Now What? Part III

"Now What" has been a series of articles concerning the financial woes and successes of professional athletes after retiring from sports.  Let's recap.  Part I focused on athletes who lost it all, spent/invested unwisely, and could have considered burning their money as a better alternative.  Part II went down the other path, exploring the post-athletic careers of Magic Johnson, Mo Vaughn, and others.  These men put their millions to good use, helping communities and turning a profit at the same time.  The third and final installment focuses on the future.  Will former athletes continue to make headline news with their financial blunderings, or will something change?

Professional athletes make incredible amounts of money.  With average salaries going up every year, being drafted gives athletes the opportunity to make more money than many Americans will make in their lives.  Although most people rightly see this as a blessing, it has also become a curse.  Athletes are seen as rich playboys who spend their money on all sorts of frivolous and unconscionable mansions, cars, and other toys.  Few people see the likes of Warren Buffet, Bill Gates, or Michael Bloomberg in a similar light.  Instead these billionaires transcend their own money, seen as smart and prudent instead of vacuous.  So far, I have delved into the many causes of this irresponsible spending and investing on the part of former professional athletes, but I have not given a forecast for the future or a comprehensive way to solve these issues (education being the only solution I previously referenced).  



Athletes, like presidents, should have both a keen mind and good advisors.  To expect every professional athlete to be schooled in post-keynesian economics, or how global trade effects their annual salaries is a futile task.  On the other hand, it would not be unreasonable for every professional athlete to read a chapter of "Freakonomics" or "Personal Finances for Dummies" every week.  Professional athletes, who have just entered the world of the upper class, should have a rudimentary understanding of taxes, investments, and banking.

We all have certain predispositions from our childhoods, whether we were originally dirt poor or wealthy, that cause us to make certain decisions.  Situations arrise, such as the poor black basketball star who wants to buy his mother the house she could never afford, or the Yale graduate who uses his money to set up trusts for the children he hasn't borne and the wife he has yet to marry.  Both scenarios have validity and neither necessarily constitutes a bad decision.  An athlete should be able to buy his mother a mansion, but simultaneously understand that he cannot buy every friend from his neighborhood one as well.  Limits exist, and as the old adage goes, everything in moderation.  These are lessons every athlete should learn.  Not only should these newly minted millionaires have at least a minor knowledge of money, they should hire the right people to oversee their wealth on a day-to-day basis.  Making your best friend your financial advisor probably won't work unless he recently received his MBA from Wharton.  Hire a team of financial advisors to manage your considerable wealth, it's exactly what most upper-middle class and upper-class Americans do.

Luke Skywalker

In Star Wars, Luke Skywalker is depicted as the only remaining hope to save everyone from the evil empire.  George Lucas' first film is titled "A New Hope".  Don't worry, I don't think I've found the one athlete who will save the rest from financial ruin, but I do think Andrew Luck should be the next poster child for "best financial decisions made in a career".  Nothing has been written in stone, much of this is speculation. 


Andrew Luck, son of Oliver and Kathy, brother of Addison, Mary Ellen, and Emily Luck, and the most recent quarterback to be chosen number one overall in the NFL draft, possesses immense talent, intelligence, and upside.  When the Indianapolis Colts selected Luck no.1 overall in the 2012 NFL draft, they knew what they were getting.  They wanted the next Peyton Manning, and from most accounts and predictions, Luck may be a Manning look alike.  He stands 6 foot 4 inches tall, weighs about 230 pounds, throws a football at the speed of an intercontinental ballistic missile with the accuracy of a skilled marksman.  His athletic abilities are only matched by his gifted mind.  Luck was co-valedictorian of his high school class, entertained scholarships to Northwestern, Rice, and the University of Virginia, and chose to attend Stanford University.  

