Professional athletes come into a lot of money quickly, and with it, some may have the urge and succumb to the temptation to live large. Lavish spending on luxury items and impulsive purchases becomes the norm. Many athletes forget that a professional sports career doesn’t last long. The problem is, once you’ve gotten used to the good life, scaling back isn’t easy.
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A stunning 78% of professional athletes go broke after just three years of retirement, Craig Brown, an NKSFB Sports Business Division partner, told FOX Business’ “Mornings with Maria” in 2022. Names like Dennis Rodman, Scottie Pippen, and Antoine Walker serve as cautionary tales for NBA players on spending their fortunes wisely.
“Four years is the average lifespan of an NBA career. And it takes us five years after that to go broke,” former NBA player Lou Williams revealed recently as he attempted to break down why professional athletes go broke.
Furthermore, Lou explained that while athletes may earn millions during that span, the actual amount they take home is significantly less due to numerous deductions and other obligations, such as collective funds. Then there are salaries to be paid. And then comes the biggest challenge: maintaining a high-end lifestyle. Lavish spending on houses, cars, and luxury items quickly drains what remains.
Without a steady income after their playing days end, but with those same expenses continuing, it’s no surprise that many players find themselves in financial trouble.
Many NFL players, too, over the years, have gone broke, despite making bank during their careers. There’s Vince Young, Terrell Owens, Warren Sapp, Michael Vick, and so many more. Cam Newton, however, resisted the temptation of an inflated lifestyle and has managed to stay afloat so far. How?
“Fortunately, I never had a financial advisor, but I never really was a splurger either, still to this day. Never really went shopping or made large purchases in quite some time. But I will say this- this is the number one rule to why a person may go broke- Even though your income may change, your expenses don’t change,” he revealed on 4th&1.
Using a personal example, the former MVP broke down his finances from 2018. He was earning around $20 million that year, and roughly $5–6 million of it went toward expenses, including everything Lou Williams mentioned, plus a few luxuries. That meant private school tuition, car payments, and home upkeep.
Fast forward to today, and while some of those expenses remain—like child care, home maintenance, and alimony—his income no longer matches what it once was.
That’s why, he says, athletes must learn to scale down their expenses as their income changes. Financial responsibility during their playing years is key to long-term stability and comfort once their careers are over.
Fortunately for Cam Newton, he’s managed his finances well, and his well isn’t running dry anytime soon. With a reported net worth of $50 million, built from $133 million in career earnings and additional millions from endorsements, he’s in a solid position financially.
That said, he still has plenty of responsibilities. The former MVP is the father of eight children, five of whom he shares with his ex-girlfriend, Kia Proctor. But the good news is, Cam still has income flowing in. He works as an ESPN analyst, and his podcast/YouTube show continues to gain traction and perform well.
