Is There Life After Football?

by James A. Holstein

  Bad Agents

  How do players get into so much financial trouble with the throng of prospective advisors trailing them around? Perhaps that’s the problem. Many players fall under the sway of seemingly well-intentioned adults when they’re mere teens. Remember, De’Anthony Thomas has been Snoop Dog’s protégé since he was 12. Agents court players from the earliest opportunity, often skirting college rules and NFL standards. Unofficial advisors—often known as “street agents”—crawl out from under just about every rock. Even if players enlist legitimate professional help, there’s no guarantee that an agent or legal representative will provide solid investment advice, or that financial advisors will handle players’ money with players’ long-range prospects in mind.

  The NFLPA requires player agents and financial advisors to be registered and certified. An agent must pass a background check, have undergraduate and postgraduate degrees, attend two NFLPA-sponsored seminars, and pass a written examination covering the CBA, the salary cap, player benefits, NFLPA regulations governing contract advisors, substance abuse and performance-enhancing-drug policies, and other relevant topics. Ongoing compliance with the NFLPA regulations is required to maintain good standing. This includes paying an annual fee, having professional liability insurance, attending an annual NFLPA seminar for certified contract advisors, updating application information annually, and negotiating at least one player contract within a three-year period.52 Registered NFLPA financial advisors must hold a bachelor’s degree, have eight years of licensed experience (FINRA, CPA, insurance license, or license to practice law), have professional liability insurance, no civil, criminal, or regulatory history related to fraud, and have no pending client complaints.53

  Regulated or not, shady advisors have made quite a mark on the NFL financial scene. According to the NFLPA, before closer scrutiny was instituted, at least 78 players lost more than $42 million between 1999 and 2002 because they trusted money to agents and financial advisors with questionable backgrounds. Included in these cases are Luigi DiFonzo, a former felon who claimed he was an Italian count and defrauded players such as Hall of Fame running back Eric Dickerson, and William “Tank” Black, who built a pyramid scheme that took about $12 million from at least a dozen players. In 2008, Atlanta hedge fund manager Kirk Wright was convicted on 47 counts of fraud and money laundering in a scheme involving more than $150 million. His client list included at least eight NFL players and former players, several of whom lost millions. In 2008, Jeff Blake, who played for seven NFL teams from 1992 to 2005, sent a shady e-mail message to 102 other retired players on behalf of Triton Financial, an investment firm in Austin, Texas, whose “athlete services” department Blake directs along with several other former players, including Chris Weinke and brothers Ty and Koy Detmer. The e-mail unabashedly claimed that “Triton is averaging 32% annualized return on its investments within the past five years.” A close examination of Triton revealed no such success. The firm wasn’t even registered with the U.S. Securities and Exchange Commission. There are dozens of other documented accounts of scams and schemes, shady investments, and tax fraud that have cost players nearly everything they ever earned in the NFL.54

  Not only are some agents frauds, but they overcharge their clients as well. “It’s basically large-scale shoplifting,” says Ed Butowsky. “Athletes don’t know industry standards, so virtually every one of them is being robbed.” Stock brokers, for example, may tout bonds with longer maturities because the commissions on them are bigger. Other advisors may overcharge for portfolio management, getting two or three percent instead of the customary one percent. Butowsky recalls meeting a former NFL player whose financial advisor—a former player himself—said that he couldn’t reveal how much he was charging to manage the player’s tax-exempt municipal bonds “because of the Patriot Act.” Butowsky said the advisor was taking $146,000 every year.55 ESPN business analyst Darren Rovell calls the NFLPA’s efforts to regulate agents and advisors “a joke,” claiming it’s something of a scam itself, a revenue stream for the union. Says Rovell, “I don’t think that they can look you in the eye and tell you that they are doing a better job at controlling who should be an official advisor and who shouldn’t.”56

