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For the 2021 NFL season, professional football players will be paid their salaries over 36 weeks, a longer period than how they’ve been paid in recent years — 17 weeks — according to an ESPN report.
Nearly 80% of NFL players go bankrupt or are under financial stress within two years of retirement, according to CNBC, and 60% of NBA players go broke or bankrupt within five years of retirement.
So will this new pay structure benefit athletes financially?
Sean Packard, a CPA for OFS Wealth in McLean, Va., who works with professional athletes including NFL players, says some will have to worry less about budgeting their money.
“My immediate thought was: good for the players,” Packard told MarketWatch. “With them being limited to pay in the season, you end up having to budget all that money.”
Carlos Dias Jr., the founder of MVP Wealth in Orlando, Fla., agrees. “It’s a positive for those who are unable to pace themselves, because they won’t run out of money.”
But Dias, who provides financial planning services for professional athletes, adds, “I see it as both a positive and a negative.” He says for some athletes, getting more money sooner means having access to capital sooner that they can use to “invest and tackle debt” — things that could potentially be more difficult if the payments are more spread out.
Packard agrees with this when it comes to the league’s higher-paid players, but points out that paychecks spread out over more time should especially benefit NFL players who make close to the league minimum.
“You look at time, value and money — you’d rather have money right now. But when you’re looking at the bottom of the pay scale, those are the ones who are going to benefit the most,” Packard says. “Sometimes you’ll see at the end of the season they’ll have blown through a lot of their money and not budgeted for everything else.”
In the end, what’s most important is teaching high-earning athletes the importance of budgeting and saving, Dias says.
“If you want to change that psychological mindset, it doesn’t matter whether you get paid 17 weeks out of the year, 36 weeks out of the year — or 52,” he says.
