Learn why pro athletes struggle financially — before and after the final buzzer.Cliff Floyd remembers the first time he came into serious money.
A retired baseball veteran who played for several teams, including the Montreal Expos, the New York Mets and the Florida Marlins, Floyd didn’t have much growing up as a kid in Chicago. His dad toiled through double shifts as a steelworker; his mom worked in a shipping department. What Floyd did have was skill as a baseball prodigy.
So when the Expos drafted him in 1991 and gave him $300,000 to start playing in their system, the money was a hard reality to wrap his mind around.
“It felt like $300 million,” he says. “I didn’t really understand it. I knew it was a lot of money — and that I’d be able to do things I’d never thought possible.”
In fact, it was just the beginning. The really big bucks came in 1999, when he signed a $19 million contract with the Florida Marlins. “That was when things went to another level,” he remembers. “I was getting $200,000 every couple of weeks. You start to understand this is no joke.”
If he’d stayed on that track, it could all have easily gone away. Before that could happen, though, Floyd managed to get his finances together. When he left the game in 2009, he realized those big checks were going to stop coming and that he’d better stop the financial bleeding in the interest of his wife and kids.
Floyd now has plenty of money in the bank (thanks to the help of money manager Ed Butowsky of Chapwood Capital Investment Management in Dallas) and a bright post-sports future as a broadcaster for Fox Sports. But not all pro athletes get their financial lives together in time.
Indeed, a glance at the headlines reveals a virtual all-star team of athletes in financial distress. Allen Iverson. Mike Tyson. Curt Schilling. Warren Sapp. Antoine Walker. Lenny Dykstra. And on and on. It seems like every week some sports legend is declaring bankruptcy, being pursued for unpaid child support or suing (or being sued) over a business gone wrong.
Such financial meltdowns aren’t isolated cases. Within five years of retirement, 60 percent of National Basketball Association (NBA) players are broke, according to Sports Illustrated. Within two years of hanging up their cleats, 78 percent of National Football League (NFL) players are suffering severe financial hardship
Those are frightening numbers, especially considering the millions of dollars successful athletes bring in. So what’s going on?
According to experts, it’s not one thing but a toxic mix of factors: Take a young kid who’s never had money, toss millions of dollars at him, pair him with agents and advisers who don’t want to tell him no, make him responsible for an entourage of hangers-on, throw in an ex-wife or two and a few kids — all those millions can evaporate very quickly.