But I had a million dollars

We hear stories about professional athletes going broke and we shake our heads not understanding how someone could have a million dollars, sponsorships and bonuses and end up broke.  It just doesn’t make sense… or does it?

Let’s take a tiny little peek at the million-dollar contract…

Athlete signs a million dollar contract, but they only take home 500k, because of various federal, state and municipal taxes. 

Taxes – $500k

Agents work hard to negotiate the perfect contract for the athletes, so they must get paid , right? 4%-10% of the million-dollar contract will be paid to the agent.  If the athlete has a business manager, accountant or any other team members, they may get paid for their services first or on an ongoing basis.

Agent  - $100k

One of the first financial decisions an athlete makes, especially if they are not playing in their hometown is where they will live? Does the athlete buy or rent? This decision sets the tone for all other financial purchases.  Does the athlete get an affordable apartment until a budget is formulated or do they let pride kick in and purchase the biggest house in the neighborhood of the veteran athletes on the team (not considering the veteran athlete has been in the league for a while and has amassed the type of money to purchase and maintain a mansion). Most athletes will purchase the big home, thinking this is the beginning of my career and I will always be able to keep up these payments and it is what they have dreamed of when they signed the contract.

House  - $4k a month for mortgage on the new mansion $48k per year

Another big purchase that athletes make when they sign the big contract is a new car.  Now it would make sense to continue driving their current car or maybe a tiny upgrade to a newer model, but pride kicks in and they purchase a luxury custom designed car to impress onlookers and maybe even to prove to themselves that they made it.

Car – $1.5k per month $20k per year or $80k

What is left? Approximately, $280k for expenses and savings, but the athlete has not taken into consideration, that they are now the local bank.  Athletes are now an ATM for family members who gave up so much for them.  All of their friends expect them to pay ALL of the bills when hanging out.

Friends/ Family/ personal expenses – $180k (this is probably on the low end)

Keeping up with jones, pride to prove that you have made it to yourself and friends as well as not being able to say no leaves athletes who signed a million-dollars contract with approximately $100k.

We prepare our high school students for college, our college students to be executives and entrepreneurs, but we do not prepare our athletes for life as a professional athlete and beyond.  Athletes need to be physically prepared for life as  a professional athlete, but also mentally for the financial pitfalls, emotionally for the struggles of being in the spotlight and spiritually to be grounded and understand the need to giveback and impact the community. 

Let's prepare our athlete to win on and off the field.

Be Blessed,

A. Mayartis J.