For players entering the NFL Draft, which is happening this weekend on ESPN, the most important thing in the world is getting drafted. After that, the priority becomes actual play time—not every player drafted will see the field in a regular-season game.
But their next priority should be figuring out how to manage their money.
To that end, the NFL just wrapped up its second annual Finance Camp. The program isn’t just for rookies (veteran quarterback Brady Quinn, currently an unsigned free agent, attended this year), but any current player looking to bone up on money management. And these guys need it: 16% of NFL players eventually file for bankruptcy after they are done playing football. In most cases, that is either due to making foolish investments (restaurants and car dealerships are the most common mistakes) or simply not knowing how to save their money, because no one ever told them.
“I always say I wouldn’t know if the sky was blue if someone hadn’t told me it was blue at some point in my life,” says Pat Kerney, who played 11 seasons in the NFL and now works for National Fire & Casualty Investments, a money-management firm in Memphis. “And the fact of the matter is it’s not just professional athletes, it’s any 22-year-old coming out of the finest colleges in America. Unless they were a business major, they probably don’t know how a credit card works.” But the stakes are higher for a pro athlete, especially an NFL player. They’ve gone from school straight to the big leagues, and from no salary to a whopping one. “We make one financial mistake in the first five years, we’ve got a big problem ahead of us, because we’ve adopted a lifestyle in accordance with our current income,” he says.
To help, Kerney lectures at the finance camp. One section he led was called Funding an Uncertain Lifespan. “I try to give them the closest thing to a crystal ball: help them forge a path for future expenses.” The goal is to hammer home a few hard truths to players: That their time in the league will end (there’s a reason the NFL is jokingly said to stand for “Not For Long”); that they will likely never earn this much again, and they need to save, and curb their spending; that major expenses will come along unexpectedly. And Kerney, who did a brief stint after retirement working as the NFL’s VP of player benefits, gets specific and nitty-gritty with financial concepts. He goes over various topics ranging from the cost of private schools, to getting mortgages, to setting up an IRA.
Josh Martin, a linebacker who has been in the league since 2013 and is currently signed with the New York Jets, attended the personal finance camp. He says his biggest takeaway was the simple notion of compound interest. "The power of putting money away and trusting that it’ll grow based on previous trends in the market, you don’t realize how powerful that is," he tells Yahoo Finance. "And you realize, 'Oh, wow, I have the opportunity to set myself up for the future. And I need to do that.'"
Charles Way, who spent four years as a fullback for the New York Giants and is now VP of NFL player engagement, has high hopes for how big the personal finance camp program could get. “We’re starting to focus on generational wealth, and how do they prepare a legacy for themselves and their family,” he tells Yahoo Finance. “This is quite different than the normal financial literacy programs each individual club runs every year. This is more specific and tailored to community. It’s not just about money anymore—there is power and influence that creates systemic value. We want these guys to save money in order to create positive change in their lives.”
All of this is why the league is now beefing up its financial-education efforts for players. Separately from the personal finance camp that took place this month, it also announced the Rookie Transition Program, a platform to be offered in June by all 32 teams to rookies—drafted and undrafted rookies—designed to prepare them for a successful transition into the NFL. The new program replaces the Rookie Symposium, which was open only to drafted rookies. Think of it as a bookend to match the personal finance camp: In June, before the season starts, rookies can get some advice on how to save; the next April, after the season ends, existing players can get re-schooled on how to keep spending smart.
The hardest thing with helping pro athletes learn to save, and to avoid bad investments, may actually be the shift in mental attitude required, even more than understanding money management. “It’s about educating these guys until they get it,” Way says. “Until they listen. Unfortunately for some, they don’t stick around long enough, and it’s not due to lack of trying. Their average career is only three years. Our players don’t have time to learn, so they often don’t get to learn.”
Kerney has seen it time and again—players who lose their money by starting their own business, or investing in a friend’s business, without doing the necessary homework that would have shown them it was a bad idea. “I don’t like to use names,” he says, “But these are guys that made well, well above the minimum. Some of them were even marquee players. And they spent a lot, but I think what hammered them was chasing this private business ownership. I think there’s an inappropriate glorification of private business ownership. It’s a pride thing, like, ‘Hey, I’m John Smith, CEO of John Smith Inc.’ Pride is the enemy of net worth.”
Of course, business ownership isn't always a bad idea; for those with a big enough name and profile, it works: They can slap their name onto a small company as an ambassador, take an equity stake, and reap the rewards. Vernon Davis is a Jamba Juice franchisee; Peyton Manning owns multiple Papa John's locations and has been a paid spokesperson for mega consumer-brands like Nike (NKE), Gatorade (PEP), and DirecTV (DTV). But the vast majority of players never see those deals, and their income stream dries up the moment they leave the field.
Kerney’s advice to players at finance camp is that if they absolutely must get into business ownership and can’t resist, have a set amount they are willing to commit to it, stick to that strict limit, and walk away when you’ve hit it. And now Kerney can use himself as an example: As director of business development for a small money-management firm, he does a lot of recruitment, and sometimes his days are boring—and that’s a good thing, he says. “I pursue NFL players and athletes of all stripes and I say, ‘Why don’t you come do what I do. It’s boring, you won’t make any headlines, but your family will be secure.’”
Here’s one anecdotal way that Way (whose nickname was “Get Out of My”) conveys to players at finance camp why they need to worry about these things right now, and not later. He has them picture the old, black-and-white movies they’ve seen, in which a family is gathered at a dinner table inside the house, maybe around a fireplace, and a large portrait sits over the mantel of some patriarch, a great-great-grandfather (or great-great-grandmother, you’d hope), who laid the financial foundation for them to live the life they are living. “He built it for them,” Way says. “And then I say, ‘Wouldn’t it be nice for that picture to be of you?’”
Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology.