The increasing salaries of athletes and a short sporting career have made sports players think more about where to invest their money while competing. By investing early in their careers they can lay the foundation for their future interests. Investing in tech or brands is much more exciting than buying second homes, cars or art for a rising number of players.

Many well-known athletes have big sponsorship deals which, on top of their multimillion salaries, add to their personal wealth. With athletes earning a lot at a young age they naturally want to put it to work to secure their futures.

Swimmer Michael Phelps, winner of 28 Olympic medals, said after his retirement he wanted to work with tech start-ups, to take a bit of risk, have fun and see how it goes. Football players are also investing in start-ups and technology, something which makes sense given footballers’ short playing careers.

This makes footballers potentially ideal angel investors, some of them could easily fund a Series A round without too much sweat. NBA stars have been investing in Silicon Valley start-ups since as far back as 2015 and this is rapidly increasing. But what do athletes invest in? Are they as good at spotting an investment opportunity as winning championships and medals?

As you would expect, they invest in what they know. They invest in sports apps, esports and sports clubs where they can use their image, fame and knowledge to help these ventures gain traction.

Investing in teams

Basketball legend Michael Jordan is a majority owner in NBA’s Charlotte Hornets and NASCAR’s 23XI Racing. Along with baseball star Derek Jeter, Jordan also has a small share in Miami Marlins who play Major League Baseball.

The famous Williams sisters, Serena and Venus, are minority owners in NFL’s Miami Dolphins. LeBron James owns stakes in the Premier League giants Liverpool FC. Gerard Piqué owns FC Andorra and a majority stake in Gimnàstic Manresa. David Beckham is co-owner of Inter Miami in the Major League Soccer and is very involved in the day to day running of the team.

While some of these investments have had a mixed impact on the team’s performance, it made them more valuable, socially and financially just because of the well-known faces supporting them.

eSports

The Swedish soccer legend, Ibrahimovic is also becoming something of a legendary investor with his involvement with Challengermode, the Swedish competitive gaming platform that allows gamers to organise both grassroots and pro-level tournaments.

Esports was a savvy investment during the pandemic. Challengermode estimates that some 2.5bn people worldwide play video games, and more than 220m people watch professional esports tournaments every month and this trend only increased with people stuck at home.

Shaquille O’Neal has invested in car washes and 24-hour gyms. After seeing the Ring product in action, O’Neal bought a stake in the Ring doorbell and his investment paid off after Ring was bought by Amazon for $1 billion.

Social Impact

However, some athletes are investing in sports to break down prejudices and to have a social impact. The US Women’s national football (or soccer) team is a worldwide sensation due to its fight for higher salaries for women and better working conditions. They want all women athletes to be financially independent when they retire. The players created an all-new women’s team for the United States’ National Women’s Soccer League (NWSL). The Angel City FC based in Los Angeles features around 14 former national team players as the founding members. Recently, tennis star Naomi Osaka also became the part-owner of North Carolina Courage, another NWSL franchise. These investments will surely help in popularizing women’s soccer in the US and may have a serious impact on women’s sports on a global level.

Tennis player Serena Williams launched Serena Ventures, a venture capital firm that invests in businesses founded by minorities and women. Serena Ventures has backed at least 34 companies. Like her sister, Venus entered the world of investing and entrepreneurship during her tennis career. She seeded a robo-investing application called ElleVest in 2017, a company with a mission centered on serving female investors. She is the founder of EleVen, a woman’s clothing line, and V Starr Interiors, an interior design company.

Formula-1 driver Lewis Hamilton has been a fierce voice to take action on climate change. Hamilton is investing in a competing team in Extreme E series (called X44). He said Extreme E really appealed because of its environmental focus and with this initiative he was able to combine his love of racing with his love for our planet to have a positive impact.

The former Real Madrid goalkeeper, Iker Casillas invested in the Madrid-based remote cardiology start-up Idoven after suffering an acute myocardial infarction himself in 2019 when training with Porto. Casillas, who invested in the company in a May 2020 angel round, is understood to use the product himself to keep tabs on his heart condition.

Before his untimely death in early 2020, Bryant was notable for being perhaps the most active and successful athlete-investor. At some point, he said he wanted to be remembered more for investing than basketball. He was known to cold call businesspeople and entrepreneurs to learn more about them and their secrets to success. From couching her own daughter Gianna, he also became a strong advocate for the Women’s National Basketball Association and female athletes all over.

In 2013, Bryant co-founded the investment firm Bryant Stibel. The firm has invested in companies like Dell, Fortnite developer Epic Games, and Chinese e-commerce giant Alibaba. Bryant himself invested $6 million in BodyArmor, the sports drink company which was recently acquired by Coca-Cola.

Most athletes become investors as a way to grow their earnings and to prepare for what it will be their main career after retirement. Either way, for entrepreneurs having an athlete as an investor in their company can only be beneficial and definitely have a great impact into younger athletes as they care about sports. Unlike most investors, they want more than just a financial return on their investments. They can not only contribute market knowledge, but they can also bring their competitive drive and desire to success into the venture.