The house always wins

May 5, 2010 1:47 PM

Antoine Walker starred on arguably the greatest college basketball team of all time- the 1996 National Champion Kentucky Wildcats and went on to earn over $110 million dollars as a 3-time NBA All-Star with the Boston Celtics. In 2010, Walker is broke and eyeing an NBA comeback to pay off his creditors, including 2 Vegas casinos owed more than $900,000.

Antoine Walker entered the NBA’s maximum-contract financial elite in 1999, the year Boston signed him to a six-year, $71 million deal. He was to be the talent and star-presence the Celtics would rebuild around, a big man with a smaller man’s ball-handling skills. And at 22, he would instantly be very rich, with a champion’s wallet even if not yet a champion’s game. As Rick Pitino, then the Celtics president and coach, put it, Walker “will never have to worry about money again in his life.’’

Athough a 32% career 3-pt shooter, Walker lead the NBA in 3-point attempts in back-to-back-to-back seasons from 2000-2003 and holds the NBA record for most 3-pt attempts in a game without a make - 11. Once asked why he shoots so many 3-pt shots, Walker replied: "because there are no fours."

posted by T.D. Strange (78 comments total)

This is no surprise to anyone who keeps up with sports. The number of athletes who are broke 5 years out of the league is staggering.
posted by absalom at 1:48 PM on May 5, 2010 [1 favorite]

Rick Pitino was right. Walker didn't have to worry about money again in his life.
posted by The World Famous at 1:50 PM on May 5, 2010 [5 favorites]

60 percent of NBA players, and 78 percent of NFL players, are bankrupt withing 5 years of leaving the league.
posted by absalom at 1:51 PM on May 5, 2010 [8 favorites]

How and why professional athletes go broke.
posted by absalom at 1:54 PM on May 5, 2010 [2 favorites]

An athlete's mismanagement and misfortune can be your unmistakable conversation-piece!
posted by absalom at 1:59 PM on May 5, 2010

Creator of the Walker Shimmy.
posted by Mountain Goatse at 2:01 PM on May 5, 2010

I have no sympathy for anyone who had a shitton of money and lost it due to being an idiot.
posted by pmbuko at 2:03 PM on May 5, 2010 [4 favorites]

There is usually a lot of LOLATHLETES when this topic comes up, but the vast majority of people in general wouldn't be able to handle the financial difficulties of getting paid for an entire career in their 20s and then managing the money through the rest of their lives. Personally I think if the various players unions really had the players' best interests in mind, they would set up some sort of mandatory retirement fund that all the players would have to pay into.
posted by burnmp3s at 2:05 PM on May 5, 2010 [17 favorites]

Yeah, gambling is a tax on people who don't learn math. It's a fair tax.
posted by mullingitover at 2:06 PM on May 5, 2010

My favorite from that team will always be Walter Mccarty. Oh Yeah. I love Walta

Go Celtics!
posted by Dick Laurent is Dead at 2:06 PM on May 5, 2010

pmbuko: "I have no sympathy for anyone who had a shitton of money and lost it due to being an idiot."

Nor do I, but if you read the article you'd see that a good number of the stories have to do with getting a cheating accountant recommended by friends, or making a string of bad investments. It's not all about idiocy or addiction.
posted by Hardcore Poser at 2:07 PM on May 5, 2010

pmbuko is right – everyone should know everything, and trust no one. That's why I do my own dentistry, for instance!
posted by Mister_A at 2:11 PM on May 5, 2010 [15 favorites]

There is usually a lot of LOLATHLETES when this topic comes up, but the vast majority of people in general wouldn't be able to handle the financial difficulties of getting paid for an entire career in their 20s and then managing the money through the rest of their lives. Personally I think if the various players unions really had the players' best interests in mind, they would set up some sort of mandatory retirement fund that all the players would have to pay into.

Totally agree. Add in the fact that most of them are "new money," and lack experience in money management. Critically, they even lack access to anyone they can trust who has that experience. It's hardly surprising, and it doesn't have a lot to do with them being athletes.

(I know the NFL does have a pension program. Don't know about the NBA).
posted by drjimmy11 at 2:11 PM on May 5, 2010 [1 favorite]

pmbuko: “I have no sympathy for anyone who had a shitton of money and lost it due to being an idiot.”

Precisely. The moral worth of a human being is exactly equivalent to their sense of fiscal responsibility and their ability to manage their money. In our brave new world, accountants are the highest saints. How can these people not have gotten the memo?
posted by koeselitz at 2:11 PM on May 5, 2010 [7 favorites]

I have no sympathy for anyone who had a shitton of money and lost it due to being an idiot.

Jeez, rough crowd. No sympathy at all for mental dysfunction and/or financial incomptenence?

He was also a generous friend and teammate who had custom suits made for coaches, routinely picked up giant team dinner tabs and, when there were funds to spare, gave to underprivileged youngsters.

I like Walker, but he seemed like one of the more lazier players during his stint in the NBA. I don't have any good suggestions for him, but I wish him the best.

Better 'Toine than Stephen Baldwin, imo.
posted by mrgrimm at 2:12 PM on May 5, 2010

Also, seriously guys. If you can't spare a couple hundred hours a month from your grueling physical training, film/research, travel, family, and media schedule to micromanage your accounts, you get what you deserve.

