Why Athletes Go Broke

The “Real Deal” is broke.

Former Heavyweight champion Evander Holyfield is playing the real life game of Deal Or No Deal. It has been reported that his $10 million estate in suburban Atlanta is under foreclosure, the mother of one of his children is suing for unpaid child support, and a Utah consulting company has gone to court claiming the boxer failed to pay back more than a half million dollars for landscaping. Just one more high profile athlete having to scale back his lifestyle to the level to which you have I have been accustomed. Why is it that athletes who seem to have everything are often completely unable to control anything related to finances?

We all played our violins to death when we heard of Latrell Sprewell’s financial troubles. On Halloween 2004, Sprewell, who was in the final season of a $62-million five-year contract with the New York Knicks, said he was insulted by the Minnesota Timberwolve’s offer of a contract extension that was reportedly worth between $27 million and $30 million for three seasons. Sprewell stated, “I’ve got my family to feed.” That quote become a national moniker for the public perception of athletes as greedy, out of touch individuals. Apparently, Sprewell still can’t feed his family. His yacht was recently repossessed and his multi-million dollar mansion is about to be foreclosed on.

While there is certainly the stereotype of the financially irresponsible NBA athlete, no professional sport is immune.

Let’s take a look at some high profile athlete financial sob stories over the years:

1. No one my age can forget Jack”The Ripper” Clark , star player for the Boston Red Sox who filed for bankruptcy in 1992 in the middle of his second year of a three-year, $8.7 million contract with Boston; he listed $6.7 million in debts. Jack was a master of financial planning and prudent asset acquisition. His bankruptcy petition listed assets such as 18 automobiles, including a 1990 Ferrari that cost $717,000 and three 1992 Mercedes Benz cars costing between $103,000 and $143,000. He owed money on 17 of the automobiles and was liable for about $400,000 in Federal and state taxes. He had also lost about $1 million in a drag-racing venture. Sounds like Jack would have been more at home in the NBA. You can read about it here

2. Johnny Unitas, Hall of Fame quarterback for the Baltimore Colts, filed for bankruptcy in 1991 citing numerous failed business ventures in his petition These failed bits included bowling alleys, land deals and restaurants. He filed for Chapter 11 bankruptcy in 1991.

3. Mike Tyson The name speaks for itself. Mike’s bankruptcy was highly publicized. Despite earning hundreds of millions during his boxing career, Mike kept it simple. His bankruptcy petition simply stated: ” I am unable to pay my bills”. According to federal court records, his liabilities totaled about $27 million. You can read that story here.

4. Dorothy Hamill, the women’s figure-skating gold medalist in the 1976 Winter Games, filed for bankruptcy after a series of financial setbacks. Hamill said she has experienced financial setbacks as a result of poor financial investment advice and management.

These are just a few of many athletes’ tales of woe. It is not a phenomenon limited to professional sports — just ask M.C Hammer. Prior to his declaring bankruptcy, it was made public that his day to day living expenses far exceeded his income of $33 million. If I am going to veer off to celebrities, I certainly have to mention Kim Basinger and Michael Jackson.

When the Toronto Star ran an article alleging that a shocking 60 percent of NBA athletes “go broke” five years after retiring, did we not all pull out that very tiny violin we have reserved for such occasions? The NBA players union and the NBA have both disputed that assertion. The article goes on to talk about all the people taking advantage of and “scamming” these athletes. While I have no doubt there is truth to this, I can also understand how such a generalization would make the NBA uncomfortable. It leaves you with the impression that 60 percent of NBA players are not only financially inept but also idiots in general. This is simply not true. While good business sense is often lacking, I view many of their mistakes as being more mistakes of trust, credibility and lack of life experience than anything else. Smart, busy people who can afford it, hire people with targeted expertise to help them. This allows them to focus on their expertise. Sometime mistakes are made and bad judgment is used in who we hire and hang out with. That is not unique to the NBA or professional sports. This happens to everyone. That is life. It happens all the time. It just does not make front page when we screw up. If there is any question at all as to how badly we as the general public screw up, just look at the personal bankruptcy filing statistics.

