... the sad thing is, you could do a lot more than an All-Star team. Seems like you could populate a thirty-team squad, 12-man deep, with former NBA players who have squandered their millions.
The stuff I read said 60% of players are broke in 5 years. On some level their agents have to be held accountable for this. My understanding is it's very common for things to happen like the agent says "I need you to look good off the court. You need to go to get like 5 sports jackets from so and so. It's already paid for so you just gotta pick it up" (This would be easier to do and also more important with the new dress code rules). Player goes to get jackets. Doesn't realize they're like 2K each and that so and so is in the agent's pocket getting a kickback. Obviously the player shouldn't have given any of his account info or anything like that to the agent, but the agent shouldn't have asked for it or defrauded him.
I don't think it's the agent's fault for the most part (although there are many cases where the agent does defraud the player, I think this is a small % overall). The player is an adult. If the players not watching his money, that’s the player’s fault, not the agents (not talking about agents who defraud players, but regular agents). And again I’m sure a lot of agents tell their players, you need to budget, you need to invest, you need to put money aside, but ultimately it’s up to the player. If I was an agent and told a multi-million dollar athlete he can’t spend his own money on what he wants, he could just fire me and then spend his money on whatever he pleases. A lot of players want yes men as their agents. The agent can point the player in the right direction, but it’s up to the player to get there himself. How many of us don’t listen to our doctor or dentist or even our own financial advisors, and don't double check our own finances? A whole lot of us I imagine.
It’s an agents job to get the player the best deal from teams and endorsements, I don’t believe it’s the agents job to manage a player’s money. You need to hire a separate accountant or financial advisor or even both for that. I bet most agents tell their players to get those and even recommend guys, but I wonder how many listen and follow through.
I think this is the usual situation with most players:
I have X years in this league, and Y more contracts and I’m going to play till I’m 35-36. From stars to scrubs I bet this is a major problem. Guys like Antoine and Marbury and Iverson I’m sure thought they’d be playing till they were at least 35. Every first rounder probably thinks they’ll sign at least another 2-3 contracts after their rookie deal. They think I can spend a lot of money now, but I’ll be sure to save and spend wisely during my next contract. They think retirement is a far way off. Not just athletes, most people don’t properly plan for retirement, I bet most people on this board aren’t making sufficient contributions to retirement (IRA’s, 401k’s etc.). Just like athletes, they’ll worry about it later, and they won’t be ready.
If 60% of NBAers go broke after 5 years, I bet just as many don’t know when they get paid. Do they get paid weekly, bi-weekly, semi-monthly, monthly? I bet they don’t know. Are their paychecks structured so they get paid all year round or just during the NBA season? I bet most of them can’t answer that question. On top of that, I bet they don’t know how much they pay in taxes: federal, state, property, I bet they have no clue. But I think a lot of regular people don’t really know either. Ask a normal person what they paid 3 years ago in taxes, and what they expect to pay in 2 years, they probably have no clue (especially if you have a significant other that takes care of it for you). Just because somebody takes care of it for you, doesn’t mean you should be completely ignorant about it.
And then it’s just poor math skills. Something that hits most everybody, not just athletes. A young player with a $5m salary, probably thinks they have $5m to spend. I’ll buy a $1m house for me, and I’ll buy a $1m house for my mom, I’ll spend about $500k-$1m on toys for me (cars, jewelry, being Santa Claus for 50-100 of you closest friends and family members), and I’ll still have $2m left to pay my bills. Well federal taxes will take 35%, and NBA players get state taxes from 20 different states (look up jock tax, it 's crazy), as well as any foreign country you play in, plus agent fees and accountant fees, they’ll be lucky to take home half their salary. So maybe they only have $2.5m, but they already spent $3m because they thought they have $5m. A lot of people fall victim to this mentality, not just athletes, even though there are people telling them not to spend that much.
Not really the agents fault unless the agents are supposed to act like parents.
