The NFL lockout by team owners against the NFL Players Association began on March 12 and it has been billed as Billionaires (Owners) against Millionaires (Players). However many of these Millionaires are already feeling the financial pressure as the lockout continues.
If the lockout is not resolved soon, the 2011 NFL season could be canceled and players will not be paid. The average NFL player salary for the year 2009 was around $770,000 (the average base salary of an NFL player in 2010 was around $990,000). The average NFL player signing bonus salary for all players in 2009 was approximately US $1.3 million. The minimum NFL player salary for a new player was $310,000 in 2009 (and $320,000 in 2010). Unfortunately, while the average NFL player may be a Millionaire (the minimum salary is $320,000 per year) and make more money than the average person (roughly $50,000 per year gross), they do not necessarily manage their dollars any better.
Average NFL Career is Short. By the way, the average NFL career is only 4 years and there are no guaranteed contracts in football, so a player’s income can come to a halt quite abruptly.
Almost A Quarter of NFL Players Live Pay Check to Pay Check. According to MSNBC which cited financial experts familiar with the NFL as their source, about 380 of the league’s 1,700 players live paycheck to paycheck.
Nearly 80% of NFL Players are Bankrupt 2 Years After Retirement. Remember the March 23, 2009 Sports Illustrated article entitled “How (and Why) Athletes Go Broke” highlighted that pro athletes from the NBA, NFL and Major League Baseball are suffering from a “financial pandemic” despite their increasingly large salaries. The article stated, among other things, by the time NFL players have been retired for two years, 78% of these former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.
In 2010, former Pittsburgh Steelers lineman Dermontti Dawson joined current New York Jets backup QB Mark Brunell in bankruptcy court. Mark Brunell earned more than $50 million during his career and his financial trouble may explain why he is still playing after no team wanted to employ him as a starter. New Orleans Saints all-time leading rusher, Dulymus “Deuce” McAllister made an estimated $70 million during his NFL career, but he was forced into Chapter 11 bankruptcy in 2010 – the same year he retired, after a failed Nissan car dealership venture.
NFL Players Association Finance Handbook. In an attempt to help its players weather the lockout, the NFL Players Association provided its members with a personal finance handbook in advance of the lockout which includes some sound financial advice:
- Save 25 percent of your annual salary
- Refinance your mortgage
- Fly coach instead of first class
- Raise money through public speaking engagements and autograph sessions
These are things these players should be doing anyway since their careers are short.
High Interest Rate Loans Show Desperation. Unfortunately, we are hearing reports from ThePostGame that players are obtaining high interest rate loans of 18-24% from lenders which indicates desperation. It may also indicate that these players are huge financial risks for lenders or that lenders are acting unfairly. I tend to think its more of the former as NFL players are huge financial risks as borrowers with high overhead and a lot of creditors to satisfy.
Conclusion. This is a sad state of affairs, but hopefully it is a wake-up call. What happens when your career is over fellas? How will you make ends meet then? Get your finances in order. Start by reading the advice I gave Allen Iverson, formerly of the NBA, who is now out of the league, but playing in China to make ends meet. In addition to this advice, create a budget, don’t use credit cards, keep your debt low, act like a consumermiser, act frugally, forget the fancy life style, eat at home, no vacations, and spend less–much less. In short, act like you need to survive the lockout as if it was going to last all of 2011.
