Sports Illustrated has an interesting article on professional athletes tendencies--regardless of the economy, which can however exacerbate the downward spiral--to run out of money and sometimes become bankrupt or in the case of former NFL running back Travis Henry be completely penniless and jailed for nonpayment of child support. SI argues that this is a financial pandemic across the NBA, NFL and MLB, citing for instance that within two years of retirement from the league, "78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce, " and similarly "within five years of retirement, an estimated 60% of former NBA players are broke." (I think we can say the same thing about college. "Within 5 years after graduation X% of graduates are under severe financial stress!")
Common contributing factors include bad business investments with an "overallocation into real estate and bad private equity," misplaced trust in family and friends or shady advisors, divorce and paternity obligations, and lifestyle expectations. Exhibit A:
When former NBA guard Kenny Anderson filed for bankruptcy in October 2005, he detailed how the estimated $60 million he earned in the league had dwindled to nothing. He bought eight cars and rang up monthly expenses of $41,000, including outlays for child support, his mother's mortgage and his own five-bedroom house in Beverly Hills, Calif.—not to mention $10,000 in what he dubbed "hanging-out money." He also regularly handed out $3,000 to $5,000 to friends and relatives.
And then Michael Vick really had to up the ante with that dog fighting shit.