Money ball’s odd bounce

CAN you imagine getting an immediate $60,000-a-year pay rise?

Well, that’s what happened this week to a bunch of young blokes that I work with.

Even better, the average 20something who got the pay rise is pulling in a whopping $371,000 a year.

I’m talking about AFL footballers, who this week scored a six-year, $1.84 billion collective pay deal.

But now for the tackle: despite the serious dough they get, a lot of these players will end up kicking their finances out of bounds on the full.

It’s a worldwide phenomenon: American footy players (lycra and crash helmets) earn an average of $US1.9 million a year, but most of them are broke within three years of retirement.

NBA basketballers earn an average of $5.15 million a year, but 60 per cent of them are broke within five years of hanging up their boots, according to a fascinating ESPN documentary called Broke. How does this happen? Well, this week I sat down with a bloke who knows: North Melbourne coach Brad Scott.

A few things you should know about Brad: first, he’s whip smart; second, he cares deeply about his players; and third, he happens to be a Barefooter!

(Oh, and fourth, I’m helping his boys this year — with their finances, not with their footy. Obviously.)

When it comes to footy and finances, Brad has seen it all.

In fact, when he was first drafted in the ’90s, he was paid an outrageous sign-on fee:

“I got seven and a half grand”, he tells me. “And $250 a game.”

(And, just like my sheepdog Betty, if he got rubbed out or injured … no pay.)

While you may scoff at the players’ pay rise ( and pay packet), after 20 years of from a very vocal but very small segment of the community. Perhaps it’s because I work in business and finance and therefore it exaggerates the number of people who are disconnected from the real world. Or perhaps their world is the real world?

The world of fine dining, pairing wines, slurping up saliva soup, scoffing magpie tacos and crunching away on that ant dessert, all for a mere $600 a head. (Yes, real dishes.)

Unfortunately, however, it is this small segment of the community, the rich and the playing and coaching Brad knows why many of them end up broke.

Let’s start the siren.

SHOW ME THE MONEY!

“PART of the problem is that everyone else thinks they’ve got it made,” says Brad.

And then he proceeds to throw cold water over the “$371,000 average wage” claim that’s bandied around in the media (and by yours truly at the start of this column).

“Look, of the 44 players on our list, only 14 are earning above the average wage, and the rest are below it and that would be similar for all the clubs,” he says.

And “below” is actually really low:

The minimum wage for a rookie is $71,500, and for a second-year player it’s $100,000.

Sure, good money for doing loud, that also make the decisions about everyone else’s lives. They are the politicians, the company directors, the serial academics and the investors within our society.

Like it or not, it is these people who set and influence public and private spending priorities (sob), social agendas (guffaw) and are supposed to be among the best minds and forward thinkers in our country (sigh).

Yet here they are woofing down tulip petal sandwiches and coffee-covered suckling pig, while the majority of us have a salad roll for lunch and something you’d do for free, but you’re hardly turning up to training in a Porsche 911.

And herein lies the problem:

“When you’re a young AFL footballer you get a lot of female attention,” Brad says.

“And the players, well, they’re not going to downplay the image. Really, it’s not in their interests to say, ‘ Hey I umm, actually don’t earn that much money’.”

And it’s not just the girls. Often when the players go home they shout their mates, and their families, who all believe they’re loaded.

I know what you’re thinking at this point: “Yeah, but that’s just what they start on, they’ll soon earn the big bucks.” And you’re right. Brad tells me that when some young players get a sizeable contract, that can mean share a Sunday roast and lots of vegies with the extended family once a week.

So it’s no surprise then, that when the Reserve Bank this week said workers should demand pay rises, everyone sat up and took notice.

The employer and financial elite sat up because they thought, “what the?”

The workers, of course, sat up and took notice because the “disconnect” with their reality just got even greater.

Here’s one of the loud minority telling them to do what they have been doing for, um, their salary is double or triple their first pay. And that’s when the real problems begin. well, ever. Demanding a pay rise.

And it’s not as if this should be something new to the Reserve Bank board. Because it’s been setting monetary policy and commenting on economic issues for, um, well, ever.

Suddenly, however, the board realises that household budgets are stuffed — wages have been going backwards, costs have been going upwards and households have been forced to stop spending.

Funny, how they didn’t realise this long ago. Like when their neighbour complained he’s really impressed by: “It’s not what you earn, it’s what you save.” they didn’t have enough money to get the car fixed for another month. Or when the school newsletter was again asking for help for students needing lunch assistance.

Or when at the supermarket they felt the anxiety from the woman in front as she handed back items to the checkout because the weekly shop was over budget.

Oh, but, yeah. They don’t do those things in their world. They just make decisions about our world. Like how many of the top 100 restaurants they’ve eaten at already.

THE GOOD COACH

THE AFL and the clubs understand the problems players face, and that’s why they’re investing a lot into player development.

Every club employs staff whose sole role is looking after player welfare. Plus, each player is mandated to have at least one weekday off per week to focus on professional development, either study or work placement.

Before the final siren sounds, the last word must go to Brad:

“The reason I’m passionate about financial education is that I’ve seen too many players who struggle after retirement, when they should be a step ahead,” he says.

“The reality is that a lot of players don’t succeed in the AFL — but they can all succeed in life.”

Tread Your Own Path!