Dave Seminara reports in the New York Times today on a new MBA program for off-season athletes at the George Washington University in D.C.:
“Something like 75 percent of N.F.L. players are bankrupt within a few years of retiring,” said Doug Guthrie, the dean of George Washington’s School of Business, citing a statistic first reported in the 2009 Sports Illustrated article “How and Why Athletes Go Broke.” “We started thinking about this problem not just from the perspective of our business school, but for our society. If you give these people the right business skills and resources, what would it mean for society as a whole?”
Great idea. When athletes ignorant of basic economics go bankrupt, it’s a personal and family tragedy, but they lose only their own money. It’s congressmen and state legislators who really need this program, because they’re bankrupting the whole country. Can we make attendance at classes on introductory economics — heck, basic math — a requirement for lawmakers when they’re out of session?
It's important to note that, while some football players are economically illiterate, that's hardly the only reason many face financial difficulties after leaving the NFL.
In the NFL, unlike the NBA and Major League Baseball, salaries are NOT guaranteed. When a team cuts a player, they no longer have to pay him. So, when you read a headline like "All-Pro Wide Receiver Tyrone Speedburner signs 6 year $120 million dollar contract, do NOT assume the guy should be financially set for life. In all likelihood, the contract is "back-ended", meaning that MOST of that hypothetical $120 million will come in the last two years of his contract. And the team is very likely to cut him long before then.
So, a few years later, when you read "Tyrone Speedburner declares bankruptcy," you shouldn't assume he's a dope who blew $120 million. Odds are, he NEVER received a fraction of that $120 million you read about.
Reply to this commentLinkReport AbuseYou make an interesting point. However, even if a player was payed "only" $12 million rather than $120 million, I find it hard to feel sorry for someone who squanders that kind of money.
Reply to this commentLinkReport AbuseThis is a good example of the fanaticism we see every day, but simply accept without question. The underlying argument here is the athletes need education and then they will save their money instead of blowing it on cars and strippers. We have this guy squandering public money on educating football players about the perils of strippers and Bentleys.
Every NFL player has spent at least three years in college. NBA players barely go to high school, but the NFL has an age limit and that means all of these knuckleheads are spending three years at a university. Somehow, they come out, many with real diplomas, ready to blow their paychecks on cars and strippers.
Only a lunatic looks at these facts and concludes they need to "solve" this problem with more education. The sane person accepts the fact a fool and his money are soon parted. Yet, this guy is probably getting high fives from the other lunatics in his department as well as hosannas from the press.
Reply to this commentLinkReport Abuse"Can we make attendance at classes on introductory economics — heck, basic math — a requirement for lawmakers when they’re out of session?"
You are really bubbling with good ideas this morning, Mr K! (What did you have for supper last night?)
As to the athletes -- don't most of them go to college before they turn professional? So how about a campaign to have the colleges make their athletes take courses in economics (also, while they're at it, in public speaking)?
Reply to this commentLinkReport AbuseMark,
Reply to this commentLinkReport AbuseHow about we have ALL congress-people complete their own taxes on, say, March 15, in public, so we can all see how much they're enjoying the process. They can use TurboTax or other commercially available software, but no tax accountants or lawyers. It would be great introduction into the economic effects of "revenues".
The percent seems way too high. When I looked at several of these “athletes go bankrupt stories”, they seem self referential and have that same feel that somebody stuck a number in an article somewhere and no one ever questioned it. Numbers proceeded by “something like” well… This is similar to the “450,000 people who die of tobacco related disease” each year in the U.S. that is overstated by at least 300%, but heck, the number shows up everywhere so why look it up?
Reply to this commentLinkReport Abuse"The percent seems way too high. "
I was thinking the same thing. I would love to see the actual study that this comment is based off of; there is a study right? This guy is (allegedly) a professor, so you would think reliable data would be important to him, particularly if he wants to invest the money in a specific curricula.
Then again, I do know that quite a high percentage of those drafted each year are out of the league within 2-years, if they get signed at all. Maybe those numbers really drive the overall percentage up. I could see a guy making league minimum for two-years while living like a king, and then the first year out of the league, when he's making zip and (likely) without any college degree, could be in heap big trouble, financially.
I would love to see the statistics divided up by athletic conference or even better yet, program. You have programs in the SEC that don't even graduate 40% of their players, while at the same time sending many of those same players to the NFL. You have to imagine the business/financial acumen with these athletes is the worst.
It would also be interesting to see a similar study for professional basketball players. Considering how many of the NBA never graduate (or even attend class), if it's high for football players, it has to be high for the NBA.
Reply to this commentLinkReport AbuseNo, we really don't need lawmakers to become like teachers, requiring a certain number of continuing education credits to keep their jobs. What we need is for the voters to pitch them out on their ear when they demonstrate their utter lack of economic sense. Of course, that requires that the *voter* be able to identify basic economic sense....................
Reply to this commentLinkReport AbuseDoes anyone think that most NFL players would have the GRE scores and grades to qualify for this type of program?
I know, many are smart enough to go through this training, but I would bet they wouldn't need it in the first place.
Or is this another school looking to build up it's celebrity cred, like Yale and Harvard?
Reply to this commentLinkReport AbuseLook: This country has a President who has shown that he has no idea of the way the world works - no familiarity whatsoever with the basic concepts of economics.
And we're worried about football players?
Reply to this commentLinkReport AbuseI have an MBA. I don't recall a class on how to keep your ego in check or manage your sense of self-importance. Accordingly, I doubt business school would have much of an impact on your average congressperson.
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