Billy Corben’s Broke, the latest film in ESPN’s 30 for 30 series, explores the issue of athletes finding themselves in financial ruin following their playing careers. There are numerous lessons to draw from this film, but I locked in on one particular issue.
One of the primary themes of the film was that athletes had no idea where their money was going. In some cases agents, many who probably had power of attorney for their client, handled all of the finances. The financial advisors interviewed discussed the inherent problems with this arrangement and the importance of engaging a reputable team of advisors, including a financial advisor and accountant. My immediate thought (besides agreeing with that point) was that lawyers should be included in that group.
More than once I’ve heard agents say something to the effect of “I’ve negotiated so many contracts I could be a lawyer.” Although agents may be skilled negoitators, they may not fully understand the terms of the contract, or perhaps more importantly, what is missing from the contract.
Although some agents may have law degrees, athletes should use independent legal counsel. Agents typically have a conflict of interest in acting as agent and attorney, as the agent is paid on a commission basis. An attorney who has no financial stake in whether an athlete signs a particular agreement can offer unbiased advice to the athlete and can play an important role on a team of professional advisors.