Athletes borrow to support themselves and their businesses
Claire Barrington-Jones is senior vice president – group sales at Borro
A collection of Pele’s memorabilia raised £3.6m at a London auction last week, setting a world record for a football sale. A portion of the money raised was donated to one of Brazil’s largest Paediatric Hospital, however, Pele said the sale was primarily about giving his fans the chance to own part of his legacy. However, not every footballer has the opportunity to be so magnanimous, England keeper David James was forced to auction a huge amount of memorabilia to cover a tax bill in 2014.
This kind of financial difficulty is not uncommon: two in five former footballers experience financial difficulty within five years of retirement in the UK. A statistic mirrored in America where 78% of NFL players face similar problems within two years of retirement.
Borro lends hundreds of thousands a year to former athletes in both the UK and the US, and has funded loans secured by Olympic Medals, Super Bowl rings, even car collections. Some clients admit during their careers they weren’t always thinking about their future. Now that their sporting careers have ended they want to move on with their lives but they don’t have the income they used to. It takes time to adjust, even for those who managed their finances well, it’s a huge change in lifestyle.
Many athletes do plan ahead and set up businesses during their careers. Some, like Michael Jordan and David Beckham, are able to leverage their image, others, like Venus Williams, follow more traditional routes. The tennis star combined her image with the American chain Jamba Juice’s healthy branding and opened her own franchises in Washington D.C.
Like any other small business owner, retired athletes still need cash flow to keep their businesses growing, and reputation alone isn’t enough for a bank. Many former sports stars go onto to run highly successful businesses in different industries and alternative lending options such as luxury asset lending can allow them to do this.