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Athletes Going Broke: Not a New Phenomenon

Stories of financial failure are hardly rare in times of economic turmoil, but the stories that tend to make people scratch their heads are those that depict once-rich athletes with little left to show for their athletic expertise.

Most recently in the news were former Tampa Bay Buccaneers star Warren Sapp, who is selling his house to pay off his debts, and former World Series star pitcher Curt Shilling, who may have to sell his memorabilia for the same reason.

Film director Billy Corben provided another glimpse into the world of athletes going bust with “Broke,” an hour-long documentary for ESPN based on a Sports Illustrated story written by Pablo S. Torre.

Corben’s film updates the cast of characters, but the stories are the same now as they once were.

Included in revealing personal interviews are:

  • Former NFL players Dante Wesley, Bernie Kosar, Andre Rison and Leon Searcy
  • Former Major League Baseball players Schilling, Cliff Floyd and Homer Bush
  • And former NBA standouts like Jamal Mashburn.

At the end of “Broke” is a list of several dozen big-name athletes who have declared bankruptcy. It includes NBA All-Stars Antoine Walker, who blew through $110 million in 12 years, and Allen Iverson, who earned and lost $154 million over his career.

Torre himself makes an appearance, as does an array of sports businessmen, agents, coaches, and financial consultants.

“How (and Why) Athletes Go Broke,” was as written in 2009. It began an investigation of the financial troubles of several elite professional athletes from a variety of big-league sports.

Torre gathered stories from former and current baseball, football, basketball and hockey players, outlining the ways in which some highly paid athletes manage to lose, squander or otherwise waste the small fortunes that are their rewards for their superlative, but always temporary, athletic prowess.

All talk about the many specific reasons why some professional athletes who win big manage to lose it all in the same ways. Those ways include the inability to handle being suddenly wealthy; the inability to say no to others; the inability to manage money and a career outside of a chosen sport; and a fundamental misunderstanding that at some point medical coverage and other perks from being a pro athlete come to an end.

The Sudden Wealth Effect

Many of today’s professional athletes come from poor backgrounds. They are not used to having money and are unprepared for the sudden affluence that comes with a large signing bonus or a huge contract. They spend freely, and sometimes compulsively, attempting to make up for years of poverty or struggle.

They may be partly or completely financially illiterate, as well – some may never have had a checking account, not understand how credit works, nor appreciate how much of their salaries go to paying taxes.

They also tend to overestimate the span of their professional lives. But as the film points out, the average career for a player in the National Football League, for example, is only three-and-a-half years.

Big Stars Have Big Egos

Fierce competitiveness and egocentricity are etched deep into the DNA of the professional athlete at the top of his game as is the ability to “make it rain.” Throwing away more dollars on possessions, entertainment, etc., than the next guy in the locker room becomes a highly important demonstration of wealth and status.

Also, some A-list athletes tend to overestimate the totality of their skills. They naively believe that just because they excel on the turf or the court, they can just as easily succeed in outside business activities both during and after their playing careers.

More than one bankrupt super-star has found, to his dismay, that catching a forward pass or tossing a blistering fast ball does not preclude the possibility of making enough bad decisions to cause an off-the-field financial disaster.

Some athletes have gambled fortunes away believing that their great luck extends to gaming rooms and betting parlors. They are so used to seeing themselves as winners, that they have a hard time understanding that, in the end, it’s the house that always wins.

Big Stars Have Big Hearts

While no one would deny that top professional athletes have expended enormous individual effort to get where they are, the fact is that nobody in this life does it all alone. And if you’re the one guy in your neighborhood, your family, your background that gets to strike it rich, it’s perfectly understandable that you are expected, by both yourself and others, to give something back to the kith and kin that knew you when.

Almost every athlete interviewed for “Broke” talks about the untold thousands of dollars – sometimes millions – spent on their parents, their “entourage,” their old friends and even on complete strangers from their childhood neighborhood. All have hard-luck stories to tell, and most have their hands out looking for help.

Because a pro athlete’s salary is often broadcast on ESPN, printed in newspapers and is bandied about on social media and other places on the Internet, it’s a tempting invitation to scam artists and hangers-on to rush in for a share.

Some of these big-hearted athletes also have put too much trust and money into the hands of agents who did not have their best interests at heart but, instead, their own. Then there are the so-called “friends” with investment schemes who took the money and ran, and scheming women who lured them into playing sugar daddy – as long as the gravy train was running.

Big Stars Have Big Bills

So much of the life of a sports star is supersized. When houses cost millions, mortgage payments are huge. When the salary is huge, taxes are enormous. When the divorce is all over the tabloids, alimony is steep and child-support is right behind that.

And then what to do about an injured ex-player when the league’s medical coverage ends but operations, physical therapy and medications must continue well into middle-age?

In Torre’s original article, he cites two statistics:

  • Within two years after retiring, 78 percent of former NFL players were bankrupt or were experiencing financial hardship because of unemployment or because of a divorce
  • Within five years after retiring, 60 percent of former NBA players had no appreciable amount of money

While some have questioned these numbers, suffice it to say that winning a Super Bowl ring or the NBA’s Lawrence O’Brien Trophy does not ensure future financial security.

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

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    Sources:

    1. Torre, P.S. (2009, March 23). How (and Why) Athletes Go Broke. Sports Illustrated. Retrieved October 5, 2012, from http://www.si.com/vault/2009/03/23/105789480/how-and-why-athletes-go-broke
    2. Antoine Walker On Bankruptcy, Blowing 110 Million Dollars: ‘I Blame Myself’. (2012, October 3). NewsOne. Retrieved from http://newsone.com/2052975/antoine-walker-broke-bankruptcy/
    3. Warren Sapp Home Will be Auctioned. (2012, October 5). Tampa Bay Business Journal. Retrieved from http://www.bizjournals.com/tampabay/blog/morning-edition/2012/10/warren-sapp-home-will-be-auctioned.html
    4. Basketballer Allen Iverson Goes Bust. (2012, February 16). Investor Place. Retrieved from http://investorplace.com/2012/02/allen-iverson-celebrity-bankruptcy/