Finance Roundtable Podcast
It is a complicated and tricky world out there. Without a solid understanding of how money works, life can be even more challenging.
We get it, talking about money is uncomfortable but we all can agree that it is an important topic to understand.
The Finance Roundtable Podcast team wants to bring you along as we interview some remarkable professors, professional athletes & financial strategists about money.
If you have ever wondered what is talked about between financial professionals and what goes through our minds when we are off the clock; then you will want to check out the Finance Roundtable Podcast.
Jacob Gold and Michael Cochell are Financial Advisors offering securities and advisory services through Cetera Advisor Networks LLC (doing insurance business in California as CFGAN Insurance Agency LLC), member FINRA/SIPC, a broker dealer and Registered Investment Adviser. Cetera is under separate ownership from any other named entity. Jacob’s California insurance license # 0E55425 Michael’s CA Insurance License # 0K90130. The views depicted in this material are for information purpose only and are not necessarily those of Cetera Advisor Networks. They should not be considered specific advice or recommendations for any individual. Neither Cetera Advisor Networks nor any of its representative may give legal or tax advice. Kelvin Gold is a Marketing Associate. Registered Address is 14850 North Scottsdale Road #255, Scottsdale, Arizona 85254.
Finance Roundtable Podcast
The Financial Tightrope of Collegiate and Pro Athletes
In this episode of the Financial Roundtable Podcast, the team is joined by David Brookbank, adjunct professor at ASU Law and co-founder of Income Protection Consultants, to discuss how student and professional athletes can protect their income through disability insurance.
The conversation explores how recent changes around NIL (Name, Image, and Likeness) and revenue-sharing agreements are reshaping college athletics—and why insurance has become a critical part of the conversation.
Topics covered include:
- The financial risks athletes face if injury ends their career
- The evolving role of disability insurance in recruiting and compensation
- Key differences in disability policy language and what to watch for
- How schools and athletes are adapting to new legal and financial frameworks
- Common misconceptions about guaranteed contracts and payout limitations
This episode offers valuable insight for athletes, coaches, athletic departments, and advisors navigating today’s changing sports landscape.
Hello everyone, welcome back to another episode of the Finance Roundtable podcast. Today's episode is going to focus on collegiate and professional athletes. Their career earning potential can be off the charts crazy. On the other hand, if they get hurt or sick, their income can quickly go to zero. This high stakes game is highly competitive, complicated, life-changing and extremely stressful. Today we'll be talking with David Brookbank. David is an adjunct professor at the Sandra Day O'Connor College of Law at Arizona State University and co-founder of Income Protection Consultants. Even if you're not an athlete, the changes in collegiate sports due to NIL name, image and likeness are fascinating and absolute game changers. Successful teams in the future will be those that have mastered the new ability to design disability policies for their elite athletes as part of their total compensation package. I welcome David to the podcast. Hello David.
Speaker 2:Hey Jake, how are you?
Speaker 1:I'm doing wonderful. We're so glad to have you here and we're talking about something that I think people have heard a little bit about NIL but they don't know what it means and they don't know how it's going to be changed or has already changed the landscape of college sports. But we're so excited to have the professional here to share with us what athletes and coaches and athletic directors are doing to build up their team but also to protect their backside. Tell us a little bit about yourself, david, and where you're from and how you got into this industry.
Speaker 2:Sure, thank you so much. I actually am an East Coast guy, even where I still make. My home is in North Carolina, grew up in a smaller town compared to a lot of towns about 180,000 people and went to high school, went to undergrad at two different institutions, graduated with a degree in information systems and then, you know, information systems wasn't right for me. So I decided to look into some other things and I actually had an old high school football coach and teacher who had gotten into the insurance industry and I saw how good it was for him, how good it was to him, and how he was able to give back and really to be an educator, still from school all the way. Now he's educating other people in business and that was very appealing to me and that's kind of been a theme throughout our entire career, throughout my entire career.
Speaker 1:That's fantastic. I think that you know a lot of student athletes. They spend so much time and energy on their sport. Student athletes, they spend so much time and energy on their sport and they're very close to family, their inner circle, but perhaps outside of the sport, outside of family, there's a lot of things that maybe they haven't been exposed to. So I'm sure that as you've gotten into the collegiate space, not only have you seen a need for insurance, of protecting those students, but I would imagine now, as an investment, it's also protecting the university as well. To give our audience a little framework of how much you actually do behind the scenes, I remember recently you were sharing with me a statistic about the NFL draft and the number of students that you actually worked with in designing some disability policies. Would you mind sharing with us a little bit of that, just so our audience can really recognize the impact that you're making in collegiate and professional sports?