I guess what I'm trying to say is, DO YOU HAVE ANY FUCKING IDEA WHATSOEVER HOW HARD IT IS TO BECOME AND REMAIN A PROFESSIONAL ATHLETE?

It's really hard.
posted by Mister_A at 2:14 PM on May 5, 2010 [2 favorites]

It's not all about idiocy or addiction.

Except it kind of is. They invest in the things most likely to fail. I know jack about money, and even I wouldn't invest $70,000 in a flotation device for couches. At some point "I didn't know anything about it" is no longer a viable excuse.
posted by Roman Graves at 2:15 PM on May 5, 2010 [4 favorites]

It's a sad issue and not surprising. I think it's also a pretty common problem for big lottery winners. People don't know how to handle huge amounts of new cash. I've always thought if I ever won the lottery I'd be a personally responsible one, but until it happens (not very likely what with not playing the lottery) I can't know.
posted by kmz at 2:16 PM on May 5, 2010 [1 favorite]

On the opposite end, current NBA rookie Brandon Jennings got a $4.5 million rookie contract, and bought a $26,000 car. FTA: "I want to save my money,” he explained."

Personally I think if the various players unions really had the players' best interests in mind, they would set up some sort of mandatory retirement fund that all the players would have to pay into.

That is a fantastic idea. Has anybody in a potential position of power within those organizations floated anything like it?

(on preview: I know the NFL does have a pension program. Do they? If 78% of NFL players are bankrupt, it... can't be a very good one, right?)
posted by davidjmcgee at 2:17 PM on May 5, 2010

Actually, there are some programs doing classes out there, and the Washington Post did a feature on this in the magazine a few years ago.

Millionaires U.
Since 2005, the NFL has partnered with some of the top business schools in the country to teach its rich young players how to hold on to their cash.
posted by frecklefaerie at 2:20 PM on May 5, 2010

I don't wish it on anyone but I can't really work up a lot of pity for someone who's debts include just shy of 1M to Vegas casinos.
posted by Babblesort at 2:25 PM on May 5, 2010 [2 favorites]

Or even whose...
posted by Babblesort at 2:26 PM on May 5, 2010

If 78% of NFL players are bankrupt, it... can't be a very good one, right?

If the monthly income from your pension is less than the monthly costs you're incurring, that pension is just an unsuccessful speedbump on the road to bankruptcy. I'd be interested to know more about how the NFL program works, but I'm guessing it doesn't work by preventing players from hyperextending that money that isn't going into it in bad, bad ways.
posted by cortex at 2:46 PM on May 5, 2010 [1 favorite]

It sounds like Antoine Walker needs to subscribe to Lenny Dykstra's Players Club.
posted by rocketman at 2:55 PM on May 5, 2010 [2 favorites]

Well, the nytimes quotation only said that 60-78% were bankrupt OR under "financial duress," whatever that means. I mean, there's a good chance that the statistic was taken from a survey of retired athletes that asked, "are there things you'd like to buy, but you can't because you don't have the money?" or something. So the quote was taken out of context.
posted by notswedish at 2:58 PM on May 5, 2010

If you can't spare a couple hundred hours a month from your grueling physical training, film/research, travel, family, and media schedule to micromanage your accounts, you get what you deserve.

A couple hundred hours a month? What?!?
posted by The World Famous at 3:02 PM on May 5, 2010 [1 favorite]

I don't think anyone was asking for sympathy and these cats probably don't deserve it, but who does? I think they are just like most Americans but on a much larger / grander scale. As far as the casino debt Walker appears to have lost less than 1% of his contract, really not that much considering how many people spend $10 a week on lottery tickets when they are taking home way less than a $1000.00 per week. As for the cars, the majority of Americans owe way more than they are worth because when purchased new they depreciate as much as 15% as soon as they leave the lot. Most Homeowners take out a 30 yr mortgage when clearly the 15 yr option can save them HUGE dollars. There are very few among us who haven't made these same mistakes on our own smaller scale. I guess casting stones at large slow moving targets is always easier than looking in the mirror.
posted by HappyHippo at 3:02 PM on May 5, 2010 [2 favorites]

Geez, maybe he can ask some of his college teammates for some cash. That team had nine future NBA players and two NBA head coaches. Did not know that.
posted by beepbeepboopboop at 3:12 PM on May 5, 2010

Geez, maybe he can ask some of his college teammates for some cash.

I'm guessing most of them have already tried to ask him for some.
posted by Salvor Hardin at 3:25 PM on May 5, 2010

Maybe it comes down to you're either business-savvy or you're not. I mean, Madonna did not graduate from college, but she still knows enough to review her bills carefully and queston any extraneous charges. Sadly, too many "instant" millionaires are soft touches for snake-oil salesmen and friends with unwise investment opportunities.
posted by Oriole Adams at 3:27 PM on May 5, 2010

The World Famous: “A couple hundred hours a month? What?!?”

