When Anthony Simmons hears the horror stories of professional athletes going broke, he's saddened — but not shocked.
After all, it happened to him.
Simmons, drafted by the Chargers in 1984, blew through his $122,000 contract as a rookie, buying a Mercedes and "spending every dime." As a result, he had to borrow $7,000 from an assistant coach just to survive the first two months.
"It was difficult for me," said Simmons, 49, a defensive end who played five NFL seasons for three teams. "I was trying to 'live with the Joneses.' It's a mind-set we have to change."
According to a 2009 article in Sports Illustrated, by the time they've been retired for two years, 78 percent of former NFL players have gone bankrupt or are under financial duress due to joblessness or divorce; within five years of retiring, about 60 percent of former NBA players are broke. There are many reasons: irresponsible spending, misplaced trust, divorce, bad investing, worse luck.
But Simmons believes it's also due to a lack of financial education, which is why his Pro Athlete Business Group is holding a two-day seminar at St. Pete Beach starting today. The company is flying in more than 200 former and current athletes (including Rickey Henderson and Frank Gore) to hear guest speakers and link up with potential investment opportunities. While the NFL, NBA and Major League Baseball all have programs for rookies and resources available, certified financial planner Jason Cole said he "doesn't really see any change as far as players making smarter decisions."
"You can have all the symposiums you want, if you don't have a way to connect and communicate and coach these kids and people on how to conduct themselves and how to run a business the right way, they'll fail again and again and again and again," said Corey Crowder, a former NBA player who wrote Success for Life, a guide for on- and offcourt success. "I was one of them. I've made money, I've lost money. Within that journey, I've learned to not make that second mistake."
• • •
Former Bucs defensive end Simeon Rice will never forget his first mistake.
Shortly after the Cardinals drafted him third overall in 1996, Rice was swindled for a sizable chunk of his first contract. Rice was approached by a wealthy investment adviser at his hotel during the rookie symposium. The adviser looked and acted the part, boasting a license, lavish home and large client list. He gave Rice a lot of money and told him in five years, he'd never have to work again.
A few years later, Rice had lost millions, and the adviser, Donald Lukens, was being investigated by the FBI and Securities and Exchange Commission for defrauding investors and sports figures.
Having lost trust in most everybody, Rice found himself putting $2 million in checks under the bed of a friend.
"Coming out as a college student, you really don't know anything about that lifestyle," said Rice, who is retired and invests in real estate and his film production company. "I don't think any guys are prepared."
The big names catch the attention, with reports of multi-millionaires Allen Iverson, Terrell Owens and Mike Tyson going broke. But former players and financial advisers paint a picture with common themes.
Crowder describes the pressure of the locker room culture, where some players feel the need to live — and look — like a millionaire. Cole, who works for Philadelphia-based ABACUS and has about a dozen clients in the NFL, NBA and entertainment business, says many athletes go into debt before earning income, overestimating what they'll make. Considering the short length of pro careers, maximizing an income stream can make all the difference.
"Whether you play one or 10 years in the league … one day you'll retire," Simmons said. "We think we can play forever."
Rice feels players should lean on veterans for advice and remain personally involved in their business deals and investments rather than it to manager, agent or adviser.
"I was able to amass so much money that losing money didn't destroy me," Rice said. "But I've seen it destroy some guys."
• • •
Simmons' group has two seminars a year in different locations, with a target audience of rookies and retired players. In one session, a speaker asked 220 athletes how many knew what an estate plan was.
Ten raised their hands. "How many of you have an estate plan?" she asked.
Two raised their hands.
It stunned Simmons, who thinks athletes can take control of their career, and retirement, by learning more.
"They tell you in the NFL when you sign a new contract, 60 percent of you guys are going to end up broke, divorced or homeless," Simmons said. "Those are the ones we don't hear about, we don't know about or are too embarrassed to talk about. I don't care if you make $375,000 or $5 million, it will hit you if you don't do anything."
For athletes interested in attending, contact Simmons at email@example.com.