Another tale of basketball millions that disappear

[JasonEvans]

This time the "victim" is Robert Swift. He went pro directly out of high school in 2004 and was the 12th pick of the 1st round, going to the Sonics. He struggled his 1st year but started playing better his 2nd. He was the presumed starting center for the Sonics his third year in the league but blew out his ACL in the pre-season. A year later, he hurt his knee again and by 2009, he was out of the NBA. He played in Japan for a couple season and, according to reports, he made about $20 million over the course of his career.

He is now 27 years old. He has not played pro ball in about 2 years... and his house just got foreclosed upon. To make matters worse, he is holed up inside the house and refusing to leave. When someone came to visit, they were told he was taking pills and could not come to the door to speak. The lawn in front of the house is littered with beer cans and the home is pock-marked with bullet holes. Yikes!

I wonder if going to college for a year, maybe connecting a bit with a coach who could be a mentor, perhaps gaining a little more perspective on the world, and being a little more mature when he entered the NBA might have made a bit of a difference for him. What a waste...

-Jason "it ain't Kenny Anderson, Antoine Walker, or Allen Iverson... but it is yet another story of a mega-rich athlete blowing it all in the blink of an eye" Evans

[brevity]

A strange variation of a common story.

This is my Robert Smith sad face.

robertsmith.jpg

[Olympic Fan]

Well, to be fair, he did destroy the MegaStreisand ...

[quahog174]

Uh, article says last name is Swift, not Smith. Sounds like he's not so swift, though.

[jipops]

60% of NBA players go broke 5 years after retirement. The number is much worse for NFL players at 78% in 2 years. It's pretty obvious there is a major problem going on here. These kids don't seem to grasp that their athletic careers are such a small portion of their lifetime. But I can see why they wouldn't get that.

[snowdenscold]

Someone needed to watch ESPN's 30 for 30: "Broke". Actually, all pro athletes probably should.

[theAlaskanBear]

60% of NBA players go broke 5 years after retirement. The number is much worse for NFL players at 78% in 2 years. It's pretty obvious there is a major problem going on here. These kids don't seem to grasp that their athletic careers are such a small portion of their lifetime. But I can see why they wouldn't get that.

What kind of sources are you looking at Jipop? Not debating, just intellectually curious.

The NFL is worse because careers are shorter, salaries are lower, and because the contracts are not guaranteed.

[Newton_14]

60% of NBA players go broke 5 years after retirement. The number is much worse for NFL players at 78% in 2 years. It's pretty obvious there is a major problem going on here. These kids don't seem to grasp that their athletic careers are such a small portion of their lifetime. But I can see why they wouldn't get that.

Someone needed to watch ESPN's 30 for 30: "Broke". Actually, all pro athletes probably should.

Strongly agree with both of you guys. This is one reason I am so against early entry in hoops. 99.9% of the younguns entering the league are not ready mentally, physically, or are mature enough. I did watch that 30 for 30 and found it incredibly sad. One poor guy signed a $3.5 mil contract and thought that meant he was going to have $3.5 mil in his bank account right away. He had no idea Taxes were going to eat up a good 40% of that, and that he would actually be receiving monthly checks, and only during the season.

I still feel strongly that Colleges should offer a Professional Sports Curriculum both for athlete's and for people that aspire to be professional or college coaches/trainers/agents/etc, to prepare these guys for their professional sports career's. Business and Finance classes should be mandatory/core courses in the curriculum to teach these guys (and gals) how the finances work, how to manage money correctly, etc, so they are better equipped when they get to the NBA/NFL/WNBA/etc, and know how to actually grow their money and secure their future's rather than blowing all of it and ending up with nothing.

The 30 for 30 also revealed that these guys are bombarded by sleazebags literally begging them to "invest" as partners in the sleazebag's latest "business venture", and many of them get scammed out of hundreds of thousands and sometimes millions of dollars in these scams.

I just find this incredibly sad and wish there were a way to drive the percentage of players this happens to down to a much lower casualty rate.

[Turtleboy]

What kind of sources are you looking at Jipop? Not debating, just intellectually curious.

I'd like to know as well. I've heard those figures bandied about a lot but have never seen any hard data to back them up.

[tommy]

This time the "victim" is Robert Swift. He went pro directly out of high school in 2004 and was the 12th pick of the 1st round, going to the Sonics. He struggled his 1st year but started playing better his 2nd. He was the presumed starting center for the Sonics his third year in the league but blew out his ACL in the pre-season. A year later, he hurt his knee again and by 2009, he was out of the NBA. He played in Japan for a couple season and, according to reports, he made about $20 million over the course of his career.