He's being sardonic. And he's right - a couple hundred hours a month is about what it'd take to adequately manage $4 million a year on your own, particularly if you don't know where to start or who to hire as an assistant. The whole "I manage my finances, why can't he manage his?" attitude that we tend to have about high-earning sports stars is, in my opinion, largely a misconception of scale.
posted by koeselitz at 3:42 PM on May 5, 2010 [1 favorite]

Who would have thought that investing in a chain of Escalade detailing drive-thrus could go tits up? Shocking!
posted by Kskomsvold at 4:02 PM on May 5, 2010

Madonna reference is interesting. I think it was Ken Fisher who looked at her numbers and concluded that, had she been more sensible, she might well have been a billionaire by now.

The schadenfreude I sense here is also interesting. Does it allow for nuance? For example, does it extend to Joe Louis as well?
posted by IndigoJones at 4:09 PM on May 5, 2010 [1 favorite]

Because we live in this foolish society that teaches that money is the answer to all problems, we mistakenly look down on people who have large amounts of money and still have problems. Managing wealth is not simply a matter of balancing your checkbook. It's more like learning to speak a different language. You're either born into it, or you have to be taught it somehow, or in rare cases you have some sort of innate sense of it.

Like Chris Rock says "Shaq is rich, the guy who signs Shaq's checks is wealthy."

Giving someone 100 million dollars doesn't make them wealthy. it makes them rich. Riches come and go. Wealth is it's own culture dedicated solely to the preservation of wealth.

And as in all things money related in this society. If it works a certain way, it's because the people at the top want it to work that way. You think NBA owners want these guys knowing TOO much about money? How do you negotiate a contract with a guy making 10 mil a year, if he's smartly turned that 10 into 20? It's a lot easier if he blew through that first 10 a little too fast.

I'm guessing guys like Kobe Bryant, Barry Bonds, The Manning brothers, Ken Griffey, who are second generation professional athletes are way better at dealing with the business side of their chosen profession.
posted by billyfleetwood at 4:10 PM on May 5, 2010 [4 favorites]

And he's right - a couple hundred hours a month is about what it'd take to adequately manage $4 million a year on your own

What? No it wouldn't! That's at least 7 hours a day. Managing that much money is not a full time job.
posted by Justinian at 4:10 PM on May 5, 2010

And he's right - a couple hundred hours a month is about what it'd take to adequately manage $4 million a year on your own

I'm not going to say this is the most ridiculous thing I've ever read on Metafilter. But it's close. Sure, for someone who knows nothing, it could take a couple hundred hours - total - to learn what is needed in order to manage it. But a couple hundred hours a month - every month - to manage a single portfolio of $4 million a year? No. Not at all. Not even close. So not even close that it is utterly preposterous.
posted by The World Famous at 4:11 PM on May 5, 2010 [6 favorites]

...the vast majority of people in general wouldn't be able to handle the financial difficulties of getting paid for an entire career in their 20s and then managing the money through the rest of their lives.

burnmp3s, the guy made $110 million dollars. That's a staggering amount of money, even for upper-middle class folks. A staggering amount of money for 99.9999% of the world population. And yet he took the most surefire way to lose money--gambling. Yeah, my sympathy level for him is exactly zero.
posted by zardoz at 4:25 PM on May 5, 2010 [1 favorite]

You know who this will NOT happen to? LeBron. The kid has such a good head on his shoulders.
posted by Faze at 4:48 PM on May 5, 2010

"...if you read the article you'd see that a good number of the stories have to do with getting a cheating accountant recommended by friends, or making a string of bad investments. It's not all about idiocy or addiction."

Both of these are examples of idiocy. I can see maybe losing $1-million and being broke. But making $110-million and losing ALL of it is idiotic. He could have kept $3-4 million in a fixed income account and lived like a (modest) king off the interest forever.
posted by coolguymichael at 4:55 PM on May 5, 2010 [1 favorite]

Every time I see A-Rod or some other big-money baseball player come up to bat and know that they are going to make more in that at-bat then I will in my entire life, my sympathy for them erodes pretty quickly.

No sympathy here. Sorry if that makes me a jerk.
posted by elder18 at 5:04 PM on May 5, 2010 [2 favorites]

I could have received learned counsel to invest in Enron, right up to the months before it went under. Or Nortel. or Pets.com. I suspect most people don't do in-depth investigations beyond asking a few advisors. Making investment choices that fail based on bad advice does not make one an idiot.

If I were to need an accountant I wouldn't have a clue what to look for, other than certification; I'm sure I would ask friends for recommendations. If they're wrong or uninformed, how would that reflect in any way on me?

Yes, putting all of your cash in play without a rainy day fund is senseless; to lump everyone mentioned in the story into the 'idiots' category is too.
posted by Hardcore Poser at 5:13 PM on May 5, 2010 [1 favorite]

Both of these are examples of idiocy.

Both of these are examples of bad decision-making. It only gets to the point of idiocy when you start with the reasonable expectation that someone would already know how to not make bad decisions, which for young adults coming into piles of money for the first time while having their personal and professional lives turned upside down is not exactly a given.

An MBA who does this stuff, that's moving into the realm of idiocy. Random guy who suddenly has to make decisions about how to deal with millions of dollars before he necessarily even has any real inkling of what financial planning means? Not so much.
posted by cortex at 5:17 PM on May 5, 2010

Well, I hope he fun with it. More fun that a lot of people have in a lifetime.

