Great Article:Nothing but debt

Zion · Jul 2, 2005

Found it on another forum so i don't have a direct link. It's from The Boston Globe.

Nothing but debt
By Jackie MacMullan, Globe Staff | June 26, 2005

The players who competed in the high basketball drama between the Celtics and Lakers in the 1980s were the envy of the National Basketball Association. They were household names, trading barbs and matching each other with endorsements and championship rings. Though Larry Bird and Magic Johnson were the primary draw, there were many opportunities for key players such as Michael Cooper and Cedric Maxwell to reap the benefits of the celebrated rivalry.

With the NBA thriving, the Boston-Los Angeles showdowns drawing record television ratings, and salaries approaching millions of dollars for the first time, the Celtics and Lakers had it all.

Too bad so many of them have so little left to show for it.

When their playing days ended, and the adulation faded, a number of the teams' high-profile players found themselves mired in serious financial difficulty. The problems were the same then as they are now: unscrupulous agents, poor business investments, greedy family members, bitter divorces, paternity suits, and crippling habits such as alcohol, drugs, and gambling.

Yet it is a far more basic problem that continues to level these professional athletes: the belief the money will always be there.

''We were a carefree bunch of guys," explained Cooper, whose defensive reputation was cemented by his matchups against Bird. ''We lived for the moment. We just assumed it would last forever."

''We weren't just competing on the court," said Maxwell, the MVP of the 1981 Finals against Houston. ''We were competing over who had the best car, the biggest house, the nicest coat."

Cooper and Maxwell paid the price. Lavish lifestyles, as well as personal and professional miscues, left them facing financial hardship that was unthinkable when they were establishing themselves as money players in those classic Lakers-Celtics duels.

''When you come into the league, all you see is the cash," Cooper said. ''The long-term future simply wasn't talked about. So you buy three cars, and you worry about how you're going to pay the tax, the registration, and the insurance later. Those little details start to add up, but you don't notice."

''During my era, everyone was trying to maximize the dollar," Maxwell said. ''We were all looking for the big score in terms of investments. I paid for that. I had investments that went bad. You not only lose your money, you end up paying fines and penalties, while the person who set the whole thing up for you skates."

Timberwolves general manager Kevin McHale, another key player in that '80s rivalry, reminds his players today that a $4 million contract is worth about $2.2 million after state and federal taxes. Add a 3 or 4 percent cut for the agent, and 2 percent for attorneys, and the paycheck is pared considerably before the players have spent a dime.

''The worst thing that ever can happen to a professional athlete is when they print your salary in the paper," said McHale. ''Because the numbers aren't real."

Two decades after the glory days of Boston and LA, the money has increased tenfold, but so have the pitfalls. According to Satch Sanders, the NBA's vice president of player programs, some recent stars are living paycheck to paycheck.

''We try to teach and say all the right things, but getting them to look into the future is virtually impossible," Sanders said. ''Most of them don't get it until the first time they're traded, or the first time they lose their job to someone else, or the first time they're injured and their livelihood is suddenly an issue."

Decisions come at a price Eddy Curry was on the cusp of stardom with the Chicago Bulls when he was forced to the sideline this season with an enlarged heart. He was on track for a sizable pay increase from his $3.8 million salary when his contract expired this summer, but now, at age 22, his future is uncertain. Curry has been making child support payments since he entered the league, a major financial drain.

''When you find yourself in a paternity situation, it can cost you as much as $26,000 to $30,000 a month," Sanders said. ''That's for only one child. If it's more, double it. What these guys don't realize is when you stop playing, the judge won't reduce the amount until all your attachable assets are gone.

''The players think once they retire, their payments are going to drop to $500 a month, like all their friends. It doesn't happen that way. You keep on paying."

Curry declined comment through Bulls officials.

Former All-Star Shawn Kemp continues to be plagued by paternity issues, as does former Celtic Kenny Anderson, who, at 34, is a free agent and hoping to extend his career. Former Houston center Ralph Sampson was hauled into court earlier this month for failing to pay child support.

