With the ongoing and evolving conversation centered around ownership and equity, many athletes and entertainers are changing their approach to contract negotiations in their respective fields and with brand sponsorship deals. This change has also led firms and representatives to alter their approach to client relations, focusing on image and long-term stability. Many advisors now advise current and prospective professionals to invest in their team early in their careers and educate themselves in business practices.
“The landscape has broadened; you see a lot of artists are taking advantage of their IP, which is themselves, and having ownership of who they are. So when they’re thinking about deals or opportunities, whether it’s taking traditional sponsorship or endorsement deals up front, you’re thinking about yourself as a business and want to align with the brand,” Sandra Richards, managing director and head of Global Sports and Entertainment at Morgan Stanley, shared. “You know, many of the people that we’ve seen are looking at it from a ‘how do we play this from an equity standpoint? Where can I take this, instead of taking all this cash up front from a sponsorship deal? How do I take equity in the company and be a partner?’” Richards said.
Ted Reid, Senior Vice President and financial advisor with Morgan Stanley for 39 years, points out that one of the biggest downfalls and money drainers for entertainers is the lack of awareness, specifically of how the people around them are impacting them. “I saw them being taken advantage of, some of them being taken advantage of by the people that were around them, and so I started teaching them how to manage their money, and words started to spread in the locker room,” Reid said. “I ended up picking a bunch of NFL players to work with, then moved on and started working with MLB players years later. I then started going around teaching financial literacy to music artists.”
Reid mentioned that lack of financial literacy is one of the biggest reasons people go broke, and that’s why he has created and joined associations to provide teaching tools to help people. “It started with the NFL Players Association, then I started seeing the NBA, which was teaching financial literacy to clients,” Reid said. “So I think over time, a lot of it came from those early grassroots, just putting together conferences, putting together events that were talking to folks about financial literacy. I mean, this is the only thing I’ve done my whole career, but I’m glad to see that it’s on a bigger scale.”
Richards wants entertainers to know that while it does become costly, having a well-educated and goal-oriented team makes life and business so much easier for them. “When you’re evaluating how you want to put your team together, the more they know, the better they can support an outcome. There is value in having professionals on your team.”
Richards acknowledges how some moms are becoming agents and representing their sons, but still encourages parents and entertainers alike to have a professional they trust around. “ When you look at pulling your team together, the question that you always have to ask everyone is, ‘What is your why? What are you playing for?’ If you know what you’re playing for, then you understand how to build out your team, and that helps you to be a little bit more intentional about having the correct people around you.
