Do NFL Players Understand Life After Football?

When I was thinking about creating a post for the business side of the NFL a few things came to mind.  How much money the NFL makes, what players have benefited from NFL marketing, who are the current stars to make the NFL successful and so on.  One of the biggest things I thought about was making sure to protect the investment.  For me the investment is the players.  I want to make one thing clear…the NFL and the NFL Player’s Association (NFLPA) are not responsible for player’s actions, because these players are paid as employees.  Even though the NFL and NFLPA are not responsible, I could see a company created to protect the players outside of an NFL agent’s position.

An enormous amount of NFL players graduate or leave college early with no true understanding of what life is like after football.  Below are three (3) things that came to my mind about many, not all, but many NFL players:

1. The First Job out of College

Life is a valuable possession and a major part of our lives are spent building our careers.  Most of society will build a career for money; some do it for the love and others commit to volunteer or charity work.  NFL players receive instant lottery tickets.  When a collegiate football player is drafted to the NFL, he goes from scraping change to get vending machine food or eating cafeteria food directly to the life of luxury.

According to a July 2011 article at Pro Football Talk at NBC Sports.com, rookies will receive a minimum salary of $375, 000.  I will repeat; rookies will receive $375,000.  They did not get a supervisor position at $50 to $60 thousand annually or a manager’s position at $75 to $90 thousand annually.  This is $375,000 to sit on the bench.  How would you like to work out a lot, sit in your office and shuffle a few papers, then attend big weekly meetings and sit far in the background with no input?

Most of the experienced working class understands what it is like to earn your money.  When a rookie player, who is normally between 21 and 24 years old, receives an annual salary of $375,000 it is very hard to budget spending.  Even if the player is a veteran of two or more years, the salaries rise above a half million dollars.  Imagine if a player was lucky to get playing time and made a few touchdowns, he might receive a million dollar contract or more.  A lot of young players cannot budget this type of money because never had money growing up.  I can say that most players seem to be very happy with their first job out of college.

2. Fees Outside of Contracts

Once these players receive their first check, sports magazines and newspapers, Internet sites, Hollywood reporters and others write about spending escapades.  Some of these players purchase extravagant things like homes for family members, three and four cars, and diamond clustered jewelry costing hundreds of thousands of dollars.

Before outside fees kick in, I would like to break down an example of a rookie contract using Josh Gordon of the Cleveland Browns, according to NFL.com.  Gordon is a rookie drafted in the 2012 class and is expected to receive $5 million over four years.  Brian McIntyre of NFL.com states, “…the contract is worth just over $5.3 million and includes $3.8 million in guarantees”.  If the contract is equally spread over the four years, this equates to $1.325 million including $950 thousand guaranteed per year.

Not saying that this is what Gordon would do, but if Gordon or another rookie saw the annual tax bracket, they may think twice about future spending.  According to Forbes.com, the 2012 Federal tax rate for a single person making over $388 thousand is 35%.  $1.325M (x) 35% (=) $463,750.

Before Gordon spends any money, his $1.325M salary (-) $463,750 (=) $861,250 left in his pocket each year.  Depending on where he lives (we know it’s Cleveland), there are a variety of other taxes that could eat at his paycheck reducing his funds to an estimated $800 thousand in salary.

Let’s say Gordon buys a home for his mother and himself.  Then he goes and buys two cars and some jewelry.  The receipts for these big-ticket items could total over $1 million.  He does not have to pay that each year, but there are maintenance fees for each of those items.  Hidden costs can ruin an individuals dreams and I guess that is why they are hidden.  If those were displayed more dreams may be diminished. 

3. NFL Player’s Length of Career

I believe most players have dreams of playing forever, but how long do NFL careers really last?  We have seen stars like Bret Favre who played for 20 years, but he is not the average.  According to NFL Communications.com, the average career of an NFL player is only 3.5 years.  Every pro football team has a 53-man roster.  A total of 32 teams in the NFL (x) 53 players (=) 1,696 players each year.  With jobs for almost 1,700 players each year, a large percentage of them will only last for 3.5 years.

Players need to ask themselves, what is my life after football?  Players do have 401K Plans, but according to Fox Business.com, the shortened span of a player’s career may cut their long-term financial livelihood short.

Under the title “Retirement Benefits: National Football League” is where Fox Business has provided the 3 types of retirement benefits set up for NFL players: (1) Pension Plan, (2) NFL Player Second Career Savings Plan – like a 401K plan, and (3) the Player Annuity Program.  All 3 of these plans provide some financial insurance, but not all.

With the shortened playing careers, some athletes have parlayed their talents into advertising, broadcasting, and even Hollywood.  For example, ex-football players and now hosts for Fox NFL Sunday have seen extensive work outside of football.  Terry Bradshaw has appeared in Hollywood films such as The Cannonball Run 2 with Burt Reynolds and Failure to Launch with Matthew McConaughey.  Howie Long has appeared in several movies including Broken Arrow and 3000 Miles to Graceland starring Kevin Costner.  Michael Strahan has appeared in several Subway television commercials and is currently the co-host to Kelly Ripa on the morning talk show live with Kelly and Michael.

In conclusion, most of society does not prepare for the additional fees outside of our paychecks.  Straight out of college, kids get jobs and are happy they are getting paid.  When things like gas for your car, rent, and taxes start eating away at your paycheck, it can be a little difficult to swallow. 

For some of the NFL players with an average career span and no plan for the future the sad conclusion could be…..no money in the end!