Andrew Luck

By all accounts, the 22-year old is athletic, smart, and a soon to be inductee into the select group of professional athlete millionaires.  Will Luck be smart with his money?  He comes from solid stock.  Luck's father, Oliver, played quarterback in the NFL for the Houston Oilers.  After retiring, the senior Luck received his law degree from the University of Texas, and moved to Germany to practice law.  Following an unsuccessful run at a seat in the United States Congress, Oliver Luck was named the CEO of the Houston Sports Authority.  Next, he took a position as the athletics director of his alma mater West Virginia University.  So, it seems young Andrew has a pretty good role model to look to for guidance in both his athletic and post-athletic pursuits.  Luck has a good advisor, but how about his personality?  According to an article in USA Today, Luck rode his bicycle around the Stanford campus instead of toting an expensive car.  He decided to forgo the NFL after his junior year of college to return for his senior year.  Luck graduated with a bachelors degree in architecture, carrying a 3.48 GPA while studying his other major, football.  


So it seems like this young man has the makings of someone who will not only succeed on the field but off of it as well.  He has a good head on his shoulders, strong role models, a great arm, and most importantly a solid attitude.  If ever there was someone whom young athletes should emulate, it is Andrew Luck.  I predict that, no matter the direction his football career takes, Luck will be successful in many spheres, especially financially. 


Well, folks, this trilogy has now come to an end.  I've profiled financial dunces like Curt Schilling and Allen Iverson, movers & shakers like Magic Johnson and Mo Vaughn, and the star of the future, Andrew Luck.  All of these men have one thing in common.  They all played or will play professional sports.  In fact, they have succeeded or most likely will succeed in their given sport.  The X-factor with these men, and all professional athletes, remains the manner in which they treat their status of "wealthy".  Education, solid role models, and above all else a strong attitude constitute the most important factors of financial success, even for those with the most money.   

Now What?: Part I

Athletes dazzle us with their incredible competitiveness, talent, and will to win.  Following a player from prospect to professional athlete to veteran provides fans with exhilarating and fulfilling memories.  During these careers, most professional athletes earn exorbitant amounts of money, placing them in the United States' top tax bracket as well as the everyday citizen's category of rich.  One question remains: "Once retired, what do athletes do with the money they made during their careers?" This three part series will explore the financial highs and lows of professional athletes after they retired from their given sport.  Part one focuses on athletes who'se retirements have been marred by financially difficulty.

Curt Schilling

Curt Schilling is in trouble.  By all standards, the former Phillies, Diamondbacks, and Red Sox pitcher needs help.  Following retirement from Major League Baseball, Schilling decided to create and run his own video game company.  He called it 38 Studios, named for his jersey number throughout his career.  From an outsiders perspective this venture seemed harmless.  A rich man who wanted to exploit the video game craze, and, more importantly, put his personal stamp on the project.  Unfortunately for Schilling, venture capitalists did not agree with Curt's optimism for the company, refusing to invest millions of dollars in the video game studio.  In response to a lack of funds, Schilling sunk about $50 million of his own into the company.  In his 18-year career, it is estimated that Schilling made just over $114 million.  


Despite putting almost 50% of his MLB earnings into 38 Studios, the company required more money for day-to-day operations.  Thus, Schilling applied for and was subsequently granted $75 million in loans from the state of Rhode Island.  The recent recession has caused strife for most state economies, but Rhode Island has been hit harder than most.  38 Studios recent filing for chapter 7 bankruptcy only deepens an already hurting state economy that, like George Foreman, cannot afford another Muhammed Ali sized punch, lest they fall to to the mat in defeat.  Schilling faces numerous other issues including an inability to pay for his employees health insurance, and failing to pay some employees' salaries.  Overall, I think it reasonable to call 38 Studios a sunk venture in need of serious help.  Schilling screwed the pooch in every way, showing his ineffectiveness as an entrepreneur, CEO, and citizen.  While Schilling could do no wrong on the mound, he did everything wrong when it came to investing his millions and running a company.  

