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Financial Planning > Behavioral Finance

Forget March Madness, Pity the Poor(?) NFL Players

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When the NFL Players Union decertified on March 11, paving the way for NFL owners to impose a lockout on the players, it effectively ended collective bargaining for the players. The players no longer have a union, but a trade association, according to the NFL. What risks does this pose to players, many of whom are high-profile celebrities, with brands and reputations to protect?

Senior CFP Linda Robertson, of Financial Finesse in El Segundo, Calif., works with the NFL Players Association (NFLPA) on financial education for the Players Association, as “part of their benefits package.”

For one thing, Robertson says, “once owners decided to go with a lockout, owners suspended payments to group insurers. Players have coverage through COBRA, but they have to bear the whole cost.”

For serious players of such a physical sport, is that a very high cost? Robertson points out that the players are “healthy, physically fit, and younger overall than many insured groups, so we needn’t worry on that account. The same goes for other group coverage—dental, life, disability insurance—players can pick up the cost themselves—to keep it going.”

Will players get paid while they’re locked out? Their pay is “consolidated” into the season; players don’t get paychecks after the Super Bowl, so the lockout won’t affect them in that way unless the strike lasts into summer training camps, according to Robertson. But if the strike lasts longer, they would not be paid until the lockout is over.

Financial Finesse is mostly in the education business for retirement plan participants. It also has been providing education to the NFLPA.

So how are they educating NFL players now that the lockout has occurred, and once the lockout ends (hopefully for pro football fans)?

Encouraging Players to Save

Robertson explains that Financial Finesse has been helping players, through the NFLPA, prepare for this lockout possibility for two years. They can use the “online financial education tools” from Financial Finesse. With the NFLPA, Robertson has

stressed that players “set aside at least 25% of their income, and keep it liquid,” she explains. In normal years, they “encourage players to save 10%” of their income.

Helping Players With Mortgage Assistance

The NFLPA is “offering a mortgage assistance program” to players, which would make the monthly mortgage payments for players if the lockout lasts for more than a certain period of time. Robertson says it is fairly common for mortgage companies to offer this kind of insurance program to regular homeowners. It kicks in when the owner is “disabled or unemployed.”

Helping Players Avoid Rookie Mistakes

Professional football players may make a high income but it’s for a limited period of time. When rookies are “suddenly earning six figures, they can get pressure from friends and family members for help.” Players are “guided to take care of themselves first instead of helping family members start a business or buy a home.” And if they want to help out family members, they are guided to put together a business plan with that family member.

Since football careers are short, players are encouraged to save and to “make the money last after” they are finished playing. They are also coached to think about their next career as part of the guidance they get on the “transition to retirement from playing,” Robertson notes. There are, she says, a surprising number of players who want to do financial planning as their next career.

NFL Union Reps as Mentors to Rookies

While Financial Finesse works with the NFLPA, helping the pros with financial education from rookie to the transition to retirement from football, they don’t do “reputation consulting.” But “it’s important,” Robertson says, “especially for rookies—how they play on the field and off the field. Much of this is done through mentoring,” she adds. The “players’ rep goes to conferences and brings back information, mentoring the other players.”

See a recent interview with Financial Finesse CEO Liv Davidson on some key findings for advisors.