He is now 27 years old. He has not played pro ball in about 2 years... and his house just got foreclosed upon. To make matters worse, he is holed up inside the house and refusing to leave. When someone came to visit, they were told he was taking pills and could not come to the door to speak. The lawn in front of the house is littered with beer cans and the home is pock-marked with bullet holes. Yikes!

I wonder if going to college for a year, maybe connecting a bit with a coach who could be a mentor, perhaps gaining a little more perspective on the world, and being a little more mature when he entered the NBA might have made a bit of a difference for him. What a waste...

-Jason "it ain't Kenny Anderson, Antoine Walker, or Allen Iverson... but it is yet another story of a mega-rich athlete blowing it all in the blink of an eye" Evans

Of course the ideas you are proposing and how they would almost always benefit the young men in question make obvious and common sense. In this particular case though, before deciding to go pro out of high school, Swift had already made one knuckleheaded decision -- to go to USC and play for Henry Bibby. Wouldn't have gotten a whole lot in terms of life lessons and mentoring from that cold and distant man, and not a whole lot of basketball knowledge either.

[theAlaskanBear]

Strongly agree with both of you guys. This is one reason I am so against early entry in hoops. 99.9% of the younguns entering the league are not ready mentally, physically, or are mature enough. I did watch that 30 for 30 and found it incredibly sad. One poor guy signed a $3.5 mil contract and thought that meant he was going to have $3.5 mil in his bank account right away. He had no idea Taxes were going to eat up a good 40% of that, and that he would actually be receiving monthly checks, and only during the season.

I still feel strongly that Colleges should offer a Professional Sports Curriculum both for athlete's and for people that aspire to be professional or college coaches/trainers/agents/etc, to prepare these guys for their professional sports career's. Business and Finance classes should be mandatory/core courses in the curriculum to teach these guys (and gals) how the finances work, how to manage money correctly, etc, so they are better equipped when they get to the NBA/NFL/WNBA/etc, and know how to actually grow their money and secure their future's rather than blowing all of it and ending up with nothing.

The 30 for 30 also revealed that these guys are bombarded by sleazebags literally begging them to "invest" as partners in the sleazebag's latest "business venture", and many of them get scammed out of hundreds of thousands and sometimes millions of dollars in these scams.

I just find this incredibly sad and wish there were a way to drive the percentage of players this happens to down to a much lower casualty rate.

I agree about the sports curriculum, it would include not only financial classes, but contracts and sports law, physiology, nutrition and health classes, sports marketing, etc. Of course you have to worry about these programs becoming "academic clearinghouses" for university athletes like the AfAm department at UNC-CH, and you also have to really worry about pigeonholing/forcing athletes into these programs leading to potentially a one-dimensional and unfulfilling life for some, athletes need to have hobbies and interests and education beyond sports. Also, lets not pretend its just athletes who have this problem, as someone in my mid-20s, plenty of us non-professional athletes could have used more financial education in school. Young+money+fame+short competitive career= perfect fiscal storm.

[brevity]

Uh, article says last name is Swift, not Smith. Sounds like he's not so swift, though.

Serves me right for not clicking the link and just relying on Jason's description. Anyone who thinks Duke had 2.3 seconds to beat Kentucky in 1992 cannot be trusted.

Not as funny, but here is my Robert Swift sad face:
robertswift.jpg

[MartyClark]

Thanks for the link. I remember when this guy was drafted. I remember thinking "what the heck?", how is this guy a 1st round pick?

The story is interesting but it's hard for me to feel much sympathy about this guy's situation. He's apparently 27 years old, has blown through millions of dollars, and now faces a problem of his own making. Perhaps, like most 27 year olds, he'll need to work for the next 30+ years to support himself.

I'm in favor of programs to educate young athletes on making good financial decisions. As I understand it, the NFL has had this type of program with financial counseling available for all of its young players. Even with 3 years of college, it seems that many, if not most, of the NFL players don't make good financial decisions. You can lead a horse to water ...

[jipops]

What kind of sources are you looking at Jipop? Not debating, just intellectually curious.

The NFL is worse because careers are shorter, salaries are lower, and because the contracts are not guaranteed.

I've heard it discussed on talk radio lately.

