Professional Hockey Players: Off the Ice and Into (Financial) Hot Water

What do hockey players and frogs have in common?

There is a longstanding myth that if you put a frog in a pot of boiling water, it will immediately leap out; but if you put the frog in a pot with cooler water that is gradually heated, the frog will remain in the water until it boils to death.  The story goes that the frog is not able to detect the gradual increase in the water’s temperature until it’s too late to act.

Hockey players are prime candidates for the boiling frog effect.

A professional hockey player has numerous obstacles to overcome if he’s to achieve his dream of playing in the NHL. Once he gets there, staying in the NHL becomes his main focus.  The NHL schedule is a grind, and you quickly adapt to the seasonal flow of the professional game: pre-season, regular season, playoffs, short break and then back to training for the next season, pre-season, rinse, repeat.  

It begins with an all-consuming routine and focus.

Where you are in your career and contract cycle adds another dimension (and stress) to the equation.  You might be a top player trying to live up to your draft position or big contract; or you might be a player just trying to stay in the NHL and get another contract. There is pressure on all players to perform at a high level on a consistent basis.

The heat is turned on, and it starts with changing financial circumstances.

No matter where you are in your team’s line-up, you’re likely making more money than your non-hockey-playing peers.  Even players on entry-level contracts playing in the AHL are making close to $160,000 USD (salary at $70,000 plus signing bonus in the $92,000 range).  Meanwhile, their former teammates from junior/NCAA/club teams are still at that level or have started their “life-after-hockey” transition and earning next-to-nothing.

Like the frog who’s just getting comfortable in the bath-like water, professional hockey player are unaware of the gradual change that’s coming. 

For players on entry-level contracts, your income easily meets your day-to-day living expenses; at this early stage, thoughts of prudently investing the surplus or protecting your assets isn’t on your mind.  Every two weeks during the season, another chunk of cash gets dumped into your bank account.  There’s no urgency to do any financial planning because your immediate needs (expenses) are being met.

The hockey player doesn’t know it, but the temperature in the pot has already started rising.

By mid-career a player may be married, have young children (and a dog or two!) and have fully embraced the seasonal nature of life in the NHL.  Money continues to flow, he may have started to dabble in the stock market, and living expenses have jumped dramatically since his early years in the league–but his cash flow still meets and exceeds them.  Little thought is being given to what happens when hockey ends, and he feels that he has several years left and more contracts to sign.

What is the IP Hockey Family Office?

IP Hockey Family office is a wealth management firm devoted to the career and financial wellbeing of hockey professionals. Our ‘family office’ model is designed to get all your advisors working collaboratively so that you end up with one clear gameplan. Our director, former NHLer Kent Manderville, ensures that each plan takes into account the unique nature of your hockey career and earnings, ensuring that your personal, athletic, and post-hockey goals are included in your wealth planning process. Learn more here.

The water is getting warmer…

Our player is now an established NHL veteran, but he’s starting to notice that his body is more sore in the mornings after games, that it takes you a bit longer to recover from nagging injuries. He notices that those young guys getting called up from the AHL can skate pretty fast and have some amazing puck skills.  His offensive production starts to dip, or his on-ice performance starts to lag a bit.  Maybe he’s been traded a few times and went from a top team in the league to one where they are in the dreaded “rebuild” phase.

The water starts to bubble…

Now Kermit’s kids are school aged, and those trades/moves become more difficult for his family. Maybe it’s time to play overseas or pull the plug entirely…but he has no clue what he would do with his time, and the thought is overwhelming.

He’s never really understood how much money he and his family spend to keep the household running. He has some money invested, but he’s got no idea what the returns have been or how much risk he’s taking.  At tax time, he just signs whatever papers the accountant sends him as his team is making a playoff push.

Summer comes and his contract expires on June 30.  Free agency opens, and no offers come his way.  To make conversation, people ask if he’ll be back with the team next year and he really has no idea where he stands; the team tells him they are “waiting on a few other pieces” before they can make a decision on him.

The bubbles come more rapidly now…

Kermit’s off-season training suffers because he doesn’t know where he’ll play (if at all) for the coming season. He’s seeing other guys sign contracts and thinks, “How can that guy get a two-year deal, I’m way better than him!”

He and his wife sit down to see how much money they have, and can’t even login to some of his accounts because Kermit never did get around to updating his password.  Finally, after a lot of effort, he pulls all his financial information together and reality hits. “I thought I had way more money than this.  I made so much money in my career, where the hell did it go?!”

At this point, his career “earnings window” is almost closed and he has the sinking realization that he did not take full advantage of the financial opportunity that comes from playing in the NHL.  Even if he did have a decent amount of money left from his career, there are many questions:

  • How much money do I and my family need to live on to be comfortable?
  • How do I invest this money given stock market volatility?
  • How do I protect this money from lawsuits or creditors?
  • What do I do now? How much money can I make in my after-hockey career? 

Stick a fork in it: our hockey player is now cooked.

It’s easy to get lulled into complacency, like that boiling frog, when you’re playing professional hockey. That’s why it’s crucial that players commit time and effort to understanding how they can make the most of this wonderful opportunity they’ve worked so hard to earn. It’s never too early to start planning on how you’re going to get out of that cursed pot of water.

Before the water gets any warmer…

Note: no frogs were harmed in the writing of this article.


Avatar photo

Kent Manderville, CFA®, CFP®

Kent is Director of IP Private Wealth hockey professional brand, the IP Hockey Family Office. Kent played over 700 games in the NHL (National Hockey League) and has personal experience with the complexity of a professional athlete’s finances. Kent experienced firsthand the importance of comprehensive financial planning and wealth management, and for the second phase of his career joined IP Private Wealth to help other athletes optimize their finances using the IP 360° process.Kent enjoys most of all, spending quality time with his family. However; he can’t shed his love for hockey and can be found tying up his skates every opportunity to play with the Ottawa Senators Alumni. A graduate of Cornell University, Kent also holds the designation of Certified Financial Planner; he has also graduated all 3 exams for the Chartered Financial Analyst (CFA) designation.