Kyle Carlson, Joshua Kim, Annamaria Lusardi and Colin F. Camerer, in a report for the National Bureau of Economic Research that was released Wednesday, looked at the future financial life of every player drafted by an NFL team between 1996 and 2003 — a total of 928.
Of those studied, 134 never played an NFL game. Out of the rest — a pool that would include everyone from perennial Pro Bowl players, to those on the margins of the league — the numbers showed a disturbing trend towards financial insolvency at some point later in life, almost regardless of how much money they made during their playing careers.
"Players with longer careers have much greater earnings and opportunity to save for retirement, yet their bankruptcy hazard during retirement is no lower than those with shorter careers and lower earnings," the paper said.
Stars as well as lesser players vulnerable
Someone who has an NFL career lasting six seasons — the median in the survey — will earn more in that period than the typical college graduate will take in during an entire working life.
The median level of earnings across all players is about $3.2 million US.
The minimum salary for a rookie is $435,000, but unlike other leagues, NFL contracts are for the most part not guaranteed — meaning they can be torn up on a whim, if the player gets injured, or the team otherwise determines the athlete is not worth the money.
"If they are forward looking and patient," the paper says, "they should save a large fraction of their income to provide for when they retire from the NFL."
But the numbers also suggest that's not happening, and the riches that come with an NFL career lead to an increased likelihood of going bust later in life, once that income dries up and some players have difficulty living on less.
"Having played for a long time and been well paid does not provide much protection against the risk of going bankrupt," the paper says.
High-profile examples are easy to recall, including two players who made numerous Pro Bowl teams:- Wide receiver Terrell Owens, who earned more than $80 million in his career but filed for bankruptcy in 2012.
- Linebacker Warren Sapp, who earned a similar amount and also filed for bankruptcy.
Among the sample group, about two per cent of people declared bankruptcy within a year of retirement. But the ratio jumps to almost 16 per cent within 12 years. It may well escalate further after that, but the study only included people who could be tracked up to 2003.
Although troubling, the new numbers are not quite as bleak as a previous report, from Sports Illustrated in 2009, that claimed 78 per cent of former NFL players are bankrupt or under "financial stress" within two years of retirement.