December 11, 2010
I am really bewildered at some of the stories we read about pro athletes losing their fortunes. It's disgusting that many of the fans in these large cities are living well making 60k-70k a year while athletes are mis-managing Millions. So how does it happen? This subject does take plenty of research but the cases are well documented. There are really too many athletes to cite, and it would make no sense to break down their financial woes on the micro level.
Many of the mistakes we see them make are failed business ventures. Former NBA player Derrick Coleman went bankrupt investing money in restoring oppressed areas of Detroit, Michigan. Former NFL Player Rocket Ismail dabbled in cosmetic products, phone-card dispensers, a music label, a restaurant. NFL Player Deuce McAllister invested millions into a car dealership. Where are the financial mentors? I don't understand why you would choose to invest all of this money blindly while your playing career is ongoing. Why not keep all of your checks in the bank until your career is over and then buy a home and choose how to invest. Shouldn't you want to be the boss and be on site daily all whileÂ keeping an eye on your investment?
Many players have child support obligationsÂ with women they never had close relationships with. Former NFL running back Travis Henry has fathered nine children by nine different women, some of the children born just months apart. Henry's annual child support payments range anywhere between $150,000-$170,000. Current New York Jet Antonio Cromartie has nine children as well, but with eight different women. Just after the 2009 NFL season ended, Cromartie was advanced $500,00 for outstanding child support payments. Baltimore Raven Ray Lewis has six children by four different women and former NBA star Shawn Kemp has seven children by six separate women. Supporting a family is not easy nor is being a pro athlete. Shouldn't you wait until your career is over to begin starting a family as well?
And finally, we all know that pro athletes are excessive spenders. An article in Sports Illustrated once reported that NBA great Shaquille O'Neal's monthly spending exceeds $875,000 including $17,000 per month on clothing. Excessive? In the same article, former NBA player Kenny Anderson claims to have had a $10,000 monthly bill he deemed as "hanging out money". I thought hanging out was free? Many of these athletes just downrright get taken advantage of due to ignorance, even by longtime friends and family.
You don't hear much about the financial woes of Major League Baseball players. Maybe because they are playing baseball year around, travelling city to city. Even after the season ends, many of them will spend their winters in southern countries where $20 goes a long way. On the contrary, NFL players have one day a week to take care of business and have many nights off to dine out, shop, party. The Robert Allen Stanford incident was pretty unfortunate to a handful of professional baseball players.
It is apparent that many athletes need a crash course learning in how to manage money. College athletes have all of their expenses taken care via scholarships and go through college with no experience on managing finances. The idea of paying college athletes is being explored, which is ridiculous. Do NCAA officials plan on paying the same amount of money to women's cross country and tennis players? Somehow I see the Men's college basketball and football players reaping the harvest. Minor league baseball players, on the other hand, sweat out their early twenties in small towns and cities on small salaries. By the time they reach the Major Leagues, they have experience in money management and how to spend their money while away from home. At the end of the day, what you choose to do with your money is your business.
Parts of this entry were courtesy of Sports Illustrated, you can read the full article here.