Why are professional athletes prone to bankruptcy?
Earlier this week, it was announced that former professional football player and current television analyst Warren Sapp had filed for bankruptcy. In doing so, Sapp joins a growing list of former professional athletes who have been forced to file for bankruptcy after retiring from their team. This has led many to wonder: why is bankruptcy such a common occurrence among retired pro athletes?
It seemed that Sapp would avoid the bankruptcy curse when he parlayed his successful pro football career into an equally lucrative position as an NFL analyst for Showtime and the NFL Network. His outgoing personality contributed to his popularity as an analyst, and even led him to a second-place finish on “Dancing with the Stars.”
But despite his successful career, Sapp reportedly had trouble paying his bills. According to his Chapter 7 bankruptcy filing, he owes nearly $7 million to his creditors and for back alimony and child support. His filing details his nearly $6.5 million in assets, and states that he currently earns a monthly income of $115,881.
Sapp is certainly not the first retired professional athlete to file for bankruptcy protection. In recent months, several big-name players have made a filing, including Terrell Owens, Allen Iverson, Dennis Rodman and Lenny Dykstra. And they are just a small representation of a larger problem: According to Sports Illustrated, 60 percent of NBA players and 78 percent of NFL players file for bankruptcy within just two years of retiring from their league.
The NFL has a rookie symposium program designed to provide new players with information and education on how to manage their new incomes. It seems that the league may need to do more to protect its players from financial ruin.
Source: The Washington Post, “Warren Sapp: The latest multimillionaire athlete to file for bankruptcy,” Matt Brooks, April 9, 2012