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Downfall of Professional Athletes

Downfall of Professional Athletes

Carl J. Whitaker Jr.
Ottawa University

Downfall of Professional Athletes

Abstract
This paper discusses the factors as to why professional athletes become bankrupt later down the
road in their athletic careers. Many people are uninformed of how this problem is starting to
spread more vigorously as the time grows; its almost like a cancer for professional athletes.
There are a variety of reasons as to why this tragedy happens to many professional athletes, but
some of the key points are overspending, lack of financial knowledge, and last poor investment
decisions. To defend these factors the use of examples and real life situations from some athletes
helps to defend the problem. Lastly, the answer to the problem is solved by making programs for
athletes to attend to become more knowledgeable.

Downfall of Professional Athletes

C.J. Whitaker Jr.

Professor Drake
Bibliographic Essay
1 Nov 2014
Introduction
Many people are well informed either by the news or newspapers about many athletes
who made an exceeding amount of money and eventually became bankrupt. Evander Holyfield
from boxing, Allen Iverson, who played basketball, Andre Rison, who was a wide receiver for
the Atlanta Falcons, and many other greats that have had their names in headlines, but not
because of their athleticism. According to Sports Illustrated, there was a study taken in 2009 that
proclaimed, seventy-eight percent of NFL players are bankrupt or facing serious financial
stress within two years of ending their playing careers [and] that sixty percent of NBA players
are broke within five years of retiring from the game(How And Why Broke 2). More than
seventy percent have an intense fear of failing (Penalty Box 12).
The causes for professional athletes facing bankruptcy as follows, one being
overspending, second being the lack of financial knowledge and lastly, poor investment
decisions. All of these topics tie together and form the epitome of bankruptcy in professional
athletes. Bankruptcy is one of the key misfortunes that professional athletes have a possibility of
facing throughout their professional careers.
Overspending
The first argument to defend this thesis deals with overspending. Professional athletes are
fumbling, striking out, bogeying, fouling out, and sitting in the penalty box when it comes to
their personal finances (Financial Planning 27). In the United States, it is very common for

Downfall of Professional Athletes

people once they begin making extreme amounts of money to afford many things, not thinking of
the consequences or conflicts that may eventually occur later. Scott Bercu, who is a financial
advisor for many baseball and basketball professional athletes here today, in an article called, For
Some Athletes, A Short-Lived Financial Success, by Mike Pesca, that stated, Sports figures, see
their salaries as infinite, like it doesnt end, like they cant spend it all.(Financial Success 1)
This quote could not have been stated any clearer because it appears to be the truth. The article
entitled Why Ballers Go Bust, by Paul Watchter, discusses the excessive spending habits of
Rumeal Robinson. Robinson was a professional basketball player who played for a variety of
teams, but was most commonly known with the Portland Trail Blazers. From his first contract he
began to splurge without restraint. Rumeal said, I bought a Nissan 300ZX and a penthouse
apartment in Atlanta.
When his brother, Donald Barrows said, [] Robinson blew money partying at strip
clubs and even paid strippers to undress and clean his apartment. (Go Bust 3) The author
claimed that federal prosecutors stepped in to check his spending habits. Robinson spent the
money on luxury cars, a Miami condo, and designer clothes, (Go Bust 3), Borrows claimed.
Rumeal was just digging a debt hole bigger and bigger with each financial decision he made, and
[eventually the hole could not get any bigger and he could not come out and that is when he
claimed for bankruptcy.] This is example a typical example of overspending. Rumeals example
highlights the bitten lesson expensive things that though the athlete can afford now, eventually
such unwise spending will catch up to them.
Lack of Financial Knowledge
The lack of financial knowledge is another key misfortune that affects professional
athletes. Many athletes when they begin as rookies can be very ignorant. They typically do not

