YOUR PORTFOLIO
/ MANAGING YOUR MONEY /
FROM
PRINCES
TO PAUPERS
Premiership footballers earn more in one week than the average
person does in a year – so how do so many of them run out of
money? Anthony Luzio finds out
T
here’s an old saying
that the best way to
make a small fortune
from football is to start
with a large one. While
this was used to warn entrepreneurs
about the likely fate that awaited
them if they bought a football club,
it could now just as easily be applied
to the players, as despite the
astronomical sums they are paid – a
study carried out by The Daily Mail
last year found the average
Premiership footballer earns
£44,000 a week – it is estimated
one-third of them go bust within
five years of finishing playing.
Former Australia captain Lucas
Neill – who is estimated to have
earned £20m in his career, including
£80,000 a week while at West Ham
– is the latest to have succumbed,
being declared bankrupt in January,
but he is by no means the first.
England goalkeeper David James,
Premier League winner Chris Sutton
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and Aston Villa’s Lee Hendrie are
among other high profile names.
The Professional Footballers’
Association (PFA) says the problems
can start just a short time after the
players’ careers finish.
“Most professional players
began playing as children and will
have been playing professionally
since their late teens,” said the
organisation.
“They have known nothing else,
are trained for nothing else and
are qualified for nothing else. After
years of being managed, suddenly
players have to manage things
for themselves – which can be a
frightening prospect when for years
you just had to turn up, train and
play the game.”
BLINDED BY SUCCESS
Kerry Nelson, managing director
of Nexus IFA, says the problem of
wealthy individuals running into
trouble is not limited to footballers.
“You can get a lot of people who
have been blinded by their own
success and money, who buy fully
into the lifestyle without thinking
about whether they can maintain it
or not,” she explained.
Gareth Griffiths, a former
professional footballer and
managing director of Pro Sport
Wealth Management, which is
partnered with the Professional
Footballers’ Association, agrees
with her.
“This is prevalent among any
sport where there is an enormous
influx of wealth that betrays your
age and life experience – you see
it in basketball in the US, while in
boxing it is perhaps even worse.”
“These players are like oil tankers
that take a while to turn around –
after footballers stop playing it can
take a long time for them to bring
down their spending and at that
point they may have already run
into trouble.”
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Griffiths says that through his
work with the PFA, he often uses
cash-flow modelling graphs to show
former footballers how soon they
will run out of money if they keep
spending at the current rate.
“It is easy to follow if you see
it laid out like that and it’s quite
powerful if you see you are going to
be penniless at 42 or 54. We show
how they need to make adjustments
to give themselves a certain return.”
PRACTICAL REASONS
Aside from overspending, there are
many other practical reasons why
former footballers run into trouble.
While most people will live off
their pension in retirement, it is
worth remembering you have to
wait until you are 55 before you can
access any of it – not much use in a
profession where the average player
retires in their mid-30s. In addition,
the maximum you can contribute
to your pension is £40,000 a year
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“Most football
players have
known
nothing else,
are trained for
nothing else and
are qualified for
nothing else”
– making the products largely
irrelevant when the average player
earns more than that in a week.
Although this is a problem the
man on the street would kill to have,
Griffiths says the reality is it pushes
players towards more obscure
financial products – and Nelson
points out these are often peddled
by people who are not qualified to
do so.
“The biggest stars have critical
relationships with agents who may
not grasp the repercussions of what
they are doing and who may be
recommending a scheme because
they get a backhander out of it or
an introduction fee – it may seem
exciting and they can get carried
away,” she said.
“They may have the best
intentions at heart, but they may
not be qualified to make the big
decisions and will put their clients in
the latest scheme with a heightened
sense of excitement – the scheme
often mirrors their exciting lifestyle.”
TAX BILLS
Among the financial products that
have enticed footballers in the past
have been film investment schemes
offering generous tax rebates. While
the concept was created by then
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