Can NFL Players Afford a Lockout?

[kanatablues]

Not really a surprise that the answer is probably 'no', despite how hard the NFLPA tried to have players put money away. There was something last week even about one player who was being asked for loans by team-mates, in one case for 6 figures.

Can NFL Players Afford a Lockout?
by Tom Barlow

The average National Football League player makes around $850,000 a year, yet, according to an expert interviewed by MSNBC, 22% of the league's 1,700 players have no savings to fall back on should the threatened lockout occur. Shocked? You shouldn't be. The combination of youth and large amounts of money has led to the downfall of many pro athletes.

Witness JaMarcus Russell, the first pick in the 2007 NFL draft, who signed a contract worth $61 million. After failing miserably at playing quarterback for the Oakland Raiders, Russell was released at the end of the 2010 season. TMZ recently reported that Russell is now in danger of losing his house after falling almost $200,000 behind in paying his mortgage.

In fact, according to a Sports Illustrated study, among NFL players who have been retired for two years, 78% are bankrupt or financially stressed, mostly due to divorce and/or lack of a job.

Why do these players have such troubles with money management? There are a number of reasons:

Keeping up with the Joneses: It's hard to remain frugal when surrounded by multimillionaire veterans wearing a new Rolex every day, using Cristal as mouthwash and driving a fleet of Lamborghinis and Bentleys.

Lack of Financial Acumen: Few of these stars are educated in running the mid-cap businesses that they are, and can't identify the difference between shrewd investments and wild speculation.

Misplaced Trust in People: Some trust people close to them, such as their parents, to handle financial dealing with which they have no experience. Others are susceptible to Svengalis who are more interested in tapping the client's wealth for themselves than working for his well-being.

The Allure of the Tangible: For those raised with little, a hefty account balance or a fistful of ETFs isn't as comforting as owning something tangible, such as property and businesses. Many jocks end up learning a hard lesson about the restaurant business; it is a huge money portal to the planet Broke.

Potential for Career-Ending Injury: Every player is one play away from a career-ending injury, so those who spend in anticipation of many future years of high earnings, buying a mansion with a sticker price five times their annual salary, for example, can find themselves trapped by over-the-top expenses.

Matters of the Heart: Many players marry early. Once they become pro stars, though, the temptations to stray that are thrust in their face are hard to forgo. Also, all too often, when a player retires and finds himself around the house all day, he and his wife come to the realization that they aren't really happy as a couple. Divorce terms and child support can be ruinous to a player no longer in the game, no longer making big money.

How does this affect the current NFL labor agreement negotiations? The league plans to lock out the players, even canceling next season, in order to convince them to sign a labor agreement more favorable to the owners. The strength of the player's union rests in the willingness of players to forgo the season and their salaries if necessary to force the league to attend to their demands.

If 22% of the players are already living paycheck to paycheck, how will they get by? The union has set up a strike fund that will pay each player around $60,000 spread out over the course of the season, or 3% of their average salary.

To put this in perspective, proportionally, if you were earning $50,000 a year and went out on strike under these terms, you would receive about $450, spread out over half a year. How long could you live on $17.31 a week?

The player's union has been dunning its members for a year to build a personal nest egg in anticipation of a possible work stoppage, so hopefully many are prepared for it. However, one would guess that those already spending 100% of their paycheck probably didn't find it easy to cut back.

If the work stoppage occurs, one in five NFL players is going to feel the pain very quickly. They may remain steadfast, but it will take quite a few paychecks, once play resumes, to make up the damage to their finances.

[BLUEYEZ]

Does the NFL have any sort of savings plans in place for its players? They must right? Nothing to do with lockout, just curious because I read so many stories on players being hard up for money and wonder if it is offered or if they just don't participate. Handing millions to 21, 22 year olds is just recipe for disaster financially.

