Broke on 30 for 30

[pbmax]

Did not see the program, but lot's of items written about it and new stories that were similar to what was aired.

Andrew Brandt's Twitter feed contained some Packer gems (though he refused to reveal Favre stories) including this one about the role that relationships with women play with financial trouble. Might be the best sentence about professional athletes ever:

Andrew Brandt ‏@adbrandt
Once had a Packer player excused from practice for the birth of his child in two consecutive weeks. Busy guy.

I hope Brandt isn't throwing a player under the bus for a false labor. :lol:

https://twitter.com/adbrandt/status/253298308800475136

http://espn.go.com/30for30/film?page=broke

[hoosier]

Andrew Brandt's Twitter feed contained some Packer gems (though he refused to reveal Favre stories) including this one about the role that relationships with women play with financial trouble. Might be the best sentence about professional athletes ever:

Andrew Brandt ‏@adbrandt
Once had a Packer player excused from practice for the birth of his child in two consecutive weeks. Busy guy.


Maybe that was a Favre story.

[Joemailman]

Maybe that was a Favre story.

Sounds more like Brandon Underwood to me.

[Bossman641]

Heard Antoine Walker on First Take talking about this the other day. $110M to broke - I don't understand it.

[Patler]

Sounds more like Brandon Underwood to me.

:lol: I'll bet he came to mind for a lot of us.:lol:
But, Brandt was gone for a year already when Underwood was drafted.

[pbmax]

Heard Antoine Walker on First Take talking about this the other day. $110M to broke - I don't understand it.

I think its easier than most imagine, though still entirely avoidable. One of Brandt's first tweets was to remember that the $1 million dollars you read about, after Uncle Sam, the state, NFLPA, agent and lawyer take their cut, its more like $300,000. Perhaps a slight exaggeration, but its probably well under $500,000 for even the most prepared.

Now think about the friends who supported you, put you up in their house, the family, the girlfriend from high school, college and the girlfriend after the draft. Each of them is calculating their take off that published figure of a cool million with no regard for your actual take home pay. Grandma wants 10% which sounds reasonable to a lot of cousins, but she's thinking $100 large, not $30. That's why the smart ones buy a house for Grandma; she may want 10% but she isn't going to look a gift house in the mouth. And if you get a deal after you throw in some Packer swag, you pocket the savings.

The other point he made was being paid yearly instead of over the entire year. Its not easy to blow through $75,000 a month when you are busy with football, but it is fun trying. Then those habits continue in the offseason. Then everyone wonders why you were late to camp and you are embarrassed to tell them you saved $275 on the plane ticket to Green Bay by not traveling on a Monday or Friday.

Its tough being a baller.

[Brandon494]

Its expensive keeping up with this life style. :lol:


http://www.youtube.com/watch?v=cRMKfkBNzbQ

[mraynrand]

I think its easier than most imagine, though still entirely avoidable. One of Brandt's first tweets was to remember that the $1 million dollars you read about, after Uncle Sam, the state, NFLPA, agent and lawyer take their cut, its more like $300,000. Perhaps a slight exaggeration, but its probably well under $500,000 for even the most prepared.

Now think about the friends who supported you, put you up in their house, the family, the girlfriend from high school, college and the girlfriend after the draft. Each of them is calculating their take off that published figure of a cool million with no regard for your actual take home pay. Grandma wants 10% which sounds reasonable to a lot of cousins, but she's thinking $100 large, not $30. That's why the smart ones buy a house for Grandma; she may want 10% but she isn't going to look a gift house in the mouth. And if you get a deal after you throw in some Packer swag, you pocket the savings.

The other point he made was being paid yearly instead of over the entire year. Its not easy to blow through $75,000 a month when you are busy with football, but it is fun trying. Then those habits continue in the offseason. Then everyone wonders why you were late to camp and you are embarrassed to tell them you saved $275 on the plane ticket to Green Bay by not traveling on a Monday or Friday.

Its tough being a baller.

When I got my first 10 million dollar bonus, it ended up being only 3.8 million in cash. After three months of cars, booze and hookers, I was grateful to still have my Neff Boomer beanie

http://www.gliks.com/Assets/ProductImages/neff-boomer-rasta-beanie-smle_t.jpg

and Polo Trevorse mid tops

http://www.finishline.com/store/images/products/lg55660001blk.jpg

[Patler]

I think its easier than most imagine, though still entirely avoidable. One of Brandt's first tweets was to remember that the $1 million dollars you read about, after Uncle Sam, the state, NFLPA, agent and lawyer take their cut, its more like $300,000. Perhaps a slight exaggeration, but its probably well under $500,000 for even the most prepared.

