How (and Why) Athletes Go Broke - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

Suave · 03-24-2009, 01:21 PM

Great article in SI about Athletes and their finances. Article does a little case study on The Rocket Ismail (still can't believe the Argo's gave him $18.2 million guaranteed over four years).

By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.

Within five years of retirement, an estimated 60% of former NBA players are broke.

http://vault.sportsillustrated.cnn.c...64/1/index.htm

malcolmk14 · 03-24-2009, 03:03 PM

Unfortunately a lot of these guys are just too stupid to invest for the rest of their lives. They want to live the high life while they're in the league not realizing that the average career of a professional athlete lasts 3-4 years.

It's not really surprising that most of these guys work all their lives towards making a living playing a sport, and don't realize the harsh reality of what happens when you can't play any more.

Fortunately, some guys are intelligent enough to prepare for life after pro sports, and it's becoming more commonplace nowadays to see these guys investing and living smart, preparing for life outside of the only thing they know. I see the leagues offering financial planning and assistance more and more these days to protect the players once they retire/get injured.

Not every guy in the NFL has the unlimited earning power of guys like Tom Brady or Peyton Manning, and the money can go fast if you're not careful. A lot of these guys are from low-income backgrounds and lack in financial education so they overspend/overestimate their earnings.

Makes you wonder how guys like Charles Barkley still have money.

flip · 03-24-2009, 03:13 PM

IMO most of them deserve it. They want to live like rockstars and drive Ferraris only to realize that they can't spend millions per year after they are retired and still survive.

To me it is no coincidence that most of baseball, basketball and football are minorities from poor backgrounds that don't know how to manage their money. They all want to live like 50 cent only to realize far too quickly that is about all they have in their bank account.

burn_baby_burn · 03-24-2009, 03:17 PM

Quote:

Originally Posted by malcolmk14

Unfortunately a lot of these guys are just too stupid to invest for the rest of their lives.

I think there is a lot more to it than just being stupid. Its easy to point fingers and shake your head or even laugh at the situations these guys are in. Still, who can honestly say that they would have managed things any better if they would have been given millions of dollars in their early 20's? I would like to think that I would be smarter than that. Still I wasn't very smart about money as a young adult. But I also didn't have any either.

burn_baby_burn · 03-24-2009, 03:20 PM

Quote:

Originally Posted by flip

IMO most of them deserve it. They want to live like rockstars and drive Ferraris only to realize that they can't spend millions per year after they are retired and still survive.

If you read the article there is a lot more to it than that. Sure some of the guys had like 18 cars. A lot of the others were victims of bad investments and trusting the wrong people. Some of the athletes mentioned in the article are still playing.

malcolmk14 · 03-24-2009, 03:28 PM

Quote:

Originally Posted by burn_baby_burn

I think there is a lot more to it than just being stupid. Its easy to point fingers and shake your head or even laugh at the situations these guys are in. Still, who can honestly say that they would have managed things any better if they would have been given millions of dollars in their early 20's? I would like to think that I would be smarter than that. Still I wasn't very smart about money as a young adult. But I also didn't have any either.

Fair enough, I guess the right word is "ignorant", not "stupid".

GirlySports · 03-24-2009, 05:18 PM

It's life. The more you make, the more you spend and spending becomes a habit.

Ice · 03-24-2009, 06:35 PM

I think the teams handing out millions of dollars to kids who come from poor economic backgrounds need to step up here. It has to be overwhelming when you come from a life of your parents barely getting by to suddenly being able to buy anything you want. Along with all that money comes people who are very willing to befriend you for all the wrong reasons. While the athletes are ultimately responsible for their own actions, a little proactive insight from an organization, veteran players who have been there, etc. couldn't hurt.

I don't know if every NHL team does this, but Kings rookies have meetings where they cover everything from being in the public eye, to managing money, suspicioius new "friends" to the various ways women will do anything to get pregnant and be set for life. Of course, we can't prove it makes a difference but I know rookies really appreciate the heads up. There are a lot of things you never think about until you're put in a position of notoriety.

Locke · 03-25-2009, 12:19 PM

They clearly aren't making enough money to begin with.

Montana Moe · 03-25-2009, 12:35 PM

If they could just learn to live off of what they were getting paid in college (if they went), they'd have plenty socked away.

corporatejay · 03-25-2009, 12:45 PM

Quote:

Originally Posted by Locke

They clearly aren't making enough money to begin with.

John Salley agrees with you.

Slava · 03-25-2009, 01:01 PM

It reminds me of an interview with Darren McCarty when he declared bankruptcy. His sentiment was basically that he is a professional athlete and invested with some people and into things that he probably shouldn't have. I actually feel bad for some of these guys...the number of hangers on and swindlers must be simply overwhelming.

Sylvanfan · 03-25-2009, 01:09 PM

Quote:

Originally Posted by burn_baby_burn

If you read the article there is a lot more to it than that. Sure some of the guys had like 18 cars. A lot of the others were victims of bad investments and trusting the wrong people. Some of the athletes mentioned in the article are still playing.