[kanatablues]

Does the NFL have any sort of savings plans in place for its players? They must right? Nothing to do with lockout, just curious because I read so many stories on players being hard up for money and wonder if it is offered or if they just don't participate. Handing millions to 21, 22 year olds is just recipe for disaster financially.

No. They run seminars for rooks and part of what good agents do is help players with their financial decisions and investments. But ultimately, it's all up to the players.

If you wanna get another take on the situation, one of my favorite columnists is Jack Bechta at nfp. He's been a players agent for 20+ years, you get a different perspective on issues from him than players/coaches/nfl executives/etc.

http://www.nationalfootballpost.com/...s-journal.html

Lots of good stuff:

The IRS is blitzing NFL players

More NFL players bilked out of millions

Agents by the numbers

How an agent can define a career

Books for rooks

Smart money

Rookie symposium just the tip of the iceberg

The rookies go to school

[ca-deek]

Wow! It is not all about the money.

A player works his entire life (even it is has only been a short one to date) just to play four or five of NFL football. And, all the while he knows that every year he misses, the college ranks are graduating new, younger, faster kids to take his place.

So can the players AFFORD a strike? Absolutley not! Life is short and the career of an NFL player is even shorter.

[BLUEYEZ]

No. They run seminars for rooks and part of what good agents do is help players with their financial decisions and investments. But ultimately, it's all up to the players.

I can't believe that they don't have a savings system in place. I know they are grown men but such large amounts of money in such a short period of time is a job that would best be for a savings system. Wow.

[ca-deek]

I can't believe that they don't have a savings system in place. I know they are grown men but such large amounts of money in such a short period of time is a job that would best be for a savings system. Wow.

Everyone should have 'savings system' in place! In the olden days it was called a BANK.

Somehow this country has changed from a time when we were all supposed to taking care of OUR OWN future to one in which we have to have a 'system' to protect us from own lack of control. Welcome to the new America.

[BLUEYEZ]

Everyone should have 'savings system' in place! In the olden days it was called a BANK.

Somehow this country has changed from a time when we were all supposed to taking care of OUR OWN future to one in which we have to have a 'system' to protect us from own lack of control. Welcome to the new America.

I agree, but majority of NFL players do not come from money and handing millions to 21 year old who is not used to having money is recipe for disaster. Having a savings system taken out before you get the check and set aside for retirement would be better addition than having rookies sit in rookie meetings that they are prolly texting, half alseep, etc during.

[ca-deek]

I agree, but majority of NFL players do not come from money and handing millions to 21 year old who is not used to having money is recipe for disaster. Having a savings system taken out before you get the check and set aside for retirement would be better addition than having rookies sit in rookie meetings that they are prolly texting, half alseep, etc during.

Coming from money has little do with it. What we are lacking here is self discipline and self control. With that as a basis, I have ZERO concern for what these kids do with their money. If they blow it on cars and houses....good! That just means a job for someone who builds cars or houses.

These kids are given so many advantages (and it starts WAY BEFORE they get to the NFL) that I have ZERO sympathy. It is not like they are the first person in the world to win the lottery when they only went to the store to buy a Coke. They knew this was coming. They sought it out. Where is the surprise here?

[kanatablues]

I agree, but majority of NFL players do not come from money and handing millions to 21 year old who is not used to having money is recipe for disaster. Having a savings system taken out before you get the check and set aside for retirement would be better addition than having rookies sit in rookie meetings that they are prolly texting, half alseep, etc during.

You can't protect people from themselves ... there are all kinds of seminars, by the league and NFLPA. Good agents not only advise them on money matters but try to steer them towards reputable financial advisors.

Athletes are sheltered from so many regular concerns, by both their agents, clubs, and entourages but ultimately, it's all up to them. You are gonna hear stories about players getting into trouble the longer this goes on ... no drug testing, no penalties for misbehavior, no one holding them immediately accountable, etc.

[BLUEYEZ]

Coming from money has little do with it. What we are lacking here is self discipline and self control. With that as a basis, I have ZERO concern for what these kids do with their money. If they blow it on cars and houses....good! That just means a job for someone who builds cars or houses.