Agents are limited to a maximum compensation of 3% of the contract value. ($30K on $1M.)

Most of a player's contract is boilerplate. Not a lot for an attorney to review. Since the attorney is not negotiating, just reviewing, attorney fees will be minimal. A player MIGHT have other work for an attorney, but not much if he is making just the $1M/year. Then again, if the player is constantly being arrested........

The bulk of what he doesn't have goes to taxes, just like all of us. Of course, most of his income will be taxed at the maximum rates.

[gbgary]

interesting show. so was the "a football life" about the cleveland browns.

[Guiness]

Agents are limited to a maximum compensation of 3% of the contract value. ($30K on $1M.)

Most of a player's contract is boilerplate. Not a lot for an attorney to review. Since the attorney is not negotiating, just reviewing, attorney fees will be minimal. A player MIGHT have other work for an attorney, but not much if he is making just the $1M/year. Then again, if the player is constantly being arrested........

The bulk of what he doesn't have goes to taxes, just like all of us. Of course, most of his income will be taxed at the maximum rates.


They are limited...now. I don't think it was always that way, and there are plenty of ways to get money from the player for other 'services'. Some, like financial planning, are valid, but there are always stories about agents/money managers who have access to the cheque book. Ricki Williams got taken for a ride by his agent, didn't he? Lawyers often work on percentages as well when it comes to contracts. I wonder how the NFLPA works for their dues? Percentages again? I certainly don't know, but 10-15% in fees off the top of the contract seems quite possible.

[pbmax]

Agents are limited to a maximum compensation of 3% of the contract value. ($30K on $1M.)

Most of a player's contract is boilerplate. Not a lot for an attorney to review. Since the attorney is not negotiating, just reviewing, attorney fees will be minimal. A player MIGHT have other work for an attorney, but not much if he is making just the $1M/year. Then again, if the player is constantly being arrested........

The bulk of what he doesn't have goes to taxes, just like all of us. Of course, most of his income will be taxed at the maximum rates.

The max is 3%, however, many players shop around and get discounts below that rate. It negotiable and probably varies dependent on marketing representation and other services agents might offer. And unlike Grandma's house, its coming out of the net. My point was that most rookies/young players are probably not in the best position to bargain for the best cost of representation. Others might pay no attention.

I often wonder what governance there is over the loans and expenditures agents lay out for players until they negotiate a contract for them. Especially rookies. Can they charge interest or is it just a deduction? And that's not to mention the cost of loans from agents for players waiting for a paycheck. I suspect many players spend more than 3% of their contract with agents, but its just a guess.

[Patler]

The max is 3%, however, many players shop around and get discounts below that rate. It negotiable and probably varies dependent on marketing representation and other services agents might offer. And unlike Grandma's house, its coming out of the net. My point was that most rookies/young players are probably not in the best position to bargain for the best cost of representation. Others might pay no attention.

I often wonder what governance there is over the loans and expenditures agents lay out for players until they negotiate a contract for them. Especially rookies. Can they charge interest or is it just a deduction? And that's not to mention the cost of loans from agents for players waiting for a paycheck. I suspect many players spend more than 3% of their contract with agents, but its just a guess.

I suspect the discounted rates are available to players signing larger contracts, and agents compensation may be on a declining scale as the total contract value increases (eg. 3% of the first $5M,; 2.75% of the next $5M, etc.). Since the example used was a player receiving $1M salary, I used the full 3%. I doubt agents will discount too much on the smaller contracts like that. As for marketing representation etc., it is my understanding that most agents receive a percentage of the compensation paid to the player for that as well. I don't think they get a higher percentage on the football salary to perform marketing services.

I read something about controls on loans from agents to players, but I don't remember too much about it, nor where to find it again. There will always be unscrupulous agents, but I think by and large typical business terms are applied by the reputable agents.

That said, I remember during the lockout there were stories about many players, some highly paid players, that were taken advantage of by fly-by-night lending agencies charging exorbitant interest rates for lockout loans. It made no sense to me, because the lockout was during a time period when players wouldn't have been receiving pay checks anyway. A few weren't paid their bonuses when expected, but that affected only a small few. Many of these guys are just not very wise, and don't listen to the sound advice they do get.

