Even athletes are not immune to the recession
When we look at the world’s richest athletes, we always assume that they cannot be affected by the economy. They seem to have too much money to spend and it seems like a never ending resource that they can always access. The global recession that hit in 2008/2009 and is still refusing to die in 2010, even managed to hurt the finances of sports teams and athletes. While the top earners have not seen any reduction in their wages and their finances have not decreased, it seems to have hit the athletes, who are not at the top of their game. It also hit former athletes really hard, who had made financial investments in real estate and, who had businesses up and running.
A news item appeared recently that got the whole ball rolling on how the recession has affected athletes. The Beckham’s have reportedly fired a third of their staff that worked in their homes around the world. The power couple have homes in L.A., England, France and Dubai and apparently employed 50 people all over the world to manage these homes. After an accountant was hired to overhaul their finances, it was suggested that they cut 14 members of staff to reduce their expenditures. It seems that even though the couple is estimated to be worth £115 million, they probably felt the pinch of the recession and decided to cut back on unnecessary luxuries like paying staff at a house they did not even live in.
Apart from the insanely rich Beckham’s, the lower tiered athletes are really suffering in the recession. The salaries of average players seem to be dropping all over the sports industry, while at the same time the big teams of the world are paying huge amounts of money to secure the biggest talent. A lot of players in the MLB, in the NFL and the NBA are seeing their contracts not being renewed for long term deals but having to settle for one or two year renewals instead.
Even though one feels bad for sports stars and the sports in general, it might even be a very good thing for sports in general in the future. Large scale sports franchises will have to learn to manage their money better and cut expenditure while giving their fans exactly what they want at the end of the day. The problem comes in when governments bail out sports clubs. When large clubs take out huge loans from governments or get massive grants to survive it puts an added pressure on the economy and on the general public. Governments in this regard should also take smarter decisions and make sure the money they provide is being used for a worthwhile reason.
One of the hardest hit segments of the sports world seems to be former athletes. A lot of players have now started their own companies and some have even entered the workforce again. The recession has been really tough on small businesses in particular and a lot of former athletes have seen their jobs being cut and have found themselves unemployed. The economy is such a fickle thing that even if someone with a lot of money decided to invest, they could see it all wiped out in the blink of an eye. And that is exactly what happened to a lot of the business people out there and it did not spare former athletes in its wave of destruction. The recession was so devastating that it affected even the world’s richest sports stars and even those we think are immune were exposed to being just as vulnerable as the rest of us.
The one positive aspect of the recession has been that athletes have been forced to become smarter with their money. They have realised that money is not everlasting and it can all get wiped out in an instant. Even large clubs and sports teams have started to manage their money better and have started to cut the salaries of their athletes. We will have to wait and see how long this recession lasts and when the economy will recover and when sports stars can go back to earning and spending huge amounts of money again.
Tags: