Tuesday, October 4, 2011
Post-Career Athletes and Money: How Athletes Can Protect Themselves from Financial Ruin
We’ve all heard the grim statistics about broke post-career athletes – 78% of retired NFL players are broke or experiencing severe financial stress after just two years. The NBA isn’t much better with an estimated 60% broke within five years.
Most athletes, when they’re just starting their sports career, say that fame and fortune will not affect them – they swear they will remain the same humble, lovable darlings as they were during childhood when they played on obscure mud fields.
What happens on the journey from obscure to stardom? One must take into account inflated incomes and egos, and the fact that athletes trust unscrupulous, suited up, slick-talkers without doing due diligence. Blind investing and irresponsible squandering of financial resources lead to post-career athletes’ demise very rapidly.
Although pro athletes make a good haul in multi-million dollar incomes, they are all just one play away from a career-ending injury. Just ask Joe Theisman. One snap…one tackle…one wrong fall…career over. Some blame the hectic demands of the season schedule and naivete about financial planning while others point to players believing there will be just one more contract extension to fund their exorbitant lifestyles.
I asked one of my NFL Player Development contacts where he thought the disconnect lies. Here’s what he had to say,
“I really feel like some of the players think, “That won’t happen to me.” Some have relied on what they do on the field to define them so that when it comes to something off the field they may feel like, “That’s not me” or “I’ll be that guy when I’m done playing.” Reality as we know it is that one day ALL players will be done playing.
One of two paths then has to be chosen… the athlete has to ask, “Do I rely on who I was on the field to define me or do I create a new me from here on out?” Both can be successful but I have found that the player who continues to redefine himself does much better. Go forward and create the new you and along with the old you, you will be successful.
So utilization of Player Development resources tends to come too late. We are not the enemy but can be seen as a nagging voice who constantly is reminding them of the inevitable. I have not yet met a Player Development Director who doesn’t want the best for his/her players, during and after football.
So, what’s the answer? One viable way is to hire a reputable financial auditor to make regularly scheduled checks of financial accounts and investments to make sure money is allocated where it’s supposed to go. And, it’s not supposed to go in Uncle Elmo’s pocket or Mr. Slick Word’s vacation resort in theBahamas.
One of my clients, MH Silverman, is one such auditor. Marc Silverman is a former Big 4 Audit Partner and specializes in protecting athletes from being financially exploited. His firm provides the checks and balances needed so current and post career athletes are not defrauded of their fortunes. Some of the services he offers athletes are:
- Pre-investment due diligence
- Portfolio audits including investment verification and valuation
- Cash receipts and cash disbursements audits
- Royalty audits
- Contract compliance examinations
Marc states, “Waiting until there is a suspected problem is waiting too long. The money is already gone. It’s essential that athletes take a proactive approach with the checks and balances to ensure everything stays where it should – in the athlete’s hands.”
If you’re an athlete or you know an athlete, you can contact Marc Silverman at 908-794-5881 or firstname.lastname@example.org to discuss how they can put auditing practices in place to make sure post-career athletes don’t say, “I never thought it would happen to me.”