Professional athletes are among the highest earners in the world, with most earnings coming from endorsements and other endeavors. The 2022 50 Highest Paid Athletes List reported, “The world’s 50 highest-paid athletes collected an astounding $2.97 billion before taxes and agents’ fees over the last 12 months”. These figures are just the tip of the iceberg as the professional and financial landscape expands, with the NCAA ruling that allows collegiate athletes to get paid and capitalize off their names, image, and likeness (NIL).
Although being a professional athlete can lead to a lucrative career, we must face the uncomfortable truth that 78% of athletes go bankrupt within three years of retirement. Women athletes face additional challenges. One is a substantial pay gap compared to their male counterparts. For example, The average NBA player earns $5.3 million per year while the average WNBA player earns on average $130,000 per year. This substantial wage gap leads many WNBA players to take their talents to international teams during the off-season. One such player is Brittany Griner, who is currently being detained in a Russian prison. Brittany has played for the UMC Ekaterinburg since 2014 during the WNBA off-season.
To unpack and discuss solutions to these ongoing issues, For(bes) The Culture sat with Morgan Stanley’s Head of Global Sports and Entertainment division Sandra L. Richards. This interview has been edited for clarity and brevity.
The Business Of Sports
Morgan Stanley GSE and Columbia Business School have collaborated on an online course, The Business Of Sports. The course brings together leaders in the fields of sports, marketing, finance, media, and management, to provide participants with an inside view of the Global Sports and entertainment industry. Guest lecturers will include Salvatore Galatioto–President, Galatioto Sports Partners, among others.
For(bes) The Culture: Does access to financial education positively impact an athlete’s chances of maintaining financial success during and post their career?
Sandra L. Richards: Yes! It has a huge impact. We want to make sure that the athletes we encounter through Morgan Stanley GSE have access to our financial education program. That program and a partnership with our financial advisors will help them better manage their finances and learn how to protect their assets long-term.
For(bes) The Culture: How does Morgan Stanley want the School Of Sports partnership to impact the industry? Will it help improve the financial statistics relating to athletes?
Sandra L. Richards: The impact for us would be accessible financial knowledge. The global sports industry is estimated to generate more than $600 billion over the next few years. We want to help people, athletes, managers, etc. tap into that $600 billion by providing in-depth details of the sports industry that are typically not discussed outside certain circles.
For(bes) The Culture: Is it possible for an athlete or entertainer to come back from bankruptcy or “losing it all?”
Sandra L. Richards: It’s hard, but I’ve witnessed it happen. With the proper financial advice, athletes have the capability and opportunities to bounce back!
The Up And Coming
On June 30, 2021, the Division 1 Board of Directors approved a name, image, and likeness (NIL) policy and in July the policy was instituted after a supreme court ruling against the NCAA. This policy allows all NCAA D1, D2 and D3 student-athletes to be compensated for their NIL regardless of whether their state has a NIL law in place or not.
This ruling has changed the potential financial trajectory for many student-athletes. The NIL policy allows these athletes to explore new avenues of creating a generational wealth for themselves and their families.
For(bes) The Culture: What can newly drafted and collegiate athletes do to manage and maintain their assets early?
Sandra L. Richards: When you think about the team that supports young athletes, it’s managers, agents, and family. It is important to remember the financial advisors handling athletes’ assets. Not waiting to seek financial guidance is the best thing these athletes can do. They are becoming millionaires overnight almost. Managing that is a huge responsibility. It’s crucial that athletes see the larger picture, invest in assets, and have the financial knowledge to make empowered business decisions.
For(bes) The Culture: With the NIL ruling coming up on a year since implementation, How is Morgan Stanley tackling this new space?
Sandra L. Richards: We’ve always thought ahead on this. The NIL rulings have opened a path for us to help these student-athletes build wealth. We take that obligation seriously. College athletes are on social media with hundreds of thousands to millions of followers, these students are the next generation of influencers, and their success is our success.
For(bes) The Culture: What resources are Morgan Stanley GSE providing to its student-athletes?
Sandra L. Richards: We offer financial literacy tools such as marketing, budgeting, and stock market education, along with lawyers and public relations professionals. These are the tools and resources that aren’t thought about when they first get into their college career. Those things alone can make a significant difference in their future professional success.
Title IX, the law that mandated equal access to activities for girls and women at federally funded schools celebrated its 50th anniversary on June 23. According to The Women’s Sports Foundation, girls have had 3 million more sports opportunities since Title IX was passed. Morgan Stanley’s Global Sports And Entertainment division has supported the efforts of gender equality in sports in a myriad of ways. Most recently Sandra participated in an onstage panel at The 50th Anniversary of Title IX – The State of Women’s Sports at this year’s s Sports PR Summit.
For(bes) The Culture: How was participating in the Sports PR Summit panel?
Sandra L. Richards: It was amazing, I was joined by some incredible women such as Hilary Knight OLY, Team USA Hockey, Gold Medalist, World Champion, and ESPN NHL Analyst; Haley Rosen, Founder/CEO of Just Women’s s Sports, and Erin Kane, Vice President of Women’s Sports at Excel Sports Management. Title IX is an impactful law that upholds women’s rights to participate in sports.
For(bes) The Culture: When we talk about inequality in sports the number one topic is the wage gap. What is Morgan Stanley, currently doing to help promote financial equality for women athletes?
Sandra L. Richards: We are doing what we do best, working with female athletes on financial literacy and education. There is a wage gap issue that needs to be addressed, our job is to maximize the finances and assets these players have now so they will continue to have long-term financial success.