Curry's problems are likely further compounded, said former All-Star Charles Barkley, because he grew up in the Chicago area, which means friends, family, former teammates, coaches, and assorted hangers-on are constantly asking for tickets.

''Everybody wants to come when you play near home, and they don't want the nosebleed seats, either," Barkley said. ''It used to cost me between $8,000-$10,000 every time I played in Atlanta. Everybody wanted to come up from Alabama for the game. Thank God I only played there twice a year.

''Now think of a kid like Eddy Curry, who grew up in Chicago and is playing in his hometown. He's got to deal with that kind of demand every night."

Celtics second-year forward Kendrick Perkins, who jumped directly to the NBA from Beaumont (Texas) High School, admits he became swept up in a flurry of free spending when he first came to Boston.

''Once you start living the NBA life, it becomes a habit," he said.

Perkins said he doesn't need to look further than his own locker room for rampant -- and often irresponsible -- spending.

''Some of our guys are ridiculous," he said. ''The cars they drive, the things they buy . . . they play cards on the plane and lose thousands of dollars. The young guys want to fit in, so they play, too. But most of them can't afford it."

Perkins said guard Ricky Davis talks to him regularly about managing his money properly.

''He tells me all the time, 'Save your money. Don't do it like me. I blew it,' " Perkins said. ''Ricky is trying to make some changes in his life. At least he's man enough to say, 'I screwed this up.' A lot of other guys are sort of in denial."

Both Cooper and Maxwell recovered financially, in part because they secured jobs connected to basketball. Cooper coached in the WNBA and was an assistant in Denver in the NBA for much of last season. Maxwell is the popular radio analyst for the Celtics.

Yet such jobs are scarce. Kareem Abdul-Jabbar is one of the 50 greatest players of all time, but his attempts to break into the NBA coaching ranks have been futile. It's hard to fathom Abdul-Jabbar needing work, but the Laker great was one of the first high-profile athletes to reveal his financial woes when he sued his former agent, Tom Collins, for $59 million in 1987. His suit was dismissed. His longtime teammate, Jamaal Wilkes, also lost significant money because of bad investments. Two other Boston players contacted for this story acknowledged their financial difficulties but asked not to be identified. ''Too embarrassing," said one.

Financial life preserver Celtics great Robert Parish played 21 seasons -- 18 as part of perhaps the best frontcourt of all time. Yet he has little to show for his years in Boston, which included a salary of $2.8 million in his final season. His last three years -- two with Charlotte and one with Chicago -- enabled him to finish his career financially solvent.

''If I had retired when I planned [in 1994], I would have had problems," Parish said. ''My family talked me into playing more. Thank goodness they pushed me. I avoided financial difficulty because of it."

Parish was already supporting two young daughters from a failed relationship when he came into the league. He later married, then went through a bitter divorce that cost him thousands in legal fees, as well as additional child support payments for a son and alimony.

He isn't alone. Sanders estimates the divorce rate in pro sports is 65-70 percent.

''While you're playing, your wife handles the kids, the house, the bills," Sanders said. ''Now all of a sudden you're home and have opinions on how to do things, but nobody wants to hear it.

''Meanwhile, your finances have slowed down, and you want to tighten things up, which means you might have to sell the summer home or pull the kids out of private school. Those things are going to cause problems between you and your wife."

The twist to this staggering number of hardship stories is the willingness of former NBA stars to throw their peers a cash lifeline. At least four members of the ''Bad Boy" teams that won back-to-back championships in Detroit in 1989 and 1990 ended up turning to their captain, Isiah Thomas, for financial relief. Thomas obliged, much the way Magic and coach Pat Riley did for some Lakers and Bird and McHale did for Celtics teammates.

One former Celtic, who asked to remain anonymous, said he was so broke he almost hawked his championship ring.

