Press protection can be essential to preserve and increase footballer wealth.

Footballers and soccer stars pay up to £20k a time to keep stories out of the tabloids. Why? Lucrative sponsorships worth millions sit in the balance.

Whenever a World Cup is upon us, usually sane, non betting, non-football-caring folk start swilling beer by the bucket, slinking off work for ‘essential’ games and start clustering in front of TV screens to watch the deeply, glamorous football stars slinking across turf in outfits that make them millions.

So what of this wonderful game? Being paid a huge salary for kicking a football around some grass; escaping the hum-drum of a 9-5 existence; having a trophy footballers wife balanced on your arm; every item of high designer fashion in your wardrobes; matching Ferrari’s and a wedding worth £1million. Should our parents have insisted we forsake our professional studies and instead run around in formation; set on only one thing, a goal? If predictions for the phenomenal growth in footy revenues are to be believed - led mainly by technology and telecoms expansion - then the answer is yes, they should.

But the tale of footballers and their wealth is not all champagne cocktails and ‘dolly birds.’ In wealth terms it is quite the reverse: cautious, conservative and peppered with a smattering of credit card excess. Setting off on my topical footballer adventure, I first put my tent up at the mega-brand, private bank Coutts. Known for their special sport division and for their many footballer accounts, I settled down with some cocoa for a good bedtime story.

I’m afraid I was a bit disappointed and no matter how much I dug about, I just couldn’t find a trap door to spring any tabloid excess. Do footballers invest in diamond mines, ship-wrecks and beer factories, I speculated? Do they need special handling to control their infamous tempers? One private banker calmed me as though a wayward child and insisted that for footballers and all sporting stars “proper financial planning and discretion is key.” No surprise there. That is one of those industry phrases that often floats about. Things were not looking good – an article on saving money, pensions and meeting rooms? As the story unfolded though, the private banker prove to be right. Advisers working with footballers have to try to make footballer clients understand that this money won’t last. Advisers counsel footy teens or teeny twenties about pensions that need to mature on their fortieth birthday; sound property investment and perhaps just one or two flashy cars.

Although most in the wealth market are a bit sniffy about footballer cash (it’s a small pool of people, when there are many more substantially wealthy elsewhere), footballer wealth is increasing rapidly and likewise for the agents and clubs who deal with them. One adviser commented that of the two hundred official football agents in the UK some may be taking up to 50% of players earnings suggesting that agents have the real money. Whether this is true or not, it was symptomatic of the mixed feelings about agents being ‘in it for themselves.’ In the wealth market, sports personalities and entertainers are sometimes considered hard work mainly because of the involvement of so many agents or ‘minders’.

This isn’t what everyone thought though and many were keen, like John Whiting, tax partner at PwC to add that agents are a positive force: “they often help convince unruly players that the advice being given is to be taken seriously.” This sentiment was echoed by Simon Smith, managing partner at Schillings who confirmed their key role and pointed out that they are the main source of work for him.

The money in football comes from success on the pitch which is then carefully handled by image specialists to attract endorsements that can and do pay more than they earn ‘running round a bit of grass.’ ‘Strikers’ earn the most in endorsements and sponsors favour them as goal scorers. After this making money is about knock-on handling of the tabloid press to ensure big brands continue to view stars as appropriate to represent them. Then wise investment in pensions, property and cash management all add up to the elusive long term financial security they all seek. The average player may only have ten years working on the pitch, so to maintain a super star lifestyle, brand endorsements represent ‘streets that are paved with gold.’ Once on this path footballers and their agents will spend between £15-£20k a time to fight off tabloid attacks and publicists like Max Clifford will bargain with reporters to keep made up or true stories away from the general public and sponsors eyes. It seems if Gazza was around now, his excesses (if they were real) would not have been documented in such a double page spread way and he would have maintained far more of his wealth. Some lawyers though like Julian Pike, a media Partner at Farrer & Co thinks press attention is a personal decision. He adds “for many footballers it comes down to a how they want to live their lives. Shearer and Scholes for instance choose to be out of the limelight but still earn considerable sums of around £5-10 million a year. The Beckhams are building ‘brand Beckham’ with worldwide road shows and using the media to double their money. This is a tricky game because should they mess up, the press will be on them like a rash.’ He finishes “I suspect many agents will be key influencers in the routes that football stars choose to take.”

On investigation the media images of big spenders everywhere and non stop parties are nowhere to be found. If footballers choose the press route, then press are treated almost as wild cards and taken care of with expert handlers. If they can’t be handled then sophisticated media manipulators will dangle better stories in front of them to get them off the scent. If this fails there is always a libel lawyer to step in and save ‘face’ or image and reputation which they do with much documented success. Substantial ongoing wealth is only attracted by careful image control which is important when at 31 you could be ‘passed it’ and forced into retirement.

But there is money in those hills and the media rights explosion, telecoms growth, web streaming and peculiar popularity of the game in places like India mean more wealth advisers and managers will be interested in this pot of candle-burning talent. If you are to tackle this market, crucial elements must be engaged to create a successful relationship and keep your clients ongoing wealth steady and growing.

