Martin Taylor regularly has to tell footballers that they’ve lost all their money in disastrous investments. “I had to explain to one individual’s wife what he’d got into,” says the head of client relations at Rebus Investment Solutions. “He couldn’t bring it upon himself to. He was seven figures in the hole.” Another player’s wife phoned Taylor asking him to talk to her husband before he did something stupid to himself. The English Professional Footballers’ Association estimates that 10 to 20 per cent of ex-players go bankrupt. Many more run into big financial problems.
It’s often assumed that footballers blow everything on Ferraris – and some do. But Taylor’s clients are victims of investments gone wrong. As footballers earn ever more, the industry of conmen and incompetents feeding off them has grown commensurately. Players who burn through millions deserve some sympathy.
Footballers rarely used to make enough to attract conmen. When England’s Premier League began in 1992, the average player still earned “only” £77,000 a year. Twenty years later the figure was about £1.2m. Now footballers are fat targets. They go almost directly from school to earning millions.
Having money brings the burden of having to invest it. Mark Burke, an English ex-pro who played in several countries and has seen some peers ruined, told me that many non-footballers would also have made mistakes if they’d had £50,000 a week and endless temptations at 19. Every shark is hunting these young men. It’s not just players’ agents, financial advisers and wannabe girlfriends; there are estate agents who will take a footballer straight to the unsellable mansion with drainage problems beside the main road. Rebus reckons footballers put more than £1bn into mis-sold complex investment schemes in the past decade. Some were sold new schemes every year.
Hannah Southon, a solicitor at Harcus Sinclair in London who has represented several footballer-victims, diagnoses: “They feel slightly embattled. They know they are a honeypot and there are flies around them. Quite early on they are introduced to these financial advisers who hang around the scene. And the footballers are quite trusting of them. I think it’s because they met them so young.” Once an adviser has penetrated footballers’ circles, he often collects multiple footballer clients.
There’s a touching example of how it all works in a court document I have before me. It’s a case brought by a former millionaire Premier League player against his adviser. They met when the player was 17. The player’s barrister notes:
1) his lack of any understanding of financial and investment issues;
2) the complete trust which the Claimant placed on Mr …, whom he treated as a close friend and fatherly mentor…
The adviser persuaded the player to invest in two film schemes. Investing in film was for years a fashionable British way of deferring tax. Many footballers mistakenly thought they wouldn’t need to pay tax at all. Their advisers seldom explained the schemes, but just faxed over the signature page of the contract.
The schemes often ended in tears, largely because films (especially British films) lose money. When the tax bills belatedly arrived, many players couldn’t pay as they had already retired, or had suffered in the property crash. “Divorce doesn’t help either,” adds Scott Ward, deputy chief executive of the players’ charity Xpro. “I think one in three players is divorced within 12 months of retiring.” To make matters worse, some footballers don’t know about all their pension pots: when Xpro began work, it found 8,000 unclaimed pensions totalling £1.4bn for ex-players.
Lee Hendrie, the former Aston Villa midfielder, is just one of many footballers declared bankrupt after the taxman came calling. Hendrie twice attempted suicide. Ex-player Stan Collymore won a court case against a former adviser, but by then the adviser had already gone bust.
When I asked Southon and her colleague Damon Parker if they felt sympathy for ruined footballers, they chorused: “Yes!” Parker says: “The saddest thing is to see someone with this God-given talent and at the end of his career he’s left with nothing. It’s awful.” Parker thinks clubs should do more to protect players.
It’s too simple to blame the footballers. These tax-dodging schemes are achingly complex, even if you aren’t a kid who has just left school. When Southon explained a film scheme to me, I was lost within minutes: how do lease payments from the film producer get diverted to the gearing bank? Even canny old football managers such as Alex Ferguson and Sven-Göran Eriksson lost money in the Eclipse film scheme. Southon reckons some advisers didn’t understand the schemes themselves: “The adviser could be a shark. Or he could just be a bit incompetent.”
Southon lives near Arsenal’s Emirates stadium. On her way to work, she sometimes passes the club’s teenaged academy players. “I see these bright young things in their tracksuits,” she says, “and I wonder how many of them will be walking through our doors in 20 years’ time.”