These kids are given so many advantages (and it starts WAY BEFORE they get to the NFL) that I have ZERO sympathy. It is not like they are the first person in the world to win the lottery when they only went to the store to buy a Coke. They knew this was coming. They sought it out. Where is the surprise here?

I bet if you did a study on the players who went broke vs ones who didnt after playing, those who went broke would come from less money. I don't have pity for them if they blow their money. At the end of the day they are grown and should be accountable for themselves but the league could do more in my opinion.

[kanatablues]

I bet if you did a study on the players who went broke vs ones who didnt after playing, those who went broke would come from less money. I don't have pity for them if they blow their money. At the end of the day they are grown and should be accountable for themselves but the league could do more in my opinion.

Just one of the links from above:

Rookie symposium just the tip of the iceberg
NFL, NFLPA develop extensive player development program.
by Jack Bechta

On Wednesday, the 2010 rookie draft class wrapped up the 14th rookie symposium.

The purpose of the Rookie Symposium is to help prepare players for the opportunities and challenges ahead. The Players Association, the NFL and its teams are committed to providing the rookies with the best resources to develop both personally and professionally.

The program includes presentations, videos, and workshops about life in the NFL. The symposium’s agenda consists of multiple topics, including: personal finance, life skills, conduct, life as a rookie, NFL policies and procedures, personal experiences, family issues and player development.

Although the symposium gets a lot of attention, it’s just one small component of a bigger program. The broader focus of the NFL and the NFLPA is to make sure players successfully transition both into the league and out of the league, as well. Other components of the player development program include an introductory meeting at the NFL Combine, a rookie orientation program that takes place about 3 times a year within each club, and a rookie conduct management program that focuses on impulse control, stress management and decision making. The program also goes on the road and visits about 25 to 35 colleges a year, where the NFL representatives talk to collegiate players about responsibilities that come along with the privilege of working for the NFL. As program director, Adolpho Birch, explained it to me, "We want to remind college players you don't come to us with a clean slate; you come to us with all the decisions you made up to this point in your life".

Above and beyond the standard league policies for personal conduct, players are given advice on how to handle the everyday stresses that come along with their high profile job. Veteran players candidly talk to them about how to handle family members who may feel entitled to their new found wealth, or a how to avoid the temptation of partying to often. They remind them that their livelihood is on the line every day and can disappear with one bad decision. From talking to my players, I learned that this was their favorite part of the symposium this week, and that the veteran who did the best job of driving home these points was Cris Carter. If you check out this video, you can certainly understand why.

Social media has also been an expanded topic at the ,as the NFL wants players to be mindful of their tweets and Facebook profiles.

In terms of players' conduct, Roger Goodell is clearly defining his legacy as the disciplinarian Commissioner. He's not afraid to get his hands dirty and get toe-to-toe with players. He actually enjoys the interaction and is in tune with the players' behavior. Roger also has been a champion of the player development program and was instrumental in bringing former players association President Troy Vincent on board as VP of Player Development.

On the transition out of the NFL side, the program helps to facilitate anything from resume training and interview skills, to broadcast boot camps and minority coaching programs. The NFLPA has struck deals with graduate schools such as Harvard, Wharton and Kellogg to have players attend executive courses in the off-season. Therefore, both the NFL and the Players Association share a common interest and actually work very well together under the Player Development Program.

Many of my clients who have been through the symposium have complained about how long and boring it can be at times. As one player put it, "I learned and chose not to use guns and drugs in junior high". Needles to say, there are many portions of the program that are directed at the 5% who might need a constant reminder to behave themselves.

The tools and resources exist for players to help themselves succeed, but the bottom line is they have to want to take advantage of them and manage their own actions.