It's unfortunate that he seems to be chasing the dream again rather than focusing a bit more on reality.
He needs to use whatever name recognition he has left to get himself setup in a business of some sort.
Car dealerships seem to be popular with NFL types, but that may not be the best business right now.

Maybe small time coaching?
Hell, they just signed the new basketball coach in town for something like 1.5 million a year.
posted by madajb at 5:31 PM on May 5, 2010

I could have received learned counsel to invest in Enron, right up to the months before it went under. Or Nortel. or Pets.com.

But you could not have received learned counsel to invest exclusively in any of those. Learned investment advice, in my experience, always includes advice to diversify. And I would be shocked if Walker or any other similarly-situated former multi-millionaire athlete lost it all on one unlucky investment that seemed to learned and honest advisors to make sense at the time.

If I were to need an accountant I wouldn't have a clue what to look for, other than certification; I'm sure I would ask friends for recommendations. If they're wrong or uninformed, how would that reflect in any way on me?

That depends. Which friends would you ask, and what qualifications would you look for in a friend who might refer you to an accountant? And how long would you stick with that accountant once the money started disappearing? How closely would you monitor the accountant's activities? Would you be smart enough to get secondary analysis and monitoring of your accounts? Would you ask people - not friends - who were in a similar situation to you and who did well through the duration of their career and into retirement, given that those people are around and accessible to a new player? Or would you restrict your search to just whoever your current "friends" happen to know? What sort of research would you do in order to determine whether the person your "friends" recommended is a trustworthy and competent financial services provider? What steps would you take to educate yourself on how best to choose advisors and monitor and manage your newfound riches?

Depending on the answers to those questions, your decisions would either reflect positively or negatively on you. If all you did was ask friends, then it would reflect quite negatively on you. If, even after receiving the money and having access through that money to extensive resources to learn more and to find better advisors, you nevertheless stuck with whoever your "friends" recommended, then that would reflect even more poorly on you.

Cortex: An MBA who does this stuff, that's moving into the realm of idiocy. Random guy who suddenly has to make decisions about how to deal with millions of dollars before he necessarily even has any real inkling of what financial planning means? Not so much.

This is absolutely right. But once you get a year or two into that random guy's career as a multi-millionaire, you expect him to have either taken the opportunity to get an inkling of what financial planning means or to have simply let it ride with whoever he gave his money to, without bothering to get a clue. The clueless new kid might not be an idiot. But the clueless guy two years into his career who hasn't bothered to figure things out is getting a bit closer to that title.
posted by The World Famous at 5:32 PM on May 5, 2010 [3 favorites]

From what I read apparently none of them were dumb enough to go broke investing in Madoff.

On the happier side Magic Johnson is worth 500 million.
posted by vapidave at 5:33 PM on May 5, 2010

It only gets to the point of idiocy when you start with the reasonable expectation that someone would already know how to not make bad decisions, which for young adults coming into piles of money for the first time while having their personal and professional lives turned upside down is not exactly a given.

There are enough stories of bankrupt pro-athletes (and movie stars, and rock stars) out there that anyone smart enough to learn a play book ought to be able to avoid it.
Hell, just splitting your money between two accountants would avoid 90% of all the bankruptcies in pro-sports.

That and staying away from the damn casinos.
posted by madajb at 5:34 PM on May 5, 2010 [3 favorites]

But the clueless guy two years into his career who hasn't bothered to figure things out is getting a bit closer to that title.

I hear that, but you can do a lot of damage early on with bad decision-making. And (especially depending on the sport) a couple years may be a significant chunk of a player's whole career.

Anyway, I'm not really trying to be an apologist for fiduciary failure. Bad decision-making is bad decision-making and can be rightly called out as such. And I totally understand the frustration of folks not making megabucks at seeing some of the highest-profile folks who are doing so managing to piss away, by one means or another, that unlikely good fortune. It's easy to have a welling-up of schadenfreude about the whole thing.

But it's also far too easy to let that carry over into "well I would never fuck up like that" territory, especially given how common this sort of story is with the much broader random sample of citizens who end up as lottery winners. I think there's a line between thinking someone fucked up and thinking that their fucking up is some sort of fundamental moral failing or character deficiency, and it feels like the way this reaction goes sometimes wanders into that ugly latter territory.
posted by cortex at 5:43 PM on May 5, 2010

I hear that, but you can do a lot of damage early on with bad decision-making. And (especially depending on the sport) a couple years may be a significant chunk of a player's whole career.

This is a very good point. By the time young players learn what to watch out for, a lot of damage can already be done. And it's way to easy to pretend that we would be way, way smarter if in their shoes, without remembering what our mentality and financial acumen probably were when we were that age.

I think there's a line between thinking someone fucked up and thinking that their fucking up is some sort of fundamental moral failing or character deficiency, and it feels like the way this reaction goes sometimes wanders into that ugly latter territory.

