Going for Broke: Bankruptcy and Professional Athletes


Olympic MedalsAthletic prowess is at the forefront of much of the world’s minds these days, with the Olympics having just wrapped up this summer. The broken records, stamina, and strength of Olympians from all over the world don’t necessarily reflect their financial status, however, even in America where endorsement contracts for top athletes are typical. The fact is, the families of athletes across the spectrum, including Olympians, collegiate athletes, and pros, must make huge financial sacrifices for years to accommodate the level of training required to reach success.

Although athletes are worshiped in our culture, very few resources are made available to offset the high cost of the training and coaching required to get to the Olympic stage.  Unlike in countries such as China, the U.S. does not subsidize its premier athletes. What this means is that, unless they are able to translate their successes into lucrative tours and endorsement deals, world-class athletes (or more, accurately, their families) have to sacrifice vast sums of money, and many end up broke or even bankrupt.

Even pro athletes are not immune to financial hardship, with many going bankrupt, usually after retiring.  In fact, Sports Illustrated estimated that nearly 80 percent of NFL players go bankrupt or face serious financial stress within two years of ending their playing careers, and that 60 percent of NBA players are broke within five years of retiring from the game.  Unlike Olympians, though, the pros tend to go broke from lavish spending, bad financial advice, and poorly considered investments. Here’s a look at top athletes and their families who have paid the price of athletic glory.

Broke and Bankrupt Former Athletes

It’s no secret that professional athletes, particularly in highly popular and well-funded team sports such as NFL football and NBA basketball, make enormous amounts of money. The average NFL player salary, according to Business Week, is $1.9 million—a salary that most of us would consider serious riches. However, several retired NFL, NBA, and MLB players are now seriously hurting for cash:

•    NBA Hall of Famer and notorious bad boy Dennis Rodman reportedly owes his ex-wife $808,935 in back child support, as well as $51,441 in spousal support, and may end up in jail due to his inability to pay. His well-known drinking problem may have something to do with the loss of his NBA fortune.

•    Another NBA superstar, ex-Bulls player Scottie Pippen, is also feeling the financial squeeze. The player who earned a reported $120,000,000 during his career, lost it through bad investments, unscrupulous lawyers, and ridiculously lavish spending.

•    Super Bowl winner and long-time NFL star, Warren Sapp, filed for bankruptcy last April. TMZ reports that he owes more than $6.7 million to his creditors, including back child support and alimony, and IRS debt.

•    Lenny Dykstra, who played for both the Mets and Phillies, filed for bankruptcy in 2009, claiming to have owed $30 after a series of failed business attempts.
Of course, losing a fortune amassed through athletic prowess isn’t limited to the big 3 sports:

•    Boxing champion Evander Holyfield was recently evicted from his 54,000 square foot mansion in Atlanta and owes millions to creditors, including the IRS. He’s reportedly selling everything, including memorabilia and jewelry, to pay off his debt.

•    Olympic sprinter Marion Jones was busted for doping after dominating the 2002 Olympic Summer Games, and things only got worse after that. Within 5 years after winning her 5 gold medals, the track star was reportedly worth all of $2,000. Legal bills were a major contributor to Jones’s financial losses.
Bankrupt Current Athletes

While the vast majority of broke and bankrupt athletes are retired, there are other current pros living on the razor’s edge of financial ruin despite the fact that he hasn’t yet retired.

•    NBA player Allen “the Answer” Iverson who, even as he continued to receive paychecks, has reportedly spent everything he made on bling, mansions, Bentleys, and treating his friends and family.

Broke Olympic Families

While high profile Olympians may be winning fame and glory from their spectacular Olympic performances, many of their families are paying the piper for all the training and other expenses that got them there.

•    Gymnastics superstar Gabby Douglas is slated to make millions in the coming years from endorsements, but her mother has filed for bankruptcy to clear her $80,000 of debt, most of which is mortgage-related.

•    Similarly, as the ink still dries on swimming champ Ryan Lochte’s lucrative endorsement deals, his parents are facing foreclosure on their home, not having been able to pay the mortgage for over a year.

Training costs for Olympic-level athletes can easily exceed $100,000 per year, not including lost earnings when parents are required to travel with their athlete offspring. Most of the costs fall on the shoulders of the parents. With any luck, these athletes and others will go on to help out their families now that they’ve made it big—and find a way to hold onto their fortunes long after they’ve retired.