I have received emails from people who had the perception that I was “sticking up” for Latrell Sprewell and athletes like him. I was not. My comments were intended to be more of a sarcastic commentary on the large percentage of high dollar athletes who live paycheck to paycheck. The point I was trying to make was that financial immaturity leading to life changing mistakes is a human problem that occurs at all income levels. It is not just an athlete problem. Mistakes in spending more than you have, bad investments, bad decisions in who to trust traverse all professions and income levels. To say that a 19 year old in the NBA should be that much smarter and makes better decisions than a 19 year old who wins a five thousand dollar scratch off, inherits money or whatever is just silly. Your income level is not an excuse to make bad financial decision. I am not a wealthy person. I have a law degree. I have also made some terrible financial decisions in my life. More than I would like to admit to myself. Why? Because I didn’t use common sense and I didn’t do my homework. Guess what? The ability to use common sense and do due diligence are resources available to ALL income levels. More money does not make you “more smart”. It just means you have more bankruptcy creditors when you screw up.

The “Real Deal” is broke.

Former Heavyweight champion Evander Holyfield is playing the real life game of Deal Or No Deal. It has been reported that his $10 million estate in suburban Atlanta is under foreclosure, the mother of one of his children is suing for unpaid child support, and a Utah consulting company has gone to court claiming the boxer failed to pay back more than a half million dollars for landscaping. Just one more high profile athlete having to scale back his lifestyle to the level to which you have I have been accustomed. Why is it that athletes who seem to have everything are often completely unable to control anything related to finances?

We all played our violins to death when we heard of Latrell Sprewell’s financial troubles. On Halloween 2004, Sprewell, who was in the final season of a $62-million five-year contract with the New York Knicks, said he was insulted by the Minnesota Timberwolve’s offer of a contract extension that was reportedly worth between $27 million and $30 million for three seasons. Sprewell stated, “I’ve got my family to feed.” That quote become a national moniker for the public perception of athletes as greedy, out of touch individuals. Apparently, Sprewell still can’t feed his family. His yacht was recently repossessed and his multi-million dollar mansion is about to be foreclosed on.

While there is certainly the stereotype of the financially irresponsible NBA athlete, no professional sport is immune.

Let’s take a look at some high profile athlete financial sob stories over the years:

1. No one my age can forget Jack”The Ripper” Clark , star player for the Boston Red Sox who filed for bankruptcy in 1992 in the middle of his second year of a three-year, $8.7 million contract with Boston; he listed $6.7 million in debts. Jack was a master of financial planning and prudent asset acquisition. His bankruptcy petition listed assets such as 18 automobiles, including a 1990 Ferrari that cost $717,000 and three 1992 Mercedes Benz cars costing between $103,000 and $143,000. He owed money on 17 of the automobiles and was liable for about $400,000 in Federal and state taxes. He had also lost about $1 million in a drag-racing venture. Sounds like Jack would have been more at home in the NBA. You can read about it here

2. Johnny Unitas, Hall of Fame quarterback for the Baltimore Colts, filed for bankruptcy in 1991 citing numerous failed business ventures in his petition These failed bits included bowling alleys, land deals and restaurants. He filed for Chapter 11 bankruptcy in 1991.

3. Mike Tyson The name speaks for itself. Mike’s bankruptcy was highly publicized. Despite earning hundreds of millions during his boxing career, Mike kept it simple. His bankruptcy petition simply stated: ” I am unable to pay my bills”. According to federal court records, his liabilities totaled about $27 million. You can read that story here.

4. Dorothy Hamill, the women’s figure-skating gold medalist in the 1976 Winter Games, filed for bankruptcy after a series of financial setbacks. Hamill said she has experienced financial setbacks as a result of poor financial investment advice and management.

These are just a few of many athletes’ tales of woe. It is not a phenomenon limited to professional sports — just ask M.C Hammer. Prior to his declaring bankruptcy, it was made public that his day to day living expenses far exceeded his income of $33 million. If I am going to veer off to celebrities, I certainly have to mention Kim Basinger and Michael Jackson.

When the Toronto Star ran an article alleging that a shocking 60 percent of NBA athletes “go broke” five years after retiring, did we not all pull out that very tiny violin we have reserved for such occasions? The NBA players union and the NBA have both disputed that assertion. The article goes on to talk about all the people taking advantage of and “scamming” these athletes. While I have no doubt there is truth to this, I can also understand how such a generalization would make the NBA uncomfortable. It leaves you with the impression that 60 percent of NBA players are not only financially inept but also idiots in general. This is simply not true. While good business sense is often lacking, I view many of their mistakes as being more mistakes of trust, credibility and lack of life experience than anything else. Smart, busy people who can afford it, hire people with targeted expertise to help them. This allows them to focus on their expertise. Sometime mistakes are made and bad judgment is used in who we hire and hang out with. That is not unique to the NBA or professional sports. This happens to everyone. That is life. It happens all the time. It just does not make front page when we screw up. If there is any question at all as to how badly we as the general public screw up, just look at the personal bankruptcy filing statistics.