In order to get a perspective from the inside, I contacted Jordan Woy, a highly respected sports agent and a principal in the sports marketing/management firm of Schlegel Sports. Jordan has represented numerous high profile athletes

Here is what Jordon had to say:

I think there are several reasons why so many athletes “go broke”. First, whether it is a lottery winner, an athlete or a star entertainer, if they are not equipped with the knowledge on how to make and save money they are in trouble. When they didn’t earn it through disciplined business practices and they don’t have those skills they usually go through it quickly. Most lottery winners or athletes make a great deal of money in a short period of time. They start spending it on things that only go down in value (cars, jewelry, partying, entourage, etc) and start to evaporate the money they do have. They can carry this off until they stop earning big money. This is when the trouble starts. It is hard to believe that MC Hammer, Mike Tyson, Evander Holyfield and now Ed McMahon are broke. These are people who earned hundreds of millions over time and it disappeared. Lavish spending and entourages were probably the downfall for the first three for sure.

Most athletes play for four to ten years if they are lucky. After they pay taxes (can be 40 to 50%) and agent fees and buy their first homes, cars, outfits, jewelry (plus, cars, clothes and jewelry for friends and family), they are left with very little. When they first “strike it rich” all of their longtime friends and family expect help. Most athletes feel obligated to help everyone out at first then they wise up. They also want to keep up with their teammates. If someone buys a Bentley, they have to buy one; if someone buys a $75,000 watch, they have to buy one to keep up the appearance. Then, of course, when the career ends and they are still living in a multi million dollar house, driving 3 expensive cars (and insurance), traveling in private planes and taking Limo’s when they go out on the town, reality sets in. The money dries up very quickly.

However, if athletes educate themselves, learn money management skills and make smart, safe investments along the way, they are usually in very good shape. After representing athletes for over 20 years, we call this our “life plan”. We take out clients on working vacations in the off season to places like Las Vegas, Cancun and on a cruise to the Bahamas to learn business networking. We have people from industries such as real estate, oil and gas, financial planning, credit repair, asset protection/estate planning, etc come to educate the players and their wives so they can learn about these business and also determine if they are interested in any of these industries for life after sports. One of the financial planners who comes always says most people die coming down from Mt. Everest not going up. The goal is for these athletes to get to their Mt. Everest AND to get down safely.

So, what do you think? Are the financial mistakes that athletes make any different than your mistakes or mine? They are certainly mistakes made with a higher downside. When we hear these stories are we just unable to comprehend that someone could have that much money and spend it all? Can we learn lessons on how to live our lives from their highly publicized financial gaffes? Do we even care at all?

With all due respect to Latrell Sprewell, we have our own families to feed….

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Is playing for another country's Olympic team treason?

All Becky Hammon wanted to do was play in the Olympics.

The U.S. didn't want her, so she found another market that was interested - Russia.

Hammon, who has no Russian ancestry, and had never even been there until she signed to play professional basketball there last year, will suit up for the Russian team in Beijing.

Is Hammon a traitor?

"This is not life or death," Hammon said. "My patriotism isn't defined by basketball. My patriotism isn't defined in 94 feet of hardwood.

"I don't expect everybody to agree with my decision or understand my decision. But I know where my courage and patriotism lie. So I'm comfortable with it. I'd still do anything for my country."

But is it within the spirit of the Olympics that a country can buy the rights to athletes just to win medals?

Under league rules in Russia, where Hammon signed to play for a team in Moscow last year, a player who has not played for another country in a FIBA-sanctioned event is allowed to become a naturalized citizen. Once a person is a citizen, the Olympic team is an option.

The WNBA MVP runner-up a year ago, who scored 20 points against the Comets last night, was left off USA Basketball's list of players from which the 2008 Olympic team would be chosen.

"I didn't say no to USA Basketball," Hammon said. "The option for me to play for USA Basketball really wasn't an option.

"It was: 'You can go take part in the Olympics or stay at home.'"

Maybe it won't bother you as much because it is women's basketball, but J.R. Holden will suit up for Russian men's team. Holden hit the game-winning shot for Russia in the gold medal game at last year's European Championships. What if he does the same against the U.S. in Beijing?

It is not unusual for American citizens to be on foreign Olympic teams. Typically, though, the loophole for participation is some familial tie. More than half the Greek Olympic softball players in 2004 were Americans who met the special requirement of having at least one great-grandparent from Greece, which had never fielded a softball team in international competition.

Not only might Hammon and Holden further open a door for flimsy participation with other countries, it's Russia we're talking about. Many of us still have "Cold War" feelings about the former communist power.

"I don't think people would be as upset if I was playing for Switzerland," Hammon said. "God loves Russia just as much as God loves America."

What do you think? Is it OK for Americans to compete in the Olympics for other countries? Is it treason?

Or does the "this is basketball, not war" argument win you over?

• • •

Jerry Greene has two words for those of you who think the home crowd really matters: hog and wash.

