Football fans are running a fever as a new season approaches. I know who I am. Why? Because I heard from a very reliable source that the GIANTS are going all the way this year. Seriously, they are. It will happen
I love to watch football. I love cheering on the GIANTS every week. As a lifelong GIANT fan, some weeks are harder than others trust me. But what happens each week on the grid isn’t as important as what happens off the field.
We all know that the NFL is a multi-billion dollar business. Players, coaches, and owners make quite a bit of money, many making millions of dollars each year. What you may not know is that bankruptcy and football go hand in hand.
some sad news
The Wall Street Journal reports that 1 in 6 NFL players will file for bankruptcy 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 he got a lot of money quickly and didn’t get any financial advice, or he hired a financial planner and chose to ignore the warnings he was given.
The causes
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 start getting big paychecks. 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 gaming years are up, they have a choice. They can try to live off their retirement as long as possible, or they can save money while gambling and get a job after retirement. Unfortunately, most players try to live off the money they earn while playing.
If you combine the facts (a person no longer earning an income but living an expensive lifestyle) you add up to zero money saved for retirement, which is why most NFL players end up bankrupt within twelve years of retirement. The retirement. This doesn’t have to happen.
Whose fault is it?
Sure, you could blame the players for being financially irresponsible. With a big paycheck comes a lot of responsibility, too, and it comes with the ability to hire top talent in financial planning, agents, etc.
A player could choose to ignore the advice and spend all of their money, or they could choose to invest a large portion of it for retirement. So, the argument goes, it’s all about individual choices.
On the other hand, an argument could be made to blame the NFL. The organization and owners make money from the athletes, but do they have an obligation to care about the players after their playing days are over?
An NFL Responsibility
Some people would say yes, the NFL should take care of its players. Some people would go so far as to say that the NFL has a duty of care to players. If so, how far does that duty extend? Well, if you read the NFL’s collective bargaining agreement, you’d think the NFL is doing more than its fair share; however, 1 in 6 players will have to file for bankruptcy. The numbers just don’t add up.
Could players save more money or perhaps make better financial decisions? Safe. Could the NFL provide more financial planning tips or programs for those players who are interested in learning? Safe. Should the NFL offer courses in bankruptcy? I don’t know. Should both parties do more work 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 wipe the slate clean. However, it’s hard to trust a skill that no longer applies to any job available: Most NFL players don’t have a backup career plan. This puts players in a difficult position (which is also unfortunate).
The solution
Better overall financial planning while in the NFL, plus 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 career education, planning and guidance. When 1 player in 6 needs to file for bankruptcy, something is wrong. It is a problem worth investigating.