By Alexis Brudnicki The minimum salary for a Major League Baseball player last year was $500,000 US. For the upcoming season it will rise to $507,500.
Sounds pretty good, right?
Even when you factor into the equation that the fixed costs before a player will even spend a personal dime in a year are more than $70,000, or that the average big-league career only lasts 5.6 years, it still seems like a good chunk of change when the average career salary of a baseball player amounts to $17.9 million.
Obviously not everyone makes that amount of money, and the mean is skewed by the fortunate few who take home much more than the majority. But with all of the stories of rich, professional athletes ‘losing it all’ or ending up without anything when all is said and done, it begs the question – how is it managed?
“So many people spend it like it’s going to come in every year for the rest of their lives and a few years after their career ends, they’re broke,” Toronto Blue Jays infielder Steve Tolleson said. “The sad reality is, and the numbers stand behind it, that’s real for the majority of athletes.”
Teenagers who sign for millions are expected to know what to do after suddenly hitting the lottery. Young players who know nothing but the game are expected to start thinking about retirement and life after baseball when there is no end in sight.
Of course, there are financial advisors and specialists who can assist in the process. Tolleson is now one of them, after completing his business degree at the University of South Carolina and partnering with the Greenville-based Parallel Financial Partners last off-season.
“What really created my interest in this was going through finance and financial planning degree at South Carolina,” the 31-year-old said. “I left after my junior year [drafted by the Minnesota Twins in the fifth round] and it took me – my wife [jokes with] me because it took me until her getting pregnant with our first [daughter] when I finally said, I’ve got to finish this – about seven years in total to finish.
“And my last study, my financial professor said, ‘This needs to be done for your own good,’ and he made me do a research project of about 50 pages that was purely on professional athletes from baseball, basketball and football, to combine and create real numbers of what happens to them and their money and how that can be avoided. That really piqued my interest of not becoming one of those numbers.”
The average length of a career in baseball is the longest of the big four sports, with the National Hockey League right behind at 5 1/2 years. The National Basketball Association has an average career length of 4.8 years, with the National Football League coming in at 3.2 years.
Average career salaries are highest for basketball players at $24.7 million, hockey players are making an average of $13.6 million over the duration of their playing days, and football players bring home $6.7 million.
“Most athletes feel like they’re great at their profession so they’re probably great at managing their life outside of their profession,” Tolleson said. “Those are a lot of the athletes who fall into trouble. It created awareness for me, which led me to continue to want to learn more and partner with the group and now try to create awareness for all of my friends who play baseball.
“It’s a special brotherhood we’re all in and we get a bad rep for managing money and managing lifestyles. It’s the reality. If you put a 25-year-old making five million a year, they live in a way they shouldn’t live. It’s not for everybody because some people are going to do what they want to do no matter what you do or no matter how you scare them, but the guys we work with are very much understanding of what life after baseball has to look like.”
Though he always had an interest in the financial world, it wasn’t until an extended trip back to Triple-A after spending time and finding success in the big leagues that Tolleson took it to the next level.
“I honestly started getting more serious about it in 2012,” he said. “I played pretty much the full year in the big leagues with Baltimore, I was designated, I played with the [Chicago] White Sox, had a great year in Triple-A and was never given the chance to play in the big leagues for whatever reason that was.
“That off-season really led me to start thinking what’s next? This is what I want to do but the ability to work in the financial world and play baseball doesn’t exist under a large bank. It only exists under an independent financial firm, basically a boutique-type agency. I have a lot of connections where I live [in Greenville, S.C.], and because of what I’ve done it opened doors of people interested in talking to me.
“It was an interview process where basically I got to meet a lot of people and decide who I wanted to potentially partner with and who I wanted to manage my assets, and in essence who I want my friends to be introduced to. That was kind of how it started and the relationship has been great, business has been good, and our clients are very happy with the services and the awareness we bring. It’s something that every sport needs, and I just hope our group is the group that can help bridge that gap for baseball players.”
Beyond the office, Tolleson has assisted many of his friends and teammates to varying degrees with their finances. They may take his advice or they may not, but he is happy to help.
“My biggest thing that I wanted to do while I was playing was to try and make my friends aware of the downfalls that a lot of athletes fall into with their money,” the father of two said. “[Being] young and 21 with a lot of money in the bank leads to a lot of potential problems down the road. So we’ve tried to bridge that gap a little bit and work with different athletes in hopes of working with many more athletes.
“We invest money for them in one area, but then we also try to give them ideas of how to plan, how to budget, and how to set themselves up for life after baseball. To be in the position that we are and to have the opportunity to make a lot of money, you need to make that money work for you and you need to make that money last.
“Baseball is a little bit better than other sports because our union has done different things as far as pension and planning to take money and put it aside for a later date, but a lot of sports don’t have that. So we’re trying to help create awareness.”
With the resources that baseball makes available to its players, it is incredibly important that they are aware of them. After spending September in the majors for the first time, it wasn’t until Canadian centre fielder Dalton Pompey went to MLB’s Rookie Development Camp earlier this month that he learned about some of his options.
“They covered a lot of things,” Pompey, 22, said. “Like how to deal with media and stuff like that, but the biggest thing for me was probably learning about the Players’ Association. I didn’t know anything about it. That was the first time in 20 years they said they had a meeting about the players’ union – what we’re entitled to, the stuff that goes on behind the scenes, what they deal with, how they help us.
“I felt like it was huge for all the players to hear that and understand that, and understand the rights and those people who are working for us every single day. It’s huge. We’ve got the best union in all of sports because of how hard they work and the stuff they do for us.”
Tolleson provides a unique perspective to his clients, living, breathing, and practicing what he preaches.
“Me knowing the costs of being a baseball player – the expenses of a house here, an apartment there, getting your family here – I’m able to bridge the gap from the financial world to the baseball world and give our clients real numbers, [and tell them,] these are real expenses before you spend the first dime out of your paycheque,” he said.
“We run a huge balance sheet for every player that shows fixed expenses for an off-season, your fixed expenses for a year, the cost of baseball, basically your costs of lifestyle, and then just give an idea of what is coming in, this is what you have going out, and this is the number you’re going to need to get to [in order] to retire after baseball.
“That number doesn’t just magically appear. You’ve got to aggressively save and plan, and if you don’t you’re going to be in trouble. I’m not going to say it’s a scare tactic but it’s real, and people who have the opportunities that we have are not doing themselves and their families justice to live a lifestyle that’s not going to put them in the best position after baseball. So we just try to bring awareness and we try to build trust because that’s what it’s all about.”