Speaker 2:Sure, this past NFL draft we worked with, I believe, all but four of the first round picks and a total of about 170 individuals that were either drafted or signed as free agents during that time period. Prior to that, the year before, it was 19 of the first round picks that we actually worked with. And, just to make something clear, I want to talk about what we do just a little bit, please. We advise we're a consultative type business and we don't sell product or any type of insurance-based product. What we do is we really work with the schools to be able to help educate student-athletes as to what's out there, what the contracts do, more importantly, what do they not do, and things such as that, to make sure that they have a really good understanding of what it is they're participating in. And then, if there's a claim, we help them walk through that process as well.
Speaker 1:Yeah, and this collegiate sport arena is now big business. And how are these universities using the NIL to not only protect their backside in case one of their elite athletes gets injured, but then also trying to make sure that the student themselves or the professional athlete is protected? Because if they get injured, not only does it affect them, but it affects their inner circle, their family, and so how do you go about working with the colleges to provide that framework for them?
Speaker 2:Your NIL changed everything when the state of California, you know, basically signed into legislation that a student athlete could profit from their name, image and likeness. A number of other schools followed that actual same action. What it did was it changed the landscape of college athletics as we know it, and it continues to change every single day Name, image and likeness. There's a big case sitting out there right now, a court case that we should have final ruling on coming up, that we should have final ruling on coming up. It's House versus NCAA which put into play this rev share agreements, the ability to have revenue share with student athletes and the ability to have name, image and likeness compensation through legitimate vendors that are out there. So what you're seeing is a lot of schools right now. I shouldn't say a lot of schools, I would say everybody. This is kind of a learn as we go experience in this landscape, because there's really no set of one set of framework rules for all schools or states to abide by. It varies by each state and I don't know that the House settlement will actually completely solve that issue.
Speaker 2:There's been talk of congressional input or having some type of presidential committee to be appointed to help look at these things. But as far as we are concerned, we think we're going to get something from Judge Wilkin by July 1st. We hope it's by July 1st because there's a lot of schools now, kind of getting back to your question, there's a lot of schools who for the first time ever are having to have contractual agreements with student athletes where they didn't have to before. They're having, and these are compensation arrangements. I'm not going to call them employment arrangements, I'm going to call them compensation arrangements so that they can have revenue share based on TV revenue, ticket sale revenue, et cetera, those type things, and that they can also profit and have the student athlete can have income from their name, image and likeness in a separate kind of vein with endorsements from legitimate endorse endorsement companies or sponsors.
Speaker 1:Wow, and I, as you were saying this, I was thinking that it's not even just at the collegiate level now. It even now trickles down into high school, doesn't it? With NIL?
Speaker 2:In North Carolina. We had actually a very highly ranked quarterback here and because of the North Carolina laws, he was not going to be able to participate in NIL. His mother ended up actually suing the state and they ended up, from what I understand, changing the rules to be able to high school student athletes could participate in NIL compensation. But yes, absolutely. We're seeing student athletes already come to school with their team intact. That could be agent, could be financial advisor, could be marketing agent or NIL agent, could be marketing agent or NIL agent. All of them come to school with this team and they're negotiating deals on what their next four years are going to look like.
Speaker 1:Wow, and would you say with NIL? You know, the dynasties of the past might not be future dynasties. It's all contingent upon how these universities manage their payroll, as well as the compensation packages that they create for these elite athletes.
Speaker 2:One of the things you will not hear yet I mean the universities say about the student-athletes is they will not call it payroll because they want to stay away from the pay for play scenario. So this is simply just a revenue share type of of arrangement or a an endorsement from some sort of sponsor, whether that be a Gatorade, dr Pepper or whatnot. I don't. To answer your question, the schools that have money, I believe, are going to actually outpace the schools that do not have money and I think you're going to see a lot of separation from those schools that have significant budgets versus some school that might be a mid-major school that does not have the money to compete. Because it's all going to come down to. You know, the bottom line is this it starts out the revenue share amount starts out at a $20 million up to a $20 million pot to be able to distribute out among your student athletes and you can opt into that or you can opt out.
Speaker 2:The Ivy League has opted out of that. So the Ivy League, you go to Harvard, yale Brown. You're not going to be able to opt into revare. You could probably still get your own NIL independent deal, but I don't think the school is going to be helping you with that, but what we are seeing is this the opt-in with the $20 million, and you're seeing conference requirements for opt-in minimal as well. So you don't have to spend that 20 million, but most schools who have the 20 million to spend will spend it.
