The finances of pro athletes too frequently follow a riches-to-rags trajectory. Not the least of their challenges involves finding a good financial adviser.
Tampa Bay Bucs cornerback E.J. Biggers is determined to avoid the financially destructive behavior that has wrecked the finances of many athletes. He drives a 5-year-old Dodge, has a weekly allowance, shares the rent on an apartment with a friend and has saved up 20 months of living expenses to prepare for a lockout. [Photo: Brian Smith]
Around 2,190 pro athletes take advantage of Florida's lack of an income tax, making the state home to more active professional athletes than any other state, ahead of
California (1,050), North Carolina (920), Missouri (740) and Maryland (610). Fort Lauderdale has more pro athletes than any other metropolitan statistical area in the country.
Top Metros in Florida
Sources: U.S. Bureau of Labor Statistics occupational employment statistics
Note: State data was unavailable for Arizona, and metro data was unavailable for Tampa Bay.
Late-round choices like Biggers are long shots to even make an NFL roster. Biggers not only made the team, but also started at cornerback last year. Now he has his eyes on beating another set of odds: Not becoming part of the 78% of all NFL players whom Sports Illustrated found are bankrupt or under financial stress because of joblessness or divorce within two years of retiring.
With no guaranteed contracts, NFL players are particularly susceptible to financial trouble. But athletes from other sports, from baseball to basketball, also drop the financial ball. Four years after winning a world championship with the Miami Heat, Antoine Walker found himself not on a basketball court — but in a Miami bankruptcy court. Some 60% of NBA players are broke five years after retiring, SI says.
Along with making mistakes born of poor judgment or good intentions gone overboard , young athletes aren't any better at picking good financial advisers than Bernie Madoff's older, more sophisticated victims were. In December, New Jersey regulators revoked the broker registration of two financial advisers who built a practice on professional baseball players, including former Marlins, Mets and Rays outfielder Cliff Floyd, now a broadcaster based in Florida, and former major leaguer Rondell White.
Floyd and White are suing the brokers in federal court in New Jersey for securities fraud over a combined $2.25 million lost in a real estate deal. Floyd is separately suing in New York over another $1.8 million allegedly misappropriated in a different deal. "They trusted these guys. They had been clients for 15 years," says the players' attorney in New York, Jeffrey L. Rosenberg.
Former defensive lineman Chidi Ahanotu, who began to focus on his long-term future after his sixth year in the NFL, cautions players: "Don't buy anything, because the NFL career is short. Don't spend a dime. Live the same way you did in college." Ahanotu now helps train athletes at Elite Gamespeed in Tampa and is president and CEO of Magellan Entertainment, a management company for athletes and other clients.
[Photo: Michael Heape]
Most of the coverage of the suicide in Sunny Isles Beach of two-time Super Bowl winner and retired Chicago Bears safety Dave Duerson focused on the repeated concussions he'd suffered as a player — and his donation of his brain to researchers studying chronic traumatic encephalopathy, an affliction caused by repeated brain injury. Less noted was the financial trauma Duerson had experienced from a financially contentious divorce, a soured business venture and a bankruptcy.
Against $14.7 million in liabilities, Duerson, a Notre Dame economics degree holder and a graduate of a Harvard executive program, had only one sizable asset, a 6-year-old uncollected $34.6 million judgment from a business venture that had failed. Duerson had been developing a financial literacy program for former players.
Athletes' short career spans create incentives for them, or their advisers, to look for home-run returns by making high-risk investments.
|Ahanotu cautions players about the dangers from some financial advisers. "If you do get a financial adviser, get yourself a financial auditor to go along with it and now you have someone to check the adviser."