When is the most important time for an athlete to be in the best shape of his or her career? After the last game is played. Seth Abraham, former head of HBO Sports and MSG Entertainment, is among those who would argue that the success of former professional athletes is measured by how they position themselves for life after their playing days are over. In his eyes, George Foreman got it right.
Professional athletes are different than everyone else in that they experiences two deaths to our one. The death of their athletic career is that first death. From Seth Abraham’s perspective, George Foreman prepared for it well. Though he is known to have enjoyed a successful and lucrative boxing career, many associate his name with the George Foreman grill, a staple in many households. The success of the grill guaranteed Foreman’s financial health in his post career. Ironically enough, he now owns and operates a cattle ranch in Marshall, Texas and every time one of them makes it to his grill, he smiles contentedly and thinks ‘Cha-ching!’
How can more former pros enjoy financial sustainability after they retire? Surely not everyone will be presented with the opportunity to promote a product that became as wildly successful as the grill named for Foreman. However, there will soon be a formula to combat the financial “unplanning” that we see many athletes undergo as a consequence of their spending and overall mismanagement of money. The formula will come as result of a study stemming from a Seth Abraham-led project team at Constellation Wealth Advisors LLC, one of the leading advisory firms in the area of private financial management, and the Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management at the New York University School of Continuing and Professional Studies. These groups recently announced a collaborative research study to gauge the overall financial health and well-being of athletes in their post-professional careers. The scope of the research will include analyzing the attributes of retired athletes who have had careers in either team or individual sports and will take into account several factors including their financial status and their participation in philanthropic initiatives.
Many athletes are not prepared to deal with the uncertainty of today’s volatile financial market. In fact, Sports Illustrated reported that a staggering 78% of NFL players go bankrupt or experience money problems within two years after their last payday. Similarly, 50% of NBA players go broke five years after retirement. Often the media dwells upon the failures of athletes after their careers have ended, but there are plenty of examples of those who have excelled. The Constellation and NYU study will produce an index of success that will help athletes to develop a roadmap to financial health before their final check clears.
The research will be based on publicly available data and will include interviews with former athletes who have achieved success in a multitude of categories during the post-career phase of their lives. The information attained will be evaluated to identify successful patterns and practices. In addition to Constellation Wealth Advisors, outside counsel from various fields will be sought out to offer their perspectives on the results.
Constellation conceived the idea for the research project after working with a number of athletes and identifying how certain key attributes, investment practices, and philanthropic involvement helped to provide a solid foundation for success in retirement years. Steve Bono, former quarterback with the San Francisco 49ers and Kansas City Chiefs, is a principal with Constellation and will be among those involved in this project. He is personally invested in this project since he once had to go through the process of preparing himself for life after football. A near career ending injury in 1989 helped him come to the realization that his career was finite. Though he was able to play football for another eleven years, he also took that time to prepare for his life after retirement in 2000. Since then, he has been working in financial services, and spent the last three years with Constellation.
Robert Boland, academic chair of the NYU-SCPS Tisch Center is pleased to be working with Bono and Constellation on this research study. “We expect that this research will help to define what is needed to ensure post-career success for future generations of athletes,” Boland said. The initial findings of the study are expected to be released later in 2013. It is believed to be the only study of its kind to date.