Speaker 2:And we're also seeing schools allocate this to certain sports. It may be football, men's and women's basketball, and then there's no rev share for baseball or any other sport like that. That is all going to be contingent and done different at every single school, and what you're going to, what you're going to find, is you know, how do these? How do them? I think the interesting question is how do the schools who don't have the money of a large power five institution, how are they going to compete in this arena? And that's going to be the question. That's the question they're asking themselves right now is is how do they compete with this? And you know, disability insurance is one of the things that they could compete with.
Speaker 1:And that's what I was going to say is I know you and I have talked about you. Know, let's say there's an elite athlete that is looking to play football somewhere and he likes both teams. Play football somewhere and he likes both teams, but one university gives him a better disability policy in the fact that it covers more potential injuries than another university, and that might be the deciding factor for that student to go to that university, because they know that they, their body, is better insured, their future income, if they get hurt, is more secured with that disability policy, and so it's amazing to think that insurance can be the differentiator on where someone might end up going. Am I correct in saying that?
Speaker 2:Yes, and a couple of things that I want to bring up with that. In regard. The way that we do our business is we're independent and objective. We look at every single option that a student athlete has. We engage with the school, we work with risk management, general counsel and athletics, and we have created this proprietary process to be able to do this. One of the things that schools who and we work with about 50 universities out there One of the things that a lot of schools are doing that do not work with us would be they would have one provider of insurance and that's it, and you bring up the difference between one contract versus another.
Speaker 2:We see it more in our universe of more or less who's going to pay for more coverage, but that is not the only determining factor. If somebody has a really nice NIL deal and insurance is one of those add-ons, you can't, by the way, with the way the new legislation is being written, you can't tie disability insurance or scholarship valuation to their rev share agreements the way it's being written. So you know, if you pay a kid for their rev share, slash NIL a million dollars, let's say. Use that as an example and you budgeted over here. You can't count disability into that number. Okay, the way that it's, the way that it is set up, it has to be a separate item. That's outside.
Speaker 2:So, in addition to because it was considered a permissible benefit prior to this legislation being passed by the NCAA, one of the things that we need to be aware of is that that can't be part of the package. That can't. The implementation committee, who is a group of individuals that are deciding on how to implement all this new legislative change, has decided that that cash benefit that the student athlete gets from RevShare is going to be just cash. It's going to be compensation for their name, image or likeness or revenue share, however you want to put it. But anything that's over here to the side is going to have to be added on top of that. So you're seeing some schools get really, really creative with that model and you're seeing other schools that are saying, okay, we've got a flatline budget of. This is what we're going to do over here for all of our student athletes that qualify. So I think we are just starting to see how creative schools can get with disability insurance.
Speaker 1:That's amazing. And in talking about disability policies, not all disability policies are the same. There are certain riders, there are certain provisions that need to be a part of and you know, if you wouldn't mind, David, sharing with us a little bit of that of, like permanent, total disability, what does that mean? Critical injury, loss of value I think those terms can be used loosely and someone might and correct me if I'm wrong, but someone might think that they're protected under a certain scenario and they don't find out until after they're injured that in fact, that disability policy didn't cover that particular injury for whatever reason. Is that correct?
Speaker 2:That is correct and you bring up a really good point. A couple of points here. Number one people need to understand. Is that correct? One of the great classes I took at Arizona State in my program was contracts, because it really gave me a great understanding of you know, I knew about disability. I mean, we had sold disability insurance for years before we started consulting on it. But once you really start consulting on it, you have to really look at each individual contract to see yes, you've got different classifications of. Let's take permanent and total disability as an example. Permanent and total disability you know it's catastrophic ending career-ending disability insurance. Well, what a lot of people don't understand is there was three different types of permanent disability definitions that stood out there. Let me give you an example.
Speaker 2:One said that if you ever sign a pro contract as a collegiate athlete, you suffered an accident that caused bodily injury, signed a pro contract as a collegiate athlete, going into the NFL or the NBA or major league baseball that you could never collect a benefit on that policy. Okay, so if you had an injury, you signed a pro contract and this is what's really interesting Major league baseball will not sign you to a contract until you pass physical. The NBA, I believe, will sign a contract until you pass a physical. The NFL will sign you to a contract and then give you a physical to see if you pass. So someone could actually sign an NFL contract under that policy wording and not pass the physical and get cut and still not be able to sign excuse me, still not to be able to collect a benefit under that policy word. There's another contract that says okay, if you sign a pro contract and pass the physical, you cannot collect the benefit. Now, a lot of people would think that that would not be a big item, that that is huge.
Speaker 2:I can give you example after example after example of individuals who have signed a pro contract. They've been put on either the NFI list or they've never made a roster. They've signed a pro contract and they've tried to rehabilitate for a certain period of time. These individuals never passed a fiscal. These individuals, after 12 months, were able to collect a policy payment from the disability carrier of well over seven figures. Okay, they would have the first contract. They would not been paid out. Okay, Second contract.