Absolutely.
posted by The World Famous at 5:50 PM on May 5, 2010

How to manage 4 million a year:

334,000 a month direct deposited into high yield money market account
from that money market account:

invest 100,000 per month in fixed income, I'd recommend investment-grade municipal bonds for the tax advantages. These should usually be laddered so that every month some portion of your bond portfolio becomes liquid and can be reinvested at the current interest rates. (caveat, unless interest rates are dropping, in which case you may want to lock in for the medium term)

invest 100,000 per month in equity, I'd recommend a low expense ratio index fund like the Vanguard 500. We're only looking for broad equity exposure here

invest 50,000 per month in a collection of alternative investments with a low correlation to the above fixed income and equity, like REITs, Managed futures, or a Real Return fund. Here we're only looking to moderate the volatility of the portfolio.

leaving 84,000 a month for your play money.

Hire a broker at any bulge bracket firm (Merrill, Morgan) to do the above, and don't pay more than 1% in fees. They will be blissfully happy to help. They'll probably also set you up with a trust & estate attorney, likely resulting in a series of trusts to help preserve and protect your assets. They'll probably also sell you some much needed insurance. Time to manage? 4 hrs per year, when you meet to go over your quarterly statements.
posted by leotrotsky at 5:52 PM on May 5, 2010 [11 favorites]

But making $110-million and losing ALL of it is idiotic. He could have kept $3-4 million in a fixed income account and lived like a (modest) king off the interest forever.

Right. Because Rick Pitino and a bunch of other people getting rich off 'Toine were forever telling him, "Hey man, don't come to practice until you've got that econ stuff down cold." I like that the idea someone who grew up in a tough part of Chicago with the singular dream of striking it rich as a pro athlete should have been sitting home balancing his checkbook when that dream came true. Maybe if he'd gotten the education you did, maybe if he had people who really cared for him instead of hangers-on telling him he was doing fine he would have.

Better yet, I like everyone who thinks $110 million is just like earning $110,000. Don't do a thing different, you just have a couple more zeroes on the end of your savings account balance. Because that's what you do with millions of dollars, is find a couple of big savings bonds. Unless you're really charitable about your earnings after spending thousands of hours in a gym to get to the point where you're earning millions, you have to find places to put the money or you'll lose it. Given a gambler's nature and some bad advice, it's not surprising nor, in my opinion, a source of schadenfreude for Walker to have lost everything.

Rather than pinching your penny loafers, go out and buy a pair of moccasins. I'm no longer shocked, but still disappointed in the idea people should be automatically hated or admired simply because of their celebrity or bank balance.
posted by yerfatma at 6:13 PM on May 5, 2010 [5 favorites]

leaving 84,000 a month for your play money.

So, basically, you aren't going to hang out with any of your peers?
$84,000 is chump change for a lot of these guys, the kind of money that you can spend in a weekend.

I know, it's incredibly wasteful, but I wouldn't underestimate the sheer amount of peer pressure new players are under to be seen as, well, as rich, young sports stars.
posted by madajb at 6:13 PM on May 5, 2010 [3 favorites]

Madonna reference is interesting. I think it was Ken Fisher who looked at her numbers and concluded that, had she been more sensible, she might well have been a billionaire by now.

Maybe. If she had Ken Fisher's educational, financial and familial support background. But compared to many of the examples in this article it seems she was/is a pretty sharp cookie when it comes to looking out for her own finances.
posted by notreally at 6:36 PM on May 5, 2010

Firstly, I can't speak for anyone else here but I don't hate the guy and I don't think he's an asshole - I just don't have a lot of sympathy for him. Empathy, maybe, but not Sympathy.

Secondly, there has to be a million "simple guides to investing" that can explain, in three sentences, how to invest for retirement. Three terms even: low-cost index funds, diversify, and rebalance.

I wouldn't expect anyone that comes into millions to not have a little bit of fun, but how about putting away a measly 10%? Then again, statistics will show you how little the average person puts into their own retirement, often times much less than 10%. The fact of the matter is there are people in all walks of life who can't manage money.
posted by mbatch at 7:22 PM on May 5, 2010

Personally I think if the various players unions really had the players' best interests in mind, they would set up some sort of mandatory retirement fund that all the players would have to pay into.

Or even the team owners. They're not dumb with money. How could they care so little?

A phenomenon I've noticed in Australia in the last 20 years [where big bucks simply couldn't be made before then, and even now it pales in comparison with Europe and the USA] is that most parents of good sportsmen are *ahem* bogans, as well as the athletes themselves. "Bogans" translates roughly to: white trash-lite.

So part of the problem is that a lot of sportspeople don't even have family who are financially savvy enough to have their back and spot a dodgy manager / advisor when they see one.
posted by uncanny hengeman at 7:52 PM on May 5, 2010

Secondly, there has to be a million "simple guides to investing" that can explain, in three sentences, how to invest for retirement. Three terms even: low-cost index funds, diversify, and rebalance.

And don't be a playa.

Everyone wants to be a playa. Make it rain on some hos.

Somebody has to get it into their thick skulls to spend 10% of their income per year on being a playa, not 99%.
posted by uncanny hengeman at 7:55 PM on May 5, 2010

Invest? If you sign a deal worth more than $10 million dollars a year, then you don't need to invest a penny. Put $5 million of it into a money market account and you're gonna make $50,000 a year. Do that for six years, and you'll make a third of a million dollars a year if you never earn another penny on top of it, and you've still managed to blow $30 million over that six years. If you've got two neurons to rub together, you've bought your house. If you can't live on $300K a year forever, then you don't deserve to.
posted by Etrigan at 7:59 PM on May 5, 2010 [3 favorites]

You know who this will NOT happen to? LeBron. The kid has such a good head on his shoulders.


