Paul Pierce "drowning financially" after earning $200m over basketball career

[liam]

I believe Larry Joe Bird has the first dime he ever made still.

[Roy H.]

Never trust anything in a child support affidavit, lol.

That said, Paul needs to significantly lower his expenses.

Last:  Quit gambling and support your kid, dude.

[Birdman]

Sorry but I don?t feel sorry for him or anyone who made that much money and now it?s almost gone.

[Csfan1984]

Absolutely. They should have been much more responsible. That's in spending and in life style. Basketball isn't forever every player has to retire at some point. Setting up long term should be the goal even when on a rookie contract. Budget and be disciplined.

What's even scarier is what's going on with a lot of the NIL kids right now.

The NIL looked like a positive but for some players it's a nightmare. For a lot of schools it's been a negative.

[Neurotic Guy]

Sorry but I don?t feel sorry for him or anyone who made that much money and now it?s almost gone.

I don?t think it matters if you feel sorry for him or not. I think what matters, since 78% of pro players go broke after 3 years (per Ozgod post), is that this happens with regularity.  I?d be interested in what variables correlate with this cluster of athletes. 

Paul Pierce is one of many and I?m not sure what would prevent this or decrease the likelihood of it.  I know pro sports offer guidance to rookies but NBA (esp rookies) are children. They are adolescent and they behave like adolescents. We know that many people well into their 20s continue to have adolescent, impulsive brains. 

It isn?t so much about the tragedy of Pierce?s financial challenges, it?s that so many of these players end up in similar situations.  It seems obvious that efforts to prevent this haven?t worked, so if I?m a leader in the players union I might start thinking out of the box.  Maybe a player pension plan that they are required to pay into that would be available only later in life would at least be a help. Idk, but it?s clearly a problem that pro leagues should address.

[No Nickname]

I believe Larry Joe Bird has the first dime he ever made still.

Didn?t Bird also have his own issues with acknowledging his biological child and paying for support for a while?

[ozgod]

Sorry but I don?t feel sorry for him or anyone who made that much money and now it?s almost gone.

I don?t think it matters if you feel sorry for him or not. I think what matters, since 78% of pro players go broke after 3 years (per Ozgod post), is that this happens with regularity.  I?d be interested in what variables correlate with this cluster of athletes. 

Paul Pierce is one of many and I?m not sure what would prevent this or decrease the likelihood of it.  I know pro sports offer guidance to rookies but NBA (esp rookies) are children. They are adolescent and they behave like adolescents. We know that many people well into their 20s continue to have adolescent, impulsive brains. 

It isn?t so much about the tragedy of Pierce?s financial challenges, it?s that so many of these players end up in similar situations.  It seems obvious that efforts to prevent this haven?t worked, so if I?m a leader in the players union I might start thinking out of the box.  Maybe a player pension plan that they are required to pay into that would be available only later in life would at least be a help. Idk, but it?s clearly a problem that pro leagues should address.

I tried to sanity check that "78% of pro players go broke" stat that came from Pablo Torre's 2009 Sports Illustrated article by pulling this year's salary (AAV) data for NBA players from Spotrac. I wanted to see how salaries are distributed, because obviously you have your supermax guys and then your guys on vet mins or low contracts. Someone like Tatum is on generational money at $60m a season for 4-5 seasons, if he invests even 10% of it it's going to be enough for him, his kids, and his grandkids and great grandkids to live on as long as they're not blowing their money on entourages, child support, entertainment, strip clubs, cars and all those things that people who suddenly come into a huge amount of money tend to blow their money on. But what about the guys on the other end of the scale? Guys like Luka Garza ($2.5m) or Amari Williams ($600k). Say they have a 5 year career and are out of the league. Is that enough to live on? Will they go broke?

Again, the qualifier is this is a single-season salary, not career earnings...I picked it because a) I'm just looking for some idea on income distribution; and b) it's a bigger pain to convert the career earnings data into Excel so I just picked single-seasons which should give an order of magnitude answer.

