Many of us know the tale of Michael Vick: one of the most dynamic and talented football players of our generation, who earned more than $200 million dollars over his career only to see it all disappear. Vick was forced to file bankruptcy in 2008 after he found himself more than $20 million in debt, with no real income stream to pay them off (he was banned from the NFL after being convicted of dog fighting and animal cruelty charges in November 2008). Vick is only one of hundreds of pro athletes that have gone broke. A Sports Illustrated article form earlier this year reported that 78 percent of NFL players face bankruptcy or serious financial stress within two years of leaving the game; 60 percent of NBA players face the same financial strife within five years. Why is this?
Pro athletes make millions and sometimes hundreds of millions of dollars over their careers, so it is hard for those of us who will never make close to that understand how athletes could ever find themselves in financial difficulty. One big problem is trust. A lot of athletes came from nothing and do not trust anyone to give tax, legal, and financial advice that could ensure a lifetime of financial stability. Other athletes have the problem of trusting the wrong people and are defrauded of their millions.
Another large problem is pressure from friends and family. Athletes feel obligated to buy expensive houses and cars for those that helped them go pro. They also get a lot of pressure from family and close friends to invest in businesses even when that friend or family member may not have any idea how to run a business. Michael Vick is a prime example of this. He bought a number of cars for friends and family members, a house for his mom, a number of houses for himself. This, among other things, all led to his bankruptcy in 2008. Fortunately for Vick, he landed a $100 million contract the Philadelphia Eagles to help pay off his debts and start over.