes find a new career after sport.
Is this a better option?
You know the ancient proverb: “Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime.”
Another question is the age that these monetary funds are paid.
Is it too late in an athletes life?
I don’t think there are many 45 year old athletes (apart from golfers) still plying their trade. Maybe less compensation should be paid out per year over a longer course of time?
Still, it is better than some sports that don’t pay at all, like NASCAR and Horse Racing. Judging by this, one could assume there is an inverse relationship between retirement compensation and risk!
Finally, and probably the most concerning question to arise:
Are Sports Agents entitled to a percentage of the pension?
Initially, one would say a definitive no. Ethically, it is wrong.
However, it is income derived from their contracts whilst they were represented, so an argument could be made that Sports Agents are entitled to a share of this income stream.
Thoughts?
– Chris Lesley
2 replies on “The Aftermath”
I would say that Sports Agents should not be entitled any percentage of the pension.
However, what about post-career opportunities that the Sports Agent helped create? After your client is done playing the sport he/she excels in, the Sports Agent should continue to help in post-career planning.
For example, if you spend a great deal of time helping a client open up a successful restaurant franchise, should you be entitled to a percentage of profits? Do agents continue to have a fiduciary duty to help their clients after retirement even if no commission is being made?
Nothing in life is free, and there is always a cost to doing business whether you think someone is entitled to a percent or not. While some people work on a percent basis, you can also find some financial advisors that have flat fees. Just something to consider when planning and getting advice. What do you think?
David