Speaker 2:You know, and people need to know, the difference between that yes, do you have 5 million of PTD? Yes, but what does the contract require you to do in order to get a payout? That is the key, and we found that it's been just a tremendous help for the schools to be able to time frame as either between six to 12 months from when the disability actually or the injury actually began. If the disability starts between six months and 12 months, as long as that individual they can sign a pro contract. But if they play in what's called more than the recovery period of games, they're not eligible to file a claim.
Speaker 2:The recovery period of games typically is about four. There are differences in each contract. I've seen some with three, but what that means is once someone plays in that fourth game, so they've got three games to play in and they can still collect a benefit under that policy wording. Once they play in that fourth game, they're deemed to have been fully recovered and would have to have a brand new injury in order to qualify. So I guess very complex, very complicated and so being able to know and look at these policy wordings and look at the contracts to explain that and then let the student athlete make their own decision on what they want to do.
Speaker 1:That's so helpful, that background, and it is true, it seems like the devil's in the details and you absolutely need to know what your contract, what your disability policy, is covering and what it wouldn't. And for our audience, I want them to know that you started working with the ACC back in 2000. And today you're working with the Power Four NCAA college football playoff. Tell me, david, who reaches out to you? Is it the student or is it the college? And then when they reach out to you and you come in, you act as a consultant, as you mentioned. You're not receiving any commissions, you're not placing the disability policy. You're coming in as a consultant and I'm assuming hearing what their problem is, hearing about this particular athlete and working together to create or define what type of protection they should be looking for in a policy. Is that about right?
Speaker 2:Yeah, because you mentioned in your previous question the different categories of interests that are out there permanent to disability and just to kind of give you an idea of PTD out of. We work with about 400 to 500 student athletes or pro athletes, combination of their, per year. I'll typically have four claims per year that we work on that are career ending claims. Then there's another category of insurance called critical injury and that's kind of like aflac for athletes. But look at it's injury specific or illness specific that pays a certain benefit if an athlete has a certain injury, okay, and the requirements that are part of the contract in order to have that claim. In other words, most claims are going to require either some sort of fracture or a complete tear of a ligament or a tendon in order to start filing the claim, in order to start getting compensation for that particular body part. And there's a schedule that it goes from. So you've seen as high as you know, for an ACL tier somebody could get as much as $2 million, depending on what their valuation is.
Speaker 2:And then there's this category called loss of value, which is one of these things where it's very subjective. Very few individuals qualify for loss of value, which is one of these things where it's very subjective. Very few individuals qualify for loss of value. As a matter of fact, there's only a couple of companies out there that are even getting loss of value offers. In the NFL. We're probably going to see anywhere from five to 15 offers in loss of value Very difficult to collect. But you have to read the policy wording Again. It's one of those things where just because someone falls in the in the draft whether it be NFL, nba or major league baseball doesn't necessarily mean they're going to have a claim. They have a number of different hoops. They have to jump through a number of different things that they have to to meet in order for the policy to pay out. So it's one of the things that we've seen in the past of there was a lot of popularity with loss of value back in prior to 2018.
Speaker 1:And then it really dwindled down, especially when critical injury came on the scene. And you've worked with over 5,000 students over your career, and how do you prepare these students for both success and failure, because they're going to experience both at some point, correct?
Speaker 2:that's correct. Um, you're either going to have someone sign a pro contract in in 99 of the cases or they're not going to sign a pro contract. And you know we're there to be able to help assist. And it's part of our agreement with the school and part of our agreement with pro athletes when we sign that agreement with them is we're there to help them navigate these waters, whether or not they end up signing a second deal and going four years through the NFL signing a second deal for $120 million. Or you know being able to second deal for $120 million, or you know being able to.
Speaker 2:Unfortunately, they may have suffered an injury in the last game that they've ever played in and they'll never play again. So from that standpoint, there's a lot of TLC and just being totally aware of what that individual is going through as we're trying to get a claim paid for them because they have to deal with mentally the mental aspect of hey, my career is over, what am I going to do next? So what we try to do is to help them along that process. I'm not a I'm not a therapist or or don't have a psychology degree, but there's a lot of conversations that we have that aren't disability insurance related. It's keep the faith, just just keep going and and just you know, what do you want to do? It's one of the things in the initial interview that we ask everyone, everyone. The student athletes is. I try to ask them what do you want to do when football's over? The student athletes is. I try to ask them what do you want to do when football's over? And that gives me a really good idea of you know.
