Helping Athletes Win The Wealth Game (Podcast)

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Today, I have two experts here with me to guide us through this evolving landscape. First, I want to welcome back Shomari Hearn, Palisades Hudson's executive vice president and chief operating officer. One of Shomari’s many responsibilities is running Palisades Hudson Entertainment and Sports, our business management practice for athletes and entertainers. Shomari is also a member of Diverse Representation,

00:55
an organization aimed at increasing the visibility of African American professionals working in sports and entertainment in roles other than as athletes or entertainers. Welcome back to the podcast, Shomari. It's always great to have you here.

Shomari Hearn
Thanks for having me back, Amy.

Amy Laburda
I'm also excited to welcome Jumaane Ford to the podcast. Jumaane has worked in entertainment and sports for more than 20 years, with experience ranging from negotiating major recording artist and acting contracts to producing film and television. Today, he's an NFLPA-certified contract adviser.

01:25
And he also runs a nonprofit organization that helps place at-risk children in prestigious boarding schools throughout the country. In addition, Jumaane is a former college football player himself. Thanks so much for joining us today, Jumaane. It's great to have you here.

Jumaane Ford
Thank you, Amy. And good to see you again, Shomari.

Shomari Hearn
Likewise.

Amy Laburda
So to start us off, I'll kick it to Shomari first. And Jumaane, you can jump in if you have any corrections. But how did you two meet each other?

Shomari Hearn
Yeah, so, Jumaane, you probably remember.

01:53
This was a few years ago. It was down in Louisiana. I was attending a Diverse Representation “Sports Agent Bootcamp” event. I was there, you know, just to learn more about the sports agent’s perspective, how best to serve their clients and also work with agents. Jumaane was one of the speakers at the event and as he was, you know, providing his comments, a lot of them resonated with me, especially going back to his childhood and upbringing in New York City.

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And realizing that we were… So, you know… After the panel was over, I got in line to speak to Jumaane one-on-one, just to get more information about, you know, his background and being in New York City and so forth. And as I'm in line, I'm standing behind someone else that was talking to Jumaane, and I was wearing a short-sleeved shirt and Jumaane saw the New York City subway token tattoo that's on my arm. And as he was mid-speech with the person

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in front of me, he was like, “Is that a New York City subway token?” So we just kicked off from there. And then we became fast friends, basically. I may have missed one or two things, but Jumaane, you can jump in if I did.

Jumaane Ford
Yeah, Shomari, I think you're dead on. I definitely remember meeting you. And it seems… It's been years now, right? We've kind of, like… We've become friends, and we speak about business and things outside of business.

03:19
I definitely resonated — just your background and hearing about, more about you and just kind of the services you offer. But being more than just an adviser, but an advocate and a teacher, right? And to some extent, to a large extent, a coach. And that definitely stuck out, because I'm, I'm very, very picky on the advisers I align myself with and people who I call my friend. And so definitely it was just a pleasure to meet you. Appreciate it. You know, you and someone in your stature taking that trip,

03:46
and sitting amongst the students and everyone else and just having humility to stand online and talk to a guy who's a peer. You know, so that, that meant a lot.

Shomari Hearn
I appreciate that. But yeah, I think, you know, similarly, I think we connected and became fast friends just because I think we approach things the same way, right? You know, you being a coach, not only to the players that you represent, but also to your son who's, you know, playing basketball right now. Right. It's just, it's just who we are. And I think that's what allowed us to connect so quickly.

Jumaane Ford
Absolutely.

Shomari Hearn 04:16
You know, even at a point… You know, I run into Jumaane at different events, whether it's a Super Bowl — We got a chance to hang out a bit. And I got to meet some of the other folks at Range Sports, where he's at now, just seeing what they're building over there and, you know, Jumaane leading the way. And I think, you know, because of, because of that, they're going to have a great deal of success over there.

Amy Laburda
I’m very excited to dive into what both of you do professionally. But before we do that, I'll ask Jumaane first, to switch it up:

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How did you get into entertainment and sports? Is it something you've always had a passion for? Is there any particular event that sort of led you down that road? Or is it something you always knew you wanted to do?

Jumaane Ford
Well, how long do we have? Let me try to cut out as much of the fat as I can. Since I was a kid, I always had an interest. Believe it or not, I started off as an actor and somewhat of a dancer — I don't even know if you know that, Shomari — as a kid. And I was in, like, in all of these local groups.

05:14
And, you know, I went to college, obviously I played — not obviously, but I played football in college, but I also was a… you know, I took theater and was in a lot of the productions on campus. And when I graduated college, I was kind of at an impasse on what I was going to do. Was I going to go to law school or was I going to pursue acting? Right. So I decided to pursue acting and somehow got into music and, you know, the music business and production and music, and found my way back and forth to film. All along

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still being involved in football, because I was coaching. You know, I have an older son and just being around him in New York City, coaching youth football and seeing these kids, and building relationships. And as they went to college, becoming like consult for the family. And it just kind of spread from there, and just through the progression of my career, and football and sports being my true passion. God blessed me with the opportunity to do it for a living.

Amy Laburda
Nice. And Shomari, I know some of our listeners may not, but you come from a strong

06:11
finance background, but that you also always had a passion for sports. How did you end up sort of marrying both of those things together, as we've been building our Entertainment and Sports practice?

