Sports fans often feel that the life of a pro athlete is glamorous. But behind the scenes, athletes are forced to deal with problems that arise from their money and fame.
That is where a company like California-based Financial Finesse comes in. The financial education firm, founded in 1999, has recently partnered with the NFL Player's Association (NFLPA) to offer players and their families financial guidance.
It is the culmination of numerous attempts by the NFLPA to join with Financial Finesse to develop a program to help its players. It comes at a time when NFL players are in a precarious position, dealing with the reality of a potential lockout for the 2011 season. As stated in the press release for the program, the NFLPA and its Executive Director DeMaurice Smith felt that the players needed financial education in preparation for what could be coming in the foreseeable future.
"We have actually been talking to them [the Player's Association] for a while," Nancy L. Anderson, a Certified Financial Planner™ at the firm, told the Daily. "At Financial Finesse we only do education — we are a financial education firm. The NFL already has programs where advisors work with the players. They were looking to add a piece with education that is completely unbiased."
The potential of a looming lockout, coupled with the reality that NFL players do not receive guaranteed contracts, is enough to cast some doubt on the financial security of these players. And while the average salary of a player is $1.1 million, many NFL players find themselves in precarious positions once they leave the game of football; 78 percent of players are in some financial turmoil — going either bankrupt or suffering from the financial burdens of unemployment or divorce — within two seasons after retiring, according to a March 2009 issue of Sports Illustrated.
"First of all, if you think about an NFL player, as you can imagine it is highly competitive," Anderson said. "When you think about this player all of a sudden making hundreds of thousands of dollars … some of the problems they run into [are] spending the money when they don't have it, identity theft, fraud and different business opportunities that were put together when they don't understand how to look at a business opportunity to compare it."
With NFL careers being fleeting — the average career lasts less than four seasons — the NFLPA also hopes that Financial Finesse can prepare its players for their life after football. Many of the players' financial problems stem from poor investments or money mismanagement.
The NFL has had its fair share of prominent players who have suffered financially, from former New Orleans Saints running back Deuce McAllister's bankrupt car company to former NFL running back Travis Henry's myriad child support payments to former wideout Raghib "Rocket" Ismail's numerous poor investments. But the league is hoping that more information will prevent such problems in the future.
"These guys have their peak earning years early when it is really hard to realize how much money that is, so if they can save half of that, it can be a huge win for their future," Anderson said. "Every NFL player needs to start their career thinking about how they will transition into their second career, and that is something where we have some steps for them and resources for them on the financial learning center."
The financial learning center that Anderson alludes to is a computer program that, through Financial Finesse, allows both players and their families to log on and input their unique personal information to help determine what steps they must take to keep their finances in check. Anderson says that the goal of the learning center is to get players to develop good spending habits early on in their careers so as to avoid problems further down the road.
"It is really important for them to have both [the] basic and planning tools they need to really understand about living on a budget," Anderson said. "One of the things we are encouraging players to do is to save 25 percent of their income this year and 25 percent next year. They should be doing it anyway, and what they are doing is to have the players have extra cash if there is a lockout.
"We are providing tools for them to figure out how to put together a budget and how to save and where to save," she continued.
With athletes' lives off of the playing field becoming increasingly more scrutinized, the NFL is doing something to try to keep its players out of the headlines for any off-field exploits, particularly when it comes to financial circumstances.
"You think of the NFL player, and you don't usually think of financial problems," Anderson said. "You think they are making hundreds of thousands of dollars, and they have it made, but it is really important for the players to take the best advantage of that money."
