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NFL Players Bankrupt: 10 Reasons Athletes May Go Brok...
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July 10, 2012
NFL Players Bankrupt: 10 Reasons Athletes May Go Broke
Include Poor Counsel, Planning, Judgement
Posted: 05/31/2012 9:54 am Updated: 05/31/2012 10:01 am
By Jack Bechta, National Football Post
An observation from 25 years of experience:
1) Gross vs. net: It never fails; when my clients get their first NFL check they call me and
say something is wrong. They are floored by how much is taken out for taxes and other
deductions. Unfortunately, the shock doesnʼt resonate long enough. I would say 90% of
players have some type of direct deposit or their check gets mailed to their investment
advisor and the players never see the net amount. Thus, they think they always are
making more money (in gross numbers) than they actually are.
2) It comes too easy and too fast: First itʼs a college scholarship, cash from uncles
during college, advances and stipends from agents and financial advisors. A large
signing bonus before the first snap in camp and making a team. When money comes fast
and easy for a young man the assumption is life will always be that way. Players can
easily develop a false sense of value of themselves. Many think that starting a profitable
business or landing a high paying six-figure cushy job will be easy after football. Why not, everything else came easy right?
Wrong! Players have a rude awaking when they can't even land a coaching job after their career ends and donʼt properly prepare
for starting a second career.
Terrell Owens #81 of the Dallas Cowboys sits on the
bench late in the game against the Philadelphia
Eagles on December 28, 2008 at Lincoln Financial
Field in Philadelphia, Pennsylvania.
3) The cost of vanity: I tell my friends that if I opened a specialized rim shop serving pro athletes, instead of being an agent, I
would be a rich man. The same goes for custom jewelry. Unfortunately, I noticed that many athletes associate wealth with material
possession. So they feel like the more they have, the richer they are. I would say 90% of all athletes are getting ripped off on auto
and jewelry purchases. I had one client have a watch appraised that he thought was worth over the $20,000 that he paid for it.
The appraiser valued it at $1,500. The diamonds he thought he had on the watch werenʼt real. I did it to teach him a lesson. The
obsession to have the latest and greatest toys, the biggest house, the newest car(s) and most expensive clothes is probably the
number one wealth killer for professional athletes. As I always say, “rich people have things, wealthy people have investments”.
4) Weak financial counsel: What I mean by this is that most financial advisors, accountants and confidants I met and observed
over the years donʼt have the fortitude to stand up to their clients in fear of losing them. If they ride their clients too hard about
spending the athlete may just fire him or her. So they tend not to make the hard calls and put their foot down on spending
patterns. For many consultants, itʼs a race to invest the playersʼ assets before they spend it. Consultants who take their time to
educate, communicate and have a way of helping players control spending get an A+ in my book but they are few and far
between.
5) Bad investments: There are some intelligent football players who made some really bad investments. The problem is usually
compounded when they make a big bet with the majority of their savings on real estate or a business. In addition, many of them
sign personal guarantees on loan deals in addition to the investment.
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6) Guilt and the family: Itʼs amazing the number of NFL players who come from single parent homes. Many grew up with the
help of the entire extended family, who is usually poor. When all resources are shared in helping one another, things are
copasetic. However, when the athlete starts earning there is a feeling of guilt and a desire to help those who helped him.
Unfortunately, itʼs never just a one-time event. Once the pipeline of fiscal aid is spread about itʼs hard to turn the faucet off. Itʼs
difficult to say “no” to the brother who is about to lose his house or the uncle who is behind on the car payment. There are ways to
help the family but there is usually not a realistic plan in place to do so. I have a client who paid off his parentʼs home loan of
$200,000 to find out two years later they refinanced and borrowed $150,000 against the house that was once free and clear of
any debt. Of course they got behind again in their payments and had little to show for the $150,000 they spent. And of course, my
client was upset but he paid it off as well. After all, it's mom and dad.
7) A few more years: Just ask any retired player if he thought he would play at least one or two more years and I promise you
90% would say “yes”. In thinking they will play a few more years they feel more money will come that they have earmarked to
save.
8) Divorce: 50% gone! When a player retires he goes from having a structured environment (which he has had his whole life),
status, fame and a steady income, to trying to figure out how to add value to the household that worked around him and his
routine for the last several years. He will struggle with developing a role in his own family, the workplace and society. A lot of
athletes get depressed and a near majority of them hideout in a bottle and/or on the golf course. No longer the breadwinner, many
wives of NFL players have told me they feel like their husband is another child they have to take care of. Many of these situations
end in divorces with no prenuptial in place.
9) Living above their means: I constantly remind my players that their peers are the people that they graduated college with not
the guys in the locker room. Any amount of monies made above your peers should be saved, invested and allocated for future
needs. Itʼs okay to live in apartment for three years before buying a house and two cars. However, the locker room becomes the
peer group and once many athletes taste the sweet life itʼs difficult to go backwards.
10) Keeping up with the vets: One phenomenon that hits most rookies is the desire to keep up with the vets. They see how the
vets live and usually emulate their life styles. Many vets are into their second contract; usually a large one, but the rooks feel like
they need to drive the same cars, wear the same clothes and own similar jewelry. Making all the classic mistakes listed above
starts the player off by borrowing from the following year. Once this pattern starts its hard to stop. Many players feel they will get
ahead on their next deal that for many may never come. For others, when the next deal does come the degree of spending just
increases. One of my former clients just told me his buddy owns a Bentley dealership (in a southeast city) and four NFL players
from his market have pre-ordered $350,000 cars.
These ten reasons why players go broke are indeed elementary and the only thing that can curtail the pattern is on going
education, intervention, and constant counseling of basic life skills.
Follow me on Twitter: @Jackbechta
Jack Bechta is one of the most respected agents in the NFL and has represented players for more than two decades.
Athletes Who Lost It All (Or Most Of It)
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