Shomari Hearn
Sure. So I think it goes back to when, you know, from early childhood, you know, I played football, got into playing tackle football until the team moved away. I think I was in fifth grade or sixth grade. They moved to a different part of the Bronx, so couldn't make the practices anymore. But football was my

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first true passion in sports. And I wound up starting to play basketball for the school that I attended. And then I started… I joined a league outside of that and really got into basketball. But then once I realized that, you know — through high school I played. But when it was time to go to college and I realized that I wasn't going to be able to play at Duke, and I was about…

07:00
Let's see, when I got to college, I was about 5-6 or 5-7. I think I grew like two or three inches in my freshman year, luckily. I realized that I wasn't going to be able to play at the professional level, let alone at the college level, although I did try to walk on it in my sophomore year. But I always had a passion for finance. So looking at studying economics at Duke, and then graduating and getting a job here at Palisades Hudson.

07:29
And immediately I was able to see all the great things that we do for our clients at Palisades Hudson, you know, just helping them achieve their financial objectives, giving them that guidance in order to allow them to make informed financial decisions. And I just immediately saw that that was lacking where I came from, you know, growing up in the Bronx and, you know, grew up around rappers, entertainers, pro athletes. And unfortunately, you would see and hear too many stories of them,

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you know, achieving success career-wise and financially, and then only to lose it all and end up right back where we were. So I wanted to be able to offer those same services that we were giving to our traditional clients, and being able to offer that to, you know, entertainers and athletes. And I think it took some time. It probably took about 18 years or so to convince Larry Elkin, the founder of the firm, that we should

08:26
be working with athletes and entertainers. But he came around and, you know, has been focused on that since. So that's… that was the reason and what allowed me to marry the two.

Amy Laburda
Jumaane, as I was going through your biography in preparation for today's episode, there were a ton of things in there I wanted to ask you about, but to start at the present day a little bit first: For those, like me, who don't know, what's involved in becoming a certified agent for the NFL? What's that process look like?

Jumaane Ford 08:53
Well, the process is interesting. For most of us, you have to have a graduate degree. A lot of people think agents have to be lawyers. I'm an attorney, but it's not a requirement. And some of the best agents are not attorneys. But you have to have either a graduate degree from an accredited university. So it could be a master's degree in horticulture. But as long you have it, you have it, right? Or I believe it's seven years’ negotiating experience. So if you were in real estate or you negotiated

09:23
large deals in business development. Or if you were an NFL veteran that played for several amount of years, that will qualify you. Then you have to register; go through the background check, which is pretty extensive; and then you take an exam. When I took it, it was in person in DC, where the NFLPA [NFL Players Association] is, and now I believe it's online. And the exam is pretty rigorous. I think about… less than 40% of people pass. It may fluctuate from year to year.

09:52
But it's kind of like a barrier to entry for people, in my opinion. But that's just the process.

Amy Laburda
Yeah. I think test-taking is always a little controversial because to some degree, you're always testing for who's good at tests, but.

Jumaane Ford
That, and I think that the NFLPA wants to limit the amount of uncles and coaches becoming agents.

Amy Laburda
Got you. All right. So once you pass the certification process, what is being an agent like, both during the season and in the offseason? What's kind of your day-to-day rhythm like?

Jumaane Ford 10:21
Well, my day-to-day, it varies from… just a new agent to an agent that's building a book of business, and so on and so forth, right? Because the majority of agents, I would say probably closer to over 90% of agents, have one active player or less in the NFL. The majority of the big dogs have the majority of clients, and it just is what it is.

10:45
And so, there's a process of… You want to recruit clients, right? And you want to recruit clients that will make it into the NFL and get paid, so that you can get paid. Because we don't get paid unless the guy's on the roster. And that's on the 53-man roster. So if there's guys in a practice squad, playing alternatively, I don't bill. I don't know if there's some agents that may bill a guy who's in the XFL or in a CFL or… It's a different certification process.

11:13
But I'm not interested in doing that. And for the most part, I'm not really interested in representing players that don't play in the NFL, just because of the amount of work we do and the amount of time that it takes. So there's different cycles and different aspects of representation. There's the recruiting, which is an entire job in itself. And that's identifying talent, contacting talent, cultivating a relationship with them, their family, the important people.

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And then there's a side of having relationships with NFL executives, the scouts who can tell you kind of where those players fall, because we can see a guy on TV and he could be one of the top players in college and win awards, but they may not translate… that skill doesn’t translate to the NFL. And we've seen it at the highest level. You know, with all of these things that’s different from my side than an adviser's side is because we make a financial investment into that player. While you invest your time

12:09
and finance to travel, we make a significant investment into training, preparing for the draft — which could be anything… on an extremely low end of $30,000, upwards of six figures plus, depending on where that player is.

Amy Laburda
With your theater background — it's obviously not a perfect analogy. But I definitely come from a theater background as well. And, like, the best person in a college program may or may not cut it professionally, because you need skills other than being a good actor

12:36
to be a successful professional actor. And I feel like it sounds like it's the same for professional athletes.

Jumaane Ford
Absolutely. Because I'm sure as an actor, you've seen some really talented people not get opportunities. And then the people who may look the part, you know, come in and then they get an agent and they're booking.

Amy Laburda
Absolutely.

Shomari Hearn
So, you know, going back to something important you said, Jumaane, was… You talked about the economics related to… not only the time, but the economics, in terms of —

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you’re signing a player, you get them ready for training and so forth. And the amount of money that's spent upfront before they go, you know, they get drafted and signed on to a 53-man roster. And from a financial perspective, or financial advisory perspective, we look at the economics and we're like, “Is this profitable?” And depending, I guess, on where the player winds up getting selected, right? Going into the draft. Hopefully you make that money back at least. But

13:33
I'm expecting, on that first contract, probably: Maybe break even? Versus… Is it the next contract, assuming they get to a next contract, where you really make your money?

