We all know professional athletes make a lot of money. Twelve-year veteran Philip Rivers made over $21 million last year, while RB Melvin Gordon made nearly $2 million in just his first year in the league. Even practice squad players are well compensated, earning no less than $6,600 per week.
We’ve all heard the horror stories of athletes going bankrupt or burning through cash with extravagant spending (See: Chris Johnson’s car), but is this the norm across the league?
I spoke with Craig Laday, a registered financial planner for the NFL Players Association, to find out how athletes tend to spend their money.
“I think one of the main misconceptions is that athletes are these recluses that blow money all over the place,” Laday said. “In my experience, that’s not the case. Quite frankly, what people fail to realize is that athletes are probably some of the most disciplined individuals out there, they just need to be educated on what to be disciplined about.”
Most people who enter the league are responsible individuals … they just need extra guidance on how to spend their money. Once they learn the ins and outs of balancing their budget — which is not unlike how rookies have to learn a new playbook, according to Laday — they should be able to manage their money with savvy.
These athletes are about to make more money all at once than they have made in their entire lives, so Laday urges the importance of creating a balance.
“You have got to be able to be coachable,” Laday said. “The challenge as a financial investor is that you have to build trust with these guys and the only way you can build trust is you’ve got to be coaching. The more you coach, the more trust you’re going to build.”
Laday understands the importance of communication with athletes and works to build trust using a familiar methodology — coaching.
“For many of these guys, it’s the very first time that they’re getting a real paycheck and they need to know where it’s going and how long it’s going for,” he explained. “You don’t really think of a football player as a seasonal employee, but unless they have endorsement deals, they’re not getting paid in the offseason so they have to budget accordingly.”
Although becoming a professional athlete is a dream come true, this profession doesn’t come without its pratfalls. Unless you are a high draft pick or an established veteran, job security simply does not exist.
“One of my clients had a great game one week,” Laday recalled, “six catches, 100 or so yards for his team on Sunday, and then he was released by his team on Monday.”
Brutal.
“Most people go into work and they know they’re going to get a paycheck,” Laday said. “These guys go to work and don’t know if they’re going to have a job for the next 14 days, 14 months or fourteen years. There’s so much uncertainty and nothing is guaranteed. Specifically for the first four years.”
The NFL is a fickle mistress, at least for those who are fighting for roster spots. Athletes are forced to learn how to manage their assets lest they become another frowning face on the front a tabloid. According to Laday, the vast majority of athletes do so competently; it is the outliers who we hear about most.
“[Athletes] have a very unique and special occupation, yet when it comes to the fundamentals, they’re just like everybody else,” Laday said. “They may have a few more commas [on their paychecks] than the next guy, but the fundamentals are still the same.”
