Tag Archives: Professional Development

It’s Amateur Night at… not the NCAA

Photo: USA Today FTW via AP Photo/The Augusta Chronicle, Jon-Michael Sullivan

With Todd Gurley and Jameis Winston investigations underway, much attention is being (re)directed to the NCAA’s amateurism claims.

Setting the tone for the current debate is Judge Claudia Wilken’s recent ruling in the O’Bannon case against the NCAA, where she found the NCAA in violation of antitrust law by preventing football and men’s basketball players from being paid for use of their names, images and likenesses.

Who are you calling an amateur?

In a culture where the tables have turned and more and more children proclaim their goals of being basketball and football players instead of doctors and fire fighters when they grow up, I don’t believe there’s anyone so naïve to think that being a student is the top priority of a student-athlete. In fact, the whole system would emphasize just the opposite. Down to the high school level (and even before then, I’d be willing to bet) coaches, teachers and administrators often collude to create the most advantageous circumstances to further the advancement of their athletes. Whether this means inflating grades or granting unheard of extensions for assignments, overlooking necessary disciplinary action or softening sanctions, athletes receive special treatment in order to remain eligible to remain in the game. I’ve even known parents to transfer their students from private to public school or across school districts if it meant more playing time and more exposure for their athlete.

This pattern of behavior makes clear early on the prioritization of athletics over academics, a pattern only to be exacerbated at the collegiate level where rigorous travel and training take precedence over class schedules, and athletes may or may not be steered toward particular classes and professors to help them maintain academic eligibility. Athletic opportunities govern families’ choices about when, where and for how long young athletes pursue an education, because these days, collegiate athletic programs function more like a D-League than anything else. And let’s not overlook the fact that near quarter of a million-dollar educations suddenly have zero dollars attached for the student who shows promise on the athletic field. That’s not generosity, that’s business. Especially when guys like Todd Gurley are easily raking in several times more than their share of tuition dollars.

Back to business.

Let’s be real. The athletes driving these DI and DII revenue sports are only considered “amateurs” because they are not allowed to share in the profits they generate, not because they’re only in it for the love of the game. We’ve seen this to be the case with the countless athletes past and present (and some unknown I’m sure) who have gotten themselves and their schools in trouble for accepting money from alumni or agents for one reason or another. At the end of the day, these athletes work extremely hard to prove themselves from the very beginning of their little league careers for a shot in the pros. That’s the point—to get to the big money—and for good reason. The story of the athlete who comes from a socioeconomically disadvantaged background and has dreams of “making it” and supporting his or her family is not uncommon. But the turning point shouldn’t necessarily be years down the road on draft day if the players are actually generating revenue before then… just without the ability to realize those gains.

Train up a child…

If a young athlete’s whole life is dedicated to training and improvement on the playing field, shouldn’t they also be instructed how to manage the success they’re working toward along the way? We hear it all the time: “Multi-million dollar athlete goes broke.” They even made a movie about it. But why? Because they clearly lacked fiscal prudence. Next question: How can they know if they’re never taught?

There can be no expectation of responsibility when a 19 or 20-something year old, fresh out of a year or two of college, is handed tens of millions of dollars with no guidance as to what to do with it, especially when the lifestyles of everyone else in the locker room suggest big houses, fast cars and flashy wardrobes are the only way to say “I made it.” (Though those may be the least of their vices…)

The point is this: If we teach our athletes how to manage their money (and otherwise function like responsible adults) early on, they’ll have a much better chance at success later in life, whether as a professional athlete or corporate professional. In fact, the O’Bannon ruling creates an opportunity to do just that.

Judge Wilken’s injunction made it permissible for schools to pay their athletes more than $5,000 per year in exchange for the use of their names, images and likenesses for revenue-generating endeavors. That’s at least $20,000 to manage. How will they do it?

To further support their student-athletes, universities can follow the lead of schools like the University of Illinois that facilitate a life skills program designed to develop the student-athlete as a whole. Programs like these can include financial education components that will help students learn essential principles for spending and investing their money wisely now and in the future. What’s great is that in its Statement of Policy regarding agents and advisors, Illinois has prohibited communications between agents and financial advisors and student-athletes, unless authorized by the university’s life skills coordinator. This supports an environment in which athletes can learn about agency/representation, financial management, etc. and be shielded from some of the risk of exploitation or misguidance (notwithstanding any deliberate action from either side).

The future of the amateur athlete is uncertain, at least as far as the NCAA regulation is concerned. With the O’Bannon ruling, it seems that collegiate athletes are ever so slowly gaining momentum toward reclaiming economic ownership of their personal brands, but further developments are unpredictable and certainly remain to be seen.

Advertisements

Breaking the Cycle of Broke: The Business Case

Just last week Iverson was reported to have been begging for change outside Atlanta’s Lenox Mall. A security guard asked him to leave, but with great difficulty, as Iverson was a childhood hero of his. Yes, Allen Iverson, the 1996 first-overall NBA draft pick and Rookie of the Year, 5-time NBA scoring title winner, MVP, Olympic bronze medalist and 5th greatest NBA shooting guard of all time according to ESPN. He earned more than $200 million in salary and endorsements over his 17 year career, but couldn’t seem to hold on to it. 

