Why Many NFL Players Fumble When it Comes to Personal Finance

Almost every breathing human being covets the life of a professional athlete.  The conception is that for a few hours a week, a professional athlete can earn millions of dollars a year in addition to the fame and lifestyle.  The skill set required is usually running fast, throwing far, or being able to shoot a sphere into a cylinder, and most Americans are in agreement that sports professionals are extremely overpaid.  In this blogger's opinion, that couldn’t be farther from the truth.

Let’s take a look at the average NFL player's career and how much the decision to play professional sports has helped a player’s finances over the course of his lifetime.

Usually, the age when a player first recognizes they have the talent to become a true college athlete is around 14.  If a student thinks they have the skills, there’s a pretty good chance that academics take a backseat to practice and conditioning.  Of the 100,000 seniors in High School that play football every year, roughly 9,000 (Or 9%) are given full or partial scholarships to Division I or Division II schools.  Let’s assume a student is good enough to get a full scholarship to a good University.  Already, the student has saved  ~$120,000 on a 4 year degree.

Again assuming that the college athlete is good enough to go professional, school is an afterthought.  While NCAA regulations require at least a 2.0 GPA to play, there are majors such as “turf management” that can make college classes a breeze.  Sadly, the free ~$120,000 that was received for an education is miserably wasted.  With eyes on the prize athletes dream of draft day where they will sign their first contract, sometimes for millions of dollars.

Now, of the 9,000 seniors that play college football, roughly 200 make it to an NFL camp each year.  (0.2% of High School athletes and 2.2% of college athletes receiving scholarships) For the lucky 200, the average length of your NFL career is three years.  The average NFL salary each year is $775,000.  Doing the quick math, the average gross gain from an NFL athlete through salary is $2.325M.  Not bad for three years work huh?  Let’s start subtracting.

First, 99% of NFL players need an agent to negotiate these contracts, and the average agent fee is 6%.  Let’s knock of $140,000 to bring the salary to $2.185M.  Next, Uncle Sam loves professional sports because he gets 35% of what everyone makes.  There goes another $765,000 that brings the total to $1.42M.  After a few meager endorsements for an average NFL player, lets say the total amount made from being a professional athlete is $1.5M.  So what next?

The reason an NFL career only last three years is usually because of major injuries.  Knee surgeries and broken bones can plague an athlete for the rest of their lives and as far as dangerous professions go, the NFL is certainly one of the highest on the list.  So at the age of 26, a man with little education and poor physical capabilities is asked to start his life all over again.  No real education usually means they are living in an expensive house with an expensive mortgage and driving a luxury car.  Chances are there’s little money left in a savings or an investment account. So what is an NFL athlete to do?  Go Bankrupt.  Almost 80% of NFL athletes are bankrupt after two years of being retired.

The dangerous combination of an unexpected injury and a lack of education continuously ruin the financial lives of professional athletes.  Very few understand the risks and only look forward to the future, without planning for it.  Rather then wasting time in class learning the difference between Bermuda grass and Kentucky bluegrass, all athletes on scholarship should be mandated to take 20 + credit hours on personal finance and money management, even if they never turn professional.

So the next time you watch the NFL draft or read about a player that just signed a multi-million dollar contract to push the guy in front of him for a living, don’t think he’s way better off than you are.  While that may be true in the moment, it probably won’t be true in the long run.