re: Broke Athletes

“By the time they have been retired for two years, 78 percent of former NFL players have gone bankrupt or are under financial stress; within five years of retirement, an estimated 60 percent of former NBA players are broke.”
– Sports Illustrated

Last night it seemed like the whole entire world was watching the ESPN show 30 for 30, which tackled the topic of pro athletes who have gone broke or filed for bankruptcy. I know some financial advisors who deal with NFL players, new and old and former. In many cases, they almost have to take on a parental role, especially as they get drafted out of college and can’t wait to go down to Myrtle Beach to get some dumbass slogan tattooed across their chest or whatever. There are calls at 2 in the morning about  transferring money from one account to another, heavy-duty scoldings about jewelry purchases and frank discussions about how many cars a person actually needs to own at the same time.

Anyway, if you catch the ESPN doc, it was pretty amazing, if only for the sheer ubiquity of broke athletes – even star players with long careers who’ve made more than $30 million aren’t immune.

What happens to these guys is pretty obvious, it always seems like the same story, involving one or some of the below components:

1.  Athlete overstimates the length of what his playing career will be. Then gets released or has a dire injury.

2. Athlete allows four or five of his boys from the neighborhood become a freeloading entourage. Once the money’s gone, so are his friends.

3. Athlete mistakenly assumes that success on the field guarantees success in the business world, buys car dealerships, car washes, restaurants, night clubs and backs his idiot family and friends in their own half-baked ventures.

4.  Athlete signs over power of attorney to a scumbag or an incompetent because he just doesn’t feel like “dealing with this shit” and by “shit” he means his own future.  Scumbag abuses trust and steals, swindles or loses the money in ill-conceived investments.

5.  Athlete signs away rights and royalties to unscrupulous agents, managers, promoters early in his career when trinkets and a small amount of money dazzle him. Later, he finds out what he’s given up once it’s too late.

6.  Lawsuits, divorces, child support, alimony and illness strike – huge expenses that were inconceivable to the 23-year-old who was nailing chicks three at a time in a hot tub ten years earlier.

Anyway, these are the typical pitfalls and 99 times out of 100 the broke athlete has made at least one of these mistakes. I’m not sure that it can ever be prevented given the de-emphasis on education our colleges are guilty of when it comes to their athletes. After all, colleges are businesses that cater to the check-writing alumni and the only thing the alumni care about is winning football and basketball games. The athletes are kept in the dark rather than taught the basics and many of them have grown up in an environment where money management just isn’t a topic of discussion.

So expect more of this.

More about ‘Broke’ on 30 for 30 here: ESPN

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. w88 commented on Sep 20

    … [Trackback]

    […] Read More Information here on that Topic: […]

  2. PI News Wire commented on Sep 23

    … [Trackback]

    […] Here you will find 21806 additional Info to that Topic: […]

  3. free sex doll commented on Sep 25

    … [Trackback]

    […] Here you can find 11428 more Information to that Topic: […]

  4. Satila meet women commented on Nov 09

    … [Trackback]

    […] Find More here on that Topic: […]

  5. replica watch commented on Dec 31

    … [Trackback]

    […] Read More on to that Topic: […]

  6. Software testing outsourcing commented on Jan 16

    … [Trackback]

    […] Find More Info here to that Topic: […]