Jumaane Ford
So as an agent it's tough, right? Because as a new agent, outside of you having a child or a former player that you can project to be drafted high, you're starting from scratch, right? And now in the world of recruiting, there are players who are going to be drafted, and you go into the process

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knowing that they won't be drafted, that are still looking to get paid for training. They're still looking for a rental car. They're still looking for housing. They're still looking to go to one of the premier facilities to prepare for the draft. And there's no guarantee in anything, outside of people drafted in the first three rounds. But you don't know if they're going to get a real opportunity. So it's somewhat of an educated gamble or guess. But that's kind of it. And you hope to break even

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for the first contract, because the second contract is where you make your money and where it makes sense. But along the way… but then first to second contract, you know, there's a fall off. There are guys who are being recruited by other agents, even though you're not supposed to, right? But there's guys that will leave you for no reason at all and go with the new agent, and they will reap the benefits of that second contract. You know, you're constantly recruiting a player. You can never get comfortable

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with a player once they're in the league. So you still got to go to those dinners. You’ve still got to do the check-ins. You still have to check in with the family. And is it profitable? It is at the highest level, but it takes time. I'll tell you, I was an agent for five years before I made any money as an agent. So the saying of “don't quit your day job” is a real thing. The majority of agents have other jobs. I still practice law. I still have real estate. I still invest in film production. And so I had a TV show

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on that I produced while being an agent. So there's so many things that you have to do to keep your lights on. But if it's your passion, if it's your calling, which it's mine, there's no bad days. I tell people all the time, I have friends who are in medicine and friends who are in law enforcement and people who serve in the military. I'm like, “You guys got a real job.” Those are real jobs. We work with people who play a child's game for a living. And that's it. So for me, it's perspective.

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And it's a blessing to be able to do this, to be able to connect with these amazing kids, with their amazing family. I call them kids because anyone under 35, 40 is still a kid to me. But it's truly a blessing to be able to do this for a living.

Amy Laburda
Yeah, I'm going to venture that Shomari is never going to get mad at someone who diversifies their income streams.

Shomari Hearn
Not at all. That's effective financial planning for sure.

Amy Laburda
Yeah. Yeah. So while we're talking about kids, I guess — not to be dismissive.

16:22
I'm closer to that 40 mark as well, so we can all be fond here. But as I said in the opening, I did kind of want to talk about college athletics a little bit, while we're all here. Now, Shomari, last fall, in 2024, you wrote an article about the state of pay-for-play rules and some of those lawsuits and potential pieces of legislation. Could you just give us a brief update, or an overview for people who aren't familiar, about where things are now?

16:50
How can college athletes profit from their skills and what is still off-limits, legally?

Shomari Hearn
Sure. So currently, the NCAA and the Power Five conferences, well, it's more like Power Four now, have entered into a preliminary settlement in order to not only pay players pre-NIL, basically going back to probably playing years around 2017 up to currently.

17:17
But that … there hasn't been a final approval of that settlement, which they believe will happen in April. And assuming that is the case, there's about $2.8 billion that will be essentially doled out to former players and existing players, to catch them up and get them what they should have received in NIL money. But also as part of that settlement, there's a revenue-sharing agreement as well.

17:45
So… which the schools and the student-athletes have to opt into in order for the schools to essentially start paying the players directly. So up until this point, even though NIL came into effect in 2021 as part of the [NCCA v.] Alston case, schools do not pay the players directly. They're being paid by what are called collectives, which are essentially boosters and, you know, some business owners who, you know, basically pull money together

18:15
in order to entice players to come play for their school or their alma mater. Up until this point, it hasn't been directly from the school, but now, assuming the settlement gets approved and payments start going out, that they'll be allowed to start paying the players directly. There's a certain cap in terms of how much the schools, each school, can pay their players. And that's across various sports. Obviously the majority of that money goes to the...

18:44
Division I football players, men's basketball players, and now some also to women's Division I basketball as well. But football and basketball definitely get the lion's share. So that's where things stand right now. So we'll see in the next couple of months what happens. We are also seeing that some players are opting out of participating in that settlement. So they have their own separate lawsuits or are part of other class action suits against the NCAA.

19:14
So we'll see where those play out. There's also the discussion, or there's been complaints filed with the National Labor Relations Board about the treatment of student-athletes and whether they're employees or independent contractors. And basically certain rights that go along with being an employee and what benefits and so forth that they should be receiving. So that's also still out there as well. But I would expect,

19:42
if the NCAA settlement does go forward and the schools are paying the players directly, it'll be interesting to see… What I would expect is that they would be deemed to be employees of the schools. That's essentially the lay of the land. I don't know if Jumaane, you had anything to add?

Jumaane Ford
No, I mean, that's dead on. Great explanation.

Amy Laburda
So in the past four years or so since Alston, with the rise of these collectives and NIL deals becoming an option,

20:10
what have you guys seen as far as dealing with players? Like, what is sort of the different things they're having to navigate? Obviously this is offering a lot of opportunities, especially for Division I football, basketball, as you mentioned. But, like, I imagine also some challenges, right, for some of these kids who are not used to dealing with this amount of money or who are suddenly having to evaluate deals that are more complicated than they might've encountered before?