Correct me if I'm wrong, but isn't LeBron the guy who hired his high school buddies as his managers and agents? That's exactly who this happens to. I can't remember the name of the agent, who is currently in prison, who was recently discovered to have made off money from something like 70 athletes he represented. He told them he would invest it for them, and basically ripped them off. Sure, he's in jail, but they aren't getting their money back. A lot of athletes come from poorer backgrounds, and they don't even know who to trust, let alone manage their newfound money.

Take, for instance, Kwame Brown (off the Pistons... Please.). His rookie year was the first time he'd actually lived away from his grandmother's house in Georgia. Suddenly, he's the number one pick, living in a condo in Washington D.C. and he doesn't know the first thing about living alone. He ate at KFC for breakfast, lunch, and dinner, because he didn't know anything about nutrition. When this came to light, one of the assistant coaches essentially moved in with Brown and became a full-time life coach to the guy.

For everyone who thinks: 'well, that guy's an idiot, so what?' try to imagine his situation. He's ridiculously tall. Private high schools have rich boosters who are happy when their school does well. So, hey, let's get this kid, and have him play for us. They don't really push him hard, since they want him to play, and he just sort of falls through the cracks, never really learning anything, until he's suddenly in the grown-up world, and people are stunned to find out that he doesn't even know what to do with a suit after he's worn it once.

The thing is, Brown, Walker, pretty much all of these guys, they earn money for other people, and most of those people really couldn't care less if the players get anything out of it. Brown isn't really the exception, I don't think. There's a reason there's a mandatory rookie camp in the NBA, and from what I've heard, finances have become a much, much larger part.

Hell, even Scottie Pippen, who is seen as a pretty intelligent guy, got ripped off for millions of dollars by a financial advisor he trusted. He was, as many have said, set for life. He trusted the wrong person, and is now scrambling to find work in the basketball world to try to recover from his mistake.
posted by Ghidorah at 8:12 PM on May 5, 2010 [2 favorites]

Walker was also the victims of a couple of robberies during his career, including one where he was tied up with duct tape in his own home. What was stolen probably didn't add up a huge proportion of what he made in his career, but it's another place that money went that's not really his fault. Shit gets complicated when you suddenly come in to millions of dollars and everyone knows it.
posted by Copronymus at 8:26 PM on May 5, 2010

Oh, and this applies more to the NFL guys, but considering the stuff that's come out about concussions and their long-term effects on professional athletes, it's no wonder so many end up bankrupt.
posted by Copronymus at 8:29 PM on May 5, 2010

What percentage of MeFites, given $110M (minus taxes and agent fees, I'm assuming) would be in debt close to a million dollars now?

Cortex's plea for sympathy not withstanding, anecdotal evidence that some (what percentage? 90? 50? 10?) of lottery winners lose their fortunes, you really do have to be DUMB to get that kind of money and lose it ALL. It's one thing to lose some, even a lot- but ALL of it? Like, once you got close to the bottom of the barrel, why not shut down the spending, or switch accountants? Why not ask the 2, 3, 5 whitest, richest dudes who their accountants are, and as someone said split it between several people?

It's dumb, it's pathetic, and I don't see why we can't judge them. It's not about a moral failing; it's like judging the hicks hurting themselves in YouTube videos- "Watch this"- but played out over a decade.
posted by hincandenza at 8:33 PM on May 5, 2010

...people in general wouldn't be able to handle the financial difficulties of getting paid for an entire career in their 20s...

that sounds so much harder than living on the maybe $150,000 i made all through my 20's. i see what you're saying but athletes aren't paid a blue collar guy's lifelong earnings. the money they make is absurd and many, many times over what i figure i'll ever make. i hate that anyone has economic hardships, but dude, seriously, he blew millions and millions of dollars...
posted by rainperimeter at 9:11 PM on May 5, 2010

I am having a hard time coming up with a personal reaction other than mild interest and mild sadness that it has come to this for AW. The fact that he is trying to make an NBA comeback says a lot. He in capable of holding another job that can pay more than survival wages. He did not get much out of his college education and he is willing to try to pay off his debts rather than walk away or file. Good luck to him. I hope he pulls an inside straight.
posted by JohnnyGunn at 9:13 PM on May 5, 2010

you really do have to be DUMB to get that kind of money and lose it ALL.

People use the word dumb but I don't think they think about what it means. Walker probably is "dumb," i.e. he probably literally has way below average intelligence. Maybe he has an IQ of 80 or 90, you don't know. If his IQ were 70 and he were legally retarded, would you still have no sympathy?

Plenty of very smart, very responsible people rode Antoine to great success in his life. A major university made a shit-ton of money off of him, while paying him nothing and providing nothing but (apparently) a total farce of an "education." What a fucking crock that was.

An NBA organization made a ton of money off of him. They provided a large coaching staff to raise him to an elite level of basketball. They provided trainers and doctors and who knows what else in order to turn this unintelligent, irresponsible young man into an NBA All-Star.

