I’m sure when most of you read a story about a professional athlete filing for bankruptcy, you think the same thing I do: How in the hell could a millionaire athlete blow through all of their cash? SPORTS ILLUSTRATED looked into the matter and found two big problems: reckless spending and bad investments. Very, very bad investments.
How bad? How about an inflatable raft meant to go under your sofa so that if a flood came, you could float to safety on your sofa? Or a mouth guard that claims to increase your performance by setting your jaw in an “optimal position“? It seems that for every Magic Johnson, who parlayed the money made from his playing days into a business empire, there are scores of athletes making P.T. Barnum sound like a prophet.
The article includes some sobering statistics: 78% of all NFL players are bankrupt or “under financial stress because of joblessness or divorce” within two years of retiring from football. And an estimated 60% of NBA players are “broke” within five years of retirement. Which explains why shows such as “Pros vs. Joes” can continue to recruit former star players to debase themselves and exploit their athletic achievements for nickels on the dollar.
The player in question who thought that floating sofas was a great investment idea was Angels OF Torii Hunter, who gave $70,000 to an apparent flim-flam man before being brought to his senses by Ed Butowsky, a managing partner at a Dallas wealth management firm who has been giving free “boot camps” to current and former athletes to help them remain financially solvent.
Which is part of the problem: many athletes see their wealth as a chance to make a host of risky investments, hoping one of them will be the one that makes them big-time businessmen. Like Raghib “Rocket” Ismail, who blew through a good chunk of his Toronto Argonauts money with a series of lousy investments. Along with his current mouthpiece venture, other losers included:
- a Hard Rock Cafe-themed restaurant
- a music label
- a series of nationwide phone card dispensers
- a framed calligraphy store
But Ismail says that the mouthpiece, which claims to help athletes “physiologically perform at the highest level” by setting the jaw in a correct position, is a possible winner. After all, he can vouch for it since he used it in his playing career. So Rocket Ismail’s pro career is what he’s using as a baseline for “optimal”? I think we can add another investment in the loss column.