Here's what I found:

(click to enlarge)


So nearly half of all NBA players make $5m or less a season, nearly 2/3 total make less than 10m. 20% make over 20m a season. So when trying to correlate that to "78% of pro-players (not NBA, all of them) go broke 5 years after retirement", assuming that other sports have similar income distribution, it makes more sense that if those guys making less than $5m a season blow it all on bling stuff, they're going to be broke. You'd assume that Truth wasn't in that category though, $200m is a lot 

As for a pension plan, they've had one since 1965. Unfortunately you  have to be 50 before you get paid, and maybe some of them have blown all their millions before that 

https://www.hoopshype.com/story/sports/nba/2020/03/02/how-nba-pensions-work/82917228007/

[Neurotic Guy]

Sorry but I don?t feel sorry for him or anyone who made that much money and now it?s almost gone.

I don?t think it matters if you feel sorry for him or not. I think what matters, since 78% of pro players go broke after 3 years (per Ozgod post), is that this happens with regularity.  I?d be interested in what variables correlate with this cluster of athletes. 

Paul Pierce is one of many and I?m not sure what would prevent this or decrease the likelihood of it.  I know pro sports offer guidance to rookies but NBA (esp rookies) are children. They are adolescent and they behave like adolescents. We know that many people well into their 20s continue to have adolescent, impulsive brains. 

It isn?t so much about the tragedy of Pierce?s financial challenges, it?s that so many of these players end up in similar situations.  It seems obvious that efforts to prevent this haven?t worked, so if I?m a leader in the players union I might start thinking out of the box.  Maybe a player pension plan that they are required to pay into that would be available only later in life would at least be a help. Idk, but it?s clearly a problem that pro leagues should address.

I tried to sanity check that "78% of pro players go broke" stat that came from Pablo Torre's 2009 Sports Illustrated article by pulling this year's salary (AAV) data for NBA players from Spotrac. I wanted to see how salaries are distributed, because obviously you have your supermax guys and then your guys on vet mins or low contracts. Someone like Tatum is on generational money at $60m a season for 4-5 seasons, if he invests even 10% of it it's going to be enough for him, his kids, and his grandkids and great grandkids to live on as long as they're not blowing their money on entourages, child support, entertainment, strip clubs, cars and all those things that people who suddenly come into a huge amount of money tend to blow their money on. But what about the guys on the other end of the scale? Guys like Luka Garza ($2.5m) or Amari Williams ($600k). Say they have a 5 year career and are out of the league. Is that enough to live on? Will they go broke?

Again, the qualifier is this is a single-season salary, not career earnings...I picked it because a) I'm just looking for some idea on income distribution; and b) it's a bigger pain to convert the career earnings data into Excel so I just picked single-seasons which should give an order of magnitude answer.

Here's what I found:

(click to enlarge)


So nearly half of all NBA players make $5m or less a season, nearly 2/3 total make less than 10m. 20% make over 20m a season. So when trying to correlate that to "78% of pro-players (not NBA, all of them) go broke 5 years after retirement", assuming that other sports have similar income distribution, it makes more sense that if those guys making less than $5m a season blow it all on bling stuff, they're going to be broke. You'd assume that Truth wasn't in that category though, $200m is a lot 

As for a pension plan, they've had one since 1965. Unfortunately you  have to be 50 before you get paid, and maybe some of them have blown all their millions before that 

https://www.hoopshype.com/story/sports/nba/2020/03/02/how-nba-pensions-work/82917228007/

Makes more sense but still alarming given that 5M isn?t nothing.  And that?s after 3 years, what about after 10?  Glad to hear there is a pension plan. FWIW, that will kick in for Pierce soon as he?s 49, but I?m sure won?t cover his exorbitant monthly expenses. That said, making 23k last month from business ventures is good money, he needs help adjusting his lifestyle. But again, a bigger picture concern is that despite the efforts of the union, many pro players spend like crazy, act recklessly, and blow through what should be at minimum a great financial start in life.  I?d be very happy for three years at $600K. Or one.