''Bird was quiet about it, but he helped me," said the player. ''He used to help other guys, too. He'd sign balls and shirts and stuff, and guys would turn around and sell them."

When asked about his role in assisting former teammates, Bird declined comment.

''I just don't think it's fair to the people involved," he said.

Miami Heat superstar Shaquille O'Neal agreed earlier this month to pay for the funeral of Hall of Famer George Mikan, who, despite having a law degree, struggled financially in the last years of his life (largely because of medical bills) and received an NBA pension of only $1,700 a month.

Shaq could well end up helping his ex-Heat teammates next, predicted Barkley.

''Too many guys develop bad habits," Barkley said. ''Whether it's alcohol, drugs, or gambling, if you wind up caught up in them, you're dead.

''And the spending is worse now than ever," added Barkley, who admits he was ''flat broke" early in his career after a series of bad investments and mismanagement by his agent. ''These kids can't control themselves. They're 20 and they think they're invincible. They think they're set for life. They'll see."

Fortune is blown Barkley was 21 years old when the Philadelphia 76ers selected him fifth in the 1984 draft.

''I went out and bought six cars," Barkley said. ''Dr. J [Julius Erving] and Moses [Malone] pulled me aside and said, 'Son, don't be stupid. Take all of those cars back except one. Save your money.' "

Barkley returned two Mercedeses, two BMWs, and one of the Porsches. But all of his mistakes were not so easily fixed. He hired Lance Jay Luchnick as his agent and, according to Barkley, Luchnick presented him with a number of grand money-making schemes, including investing in a cattle ranch.

''I'm 21 years old and I'm thinking, 'Great. This guy is going to pay my bills and invest the rest,' " Barkley said. ''He's telling me, 'You put in $2 million and you'll get back 10.' Sounds perfect, doesn't it?

''Only when the investment goes bad, and everyone else declares bankruptcy, they keep coming after you because you're still earning money.

''After four years in the league, I was dead broke. I got sued by all these little small-time ventures. It was bad for five or six years after that. I sued Luchnick and won a $5 million judgment, but he filed for bankruptcy and I got none of it."

Calls to Luchnick's San Antonio office went unreturned.

Barkley had earned the reputation as a generous teammate who always picked up the check, housed younger players at his home, and gave away money to anyone who needed it.

''It's really tough to say no, especially for the black guys," Barkley said. ''You support so many people. I was supporting my mother, grandmother, and two brothers.

''I lent millions of dollars to people I'll never see again. If you don't, they say, 'You're not black anymore. You're too good for us.' When you're young, you take that stuff to heart."

Barkley was fortunate to recoup most of his fortune over the course of a successful 16-year career. He hired Glenn Guthrie to oversee his affairs and requires an itemized account every month of his expenses. Much of his money is invested in CDs.

''I'm so conservative it's ridiculous," he said. ''I don't lend money any more, either. After the grandmother has died for the fourth time in a row, you've got to ask, 'How many grandmothers you got?' "

Generous to a fault Sixers star Allen Iverson is in the midst of a long-term contract worth $91.4 million. His teammates joke that you couldn't give that much money away, but that Iverson sure is trying. When a team trainer was caught stealing cash from Iverson's locker a few years back, Iverson said he hadn't noticed the money missing. The All-Star point guard is known for having a huge entourage -- and a huge heart. He's given away cars, jewelry, and gifts to a posse of more than 30 people.

He is the modern-day Dominique Wilkins, the nine-time All-Star whose generosity to his immediate and extended family was legendary.

''Nique's biggest crime was he was too nice," Barkley said. ''He was going broke while everyone in his family was driving around in Mercedeses."

Wilkins's brother Gerald played for 13 seasons and made half the money his brother did, but is in much better shape today because he was able to draw the line.

