Rookie Spending - Good article Vic Carucci

Presumably, Matt Ryan and Jake Long won't have any financial problems for the rest of their natural-born lives.

It's a presumption based on the nearly $35 million in guaranteed money Ryan will collect from the contract he recently signed with the Atlanta Falcons and the nearly $30 million in guaranteed cash Long will pocket from the deal he reached with the Miami Dolphins before April's draft.
Education of a rookie
NFL.com's five-part series chronicles the challenges rookies face in their passage into the NFL and the programs the league has implemented in an attempt to ease the transition.

Monday: Part 1 -- Appreciating history
Tuesday: Part 2 -- Handling finances
Wednesday: Part 3 -- Dealing with media
Thursday: Part 4 -- Marketing and image enhancement
Friday: Part 5 -- Avoiding off-field pitfalls

Ryan and Long are the names and faces of mind-boggling wealth from the NFL's rookie class of 2008. Yet, they hardly represent the norm for most of the 252 players drafted in April. It's one thing to be the top overall choice (Long) or the third overall pick (Ryan). It's quite another to be selected in the lower portion of the first round or in the bottom half of the draft.

Although risks can threaten those at both ends of the league's food chain, the typical rookie must exercise careful and cautious financial planning -- provided there's enough football success to prolong his career.

As Long, Ryan and the rest of the 2008 rookie class were told at the recent NFL Rookie Symposium in Carlsbad, Calif., a $500,000 signing bonus doesn't go quite as far as one assumes it might, especially with the many forces capable of separating players from their cash. After the agent takes his 3 percent off the top for negotiating the contract, after taxes, after union dues, after finding a place to live, after buying furniture, after buying a car, after living expenses, and after paying the cell phone bill, there isn't a whole lot left from that bonus, or from the weekly check from the $295,000 rookie minimum base salary that doesn't kick in until the regular season begins.

And there are still those pre-draft loans, which many rookies secure against future NFL earnings, to pay back. How about fulfilling mom's dream of living in a new house or driving a new car? How about obliging any number of other family members and friends looking for a seat on what they perceive as an endless money train?
Out of the woodwork

"People you know and a whole lot of people you don't know have plans for your money," Sheryl Tucker, long-time editor of Money Magazine, warned attendees at the symposium. "Everybody comes out of the woodwork. Second cousins once removed and twice removed will be coming to ask you to become their human ATM. They're going to come to you asking for money all the time."

Which is why the league, its teams, and the NFL Players Association offer plenty of help and guidance in the area of financial management. Ultimately, it's up to the player to figure out what to do with his money, but everyone who enters the NFL is encouraged to hire a financial adviser and consult other professionals about how to protect their earnings in what, for all players, is a short-lived career.

Players can become easy targets for investment scams, especially when approached by friends and relatives. Tucker said an unnamed veteran NFL player told her he receives at least one proposal per week to invest $100,000 in "some whacked-out idea." The player usually says no, but too many others say yes. The NFLPA estimates that, between 1999 and 2002, at least 78 players were defrauded of more than $42 million. Dale Carter, who spent 13 seasons in the NFL, filed for bankruptcy in 2002, claiming debts of $5 million.

The pressure to respond to a variety of demands on cash can be considerable, often creating a major distraction.

Jamie Squire / Getty Images
Chiefs second-year defensive tackle Tank Tyler suggests rookies find as small a living space as possible, to discourage potential hangers-on from moving in.

"Everybody's saying, 'We made it,' but you made it," second-year Kansas City Chiefs defensive tackle Tank Tyler said. "It's not your responsibility to take care of everybody else. Issues come up. Friends get locked up, and the call that's going to come is to (find out) how 'real' of a person you are, how 'real' of a friend you are. (They'll say), 'You're going to leave me locked up? It can't be that much money to you (to bail them out); you're in the NFL.' But that couple hundred dollars from four or five people is going to end up adding up to a couple of thousand dollars."

"You can't fix everybody's problems," second-year Indianapolis Colts defensive tackle Ed Johnson said. "It's going to be hard to (say no to) guys you've known since you were 6 years old. I've had to say no a couple of times. They'll keep asking, but you've just got to be persistent and just let them know that you can't do it."

The best plan, according to financial pros and veteran players, is to designate someone to say no. In most cases, that person is a financial adviser.

The NFLPA registers financial advisers, just as it does agents. Although the union has 550 registered, players still are urged to check each one's credentials thoroughly and never hesitate to replace the one they've hired if they are dissatisfied with the service.

"You must be an active participant in this entire process," said Dana Hammond, who oversees the registration of financial advisers for the NFLPA. "You can't just hire someone and then turn everything over to that individual. You want to ask questions."

"You have to surround yourself with the right people who can point you in all the right directions to handle those situations," said cornerback Dominique Rodgers-Cromartie, first-round draft pick of the Arizona Cardinals.
Just say no

Another rookie cornerback, Cowboys first-round pick Mike Jenkins, is one of many members of the NFL's rookie class of '08 who already has a financial adviser. And he already has been putting him to work. "A family member called me and said they have a plan for just spending my money or they need something or they want a car or they need a loan," Jenkins said. "I always call my financial adviser and tell them to link up with the person who needs whatever and let them handle the situation."

Tyler, who has a townhouse near Arrowhead Stadium, recommended that rookies find the smallest living space possible in order to discourage relatives and friends from moving in. Each team helps players with finding property listings and with relocation.

If any family members or friends do end up moving in, Tyler has this advice: "Make sure they get a job, make sure they have something to do. (Otherwise) they're going to be depending on you for everything, and your job is to go to work and worry about that, not worry about what's going on at home."

Before his rookie season in 2007, Baltimore Ravens offensive tackle Jared Gaither sat down with his family members and discussed spending limits for them, including travel and the cost of tickets. He said it proved effective in minimizing arguments, awkward situations, and other distractions.

Rookies can immediately enroll in the league's benefit plan, which, valued at $2.5 billion, is considered the very best in professional sports. For now, they are covered by the life-insurance portion of the plan. If they are on the final 53-man roster, practice squad or injured-reserve list for one regular-season game, they receive medical and dental insurance as well. The plan covers a player's children, as long as birth certificates can be produced, and his spouse, as long as the couple is legally married.

The NFL also has a severance plan. To qualify, a player must have a minimum of two credited seasons. A credited season is three regular-season games on the regular roster or IR; practice squad doesn't count.

Players can participate in a 401(k) plan, in which pretax contributions are automatically deducted from the weekly in-season paycheck. Beginning in November, a player can contribute 10 percent of his pay, up to a pretax limit of $15,500. The league begins to match 401(k) contributions in a player's second season. With four credited seasons, a player is eligible for the league's annuity program, which begins paying a player when he is 35 years old or five years out of the league.

"We like to do womb-to-tomb protection," said Miki Yaras-Davis of the NFLPA.

Still, most of the onus is on the players to protect themselves.

"You have to be mindful of your relationships," Tucker told the rookies at the symposium. "And if you have meaningful relationships, based on how much money you provide that person, whether it be your friend, your girlfriend, your family members, then that's not a meaningful relationship."

It is the kind of relationship that can do plenty to end the one between a player and his money.

I never really thought of all these guys having the huge families and asking for requests like 'bailing me out of jail'. I guess if any of my friends made it big, the most we'd ask of them is to buy the brats and we'd get the beer. Well, maybe I'd tell him to get both.