Sidelined: Nearly 1 In 6 NFL Players Files For Bankruptcy

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We might think professional athletes score outrageously large contracts, but it turns out that multimillion-dollar careers aren’t enough for 15.7 percent of NFL retirees.

Nearly one in six ends up filing for bankruptcy protection after retiring from the league, according to an analysis published this month by the National Bureau of Economic Research, a private, nonprofit, nonpartisan research organization in Cambridge, Massachusetts.

The authors used NFL players to test the theory of consumption smoothing, which, the Wall Street Journal explains, states “that people will save more when their income is high to help cover future expenses when their income will be lower.”

To test whether the professional athletes had set aside sufficient savings, the authors analyzed how many retired NFL players file for bankruptcy. The authors collected data on all players drafted by NFL teams from 1996 to 2003.

The authors state:

Contrary to the life-cycle model predictions, we find that initial bankruptcy filings begin very soon after retirement and continue at a substantial rate through at least the first 12 years of retirement.

That’s not necessarily their most surprising finding, however. Neither a player’s total earnings nor the length of a player’s career affects bankruptcy rates, as one might expect.

“Having played for a long time and been well-paid does not provide much protection against the risk of going bankrupt,” the authors state.

One of the most “astonishing” examples of NFL retirees who’ve been to bankruptcy court is Warren Sapp, Money magazine reports:

The seven-time Pro Bowler and Hall of Fame defensive tackle earned $82 million during a 13-year career that ended in 2007. By the spring of 2012, however, he filed for bankruptcy, even though he was still pulling in $116,000 per month at the time as a TV analyst.

Last month, the website GiveMeSport detailed the financial fates of eight NFL players who filed for bankruptcy despite earning more than $50 million. No. 1 was former Atlanta Falcons quarterback Michael Vick, who reportedly filed for bankruptcy in 2008 despite $130 million in earnings.

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