How Can Athletes Protect Themselves Against Financial Scams?
December 4, 2013
Professional athletes are paid millions of dollars every year and to make sure it lasts, many seek out investments. However, these people often find themselves in the middle of financial scams, as advisors and other trusted associates attempt to take advantage of them.
Many athletes, including John Elway and Derrick Coleman have lost millions as a result of bad investments and financial scams. It would be near impossible to eliminate these situations altogether, but there can certainly be steps taken to reduce the amount of athletes who end up broke.
There is no question that part of the burden is placed on the athletes themselves. At the end of the day, they are responsible for their own decisions. But, professional sports leagues and teams could also be held accountable. One recent incident occurred in the NBA with former Miami Heat guard Mike Miller claiming the team recommended him to a financial advisor that allegedly lost Miller $1.7 million in a scam. Miller earned $6.6 million last year, according to USA Today, and has made millions of dollars throughout his career, so $1.7 million may seem miniscule to him. But, athletes can’t play the game forever. And, investments are one way to make their money lasts, which is why being tricked into financial scams needs to be an issue discussed moving forward.
The various player unions seek to protect players by requiring certain parties, such as agents and financial advisors, to be reviewed, disclosed, and obtain specific authorization before dealing with players. However, the most important party in this equation is the Sports Lawyer. Players need to seek and hire qualified attorneys who can implement certain procedures and protections as a means of protecting the player. For instance, when advising and representing my celebrity clients, I insist against personal guarantees and I require other parties to specifically sign off on specific written representations and covenants about their obligations to us. I also seek to always protect my client’s “brand”, such as their image, likeness and trademarks. I also review each contract carefully, rather than relying upon my client’s agent who may not have sufficient legal experience with the specific type of deal. Finally, professional athletes and other celebrities should also beware of any deal or opportunity that must be signed up immediately for the chance is lost forever. Never give in to suspicious deadlines.