''Gerald knew how to say no," said Celtics coach Doc Rivers, a teammate of the Wilkins brothers in Atlanta. ''I'll never forget one Christmas when we were playing the Knicks. Gerald was telling his mother, Geraldine, 'I'm going to give you all gifts -- that's it. You're not taking all my money like you did to Nique.'

''Dominique was the nicest human being in the world. He just didn't know how to say no."

Thomas said the biggest pressure facing pro athletes is to not forget where you came from.

''It's almost damn near impossible to avoid it," he said. ''You feel this tremendous need to take care of your mother, father, sisters, brothers, nephews, nieces, and everyone in your extended family. All of a sudden, it's out of control, and you're out of money.

''I was fortunate. My family let me live. My mother stepped in and said, 'We're not going to do this to you.' My brothers wouldn't have taken money, even if I offered it. We grew up in the West Side of Chicago. Even though we were poor and lived in the ghetto, we took pride in who we were."

Thomas has helped at least a dozen players get back on their feet. When he read that Bob Cousy was auctioning off his memorabilia so he could give the money to his children and grandchildren, Thomas, concerned that Cousy was strapped for cash, offered to buy it all and donate it back to the Celtics legend. Cousy, who is financially set, appreciated the gesture but declined.

Many others have taken up Thomas on his generosity. He is currently assisting the children of a former All-Star who never even played for the Pistons with their college tuitions.

''You like to help," said McHale. ''But after a while, when you are helping a guy that just blew through $8 million, you have to ask yourself, 'Am I helping him or enabling him?' "

Change in spending habits Perkins, who will make less than $800,000 next season, has seen the light. He has one car, a Denali, and will buy another this summer, ''but it will be used, with low miles," he said.

''Last year, I spent $5,000 a month. That's too much money. I'm cutting back."

Denver forward Kenyon Martin said he, too, has changed the way he spends money.

''I've heard all the horror stories," said Martin. ''I don't want that to be me. I've got good people around me. They won't let me do whatever I want. They've got me on an allowance."

Celtics head of basketball operations Danny Ainge believes an allowance is not the solution.

''My biggest pet peeve is when agents give their players an allowance," said Ainge. ''They don't teach them how to pay bills. The responsibility of the agent is to educate these guys instead of building up a dependency. Show them how to set up a bank account. Show them how to buy a house. Don't do it for them and charge way too much money while you're at it."

Portland general manager John Nash said he's surprised more players haven't followed the lead of Tim Duncan and Grant Hill, who employ Lon Baby as their agent but pay him an hourly rate instead of a percentage of their salaries. But Nash does not believe the problem of handling money is unique to the NBA, or even pro sports.

''My son is 25 years old," Nash said. ''If you put $15 million in his hands, he'd go through it pretty quickly."

Sanders imports former NBA players who have made the wrong decisions to speak to today's multimillionaire stars, but he's not convinced they get the message.

''All they've got to do is look around," offered Maxwell. ''It's sad. Curtis Rowe was one of my best friends on the Celtics. He was rolling in it. I lost touch with him, but someone I know saw him recently. He saw Curtis walking down the street in Detroit, barefoot, with nothing."

Perkins won't predict which current Celtic -- if any -- is headed in that direction. The veterans, he said, make so much money it's impossible to fathom them blowing it all.

''That's the one good thing about going out with a vet," Perkins said. ''You know they're always going to pick up the check."
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steddinotayto · Jul 2, 2005

i bet some current and most former NFL players got it worse

MartianMan · Jul 2, 2005

sucks...but seriously. Are you going to feel sorry for guys that make 100x what you make?

KellyDwyer · Jul 2, 2005

MartianMan said:

sucks...but seriously. Are you going to feel sorry for guys that make 100x what you make?
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Nope, but I do feel for guys who are taxed 100x what I am.

xiki · Jul 2, 2005

KellyDwyer said:

Nope, but I do feel for guys who are taxed 100x what I am.
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I'm empty of empathy for all of the above.