[BLUEYEZ]

Many of my clients who have been through the symposium have complained about how long and boring it can be at times. As one player put it, "I learned and chose not to use guns and drugs in junior high". Needles to say, there are many portions of the program that are directed at the 5% who might need a constant reminder to behave themselves.

The tools and resources exist for players to help themselves succeed, but the bottom line is they have to want to take advantage of them and manage their own actions.

I know they surely provide them with information but it is like sitting in sex ed class in high school. People still have sex and babies in high school.

Having a savings system that comes out of your paycheck is just standard today and I think it would benefit NFL players even more so seeing how you could set aside a huge chunk of money without missing it with such large paychecks.

[kanatablues]

Another ...

A rookie’s most important business decision
Holding on to their wealth isn’t easy for many players.
by Jack Bechta

Seventy-five percent of NFL players are broke within 3-5 years of playing their last games.

The seventy-five-percent statistic isn’t necessarily accurate. The NFL may argue that this number has never been verified and is grossly exaggerated, and there have even been surveys of retired players that put the number at closer to 40 percent.

Here’s the problem: First, when these phone surveys are conducted, they can only reach the most stable players who had the same phone numbers for years. Second, those who are broke are embarrassed by their situations and are usually difficult to locate. They also don’t always come clean or even participate in the surveys.

The NFL players union has been trying to help players by hiring an investment czar in charge of registering and monitoring financial advisers. This office works hard to educate the players and sets high standards for the advisers. The registration process filters out the worst of the worst, but it doesn’t necessarily attract the best of the best. Furthermore, players usually select advisers who aggressively recruit them and represent other high-profile players, so they aren’t actually seeking out the highest qualified adviser but are interviewing only those who pay them the most attention -- the same way they might handle the agent-selection process. Selecting an adviser who aggressively recruits isn’t a bad thing because these individuals have to promote themselves, just as I did when I was in the business.

I’m personally skeptical of firms or individuals who solely solicit athletes. I would like to see that my clients’ investment advisers also work with high net-worth professionals outside of sports. For the most part, I’ve been impressed with some of the investment professionals who have solicited my clients’ business.

For those who are broke after football, there are the unscrupulous John Gillettes and Don Lukens of the world who were the reason for the players’ financial demise. However, the players are their own worst enemies because they simply lack fiscal discipline and don’t do the math. Even those who selected the worst of the worst advisers usually ignored all the obvious signs because their vanity was being massaged all the way to bankruptcy.

Many NFL teams and the league itself commit resources to educating the players. During the annual rookie symposium, the league brings in well-known retired players who share their stories about misguided financial decisions that are meant to get the rookies’ attention. They also offer sage advice on how to avoid making the same mistakes of those before them.

With the collective efforts made by agents, financial advisers, vets, the NFL and the players association, there doesn’t seem much change to the 75-percent trend. To have time, money, status and fame at the exciting age of 23 is a challenge for anyone to manage. I always hear people criticizing young athletes for being stupid with their money, but I guarantee you most of us would have made the same mistakes given the opportunity.

I personally believe that 75 percent of players have spent and lost most of the money they made during their careers within about five years. They simply have a hard time adjusting their lifestyle below their new income level. In addition, since a lot of money came fast and easy from the NFL, there’s a sense that some company may pay them a nice salary to be a hand-shaker. The biggest mistake players make is that they spend to the level of their income with the idea they can stack up their cash in the last two or three years of their careers. However, those years never seem to come, and their careers end prematurely.

Another problem young players face is that the people around them become enablers. They don’t do it on purpose; they simply get a taste of the lifestyle that status and cash can offer and don’t want to stop the ride. So when Johnny Starter buys his mom a new house or car, she doesn’t always say, “No, son, you save your money for now. See how many years your career lasts. We’ll see how much you have put away before buying me anything.”

Spending is a bad habit. In my book, the No. 1 service a financial adviser can offer is fiscal discipline, which takes some guts and an ability to be stern, which is rarely found in the industry. The greatest financial advisers sometimes lack the ability to stand up to their clients’ bad habits. They don’t want to be the ones to stop them from buying a lifestyle above their means in fear of losing them as clients.

