Financial literacy and sports often go hand-in-hand. Butler University men’s basketball is also near. Amidst all of the squeaks and bounces in Hinkle Fieldhouse on Media Day, all I could think about was what the future holds for the Bulldogs. No, I do not mean how great Butler Basketball will be this season, but further down the avenue of life. Life after basketball.
Financial literacy is often defined as the ability to make informed and effective decisions regarding money management. Athletes face a unique set of financial challenges compared to individuals in other professions. Many athletic careers are often shorter and more physically demanding than other jobs. This increases the urgency to make sapient financial decisions. The pressure to maintain a particular lifestyle and the temptation to submit to luxurious spending can quickly deplete their hard-earned riches.
Despite their astronomical salaries, many professional athletes experience financial hardship early in their careers. There is a new sports documentary about a former athlete ‘losing it all’ nearly once a season.
According to Sports Illustrated, 78% of National Football League (NFL) players file for bankruptcy or are experiencing financial stress only two years after retiring; 60% of National Basketball Association (NBA) players suffer the same fate after five years of retirement.
A 2016 study by the Institute for Sports and Social Justice similarly found that 44% of former NFL players have experienced financial hardship at some point after retirement.
Some athletes go broke immediately after signing their rookie deals, such as NBA Hall of Famer Shaquille “Shaq” O’Neal.
In 1992, the Orlando Magic drafted Shaq with the No. 1 pick in the NBA Draft. The pick led to Shaq signing a four-year deal worth $17.4 million, with an average annual salary of $4.3 million.
“The president of the bank pulls me in, and he says, ‘Sir, I love you. I don’t want you to be like all these athletes that go broke,'” Shaq recalled in an interview with FUBU founder and Shark Tank personality Daymond John during Black Entrepreneurs Day. “You need to get your stuff together.'”
Greg Oden, director of basketball operations at Butler University and No. 1 pick of the 2007 NBA Draft, is another professional athlete who knows all too well how a lack of financial literacy can impact an athlete’s career.
“Just going through a couple of years in the league and not paying attention to [his] finances” is what Oden said drove him to understand the importance of financial education.
Now, Oden is doing his part to increase financial literacy among athletes at the collegiate level.
“I’ve got a great company, Edyoucore, that gave me the tools and platform to tell my story and let these guys understand how important is to be in the know about your finances.”
Butler University forward and current graduate student John-Michael Mulloy also knows about the importance of financial literacy. “I double majored in entrepreneurship and finance [in undergraduate], and now I am getting my master’s in business administration,” Mulloy said.
Oden emphasized that such awareness is key for a professional athlete’s financial success.
“Be in the know about your finances because it is YOUR money,” Oden said.
Contact multi-media staff writer Noral Parham III at 317-762-7846 or via email at noralp@indyrecorder.com Follow him on Twitter @3Noral. For more stories regarding financial literacy and sports, click here. You can also check out the Indiana Minority Business Magazine by clicking here.
