Last week, the NBA held its annual draft. Choosing from very talented players, this year did not disappoint. Talent abounded as the draft boasted very versatile players at each position from all over the world.
Unfortunately, players being stupid did not disappoint either. Before Rodney Hood became a first round NBA Draft pick, he purchased over $80,000 of high end jewelry, as TMZ Sports reported. According to TMZ among the purchases that the 21-year-old picked out were a $50K diamond-coated stainless steel Breitling Bentley watch from Rafaello & Co. in New York City and he also paid $30K on an 18-carat gold and diamond bracelet with princess cut and round diamonds. WOW!
Rodney went to Duke University. Duke is a difficult school to earn admittance into due to its academic criteria being higher than many other schools, especially in the Atlantic Coast Conference. You have to have a good head on your shoulders, be quite smart even…smarter than what Rodney Hood did just before the draft. Come on Rodney, use your head!
Draftee, Cleanthony Early, was another player that went on a pre-draft jewelry spending spree. He reportedly spent $62K at Rafaello & Co. buying a yellow gold watch and a Cuban link diamond bracelet.
Here’s a link to the article showing Rodney and Cleanthony’s pre-draft purchases: http://www.tmz.com/2014/06/28/nba-rodney-hood-cleanthony-early-jewelry-rafaello-and-company-diamonds-nba-draft/
I am all for nice things, if you can afford them. An $80K debt before being drafted is not an intelligent investment for several reasons. The most glaring reason is that his Agent had to have footed the bill. Agents are not good for players overall and I will get to that. But first, I want to share some ugly truths. Here’s an NBA statistic that may shock a lot of readers. Three and ½ years after retirement, 68% of professional basketball players declare bankruptcy. 68%!
Here’s something else most people don’t know. It’s a secret one of our staff members learned from a friend who has a very successful business in a state with a very popular NBA team, as well as other professional sports teams. Guess who loves professional athletes because they are good for their businesses? People who own repo companies, that’s who. Why? The repo companies make a ton of money “recovering” expensive cars, boats and other toys from professional athletes. The interesting thing to learn about that is most often the athletes will re-claim the toy, just to have it repo’d again for non-payment a number of months later. So guess what? The repo company REALLY loves that. They get to make another commission off the same toy, and they get to charge HUGE rates for impound and storage until the toy is reclaimed. The other benefit that the repo companies also appreciate is that to recover these toys, it is not like they have to go to the rough part of town.
Bankruptcies and repossessions happen so frequently because the professional athletes are completely out of touch with their finances. A professional athlete allowing an Agent to manage their life is the reason there are so many bankruptcies soon after professional athletes retire. Why? The Agent does not want the player to handle his own money. They charge ridiculous fees to handle the professional athlete’s money and are completely against the players learning how to work with money regarding their own financial literacy. Why? If you educate your client, you cannot steal from them anymore.
I know this first hand. My Agent ripped me off.
Contrary to everyone’s belief when it comes to professional basketball players, a lot of us didn’t and don’t make the big money. I didn’t make “big money” during my 10 years of professional basketball, but it did allow me to get paid to play a game, stay in great physical shape and travel the world, learning new cultures. I had the opportunity to live in and experience, China, Poland, Italy, France, Venezuela, Puerto Rico, and Argentina. I was a journeyman, whom truly enjoyed the journey. When I was done playing professionally, I amassed around $350,000 in ten years of playing basketball, or about $35K a year, a teacher’s salary. I did not declare bankruptcy.
Now that my days as an NBA player are finished, I have new roles and one of them is working hard to help athletes understand the value of a dollar, financial literacy and long-term sustained income. I would love to have a sit down with some of these players and have a 15 minute conversation with them that that will at least get them thinking. How about putting the money they earn into a franchise company, creating a perpetual money making machine? Then, buy these extravagant toys and bling on your first money made from NOT PLAYING BASKETBALL!
They don’t know it now, but these overindulgences are great predictors for a very bad situation in the future. Essentially, this behavior is an unknown cry for help. Professional veterans need to take these rookies and talk some sense into them. They need help, and they need it NOW.