Speaker 2:If they do have a claim, how do we get them to do what they want to be able to do and how do we get them paid and then start that you know down the road of where their next financial goals are. Whether that you know down the road of where their next financial goals are. Whether you know we've had clients that have started real estate, got their real estate license and started flipping houses, you know, within a year after getting a significant claim. Another one is, you know, apprenticed with a general contractor after he retired from the NFL and now owns his own custom home building business. So it's just a wide variety of things that people you know that we're able to help people with from the standpoint of the helping them educate. Educate them on the policy itself, what it does, what it doesn't do. If there's a claim, then being there as an advocate for the student athlete to be able to ensure that they. You know, we've done everything we can to get this client paid.
Speaker 1:It's so interesting because let's play this out two scenarios. There's an athlete that has a very long and successful career. Even a long, successful career is short by career standards Maybe it's five years, six years, seven years but let's say that it's successful and during that time period they've been successful in putting money away and making sure their financial house is in order. That's a phenomenal scenario. But for those individuals that are a year in and then get hurt and they're not able to play you nailed it on the head and the fact that this disability policy is there to allow them to pivot and go a different direction in their life. They focus their entire life on the sport, and now they can't do that anymore.
Speaker 1:And if they don't have a source of income or revenue any longer because their body is no longer able to perform, you know that could be devastating across the board for not only that athlete but everyone within his or her circle, and so the disability policy is almost like a little bit of a lifeline for them to be able to, you know, pick themselves up by their bootstraps and say, okay, this didn't play out the way that I wanted it to, but fortunately I have this policy here and now I can go into construction or I can become an apprentice or I can start my own business, and really what you're doing is you're giving those athletes an option. If this doesn't work out because of an injury, you have a lifeline financially to then be able to still fulfill other dreams of your life. Is that, is that right? Is that a good way to kind of frame that?
Speaker 2:100 percent. 100 percent and we've seen great success stories, you know, with that happen. You know, I had an individual who I think it was 2018 or 2019, had a $2 million PTD claim and this individual has probably quadrupled that money by being just a really good steward of what he's been given and understanding how things work. He's a great entrepreneur and he's got a couple of different businesses that are just going really well.
Speaker 1:Wow, that's phenomenal. Well, on that, you know, you've learned so much over your career and, in my opinion, your career is only getting started and I'm so excited to not only see where you go, but the two of us. We have some things in the works that we're planning to roll out over the next six to nine months, but share with our audience a lesson you've learned that you wish every student, athlete coach or athletic director could hear.
Speaker 2:That's a great question. There are a number of people who are going to come at. If you let's just use. Let's say, I'm a student athlete and I'm very highly rated. There's a lot of noise that's out there, right, there's a lot of noise, people pulling me in different directions. Hey, you need to listen to me, you need to listen to me, you need to listen to me, you need to do this. I can do this for you. I've got a guy over here can do this for you.
Speaker 2:And the thing that I think it's very important for student athletes, or any athlete or anyone who's in that role, to understand is you got to have wisdom. You got to have wisdom to be able to make the right decisions on who am I going to listen to and why am I going to listen to them. Right, it's not just the fact that they have a connection, it's what is their track record in history with people who were a lot like me or just like me in my journey? Do they have a good track record? Or are they somebody who's just brand new getting into this thing? And and that is one of the things that you know I could dive really deep into this, you know, from the standpoint of talking policy language, because you just described what we describe.
Speaker 2:What we're describing here for an athlete is the old own occupation or specific occupation that used to be in disability policy, sold domestically. And you know, for instance, if you were a physician and you were a surgeon and all of a sudden you started having a tremor and couldn't perform surgery anymore, you could still teach as long as as as you couldn't perform surgery, that was your own occupation, own specific occupation. Well, the occupation of these individuals are going to be sports, right? So the other thing that you have to look for in those contracts is kind of down a rabbit hole is most contracts do not say NFL, they say professional football. So if somebody that means that the insurance companies are protecting themselves on the side of saying, okay, you might not be able to play in the NFL, but if you go to the CFL and play, you're not going to claim, saying, okay, you might not be able to play in the NFL, but if you go to the CFL and play, you're not going to claim. If you go to the European League or the United League or XFL, whatever league you go to and play for compensation, you're not going to get a claim from that standpoint.
Speaker 2:So I think having a good understanding of the team that's around you to help, along with being able to have confidence in them to advise you on hey, this is the right thing for us to do, or hey, I think we need to put the brakes on here for a few minutes and and just um see where we're headed. You know, it's one of those things that everybody's excited. I see excited run into sports right now with different solutions and it scares me. Yeah, because typically who's run into sports with solutions has an ulterior motive that's there because they're there to sell.
