Many people assume that NFL players, by virtue of being professional athletes, are set for life financially if they play in the league for even a few seasons.
Nothing could be further from the truth.
Relatively few players have long careers, they lose roughly half of their income – if not more – to taxes and agent fees, and many of them have split contracts, which allow teams to pay a player less if he gets injured.
“In 2015, 58 percent of the entire NFL had a split written into their contract, and players lost over $25 million in salary due to split contracts,” former NFL linebacker and current financial guru Nick Greisen said on CBS Sports Radio’s The DA Show. “Any guy that’s drafted after the second round will have a split in their contract. If a guy only plays three years, as a rookie, you have the potential to lose $117,000. That equates to 25 percent of your salary. If you only play three years, that’s a big chunk of change.”
The average NFL player probably doesn’t even know this.
“A lot of players don’t even know what exists in their contract,” Greisen said. “The agent hasn’t notified them. They haven’t looked into this. (They say), ‘I just want to focus on the playbook. I want to focus on this team.’ And they aren’t looking at the ways they can actually protect themselves against loss of earnings due to injury.”
Greisen, 37, was a star linebacker at Wisconsin. He was a fifth-round draft pick in 2002 and spent eight years in the NFL, playing for the Giants, Jaguars, Ravens and Broncos.
“When I got drafted, I think I got a $113,000 signing bonus, and I thought I was the richest guy in the world,” Greisen said. “After taxes, it was like $70,000. (I thought), ‘Oh, this is amazing. I can buy a car and I can do this.’ But you don’t understand financing, you don’t understand debt and you don’t have those relationships built. You don’t have the trust built with financial advisors. I had just known my agents for the past maybe four months from the time I had signed on with them to the time I had gotten drafted, so you’re kind of taking on a lot of their knowledge and trust.”
Greisen learned some financial do’s and don’ts from his older brother, Chris, who also played in the NFL. Chris, a quarterback, was a seventh-round draft pick in 1999 and spent time with the Cardinals, Redskins and Cowboys.
“I had that initial help, but a lot of guys, I don’t think they have that,” Greisen said. “I don’t think they understand where and how they should manage their money, and that is something that I think is being missed at the college level.”
NFL players, Greisen said, are used to having everything handed to them. The vast majority were given Division I scholarships and didn’t have to pay tuition. As a result, many enter the league at 21 or 22 without a basic understanding of money – what it takes to earn it, what it takes to keep it, what it takes to manage it. Few 22-year-olds are financial wizards, but the stakes are much higher for NFL players.
“When an NFL player makes a mistake,” Greisen said, “it’s typically much larger money than it is if you weren’t playing.”