  Grave danger also lies in players’ willingness to let agents take over other aspects of their lives. Butowsky says agents are more than ready: “‘I am going to take care of your insurance. I am going to take care of helping you find a house. I am going to take care of getting you endorsements,’ which very rarely happens by the way. ‘And I am going to take care of your finances.’”57 Players don’t see their bills, or keep track of payments. They’re in the dark about taxes. They lose touch with their own money, learn only what their advisors want them to know, and often end up with far less than they thought they had. “You think of sharks in the hood, you think of gang bangers and drug dealers. You haven’t seen nothing ’til you step into some of these white collar criminals. . . . Look at all the players who got caught up in the pyramid schemes,” laments Bart Scott. Butowsky concurs: “I know many people who have had money wired out of their accounts to private equity accounts or into other accounts without their knowledge. A lot of signature forgery, and that is criminal.”58 Unfortunately, the humiliation of being duped keeps players quiet about their losses, allowing the scamming to thrive. It’s a sad story, told too late, according to Leon Searcy:

  NFL guys are very egotistic. They don’t like anybody to get the best of them on the field or off of the field. So, when they do get [scammed] by an investor or schemer, most of the time they are not telling you, because they don’t want you to know they done got got.59

  Family Fortunes

  Most NFL players insist that they’re good family men, a noble sentiment that sometimes can be costly. George Koonce learned the hard way:

  You sign that first contract and you’re overwhelmed with excitement and expectation. You made it. You’ve been drafted. Then you try to concentrate on football, making the team. And you turn to your trusted friends or relatives to help you stay focused on the job at hand, to earn a spot on that opening day roster. But are your friends and family relatives really equipped to manage your finances? In most cases no. But they are going to try anyway, and you want to let them.60

  Like so many others, Koonce found his family descending upon him from all angles. Former coach Brian Billick warns that relatives suddenly emerge that players have never before met. “However big you think your family is, it will grow in the weeks leading up to your appearance at the NFL draft. At the 2003 draft, Charles Rogers had 98 people in his entourage.”61 Pulling no punches, Bart Scott warns that “getting money sometimes is like turning the lights on in a dark house in the ghetto. It exposes a lot of roaches and rats.”62

  These “new” families often start treating players as breadwinners—or lottery winners—even though their connections are tenuous. Koonce remembers feeling anxious and confused. Adult family members were suddenly asking him for financial advice and help. “They felt that because I was making a lot of money I had all of the answers.”63 At least they were asking. Bernie Kosar signed a $6 million contract in the 1980s and saw his family immediately take over:

  I wanted to get an agent to separate the money, football, and the family, so that we all could kind of coexist. But my family wanted to represent me; they wanted to manage my money. My father, he didn’t really have a job after the mills had closed, and there weren’t a lot of opportunities. I knew with my signing bonus he was paying off his mortgage and paying off the house and cars, and things of that nature. But, as I came to find out later, the Cleveland Browns also cut a contract with my father who also got a million dollars.64

  Not only did Kosar’s family hijack his income, he reports willingly loaning millions more to family members, teammates, and friends—money never repaid. He says financial advisors he “loved and trusted” mismanaged his money, losing as much as $15 million in a rash of bad investments.65

  While Kosar’s si
tuation isn’t typical, it’s hardly unique. Some family members become de facto money and investment managers, while others approach players with “surefire” investment opportunities, showing up needing a little cash to get a hot new business off the ground. Says a former player’s wife about how friends and family tap into NFL salaries: “My husband will go places and meet friends, and everybody has this wonderful idea that just needs some investors. Basically, they want to play with your money. If the investment makes it, then everybody is happy, but if it doesn’t, they haven’t lost anything; only you have. I think that people play on that. ‘Hey, we’ve been friends for years.’”66

  More commonly, friends and family are just looking for a little help from someone they’ve known all their lives who’s now stumbled onto some good financial fortune. Koonce remembers an onslaught of requests from his family shortly after his first payday. His parents had never discussed family finances with him, but suddenly they were lamenting their tight situation. Aunts, uncles, and distant cousins he barely knew were telling him about their financial woes: “If you don’t come through for me, I am basically going to lose everything I got.” “I’ve been out of work, you know the situation with my car, the bills.” Koonce remembers asking himself, “When did I become the bank?” He typically responded with compassion and measured generosity, with only one big regret: “I started a trucking company with my sister. I think I lost over half a million.”67