This includes making agents your new-best-friends – they are the source of client referral having up to thirty or forty footballer clients on their books; working with their publicists; being prepared for crisis tabloid litigation which may attach to you, analysing ways to make wealth last and hiring peers who can explain that saving is cool (the government haven’t manage to convince anyone else it is). On the good side you will undoubtedly get invited to a few sexy parties and may even get married to a footballers wife all of your very own

Soundbytes

High profile sports agents with ‘press orientated’ players recommend handling the press through professional media management. Publicists like Max Clifford protect reputations; give advice on press and television offers and do their utmost to deter unwanted tabloid attention.

Is the press control worth it?

“Big money sponsors favour the well behaved” says Michael Stirling, founder of agency Global Sponsors. “They don’t like violence, racism, anything risqué or anything deemed to be bad behavior.” For players hungry for big bucks from endorsement money (to bolster the coffers of a short, explosive career); yes a publicist is worth it. They keep those ‘seen in a nightclub with girl’ stories out of print and keep enquiries coming in. “Sponsorship is tied to branding. We work with footballers to work out their long term objectives and align them with sponsor brands that enhance this development. High profile players could expect to earn £25 million over the period of their contract. Although certain footballers will always attract certain brands because of their image, we reject a lot of brand sponsorship approaches as unsuitable.”

Why should you be interested in footballers as a client?

The Premier League is the most lucrative football league in the world, with total club revenues of over £1.3 billion in 2003–04 according to Deloitte. This will increase substantially by the 2007-08 season, when new media rights deal start. The main UK live television rights for the three seasons from Summer 2007 to Summer 2010 have been sold for £1.7 billion, two thirds more than the previous deal, and it is expected that other rights due to be negotiated (highlights; overseas; mobile phone) will add several hundred million pounds to this sum.

Footballers head to Dubai

One private bank that focuses on sports and entertainment clients has two groups in their the football division: established talent who are high earning players, usually on two year contracts. They tend to be UK residents, normally at the peek of their careers but are sometimes also retired or retiring. The second group are new, young or aspiring talent. The private banks pick up clients from other players (recommending them) or relationships with agents or clubs themselves. They supply clubs with banking and financial services during frenzied hiring patches too. Private bankers say understanding their clients wanting ‘to keep up with the Joneses’ is paramount so they offer credit cards with large limits on them and flexibility to increase spending power (or borrow money) easily.

Property investment was a reoccurring theme with many managers, suggesting that this is a first step to long term security. If rumours are to be believed footballers are taking this seriously with stories of multi million pound properties being snapped up in Dubai. Although other stories suggest the likes of Beckham were ‘given’ substantial properties to help ongoing selling and promotion in the region. Whatever the truth footballers are regularly waving wads around in this new playground of the rich.

Split country contracts

Foreign footballers usually have split (dual) country contracts so that they separate income from other countries and not pay UK tax on it. For this they must be UK non domiciled (not permanently living in the UK) and must not allow any foreign cash to enter British shores. However John Whiting at PwC warns: the revenue do investigate these contracts and whilst they can’t stop them, do be clear to demonstrate the money is being run separately and not from the UK.

Footballers wives filing for divorce

Ray Parlour (ex Arsenal) earned £1.1M per year net. In their divorce Mrs Parlour's maintenance award was £400k per year which significantly exceeded her needs. The Court said that it was discriminatory not to allow her to share in the ability to make savings from significant income. And Mr Parlour had a limited shelf life, so it was important for her to be able to save whilst he still earned such a big salary. The case was widely reported in the Press.

Planning for retirement

“Before anything financial or tax planning can be done with footballers or sporting clients you need to ask: “what do you want, what are your plans’ /pension provisions/ what strategy have you for living a life that is funded by only ten years of high earnings. It takes a totally different mindset. They are no different to anybody else in that ‘its what they want to do with it’ that matters. If for instance they want to be on TV when they retire, then we should look to invest in or set up a production company." John Whiting, Tax Partner, PwC.

The Beckhams

“The Beckhams push as hard as possible to build ‘brand Beckham.’ Shearer never had any trouble with the media nor Scholes. Its down to choosing how they want to live their lives and how much money they want to make.”

A day in the life of a publicist

The publicist is often the middleman between the high-profile personality and members of the media. They usually want clients to receive positive acclaim, but many publicists surveyed noted the old adage that “the only bad publicity is no publicity.” Politicians and captains of industry require a little more specific spin on their press-they want to be seen as forward-looking and confident-but other professions are less picky, as in the case of the rock star who reveals the sordid details of his steamy nightlife to cultivate a racy image. Publicists also perform damage control, attempting to counteract any undesirable press coverage the client receives. This position as “last line of defense” is what distinguishes the adequate publicist from the extraordinary one. Good publicists can turn scandal into opportunity and create valuable name-recognition for their clients.


This first appeared in http://www.citywealthmag.com/ newsletter.

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