Here is an article found via google:

http://usatoday30.usatoday.com/sport...ble/54465664/1

[Kdogg]

Strongly agree with both of you guys. This is one reason I am so against early entry in hoops. 99.9% of the younguns entering the league are not ready mentally, physically, or are mature enough. I did watch that 30 for 30 and found it incredibly sad. One poor guy signed a $3.5 mil contract and thought that meant he was going to have $3.5 mil in his bank account right away. He had no idea Taxes were going to eat up a good 40% of that, and that he would actually be receiving monthly checks, and only during the season.

NBA rookies all get a crash course in finance directly from the NBA at a "rookie camp." This is a manadatory thing. If these guys don't listen then it's all on them. I have a hard time feeling sorry for any of them. In truth he was lucky to get as much as he did. That draft year the Celtics were trying to "hide" him so they could draft him later. All that cloak and dagger raised his draft stock. The Sonics picked him up a few spots earlier so he picked up more money. I've suffered many bad Sonic drafts but remember that one really perplexed me.

[mgtr]

I still feel strongly that Colleges should offer a Professional Sports Curriculum both for athlete's and for people that aspire to be professional or college coaches/trainers/agents/etc, to prepare these guys for their professional sports career's. Business and Finance classes should be mandatory/core courses in the curriculum to teach these guys (and gals) how the finances work, how to manage money correctly, etc, so they are better equipped when they get to the NBA/NFL/WNBA/etc, and know how to actually grow their money and secure their future's rather than blowing all of it and ending up with nothing.

Of course I agree, but would go further. I think all colllege students should have such a course. Most students have not been in the real world (some have, of course) and have no idea about taxes, retirement, health care and investments. I would venture that most would jump at the chance at working for $40K a year forever, knowing nothing about inflation, the cost of children, etc. Having taught these kids in business courses, I was routinely shocked at how little they understood the real world, even if they were ace students. I had plenty of former students return after, say, 10 years who would complain about the relevance of what I taught them. Sad.

[Ian]

NBA rookies all get a crash course in finance directly from the NBA at a "rookie camp." This is a manadatory thing. If these guys don't listen then it's all on them. I have a hard time feeling sorry for any of them. In truth he was lucky to get as much as he did. That draft year the Celtics were trying to "hide" him so they could draft him later. All that cloak and dagger raised his draft stock. The Sonics picked him up a few spots earlier so he picked up more money. I've suffered many bad Sonic drafts but remember that one really perplexed me.

I can also give a 10 year old a course in calculus, doesn't mean he's going to be able to do derivatives after the course.

It takes experience and maturity to understand some of these stuff in finances. Giving a 18 year old who's never paid a bill or filed taxes a course isn't going to do him much good. This is one of the reason why the urgency to "get the money" is misplaced.

[dukelifer]

I can also give a 10 year old a course in calculus, doesn't mean he's going to be able to do derivatives after the course.

It takes experience and maturity to understand some of these stuff in finances. Giving a 18 year old who's never paid a bill or filed taxes a course isn't going to do him much good. This is one of the reason why the urgency to "get the money" is misplaced.

Might be better to give the bulk of the money to these guys after they play - held in a trust. Minor league players ride the bus and live on nothing for years - they probably learn the value of a dollar.

[JasonEvans]

I knew it was Robert Swift... dunno how I wrote Smith. So sorry.

Also, what is .2 seconds among friends? Eh?

Lastly, I have long recommended that all pro sports leagues hold back a portion of player salaries -- say 10-20% -- and that it be invested in a combination of stock index and bond funds (you could have a panel of professional investment advisers picking a reasonably safe path that also offers reasonable growth). The moment a player retires from the NBA, it would be easy to compute how long he would have from that date until his pension kicked in and the money would then be re-paid in equal monthly installments over that time.

So, Swift would have at least a couple million, which will continue to grow slowly, that would be paid out to him monthly over the next 30 years. It would be enough to keep him from being bankrupt, at least.

Some have criticized this as a way of treating the players like babies and denying them full access to their funds, but it seems clear that something needs to be done.

-Jason "I feel like something major happened with 2.3 seconds left... my brain must be dead" Evans

[hurleyfor3]

Lastly, I have long recommended that all pro sports leagues hold back a portion of player salaries -- say 10-20% -- and that it be invested in a combination of stock index and bond funds (you could have a panel of professional investment advisers picking a reasonably safe path that also offers reasonable growth). The moment a player retires from the NBA, it would be easy to compute how long he would have from that date until his pension kicked in and the money would then be re-paid in equal monthly installments over that time.

That's pretty much how all pension plans already work. What you're suggesting is a modified 457 plan, where withdrawals can take place before age 59½ without penalty, but contributions aren't capped at the 401k limits.