According to Sports Illustrated Magazine, within two years of retirement, 78 percent of former NFL players are bankrupt or under serious financial distress. Moreover, within five years of retirement, an estimated 60 percent of former NBA players are bankrupt.
This is as the minimum salary in 2009 for an NFL rookie stood at $310,000. Two year veterans make an even healthier $460,000. As for the NBA, the minimum rookie salary in the same year stood at $457,588 with two year veterans earning $825,497. So what could possibly account for these athlete’s financial troubles?
The Business Insider studied this question and compiled ten common ways athletes lose their assets. They include:
Putting cash in a Ponzi scheme | Making bad investments | Getting divorced | Trying to run a business | Doing drugs | Having too many children | Using the wrong advisors |Investing too much in real estate | Fighting dogs | Acting dumb
Journalist Chris Chase explains,
The 78 percent number is buoyed by the fact that the average NFL career lasts just three years. So, figure a player gets drafted in 2009, signs for the minimum and lasts three years in the league: He will have earned about $1.2 million in salary. Factor in taxes, cost of living and the misguided belief that there will be more years and bigger paydays down the road, and it becomes a lot easier to see how so many players struggle with money after their careers end. Nobody plans on playing just three years in the NFL, you know?
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