Jumaane Ford
Well, I'll jump in. For me, it's a good thing

20:38
more than there's a negative to it. But, in essence, your recruiting process starts a lot earlier. So now we're recruiting these top-level players once they get on campus. Where normally it starts kind of at the end of their second year, depending on the type of player, because they become draft eligible three years removed from high school. A lot of the players are coming out after three years or four, but three years for the most part for the higher-end players.

21:06
So before then, you know, I'm recruiting a guy later, but now I'm recruiting him early and also possibly representing them for NIL marketing, which is separate from NFL representation. And in essence, you're recruiting them twice, because while you're an NIL client, it doesn't really stop other agents, marketing agents, from recruiting a player, or NFL agents who are recruiting them solely for NFL while you're doing it for NIL marketing. And if I'm jumping ahead a little bit,

21:35
a lot of agents don't do NIL marketing representation. And a lot of times some agents will take on NIL marketing, because they believe that it's good to have their relationship or connection. But if it's a player like an offensive lineman or a defensive player where there isn't as many marketing opportunities, it's probably better not to do it, because more likely than not you'll fail. And even if you're successful for that position, there's going to be someone to say, “Oh, that's all they got? I could have gotten you more,” or “You didn't get anything.

22:05
That means that this person isn’t going to be a good NFL agent.” So you kind of have to be trepidatious on how you approach the representation overall, because it's still a lot of time you spend.

Amy Laburda
That makes sense.

Shomari Hearn
Obviously, Jumaane is on the front lines when it comes to, you know, dealing with trying to secure deals and opportunities for his players. I typically come into the picture after the fact. And then, you know, from our perspective as advisers and also preparing the tax returns and so forth, it is a

22:35
big adjustment for these kids. I agree with Jumaane. I view them as kids as well. Just in terms of… oftentimes, and not in all cases, but a lot of times, their parents may not have the financial knowledge of dealing with earning this type of money. And on top of which, like I said before, up until this point, these players are receiving this income, but it's in the form of self-employment income. They're not…

23:05
They're not employees. So no one is withholding income taxes or Medicare, Social Security taxes from this compensation. So if they're not properly prepared to receive, you know, what comes with receiving this income, or earning this income rather, oftentimes they can find themselves in financial trouble before they even know it. Right? A student-athlete being paid by the NIO collective for $350,000. They think they're like, “I'm balling out of control now. $350,000?

23:34
I could never imagine making that much money.” But they think the entire $350,000 is available to spend. So all the things that they've wanted up until this point — a nice car, nice clothing, jewelry — they're going out and getting it. But no one has educated them, or properly educated them, at least, in terms of saying, “Well, yeah, all that money is not available for you to spend. Some portion of that money needs to be set aside, because you’ve got to pay income taxes. By the way, you're also going to have to pay

24:04
Medicare and Social Security taxes, both as the employer and employee.” So assume, you know, probably four — three, four dollars out of every 10 should be set aside in the savings account to, you know, to cover taxes, right, alone. And then also, just looking at it and saying, “You know, this is great money, but you just never know, will this be it or not?” So you should be saying, “Yeah, I will probably try to save at least 10 to 20% of this money.” So

24:33
not only building an emergency cash reserve, but more importantly, also putting this money into something that can be invested for the long term. And that starts by looking at whether or not to set up… especially if they have these big tax bills that are coming, some of the things that I'll talk to them about are setting up a retirement plan: either a simplified employee pension, a SEP IRA, or a Solo 401(k) plan. It allows them to contribute way more than if they just set up a traditional IRA.

25:01
It's this forced savings, in a sense, where even though you're not required to make these contributions, if you do, there's some limitations on you being able to access this money. So essentially forcing you to start investing for the long term, right? Whether or not it pans out, whether you make it to the next level or not, you at least have put some money away, using the benefit of time value of money, compounding and so forth, to have this money work for you, will pay off in the long run.

Jumaane Ford 25:31
Right. And now I'll say, also, there's another aspect of NIL compensation that players and people around those players don't really know a lot. It's… like last year we saw a few players getting private jet deals and the use of private jets, and — or use of a car. They're taxed on that.

Amy Laburda
Yeah.

Jumaane Ford
They're taxed. And so you kind of have to proceed with caution on accepting those type of deals, because this private jet ride could be valued at $30,000 and you're paying the taxes on that later.

26:01
So there's no such thing as a free ride, literally.

Amy Laburda
Yeah. I can't say if I were a sophomore or junior in college and someone handed me $350,000, I would have made wise choices right off the bat either. I certainly have a lot of sympathy for these kids because, you know, someone's like, “Hey, would you like a ride on this private jet?” Sounds great. Like, why would you not? Or I think, you know, Shomari and I have talked before off mic about the generosity impulse, right? Like, you want to

26:28
pay off debts for loved ones or people in your life. And I think that's great. But that kind of context that Shomari is talking about, and Jumaane as well, is just something that I think no one really has until someone trusted, you can sit down with and be like, “Hey, let's look big-picture at this whole thing, not just at this one lump sum of money.” I will give the disclaimer to our listeners: Neither of you have a crystal ball. Neither of you are psychic, as far as I know.

26:55
But looking towards the future, if we do end up seeing schools paying some of these kids and treating them possibly as employees, as Shomari was talking about, sort of the ambiguity there about their status, do you think that's going to affect these NIL collectives? Do you think that's going to offset? Or do you think they're just sort of both going to be in the atmosphere going forward? Or is it really too early to say at this point? Jumaane, I'll kick it to you first if you have any thoughts.