Allen Iverson

Schilling does not constitute the only famous millionaire athlete to incur financial troubles after retiring from professional sports.  Not to pick on former Philadelphia athletes, but no conversation concerning athletes financial troubles can begin or end without including Allen Iverson.  The former 76ers MVP guard has hit rock bottom.  After securing himself as one of the greatest professional basketball players of all time, and racking up over $200 million, Iverson retired from the NBA in 2010.  During that illustrious 15-year career, Iverson supported more than 50 of his closest friends, a family, and his "thug" desires.  "The Answer", as Iverson was known during his career, owes $859,000 to a Georgia jewelry store and $2.5 million on a house in Denver, Colorado.  In addition to simple debt, Iverson's wife has filed for divorce, which could cost the broke former NBA All-Star even more money.  


So, to recap, Schilling took his riches and invested poorly, irresponsibly managed his business, and now wants help cleaning up the mess he made.  Iverson lived above his means, leaving us wondering how a millionaire could be so stupid, and faces more legal issues due to divorce.  These two former athletes shed light on a number of common problems that plague former professional athletes.  Poor investments, frivolous spending, unreasonable loyalties for friends, and familial issues lead to the most prolific falls from grace.  


What can we learn from these regrettable situation?  First, we learn that no matter how iconic and rich a person is, the ability to lose everything remains constant.  The American Dream is built upon every person striving for more and greater life pursuits.  More often than not, one of these chief goals is to attain wealth.  Professional athletes are blessed with special talents, and simultaneously work incredibly hard, thus earning themselves the title of millionaire.  Unfortunately, earning millions of dollars does not imply financial acumen or the ability to make informed and well-calculated decisions.  


So, what are the issues involved, and how can athletes help themselves to avoid financial ruin?  First, athletes need to take their educations more seriously.  Almost every NFL and NBA player attends college, but few take advantage of the gift of education.  Maybe, instead of majoring in fitness and exercise science, athletes should consider taking a few classes in economics.  This might be a smart decision, even if said athlete plans on leaving school early for the pros.  Second, finding smart, experienced, and trustworthy financial advisors to educate, instruct, and assist in investments and money management might prevent future financial collapse.  This advice only grazes the surface, and with so many professional athletes wasting their fortunes every iota is necessary.


In the second and third installments of this ongoing series, I will delve into professional athletes' successes in retirement, the future of post-athletic financial activities, and my take on the whole situation.    

On Sportsmanship

No one denies that sports create a hyper competitive atmosphere in which two opponents square off in order to beat the other.  These situations create tension, cause adrenaline to flow, and stir up emotions like frustration, anger, ecstasy, and relief.

While watching game 7 of the NBA Eastern Conference Finals between the Miami Heat and Boston Celtics, I came to the conclusion that both teams, were they to win, deserved the victory for their effort and tenacity throughout the series.  These two teams had their differences, but in the end, the both teams showed heart and played with fiery competitiveness.  The Heat won game 7 and thus earned the right to move on to face the Oklahoma City Thunder in the NBA Finals beginning tomorrow in Oklahoma City.

With about half a minute left in the game and the score skewed in Miami's favor, Doc Rivers, the Celtics head coach, removed his star players from the game.  The Heat allowed the clock to run out, thus beginning a celebration in the American Airlines Arena in Miami.  Instead of walking onto the court and shaking hands following the final buzzer, Celtics point guard and center, Rajan Rondo and Kevin Garnett respectively, left the court for the locker room.  Back on the court, the two head coaches shook hands, as is customary, and the other players gathered amongst a throng of reporters and player personel to shake hands.  Whether these players actually congratulated each other or merely made dinner plans is unknown, but one thing is for sure, Rondo and Garnett were no where to be seen.  The ESPN cameras made sure to follow the two Celtic stars as they left the court and headed directly for the away locker room.

Flyers and Penguins players shaking hands
 following a hard fought playoff series

This sparked a conversation between me and my friend Jake concerning sports and sportsmanship.  Jake, a devout hockey fan and player, remarked that he disliked the post-game activities of the players, and he especially expressed disappointment in Garnett and Rondo for leaving the court without even shaking hands.  He pointed out to me that at the end of every NHL playoff series the players from both teams line up in the middle of center ice and shake hands.  This tradition does not exist for every regular season game or even every playoff game, but is mandatory after a playoff series.  The NHL seems to understand something the NBA does not, that sportsmanship is important.