In order to get a perspective from the inside, I contacted Jordan Woy, a highly respected sports agent and a principal in the sports marketing/management firm of Schlegel Sports. Jordan has represented numerous high profile athletes

Here is what Jordon had to say:

I think there are several reasons why so many athletes “go broke”. First, whether it is a lottery winner, an athlete or a star entertainer, if they are not equipped with the knowledge on how to make and save money they are in trouble. When they didn’t earn it through disciplined business practices and they don’t have those skills they usually go through it quickly. Most lottery winners or athletes make a great deal of money in a short period of time. They start spending it on things that only go down in value (cars, jewelry, partying, entourage, etc) and start to evaporate the money they do have. They can carry this off until they stop earning big money. This is when the trouble starts. It is hard to believe that MC Hammer, Mike Tyson, Evander Holyfield and now Ed McMahon are broke. These are people who earned hundreds of millions over time and it disappeared. Lavish spending and entourages were probably the downfall for the first three for sure.

Most athletes play for four to ten years if they are lucky. After they pay taxes (can be 40 to 50%) and agent fees and buy their first homes, cars, outfits, jewelry (plus, cars, clothes and jewelry for friends and family), they are left with very little. When they first “strike it rich” all of their longtime friends and family expect help. Most athletes feel obligated to help everyone out at first then they wise up. They also want to keep up with their teammates. If someone buys a Bentley, they have to buy one; if someone buys a $75,000 watch, they have to buy one to keep up the appearance. Then, of course, when the career ends and they are still living in a multi million dollar house, driving 3 expensive cars (and insurance), traveling in private planes and taking Limo’s when they go out on the town, reality sets in. The money dries up very quickly.

However, if athletes educate themselves, learn money management skills and make smart, safe investments along the way, they are usually in very good shape. After representing athletes for over 20 years, we call this our “life plan”. We take out clients on working vacations in the off season to places like Las Vegas, Cancun and on a cruise to the Bahamas to learn business networking. We have people from industries such as real estate, oil and gas, financial planning, credit repair, asset protection/estate planning, etc come to educate the players and their wives so they can learn about these business and also determine if they are interested in any of these industries for life after sports. One of the financial planners who comes always says most people die coming down from Mt. Everest not going up. The goal is for these athletes to get to their Mt. Everest AND to get down safely.

So, what do you think? Are the financial mistakes that athletes make any different than your mistakes or mine? They are certainly mistakes made with a higher downside. When we hear these stories are we just unable to comprehend that someone could have that much money and spend it all? Can we learn lessons on how to live our lives from their highly publicized financial gaffes? Do we even care at all?

With all due respect to Latrell Sprewell, we have our own families to feed….

©2008 Brian Cuban

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Who would have known that Jose Canseco and Latrell Sprewell would have so much in common. Both overrated volatile sports figures who spent it a lot faster than they made it. Both facing financial ruin due to their “financial fiscal” theories on making and saving money. Jose Canseco being the latest to offer his take on the “pressures” of being a millionaire.

Jose Canseco’s home just recently went into foreclosure Canseco recently told the syndicated TV show “Inside Edition” that he walked away from his $2.5 million, 7,300-square foot home in suburban Encino because it didn’t make sense to continue making payments.

This in itself is not shocking. With the downturn in the housing market, many are finding upper end homes worth far less than the mortgage. They find it cheaper to walk away than throw bad money after bad. Not necessarily a bad financial move.

What was amusing and what brought back memories of Latrell Sprewell was the following quote from Canseco:

“You know my life, this financial thing, is a very complicated issue. Obviously, when you make all that money, people think, `OK, let’s assume it is $35 million.’ People have to understand that $35 million, you’re paying the government 41 percent. That leaves you with about $17 or $18 million, not even. Then you’re taking care of your whole family.”

Ok, let as all have a financial pity party for Jose Canseco who was unable to take care of himself and his family on 18 million. Parties, cocaine, strippers and his steroids bill certainly put a dent in that sum…..

Who can also forget NBA has been Latrell Sprewell’s ramblings about how tough it is to support a family back in 2004 when he was demanding a trade if he did not receive a contract extension from the New York Knicks.

On Halloween 2004, Sprewell, who was in the final season of a $62-million, five-year deal he signed with the Knicks, said he was insulted by Minnesota’ s offer of a contract extension that was reportedly worth between $27 million and $30 million for three seasons. “I’ve got my family to feed,”

That quote become a national moniker for the public perception of athletes as greedy out of touch individuals.

Apparently Sprewell still cant feed his family because his yacht was recently repossessed and his multi million dollar mansion is about to be foreclosed on.

Maybe Canseco and Sprewell should get together to discuss getting their families fed. Canseco can give Sprewell tips on bulking up for his next career as a professional wrestler where he will practice his patented “choke hold’ and Sprewell can give Canseco tips on yacht upkeep for his next career cleaning them…..

Hey, they have to feed their families right?

Avery Johnson has been let go as head coach of the Dallas Mavericks. I will miss him and it has nothing to do with basketball. I would not write on it or comment about if it did. My brother Mark Cuban’s basketball decisions as owner of the Dallas Maverick are his own for his team I have zero credibility to comment about it on any level.

I will miss Avery Johnson the person. I liked him a lot. He and his wife are by far two of the nicest, classiest individuals I have met or will probably ever have the pleasure to meet. In all of the basketball hub bub, it is easy to forget all of the great things they did for Dallas and surrounding communities as well as their hometown of New Orleans giving so much of themselves personally and financially.

In the world of professional sports the only certainty for a coach is that he will one day resign or be asked to leave. It a 100 percent certainty. Some get to do it on their own terms but those are few and far between.

Avery may no longer be the coach of the Dallas Mavericks but in my mind he will always be a class act

I wish he and his family the aboslute best in their future.