How many of those people who devoted so much time, manpower, and money to his basketball education spent a dime or a second teaching him how to be fiscally responsible? He spent two years in a major university -- did anyone make sure he learned about finance there?

What I see is they took a kid who couldn't responsibly run his own life, gave him an unfathomable level of support to become a good basketball player and absolutely no support to become good with money.

Don't judge him because he's dumb. It's not his fault. He was probably born that way, and given no real education, even as he "attended" a major university, provided no real financial education, even as smart men in fancy suits earned millions of dollars pretending to look out for his interest. He was coddled and protected for as long as he made other people money and then as soon as he was too old, they just let him go and say what a shame he isn't better with money.

Did any of the 70 people he supported with unbelievable generosity at one time take him aside and advise him to put that money away for the future? Did they turn down the money and gifts, and instead get their own jobs and their own money?

So did he bring this on himself? Yes. But how many people of his intelligence could do better when all the people tasked to educate and look out for him did no such thing?

I have a lot of sympathy for him. Everybody who should have taught him and looked out for him just used him and let him become a grown man who doesn't know shit about shit except for that one area where he was profitable for so many other people that teams of people spent years and years and millions of dollars to train him in.
posted by callmejay at 9:20 PM on May 5, 2010 [5 favorites]

Not to mention the casino, which happily enabled and no doubt encouraged in a million ways all the gambling.
posted by callmejay at 9:32 PM on May 5, 2010

hincandenza: “What percentage of MeFites, given $110M (minus taxes and agent fees, I'm assuming) would be in debt close to a million dollars now?”

Many, many more than you think.

“It's dumb, it's pathetic, and I don't see why we can't judge them. It's not about a moral failing; it's like judging the hicks hurting themselves in YouTube videos- "Watch this"- but played out over a decade.”

Judging means finding a moral wrong. That's exactly why it's wrong to judge people for mistakes that aren't moral failings. When people fall in love with the wrong people, or get lost on their way to work, or lose something important, or do anything that doesn't involve their own moral choice, we don't blame them or judge them for it. In fact, I think it can be said that it's wrong to judge people for their own unintentional mistakes in this way. And by the way, it's just as wrong to judge "hicks" for "hurting themselves in YouTube videos."

If you can't accept that as a moral imperative, at least accept me. I'm thirty years old, and I'm absolutely shit at dealing with money. I'm many, many thousands of dollars in debt, mostly because of student loans. My credit is below the floor. I'm working on it, but it doesn't come naturally to me. Does this make me unintelligent? Does this mean I'm silly, or stupid, or an idiot?
posted by koeselitz at 10:05 PM on May 5, 2010

It's dumb, it's pathetic, and I don't see why we can't judge them.

'Cause we're not mean-spirited, judgmental assholes?
posted by ambient2 at 10:21 PM on May 5, 2010 [1 favorite]

Honestly, I'm uncomfortable with calling Walker dumb. I don't know him. I can't make that call. What I will say, based on the state of athletics in education in America is that it's quite likely he wasn't educated. As I said earlier, students with amazing athletic talent are essentially given a free ride through school. A lot of elite athletes (say, for example, Kevin Garnett or Amare Stoudamire) attend several different 'prep' schools through out their teens, essentially being rented for a year by the school so the school can win a championship. Garnett went to 4 or 5 different schools before he was drafted. Stoudamire went to 6, I believe. I wouldn't call them dumb, I would say that they've been used by schools who couldn't care less about their 'students' as long as they brought in money/booster support/championships.

As for Walker, Kentucky? Does anyone really believe athletes at Kentucky have to really worry about grades? What about Memphis? Derrick Rose (thank god the Bulls drafted him) has such a limited vocabulary that it's been written about in Chicago newspapers, not just on blogs. He's an amazing talent, and maybe at some point, he'll take it upon himself (like Garnett, or Vince Carter) to take the time to earn an education.

For all the talk of dumb, or stupid, what really fits those criteria is the money. They're earning stupid money. By that, I mean the amount of money that can make you stupid, that can make you do stupid things. Did Mike Tyson really need full length mink coats? Does anyone? If you're young and poor, and you see the riches flaunted by your role models, and suddenly you're given all that money, when at best you've had a weekend seminar covering finance as well as living right, not going out to clubs every night, staying away from groupies and drugs, you're going to do stupid things with it. And who are you going to trust with it? Someone you've known all your life, who wants the same things you want, who dresses, talks, and acts like you, or someone you've never met, who is pretty much alien to you? When you've decided to make your buddy from high school your financial manager, is he really qualified? Maybe he wants the party to keep going. Maybe he doesn't want to make you angry. Maybe he won't tell you when you're 'close to the bottom of the barrel.'
posted by Ghidorah at 11:30 PM on May 5, 2010

About lottery winners, this episode of TAL, Nice Work If You Can Get It, talks about a guy who makes his living buying annuities from broke lottery winners. There is an entire industry based on paying down the debts of lottery winners to get their annuities. You've just won the lottery. You're getting $50,000 a year for twenty years. You wouldn't think of yourself as rich, would you? Sure, it would be pretty easy to make that last, if you think about it.

