There is no bigger and more highly anticipated off-season sporting event than the NFL Draft.
The NFL Draft conversation has dominated the sports-talk radio airwaves and sports television stations for months and is continuing to heat up even amidst the global pandemic the world is facing right now due to Covid-19.
These are unprecedented times. The world has turned upside down. The sports world is no different.
The NBA and NHL seasons are suspended until further notice. MLB Opening Day has been cancelled and talks about if, when, and how the season will be played is a daily topic of conversation. NCAA football teams are not practicing with the start of the 2020 season in jeopardy.
Sports for many is a way of life. It represents hope. Sports sparks and ignites us. Most importantly, it unites us as a country.
With the NFL Draft less than one week away, we are living in unprecedented times. There has been much controversy surround the 2020 NFL Draft – should it take place and how should it take place?
NFL Commissioner Roger Goodell made it clear that the NFL Draft will take place, not with the lineup of festivities as was scheduled, but virtually.
The NFL Draft is scheduled to take place on Thursday, April 23rd – Saturday, April 25th. And, I can’t wait.
The beauty of the National Football League is that there is no offseason. Will the Cincinnati Bengals select LSU quarterback Joe Burrow with the first overall pick, or will they trade the pick? The draft buzz is heating up, and this and other burning questions will be answered in one week.
I’ll leave those questions to the experts.
Regardless if your client is the first pick of the 2020 NFL Draft or the last (aka “Mr. Irrelevant”), chances are your client will be walking into fame and fortune – more money than your client has ever seen before. This is a great thing, if your client knows what to do with it and how to protect it.
Should your client buy the house for mom, the flashy car for dad and the diamond Rolex watch for the childhood friend who has magically reappeared in your client’s life weeks before draft day?
I am sure you have heard the horror stories – how athletes lost millions, how athletes went bankrupt, how athletes got taken advantage of by their “trusted” advisors. I could go on and on, but you get the point, I hope.
Now, I am not saying mom shouldn’t get the house she always wanted. I’m saying, professional athletes should surround themselves with well-respected advisors who understand money, the NFL, contracts, and can put a team of professionals in place who seek to guide, protect and advise, with the athlete’s best interest in mind.
The prospect of playing in the NFL is a huge accomplishment. From the days in Pop Warner to the early morning training sessions in high school and college, this is what your client has worked for. Being drafted and entering the National Football League is a time of celebration, but it’s also a time be smart about how your client celebrates, and what your client spends money on. Your client must be protected from ending up on a list of athletes whose fortunes went up in flames.
Here is what every NFL draft prospect and rookie needs to think about before and after draft day about how to protect their assets and income. As an attorney who has worked with individuals in the sports and entertainment industries in family law matters, here are my observations as to the best ways to protect your newly acquired wealth.
- Find the Right Agent
Finding the right agent may just be the most important relationship that you enter going forward. The right agent should be someone that the athlete can trust and is comfortable with. The right agent has a plan that fits the athlete’s goals – a short term and a long-term plan for life on the field during the athlete ’s playing career and life off the field. The NFL is a sport that is not kind on the body. Finding the right agent to guide the athlete through life on the field and off is crucial.
A good agent becomes family. A good agent will be thinking about how to maximize a player’s earnings on and off the field. An agent should prepare a player for life after football and maximize his income and earning potential in off-the-field endorsements.
A player’s team of professionals should have detailed knowledge of contracts, social media, marketing and endorsement opportunities, and all the ways to promote and maximize an athlete’s earning potential and brand through various social media platforms. The team should consist of professionals who can provide the athlete access to opportunities in post-retirement life from the NFL and begin creating those opportunities for the athlete beginning with the NFL Draft and throughout the playing career.
- Considering Popping the Question
Athletes have bullseyes on their backs – it is the nature of the world we live in.
Is it for love or is it for money? When it comes to protecting the kind of wealth that flows from an NFL contract, it doesn’t really matter. Entering into a prenuptial agreement before your client gets married is an absolute necessity and the smartest thing an NFL player can do to protect current and future earnings from contracts, sponsorships, and off the field ventures like businesses and investments.
I have seen the other side of it – the ugly side. This isn’t the side an NFL player ever wants to see – a divorce being litigated through the media and the public spotlight.
Let’s imagine an NFL superstar who marries their high-school sweetheart right after being drafted, without a prenuptial agreement. Would you think the $10 million house and the apartment in Miami, the fancy cars, business ventures, and other properties and investments are protected? Or better yet, how do you think a divorce like that ends up? If you think the NFL superstar was given a hometown discount when it came time to negotiating alimony, child support and split of assets, think again.
Knowing how to protect all this prior to marriage in the form of a prenuptial agreement is vital.
- Find a Financial Advisor
What happens to many athletes and their money is hard to believe. But yes, the horror stories are real, so – believe it. Financial stress and bankruptcy due to divorce or unemployment is a real problem.
The challenge athletes and particularly NFL players face financially is different from other professions. For the most part, an NFL player’s peak earning years occur at a very young age, often in their 20s, and last a very short time. This is unlike other professional athletes, professions, including public-facing professions like actors and musicians, who are likely to earn more with experience and exposure.
Talking financial planning isn’t an easy conversation, but it is a necessary one. Unfortunately, some financial advisors do not start this conversation early enough with an athlete once the athlete enters the league or in some situations, the conversation about saving and retirement does not take place at all.
The stories are tragic, but they happen way too often.
The conversation about how an NFL player should live during his playing days and post-retirement is one that should take place before and immediately after draft day, when the player’s career is just starting. The choices an NFL player will make from day one and during peak earning years while playing in the league will affect how that player and his family live after the player’s career is over.
- Disability Insurance
Here’s one unpleasant reality – a football player is one hit away from a career-ending injury. As a professional football player, protecting and preserving your body is tied to your financial success.
An unexpected and sudden injury can cut off an athlete’s income stream at any moment resulting in a financial catastrophe to the athlete and his family. While a portion of a football player’s contract is guaranteed the majority is often not.
The money is too big and the risk for injury is too great to not be protected.
Once your client has been drafted and is in the NFL it’s tempting for a player to think that financial worries are over.
This is as likely as being down 100-0 at halftime on the road in Lambeau Field in December and making a comeback.
For more information contact Berkman Bottger Newman & Schein, LLP.
To schedule a consultation with an NYC divorce attorney, please calls us at (212) 466-6015, or reach out to us through our contact form today. We maintain offices on 5th Avenue in Manhattan, in White Plains, and in Hackensack, NJ.