• • •

Remember sweet little Pebbles from the Flintstones? Well, Ashley Harkleroad, who hails from Flintstone, Ga. Was known as Pebbles back in the day.

Harkleroad has decided to show her pebbles to us all, as she will be the first professional tennis player to pose nude for Playboy.

• • •

Joke of the Day:

From Jay Leno: "A lesbian couple in Seattle claims they were asked to leave a Mariners game for kissing in the stands after a mother and son complained. Well, the mother complained that they were kissing, and the son complained he couldn't see."

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Outrageous Tales of the Stanley Cup

Mike Bolt is the official keeper of the Stanley Cup. Where it goes, he goes. Here, he shares just some of the odder things that have been placed in or sucked out of the NHL's most cherished prize.
What are the most common questions you get from fans?
"Is it the real Cup?" Yes. "How much does it weigh?" 35 pounds. "What happens when it fills up with names?" The rings at the top come off and go to the Hockey Hall of Fame in Toronto. Then we put a new ring on the bottom. So this year's winner will be on the cup for 62 years.

What kind of action has it seen?
It's been used to chill champagne... Doug Weight [of the Hurricanes] made an ice-cream sundae in it with his kids... The Devils made a margarita in it at a nightclub—they even salted the rim... Guys have taken it fishing, putting bait in the bowl... [Former Ranger] Ed Olczyk fed a Kentucky Derby winner from it. But the best is when a player walks into a bar with this thing. It's like a major celebrity walking in. It only likes being hoisted by the winners, though—you have to earn the right to hoist it.
Ever had to deck a drunk fan?
Again, we're around bars and alcohol, and you do get the odd jerk who'll mouth off to you. But big deal, I can take it. As long as this thing stays safe, I don't care how much this guy's chirping in my ear. I'd like to smack them, but I can't. I had to push a fan away once because I thought he was going to urinate in it, but that's about it.

Speaking of which, is it true that Claude Lemieux took a dump in it on The Howard Stern Show?
No. I've heard two things: They put chocolate pudding or a chocolate bar in it. Personally, I don't know why someone would think that was funny; people drink and eat out of this thing. I would not have allowed it if I were around in '95 when it happened. I always say, you want to keep winning this, you respect it, because in 1940 the Rangers burned the deed [to the old Madison Square Garden] in the Cup and then urinated on it to put out the fire—and it was 54 years before they won it again. But 99 percent of the guys, if not 100, are very respectful around it.

Any other unusual Cup sightings?
I was in a bus with [Ducks forward] Corey Perry on the 401 to London, Ontario. There was a major accident, and traffic was not moving for like two hours. These kids outside were sitting on top of their parents' car and could see the Cup in the bus, so they were going like this [mimes lifting the Cup], like, "Hoist it! Hoist it!" Well, Corey goes a step further and takes it right out onto the highway. Next thing you know, we're having a tailgate party in the middle of Canada's biggest highway.

Who's downed the most booze from the Cup?
[Ducks forward] Teemu Selanne is the warmest, most sincere man you could ever meet—but he is also one hell of a drinker [laughs]. We were at his place in Anaheim, and he had eight to 10 of his buddies there. They went through about 12 bottles of Scotch, right out of the Cup. If I drink half a bottle, I'm going to fall down, and I have a tolerance. Not Teemu. No problem. One of the best drinking clinics I've ever seen.

Has the Cup ever put you in harm's way?
We went to Afghanistan this past March and had a missile attack our first night. We first arrived in Kandahar in flak jackets, the whole thing. Later on, I get back to the barracks and hear an air-raid siren, but I was dying for a shower, so I figured I'd just sit tight. I got into my room and—true story—sat down on the Cup case and read Maxim. I swear. I go into the shower, and when I get out a bunch of the guys are around going, "Mike, where were you during the missile attack?" I told them, "Sitting on the Cup case reading Maxim." And they said, "Holy crap, you're dedicated to your job!" [Laughs] Truth be told, if I had known better, I would have ditched the Cup and been like George Costanza pushing women and children out of the way.

So is it true that if a player keeps it at his house, you have to stay there, too?
We're there the whole time, yeah. People ask, "What if a player wants to sleep with it?" I say, "Move over."

Ever woken up to something you might have wished you hadn't?
We're sworn to secrecy on a couple of things… I don't care if it's Maxim, you're not getting it out of me. You can use your imagination.

Be sure to follow Buffalo Sabres goaltender Ryan Miller's Playoff Blog.

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