  Family members’ sense of entitlement is sometimes overwhelming. They fail to recognize the burden their requests actually amount to; tickets to games, airfare to game sites, hotel rooms, and restaurants become expensive. Players sometimes support family members and acquaintances who previously helped them pursue the NFL dream, and married players find their in-laws are suddenly much more “congenial.” Most of the demands aren’t outrageous, but they presuppose the player’s ability and willingness to take care of everyday expenses without batting an eye.68

  Family and friends are generally ignorant of the player’s actual financial situation. They’re unaware that his salary is non-guaranteed and he’s at risk of being released at any time with no compensation. One player and his wife were incredulous when his parents asked him to pay off their home mortgage, even before he made an NFL roster. An undrafted free agent, he had signed a $230,000 contract and received a $15,000 signing bonus. When he was demoted to the practice squad, his salary dipped to $73,950.69

  Clearly, one of the greatest challenges of managing new-found wealth is learning to say “No.” George Koonce isn’t the only player to hear the “tragic” stories of folks he’s known for years. Leon Searcy recalls some of his own:

  People that you have known all of your life all of a sudden can’t function without you. “I can’t keep the lights on. I can’t pay the mortgage, my car note is due.” They knew when payday was. They knew it better than I did. They had it circled on the calendar. . . . They were sitting out in the parking lot, leaning up against my car, asking me to help pay for their car note. . . . You give two or three thousand to eight to ten guys. “I got to have $200 here, $3,000 there. I got this child support; I got to pay my baby mama.” I couldn’t say no.70

  But he had to learn. So did Bart Scott, who recalls taking care of five different households. “I paid more rent than government assistance.” Or Bernie Kosar, who, over the years, claims to have helped out “25 to 50” families. Ed Butowsky chimes in: “I have clients of mine who literally have six houses, for their parents and friends. And they bought them all, and they are making mortgage payments. When their career ends, what are they going to do? Call up and say it is time to move out.” Winfred Tubbs adds an exclamation point. “Out of 100 percent of the money I loaned out I didn’t get one cent paid back.” “It’s hard to tell people that you love, ‘No!’” says Herman Edwards.71 Braylon Edwards amplifies the sentiment:

  It’s hard as hell. You know, your sister might come up to you. Your auntie . . . You might have to tell your mother no. And I know that sounds ridiculous. . . . You have to own your money. The checks that they sending you . . . it says “Braylon Edwards.” . . . These are your checks. The bank account is in your name. The money that they’re trying to come after is yours.72

  Divorce and Child Support

  Former NFL players are more likely to be currently married than comparable men in the general population. They’re divorced at rates approximately the same as their age peers.73 While it’s inaccurate to say their married lives are just like everyone else’s, their marriages are not as unstable as popular opinion would have it—or that the NFL apparently thinks they might be. Jerry Richardson, former NFL player and current owner of the Carolina Panthers, once told his team that divorce was the biggest financial threat they might face. He was probably referring to some of the huge financial settlements that have resulted from divorces involving highly paid NFL stars.74 While Richardson is undoubtedly exaggerating, he reflects a prevalent ambivalence around the league about marriage and women. On one hand they are viewed as steadying forces. On the other, they’re seen as threats to the NFL’s pervasive control of players’ lives. From management’s point of view, marriage is a variable to be managed carefully.

  This is a very instrumental outlook on players’ domestic arrangements. By and large, management thinks marriage is a sign of maturity. Married players are likely to give up the “fast” life and become more committed to settling down to business. The message comes across to players, as George Koonce recalls:

  I got caught up in what do the coaches want to see. I think the coaches feel like if you’re married, you got a family, you’re more responsible. [One player], my idol, he was married. Reggie White, the leader of the team, he was married. So I’m looking like this is what you’re supposed to do.75

