Goldman Sachs Wealth Management has become one of the first financial institutions to partner with the NFLPA on a new initiative that provides nearly 5,000 active and retired athletes access to a financial advisor. Through this partnership, athletes will have access to advisors who can help them preserve their wealth and achieve their financial goals.
“A lot of ideas are presented to players from people inside and outside of their circles, not all of which are necessarily a fit,” says Nicole Pullen Ross, head of Sports & Entertainment Solutions for Goldman Sachs Wealth Management. “Our expertise and network can serve as a resource to help them vet these opportunities to determine which ones make the most sense to move forward with.”
Over a decade ago, Pablo Torre of Sports Illustrated published a story that has been widely-cited since reporting 78% of NFL players are bankrupt or under “financial stress because of joblessness or divorce” within two years of retirement. Years later, Torre wrote for FiveThirtyEight about a new working paper from the National Bureau of Economic Research that came to a very different conclusion after reviewing bankruptcy records of 2,016 players who were drafted by NFL teams from 1996-2003. That study found just 1.9% of former NFL pros have filed for bankruptcy within two years of retiring, a percentage that rises to 15.7% after 12 years into retirement.
Torre says in the FiveThirtyEight piece that it’s important to note his 78% figure wasn’t only about bankruptcies but also other types of financial stress that don’t necessarily lead to a bankruptcy filing but that result in athletes being essentially “broke.” He also notes the working paper didn’t include players who weren’t drafted, accounting for nearly one-third of active rosters back in 2013.
Because of the shame associated with admitting to financial stress publicly, it’s nearly impossible to come up with an accurate figure. What is obvious, however, is the increasing emphasis the NFL Players Association has put into financial education and planning.
Currently, there is a financial education series for second- and third-year players, in addition to ongoing webinars and access to a coaching line that provides on-demand and scheduled personal finance coaching. The Financial Hub offers customized financial education through a third-party, and the Pocket Playbook offers a dynamic tool that allows players to establish budgets and forecasts wealth based on a player’s individual income and expenditures.
The NFLPA also gives players access to individual and institutional advisors that are registered with the association, like Goldman Sachs. Individual advisors must meet certain eligibility requirements, submit an application and agree to submit to a background investigation. Institutions must also meet certain criteria and designate and monitor advisors that meet the criteria established by the NFLPA.
“The NFLPA offers players a number of resources to help players and their families protect and manage their finances,” said Dana Shuler, senior director of player affairs for the NFLPA. “We have hosted webinars and continue to work with our members on an individual basis to assist them in navigating the myriad of resources available.”
Pullen Ross says the new partnership with Goldman Sachs gives current and former NFL players peace of mind that they have access to advisors who are acting in their best interest and taking their individual needs into consideration.
“Our registered advisors are subject to background checks and eligibility requirements to participate. Certain eligibility requirements include work experience and professional designations. As part of our partnership with the NFLPA we provide additional services for the athletes we work with since we are mutually committed to ensuring the players are not exposed financially or partnering with advisors that could potentially mislead them.”
Goldman Sachs’s size, experience and offerings allow it to work with current and former players of all levels.
“Through the Goldman Sachs ecosystem, services are scaled to meet the player where they are in their career—and to grow with them. As a player’s wealth and complexity increase, we have services to help them accomplish their goals. This enables us to help everyone from rookies to max contract players to those who have retired from the game.”
Shuler says the association has stepped up efforts during the current economic climate created by the global pandemic.
“Players face many of the same issues as the public as a result of the current economic climate. There is concern regarding ability to return to work in a safe and healthy environment,” said Shuler.
“In addition, the market downturn is quite unsettling for players who make a vast majority of their money during their playing careers. This can specifically impact players who are currently transitioning into their second careers. These players are likely relying on their investments as a means of support as they transition. They may also experience difficulty in selling a home in this climate, thus making it difficult to downsize.”
Pullen Ross says the partnership is coming at the perfect time for current and former players.
“With the current situation our country is facing, it is more important than ever to have a plan—a budget, cash reserves and access to liquidity if needed.”
She says some of Goldman Sachs’s clients have been taking advantage of the recent market disruptions.
“For current players, their wealth curve is inverted. In most cases, people build their wealth, increasing gradually over a longer period of time. NFL players, and athletes in general, are making significant income early on in their career and there is a window in their playing career to turn that into wealth.”
“For retired players, as they begin their post football careers, they are generally not generating the same income they were making as an active player, which could lead to significant adjustments to their spending and savings plan but also opens up an opportunity to explore new passions.”
Goldman Sachs is not new to the sports world, serving as an advisor across all the major sports leagues working with athletes, team owners, coaches and executives, including over half the teams in the NFL. Current and former NFL players now have access to a wide variety of offerings, including advisors, services and resources tailored to meet each individual athlete’s financial situation.