Jumaane Ford
So as far as the collectives,

27:23
those relationships now are kind of forced. These schools don't want to have a collective. They don't want to pay players. And in essence… Even in my work, we’ve created some partnerships and [are] in the process of creating more partnerships with schools, so we can help them create platforms for true NIL, which is kids making money off of marketing and endorsements, other than paying for play. Schools do not want to get into that. They don't want to hire these white-collar consulting firms to create NIL

27:53
companies for them or pay attorneys to run an NIL for them with the collective. So they don't want to do that. So they want to get into the profit-sharing aspect. And so I believe long term, the collectives will kind of fade or be absorbed into it. And the school will do the profit sharing along with compliance and helping to deliver NIL. That's where I see it going.

Shomari Hearn
Yeah. And I agree with Jumaane. I think,

28:19
as you mentioned, I think a lot of it will start to fade away. But I do think in some cases there may be — and Jumaane, you can let me know if you think differently — but in terms of at least what's being discussed with the settlement and the revenue sharing, the schools have a specific cap in terms of how much they can spend, in terms of essentially paying the players. If there's a highly sought-after or top tier recruit,

28:49
likely to go, you know… Everyone's seeking them, but there's this cap in terms of what they ought to spread across their athletic department. Will there be situations in which, in order to secure that player, or a couple of players, where additional money from a collective may come into play?

Jumaane Ford
Absolutely. Absolutely. I mean, when NIL came out, and I remember a few years ago and I saw it happening,

29:19
but in essence, I was blessed to work with a few players that first year that made a lot of money. Right? But for the majority of it, these kids were underwear models. And what I mean is that they were getting free underwear and posting it. And in their bios, you saw they were such-and-such-and-such company reps. And they were just doing a whole bunch of stuff. A lot of players’ families will reach out to me. And these are players from like innocuous schools in the middle of say, wherever. And

29:48
you know, they wanted me to represent the NILs and, like, there's nothing really there. You know, because NIL mirrors the NFL. And what I mean by that is 95% of marketing goes to the top 5% of the players. And then the other 5% of marketing is sought after by the other 95%. And that's it. And if you understand that part, it will help you understand NIL, true NIL in the form of marketing and endorsements, as it is. Right? But as far as the collectives,

30:18
we've seen, and most of this isn't publicized, but we've seen offensive linemen get seven figures to play. I've seen offensive linemen get seven figures to play at a school where you won't see an offensive lineman outside of Jason Kelce do marketing and endorsements. And the same with marketing for defensive players. As a defensive player, you have to transcend the sport

30:46
to get marketing. You know, a guy like J.J. Watt or a guy like Von Miller, who are superstars, they will get endorsements. But some of the best defensive players, like a Chris Jones or a Myles Garrett, they'll never do an ad because they don't necessarily transcend the sport. But guys like Von Miller and J.J. Watt will get marketing. And so when you understand it and that approach, then it helps you understand kind of how to approach NIL.

Amy Laburda
So

31:14
if a young athlete — or a performer, because I imagine… Jumaane, you have experience with entertainment contracts as well, and I have to imagine there's a similar split of the top 5% who are getting really sought after and everyone else sort of scrambling. So say a young person in one of these fields is fielding multiple offers. Say they've really sort of won the jackpot, as far as desirability. Broadly, are there things that they should be looking for? I imagine

31:41
neither of you would advise: Just look for the biggest number after the dollar sign and go with that one. But in the absence of that, what sort of things would you advise someone to be looking for, broadly speaking?

Jumaane Ford
And that's an amazing question, right? Because we see these bloated or inflated NIL numbers, right? And what we don't understand is that the kids have no autonomy, and that school is basically buying your entire name, image and likeness. Right? So for me, when I negotiate NIL contracts with the collectives, some may

32:10
think that there may be a lower dollar amount, but this kid still has full autonomy. So if a kid is going to sign and we see, “Oh this kid signed for $5 million,” “this kid signed for $10 million,” but, you know, they've given up their trading card, which is… could be, you know, depending on the player, seven figures plus. Memorabilia, their likeness, the ability to go after a beverage deal, their ability to go after a clothing deal. And so when you look at all of those things, it varies. So if

32:39
you're saying, “You know what, just give me this money, and I have no interest in anyone working for anything outside of my true name, image and likeness,” then that's fine. But if, you know, for me, if it's a player, especially an offensive player — quarterback, running back, wide receiver — that's going to be fielded with marketing deals outside, that could be a cover boy or girl, right? Because there is a lot of NIL in basketball. We've seen it with Caitlin Clark and now we've seen it with JuJu [Watkins] and, you know, so many others in volleyball and soccer, but

33:08
in essence, you… For me, I like to have my players maintain and control their own IP, their own intellectual property. And for me, that's just important. And maybe it stems from my day in music, right? Where we use a term like not owning your masters. Those are the things that your grandkids will eat off of. And the same within your own IP in college. If you don't control how many times you have to post some silly local car dealership that's a booster

33:37
for the school, but there may have been a Nissan national campaign or a Dodge national campaign that would help grow your brand so much more. Or if there is a technology company that's aligned with the school, because they pay for the school to put their logo on a sideline, but there's another company that would give you six figures for yourself to do that. Those are things that I, that's how I approach NIL. It's just really having a player maintain control of their own intellectual property and,

34:06
and really to roll my sleeves up and fight these collectives, because someone has to do it. Because really, a lot of times when you see kids go through the recruiting process, it's… The first thing they have you do is put on those uniforms and take pictures, right? And the pictures are done in front of luxury cars: Lamborghinis, Ferraris, and money and just these silly things, right?

