Top performing athletes earn over seven figures annually for their talent, but most spend it too quickly and go bankrupt. The NBA has more players frittering away their money faster than in any other sport. Although some big-name athletes are a lot more cautious to the point that “tightwad” comes to mind.
An athlete’s career is significantly shorter than most professions, and the money they earn has to be spent wisely to last the rest of their lives. After leaving the NBA, 60% of players go broke within five years.
There are a few reasons a player experiences financial problems, but primarily because of mismanaging funds. According to Chris Dudley, a former NBA player for the Portland Trailblazers, salaries in the NBA have increased dramatically since the Cleveland Cavaliers drafted him in 1987.
Dudley has stated it is easy for players to go broke because when an NBA player hits the big time, not only do old friends and family members ask for handouts, but total strangers start hounding them relentlessly for investments in various projects.
Professional athletes are paid millions of dollars annually, but it is paid out over a few years, so the NBA players must invest wisely. The realistic ones have self-discipline, are cautious about whom to give money to, and do not have the same financial problems.
Charles Barkley, who played for the Houston Rockets, the Phoenix Suns, and the Philadelphia 76ers, lost much of the money he made from the NBA through gambling debts. He has been forthcoming about his gambling addiction, admitting that he once lost $10 million in one night.
The NBA star stuck a deal with TNT as a Broadcaster. Although Barkley recently contemplated joining the Saudi Arabian-backed LIV. It is unknown if TNT will let him keep his $30 million three-year contract if he signs on with the controversial tour.
Another NBA star, Scottie Pippen, who played for the Chicago Bulls in 2003, made tons of cash throughout his career. However, even though he was known to be a cheapskate, he did fritter away his money with bad choices, such as buying a private jet for $4 million that broke down that took almost a million dollars to repair.
Former New York Knicks player Larry Johnson retired from the NBA after the 2000-2001 season and lost most of his money in a very messy child support case that ended with him selling his million-dollar home to settle out of court. Although, he did spend plenty of money on material things as well.
Some big-name NBA stars were on the other end of the losing spectrum with their fortunes. For example, Micheal Jordan, who played 13 seasons with the Chicago Bulls, is cautious with his money. Jordan has been known to be a lousy tipper, says Barkley, a close friend of Jordan’s, who stated he is so tight with money he does not even donate anything to charity.
LeBron James, another NBA great, will not have to worry about money because he is known to be so frugal with his money that when he was offered a meager price for a Pandora account, he turned it down. James is worth over 200 million, and he refuses to pay for an ad-free account to hear the music he loves. So he gives a new meaning to the phrase “pinching pennies.”
It is very easy for NBA athletes to go broke and file for bankruptcy protection. But unfortunately, there are always people who prey on the rich for money, like investors and small filmmakers who need financial backing for their next ‘big’ project.
While players are in the NBA and actively playing, they are not thinking about what happens when the money runs out. It is the last thing they could think of going broke. Dudley believes the funds will always be there, so most players do not closely watch what they are spending.
Written by Katherine Miller
Edited by Cathy Milne-Ware
The Sportster: 10 NBA Players Who Foolishly Burned Money (and 5 Who Pinched Pennies); by Matthew Wilkinson
CNBC: Money lessons learned from pro athletes’ financial fouls; by Chris Dudley