Over the next few weeks, 224 people will start a very high-paying job. Due to the risks and competition inherent in this industry, a vast majority will be employed in this field for just a few years. All of them are young men, most with no previous work experience and very few with a detailed understanding of how to make this windfall salary work for them throughout their lives.
Yes, the NFL Draft changes the lives of these 224 young men and their families. Those selected in the first round will almost always receive meaningful contract offers and sponsorship opportunities. These men will quickly become high-net-worth individuals by any measure. The work that must be done to help safeguard their financial future will need to focus on wealth management, diversification, tax mitigation and long-term growth.
The capital these first-rounders will likely earn throughout their careers—regardless of playing time—should be enough to support the lifestyle they strive to live and provide for their loved ones.
For those who find themselves in the deeper rounds of the Draft, proper wealth management to protect their earnings and grow their assets over time is even more crucial. These salaries may seem meaningful; however, after paying agents, lawyers and other dues, the totals earned over a shorter period as a professional athlete may not yield a nest egg that can support the elite lifestyle they desire.
While nothing is ever a guarantee, just like having a specific game plan to play a better team can put you in a position to win, developing a strategic long-term financial plan may provide stability and long-term asset growth for late-round draft picks.
Player’s Stats
The minimum salary for an NFL player in 2024 is $750,000. The average term as a player in the NFL is about 3.3 years, according to the NFL Players Association. Therefore, a player could reasonably expect to bring in at least $2.25 million during their playing career. According to the National Library of Medicine and the Social Security Administration, this is actually less than what the average American man with a college degree earns over a lifetime.
This flies in the face of the perception that these individuals are set for life. Unlike other professional sports, there are very few meaningful employment opportunities for football players in lower divisions or leagues. Many of these players have dedicated their entire lives to making it to the NFL, with less time dedicated to other skill development, which, unfortunately, puts them at a disadvantage within the greater workforce.
A National Bureau of Economic Research found that 78% of players “go broke within three years of retirement,” and roughly one in seven former players file for bankruptcy within 12 years of leaving the league, ESPN reported a few years ago.
A Different Game Plan
Even after taxes and other hard costs while playing, these young athletes bring home paychecks that far exceed the average individual’s paycheck. Through planning and working with a wealth advisor, the average player can work towards protecting and building upon his 3.3 years of salary, resulting in financial stability after playing.
Agents, lawyers and other professional support team members can help these young men navigate a wide range of issues regarding their short-term financial lives. However, working with a highly qualified wealth manager with specific expertise serving pro athletes should result in a better plan for their long-term stability—regardless of playing time.
While there is always the chance Mr. Irrelevant will start as a quarterback in the Super Bowl, there is no doubt that those chosen in the later rounds would be better suited to spending some of their pre-season preparation putting together a strong advisory team.
Marc Specht is a partner and head of sports and entertainment with Perigon Wealth Management, Premier Sports Network’s official wealth management partner in North America.