Despite my best efforts, I often have difficulty mustering sympathy for those who make millions of dollars annually for doing something I consider to be “useless”. But over these last few weeks, as we have engaged with all manner of sociological theories I keep coming back to the question of why it is so many professional athletes go broke so quickly after leaving their career.
To begin this discussion I think it’s important to understand what exactly the numbers are. According to an article by Chris Dudley, an estimated 60 percent of NBA players alone go broke within five years of leaving the league and a similar phenomena is seen in the NFL where approximately 78 percent of players go bankrupt after just two years (Dudley 1). I feel as though it’s important to note here that, while Dudley does not cite specific information, the fact that someone brought it up in class discussion seems to indicate that it is somewhat reliable. These numbers, if accurate, are shocking. I can’t imagine this is something commonplace among other high-earning occupations.
So what exactly might be behind this? Dudley’s own diagnosis is that professional athletes are the victims of predatory contracts, aggressive financial advisors who direct the players towards scams, and alienation from their wealth (Dudley 2-3). This is also coupled with the fact that the actual earning period of professional athletes, unlike other high-earning occupations, is only a few years (Dudley 2). As a result of these compounding factors, professional athletes come into vast sums of money very quickly and are encouraged to use it while they have it only to discover that they didn’t save any for a rainy day.
I think this pattern of behavior among professional athletes is somewhat of a microcosm of James Coleman’s theory of social capital. The two fundamental elements of social capital can be seen in the way professional athletes relate to those who they place in charge of their wealth. Those two elements being both trustworthiness of the social environment and the extent of the obligations held (Coleman 2). As professional athletes come into tremendous sums of money, they turn to financial advisors to manage it, no doubt under the assumption that they manage with the athlete’s interests in mind, and the more money they make, the more they come to rely on their financial advisors.
It is in this relationship that we can observe that social capital is often created and used in an imbalance. Athletes, not wanting to be burdened with the direct management of their resources, place trust in their advisors but the advisors, seeking to make money for themselves, take the trust placed in them and run with it. This isn’t, of course, to say that all financial managers are leeches (#notallfinancialmanagers) but it is certainly illustrative that Coleman’s theory is not always balanced. Just as some economic models presuppose rational action and equal distribution of information, it is easy to imagine that social capital operating in the same fashion. But given the fact that people lie or cheat adds an entirely different wrench into the equation. Humans, both in physical and social markets, do not always act rationally or honestly.
Sources Accessed:
“Money lessons learned from pro athletes’ financial fouls” – Chris Dudley
“Human Capital and Social Capital” – James Coleman
Data/Society/Decision-making Spring 2019 