34:31
And what that's doing is disarming these families to make you, you know, like, wow, this is like, it's so great. When they're recruiting you… It's like, back when I took kids on recruiting visits, it was like, we don't need to do this. We'll do this after we commit. Right? Because I don't want this player to be so in awe, so they feel like these schools are doing them a favor. Right? You're a recruited athlete because they need you.

Amy Laburda
Right.

Jumaane Ford
Right? And so, you know, once we take that allure away,

34:57
because when you have some of these — and I won't name any names of coaches — but some of these historic coaches that sit you in their office and they've got all these NFL players behind, and these are pre-NFL, pre-NIL days, where they basically controlled everything. And they'll tell you, “Oh, you come here and you give me three to four years, and you'll be there.” And it's like, that's fine, but you could do that down the road. And we saw this happen, right? We see some of the top players… I mean, Josh Allen went to Wyoming, right? And that's just kind of it. And the other Josh Allen, where — Kentucky is a great school —

35:27
went to Kentucky, right? And he was a top pick. So it's more about where you can go and succeed. So with negotiating these deals, it's not — understanding the equilibrium on where you stand in that deal, right? And the negotiating process, and that no one's doing you a favor, and you have to control the process. And the people around you have to control the process. And trust you.

Shomari Hearn
Well said. I mean, I agree wholeheartedly. I think, especially again, if you don't come from

35:56
money or wealth, and you see this big number in front of you, obviously you think like, “What else is there to be discussed? Like, I'll just sign on a dotted line.” But as Jumaane said, there's so much more opportunity. Oftentimes you may be better off taking less money in order to have that freedom and flexibility to enter other types of deals that will be more lucrative overall in the long run. So that's why it's important to have a great agent like Jumaane.

Jumaane Ford 36:25
Thank you.

Amy Laburda
So while we're sort of talking about how anything can happen, there are a lot of futures ahead of these kids. I think it's worth touching on athletes being at particular risk for an accident or an injury to really change the shape of the future they're envisioning. I think as a college basketball fan, I'm never going to forget Kevin Ware's injury in 2013. I think that that was pretty vivid for a lot of us, but it's certainly not the only example of someone who just, you know,

36:53
you land on a leg wrong and your whole future changes. So as an agent or as a financial adviser, how should young players think about financial self-defense for themselves, in case something like that happens and you just are rewriting your expectations in real time when something like that goes wrong? Shomari, I'll kick it to you first.

Shomari Hearn
Sure. So especially when it comes to one of the elite athletes that are slated to go in the first couple of rounds,

37:22
whether it be the NFL or to the NBA, for example, it makes sense for them to obtain what they call permanent total disability coverage and add, along with that, a loss of value rider and a critical injury rider. These coverages will protect them if, for some reason, they sustain or suffer a career-ending injury while in college, in order to be able to still get some of the value

37:51
that they might have obtained had they remained healthy and went on to have a good professional career. Those coverages are obviously not cheap. Some of these premiums, especially depending on who the player is and where they're likely to go in the draft, the premiums can be a few hundred thousand dollars. So before NIL, for example, players would have to, if they obtain this type of coverage, they would have to borrow

38:19
in order to pay those premiums. Again, there's certain players, these top-tier players that are getting large NIL deals. They could afford to essentially pay for these without having to borrow. So that winds up being the discussion with the agent and the adviser, and their families. But it's worth putting into place some sort of protection, considering how much value is at risk.

Jumaane Ford
That's right.

Amy Laburda
Makes total sense.

38:49
So I think we've talked a lot in this conversation about the importance of having good advice, right? Whether it's evaluating a contract, or that sort of financial self-defense we were just discussing, or thinking about retirement, all these things are really going to benefit from someone with your guys' expertise or similar expertise stepping in. But I imagine, as Shomari said, a lot of these people, you're not going to get a recommendation necessarily from someone you know. You might, if you have a colleague, but you might be sort of just jumping into the pool of

39:18
professional advice somewhat blind. So, from the player's perspective, what sort of things should you be looking for in an adviser, an agent? What are some green flags? What are some red flags? Jumaane, I'll ask you first.

Jumaane Ford
Well, I mean, first and foremost, you want to… and it varies, right? From your adviser and, you know, an agent. But obviously it is an experience factor. All right. Like we'd love for, you know, new guys to get opportunities. And when I was a new guy, you know, just

39:47
wanted to sign the top guys, But you're not giving the keys to a spaceship to, you know, someone fresh out of flight school. You're just not doing it. Right? And then you, you, you balance their levels of expertise and their relationships. But when it gets down to it, when all things are considered, right, you have to look at the relationship. Is there someone I can trust? And some people want different things. Like, I have clients that I may talk to every day, you know, and I may talk — you know, clients I talk to once a week. And then some clients that I talk to once a month.

40:15
And it's just kind of to the individual, how much do they need? But also, you really want someone that communicates with your inner circle, whether it be your mom, your dad, your spouse, because players are getting married. And just a plan. And also, you want people who play nice in the sandbox with others. And so, if I’m the agent and Shomari is the adviser, we should be communicating, because there should be a goal coming up, especially where we're going in negotiations for second contracts,

40:45
you know, we've got to look at what this player's goal is. So, you know, there are times we may want to break the market, but in essence, if this player's goal is here and they're comfortable with that, that we have to do what the client wants.

Amy Laburda
Right.

Jumaane Ford
Because we work at the leisure and [have] the privilege of working for these clients. This isn’t our show.

