Why Do NFL Players Go Broke?

The NFL is one of the most competitive football leagues in the world. Featuring some of the best footballers from across the country and around the globe, the NFL attracts top-tier level talent and prospects.

And for these players, making it to the NFL is not only the pinnacle of their playing careers but also an opportunity to increase their earnings potential.

With the average NFL player salary standing in at $2.7 million, the NFL is not only the most popular sports league in America but also one of the best paying.

However, even with such an outsized salary, nearly 80% of all NFL players are broke within 3-years of retiring from the league.

Below, we are going to look at and review just why do NFL player go broke and what steps can be taken to ensure that NFL players who retire are able to live comfortably with their earnings for the remainder of their lives.

How Much Do NFL Players Get Paid?

While the statistic that 80% of all retired NFL players go broke within 3-years, it is important to understand the overall pay and salary structure which dictates the NFL and the league as a whole.

And while famous, well-known, and household players such as Tom Brady, Russell Wilson, and Patrick Mahomes will fill the airwaves with their record-breaking contract deals, typically worth several hundreds of millions, the reality is that for lesser known players, the average salary in the NFL is a more modest $2.7 million.

However, that $2.7 million number does not accurately reflect the median salary that most NFL players take home.

With superstar players raising the average of all players, the average salary substantially differs from the median one.

Rather, the median salary in the NFL stands at a paltry $860,000.

And listen, we’re not saying that $860,000 is a small sum.

But if you’re risking life and limb and are a professional athlete in one of the world’s most popular sports with revenue in excess of $1.8 billion, you should definitely be making over a million a year, minimum.

And while we’ve discusses whether or not NBA players are overpaid, the honest truth is that NFL players may just be underpaid.

What Is the Pay Structure in the NFL?

Admittedly, the NFL and its team owners have agreed with the National Football League Players Association (NFLPA) to set certain minimums and guarantees for NFL players currently in the league.

However, the minimums and guarantees, in our opinion, are simply too small.

Currently, an NFL rookie is entitled to a minimum salary of $660,000. This figure remains set for the next 3-years, with a guaranteed increase entitled to the respective player in their 4th year in the league, when the minimum salary increases to $900,000.

And, for players that do not receive automatic pay increases, they will finally crack a million dollar salary in their seventh year in the league, when the minimum salary is set at $1.075 million.

However, and a major caveat to all this talk, is that the majority of NFL players do not make it past three years in the league. That is, the average time spent in the league for all NFL players is just 3.3 years.

Within a 3.3 year time period, it is simply too difficult to accumulate a significant amount of income to plan for the remainder of your life and retirement.

The Reasons Why So Many NFL Players Go Broke

Below, we are going to take a deeper dive into just why so many NFL players go broke once they do retire. And even though NFL players are paid significantly less than their professional athlete peers, the 80% figure is simply too astonishing to not take a deeper look into.

Significantly Less Pay and Time in the League

As stated above, NFL players are some of the lowest paid professional athletes in the United States. And with the NFL’s annual revenue exceeding $1.8 billion, the onus is on the NFL, the team owners, and the NFLPA to ensure a more equitable distribution of wealth amongst all players.

And while we’re not advocating for a similar pay structure for all players – no one would argue that Tom Brady doesn’t deserve his high salary – there should be higher minimums for all players across the board, with automatic increases occurring on a yearly basis.

Similarly, with the average length of time in the league being a mere 3.3 years, the salary increases should be set to reflect that fact, with the minimums increasing significantly between the second and third year of a players playing career.

Lack of Financial Planning and Long-Term Vision

Unfortunately, a major reason why so many NFL players go broke within 3-years of their time in the league is due to a lack of competent, long-term financial planning. For most NFL players, the luxury of the league appears everlasting.

However, the statistics state otherwise, with most players lasting a mere 3.3 years.

NFL players need to understand that fact and begin planning, from the moment they enter the league, for the time when they will no longer be a part of it.

And while the NFL has recently instituted and contracted a number of financial planning services, many players simply do not take advantage of those services.

Opting to spend the majority of their income on homes, cars, and jewelry, many NFL players are simply unable to maintain that lifestyle once they retire.

Perceived Obligations to Family and Friends

While not true of all NFL players, there remains a majority of players whom feel an obligation towards their family, friends, and community to give back and support them for their loyalty and support.

And while supporting and assisting a family member is important, too often, NFL players will take on too much, simply unable to keep up with the ever-increasing demands of friends, family, and their own needs.

And while declining to help a friend or family member in need and one requesting assistance can be difficult, it is a hard conversation that unfortunately may need to happen.

Divorce and Child Support Payments

Lastly, the reason why so many NFL players go broke within a few years of retiring from the NFL, unfortunately, is due to a divorce and obligation to pay child support.

With a divorce, many-times, taking nearly half of an individuals assets and savings, such an occurrence can significantly wipe away any wealth an NFL player may have stashed away.

And while we can’t advise an individual on whom to marry, we can encourage having a pre-prenuptial agreement signed before a marriage to ensure security of assets and property before entering into the marriage.