The entrepreneurial side of athletes

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Recently some news about entrepreneur athletes of the major income sports (football, tennis, basketball, etc.) came out and made me investigate on this topic as many of them have already won enough money for the rest of their lives and their future generations’ lives as well; and the fact that each week more and more invest makes me wonder; what is their motivation? Is it a new “fashion”?. Many can remain linked to sports (probably each sport star mentioned later in this article) as coach’s on different categories, commentators on the radio or TV, etc. but many can’t and therefore need to invest. Practically on every sport (excluding golf) age is an important factor which makes their careers very short, and taking into account that the exigency is huge, making their debuts in first division or different competitions when teenagers, their opportunity cost in most cases is their studies, and therefore leaving aside many possibilities for their future.

On the past, sportsmen didn’t earn enough (or mishandled their earnings) to have an insured future in economic terms and probably needed to find other opportunities outside from their sport career which started at early age’s but ended soon as well. In these cases they had no alternative, they couldn’t live the rest of their lives with what they’ve won on their 10 or 15 years’ career’s (as many can now) and without the proper education and counseling it’s hard for them (this is the situation of almost every retired Southamerican athlete). Some clear examples, between others, are the Brazilian football legend Garrincha who died in extreme poverty after wasting all his fortune; or the famous boxer Mike Tyson that was involved in many problematic situations and wasted his fortune in excesses that led him to ruin.

Due to globalization sports have seen an amazing growth in many aspects, particularly economic. It’s easy for most first class athletes to live the rest of their lives with the savings of their sport careers as they sign millionaire contracts with their clubs and sponsors, they win fortunes with publicity and receive prizes from the competitions they are part of. But despite this, as mentioned before, there are every time more news about athletes investing, people who have huge fortunes in their bank accounts and look for new motivations which are many times achievable by having the facilities to invest.

On what do sport stars invest? Most of them incline towards the gastronomic sector, many others on clothing brands, and others decide to venture on real estate, technology and entertainment between other businesses.
We will have a general look at some projects sportsmen from a few sports in particular launch, there isn’t a clear pattern which divides their “commercial tastes” but most of them invest on the same businesses. In first place we have some tennis players who seek for other businesses outside their careers in sport: Novak Djokovic for example has decided to boost his familiar gastronomic development of coffee shops and restaurants; Venus Williams and Caroline Wozniacki created clothing brands; Rafael Nadal and Andy Murray built hotels while Maria Sharapova launched a candies business called Sugarpova, the most unique and particular business of the list.

If we take a look at the basketball players we can find two very interesting examples in two of the biggest of the whole history such as LeBron James and Earvin “Magic” Johnson. James dabbled in the technology industry as a shareholder of Beats Electronics and received 30 million dollars when sold to Apple, he also founded a social network to connect athletes and fans called Blaze and a producer called Spring Hill Entertainment. On the other hand, Johnson owned 105 Starbucks franchises (between several other businesses he invested with his company Magic Johnson Enterprises such as Burger King, LA Lakers, T.G.I Friday’s, etc.) which he sold back to the coffee shop’s company on 2010.

Going in depth with football players we can find many who have found other motivations besides their career inside the pitch. Some examples are the best players in the world: Lionel Messi, who invested mainly in real estate and in the gastronomic sector with a restaurant called Bellavista del Jardin del Norte in Barcelona; and Cristiano Ronaldo, who owns a dancing club called Seven and a sportswear line -CR7- (both between other businesses). On the technology sector we have Gerard Piqué that owns a videogame company called Kerad Games, an inversor group called Kosmos and together with his Spain National team companion in the defensive line, Sergio Ramos (who also opted for a gourmet food restaurant and is part of the inversor group for the app Fever), a social network for football players called Power to the Players. On the other hand, Andrés Iniesta a owns a wine cellar called Bodegas Iniesta which he aims to expand in big amounts to Asia, while Zlatan Ibrahimovic built Padbol (a raising sport in Europe for which he owns the rights in his home country Sweden) courts in the five Nordic countries and has a clothing brand called A-Z.

An amazing case and probably the most remarkable business from a footballer (or any athlete) isn’t exactly from a world class player, the French Mathieu Flamini had a successful career playing for giant teams such as AC Milan or Arsenal but didn’t become the richest player by practicing the sport; he founded in 2008 a biotechnology company called GFBiochemichals which produces levulinic acid, a petroleum substitute. Flamini considers a footballer’s career is full of ups and downs and that his company helped him clear his mind, to think in other things as an intellectual challenge. [1] Nowadays, GFBiochemichals is valued in 30.000 million Euros

In conclusion, I think athletes invest to have some activities when their careers are ended, to find some motivation in their elder years and not just remain living with what they’ve won when young, to keep feeling the competitiveness sports produced in them. Do they need to invest? Probably not, but they do it to face new challenges in a future, being part of something unknown for them helps to keep their heads focused. Another aspect to take into consideration is that maybe these athletes learned from past colleagues experiences’; they’ve seen world stars in bankrupt, jail or in other terrible conditions even though they had brilliant careers and understood they can’t live without order, motivations, and their heads focused in something when the huge exposition they have nowadays ends; they are conscious that the “dream life” they live will end sometime. Ex-Manchester United defender Gary Neville once said “I had to be logic, knowing how to fill the void that would end up coming” when talking about his life after his retirement, and he did so by becoming an entrepreneur and investing in different businesses outside of sports; probably what each one of the athletes mentioned before aims to do.

[1] https://argentina.as.com/argentina/2018/02/02/futbol/1517603927_954116.html

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