Speaker 2:If you talk to as an example, we work with University Risk Management. They have a totally different view on how insurance is placed in force versus how an athletics department is right, because a lot of times we will get you know in athletics, we'll get individuals who are former alums from the school that will come in and say, hey, you need to be doing business with me, but how do you know that that person has the authority and the ability to give the solutions that that team and that organization actually needs right? Great example of that would be someone who only has access to one market when we know there's seven markets out there. Great example of that would be someone who only has access to one market when we know there's seven markets out there. Right? How do you know that that's in the best interest of the student athlete and that's where our firm is set apart.
Speaker 1:And once again, just, you are not receiving commission. The university pays you as a consultant, so you get a fee to give that consultation. What they end up doing, that's up to them. They're paying you for the advice, for the contract revisions, looking at the details, and this is so fascinating. Of course, this is big business, but can you share with our audience, david, why you never hear about athletes' disability policies? I mean, this is like made for, like an amazing TV show or movie, but yet you never hear about athletes collecting on their disability policies and the story behind that.
Speaker 2:Well, mainly because if you have a claim and we've had hundreds of claims in my career that we've been successful in getting paid out on to student athletes, professional athletes as well as professionals the insurance company is going to require that student athlete to sign a nondisclosure that they cannot tell the details of how much they were compensated or what they were compensated from that claim.
Speaker 2:We've seen in the past complaint. We've seen, you know, in the past. Individuals try to get into the media and try to get that information from you know, former insureds, things like that but there's going to be a nondisclosure that if they ever disclose the details of that transaction that they receive, they'll be penalized, they have to pay that money back. So nobody's going to really talk about that. The only ones that you hear about are the ones that tend to go sideways and there's a problem typically with someone filing a claim who had a claim denied and then they want to take legal action against them. Don't know that that's the best action initially. Ultimately that should be the last action. But there are different ways that individuals could go about looking at negotiated settlements or mediations or things like that prior to hiring or enlisting legal counsel in order to do that.
Speaker 1:So amazing, amazing. Yeah, I mean that explains it. Non-disclosures that's why it's under the radar, and I find this just so fascinating. It's a big story that very few people know about. But here's another question for you, david Is there a defining moment of your career? I mean, you've had your hands in a lot of different things over the years. You're working with a lot of different universities, a lot of students lot of students.
Speaker 2:What's one defining moment of your career? I would say the first time that we actually had a seven-figure claim paid out on a student athlete was a moment, was an aha moment and a defining moment Prior to that. One of the reasons that we got involved with this was to be able to help the schools navigate this, because so many student athletes were being taken advantage of prior to uh, let's say, pass it some legislation that passed a few years ago. The only way to really pay for this was for the student athlete to get a loan against future earnings. We can imagine what happened there.
Speaker 2:You had individuals who were being sold policies, oversold policies, and they never went to the pros. So they would end up having this huge debt, huge loan, to pay off. But then the schools started paying premiums and they made it to where they could pay it out of this budget, called a fund, called a student assistance fund, and then legislation was changed to where it could come out of any fund. So now if, for this gap of about five years, schools paid, I'd say, for 99% of the coverage, now you're seeing student-athletes, with their NIL shares and NIL revenue, be able to pay for more of that the number of defining moments. Every time we get a claim paid for a student-athlete or a pro-athlete is a defining moment. I tell them this I can't play anymore, but this is this, this is my championship game, and so let let me do what I need to do in order to try to get your claim paid.
Speaker 1:Yeah, that's amazing, that's that's, that's quite phenomenal. I think that that's what a a source of pride to know that you had a piece in that to make that happen for that individual, and that you had a piece in that to make that happen for that individual and giving them a lifeline of life, a second chance to follow another dream of theirs, and using insurance as the vessel to get them there.
Speaker 2:That's pretty awesome. Yeah, a lot of people didn't think insurance was going to be. I tell my students at ASU you know they're kind of fascinated in what we do. I said, well, you know, it's not sexy. Insurance is not sexy. It's not you know the glamorous thing. But hey, if you have a claim you're sure glad you had it.
Speaker 1:Absolutely, absolutely. I want to put you on the spot a little bit, david, and let's say that you know these last few minutes of this podcast episode. If you were to talk directly to the agents, directly to the athletic directors, the coaches or students that are trying to think about either building a team or protecting their income potential, can you speak to them on maybe two, three things that they really should be looking for to make sure that their program is protected, their body, their family is protected? Do you have any you know words of wisdom that you might give them?