[Guiness]

That said, I remember during the lockout there were stories about many players, some highly paid players, that were taken advantage of by fly-by-night lending agencies charging exorbitant interest rates for lockout loans. It made no sense to me, because the lockout was during a time period when players wouldn't have been receiving pay checks anyway. A few weren't paid their bonuses when expected, but that affected only a small few. Many of these guys are just not very wise, and don't listen to the sound advice they do get.

Yes, that was interesting, the players were floating loans when they would not have been getting game day cheques anyways. Makes you wonder, do they regularly get loans every summer to tide them over? The rates just went up when there was a much higher chance the players might not be able to repay them (if the lockout had lasted).

As far as the rest of your comments, I don't know. Maybe football players are really bad with money. Or maybe we only hear about the ones that mess up, and most are able to live comfortably off what they made.

[Patler]

Maybe football players are really bad with money. Or maybe we only hear about the ones that mess up, and most are able to live comfortably off what they made.

If the commentary linked in the original post is accurate, the vast majority are not living comfortably:


According to a 2009 Sports Illustrated article, 60 percent of former NBA players are broke within five years of retirement. By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress.

For NFL players, I would like to see the stats for players who had legitimate careers. Does the 78% include the guys who played only a year or two? Does it include players who spend just a couple years on practice squads? Does it include all of the 7th round draft picks who never sign a second contract? Many don't have degrees, they didn't earn a lifetime nest egg, and they have no marketable skills. Their becoming financially stressed 5 years after football is not surprising.

I would be interested in knowing how many of the players who signed a second contract go broke soon after leaving football.

[swede]

According to a 2009 Sports Illustrated article, 60 percent of former NBA players are broke within five years of retirement. By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress.

Replace "retirement" with "college graduation" and those numbers are par for the course for young people nowadays. [/sarcasm]

I thought Patler made an excellent point about conflating the huge number of former players who had minimal salaries and minimal years of service with the smaller number of veterans who stayed in the league long enough to become vested in the pension and benefit from a second or third contract. Those are very different groups of "former players".

[pbmax]

I think failure rates like that show that sustained success (outside of one's original area of expertise) takes a significant amount of support and context. It is often over stated (or perhaps over assumed) how many elite level athletes come from ultra poor backgrounds. People often recall Al Maguire's famous admonishment for hardship draft status "look inside these kid's refrigerators" but subsequently make too many simplistic assumptions. Such as the general belief that the Fab Five were all from relatively poor backgrounds (or urban poor) when they enrolled at Michigan. Chris Webber's childhood was fairly typical middle class with access to good schools and both parents involved. Webber himself at times encouraged this view when it helped make a point for him.

But even players from ordinary and successful childhoods can have trouble adapting to the demands of such large amounts of money. I know that its a problem most would be happy to take on, but its more challenging than simply a matter of self-restraint. There are precious few role models from the players own lives who are prepared for such a drastic change of circumstance. Its easy to scoff, but its harder to manage than most would admit.

[Pugger]

interesting show. so was the "a football life" about the cleveland browns.

That show about Cleveland was so SAD. I remember hearing all the flowery speeches about Modell when he passed away and I kept thinking that guy was a creep for moving that team to Baltimore and leaving those fans heartbroken like that. Thank GOD that can't happen to us.

[Pugger]

I think failure rates like that show that sustained success (outside of one's original area of expertise) takes a significant amount of support and context. It is often over stated (or perhaps over assumed) how many elite level athletes come from ultra poor backgrounds. People often recall Al Maguire's famous admonishment for hardship draft status "look inside these kid's refrigerators" but subsequently make too many simplistic assumptions. Such as the general belief that the Fab Five were all from relatively poor backgrounds (or urban poor) when they enrolled at Michigan. Chris Webber's childhood was fairly typical middle class with access to good schools and both parents involved. Webber himself at times encouraged this view when it helped make a point for him.

But even players from ordinary and successful childhoods can have trouble adapting to the demands of such large amounts of money. I know that its a problem most would be happy to take on, but its more challenging than simply a matter of self-restraint. There are precious few role models from the players own lives who are prepared for such a drastic change of circumstance. Its easy to scoff, but its harder to manage than most would admit.

pb makes a good point. So many of these kids get big contracts but have no clue on how to manage it. They should be more frugal and invest most of it but 20/21 year old kids don't think about the future. To them the future is several lifetimes away so they spend it all on themselves and their families.