Friday Detour: Go Get You Some!

My wife and I were at a financial planner last night and the planner was discussing that we wouldn't be his only "younger" clients. He mentioned in passing that one of his clients was an NFL player in his late 20s or early 30s, who was "not going to be playing football anymore." (He never revealed who it was.)

It got me thinking that this football player was retiring, or not going to be re-signed, and everything he worked for his entire life was going to end at such an early age.

Figuring that that this player, whomever it may have been, probably spent 4 years in college, thus entering the NFL in his mid-20s, I estimated that he probably has been in the league for 5 or so years. Now depending on where he was drafted odds are that he didn't receive one of the outrageous signing bonuses or first year lucrative contracts out of college.

For arguments sake, I will figure that this guy was a late draft pick and had a career mainly played on special teams.

So to figure out how much he probably made during his tenure in the NFL, let's look only at the minimum salaries for players.

As of 2007, the minimum salary for rookies and first year players was $285,000/year. Second year players are entitled to a minimum of $360,000, third year players can receive as "low" as $435,000, fourth year players $510,000 and finally the minimum for 5-year vets is $595,000.

So assuming this player received "only" the minimum throughout his career, he walked away from his job earning a grand total of $2,110,000. His agent took out between 2% and 5% (I think 3% is pretty average) and then the federal government taxed him at approx 30%.

Assuming that the agent received approx $63,000 and the government took an additional $633,000, this player walked away with $1,414,000 for his 5 years in the league. Not too shabby at all.

The problem is that now the player is out of the league and his ability to earn that much money is pretty much out of the question.

If the player never worked another day in his life, his $1,414,000 is the equivalent of him making just over $40,000/year for the 35 years most people are employed. That is not a whole heck of a lot of cash.

Now, I understand that given a bull market and the right investments, he can surely take that large sum of money and live happily ever after. Even in this economy, if he invested into munis or other bonds and returned 5% he could have $70,000 a year for the rest of his life without ever touching the principle. (See, I was listening when the financial planner was speaking yesterday.)

That is not my point. My point is that people all over the sports world complain every time they hear about another big contract. They cringe and cry afoul when they hear that the Yankees tied up approx half a billion dollars this off-season and that people like A-Rod are making $25M a year.

But to them I say "Go Get You Some!"

Since the average NFL career is only 3.5 years that means at minimum these players are earning less than $1M before taxes and agent fees. Again, that is a lot of dough, but think what would happen if you trained your entire life for a job and then were told you could no longer be at that job after only 3.5 years.

Per the 2005 US Census Bureau, the average American makes $32,140. Take into consideration what would happen if you could earn your $30k and change for only 3 years. Essentially that is what is happening to these players.

Sure they can go out and get other jobs and maybe even use their name recognition to their advantage, but ultimately for probably 99% of players, they are "forced" to enter the same world we all live in. Namely desk jobs, manual labor or entrepreneurship. They come back into society, a hell of a lot richer than us, but scrounging for the same jobs we are scrounging for. And this is not what they worked an entire lifetime to achieve.

Now, I don't feel sorry for the ones who mismanage their money. Not a tear is shed for the ones who Jay-Z "See the rollers roll up wit ribbons/I seen them repoed, re-sold then re-driven." (From Kanye West's "Never Let Me Down" off College Dropout.)

But to think that you spend your entire life with one goal; you work hard, outperform your peers and then 3.5 years later are told you aren't good enough and essentially fired. This must be excruciating.

So next time you hear of a professional athlete signing an insanely lucrative contract, think about what is behind the contract and all the other ones that didn't get on SportsCenter for signing a contract and won't have a televised press conference when they hang it up.

For every Brett Favre, who played for 18 remarkable years, there is always a Larry Stegent, a RB for the 1970 StL football Cardinals who had 1 career reception in only one season in the NFL.

Keep sporting!
- Who's In First

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