Downfall of Professional Athletes

think critically. Many of the NBAs 400-plus players do not have wills or adequate life
insurance, let alone a former estate plan (Financial Planning 27). It is very common for athletes
to consider not graduating from college and going straight into the draft of the professional sport
if they are accomplished. [For example, LeBron James has no college experience at all; he came
straight out of high school.] Many players such as Johnny Manziel are entering the draft and did
not graduate from the established University that they attended when playing college ball.)
In a recent study, pointed out approximately only twenty-two percent of professional
athletes graduated from college and have a degree. So as you can see professional athletes are
not aware of the financial responsibilities that they face once they make large salaries because
theyre lacking financial knowledge. Their mindset is that the money shall continue. It is no
ones fault but their own. Their mistake is not finishing college.
Many of professional athletes also came from poverty and so once they see those dollar
signs and zeros, they were anxious to spend their money urgently. In an article by Monte Burke,
entitled Curt Schilling And Why Athletes Make Such Poor Financial Decisions, stated that Lenny
Dykystra was one of Curts former teammates for the 1993 Philadelphia Phillies and went
bankrupt and filed a false financial statement. As a result, he was sentenced to three years in
prison. Unfortunately, he is not alone. In ESPN 30 for 30:Broke, Andre Rison wrote that players
actually competed when it came to buying expensive items. This resulted in poor financial
decisions. Many professional athletes are unaware that they can get assistance by getting a
financial counselor to help them, and most prefer to do it themselves. As a financial planning
professional, with your expertise and services, you can have a positive and significant impact on
an athletes life (Reinhold 1). Many are able to manage their money, but others, however, are in

Downfall of Professional Athletes

denial and really need the help in order not to land themselves into the horrific situation of
bankruptcy.
Poor Investments
The last piece of evidence presented to defend the thesis is the athletes problems with
investing poorly into the wrong things. According to an article in the International Business
Times magazine, called Athletes Who Went Broke, it gave a list of numerous athletes who
went broke due to poor investments, such as Curt Schilling and Lenny Dykstra. Schilling is a
retired baseball player who came up with the unwise idea of investing over fifty million dollars
into a business called 38 Studios. Unfortunately, 38 Studios declared bankruptcy and it resulted
in Curt Schilling losing all of his money.
Lenny Dykstra is another example of an athlete who because of poor investments became
bankrupt. Dykstra played baseball for two Major League Teams, the New York Mets and the
Philadelphia Phillies. Lenny decided to invest his money by starting a high-end jet charter and
magazine that eventually went bankrupt as well. He lost between ten and fifty million dollars
worth of assets because of it. Dykstra and Schilling are just two examples of the many athletes
who have become broke due to poor investments. Athletes are so impressed that any and every
idea to start a business on the side will be a great success. They are unwilling to research and
investigate to see if the business or proposition is really a good idea.
Conclusion
In conclusion, bankruptcy is one of the key misfortunes that professional athletes face
throughout their professional careers. Professional athletes go broke due to many things. The
most common reasons today include overspending, the lack of financial knowledge, and poor
investment ideas. Many think that their money supply will be infinite, but it is simply not. The

Downfall of Professional Athletes

solution to stop these problems from happening is very simple. Some sports have made it
available to the athletes in their league a class that teaches you how to be successful when it
comes to financial situations. If all sports leagues buy into doing that, then there would be a huge
decrease on the athletic bankruptcy stories on the news and in papers. One thing that must be
demanded is that its mandatory instead of not required. With the idea of it being non-mandatory
then the athletes will not benefit from the program, resulting in the same results as before, many
broke athletes. If these actions are met, then there would be a huge decrease in players filing for
bankruptcy and all athletes will be successful and stable financially also.

Downfall of Professional Athletes

Bibliography
Watchter. Paul. Why Ballers Go Bust. Bloomberg BusinessWeek. Article. October 11,
2010.
Torree. Pablo. How (and why) Athletes Go Broke. Sports Illustrated. Article. March 23,
2009.
Wiles. Russ. Pro Athletes Often Fumble The Financial Ball. USA Today. April 22, 2012.
Burke. Monte. Curt Schilling And Why Athletes Makes Such Poor Financial Decisions.
Magazine. Forbes. May 25, 2012.
Athletes Who Went Broke. Article. International Business Times. November 25, 2013.
Pesca. Mike. For Some Athletes, A Short-Lived Financial Success. National Public Radio.
May 19, 2011.
Professional Athletes Fumbling Financial Planning. Article. Journal of Financial Planning.
July 2002.
Pro Athletes Financial Plans In Penalty Box. Article. Journal of Financial Planning. April
2009.
Reinhold. Eric.A Game Plan For Working With Professional Athletes. Article.Journal of
Financial Planning. June 2000.

Downfall of Professional Athletes