Bankruptcy: a trend of NFL players
Soccer fans are starting to get a fever as a new season approaches. I know who I am. Why? Because I’ve heard from a very reliable source that the GIANTS are going to make it all the way this year. Seriously, they are. It will happen.
I love watching soccer. I love cheering on the GIANTS every week. As a lifelong GIANT fan, some weeks are tougher than others, trust me. But what happens each week on the grid is not as important as what happens off the field.
We all know that the NFL is a multibillion dollar business. Players, coaches and owners make a lot of money, many making millions of dollars every year. What you may not know is that bankruptcy and soccer go hand in hand.
Some sad news
The Wall Street Journal reports that 1 in 6 NFL players will go bankrupt just 12 years after retirement. Those are some serious numbers when you break them down further.
We have said before on this blog that bankruptcy can be a good and positive thing when used as a financial planning strategy. But sometimes bankruptcy is the only option a person has because they made a large amount of money quickly and did not receive any financial advice, or they hired a financial planner and decided to ignore the warnings they were given.
Most NFL players make a lot of money during their playing years, but they don’t have very long careers. Also, many players are very young when they begin to receive large salaries. In many cases, these players have never been exposed to this type of money. It is understandable that they go a little crazy.
However, once their gambling years are over, they have a choice. They can try to live off their retirement for as long as possible, or they can save money while playing games and getting a job after they retire. Unfortunately, most players try to live off the money they won while playing.
If you combine the facts (a person who no longer earns income but leads an expensive lifestyle), the money saved for retirement is zero, which is why most NFL players end up bankrupt within twelve years. post-retirement. This does not have to happen.
Whose fault is it?
Sure, you could blame the players for being financially irresponsible. A large paycheck also comes with great responsibility, and it comes with the ability to hire top talent, agents, etc. financial planning.
A player could choose to ignore the advice and spend all of his money, or he could choose to invest a large part of it for retirement. So, the argument goes, it’s all about individual choices.
On the other hand, one could argue to blame the NFL. The organization and the owners make money from the athletes, but do they have an obligation to care about the players after their playing days are over?
A responsibility of the NFL
Some people would say that yes, the NFL should take care of its players. Some people would go so far in saying that the NFL has a duty to care for players. If so, how far does that duty extend? Well, if you read the NFL collective bargaining agreement, you would think the NFL is doing more than its fair share, but 1 in 6 players will have to file for bankruptcy protection. The numbers just don’t add up.
Could players save more money or perhaps make better financial decisions? Sure. Could the NFL provide more financial planning advice or programs to those players who are interested in learning? Sure. Should the NFL Offer Bankruptcy Courses? I do not know. Should both parties work harder to solve this problem? Absolutely.
A matter of skill
Even in these cases, filing for bankruptcy can give players who haven’t saved money a way to clean the slate. However, it’s hard to rely on a skill that no longer applies to any available job – most NFL players don’t have an alternate career plan. This puts players in a difficult position (one that is also unfortunate).
Better overall financial planning while in the NFL, as well as honing another skill after retirement, are two of the things that could save some NFL players from bankruptcy.
In the meantime, the NFL could look to improve the overall financial lives of its players. The NFL could offer more options to those players interested in learning more in the areas of education, planning and career guidance. When 1 in 6 players needs to file for bankruptcy protection, something is wrong. It is a problem worth investigating.