Speaker 2:Well, first of all, let me step back a minute and say yes, but I'm going to address coaches and administrators first. Okay, because of the fact that typically coaches and administrators are state employees, they are so undervalued. With the disability insurance that they have, they don't have enough to protect their contracts. As an example, there's one state that we were looking at state program and a year $700,000 a year. Or a coach making a million to $4 million a year. $1,800 a month is not going to cut. So I've seen just this really gap there of people who really they don't understand. They're taking care of their student athletes by purchasing coverage on them. They need to be looking at their selves now to make sure, in the event that they have a disability that can't work, that they're covered adequately, because there's going to come a time, potentially, where one of these administrators or a coach may have to go out on disability insurance and it's not going to be what they thought if they haven't financially prepared insurance and it's not going to be what they thought if they haven't financially prepared. You know. The other thing for student athletes is I would make sure you look at all of your options. Make sure that someone is out there. They don't just bring you one option to look at. You want to see every option that you have available and you want to also see not only in insurance do we look at the ones that make offers. We want to make sure that we record the individuals or, excuse me, the individual companies that decline on that individual, because we want to go back to say, hey, you didn't get an offer from this company, you know, but you did from these other four, right, so that's one of the things that we make sure that we cover in what we do. The other thing is, you know, with our whole dynamic change in college athletics, I really think agents are going to be the ones who are negotiating these deals going forward and they're going to be the ones who are demanding the disability insurance for the student athlete, ones who are demanding the disability insurance here for the student athlete On one side. You have, you know not I see this being a ripple in the water of you know, some schools saying, hey, we're paying you enough, nio, you can buy your own disability insurance. I think that potentially, that could be problematic in the transfer portal, as long as I was told by an administrator a long time ago. As long as one school pays for disability insurance, they're all going to pay for it in some way, shape or form. So I think you're going to see some knee jerk reactions at first, but then I think that that will probably level out. You know, it's one of these things.
Speaker 2:Disability is something that we chose to operate in because it's very unique I actually had. Actually, one of the reasons that that I actually chose to get into disability insurance was I purchased my first disability policy when I was 21 years old, at the advice and wisdom of my great uncle who worked for the gas company. He said you're out of college, you need to protect what income you have. You know that you have. You're out of college, you need to protect the income that you're going to be earning. Okay, so you need to do that through a disability policy. So I've been a big believer in disability, for myself, for for our company, you know, for for my wife.
Speaker 2:So it's one of the things that a lot of people just don't think about. They think about life insurance. You know, hey, what's the two certain things are death and taxes. Right, you don't think about disability insurance and, especially among athletes, the likelihood of suffering an accident that causes bodily injury that leads to a disability, it's very high right. For me or you it's probably going to be a sickness, unless you have a catastrophic injury. You know automobile accident or something like that injury, you know automobile accident or something like that. It's very interesting when you also when you get into the pro space a lot of people think, well, my contract says a guarantee, so I'm guaranteed all this money. Not necessarily, the guarantee is only worth. What the guaranteed is defined at is what the guarantee is defined at inside of the contract. So that's another area that I see. You know that people really need to address and to look at. A lot of times agents won't think about that. They'll say, well, your money's guaranteed, but it's only guaranteed if you are, if you meet these certain conditions.
Speaker 1:Mm-hmm. That brings up a good question. At the collegiate level, it sounds like you're introduced to the athlete through the university, but on the professional level it sounds like it's more of a direct relationship with the professional athlete, opposed to the organization itself. Is that correct, or can it be anything and everything?
Speaker 2:Anything and everything. But I will say this it's getting to the point where you know we must be doing something right, because we get a number of pro athletes that are brought to us every year, whether it's by agent, financial advisor and what's really funny is I can think of all but one we worked with during their college career. And so whenever you say they say, well, hey, we've got a consultant we want to bring in, and we and they mention our names like, oh, we worked with them while we were in college, so the relationship there just kind of continues on. It's just like you know, we went, we went away for about four years, but now you're getting ready to sign your next deal, which could be a mega deal, and they bring us back in to consult on that. So it's brought in from.
Speaker 2:You know, either the individual business manager could be financial advisor, could be a agent, could be a combination. I've had individuals who it's really fascinating. I've had individuals who their attorney not their agent has brought us in to look at their individual coverage because they were going through a last year of their rookie contract, getting ready to sign a major deal, and those are always really good introductions.