[Celtics4ever]

It is sad to see.  Having AW as a role model probably didn't help

[gift]

Yup, some of these child support amounts are insane. They cripple men while women stay home and won't try to even pay a 1/4 of their bills. Be careful who you have children with.

Maybe so, but it's also crazy to blame that for his financial woes. If the guy had saved even $500k/year while he was earning $200M+ as a player, he'd have enough savings to support this lifestyle indefinitely on simple interest alone. And still with room to blow $190M. I feel for these guys on some level as it's obviously a product of the system at some level, but at the end of the day they've simply refused to acknowledge anything but a loose, superstar lifestyle their entire adult life -- and eventually it comes around.

100%.  I'm a CPA and actually do some work with professional athletes.  You'd be amazed at some of the overhead and outflows some of these guys have.  Head scratching & ridiculous.  A decent amount of athletes have no financial acumen whatsoever, are listening to the wrong people, or just getting bad financial advice all together.

I definitely understand how it happens. What continues to surprise me is the extent to which it keeps happening, even to guys who just watched it happen to a former teammate or mentor. I guess everyone just thinks it won't happen to them.

Compare with Tatum whose mom was definitely aware of the danger and planned with Jayson to live off of endorsement money (at least for some amount of time) and set aside his entire nba salary for the future (I'm sure he's dipped into that now with his bigger contract, but it shows he started with a solid plan).

[Kernewek]

Yup, some of these child support amounts are insane. They cripple men while women stay home and won't try to even pay a 1/4 of their bills. Be careful who you have children with.

Maybe so, but it's also crazy to blame that for his financial woes. If the guy had saved even $500k/year while he was earning $200M+ as a player, he'd have enough savings to support this lifestyle indefinitely on simple interest alone. And still with room to blow $190M. I feel for these guys on some level as it's obviously a product of the system at some level, but at the end of the day they've simply refused to acknowledge anything but a loose, superstar lifestyle their entire adult life -- and eventually it comes around.

100%.  I'm a CPA and actually do some work with professional athletes.  You'd be amazed at some of the overhead and outflows some of these guys have.  Head scratching & ridiculous.  A decent amount of athletes have no financial acumen whatsoever, are listening to the wrong people, or just getting bad financial advice all together.

I definitely understand how it happens. What continues to surprise me is the extent to which it keeps happening, even to guys who just watched it happen to a former teammate or mentor. I guess everyone just thinks it won't happen to them.

Compare with Tatum whose mom was definitely aware of the danger and planned with Jayson to live off of endorsement money (at least for some amount of time) and set aside his entire nba salary for the future (I'm sure he's dipped into that now with his bigger contract, but it shows he started with a solid plan).

I don't rate much of Bill Simmons' 2010's output that highly, and this includes The Ringer at large, but I always thought this excerpt from a piece about David West was pretty interesting, in that it's highlighted as being very atypical for athletes:
https://www.theringer.com/2016/10/03/uncategorized/dont-call-david-west-a-ring-chaser-ef829963efeb

When West entered the league, his financial advisor counseled him to treat his $1.2 million rookie salary as if it were the only money he would earn from the league. He did the same thing for Year 2, Year 3, and every year since. More money was earned, of course, along with more success. West made two All-Star teams. He made the playoffs seven times, reaching the conference finals as the heart of a Pacers team that twice took LeBron?s Heat close to the brink. And by remaining responsible with his money, West hit the tail end of his career realizing he didn?t need more checks to live the life he wanted. ?I made my money and I was smart with my money,? he says. ?And so I hit the end of 10 years, and it?s like, ?Wow. My body feels good. My mind feels good. I?m still having fun. And now maybe I can focus only on the things that matter to me.? Because these years are just a bonus. It?s like a part of my career I never expected to have.?

