The business of baseball peaked its head outside today with the filing period of arbitration beginning today. Players and teams will exchange their financial request on January 19, and for cases not settled by February 1st, hearings will take place.
This is an opportunity for players to make a case for what they are worth based on their performance. Agent Alan Nero said, “arbitration gives us the opportunity to compare people based on statistical comparables.”
Players have historically been well rewarded in this process. Last year, the 111 players eligible for salary arbitration (eligibility now begins after three years of service) set a new record by receiving an average pay increase of 172 percent.
The big story this year is two-time defending National League Cy Young Award winner Tim Lincecum, who is in his first round of arbitration. It has been speculated that he could ask for somewhere in the neighborhood of $20 million.
With the opportunity to sign such lucrative contracts one would assume these athletes would be financially set for the remainder of their life.
Unfortunately, we are witnessing at this moment how vulnerable athletes are to financial disaster.
Triton Financial, an Austin, Texas-based investment firm which boasts prominent ties to the sports world — including a sponsorship deal with the Heisman Trophy Trust; a three-year contract for a PGA Champions Tour event, the Triton Financial Classic; and a roster of former Heisman Trophy winners and NFL players that were employees of the company — has been sued in a civil action by the U.S. Securities and Exchange Commission for defrauding investors in a multimillion-dollar insurance scam, according to documents filed yesterday at Austin federal court.
Athletes need to make sure they are paying attention and educating themselves on how to choose a qualified financial advisor. Too many guys let their agents or someone else choose their financial advisor for them, when in reality a professional athlete needs to spend as much time searching for the proper financial advisor as he would spend searching for the right person to spend the rest of his life with.
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