A career in the NFL is one of the most sure fire ways of becoming filthy rich. Even the slowest, smallest and the least talented football players make more money than far smarter people do working regular jobs. But a new study by the National Bureau of Economic Research has found that despite making so much money, 16 percent of all NFL players go bankrupt within 12 years of their retirement.
The research, conducted by Kyle Carlson (Cal Tech), Joshua Kim (University of Washington), Annamaria Lusardi (George Washington), and Colin F. Camerer (Cal Tech), examined the financial records of more than 2,000 NFL players spanning almost 20 years.
As of 2014, every player on any 53-man NFL roster is bound to earn at least $420,000 a season. Even those who are kept just for practice squads also take home at least $107,100 annually. Considering that the median household income in U.S. was $51,939 in 2013, even the smallest earner associated with an NFL team makes more than twice what average American families do.
This is why running out of money to pay creditors should happen much less for former NFLers, but the study shows that Chapter 16 bankruptcies are just as common among them as they are in other demographics.
"Having played for a long time and having been a successful and well-paid player does not provide much protection against the risk of going bankrupt," the study observes.
This unusual financial behavior is not just limited to the NFL. Poor money management skills has led a number of former NBA stars and boxing world champions to blow out fortunes they had amassed during their careers. Just recently, former heavyweight boxer Riddick Bowe, who had career earnings in excess of $50 million, was spotted selling his tweets for $20. Other former pugilists like Mike Tyson and Evander Holyfield have similar stories.
It just goes to show how top athletes don't just need to work on their sporting skills, but they also need coaching in how to effectively manage their monies. Some player unions have started working on it, but judging by the numbers that the aforementioned study is quoting, they need to step up their game.