Poor personal finance leaves NFL players at a loss during lockout
Many people may assume that players in the National Football League, with their high salaries, escape life’s personal finance challenges. But a large percentage of NFL players live paycheck to paycheck — like most people — and financial hardship is an issue in the NFL labor dispute. NFL owners know that many players could go broke during a lockout and are prepared to wait until the union gives in.
NFL player salaries and the lockout
The NFL labor dispute blew up on March 12, and the team owners locked out the players’ union. If the dispute isn’t resolved quickly, the 2011 NFL season could be canceled and players won’t be paid. NFL players may have more money than most people on average, but that doesn’t mean they know how to manage their personal finances. For many NFL players, their everyday expenses include big bar tabs, fast cars and luxury homes. MSNBC reports that according to financial experts familiar with the NFL, about 380 of the league’s 1,700 players live paycheck to paycheck. This is despite the fact that the average NFL player salary for the 2010 season was $1.87 million. But considering that the NFL rookie minimum salary is $320,000, that average is skewed heavily because of a few superstars. Most rank-and-file NFL players, who earn in the low six figures after paying taxes and their agents, could be in serious financial trouble.
NFL players and bankruptcy
NFL players are notorious for neglecting their personal finances. Sports Illustrated estimated that nearly 80 percent of retired NFL players have declared bankruptcy. More than a few NFL players make more headlines with their financial problems than with their play on the field. Luther Elliss filed for bankruptcy in 2009 after making $11.6 million playing for the Detroit Lions from 2000 to 2004. Heisman Trophy winner Raghib “Rocket” Ismail went broke after earning about $18 million playing for 10 years. Current New York Jets backup quarterback Mark Brunell filed for bankruptcy last June despite earning more than $50 million during his career. A player for the Philadelphia Eagles told Philadelphia Sports Daily that broke teammates have asked him for personal loans of up to $100,000.
NFLPA financial advice too little too late?
NFL owners, flush with cash, may believe that players who can’t afford to miss any paychecks won’t be willing to hold out to get what they want. In an attempt to mitigate those circumstances, the NFLPA gave its members a personal finance handbook as the lockout approached. The NFLPA handbook advises players to save 25 percent of their annual salary. Other advice includes “socializing with a purpose,” refinancing mortgages and flying coach. The handbook also suggests public speaking engagements and autograph sessions to make ends meet while the union is locked out. But the advice may be too little too late for many NFL players. For players who haven’t already planned ahead for the NFL lockout, a handbook isn’t going to be a lot of help this late in the game.