The reason Kirk Ferentz, Urban Meyer and Nick Saban get the most out of their players is because they draw lines in their programs that players know not to cross. They command respect, and their players do as they’re told. These coaches represent the personality types to keep players from going broke because they tell them what they need to hear, not what they want to hear. They would make great investment advisers.

Every player needs a financial coach in their ear to educate them and design a strict program that will result in great fiscal habits. It’s the players’ important responsibility to find the professional(s) who will make them better and guide them toward the 25 percent who have held on to and created wealth.

[Pyssed Doph]

me and the wife always have this discussion.

it should be a requirement that these kids when they are in college have to take business management courses.

but that would end up taking money out of the many hands of the agents and their agencies.

young kids come into the league with boatloads of liquid money. you want this house ... its going to be 5 million. forget the fact that until said player showed any interest it was actually going for 3 million. and lets not even talk about a player actually saving and paying cash for siad house. nope. lets take out a 5 million dollar loan with a hig interest rate because i probably dont have any established credit or anything like that.

hmmm i got this big house ... i need to funrish this thing. ill just take out another loan. and let me get about 4 cars to fit into my 4 car heated garage.

im rich beatch ... im not going to be cutting my own grass so im going to need to hire somebody to do the landscapping and what not on my house(s). i got mad loot and because no one actually told me about managing my money ... ill just hire an accountant to take care of paying my bills and my taxes. i dont want to be bothered with all that little stuff so ill just give him/her power of attorney.

no one told me i should prepare for life after football. yes i went to college but i didnt go to get an education. i went because it was a requirement for me to get into the nfl. i couldnt begin to tell you want my classes consisted of because most of my classes werent a challenge because i was a part of the money making machine that colleges are into as well.


im 36 years old, my playing days are over ... i now sell boxed meat door to door and i do the ickey shuffle for tips. i sign autographs for money at my hotdog stand while wearing my jersey at the home games.


why do so many guys go right into broadcasting right after their playing days are over. because its a job. and they need the income.


can nfl players afford a lockout. no they cant. and its their own **** faults. and its sad. its easy to see why many of these guys lose everything once their playing days are over. hell ... they cant even maintain when their playing days are current.

[kanatablues]

It's not like they aren't advised what to do, they are coddled and given advice that is pretty much common sense anyways. But you can't help someone who doesn't want to be helped ...

Smart money
Asset protection advice for the pros, by a pro.
by Jack Bechta

Over the next 40 days, millions of dollars worth of signing bonuses will go out to NFL rookies. However, the chances are that the lucky players who play 8 years or more could still be penniless 15 years from now. In 1993, QB Mark Brunell was drafted in the 5th round, played 16 years and made millions of dollars, and is now is about $20 million in the hole.

Those who read my column know that I am passionate about helping NFL players keep and protect the money they earn. So instead of just telling clients what they should do, I went one step further and asked an asset protection expert and partner at Blanchard, Krasner & French, in La Jolla, California, Reggie Borkum, to give us some specific instructions on how to manage all that money.

Here are seven basic steps that he recommends players take to protect themselves:

1. Separate business assets from personal assets. In other words, if you buy a piece of investment property, purchase that property in a Limited Liability Company or other similar entity so as to isolate the risk in that investment from your personal assets (your car, house, boat, stock account, etc.) and your other investment properties.

2. Same goes for any new business or venture your high school buddy wants you to fund. First off, I would recommend you make your high school buddy put up some of his own cash so he has “skin in the game” and set the business up as a Subchapter-S corporation or other similar entity to separate business from personal. Most importantly, have your own legal counsel and accountant review the deal paperwork and keep tabs on how the money is being spent.

