The Mendoza College of Business’ Ethics Week concluded Friday with J. Jonathan Hayes, director of pro sports at Pegasus Partners Ltd., speaking about the business of helping professional athletes give back.
Hayes said he got his start helping athletes manage charitable foundations by taking them on as clients when he was a private banker in Cincinnati early in his career.
“I always thought that their agents did more of the financial advising and helping the guys get direction with what to do with the contract dollars that the agents would negotiate for them,” he said. “I came to find out that most guys were not getting any advice at all, and if they were, a lot of times it was bad advice, or maybe the agent had a little bit of a shady angle that he was pursuing.”
Hayes said discovering the lack of guidance for professional athletes with millions of dollars in their bank accounts inspired him to specialize in helping these clients manage their assets.
“In 1995, I got the bank to start a separate practice focused on wealth management for pro athletes,” he said. “[I made] a shift from private banking … to actively helping advise the guys on what to do with the money that they were amassing as professional athletes.”
The trend of professional athletes starting charitable foundations, Hayes said, was largely prompted by the salary growth that came about in response to factors such as league expansions, players becoming more vocal during contract negotiations and the advent of sports on cable television.
“What really started to drive this was, back in the ’70s and ’80s, you really started to see a more uniform growth in player contracts,” he said. “Prior to that, the superstar players — you would see those guys get rewarded by their teams. But if you were the third pitcher on a staff, if you were the sixth man coming off the bench of an NBA team [or] if you were the backup quarterback, you weren’t making anything. [In] the ’70s and ’80s, that started to change pretty dramatically.”
Once professional athletes began making more money, their agents started encouraging them to give back in some way, Hayes said.
“With that, the player agents started to become a little more socially aware,” he said. “One of the ones that you would hear about most often — at least publicly — was Leigh Steinberg. Steinberg was the preeminent football agent in the ’80s and ’90s. … The evidence of some of the charitable work that Leigh’s clients did start to get involved in is fairly strong.”
Hayes said this trend grew once players who lead the way with their charitable acts started generating more positive press.
“A couple other things started to factor in to create some acceleration behind this,” he said. “I think the teams liked that their players were charitable, that [they] were involved with the community. … It helps owners to sell more tickets to fans if the fans perceive that they’re rooting for a bunch of good guys.”
Hayes said it didn’t take long for players to begin adding to this movement on their own, as well.
“The players themselves — it became kind of a cottage industry there for a while,” he said. “ … You’re the star wide receiver on the team, the quarterback is going to have a golf outing for his foundation, so he invites all his teammates there, you go to it, you see fans there, you see sponsors, everybody is wearing the shirt with the quarterback’s foundation’s logo and the players liked that. Whether it touched them on an ego level or it touched their hearts, a lot of players said, ‘That was really cool. I want to do that.’”
With the good done by these charities, though, there have always been people willing to take advantage of professional athletes or fans that are willing to donate to a particular athlete’s cause, Hayes said.
“Once markets start to occur, there are those that see that opportunity and want to be a part of it,” he said. “Sometimes it’s for legitimate reasons [and] sometimes not, but there were — and still are — people that want to get athletes to say, ‘Hey, let me help you have an event. Let me help you run a foundation.’ … Especially early on, you would see a lot of, ‘I’m going to charge a big fee for doing this.’”
In spite of occasional negative stories, Hayes said the good player charities have done vastly outweighs any bad instances, pointing to stars including LeBron James, Tiger Woods and David Robinson, father of student body president Corey Robinson, as athletes who have paved the way for greater charitable efforts.
“The fact is some really good work has come out of what we’ve seen athletes and their charities do,” he said. “ … We see charitable activity now in leagues. … We don’t have to look too far from our own Notre Dame family to find some great examples of charitable work done by athletes.”
