Achieving the NFL dream is often a long and arduous journey for young football players, and with the thrill of strapping on a professional football helmet for the first time also comes a lucrative salary that many doctors, lawyers and academics may never see in their lifetimes.
But with the windfall also comes the temptation to spend lavishly and invest haphazardly, presenting potentially devastating long-term financial problems for young players who simply didn’t know better. Despite an average salary of more than $2 million, a significant portion of NFL players find themselves in financial trouble during or after their careers. A report from The National Bureau of Economic Research found that 15.7 percent of NFL players have filed for bankruptcy 12 years after they retired.
“It’s the excitement of being rich,” explains financial adviser Jeff Carbone of Cornerstone Financial Partners, who works with both NFL and NBA players. “The biggest thing we tell clients is that it’s not about being rich, it’s about creating wealth, and being wealthy and maintaining wealth for your life and your family’s life. ‘Rich’ is a flash in the pan. ‘Wealth’ is created to last. So we talk about making sure they understand that concept.”
The most prominent NFL rookie who has become flush with riches is quarterback Jameis Winston. The brash former Heisman Trophy winner was the No. 1 overall selection in April’s NFL Draft, signing a four-year deal with the Tampa Bay Buccaneers worth $23.35 million, $16.7 million of which is guaranteed. Winston, who is only 21 years old, will be playing in eight games in Florida and one game in Texas -- states that don’t have income tax.
Winston is on the high end of the spectrum. While most rookies still earn far more than most Americans, most aren’t necessarily making life-changing money. Still, the 2015 league minimum pays NFL players $435,000 in their rookie season. The average salary for a teacher in Florida is $47,780.
Only 20 players on the Super Bowl-winning New England Patriots made at least $1 million last season, meaning more than half the roster earned less than a seven-figure salary. Considering the short career span of NFL players, those who can’t count on a yearly $1-million salary have to prepare early for life after the NFL.
Former NFL offensive lineman Jeff Byers went undrafted after a stellar career at USC, yet managed to play in the league from 2010-2013. Byers would later turn in his Carolina Panthers jersey for a business suit, serving as a financial advisor with The Drexler Group of Wells Fargo Advisors in his home state of Colorado after officially retiring from football. He recognizes the pitfalls of being young and lacking in financial knowledge.
“You have to learn how to budget. You have to live significantly under your means,” said Byers. “As a 22-year-old making $400,000, you have to act like you’re a 22-year-old making $60,000. Because the fact of the matter is that in professional sports you’re making all of your income, potentially all of your big income, in the first five years of your career. After that, who knows if you’re still playing? So you have to save for those five years what you would save over a lifetime of a career if you weren’t a professional athlete.”
The violent nature of the NFL means players are constantly in danger of getting injured and never being able to play again. But the structure of NFL contracts makes playing professional football different than any other sport. Unlike the NBA, MLB and NHL, NFL contracts are not guaranteed, other than the signing bonus. If a player isn’t performing the way a team thinks he should, he could find himself without a paycheck.
There are plenty of stories about high-profile players who have signed big contracts and blown all of their money. But their large signing bonuses make it a lot easier for them to withstand getting released or making expensive purchases. Players who didn't get drafted in the first few rounds don't have that same luxury.
Sharing a locker room with millionaires, some players feel the need to keep up with the highest-paid stars on the team. Even if it means spending beyond what they can afford, some rookies get caught up in the lifestyle and make purchases that come back to haunt them.
“There’s just a lot of competition in the locker room in terms of cars you drive, the way you spend your money,” Byers said. “It’s very materialistic. Everyone wants to act like they’re making a million dollars, but the true fact of the matter is probably 75 or 80 percent of the locker room hasn’t made a million dollars. The majority of the locker room is making the league minimum, and their average career is three years. And if you’re trying to live like the 1 percent in the locker room, you’re going to be in a lot of trouble.”
Byers and Carbone have seen first-hand how players have tossed money around. Byers recalled a rookie teammate who bought a Range Rover as soon as he was signed to the team off the practice squad. Carbone recounted the story of a former player who came into his office seeking financial advice because he was unsigned and no longer had an income, but was still making hefty payments on a Mercedes-Benz.
Undrafted free agents and players drafted in the later rounds are in an interesting position. They earn a higher salary than most Americans, but that could change at any day, given injuries, poor performance on the field or other circumstances. Meanwhile, some high-paid rookies have difficulty saving with the pay structure. With 17 weeks in the NFL season, players get paid 17 weekly pay checks that make up a majority of their salary, and by the offseason they are yearning for the next season to start so they can receive their next check.
The NFL has made efforts to protect rookies from overspending and making poor investment choices. The annual NFL Rookie Symposium provides players a look at life in the pros, which includes current and former players telling the rookies of their experiences in the league. A 401k plan is also available to the players, as the league looks to help them prepare for life after football. The NFL Players Association pension fund can provide a player with $1,275 per month when they turn 55 years old.
Even with the education on managing personal finances, many young players remain unprepared for the harsh lessons that may result with poor planning.
“It’s before they make it to the NFL that we’d like to see more education on the players,” said NFLPA certified agent David Schuman, who represents players who have entered the league in 2015. “Even if it’s not on the NFL’s side, because it may not be their responsibility, more even on the school’s side, making sure whether they make it or not, they understand financially what’s going to happen if they do make it.”
Schuman is the co-founder of the athlete representation agency Inspired Athletes, which represents players like Neville Hewitt, who recently signed with the Miami Dolphins as an undrafted free agent. He also represents Andrew Bose, who signed a three-year contract worth $1.575 million with the Baltimore Ravens after trying out at the team’s rookie camp. Just a few days later, Baltimore released him to make room for cornerback Kyle Arrington.
Suddenly unemployed, Bose is without a contract and still looking for a team. Like Bose, numerous players who make a 53-man roster out of training camp find themselves in the same position after a shorter stint with a team than they anticipated.
In recent years, there's been additional focus on big-name athletes who have filed for bankruptcy after making millions in the NFL. The ESPN documentary “Broke” detailed many stories of players lured into bad investments and making payments to family and friends only to see their income quickly evaporate. While a portion of today’s players continue to mismanage their assets, all of the negative stories might be helping other players learn from mistakes of the past.
“There is a select group of guys that will think they’re going to be in there forever, but more and more players are starting to inquire about how you’re going to help them and what are the things that are in place,” Schuman said. “Even if they don’t understand it, they want to know that there’s something there that’s planned for them.”
As players look to invest and make sure it becomes enough for them to live on after football, putting their money in trustworthy hands becomes key.
Professional athletes are at times duped into not only poor investments but legally dubious ones. In April, former NFL cornerback Will Allen and a business partner were charged by the Securities and Exchange Commission for allegedly operating a $32-million Ponzi scheme that purported to loan to cash-strapped athletes.
Simply finding a reliable financial planner can avoid years of money problems, particularly for the many players who won’t benefit from a 10-year career and pension checks to rely on in retirement.
“That’s what these guys have to realize,” Carbone said. “It’s their money. They’re accountable to their money. They should understand what they own, and they should understand who’s managing it for them. They should understand the strategies about how assets work and why they own a certain asset and why they wouldn’t.”
Bobby Ilich contributed to this report.