In 2009, Sports Illustrated published “How (and Why) Athletes Go Broke,” a piece detailing the financial hardship suffered by retired professional athletes. In it, SI claimed that “By the time they have been retired for two years, 78 percent of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.”
Since then, the statistic has been highly cited and widely circulated, serving as a cautionary tale to current and former players and an illustration of how fleeting the money and fame of being a professional athlete can be.
However, a new study by the National Bureau of Economic Research has blown Sports Illustrated’s claims out of the water. The study (via the Wall Street Journal) actually found that 15.7 percent—or one in six—of NFL players file for bankruptcy within 12 years of retirement. The findings found “little difference based on career length or earnings” among players. [mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#eeee22″ txt_color=”#000000″]”[H]aving played for a long time and having been a successful and well-paid player does not provide much protection against the risk of going bankrupt,” per the report.[/mks_pullquote]
Additionally, the Bureau’s report saw bankruptcy filings increase within two years of an NFL player retiring, and then going up over time. The filing rate was also “similar to or higher than” the rate of bankruptcy filings among the general population. The findings were based on data collected on approximately 2,000 players drafted into the league from 1996 to 2003, bankruptcy court records and financial information available on about 900 of those players.
Granted, this information does not necessarily directly clash with what Sports Illustrated wrote in 2009, given that their 78 percent figure includes “financial stress,” separate from bankruptcy. They did not detail exactly what “financial stress” entails—and such a broad statement could certainly apply to 78 percent of retired NFL players, just as it could for 78 percent of the people reading this sentence.
But now there is a concrete number of how many former NFL players have or are expected to go broke after their playing careers have ended. Though distressing, it is still not as egregious a situation as Sports Illustrated made it out to be in 2009. It turns out that high-paid athletes can in fact behave more responsibly with the money they made than was initially believed.
Photo: USA Today Images