Shomari Hearn
Exactly. And, you know, it's interesting, even though obviously Jumaane as the agent and myself as the adviser play different roles,

41:12
a lot of those same qualities and characteristics that Jumaane outlined is the same thing, you know, I would say you want in an adviser, right? You want someone who has the relevant experience. You also want to be aware, obviously, of the, you know, the fees associated, what they charge, just seeing how they're compensated, right? Because sometimes they may be stated like, OK, these are, these are our fees. Like with Palisades Hudson, everything is outlined upfront.

41:42
But we don't receive compensation from third parties. But there may be other advisers who are heavily compensated by putting these players into certain products. Understanding, are they heavily pushing products, and so forth? Also, it would help if you ask for… that the players and their families ask for referrals. Saying all right, are there other

42:07
players that you work with that we could speak with, just to get a gauge on, you know, how it's been, working with you? So that can give some insight.

Jumaane Ford
I'll jump in and… just for me and, when I help vet advisers, I ask them about these. I speak on it. The insurance policies that a lot of advisers try to pump on the players, where they're getting compensated from it. And, you know, so there are some agents who may cut their fees, but they make up their money and then some

42:37
in other places. And it's tough, because you want to be mindful and you definitely — I don't negative recruit, I don't need to. Right? But these are the questions that I ask of advisers. And, you know, when they try to explain it in a way that may work for a respective athlete, it doesn't work for me, because I understand what they're doing.

Shomari Hearn
Exactly.

Amy Laburda
So, I mean, it sounds like one of the things that finding at least one professional you really trust can offer is then opening a universe of other professionals. Right?

43:05
You guys know each other, you guys talk. So once you have someone that you're like, “Oh, I'm really vibing with this person. They've proven that they're trustworthy,” that then sounds like it might be a good source for building out your team more fully.

Shomari Hearn
I think that's absolutely right. And I think, you know, once you build that credibility and trust with the player, with their family, they look at you as a resource in terms of saying, “All right, who should I work with as an agent?” Or vice versa, “Who should I,” you know,

43:35
“Are there any advisers that you would recommend based on your experience working with you?” And I think that's why it's important to build relationships.

Amy Laburda
Yeah, Jumaane mentioned that it really should be the client’s show. And I think that makes a lot of sense. And it sort of neatly ties back to our first episode of the season — so thank you for that, Jumaane — where Larry Elkin, who founded our company, talked about wealth being the ability to make choices. Right? And the ability to have options.

44:01
I think it sounds like one of the things that I'm hearing from you two is that part of what a really good professional does is communicate well with their clients and really sort of tease out: You're getting to play this sport at college level, maybe at professional level. You've fulfilled what's probably a childhood dream.” But then what dreams are coming next, right? Sounds like it could be a thing. And I imagine, though you can correct me if I'm wrong, that for some people it's really easy to picture

44:29
next steps. Like, “Oh, now I'm going to do X, Y, and Z.” And some people might be a little at sea, where they're like, “I did this thing, but I've been thinking about this thing for years and years and years. And I didn't really think beyond this thing as much.” Is that a thing you've encountered? Is that true?

Jumaane Ford
All the time. I mean, it's funny. To just kind of kick it off: There are two phrases that are the most overused, and wrongly used, in my business and your business. And those two phrases are “generational wealth,”

44:58
right, and “life after football.” Right? Because here's the thing, and I'll start with life after football, right? Like for me as an agent, you know, outside of just doing transactions, it's my job to help you decide, kind of, what those things are. But it cannot happen after football. So I call it life during football, because, you know, this business owner or this person who leads this fund or this person who runs this franchise is more interested in having a conversation

45:27
with said player who's the starting quarterback for the New York Giants, the starting quarterback for the Oakland Raiders, as opposed to this guy who used to play. All right? So you want to make those connections, and it can be by alumni from school. A lot of these players are at big schools. You know, so whatever city they go to, it should be my job to help connect them with the head of the alumni association. Right? And so when there are alumni events, and you know that, you know, there are fanatics, sports fanatics in every city. Right? So this person who is this billionaire,

45:57
former booster or former student of said college, will want to work with you and say, “I have this event coming up. This person may be interested in it.” And we see a lot of that happening with the Golden State Warriors being in Silicon Valley. Right? And that's probably the perfect example.

Amy Laburda
Yeah.

Jumaane Ford
Right. And then the term generational wealth is like: What does it mean? Right? If I work for the money, your kids are probably going to mess it up, right, because they didn't work for it. Right? And we see how money just evaporates after one generation, because no one worked for it

46:26
and no one had a plan. So generational wealth is really not a thing, because the wealthiest people don't leave their kids any money. And I've said this years ago: I'm not leaving my kids any money. It's like, “Oh, what do you mean?” Because if they had me as a parent, and I put you through school, if I got to pay you for me to die, for you to have any success, then I failed you as a parent. So you've got to do your own thing. That doesn't mean like, I won't leave them something. But it's not my job as a parent to pay you for me to die.

46:56
I'm not doing that. You know, if I give you all the toolage and the access to the things that I've given you while I'm alive, then those are the things. So you know, generational wealth is just nonsense, because we see the kids of some really wealthy family, you know, drive off the side of the cliffs or end up on the news. So athletes, it’s just as bad or worse, because there are so many people around them that don't have the requisite skills to maintain the money that they made during the players career.

