Pro Athletes Can’t Hold Onto Their Money
It’s not surprising that some athletes make terrible financial decisions, and one often hears about the Michael Vicks and Mike Tysons of the world ending up with nothing. But I didn’t realize that it was quite so common, and that these examples aren’t exceptions but rather the rule. According to a recent Sports Illustrated article, “[b]y the time they’ve been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce”.
Seventy-eight percent is an astonishing number. Even given that many of the players in the league simply don’t earn the marquee salaries that are most prominent in media coverage, the minimum salary in 2008 for an NFL player is $295000, and that’s for a rookie. That’s not a crazy amount of money, but it’s not peanuts, either. Apparently the average length of a player’s career is about three-and-a-half years and the average salary last year was $1.1 million. Averages may not be that useful here given how the stars would skew those numbers; what we really need is to know what percentage of players earn more or less than that amount.
Given that the average player isn’t going to earn enough to comfortably retire on, it seems even more important that all of them get some kind of decent financial training and/or advice. I find it odd that the NFL player’s union, the NFLPA, is only mentioned as a source of statistics, and that none of the major leagues seem to have this for the athletes. It doesn’t make sense for the owners to provide that kind of training, of course, but it does make sense for the unions.
The article is focused on the United States, but I have to assume that the situation with sports stars (soccer stars in Europe, for example) in other locales is somewhat comparable.
It may be hard to have sympathy for people who are making that kind of money, but in truth it’s still a highly exploitative system. I’ve never been a fan of the “player salaries are obscenely high” school of thought, primarily because of the vast amounts of money sloshing around in the system and the fact that if those players didn’t get the money, the owners would instead, and I don’t see how that’s somehow better. But those lucky few really are the exceptions, and I do think that all of the players should be able to retire after a reasonable career given that the sport as a whole makes ridiculous amount of money.
It’s not that I think that playing any of these sports to such a high level makes you deserve a wealthy retirement, it’s that I think that if anyone is going to profit off of the hugely lucrative machine that is pro sports, it should be the players.
In the US, unmentioned in this article, it’s also the case that by the time players make it to the professional level, they have already been contributing to vast sports profit via their participation in college football and basketball. For four years they make almost nothing—they get a scholarship and lots of special treatment, but not money in hand—at the same time that those college sports rival the professional leagues in terms of the money they bring in. So they do that for four years as incredibly cheap labor, and then they get a short career, a decent amount of money, and apparently little support in terms of what to do with that money. Yes, they’re still unbelievably lucky, and there are people who are far worse off in the world, but that doesn’t alter the fact that they’re still exploited labor, and I think it says a great deal about the culture when even those who are “living the dream” are so clearly exploited labor and for the most part cannot give themselves a solid financial future.
14 Apr 2009 at 00:33
Do you think that maybe the money should be taken from those athletes, put in a fund and then paid back gradually over time? The same could be said for people in other industries too; the real issue is about people being paid very large sums of money soon after earning very little. For some, it’s always going to be an ‘easy come, easy go’ situation (regardless of the groundwork they put into reaching that level) once they start earning very large sums of money. Actors, prize winners and sometimes even software developers have that problem too. They need to look for that help themselves, because you can’t hand-hold everyone.
15 Apr 2009 at 08:50
Kev would like to hold everyones hand, to touch it and squeeze it for a long time.
16 Apr 2009 at 01:23
That’s good, Garret. Keep up the good work. It’s good that you’re still able to maintain a relevant dialogue with people in the written word.
16 Apr 2009 at 05:18
Ah Kev, such wit such brevity. Why I can hear Oscar wild and Groucho Marx awaking from their lifeless slumber tears of admiration running down their rotten phisogs.
Did you put the retort in the oven gas mark 7, or let it soak over night. Ah Kev, a savant to an idiot savant, an agar dish of meaningless background static. Ah Kev.