Professional athletes are role models and should act accordingly.  In Baseball the winning team usually celebrates by shaking each other's hands in the middle of the infield, while the losing team retreats directly to their respective locker room.  As a high school baseball player, we were expected to shake hands with the opposing team following the final out, lest you found yourself being chewed out by the coaches.  In American Legion Baseball every player and coach lines up before the game and recites the official pledge, which states: "I will keep the rules.  I will keep faith with my teammates.  I will keep my temper.  I will keep a stout heart in defeat.  I will keep my pride under in victory.  I will keep a sound soul, a clean mind, and a healthy body."  Imagine if every NBA player had to recite those lines in front of 20,000 fans and millions of television viewers.  It would never happen, but it should.

Every statement in the American Legion pledge speaks to sportsmanship.  First, all players should abide by the rules of the game, also known as, "no cheating".  Every player should have faith with his teammates because teammates should be respected too.  Keeping one's temper under check, having a stout heart in defeat and quelling one's pride in victory all point directly to good sportsmanship.  Players should not gloat when they win or throw a fit when they lose, these are characteristics of immature children, not honest competitors.  Finally, keeping a sound soul, clean mind, and healthy body refer to respecting oneself as much if not more than one's opponents.  So, to recap, according to American Legion Baseball, players should respect their teammates, the other team, and themselves.  I would think that if 16 year olds can abide by these simple maxims that professional athletes could do the same.

At the end of every soccer match the players cheer for the fans.  They say "thank you" to their fans for supporting them in victory or defeat, a gesture never seen in the four major American sports (Baseball, Basketball, Football, and Hockey).  Not only do the players shake hands with each other and thank the fans, often times they will exchange jerseys with the opposing team's players in order to have a momento with which to remember the match.  Don't get me wrong, there is no love lost in soccer, but no matter how hard fought and grueling, following any given match, the players make a public showing of good will towards each other and the fans.

The issues with sportsmanship and professional sports are many, but they are easily ameliorated.  NBA commissioner David Stern should fine both Rajan Rondo and Kevin Garnett for walking off the court before the end of game 7, and issue a separate fine for not shaking hands with their opponents.  After incidents like the "Malice in the Palace" and Metta World Peace's "accidental" elbow to James Harden's head, the NBA needs to portray less of a thug image.  Fining two of the NBA's best and most visible players is a good start, but David Stern should also institute a rule saying that both teams (we are only talking 12 players per team) must lineup and shake hands at the end of every playoff series, similar to the NHL.  It should take place before the customary celebration and trophy ceremony so that the fans, both in the arena and on TV, see that despite the fierce competitive spirits portrayed during the games, the players are peers who respect each other.

The NBA is not the only league in need of a sportsmanship makeover.  Major League Baseball and Bud Selig should direct all teams to shake hands following the end of every playoff series.  The celebratory dog piles seen at the end of every MLB playoff series make for great TV, and are well deserved, but after the dust has settled, both teams should lineup and shake hands before retreated to their respective clubhouses.

Wade and Rajan Rondo

As Garnett and Rondo left the court prior to the final buzzer sounding, the ESPN commentators made quick mention of the Celtics' early exit, but said nothing else concerning the matter.  I assumed that the next morning I would hear SportCenter anchors talking about the unsportsmanlike conduct displayed by Rondo and Garnett, but instead they barely made mention of it.  As a sports fan I was very disappointed.  Usually pundits salivate over their chance to mention a sports star's improprieties, but not in this case.  If a player is arrested for DUI, accused of rape, or in the middle of a divorce, cable news channels pounce on the story, reporting up to the minute details as if martians had just landed on earth, but a lack of sportsmanship goes unreported.

So, let's all remember that a sporting event, while fun, exciting, and important, is just a game.  Nothing is more important in competition than respecting your opponents, your teammates, and above all, yourself.  Parents remind your children, friends remind your friends, and fans remind your fellow fans that we should all show some sportsmanship and be respectful of one another.