This year certainly didn’t disappoint, with money paid to our top footballers soaring to stratospheric levels.
This cash is earnt with many hours of blood, sweat and (in Gazza’s case) tears, but how can top athletes make sure they are keeping their fair share of these earnings? Foreign exchange plays a significant role in the modern world, particularly when athletes are constantly moving across borders to maximise a limited period of career earnings.
If a cricketer is paid $1.5m to play in the IPL,he will want his money back in sterling when he returns to the UK and rain delays at Lord’s. Formula One driver Lewis Hamilton is paid $31m per year plus bonus and needs to transfer currency for when he visits his houses in Monte Carlo, New York, Colorado and family in Britain. Manchester City’s Sergio Agüero is paid £250,000 per week, which wouldn’t get him far in his home country of Argentina unless transferred into the notoriously volatile peso.
All are repatriating funds, and all are looking to secure the best advice and rates of exchange either on a regular or ad-hoc basis. When the stakes are so high, even a small percentage loss made by exchanging at the wrong time, rates or fees can be hugely punitive.
Since its inception, Argentex has forged strong links within the sporting community and like our clients, we are highly competitive, and want to secure them the best possible rates. This alignment of purpose and deep sector expertise has allowed Argentex to develop a holistic approach to the sporting world, and to emerge as a trusted advisor to individuals and organisations globally.
The existing retail banking system, besides often charging hefty international transfer and FX fees, is not set up to meet the demands of these high-flying customers. The world of elite athletes is built on reputation, performance and professionalism, as well as flexibility. Many clients will in contact after hours or at weekends with various requests from the straightforward to the complex…
For example, an Australian sportsman, could originally be from New Zealand, with earnings accrued in Ireland and currently contracted in England. In effect, the client has exposure to four currencies. In this case, an advisor like Argentex needs to develop a hedging strategy which allows the player to move money effectively between four jurisdictions, taking advantage of favourable exchange rates to maximise the amount of their earnings which they retain.
However, as with choosing a coach and support team, sportspeople need to navigate the plentiful good, bad and ugly financial and FX advice on offer. In the first instance, they should also seek to speak to trusted and fully regulated advisers who can be recommended by their sports body, club or teammates.
The most reputable FX service providers work in partnership with the various levels of a given sport. From the trade body, who may be converting funds from television rights for a major tournament, to the club who may be purchasing a player, and then the player themselves who may be remitting money to support their families. For example, Argentex works with Manchester City, the England Cricket Board and the Rugby & Football Union to name a few.
Furthermore, FX advisers are able to provide access to a supportive financial network for incoming sports men and women. Those with longevity in the industry can call on a plethora of contacts in order to help support incoming clients and those making the step-up into top tier professional sport. A recent example included supplying an incoming player with a contact to find them a property, a contact to set up their new phone, and referring them to a leading bank in order to set up an account.
As we marvel at the world-class skills and entertainment that our sporting heroes bring households up and down the country, few realise that significant activity goes on behind the scenes to manage their currency risk to ensure these highly tuned athletes maximise every last penny of their short, lucrative and globe-trotting careers.