We are all familiar with the sports cliché of the athlete who makes millions as their career takes off, but is bankrupt by the time retirement comes round. According to Sports Illustrated, 78% of NFL players face bankruptcy or serious financial stress within two years of retiring, and 60% of NBA players face the same problems within five years.
Indeed, for every uber-successful Magic Johnson, there are dozens, if not more cases such as Curt Schilling, the three-time World Series winning pitcher who recently declared bankruptcy despite having earned more than $114 million over the course of his career.
While professional athletes undeniably have oversized earning potential including endorsements and speaking fees, the career span of a pro athlete is a short and unpredictable one, with salary taxed at exceptionally high rates – not the more tax-efficient capital gains rates so often paid by the ultra-wealthy.
Private Insurance for Sports Figures
A skilled money management professional can not only can help pro athletes steer clear of wasteful spending habits but help them work toward thriving long term by facilitating a lifetime of asset protection, risk management and wealth preservation for them and their family.
Many trusted financial advisors are familiar with the concept of captives, but remarkably they are little used by sports professionals. Captives can deliver a package of benefits that help to protect the worth of an emerging brand.
With a captive, sports professionals can:
- Fund selected self-insured risks
- Reward themselves financially for effectively managing brand risk
- Transfer high risks to traditional insurers
- Leverage government-provided tax incentives
- Build tax-deferred resources to fund growth
Setting up a captive insurance company can involve layers of complexity and the learning curve is often steep. That’s why athletes and their advisors turn to Captive Alternatives for help in creating and managing the innovative, new breed of captive – the Protected Captive™.
CapAlt Sports & Entertainment Division
CapAlt is focused on making captives understandable and convenient for sports professionals. The types of risks covered by a Sports package include brand rehabilitation, loss of contract and other highly focused coverages. CapAlt works with sports agents and financial planners with a Sports & Entertainment focus. Contact us at firstname.lastname@example.org to learn more.