KellyDwyer · Jul 2, 2005

xiki said:

I'm empty of empathy for all of the above.
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I'm not saying I feel these guys were screwed over. I just feel sorry for idiots, sometimes, that's all.

Dr of Dunk · Jul 2, 2005

I hate when these articles target just athletes. They are having the same issue that so many "average" Americans in this country have. They can't save... they don't know how to save... and they end up being broke, filing for bankruptcy, etc.

It's gotten pathetic : http://www.chartingtheeconomy.com/Savings105.html

Relativist · Jul 2, 2005

It's really no different from winning the lottery. Some lottery winners start spending with complete disregard to money, failing to recognize that their winnings are only a fraction of the face value. It's sad, because it's so preventable, but it's also frustrating.

steddinotayto · Jul 2, 2005

Relativist said:

steddinotayto tells it like it is - "I know how you feel Don. The way you feel about Tyson Chandler is the same way I feel about Jessica Alba but we all will eventually come to the conclusion that, no, it's never going to happen."
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hahah did i really post that?!?

Rocket River · Jul 3, 2005

xiki said:

I'm empty of empathy for all of the above.
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most people are empty of Empathy
for anyone NOT THEM

it is now the way of a TYPICAL AMERICAN

Rocket River

wizardball · Jul 3, 2005

man i could' care less ... there are millions of people who have been broke and then all of a sudden gotten rich.... its childish how some of these guys act... if you can't handle it then too bad for you...that's life.

Williamson · Jul 3, 2005

I can't say I feel sorry for people who piss away their money, but I do feel sorry for people who strike it rich and have everybody in the world taking advantage of them. Can you imagine having all of your loved ones turn into money sucking leeches? That's pretty terrible.

pippendagimp · Jul 3, 2005

Dr of Dunk said:

I hate when these articles target just athletes. They are having the same issue that so many "average" Americans in this country have. They can't save... they don't know how to save... and they end up being broke, filing for bankruptcy, etc.
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Would you term these players as $35M thousandaires?

DaDakota · Jul 3, 2005

A fool and his money are soon parted.

dharocks · Jul 3, 2005

Man, some cold hearted folks on the BBS.

I feel for anyone who's lost all they had, regardless of how much it was or in what manner they lost it.

It just makes me feel sad, I guess.

pippendagimp · Jul 3, 2005

DaDakota said:

A fool and his money are soon parted.
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A fool and his $ were lucky enough to get together in the first place

DaDakota · Jul 3, 2005

pippendagimp said:

A fool and his $ were lucky enough to get together in the first place
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I wish I could explain more but I have worked for some very stupid multi millionaires, and watched them blow through cash and companies because they don't understand the value of a single dollar.

Very frustrating.

DD

pippendagimp · Jul 3, 2005

DaDakota said:

I wish I could explain more but I have worked for some very stupid multi millionaires, and watched them blow through cash and companies because they don't understand the value of a single dollar.

Very frustrating.

DD
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Yeah, it's called Nouveau Rich Syndrome.......and the whole wretched lot of them seem to ruin the otherwise natural forces of market efficiency wherever they sprout up, b/c they are unable to appreciate the simple concept of price vs. value.

slcrocket · Jul 3, 2005

I understand the general idea of the article, and it's kinda sad that some of these players don't have the education or the real-life experience of managing money before they makes millions of it.

However, it IS hard to feel TOO sympathetic when I work 60 hours a week doing something I don't even like to make ends meet, put myself through school, and raise my own family. Regardless of the fact that these guys don't have tons of experience with managing money, some of the things that they do outlined in the article are just downright stupid.

Rocket River · Jul 3, 2005

pippendagimp said:

Yeah, it's called Nouveau Rich Syndrome.......and the whole wretched lot of them seem to ruin the otherwise natural forces of market efficiency wherever they sprout up, b/c they are unable to appreciate the simple concept of price vs. value.
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aaahhh nothing like OLD RICH snobbery

Yet another way to be devisive

Rocket River

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