But dude, you won the lottery. You're family thinks you hit the jackpot. Your friends think you're rich. Everyone is going to be asking you for something. Who hasn't had that idle discussion with family? 'If I win the lottery, I'd buy (X) for (Y), and (A) for (B).' And then you're declaring bankruptcy less than a year after winning the lottery.
posted by Ghidorah at 11:35 PM on May 5, 2010

Better yet, I like everyone who thinks $110 million is just like earning $110,000. Don't do a thing different, you just have a couple more zeroes on the end of your savings account balance. Because that's what you do with millions of dollars, is find a couple of big savings bonds.

Perhaps one treats $110 million differently than one treats $110k, but isn't the point that if you didn't, if you treated it as if it were $110k, you'd be pretty safe from bankruptcy? I'm not going to deride this guy too hard for losing this much money, but, at the same time, I find it kind of incredible the number of explanations for why this isn't surprising that just seem to override how much money we're talking about here. Go back and look at leotrotsky's numbers, which are just for four million per year, broken out on a monthly basis, in order to get some context on this. We aren't talking about someone who lost their wallet, we're talking about someone who list their large apartment building.
posted by OmieWise at 5:08 AM on May 6, 2010

Hey I heard Elie Weisel lost all his money to Madoff and now he's broke, what a fucking MORON, you have to be SO DUMB not to know better than to manage your money better than that, I have NO SYMPATHY for that guy, what a fucking RETARD.
posted by saladin at 5:11 AM on May 6, 2010 [3 favorites]

Every time I see A-Rod or some other big-money baseball player come up to bat and know that they are going to make more in that at-bat then I will in my entire life, my sympathy for them erodes pretty quickly.

A-Rod only makes about $40,000 per at bat.
posted by dfan at 6:25 AM on May 6, 2010

saladin is right on the money. Madoff swindled zillions from people who ought to have known better, including pension managers and other financial professionals; but the blame is centered squarely on Madoff. But when some rich young athletes get swindled, well, it's their fault and they deserve no sympathy, because they don't really deserve that money and they're going to blow it all on crack and hookers anyway.
posted by Mister_A at 7:34 AM on May 6, 2010 [1 favorite]

Yes, going broke on 4 million per year is much harder than going broke on 40,000 per year, because such a small percentage would be required for subsistence. You have to actually work at losing 4 million per year. That means you would have to lose 333,333 dollars a MONTH. Lose, with nothing to show for it. Not a house, or cars, or artwork, or any assets. Completely blow.

Let's say you want to live very well, which is fine, so housing, clothing, and food cost $100,000 a month. That means you still have to BLOW over $200k a month. Completely blow, with nothing to show for it.

Also, it would make a lot of sense, financially, for the professional teams to invest in auditors that work for the players for free. I can't help but think the escalating salaries are due, in part, to the rapid rate at which pro athletes apparently routinely lose millions upon millions of dollars.

If the teams participated in keeping the players solvent, they could probably over time actually drop salaries, since it would be demonstrated paying someone $50 million would more than take care of all their wants and needs if even modestly managed.
posted by discountfortunecookie at 8:06 AM on May 6, 2010 [1 favorite]

So, basically, you aren't going to hang out with any of your peers?

Oh, I don't know. I think as long as you concentrate on doing whatever is necessary to make the shots you're paid to make, you'll have plenty of opportunities to enjoy the success. The sad players are the ones that have to drop thousands a night. 'Cause once that money runs out, people will forget your name quick.
posted by Civil_Disobedient at 8:26 AM on May 6, 2010

'Cause we're not mean-spirited, judgmental assholes?

You've been here before, right?
posted by The World Famous at 10:14 AM on May 6, 2010 [1 favorite]

why don't the basketball/baseball/NFL teams lend these kids their accountants? A small fee, and they would be sorted for life. why are they left to their own devices when they have this amount of money? do the clubs just not care?
posted by marienbad at 10:29 AM on May 6, 2010

why don't the basketball/baseball/NFL teams lend these kids their accountants? A small fee, and they would be sorted for life.

These kids are welcome to hire the same accountants that the teams use. No "lending" necessary. I suspect that a huge part of the problem (aside from people mooching and embezzling) is that the players do not follow the advice of financial advisors.
posted by The World Famous at 10:39 AM on May 6, 2010

Perhaps one treats $110 million differently than one treats $110k, but isn't the point that if you didn't, if you treated it as if it were $110k, you'd be pretty safe from bankruptcy?

You can't. That's the thing, you cannot do that. Your local bank branch does not offer a $100 million CD. At those numbers, it's not the same and that's why I'm ignoring the numbers offered in examples above, because I don't feel like the people offering them know what they're talking about. Once you've maxed out your allowed retirement contribution for the year, you have to start looking at tax shelters. You can do some of that with life insurance products and at least stay ahead of the tax man and inflation, but it you want to make the money grow, you have to seek out investment opportunities (hint: not car washes, that never works out for athletes). Which really requires more than 8 minutes a week or whatever is quoted above. It requires trustworthy advisors and Antoine's agent should have been able to provide those, but only if his agent had 'Toine's best interests at heart.
posted by yerfatma at 1:00 PM on May 10, 2010 [1 favorite]