3. Life insurance is another great way to provide for your dependents. Generally, the younger you are and the better your health, the less the annual cost of the policy. You can also decide between a Term Policy that provides protection for a given number of years (i.e. a 10, 20 or 30 year policy) or a Full Life Policy that remains in place throughout your lifetime.

4. Set up an estate plan. This can serve various purposes. First, it enables you to name guardians for your children should something happen to you. Second, it is a great way to begin transferring assets out of your estate and to your children (you can even set up a trust for your children and limit when they can access the money.) Third, it enables you to decide who gets what should something happen to you. (If you leave it to probate, dying with a will or nothing at all in place, the brother you don’t talk to could end up with all the money.)

5. Keep track of what you own, what you owe, and what you make. It's a good idea to pay your own bills so you are aware of how much you are spending on a monthly basis.

6. Hire an accountant. Pick one that has experience dealing with NFL players but is not under the same roof as your financial advisor or agent. A good accountant can be your first and last line of defense.

7. Do not co-sign for anyone on a loan or give your signature as a personal guarantee for a bank loan or real estate deal.

While these points are just the beginning of a complex area full of pitfalls and “buyer beware” signs, the hope is it provides a good starting point for further questions and prevents this current crop of rookies from making the same costly mistakes as some of the past players in the league.

[kanatablues]

can nfl players afford a lockout. no they cant. and its their own **** faults. and its sad. its easy to see why many of these guys lose everything once their playing days are over. hell ... they cant even maintain when their playing days are current.

This was particularly interesting ... The IRS is blitzing NFL players

Players better be ready for the IRS, interesting figure that an estimated 20% of athletes will be targeted for audits as opposed to 2% of the general population. ~500 FAs hoping to cash in, there's signing/roster/workout bonuses, guaranteed money ... not hard to imagine there will be problems.

[Pyssed Doph]

I know they surely provide them with information but it is like sitting in sex ed class in high school. People still have sex and babies in high school.

Having a savings system that comes out of your paycheck is just standard today and I think it would benefit NFL players even more so seeing how you could set aside a huge chunk of money without missing it with such large paychecks.

many do have that ...

but the problem is trying to maintain the lifestyle you had when you had the regular nfl check coming in. once that check stops coming in ... its not like the aquired bills all of a sudden go away. you have to pay them somehow ... and 1st stop is the savings.

too many guys think that if they just stop buying stuff and partying so much that everything will be ok. they realize too late that that isnt where the damage was done. having a 5 million doallr house that you have a 30 year loan attached to ... it doesnt help you that you now have to sell that house at 2 million just to try to get some added relief.

[BLUEYEZ]

It's not like they aren't advised what to do, they are coddled and given advice that is pretty much common sense anyways. But you can't help someone who doesn't want to be helped ...

The NFL wants to protect players from concussions, maybe the NFL should try to protect them from financial ruin too. Like I said before, they are grown men. But the having each player set up an account where say 25% goes directly into a savings account that can only be touched when their playing days are over could be a good step. Maybe the players would not accept this but it would be for their own good.

[BLUEYEZ]

many do have that ...

but the problem is trying to maintain the lifestyle you had when you had the regular nfl check coming in. once that check stops coming in ... its not like the aquired bills all of a sudden go away. you have to pay them somehow ... and 1st stop is the savings.

too many guys think that if they just stop buying stuff and partying so much that everything will be ok. they realize too late that that isnt where the damage was done. having a 5 million doallr house that you have a 30 year loan attached to ... it doesnt help you that you now have to sell that house at 2 million just to try to get some added relief.

If you have less money in your pocket to begin with and going into savings then the lifestyle is easier to maintain. When I have money taken out pre-paycheck I don't think you miss it. At least I don't. And my checks are nothing like what they get.

[drummerguy872]

I have no sympathy for these players. If you make a six figure salary and you can't save up some money, you deserve to be bankrupt. There are millions of people in this country struggling to make ends meet, and these overpaid babies can't manage hundreds of thousands of dollars? Ridiculous.