Photo Credit: The News Nerd
Photo Credit: The News Nerd

But all is not lost. Thankfully, Iverson had someone truly looking out for his long-term, best interest during the height of his career. Known as “The Reebok Fund,” Iverson reportedly has a $32 million trust funded with earnings from shoe deals that he cannot touch until he’s 55. He’ll be able to start drawing on his NBA pension at age 45. He’s 39 now, so there’s still some figuring out to do in the meantime. But for many athletes, Iverson’s “meantime” is their perpetual future outlook. If it weren’t for the foresight of a trusted and savvy friend, Iverson would likely be looking at indefinite financial ruin.

A 2009 Sports Illustrated article reported that 60% of former NBA players are broke within five years of retirement. Among NFL retirees, bankruptcy and financial duress become harsh realities for more than three-fourths of athletes only 2 years after hanging up their cleats. ESPN’s 30 for 30 film “Broke premiered in 2012, revealing the dark side of success and painting a complex picture of the many forces that drain athletes’ bank accounts.

broke

What’s sad is that this isn’t new news. The real tragedy is that this continues to happen to some of the most highly esteemed people in America. But why? 

These days, with the almost inconceivable amount of resources available to professional sports leagues–especially to the NBA and NFL, whose teams are collectively worth more than $19 billion and $37 billion, respectively–you’d think there would be a support infrastructure built in to guide these guys from the time they sign their rookie contracts through their retirement. While both leagues have their own versions of a rookie symposium that touch on financial responsibility, obviously there’s still more work to be done… Mostly because you can’t teach a 19 or 21 year old everything he needs to know about life as a professional athlete (or a responsible adult, or even about basic personal finance) in 3 days. But more than that, THIS KEEPS HAPPENING! 

Now certainly Allen Iverson’s financial situation is no more the fault of the NBA as any professional athlete’s “brokeness” is the fault of the league that gave them their fortune. Like anyone, Allen Iverson is fully accountable for his decision-making. However, given the unique position the NBA, NFL and other sports leagues have, there is more they can do to help their athletes learn how to make wise decisions with regard to money to avoid falling into the next generation of broke former superstars. 

Not the league’s job, you say? Perhaps not. However, it IS in their best interest. Any professional sports league’s greatest asset is their athletes. Yes, the TV deals and brand equity may (now) be valued higher than any individual player or franchise, but let’s not forget there would be nothing to watch and nothing to brand without those guys (and girls!) putting their bodies on the line on the playing field. That being said, it is in any league’s best interest to protect their assets–even from themselves.

First, it’s the right thing to do. I’m a firm believer that, if you have the capacity to do help, you have the responsibility to help. You know, “to whom much is given, much is required.” The NBA, NFL, etc. have the resources (financial and otherwise) to convene the foremost experts on financial management, investment, and other topics to present a more comprehensive curriculum to teach athletes what they now need to know on a grander scale (due to the sheer amount of money they’re making). Further, this curriculum should certainly be presented in the Rookie Symposium but must be made available year-round to players in all stages of their careers to promote continued learning and educated decision-making beyond an athlete’s first year of play. Not interesting enough? How about getting the athletes (current and former) who have graduated with bachelor’s and master’s degrees in finance or economics to teach their teammates some of the do’s and don’ts of personal finance and investing? This would be less common in the NBA with players eligible for the draft only 1 year out of high school, but in the NFL where many athletes complete their college degrees before starting their pro football careers, this would be a great way to not only encourage continued education but deliver valuable information via trusted sources. They read the books in school and are living the life on the field–they truly get it. 

Second, it makes business sense. There are no positive gains for a league’s brand equity when it faces law suits from former players over benefits or anything else. Moreover, when the league’s players do well on and off the field, it greatly improves the on-field product. How? Check out these stats from the American Psychological Association:

  • 43% of employees say that home and family responsibilities interfere with job performance
  • Conflict between work and family roles was found to lower the perceived quality of both work and family life which, in turn, influences organizational outcomes such as productivity, absenteeism and turnover.
  • The existence of programs that facilitate work-life balance is related to organizational commitment and job satisfaction.
  • Companies with higher growth in profitability have engagement levels that are more than 20% higher than those of their counterparts and provide more growth and development opportunities.
  • In a 2009/2010 report, companies with the most effective health and productivity programs achieved 11% more revenue per employee, delivered 28% higher shareholder returns and had lower medical trends and fewer absences per employee.

So, putting this in NFL/NBA terms: an athlete that has personal development opportunities available through his team and/or league can leverage those opportunities to minimize negative impact from home and family stress on job performance; become more productive on the field; and yield greater profitability for the team. I think that makes a pretty good business case, don’t you? 

Think about it: A player facing divorce has significant emotional duress to contend with that will likely affect his performance on the field. What’s more, there’s great cost to the whole process, from the lawyers’ fees to the ultimate price of settlement. An then the guy still has to figure out what to do with what money is left (if any). We’ve seen this situation far too often, in addition to those that are marked by extravagant spending and bad investments. What these guys need is guidance, and the teams and leagues they play for have the responsibility and even the selfish interest to do something about it. 

New York Times writers Teresa Amabile and Steven Kramer put it this way: “Work should ennoble, not kill, the human spirit. Promoting workers’ well-being isn’t just ethical; it makes economic sense. Fostering positive inner lives sometimes requires…that managers address daily hassles and help with technical problems.”

Daily hassles and technical problems could, in this case, be described as everyday money decisions and the lack of knowledge to effectively deal with them. Teams and leagues have what it takes to solve the “technical problems” by providing players, current and former, with the tools they need for success. It’s just a matter of will at this point.