Speaker 1:What an exciting career, and I know that there's probably countless stories you can't share with people because they're so private. But what I do also respect greatly about you is you are not a name dropper. You're not someone that is touting himself. You are a behind the scenes guy working with the university, working with the student athlete and their family, because I know that that's also. You've got to work with the family of the student athlete as much as you, getting being able to get along with the student athlete and and so I thank you for being such a professional. It's great to know that there are some titans out there that are behind the scenes that really have the best interest of the athlete and is working with the universities to not only protect the university but, most importantly, protect the athlete and to give him or her the best possible financial future possible if there is an injury in their career. This whole episode has just been so phenomenal and I know my audience has some of their brains probably exploded a little bit with all the data that was thrown at them. I remember when you and I first started talking, I had to do a lot of reading and a lot of research just to get to a point where I could talk at a professional level with you because you're so technical, you're so knowledgeable within the field of contract law as well as sports law. So it's just been fantastic to get to know you, as I have over the last year, and, as I mentioned earlier, I think our audience is going to be excited to find out some of the things that you and I are working on here in the near future, and there's just a real opportunity there.
Speaker 1:We're both educators. You teach at ASU, I teach at ASU. That alone is a huge differentiator, because we lead with education. We feel that with proper education, people will have the knowledge and the power to move forward in the right direction. That makes the most sense for them, and I think both you and I we you know, we find a sense of pride of helping that next generation. We made a lot of mistakes along our own paths and if we can extend an olive branch to the younger generation and tell them, hey, you might want to take a step over here or look out for that obstacle over there, not only do they appreciate it, but it definitely makes us feel like we are purposeful, we're providing value and helping others.
Speaker 1:So, david, any last words of wisdom that you have. Is there anything that you wish or hope that our listeners walk away with? If, a if, if, if listeners were to walk away with just one nugget, what would that one nugget be? You've said so much and it's been so powerful, but if they were to leave with just one thing, what do you, what do you hope the listeners walk away with?
Speaker 2:I hope they walk away with this Prior to going to law school at ASU. I would sign and I'm sure everybody's been guilty of this. Whenever you send a form or lay a form in front of you to sign, it says please sign this and it's an agreement, a contract. How many times did you really read those? You know you're a warranty card. Did you read it before you signed it? You know something that you're you may be taking a loan out. Did you read everything? Disability or insurance is just one of those things that it's a contract. It's one of the things that, to make sure of, everybody needs to read everything before they sign it, because there's a lot of things that you may agree to and you see this in intellectual property law buried into contracts. You've got to read your contract. If you don't read your contract, it's on you. So when it buried into contracts, you've got to read your contract. If you don't read your contract, it's on you. So when it comes to contracts.
Speaker 1:Assume nothing right. You can't make assumptions that you're protected here or it covers you in this direction. Assume nothing, dive into it and get to know the details.
Speaker 2:Correct Because, at the end of the day, to know the details. Correct Because, at the end of the day, what is going to hold the water and what is going to hold up and what is legal in binding is what does the contract say, bottom line, what does the contract say? And if we know what the contract says and how to interpret that, that's going to put us so much further ahead than you know, the majority of people who are just trying to navigate through this world. You know, I didn't know I signed that. Well, maybe I shouldn't have signed that, or you know that kind of thing. It's always good to get a second set of eyes and look at something as well.
Speaker 1:Great advice, my friend. Well, thank you so much for joining us on the Finance Roundtable podcast us on the Finance Roundtable podcast. I'm so looking forward to the future, together and for the audience. Thank you so much for all of our support, the support that you've given us. As we're talking with you, I love hearing what you like, what areas you want us to focus more on. This has become a great little community and it's really wonderful to put these episodes out. And thank you for listening. And, david, once again, thank you for making the time to be on the podcast today. I hope this message is sent out to many individuals and elite athletes everywhere. Look at their disability policies, slightly different than before.
Speaker 2:Great Jake, Thank you so much for having us and I'll look forward to the future. Take care.
Speaker 3:Thank you, buddy, take care, bye-bye us and I look forward to the future. Take care. Thank you, buddy. Take care, bye-bye. Thank you for listening to Finance Roundtable. Make sure to check out our episodes at wwwfinanceroundtablepodcastcom. We also encourage you to explore wwwjacobgoldcom to find articles, research videos and more from Jacob Gold and Associates Inc. If you have a question for the show, please email Jacob at jacob at jacobgoldcom.
Speaker 1:Jacob Gold are financial advisors offering securities and advisory services through Cetera Advisor Networks LLC, doing insurance business in California as CFGAN Insurance Agency. Thank you, california Insurance License 0E55425. The views depicted in this material are for information purpose only and are not necessarily those of Cetera Advisor Network. They should not be considered specific advice or recommendations for any individual. Neither Cetera Advisor Networks nor any of its representative may give legal or tax advice. Registered address is 14850 North Scottsdale Road, suite 255, scottsdale, arizona, 85254. David Brookbank is not affiliated or registered with Cetera Advisors Network LLC. Any information provided by David is in no way related to Cetera Advisors Network or its registered representatives.
