The sports industry offers many of its professional athletes a plentiful salary. That said, time after time, poor financial decisions have left many pro athletes in unfortunate circumstances.
According to CNBC, over 60% of NBA players have gone bankrupt during the first five years of retirement. While many factors can lead to these hardships, many have been tied to the culture around money within the Sports Industry.
Financial Literacy has only become more important in recent years following the establishment of the NIL regulations in 2021, which gave NCAA college athletes the ability to profit off their likeness.
New Trader U noted that some of these reasons include the short careers athletes have in their respective fields, lifestyle pressures from maintaining demanding purchases like cars and homes, financially assisting friends and family, or even bad business ventures.
Simply put, these financial failures are likely due to the school system’s failure to properly educate young people on managing their finances. This has resulted in young athletes walking uneducated into endorsement deals without proper representation. It is a sentiment that has been echoed by Ithaca College sports media professor Ellen Staurowsky to Yahoo Finance.
“There is a lack of infrastructure to provide protections that athletes need, making them vulnerable,” said Staurowsky. “These athletes are being offered endorsement deals that sign away rights to their name, image, and likeness into perpetuity because they didn’t have representation and were doing this on their own. There needs to be real reform like a player’s association to support college athletes to have a place at the table.”
One of the biggest ways the sports industry can combat this is by creating and uplifting education programs focused on financial literacy for athletes. Thankfully l, major organizations like the NFL have already gotten a head start.
The NFL Players Association Financial Education Program is one such program. Other initiatives, from officials and other retired athletes within the industry, have focused on using social media as a platform to push out financial information.
Retired NFL player Carl Nassib told CNBC how he uses his own life stories on personal finance using his social media.
