Conflating the two groups as similarly-placed economic royalists, neither of whom deserve sympathy from an American public grappling with a depressed economy, is understandable. But to create an equivalency between millionaire players and billionaire owners obscures a scarier picture regarding the players’ long-term economic prospects.
To be certain, little sympathy exists for millionaire athletes, particularly as the American public suffers through a struggling economy. This article is not meant to defend rich NBA players who frivolously squander away their money, such as Latrell Sprewell who complained about a $21 million contract because it was hardly enough to “feed my family,” all the while spending millions on real estate and an Italian yacht.
But for every Sprewell, there are dozens of no-name players who for a multitude of reasons go broke shortly after retirement. In fact, a 2009 Sports Illustrated investigation found that approximately 60 percent of NBA players enter bankruptcy within five years of exiting the league. For NFL players, that level stands at 80 percent.
Sports Illustrated discusses a number of contributing factors, including poor investment decisions, dishonest financial advisers, high rates of divorce, and leeching friends. Many of these reasons stem from a single root cause: for most professional athletes, this is all they ever trained to do. College athletics – to say nothing of professional sports – is so cutthroat that in order to have even a chance at success, athletes had to have devoted nearly every waking moment to honing their skills. Top NBA prospects are typically perfecting their free throws, not learning to live on a budget or developing marketable job skills for when they turn 40.
When you mix this single-minded devotion to a sport with the culture of excess that exists in professional athletics, it’s not entirely surprising that bankruptcy is so prevalent for retired athletes. Very few can be Charles Barkley or Shaquille O’Neal and get cushy jobs as television commentators in their retirement. Most struggle with the whiplash between living standards, but also find in retirement that athletic skill doesn’t easily translate into the business world.
Again, I’m not going to cry any tears for wealthy people anywhere whose lavish lifestyles brought about financial ruin. But it is instructive to consider a bit more deeply why the bankruptcy epidemic has festered among professional athletes while managing to avoid rich people elsewhere, including sports team owners. Initiatives have laudably sprung up to teach professional athletes better money management skills, but for a number of reasons those efforts thus far have been minimal and fairly ineffective.
In a sense, professional athletes are almost akin to lottery winners. Both enjoy massive, short-term payouts, but these earnings did not come from skills that can be used to generate more money over the course of their working life. Few people anywhere are mature and responsible enough to handle the effects of winning the lottery. To expect that 20-year-old professional athletes who have devoted every aspect of their life to a sport will have the financial wherewithal to manage their newfound riches is daft.
Put simply, players are athletes; owners are businessmen. Through various paths, most have established themselves in the business world with skills that will continue to enrich them throughout their life. Most professional athletes, on the other hand, are not businessmen. They are young, far less mature, and possess a completely different skill set than what’s needed to earn money over the course of their lifetime.
There’s no easy answer here; a lot of the problems are systemic in every level of society. We all participate in a culture that lionizes sports figures and encourages kids to do what it takes to become the next Kobe Bryant. Even for those who devote 22 years of their life to athletic success and manage to go pro, a single ankle injury or slump can end a player’s career before he has a chance to cash in on the millions he set out to pursue. It’s easy to have scorn for free-spending superstars, but for the vast majority of players who go bankrupt, the situation is much more nuanced.
To be sure, there are few among us who wouldn’t take even two years at the minimum NBA salary of $473,000. Would we give up most of our marketable skills for that million dollars? Harder to say.
There are, of course, millions of Americans in far more precarious financial situations who deserve sympathy well before bankrupt professional athletes. But lumping together NBA players and NBA owners in the same “millionaires and billionaires” pool and then casting a pox on both houses obscures the real differences that exist.
The majority of players go broke. Owners do not.