The Rising Stock of Athlete Investors

The Rising Stock of Athlete Investors

Morris Esformes Discusses The Rising Stock of Athlete Investors from Morris Esformes on Vimeo.

Leaders, a conference and content platform for executives in professional sports, recently published a 30-page report detailing investing and Venture Capital (VC) in the world of sports from June 2017 to November 2018. In it, researchers and experts attempt to break down the $600 – 700 billion dollars a year that flows through the global industry of sports, and analyze any trends that might impact it going forward.

One notable section chronicles the rise of the “athlete investor.” It details how this generation of athlete has seen an increase in activity in the world of finance and angel investing. Names like Kobe Bryant, Lebron James and most recently Kevin Durant have all become outspoken investors and venture capitalists in their own right. What was interesting was the unprecedented evolution from brand ambassador and spokesman, to stockholder and board member. The question is: What is it precisely that is driving this change?

The report lists a number of factors. One being the ever-increasing earnings of professional athletes. Another notes the short average length of professional athletes’ careers. These factors combined, gives these athletes the means and incentives to further their financial standing.

I believe it all comes down to two core pillars: influence and planning.

Athlete Influence

With the rise of social media, athletes are focusing more and more on their personal brand. They are able to tap into their influence and network to provide value for a company. Many athletes, the majority of which are in the NBA, have social media followings that number in the millions. Their personal brands transcend the sports in which they play and they can leverage this with the brands and companies in which they invest. And while the likes of Kobe Bryant don’t invest to solely serve as an endorser, their notoriety still generates buzz around all of their active investments.

Rise In Net Worth & Post Retirement Planning

Athletes are earning more than ever and with this comes the added ability to invest and diversify their assets. Athlete earnings, in combination with increased focus on an athlete’s post-retirement stability, creates a very viable climate for athlete investments.

These factors also lend credence as to why many of the major athlete investors are coming from the NBA. Professional basketball players have the highest average salary of any major U.S. sport according to a 2016 Forbes report, at $6,250,000.

While MLB superstars don’t have nearly the same amount of influence as athletes of other sports, they certainly have the monetary means. And while NFL stars have the reach and following that more closely mirrors the NBA, their careers are statistically the shortest, and  would thereby be wise to make investments to maintain their bankroll.

As the money in sports continues to increase, it only seems obvious that the trend of athlete investors will continue to grow with it. More and more stars are gaining access to the influence, the audience, and most importantly, the cash to make impactful contributions in the financial world.

Morris Esformes
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