It wasn’t long ago that Terrell Owens sat upon a throne atop the world. The wildly successful wide receiver played for a number of high-profile NFL teams, including the San Francisco 49ers and Dallas Cowboys. He was one of the most infamous sports players in the world, known for his on-field taunts, exceptional athleticism, and massive ego. Between his reality TV show and massive contracts, he earned over $100 million in his two-decade career.
So now that TO is retired, he must be sipping rum drinks on his private yacht in the Caribbean, right?
That’s not exactly how it turned out. Like so many other professional athletes, T.O. filed for bankruptcy not long after he hung up his cleats. To the average American who makes less in an entire year than star players make in a single game, this is unthinkable. Yet Darrell Johnson, a sports and crisis management expert and founder of Ty Ryan Sports Group, says that it happens all the time. It’s the worst for black athletes, who Darrell claims are the most vulnerable to financial ruin. A shocking 90% run into financial trouble after they retire.
In an interview with HFR founder Samir Becic, he explained why that is, and how he thinks the problem can be fixed.
From Passion to Profession
Darrell started his career by helping athletes who found themselves in trouble. When professional athletes run into media scrutiny, they often don’t know where to turn. Darrrell discovered that he had a talent taking control of the situation and giving advice.
Soon, his passion grew into a profession. He started a crisis management program, but didn’t stop there. He had a vision for a new, all-inclusive type of agency, one that covered PR, marketing, law, management, and negotiation.
His service is in hot demand. Professional athletes often find themselves on the side of trouble, with many of the most visible 3% of athletes finding themselves on the wrong side of a drug or assault scandal.
So when they have a problem they have 48 hours to contact Darrell so that he can help them get out in front of it. He said that many athletes think the problem will just go away, that if they hide at home the media will move on to the next issue. That’s not the case. Darrell advises players to fall on their sword, or risk losing money after 5 years.
Taxes, Child Support, and the Apathetic Agent
While media scandals follow many athletes during their career, the harsh reality of bankruptcy is the real specter haunting retired pros. Hence, the original question: how can guys like Warren Sapp and Terrell Owens lose more money than most people will ever make? Is it even possible to spend 100 million on houses, cars, and clothes?
Lavish spending is part of the problem, but it doesn’t even begin to tell the whole story.
Darrell explains that the main problem is that young African-American athletes who were raised in a family that never knew anything about financial investments are suddenly gifted a large salary at a young age. The agent gets his payout immediately, so he doesn’t much care what happens down the line.
Darrell explained: “3 years after African-Americans retire, 89% of them are broke. The reason is because they don’t get the financial advice that the white athlete gets. The white athlete chooses a white accountant, agent, and lawyer who understand his background.
But 9 out of 10 times theses agents don’t understand the African-American athletes’ background. It is up to the financial advisor and agent to come together to protect the guys future, but they don’t. They are not setting up trusts or nonprofit accounts.”
He went on to explain just how it happens. Imagine a young African-American guy who grew up in the impoverished 5th Ward of Houston. He’s never came from money, but has a real talent for football. All of a sudden he gets whisked off to Notre Dame on a scholarship. He experiences total culture shock, he’s in a stadium of 100,000 screaming fans and the first time in his life he has someone give him something.
Then when he goes into the NFL another white man gives him a contract, so he develops this trust. But he’s never advised on how to invest his money. They’re not educated about it, and they don’t have their money with someone who truly cares about them. Then they have to pay taxes in every state they play in (the “jock tax”), expensive child support payments, and endless friends and family who feel like they are owed a piece of the pie.
Reinvesting in Your Community
The great disparity led Samir to ask whether or not this problem wasn’t based in racial bias. Considering that the NFL is a hugely popular entity, why couldn’t they do anything to prevent the agents from going broke? The NFL says they set up financial education training, but it is often cursory and ineffective. Is there a solution to this problem?
Darrell had one solution: black athletes should give black agents a chance with their money. This will let them keep the immense wealth within the community, invested in trust funds and non-profits that give back. Darrell says that’s exactly what his agency does. He helps athletes with financial planning from day 1, setting up trusts and non-profit foundations in their name. The care of someone who knows the struggle and has the black athlete’s best interest at heart means that none of his clients have filed for bankruptcy. He hopes more African-American athletes will consider working with black lawyers in the future.
Samir concluded the interview by saying: “Darrell is a man who cared for people first and then turned that passion into a profession. But he always kept that care first.”
