Many athletes think about what they’ll do after sports, some choosing to become entrepreneurs. Learn how a trusted Financial Advisor can help plan for success.
Entrepreneurs and athletes have a lot in common: Both have competitive drives and get-it-done mindsets. They don’t shy away from calculated risks and consider failure as a learning opportunity.
The traits that make many athletes successful in sports can help them succeed as entrepreneurs. However, the first steps into this career can be daunting. Just as learning and mastering any sport can be grueling, building a business is hard work, with a steep learning curve and a high risk of failure. And just as athletes benefit from coaching, entrepreneurs can thrive on professional advice that helps them make sound decisions and avoid unnecessary risks to their financial long game.
Morgan Stanley’s Global Sports and Entertainment Directors—many of them former pro athletes—often advise their clients about their post-sports career as part of long-term wealth planning. Here are three tips they shared for athletes who may be interested in going into business for themselves.
For athletes, an entrepreneurial second career can mean a variety things. Traditional opportunities include restaurant franchises, car dealerships and real-estate development. Some have converted their star power into their own brands and launched product lines in food and fashion. Others may become corporate brand ambassadors. In recent years, more athletes are entering the field of venture capital, building teams of advisors who can vet promising startups for investment, in sectors they feel passionate about. Another recent trend: Owning a majority or minority stake in a professional team.
Ask yourself: What pursuits appeal to you and what would be a good match with your skill set? The off-season is an ideal time for athletes to explore these questions, assess their options and begin networking with people who can open doors for them.
Players associations have encouraged career exploration by offering seminars and internships, and Financial Advisors can help sort through these opportunities to identify a good fit. Athletes must be willing to assess their abilities, relationships and interests honestly to move forward.
Athletes attract a lot people into their orbit. Some may not have the most honorable intentions and could try to pitch them all kinds of flimsy business ideas—often as “sure bets.” Building a team of trusted advisors can help separate honest brokers from fast-talking speculators.
Such a team might include agents, attorneys, accountants, Financial Advisors and others close to the player who can be trusted to help vet opportunities and determine whether they fit the broader, long-term financial goals. For example, if an NFL player retires at 35, his retirement benefits may not kick in for many years. That may drive a different set of considerations for building a second career to help sustain the player and his family, while building wealth for the future.
Career 2.0 can be a new idea or a tried-and-true formula. It largely comes down to personality and opportunity. Not every star athlete gets an offer in the broadcast booth. Some choose to be coaches or leverage their brand sponsorships into business relationships or executive jobs. The key is to remain open-minded. Opportunities don't always seem obvious, at first.
In some cases the second career turns out to be a bad fit or has a short life, requiring another career pivot. Ideally, this refocus comes at a minimal cost to long-term financial security. The key is having the right people around you to sort out what happened and learn from the experience.
Whatever path an athlete chooses, it's important to avoid feeling invincible when it comes to making your next move. Morgan Stanley Global Sports and Entertainment Directors are chosen for their advanced experience working within very specific fields. Learn more and connect with a Global Sports and Entertainment Director near you to help you develop a sensible transition plan. Then, you can enjoy your second career, knowing you are better prepared for what the future holds.