Shomari Hearn 47:25
All excellent points. I would say, yeah, when it comes to generational wealth, you… you hear that bandied about all the time, especially on social media. So it's, you know, it's like a reflex that people say, “Oh, you know, generational wealth.” You know, for the most part, I understand what they mean, but I think, you know, there are obviously merits to what Jumaane is saying, because in the industry that we work in, the clientele, we work with high net worth individuals. And a lot of those, that first generation that

47:54
generated the wealth, you know, have similar concerns, right? They don't necessarily want to just leave it all behind to their children, because they want them to have a similar work ethic or a similar drive. Because, you know, there's… another phrase is shirt sleeves to shirt sleeves in, like, three generations. Where basically that first generation makes it, you know, the second generation, you know, they're sustained on it. But by that third generation,

48:19
who had no connection or attachment or involvement in earning that wealth, and winds up squandering it. Right? So you, you want to avoid that. But I think, you know, a lot of what Jumaane said is, yeah, you do a good job at parenting and just giving them the skills and the, you know, helping them build the mindset that they need in order to go out and be successful on their own, no matter what that success is,

48:44
then I think that obviously you've done well as a parent. And that doesn't mean that you can't leave anything behind to them, but at least by doing what Jumaane was explaining, the money that you leave behind will be put to good use. It'll likely continue. That's where you will get generational wealth. It's not, basically, that first generation making it and then everybody else just being able to kick back and relax. So I think that's extremely important.

49:12
I think it's important to work with your team of advisers, right? Not only a financial adviser, but your agent, in order to allow them to help you, or the player, get to what their ultimate goal is, right? Beyond their playing days.

Amy Laburda
So, Shomari's been on the podcast before and knows I'm going to do this. So, I will kick it to him first. But I always like to end giving my guests the last word. So, we've talked a lot today. I could easily talk to you guys for another hour. It's been so fun to pick your brains.

49:42
But I'll respect your time and our listeners’ time and not do that. But before we wrap up, I'll ask you both, starting with Shomari: Do you have any final thoughts about athletes planning their financial lives, NIL collectives, anything we've talked about today that just had any last thoughts you didn't get to touch on?

Shomari Hearn
Sure. I would say for one, I think it's great that these college athletes are able to earn money now. I mean, obviously they've made billions of dollars

50:10
for their schools, for the NCAA and so forth. And they should be able to take part in that, especially considering that not all of them will go on to the next level, right? So it will give them a great head start, obviously. I would also say that it's important, now that you are able to earn this money, that you handle it responsibly, meaning that you work with a good agent, that you work with a good financial adviser, and that you also take their advice.

50:38
Right? I mean, obviously they have more experience than you in this. And if they are there as fiduciaries, like myself, in order… we have to put your interest first. We're giving you this advice for a reason, because we have had the relevant experience to see, if done properly, how this can benefit you for years and decades to come. So, you know, my advice is that they build a good team of advisers around them, and that they invest correctly or at least

51:08
responsibly. That they just act responsibly with the money that they're earning.

Jumaane Ford
And I'll say for NIL: I'm super excited about NIL and where it's going. I do not believe that there needs to be NIL regulations. And the only way that there should be an NIL regulation, if they regulate with these college coaches who are being paid, right? Because we have college coaches in most of these schools are state employees that get paid 10 times more than the governor, 20 times more than the governor.

51:36
Right? And that, that shouldn't happen. So if you want to regulate NIL, then you regulate what college coaches are being paid and you cap that. That's something that I'm really passionate about. I… kind of to piggyback on what Shomari said, when these players are making said several hundred thousand dollars a year, the players making $500,000 a year to play college football, treat it like it's the only money you'll ever make from football. Right? We don't know what's going to happen with NFL from, from injuries to skilled,

52:05
you know, transition and translating. So treat it like it's the only money you’ll ever make. Don't go off wasting it on things like cars and jewelry. Thankfully, most of the jewelry these athletes wear now is nonsense and fake. I'm OK with that. You know, we couldn't wear that stuff back in my day. So this oversized jewelry is, you know, isn't worth the whatever, the materials that they put it on. But in all seriousness,

52:33
I'm excited for these kids having the opportunity to provide for themselves and get their parents to school. I mean, a few years ago, there were players at these prestigious universities and their parents couldn't afford to come to games, because of the background, right? So that's, that… I would like for schools to add into the curriculum, of advisers coming on early and speaking to players, and creating some sort of opportunity for them to work with,

53:00
you know, different advisers and create a pool of advisers, not just one. But so that players can prepare themselves, and deal with the tax implications, and deal with siphoning and separating it from family, because it's not necessarily a player's job to take care of everyone. And they need to understand that.

Amy Laburda
Great. I think that's a wonderful note to end on. Shomari, Jumaane, thank you so much for sitting down with me today. It's been a real pleasure having you on the podcast.

Jumaane Ford
Thank you so much, Amy. Thank you, Shomari.

Shomari Hearn
Yes, thanks.

53:29
Thanks, Jumaane, as well. We appreciate it.

Amy Laburda
“Something Personal” is a production of Palisades Hudson Financial Group, a financial planning and investment firm headquartered in South Florida. Our other offices are in Atlanta; Austin; the Portland, Oregon metropolitan area; and the New York City metro area. “Something Personal” is hosted by me, Amy Laburda. Our producers are Ali Elkin and Joseph Ranghelli.

53:56
Joseph Ranghelli is also our director, editor and mixer. Our firm has written two books: Looking Ahead: Life, Family, Wealth and Business After 55 and The High Achiever's Guide to Wealth, which offers advice for younger professionals, entrepreneurs, athletes and performers. Both books are available on Amazon, in paperback and as e-books.