BLACK ATHLETES LOSING MILLIONS EVERY YEAR
Mismanagement and Lack of Financial Planning steals athletes’ futures
By Sharon Mallory
Nationwide (BlackNews.com) -- I saw some very disturbing news recently regarding Clinton Portis, a former NFL player who played nine years in the NFL and earned approximately $43.1 million dollars during that time. However, Portis has none of those millions left. He discovered too late that the money he thought was being managed and set aside for his future was pilfered by his financial management team on risky investments and schemes. He sought revenge but fortunately didn’t go through with his plan.
It’s not a new story. There have been other athletes that have found themselves broke after successful careers – left with nothing but a number on a jersey. How does this happen? Many times, African American athletes have little to no knowledge, experience or exposure to financial planning or management before entering the pros. At the start of their careers, they are swarmed by “financial experts”. Sometimes they are introduced to them through their signing organization or management team. So, perhaps out of fear or pressure, they go along with the package provided never knowing how to vet these “experts” or realizing they have the ultimate control of their finances.
In Portis’ case, as with some others, he was allowed just enough money to keep him distracted buying all his “wants” (cars, houses, clothes, jewelry, and the list goes on) while the unscrupulous financial managers were draining off money into frivolous and failing ventures across the country without his knowledge. Often, athletes are also discouraged from investing in their own communities by these firms – the ones that supported and nurtured their early talent.
So, what can be done? First, our student athletes and parents need to know and understand what to look for in an investment or wealth manager well before they sign a pro contract. They need to interview several professionals and understand their investment philosophies. And second, the management organizations should take some responsibility and expand the diversity of the firms in their presentations. There are some pro organizations that offer no opportunities for African American investments firms to provide presentations or information to young athletes. As a registered investment advisor, protecting my client’s interest is first and foremost. I can’t even begin to imagine how someone who fashions themselves as a wealth or financial manager would allow their client to travel down the road to financial ruin. The reckless disregard for the futures of these athletes is deplorable. It’s nothing short of economic oppression on a very specific and targeted segment of people. And it continues to happen.
Sharon Mallory is CEO of SDM Investments LLC, a Registered Investment Advisory firm in Chicago, IL and Merrillville, IN. She is the ambassador for Women’s Money (Illinois and Indiana), a financial education program for women that delivers its proprietary financial mentoring program to women and girls nationwide. She is also the author of "Drama, Dollars, and Dreams: A Diva’s Guide to Financial Management" (lulu.com).
