In reading a couple of stories recently about the welfare of NBA players, I wondered were professional athletes struggling financially during the coronavirus pandemic? A recent tweet by former NBA Player Jay Williams includes the following interview with Portland Trail Blazers shooting guard CJ McCollum…
Sadly, that answers my question. McCollum, vice president for the NBA players association believes some players are struggling with the threat of a pay stoppage. Eric Pincus of The Bleacher Report asked a similar question in his column “How Much Money Will NBA Players Lose Due to the Coronavirus Pandemic?”. He states “Without that joint effort, the CBA is bound by its force majeure language, which allows for the league to withhold player checks for games that are canceled, not postponed. Most players are scheduled to be paid next April 15.” This could undoubtedly leave some, including a few big-name players hurting financially over the next few months.
Millionaire athletes feeling the pinch after missing one paycheck?
This begs the question, why are well-paid athletes finding themselves in dire straits financially in this day and age? Haven’t they heard of former athletes, particularly black ones, finding themselves broke after making good money in their respective professions? Sports Illustrated once estimated that 78 percent of NFL players are either bankrupt or under financial stress within two years of retirement and 60 percent of National Basketball Association players are broke within five years of leaving the sport. Why is this still happening?
The list of black former athletes going broke includes Allen Iverson, Antoine Walker, and Vin Baker of the NBA, and Lawrence Taylor, Terrell Owens, and Vince Young of the NFL. It also includes former boxers Riddick Bowe, Leon Spinks, Mike Tyson, and the late great Joe Louis. This is just a small sampling of those that hit rock bottom financially after making millions of dollars. Going broke isn’t relegated to male athletes. WNBA star Sheryl Swoopes and three-time gold medalist track star Marion Jones are just two female athletes that struggled financially. The list gets even longer when adding lesser-known athletes.
Given that this has happened for generations one would think lessons learned from athletes of yesteryear could be applied today. Why is it still happening? Lorimer Wilson’s column “Majority of NFL, MLB & NBA Players Go Bankrupt Within 5 Years! Here’s Why” gives some detail of the major reasons covering overspending, career duration, lack of financial knowledge, poor investment decisions, and hanging with a bad crowd. He mentions athletes see their salaries as never-ending and attempts at living “the life” without understanding the fiscal responsibility that comes with it. They are also targets for poor investments and scams, while not savvy enough to surround themselves with financially sound decision-makers often leaving those decisions to others.
Former NBA player and Fab Five college star, Jalen Rose explained in great detail in the video below why athletes go broke. He also gives valuable insight into the roles of an athlete’s entourage.
Mismanaging income is not relegated to black athletes. Sports history is littered with stories of athletes of almost every stripe finding themselves struggling financially. Notable names include Bernie Kosar, Johnny Unitas, Bjorn Borg, Curt Schilling, and Lenny Dykstra, making news concerning their financial mishaps. However, we’ll concentrate on black athletes where there continue to be wash-rinse-repeat stories every year.
Although the number of current and former athletes facing financial difficulty is alarming all is not lost. Both the NFL and NBA have programs to assist players in arming them with information to better understand the financial aspects of being a pro athlete. Players unions are working with leagues to look out for retired players. Athletes are becoming financially astute as in the case of NFL player Marshawn Lynch giving young players advice, and Lewis Neal, an LSU graduate looking to turn pro, who self-studied finance while in college. It appears things are better for the pro athlete, however, there are still too many stories of black athletes young and old struggling financially.
Sadly, what happens to a lot of these athletes happen to many in our communities, just on a different scale. Is there something that can be done to instill a basic knowledge of personal finance in black communities so young athletes have a fighting chance? Early financial education, improved life skills, and mentoring are just some of the keys that could help. Unfortunately, that is a topic for another conversation that we will delve into in future columns.
How do you think black athletes and the communities they come from could better prepare themselves in understanding personal finance? Join the discussion by leaving your comments below.