Why do rich athletes go broke?

[jeffrey]

Man, karma’s a bitch.

That’s not to say Latrell Sprewell is deserving of the fate he now shares with countless other Americans by virtue of having his home foreclosed on. But then, we are talking about a baller who easily made in the neighborhood of $40-50 million over the course of his 13-year NBA career, then thumbed his noise at the chance to earn at least $21 million more by defiantly retorting “I’ve got my family to feed” when Minnesota offered him a three-year extension back in 2004...

Perhaps he's in denial, as seems the case with four-time heavyweight champ Evander Holyfield "I'm not broke; I'm just not liquid," the 45-year-old Holyfield argued recently upon narrowly avoiding a court appearance on charges that he was around $9,000 behind in court-ordered child support payments for one of his 11 children...

New York Sports Examiner: Why do rich athletes go broke?

[kork13]

the maddening sense of invincibility and entitlement

Gets 'em every time... ya know, I think in every "riches to rags" story (or just "where'd all my money go?", as is the case here) I've never seen one where the phrase "a sense of entitlement" was absent.

Personally, I'll never understand why athletes and movie stars are even offered million-dollar salaries... I mean, even your bottom-rate new guys still get around 1 million/yr. Are they really considered that necessary? I mean, doctors are highly paid because their education is expensive, malpractice insurance is expensive, and they have a skill set that's always in high demand... but even still, how many top doctors do you see broaching the $1M salary line? Not too many... yes, they're clearly out there, but the large majority are still well below $500k. So I just ask why? Does your average sports player really need, or even deserve a $15M salary? I defy someone to validate that to me...

[gamecock43]

There is no financial education in the NBA. The go from college scholorships into the NBA making millions immediately. They have literally never had to pay for anything.
Then there is no education about money, just an emphasis on making it.

kind of a boring reason- it is the same as anyone else who wins the lottery or whatever and is broke within a few years.

[kork13]

But that doesn't answer why it happens... I mean, why would a team want to pay somebody millions to play? what do players provide that is worth paying that much for? (besides advertising value? or is that probably it?)

I did just think of one, actually, that at least validates a higher-than-most-jobs salary.... Pro athletes (esp. football players) subject their bodies to a great deal of punishment... not just spraining ankles, but breaking bones, tearing ligaments, getting concussions, etc. First you need to be able to pay for treatment, then also there's the risk that a serious injury (back injuries particularly) could not only end your sports career in an instant, but also prevent you from working for a while.

Still, it seems a bit excessive....

[gamecock43]

TV rights....TV pays the team millions of dollars to show the games- knowing that advertisers for shoes/beer/food will pay millions to advertise during the game.

Then there is the private cable channels that sell "NBA packages" and you buy the channel for the season and get ALL the games, rather than just local teams. ...The NBA sells their rights to have the game televised.

The numbers are astounding. And the players want a piece of the action.

The players have agents that are really good 'crap sellers' in a way who can convince the team that this player is their answer to winning...because winning teams tend to create something like an extra 60% of fans while they are winning. (I read that about baseball teams...outdated info too..from the late eighties...but I assume it applies here in some sense.)
winning =fair weather fans= who equal some dollar amount in revenue for each extra fan.

And all NBA gear (I assume) gives a portion of ALL sales to each team. (Thats how it is in MLB) so if you buy a jersey...each NBA team gets a portion of that money.

So there is alot of money in sports. It is insane that these guys make more money than the president- but if the players just got a normal salary then the owners would be making many many millions of dollars a season. Obv the players feel exploited and demand more money.

[gamecock43]

and each player is insured by the team for career injuries- if it's career ending- then there is workmans compensation. (coming from an MLB background)...but think about this...the MLB is the only sport that offers retirement (that I know of..and only if you play in the majors)...so those millions literally NEED to last these guys forever.

[maat55]

But that doesn't answer why it happens... I mean, why would a team want to pay somebody millions to play? what do players provide that is worth paying that much for? (besides advertising value? or is that probably it?)

I did just think of one, actually, that at least validates a higher-than-most-jobs salary.... Pro athletes (esp. football players) subject their bodies to a great deal of punishment... not just spraining ankles, but breaking bones, tearing ligaments, getting concussions, etc. First you need to be able to pay for treatment, then also there's the risk that a serious injury (back injuries particularly) could not only end your sports career in an instant, but also prevent you from working for a while.

Still, it seems a bit excessive....

I've wondered the same thing, where does all that money come from to pay the players and the owners. One thing I'm sure of is that it is coming from us in the end. We buy the products they endorse.(I personally do not buy Nike just so I can say: they're not getting it from me) I'm sure Nike is a good company, but high adds costs has to be involved.