Professional sports contracts are some of the most valuable things in our society today. They can reach numbers into the 600 million dollar range, but typically average around 2.3 million dollars a year. But despite the substantial earnings during their playing days, a significant number of athletes struggle to maintain their wealth in retirement. Several factors contribute to this trend, highlighting the need for financial education and strategic planning within the athletic community.
One of the most significant hurdles athletes face in securing their financial futures is the dearth of financial literacy within their ranks. While they may be experts in their respective sports, the intricacies of wealth management often elude them. The sudden transition from a tight-knit, high-stakes sports environment to the world of personal finance can be overwhelming.
Without a solid foundation of financial knowledge, athletes become susceptible to poor investment decisions, extravagant spending, and financial mismanagement that can erode their hard-earned fortunes.
Another layer of difficulty also comes into play when these professionals get their contracts. Oftentimes, when athletes enter their professional sports careers they are fresh out of college or even high school. These athletes find themselves thrust into the limelight at a young age, and contracts and endorsement deals can be staggering. The allure of newfound wealth is intoxicating for some, leading to impulsive financial decisions and a lifestyle that may be unsustainable in the long run.
Even some of the biggest names have struggled with finances after their career. Mike Tyson, Dennis Rodman, Lawrence Taylor and Evander Holyfield have all had financial problems after their careers. They all faced one common problem: failure to pay for the lifestyle they lived while playing their sport.
Another prominent problem is the lack of long term pay for athletes. Athletes often sign deals that span only a few years, leaving them with a limited timeframe to accumulate wealth. In a highly competitive and physically demanding environment, an injury or decline in performance can abruptly curtail a career.
Some schools and universities have recently started implementing a solution to the financial literacy struggles many athletes face. By teaching courses in managing finances, they hope to benefit the student athletes that make it to the pros. Drew Geerts is a senior at Pleasant Valley and has taken many business classes. “I feel as though PV has done a good job in teaching kids how to manage their money. It’s not on as big of a scale as pro-sports athletes but it can easily carry over to that,” said Geerts.
Another beneficial way to help athletes combat these drastic losses would be to take lower checks over a longer period of time rather than getting large payouts all at one time. “I think that paying smaller payouts through longer times would help the athletes keep their money longer,” said Gavin Carroll. The long term payment plan would help combat the issues of blowing through money and losing it all.
Professional athletes often live expensive lifestyles while they play professionally. Losing money after their career is very easy to do and many athletes suffer from this. Luckily, there are multiple solutions to combat the endemic of professional athletes going bankrupt.
