One of the most popular articles I ever wrote for the National Football Post is “Ten reasons why NFL players go broke”. The truth is that there are also several more reasons. As these activities may not be the main culprits that drain the bank accounts of NFL players, they do add to their demise.
Starting a foundation: 98% of all NFL players that I have met want and do give back in some way. They give their time, their money and their resources to help make the difference in the lives of those less fortunate. NFL players actually don’t get enough attention and credit for their philanthropy efforts. In working with and observing my own clients and other players around the league, I have yet to see numerous successful foundations.
Many players are encouraged to start a foundation just for the sake of having one. It’s very difficult to find qualified people to operate a foundation. Many pro athletes hire family members who have no management or fundraising experience. The cost of running a foundation, paying the manager and financing just one event a year can easily exceed $100,000 per year. So that golf or bowling tournament better produce at least twice that in revenues.
Drew Brees’ foundation, The Brees Dream Foundation, is an example of a foundation that has been a model for success. The difference is that Drew and his wife, Brittany, are hands on managers and operators of the entity. Drew also has the will and the clout to personally raise money. Just slapping one’s name on a foundation will not bring in the donations and event sponsorships.
I tell my clients that unless you are making ten million dollars a year and have a qualified and experienced professional to run it, don’t waste your time. If your name is not Peterson, Brady, Manning, Tebow, Rodgers or Polamalu, it’s going to be difficult to manage and have a foundation that truly makes sense.
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The Restaurant: They just can’t help themselves with the temptation of the restaurant business. I can’t blame them as I am tempted myself but have always held back from getting involved. I have had some clients invest with friends, families and proven entrepreneurs but have never seen one work. Yes, the facts are that the majority of restaurants fail miserably. Furthermore, the ones that work are usually owner operated.
Although I have seen more successful formulas for financing restaurants lately it’s still a bad investment no matter how you look at. Well-known players are better off lending their name to a proven restaurateur on a royalty deal rather than put up their own cash.
The Vegas tables: NFL players are notoriously bad gamblers. They gamble at riverboats, Indian Reservation Casinos, Atlantis, the team plane and of course Vegas. Pro athletes don’t gamble frequently but when they do they go pretty big. NFL players may only get to the tables twice a year and it’s not uncommon to leave $50,000 or more behind in losses. The funny thing is they never really know how much they actually lost. One client told me they saw a well-known teammate lose $150,000 in 5 hours at the blackjack table. Ouch! Counting other costs such as the buddies, the rooms, the limos and the clubs it’s not uncommon for a player to have a $100,000 weekend. Come to think about it, a $15,000 weekend is too much. However, the guys do need to blow off some steam but when money comes easy to them it goes easy as well. Over the course of a ten-year career a few players could have gambled over $500,000 to $1,000,000 away. Monies they wish they had ten years after retiring.
I tell my players to go have fun but put a hard cap on what you are willing to lose, and if you hit that number, shut it down and walk away.
As the continued horror stories of bankruptcies of NFL players keep coming I will keep pointing out my insights on why this happens in hopes of educating young players on the trappings of being a young professional athlete.
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