That seems to be the one that sticks out to me. Lets face it when you're that young it's hard not to be a bit naive, and theres no shortage of sharks out there looking to earn the trust of these people and than cut their throats when it's to their advantage. Often these sharks can be acquaintances of agents whom these guys trust to look after their affairs.

Bobblehead · 03-25-2009, 01:42 PM

And I'm sure there are a lot of people with good intentions, not out to swindle the atlete at all.

How many people here have an idea where they think they could realistically make it rich? If not you, than someone you know. Now imagine that there is suddenly someone with a huge amount of money. You aren't out to swindle them, you honestly believe your idea will work. You've seem worse ideas succeed, this one should be a no brainer. Your won excitement, your own belief sells the idea, and before you know it you discover that it isn't as easy as it looks.

I believe this is where a lot of the money goes. Not a lot of malice, but just misplaced belief in a "can't fail" idea.

And instead of the athlete putting away their earnings for the future, they take a gamble. These guys know they can't play forever, but they sure would like be able to be able to afford the same lifestyle forever. And even if you tell them there is only a 1 in 30 shot this will succeed, well they have been beating much bigger odds than this to make it pro, so 1 in 30 is for nothing.

FurnaceFace · 03-25-2009, 01:56 PM

Reminds me of a conversation I overheard a few years ago. I believe it was a WHL player and his agent who were sitting beside us at lunch and the agent was having a fairly serious heart to heart talk about the kids finances and how he couldn't spend all his money like that and how he needed to build a budget etc. I thought it was pretty good of the agent (or whoever this was) to be giving the kid advice. I think more of this would really help and applaud the effort The Kings make. I would hope more teams do that sort of thing.

burn_baby_burn · 03-26-2009, 08:35 AM

Quote:

Originally Posted by Ice

I don't know if every NHL team does this, but Kings rookies have meetings where they cover everything from being in the public eye, to managing money, suspicious new "friends" to the various ways women will do anything to get pregnant and be set for life. Of course, we can't prove it makes a difference but I know rookies really appreciate the heads up. There are a lot of things you never think about until you're put in a position of notoriety.

The NFL does this for their rookie players every year. I believe it is called the Rookie Symposium. Deion Sanders also has an 8 week training camp for college defensive backs going to the NFL Combine called Prime-U. They had a one hour special about it on the NFL Network.

Not only does Deion prime these young athletes for their workouts at the Combine. He also has guest speakers come in to talk to the young athletes about making the correct choices about the opportunity they are about to get. Cutting off bad friends from the hood or other people that don't share the best interests of the athletes etc, etc.

He also had a former model come in to talk to the athletes about being leery of gold digging woman. Who won't necessarily like the athletes for who they are, but for what they have and what they represent.

Deion also had the athletes over to his mansion to show the boys what they could achieve if they worked hard. At the dining room table, Mrs. Sanders explained to the athletes about making the right financial choices during thier career since the mega pay checks disappear once your playing days are over.

I was pretty impressed with the whole thing. I guess it is up to the athletes if any of it sunk in or not.

Suave · 03-26-2009, 10:07 AM

I think all the major leagues have similar camps. The NBA has a six day rookie transition orientation program. Although it definitely is up the athlete what they actually get out of it. Case and point, Chalmers and Arthur who got kicked out of the program last year for smoking pot.

FlamingLonghorn · 03-29-2009, 11:37 AM

Quote:

Originally Posted by malcolmk14

Makes you wonder how guys like Charles Barkley still have money.

It might have something to do with the fact that he still has a relatively high paying job. Also, he was best buds with MJ and Magic and probably got in on some of their investments.

moon · 03-29-2009, 12:13 PM

Quote:

Originally Posted by burn_baby_burn

The NFL does this for their rookie players every year. I believe it is called the Rookie Symposium. Deion Sanders also has an 8 week training camp for college defensive backs going to the NFL Combine called Prime-U. They had a one hour special about it on the NFL Network.

Not only does Deion prime these young athletes for their workouts at the Combine. He also has guest speakers come in to talk to the young athletes about making the correct choices about the opportunity they are about to get. Cutting off bad friends from the hood or other people that don't share the best interests of the athletes etc, etc.

He also had a former model come in to talk to the athletes about being leery of gold digging woman. Who won't necessarily like the athletes for who they are, but for what they have and what they represent.

Deion also had the athletes over to his mansion to show the boys what they could achieve if they worked hard. At the dining room table, Mrs. Sanders explained to the athletes about making the right financial choices during thier career since the mega pay checks disappear once your playing days are over.

I was pretty impressed with the whole thing. I guess it is up to the athletes if any of it sunk in or not.

Perhaps he is able to talk from experience (in making bad choices) but Deion Sanders would seem to be a guy that I would stay away from when talking about how to act as a pro.

I guess he has ended up okay, but he has made some terrible choices off field and on-field as well.