Sports Industry Leaders on the Challenges of Finance Management for Athletes
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Stephen Rhodes, founder and managing principal of Signify Wealth, kicked off the Variety Entertainment and Technology Summit with an astounding fact from his research, “First round picks of the NBA draft have the ability to make a billion dollars of on-court income,” he explained. “And they don’t have to be Lebron James to do it.”
As a result of this windfall of investment opportunities, that space also creates both “winners” and “losers” in the marketplace. Rhodes warned that despite the abundance of opportunities, very little is equally dispersed among the athletes. “What I’m seeing is… not a lot of athletes have taken the time to build out the infrastructure that is necessary for them to take advantage of those opportunities.”
Rhodes joined founder of Advise Sports and Entertainment, Dee Thompson to discuss how athletes are utilizing new financial tools to best advance their interests outside of the game. Moderated by Todd Burach, senior vice president and team leader of sports and family office banking at City National Bank, the panel was focused on growing and stabilizing across-platform financial security in the sports industry.
“My concern is that what was intended to benefit the athletes ultimately doesn’t… We’re trying to fight as hard as we can to make sure that the athletes are the ones who capture as much of that as humanly possible and are in the position to benefit from the work that they put in.” Rhodes continued.
Many of Thompson’s clients are the NIL space — name, image and likeness. As Baruch noted, college athletes were recently allowed to monetize their NIL off the court while still being a part of the NCAA.
“In terms of the NIL deals, only the top 1% are really making the money, and actually women are making more money than men are,” Thompson pointed out. Thompson outlined how she sets her clients up for financial success by helping them build a sound structural foundation.
“The basic thing is to make sure they have their infrastructure in place, that they have their LLCs, that we help them to save money as they go along and build up their money to be able to do things differently,” she said.
The trio also discussed how female athletes make more money off court than on. There’s a stark disparity between WNBA and NBA salaries, for example, and Thompson explained that female athletes can earn more money in college than they can professionally.
To wrap it up, Thompson emphasized how a player’s individuality can be key to their success: “Really get to know who that athlete is and they can actually bring things to the table that will transcend what you originally thought it was going to be,” she said.
Watch the full conversation above.
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