I saw this film on Netflix streaming. The title is "30 for 30: Broke" and
it is the shocking story of just how many professional football,
basketball, baseball players and other professional athletes end up flat
broke. We all know it happens but I was surprised at just how often it
occurs and some of the really big name "sports super stars" that are now
Here are some of surprising facts:
1) By the time they have been retired for two years, 78% of former NFL
players have gone bankrupt or are under financial stress.
2) The average playing career of an NFL player is 3.5 years and 65% of NFL
players leave the game with permanent injuries.
3) Within five years of retirement 60% of NBA players are broke.
4) While NBA and MLB contracts are guaranteed, NFL contracts are not
guaranteed. The only NFL contract that is guaranteed is the signing
bonus. Meaning an NFL player can sign a multi-year, multi-million dollar
contract only to be cut from the team if injured.
5) More than 60% of "pro ballers" get divorced within three years of
leaving pro sports. And the vast majority of them have no "pre-nupt"
agreement to protect their assets.
The majority of pro-sports players who end up broke are black, but that is
primarily because the majority of pro athletes are black. The problem is
not racial, it is the lack of knowledge in financial planning and how to
avoid the pitfalls of being famous, highly paid and highly visible. If
you are a pro athlete, your income is a matter of public record which
tends to attract con men, hustlers and greedy friends and family members.
Reality is that some 20 year old athlete suddenly finds himself holding a
check for $20 million dollars and he's never even written a check and has
no idea how to open bank account.
During the interviews with former pro athletes, they speak freely about
their immaturity, shallow values, desire to compete for status symbols
with other athletes and all around poor judgment. In addition, none of
them seemed to realize that their playing careers could end in an instant
if they were injured. They just thought it would go on forever. Here are
what they list as the most common reasons pro athletes end up broke:
A) Irresponsible spending and a desire for "bling" meaning gold ropes,
gaudy diamond covered necklaces, multiple expensive cars and hugely
expensive houses that they could never afford to maintain.
B) Multiple "baby mamas", having as many as ten children with different
women and then being sued for spousal and child support.
C) Paying for huge (up to 40 person) entourages that go with them
everywhere and are constantly hitting them up for money. Dropping $50,000
to $100,000 a night "clubbing" and literally throwing fistfuls of $100
dollar bills up in the air to watch people scramble to get them off the
D) Taking bad financial planning and investment advice, often from
unqualified family members who insist on acting as their agents. And even
when they do hire a "professional" non family member, many of them were
little more that thieves, embezzlers and street hustlers. Many athletes
lost huge amounts of money in bogus investment deals and in poorly
planned, poorly managed businesses that went belly-up for a total loss.
E) Failing to pay taxes and getting sued by the IRS for back taxes and
penalties. Again, part of having bad, incompetent and dishonest people
managing their money. And being too lazy, or too ignorant to take
personal responsibility to ensure that their taxes were being paid.
In some cases it is hard to muster any sympathy for these broke pro
athletes. Most of them earned more money than the average guy will earn
in ten lifetimes, and they just pissed it away. Mike Tyson, for example,
earned an estimated $400 million dollars and is now broke.
If nothing else, you'd like to think their financial mistakes would serve
as examples for other pro athletes. But sadly, that doesn't appear to be
the case. One agent talked about how the NFL is now trying to provide a
financial management class but said most of the young guys were literally
"nodding off" as he spoke.
Probably the best advice came from Herman Miller who is a former NFL coach
and corner back. "The NFL is not a career, it's an opportunity. And you
never know when it's going to end"