On Athletes LIke Terrell Owens Going Broke
It took a little while for the GQ profile on Terrell Owens to catch fire, but now it’s all over the blogosphere and everyone knows that Owens is broke, lonely, and without direction. But one thing you can’t say about Owens it that he spent all his money on houses, cars and shiny jewelry. That’s simply not the case.
I’ve started to answer reader questions on my vlog (which will soon be moving off You Tube and on to this site) and one of the questions I got was about whether I thought that the trend of athletes going broke would end and if white players were as guilty of overspending as black players.
You can see my video answer here:
To answer the question I chose to take the focus off of houses, cars, clothes and jewelry. Partly because we all (Americans, in general) overspend on things like that. We just can’t do it at the same scale as athletes. Plus if you buy houses, cars, clothes and jewelry you can often later get a percentage (albeit small) of that money back by selling those items. They’re dumb purchases but they’re not always total losses.
What is a total loss? Bad investments, loans to family members, child support and alimony/divorce settlements!
If you steer your money into the wrong places as Terrell Owens did, you will never see a dime of it again. In fact, Owens, along with my favorite running back ever, Clinton Portis, is embroiled in a lawsuit against Pamela Linden who they claim mismanaged their money and irresponsibly or falsely invested it.
From the GQ profile:
Most egregious of all was the ill-fated Alabama entertainment complex (with an electronic-bingo component) that cost him $2 million. He invested, he says, at the suggestion of his advisers and a lawyer they steered him to, Pamela Linden. The venture turned out to be illegal in the state, not to mention a violation of the NFL’s policy prohibiting players from investing in gambling. Owens is suing Linden, as is Clinton Portis, the former Redskins running back who also invested. (Several other players and the boxer Floyd Mayweather Jr. also got sucked into the venture.)
This is a common occurrence among athletes. The athletes that have been suckered into bad investments and ponzi schemes are too many to name!
I talk about this in the video, but it bears repeating. Advisors, the media, and the public are always on athletes’ cases about doing things to make their money last. And that’s what athletes try to do by investing in businesses that will keep them wealthy once their playing days are over. Unfortunately, not coming from wealthy backgrounds they lack the networks that rich people who built companies from the bottom up or inherited their money have access to.
They can’t rely on informal conversations at the country club to help them fact check and corroborate some of the information they’ve received. Their only “in” to that world may be their agent. In Portis and Owens’ case, they trusted their agent Drew Rosenhaus to lead them to other financial managers they could trust. And, as it often does, it backfired on them.
We can talk all we want about monitoring investments and things of that nature but the fact is that athletes, in particular football players, do not have the time it takes to manage most investments. They think they do, and advisors tell them they do or, like Owens was told, advisors say “worry about football and we’ll worry about the rest.” I think it’s very hard to understand the world of the wealthy unless you have a foot in the door–and that includes YOU the judgmental public. Shit, Donald Trump has filed for bankruptcy many times. Rich people face a different set of challenges, rules, and rationale when it comes to managing their finances. Simply being responsible is the least of it.
Just once, I’d love to hear people tell athletes, hey, you know what? You don’t have to invest beyond stocks and bonds right now. Save every dime you can and when you have more time to learn about business and manage investments then do so. No harm in waiting.
There’s also no harm in waiting to have children or get married either. If you make the bulk of your money while you’re young, waiting until you’re older to collect dependents is wise. And although it’s hard to tell cousins and family members “no” especially when it comes to medical and housing expenses, more athletes need to find the courage.
I would never say that overspending isn’t an issue with athletes, but I cannot tolerate the willful ignorance it takes to believe that this issue isn’t much more complicated than that.
On Monday, I’ll be on former NFL player Lamar Campbell’s show “Life After the Game” to talk about why athletes and their money are often parted way too soon. More details on that later!