Monday, February 27, 2012

Riches to Rags

Terrell Owens,  Latrell Sprewell, Mark brunell, Antwan Walker, Jim Layritz just to name a few.

Professional athletes from the nation's three biggest and most profitable leagues—the NBA, NFL and MLB—are going for broke. Although salaries have increasingly risen over the years, they just can’t seem to get it right. Peep this:

• By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.

• Within five years of retirement, an estimated 60% of former NBA players are broke
The B.O.S takes a look at some things that contribute to the financial troubles of many professional athletes....and this is only the short list.


Now Broke- Allen Iverson

There are a lot of things that could fall under this title. It's all part of that notion of how a pro athlete should live and provide for those around him. If he isn't spending conspicuously, then he hasn't made it. When a rookie is suddenly getting pay checks in the ballpark of $500,000 every two weeks, the idea of remaining somewhat conservative while planning for the future seems ludicrous.  They find themselves purchasing million dollar homes, several cars of at least, eating at fancy restaurants, popping bottle after bottle at night clubs then heading to the strip clubs….and paying for EVERYONE that’s with you!.  They fail to realize that once the income stops, the monthly payments don’t.

Athletes spend a lot of money on WOMEN as well! Just imagine if they have several that they are interested in. If the women are playing their cards right, they are being showered with gifts, lovely vacations, shopping sprees, and getting her bills paid! If an athlete is doing this for one woman yet alone two, three, or, four….it all adds up. Not to mention if the athlete is married and taking care of home and then having to take care of his “side pieces”, that’s even more. Here’s what a current NFL player had to say about it “This girl wasn’t a groupie, but a chick I was dating. Me and her went to hang out and it was $500 times 2 for travel, $300 for food, throw away money about $200, hotel about $800 and that’s $2300 for a three-day weekend. Now imagine if you have a groupie, and y’all are staying in the Fontainebleau in Miami and hitting clubs and buying tables. You can easily spend $5K without blinking."  And this isn’t happening once a year folks….or on just one girl!

Between 60-80% of professional athlete marriages end in divorce.
No athlete in history understands the financial cost of divorce like Michael Jordan.  When all was said and done the former NBA superstar handed over $168 million to his ex-wife Juanita. Thankfully, Jordan didn’t waste all his money, so while the settlement is indeed a huge blow to the bank account, the six-time NBA champion’s endorsements and business deals will keep him out of the poor house.  Not all players are so fortunate.  And in accordance with certain divorce law, the wife is entitled to half of the husband’s assets, including everything he earned during his sports career, #duhhhhwinning!!

In 1994, when NBA center Dikembe Mutombo was engaged to Michelle Roberts, a med student, Roberts refused to sign a prenuptial the day before the wedding. Five hundred guests—including a large party from Mutombo's native Democratic Republic of Congo—had begun flying in to Washington. "[Roberts] never signed," Falk says, "and Mutombo never married the girl." Calling off the nuptials reportedly cost him $250,000. A far cry from what it may have cost him if he had married her without a prenuptial and it ended in divorce (See Kobe Bryant).

Children almost always complicate the issue. How to limit paternity obligations is a challenge for pro athletes. Diapers for one baby are expensive, yet alone several.  Professional athletes have a bad reputation for making many babies, with many different mothers.  Monthly child support payments definitely add up. Many athletes have seen their fortunes exhausted by monthly child-support payments in the tens of thousands of dollars.
Boxer Evander Holyfield:  It is estimated that Holyfield made over $200 million during his fighting career.  He was sued for missing the $3000 per month payments for only one of his 11 children. 
NBA’s Kenny Anderson:  7 children from 5 different mothers (3 girlfriends and 2 wives).  His babymamas include Tami Akbar, from the reality show Basketball “Wives” (term used loosely), and Spinderella from Salt n’ Pepa, who apparently never got around to talking to him about sex.
NBA’s Sean Kemp:  7 children, 6 women (the number of both children and women is assumed to be higher)
NFL’s Travis Henry: 9 women, 9 children.  At roughly $3000 a pop, his monthly child support payments are equivalent to what some people earn in a year.

Many players, consequently, are financial prey. Many want to see their money grow so they “invest” in businesses or ideas that are exaggerated by investors, agents, and sometimes friends. Michael Vick ventured into a car-rental dealership, real estate, and a wine shop. Result: $6 million in the hole, forcing him to file Chapter 11 bankruptcy. However, his new contract should help him cover that. Let’s hope he learned his lesson.

Athletes have the tendency to hire the wrong people as advisers, and trust them far too much.
They hire these people not because of expertise but because they're friends. As soon as these new professional athletes sign their names on the dotted line, they are surrounded by vultures in the disguise of investors, financial advisers, and even friends and family who would tell them how to “protect” and spend their fortunes
You can ask a player, 'How are you doing?' A lot of the time they'll say, 'I have no idea.' All the bills are paid by someone else, and none of the statements go to the athlete.

In fact, according to the NFLPA, at least 78 players lost a total of more than $42 million between 1999 and 2002 because they trusted money to financial advisers with questionable backgrounds. But don’t get it twisted, even when athletes trust financiers of high repute, things can still go terribly wrong.

I'm thinking that the professional leagues need to spend more time teaching money management and less time on "how to deal with groupies":-)

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