[Donoghus]

One of the biggest things I've seen is the impact of family & friends on these athletes.  Athletes putting relatives and friends on payroll or some just plain leeching of the athletes since there is a human tendency not to say "no" to friends & family.  That stuff adds up.  You got a payroll to maintain with exaggerated salaries (and payroll) taxes to do no-show or "grossly overpaid for the level" jobs and that's an easy way to eat up money fast.

[SHAQATTACK]

My meager life i maintain ,  this seems impossible to me .

[byennie]

Sorry but I don?t feel sorry for him or anyone who made that much money and now it?s almost gone.

I don?t think it matters if you feel sorry for him or not. I think what matters, since 78% of pro players go broke after 3 years (per Ozgod post), is that this happens with regularity.  I?d be interested in what variables correlate with this cluster of athletes. 

Paul Pierce is one of many and I?m not sure what would prevent this or decrease the likelihood of it.  I know pro sports offer guidance to rookies but NBA (esp rookies) are children. They are adolescent and they behave like adolescents. We know that many people well into their 20s continue to have adolescent, impulsive brains. 

It isn?t so much about the tragedy of Pierce?s financial challenges, it?s that so many of these players end up in similar situations.  It seems obvious that efforts to prevent this haven?t worked, so if I?m a leader in the players union I might start thinking out of the box.  Maybe a player pension plan that they are required to pay into that would be available only later in life would at least be a help. Idk, but it?s clearly a problem that pro leagues should address.

I tried to sanity check that "78% of pro players go broke" stat that came from Pablo Torre's 2009 Sports Illustrated article by pulling this year's salary (AAV) data for NBA players from Spotrac. I wanted to see how salaries are distributed, because obviously you have your supermax guys and then your guys on vet mins or low contracts. Someone like Tatum is on generational money at $60m a season for 4-5 seasons, if he invests even 10% of it it's going to be enough for him, his kids, and his grandkids and great grandkids to live on as long as they're not blowing their money on entourages, child support, entertainment, strip clubs, cars and all those things that people who suddenly come into a huge amount of money tend to blow their money on. But what about the guys on the other end of the scale? Guys like Luka Garza ($2.5m) or Amari Williams ($600k). Say they have a 5 year career and are out of the league. Is that enough to live on? Will they go broke?

Again, the qualifier is this is a single-season salary, not career earnings...I picked it because a) I'm just looking for some idea on income distribution; and b) it's a bigger pain to convert the career earnings data into Excel so I just picked single-seasons which should give an order of magnitude answer.

Here's what I found:

(click to enlarge)


So nearly half of all NBA players make $5m or less a season, nearly 2/3 total make less than 10m. 20% make over 20m a season. So when trying to correlate that to "78% of pro-players (not NBA, all of them) go broke 5 years after retirement", assuming that other sports have similar income distribution, it makes more sense that if those guys making less than $5m a season blow it all on bling stuff, they're going to be broke. You'd assume that Truth wasn't in that category though, $200m is a lot 

As for a pension plan, they've had one since 1965. Unfortunately you  have to be 50 before you get paid, and maybe some of them have blown all their millions before that 

https://www.hoopshype.com/story/sports/nba/2020/03/02/how-nba-pensions-work/82917228007/

Great post. I do think there are some gaps in the headline statistics. Blowing say $10M of lifetime earnings is hardly shocking at all even though it sounds like a lot. You take home maybe $6M, surely 99% of those players are going to spend at least $500k/year on lifestyle... and then you gotta live off it for 50 years? That trap I can see.

Beyond that, I think we start talking about addiction and temptation thrown at people from a young age. From age 15 to 45, your world is one of unlimited access, women, adoration, bigger and bigger checks, family & friends want a piece... and you never really button up any of it. You just ride the wave. Who is there to make sure you "grow up"? How many people, given that much temptation, would not take unnecessary risks?

It's a tough problem. Players do have pensions. If you made them bigger, would it make any difference? Do you make them all buy annuities at age 25? How do you solve the "child star" problem at large?

I do think it'll have to start with the player's association most of the time. They do stuff now, but it probably needs to be more, and let's face it, they're still more concerned with getting everyone paid.