Advising Ballplayers During the Pandemic
It is amazing how quickly the world can change. High School State Associations and the NCAA cancelled 2020 Spring sports. Major League Baseball (MLB) suspended Spring Training and delayed the regular season until they deem it safe to return to competition. There is a strong likelihood the MLB Amateur Draft will move later in the summer from the June 10th date originally scheduled.
With that said, there is some good news. MLB and the Players Association aligned on an agreement to pay their Major and Minor League ballplayers through the end of May, helping alleviate potential cash flow constraints for players and their families. Why is this action incredibly important? Professional baseball players only receive a salary during the baseball season, so most ballplayers have not deposited a paycheck for roughly seven months. From a ballplayer adviser standpoint, this is one reason why we ensure clients have cash to meet their needs, with an additional emergency savings account set aside for unanticipated events.
Our Approach to Advising Ballplayers During the Pandemic
While the recent market pullback was deeper and faster than anyone could have predicted, financial plans for our ballplayers consider the highs and lows in many different market scenarios. History indicates the market will undergo a significant pullback at least once every ten years. We have prepared for these pullbacks – in fact, we plan for them to occur — when we make investment recommendations.
Knowing that a plan for volatility is baked into our basic investment advice, much of our time and attention shifts to the individual risk profile of each client. Many investors express confidence that they can deal with market highs and lows, only to realize over time that it is not always about making the highest return on their investments. Uneasy times give us an opportunity to talk with ballplayers about their degree of comfort with their customized investment plan. Those conversations help us determine if we should continue to execute the current strategy, or make an adjustment to the plan.
In addition to fielding a solid investment strategy in line with a player’s risk profile, we focus on tax preparation and engaging in meaningful discussions with clients’ accountants about 2019 taxes and 2020 tax planning. The CARES Act pushed back this year’s tax filing and payment deadline to July 15th, giving clients tremendous flexibility on when to file their 2019 return.
Inevitably, the impact of COVID-19 has highlighted the criticality of ensuring estate plans and healthcare directives are current and meet ballplayer goals in the event of serious illness. If illness does occur, the player should not have to hope that his wishes are followed. It is our job as Advisors to make sure players work with a qualified attorney to enact a personalized plan.
Most of our ballplayers are using this extraordinary time to train in very creative ways, engage with their families, and even go turkey hunting (usually not possible during baseball season). But this is also a great opportunity to evaluate customized financial plans and strategies to prepare for any curve ball that life wants to throw at us.