While the number of female sports professionals and salaries have increased dramatically since Title IX, these athletes need to make financial wellness a key part of their game plan.
This year marks the 50th anniversary of Title IX, the groundbreaking federal civil rights legislation that has contributed to bringing millions of girls and women into athletics.
The landmark gender equity law requires schools, agencies and other institutions that receive federal funding to operate all educational activities — including sports programs — equally for women and men.
Since Title IX's passage, women in sports have come a long way. For example, female participation in high school and college athletics skyrocketed1 and professional money-making opportunities are also expanding. Television broadcasters and streaming platforms have added more Women's National Basketball Association and National Women's Soccer League games to their lineups2 and endorsement deal revenues are also on the rise.3 Recent changes to NCAA regulations allow college athletes to earn money off sponsorships, and social media has also opened up non-traditional avenues for female athletes to attract fans and business opportunities. Tennis star Naomi Osaka, who brought in nearly $60 million last year to become the highest paid female athlete in the world, also demonstrates the potential earning power of elite female athletes.4
Yet with all of these advances and opportunities, Osaka was one of only two of Forbes' highest paid athletes of 2021 who were women. The sports gender pay gap is so significant that it’s estimated that NBA players earn 100 times the salaries of their female WNBA counterparts,5 and the U.S. Soccer Federation recently agreed to a $24 million back pay settlement for female players.6
Given these and other disparities, many women who have gone on to pursue careers in sports are finding long-term financial well-being elusive.
"Even now, the disparity in wage income is amazing for the female athlete," says Cathy Bender, a Merrill Lynch Wealth Management Advisor. According to Bender, female athletes have often not received the same quality of financial guidance as their male counterparts.
"Many trailblazing female athletes have suffered financially because they didn't receive suitable financial guidance," Bender notes.
Ms. Bender is a trailblazer herself. She was the first Black female athlete to attend Vanderbilt University on a basketball scholarship in 1978,7 has been inducted into the Tennessee Sports Hall of Fame, and now uses her expertise as a financial advisor to help clients pursue their financial goals.
In recognition of the unique financial circumstances that athletes face, Merrill recently created a first-of-its-kind professional Sports & Entertainment Accredited Wealth Management Advisor™ (SE-AWMA™) designation, launched in partnership with the College for Financial Planning, a Kaplan Company.
The program equips advisors with specialized knowledge, tailored to the unique needs of high-net-worth clients in the fields of sports and entertainment who want to grow, preserve and transfer their wealth.
Female sports professionals face challenges, such as fewer teams to join, less media coverage, lower pay and smaller sponsorship deals compared to their male counterparts. These constraints are compounded by the fact that if a female athlete decides to start a family, pregnancy can threaten the renewal of her contract, or lead to cuts in sponsorship deals, something that Olympic gold medalist Allyson Felix recently publicized.8All of these heighten the importance of having a financial advisor who understands these challenges.
"Female athletes often have small windows of opportunity where the wealth is coming in, that they need to take advantage of," Bender offers, "but sometimes they've been advised to invest conservatively, or have been treated a certain way because they're women, and haven't seen the same returns as men."
Not only is the window of financial opportunity often shorter for women, it also often occurs when the athlete is quite young, according to Merrill Lynch Wealth Management Advisor Leanne Jewett.
"Peak career earnings tend to occur at a younger age for female athletes, so they have to capitalize quickly on a financial plan," Jewett notes. "They've typically put in a lot of hard work and have had to be extremely goals focused. We try to translate that kind of goals-based approach into their financial planning."
The primary ideas Jewett tries to instill in her clients are:
|The power of planning|
|The power of starting early|
|The power of giving investments time in the market|
There are other important statistics that female athletes need to consider, such as that women live longer than men, which means a longer post-career retirement. Childcare is also a major expense for mom-athletes, according to the Women in Sports Foundation. Care for elderly parents may also fall to them.
Additionally, systemic racial inequities have also played a role in excluding many families of color from creating and understanding the complexities of intergenerational wealth.
"Oftentimes, female athletes haven't been educated about the importance of financial literacy," Bender says. "That's why it's so important that female athletes take charge of their finances and find an advisor they trust."
This idea is echoed by Merrill Lynch Wealth Management Advisor, Linda Davila.
According to Davila, "One of the things that's most critical for women to do is educate themselves." Many sports professionals are generally unfamiliar with investment management, tax planning, asset protection and trusts, and estate planning. As these professionals start making money, acquiring basic financial skills is critical. Women in sports are also often deeply connected to their communities, and want to give back in ways that empower recipients.
"Women in sports need to take control of their financial lives and find a firm that can help them manage their financial future," Davila recommends.
Merrill's advisors are prepared to serve clients in all stages of their athletic career — at the beginning, their peak years, near-retirement, to retired or starting their second career. For many athletes, the greatest challenge is how to build enough wealth during their relatively short career spans to perpetuate their lifestyle after retirement for the rest of their life.
While both educational and professional institutions still have a way to go to achieve the equality goals of Title IX, the law opened doors for women to step into high-profile and high-earning sports leadership positions, including coaching, broadcasting and team ownership. In 1972, there were only 700 girls playing on high school soccer teams and there were no professional women's teams in the U.S. In 2020, Angel City FC joined the National Women's Soccer League as the 11th expansion team, followed by the San Diego Wave. Angel City FC boasts an unusual ownership structure that includes a growing slate of professional female athletes and celebrities. Their aim is to push for higher salaries, better working conditions and 401(k) benefits.9 These owners hope this model will spread.
"We're seeing this more and more," says Linda Davila. "Women are taking ownership for who they are and what they're doing.
Merrill offers comprehensive services with an understanding of the unique positions of women in the sports industry
|Legal advice or referrals|
|Personalized investment strategies that address unpredictable and/or large sporadic income streams|
|Tax minimization strategies|
|Manage everyday cash and access liquidity — help with planning for your income and cash flow needs, including expense management and budgeting|
|Help figuring out multiple income streams, compensation for use of name, image and likeness, early in career — even while in college|
|Access to Bank of America Loans and mortgages — realize borrowing power to fund your needs, from buying a first home to funding unexpected opportunities (i.e., vacation home, securities-based lending, customized lending, custom mortgages)|
|Plan for a fulfilling retirement and help with understanding league-sponsored pension plan characteristics and league-specific 401(k) benefits|
|Give back to loved ones and community — our Private Wealth Services group will work with you to determine the legacy you want to create for yourself, your family and chosen causes|
|Preserve income and assets — thoughtful planning and insurance solutions that can help protect the things you care most about — your family, business and assets|
Then we can provide you with relevant answers.Get started