  Some younger players think that being married actually improves their chances of making a roster, so they make the commitment. Of course, that commitment is sometimes just for appearance’s sake. “These same guys never stopped seeing multiple girlfriends because they never developed an understanding of what it meant to love another individual as much as they loved themselves and football,” recalls Koonce. “To them, it was perfectly normal to give themselves physically but never emotionally to these women. These same players were shocked when their wives filed for divorce.”76

  The NFL’s instrumental perspective carries over to divorce. It’s viewed as a distraction that needs to be “handled” if it can’t be avoided. Indeed, it’s sufficiently important to be a prime topic at the annual Rookie Symposium, an orientation program for new players. The advice dispensed there, of course, comes mainly in the form of graphic warnings about women who will try to entrap NFL players to tap into their big contracts—“gold diggers,” as they are called—and admonitions to players to protect themselves with prenuptial agreements and other financial safeguards.77

  Realistically, while divorce won’t be a major financial problem for most players, it has deflated many post-career bank accounts. Bernie Kosar, for example, claims his divorce cost him between four and five million dollars.78 Troy Aikman reportedly paid over $1.75 million to settle his divorce.79 There are plenty of accounts of other expensive NFL divorce settlements, which tend to emphasize the cost to players and overlook the investments that wives may have put into the marriages.

  While there’s no systematic evidence confirming that NFL players father more out-of-wedlock children than others of their age and background, anecdotal evidence abounds suggesting that a substantial number of players and former players are paying child support. Indeed, a 1998 Sports Illustrated article titled “Paternity Ward” reported that the number of out-of-wedlock children fathered by professional athletes is “staggering.” One sports agent says he spends more time dealing with paternity claims than he does negotiating contracts. Court records document myriad cases where former players are being held responsible for up to a dozen children fathered out of wedlock.80

  Paternity at this volume can be an
expensive proposition. In some states, a man proven to have fathered a child may be ordered to pay roughly 20 percent of his income as child support until the child turns 18. While the average annual child support payment in the U.S. (2010) is about $5,200, 20 percent of an average NFL salary comes to quite a bit more than that (approximately $154,000). Sometimes judges will cap support payments—for example, at $10,000 per month per child—regardless of the father’s income.81 Recently, we’ve seen a number of highly publicized figures for NFL fathers: As already noted, Warren Sapp owes a total of $75,495 a month in alimony and child support.82 Antonio Cromartie reportedly owes $294,000 a year in child support payments and recently took a $500,000 advance on his $1.7 million salary to cover child support.83 Former NFL wide receiver Terrell Owens says he owes child support of $240,000 annually for each of his four children by four different women. Travis Henry claimed to have a child support bill of $17,000 a month in 2009.84

  Affording Life after Football

  Despite the financial horror stories, most NFL players fare pretty well financially after retirement. Even if the financial stream slows to a trickle, a modest lifestyle seems well within reach of most players. (Of course, as we’ve seen, modest aspirations aren’t the NFL norm.) In an effort to contextualize the “Greedy Players” myth, journalist Hank Koebler of the Huffington Post has constructed a scenario describing just how long an “average” player’s earnings might support himself (and his family) in an “average” lifestyle. Assuming an average career of 3.5 years, paid at the median salary of $770,000 per year, a player could expect total football earnings of about $2.7 million. Conservatively assuming that the player actually takes home around 40 percent of his gross pay after taxes, agent’s fees, and other payroll deductions, that leaves the player with a bit over a million dollars in hand. The United States Census Bureau listed the median U.S. household income for 2011 as around $50,000. Continuing to assume that a player would choose to live within the means of the average household, the accumulated NFL take-home pay for his average career could last him around 20 years, not counting any interest or investment income the savings might generate. That should carry the player to the time when he can tap into his NFL pension (at age 45). While this financial scenario might be quite a comedown from high times in the NFL, it demonstrates that being broke isn’t the only alternative for former players who haven’t struck it rich.85 And it provides an interesting counterpoint to Darryl Gatlin’s account of players’ “obligation” to the NFL lifestyle, raising the question: Does human nature inevitably say, “You have $3 million, you are supposed to live like you have $3 million. So you can spend $3 million”? It’s more likely that this is the NFL player ethos talking.