What the NFL lockout can teach you about money

It has perhaps never been more obvious that the National Football League, the undisputed king of all American sports, is a business. It's also becoming clear that some of the folks involved are no better at handling money than you or me, even though most make more money in a year than we may see in a lifetime.

We've seen several examples of this in recent weeks -- some tragic, some ridiculous, others somewhere in between.

Gearing up for lockout
Nearly one in four NFL players lives paycheck to paycheck, according to a recent MSNBC story that quotes "financial experts familiar with the league." That may be shocking, considering that the minimum salary is $320,000 and the average NFL player made $1.87 million in 2009-2010, but it is happening -- and in today's NFL, it's putting players at tremendous risk.

That's because at 12:01 a.m. Eastern on Friday, NFL owners are likely to institute a lockout -- a work stoppage that occurs when labor negotiations become so contentious that owners would rather shut their doors than pay their workers. (Update: Late Thursday, the owners and players' union agreed to a 24-hour extension.)

Many have speculated that the lockout could drag into next season. If that happens and games are canceled, players will not get paid. In short: No game, no paycheck.

The NFL Players Association has seen this coming. According to MSNBC, the players' union "has been urging its members to stockpile cash for two years." The article adds that "many players have, indeed, heeded the union's warnings by hiring money managers, sticking to precise monthly budgets, living with roommates, and postponing big buys (i.e., new homes) -- or even small ones (new neckties), said several NFL players and their accountants."

Carson Palmer, the disgruntled Cincinnati Bengals quarterback, reportedly boasted, "I have $80 million in the bank."

But are all quarterbacks pinching pennies? Safeties saving every nickel and dime? There's no way to know. However, pro athletes don't have a great track record of being financially savvy. As proof, MSNBC cites a Sports Illustrated article indicating that nearly 80 percent of retired NFL players have declared bankruptcy. That number is undoubtedly skewed by older players who played in the days before astronomical salaries were the norm, but it is telling, nonetheless.

A tragic end
The latest high profile example of this is Dave Duerson, a longtime NFL player who was part of the Chicago Bears' 1985 Super Bowl championship team. Duerson committed suicide in February just a few months after declaring bankruptcy.

According to an ESPNChicago.com article, Duerson "listed $34.6 million in assets and $14.7 million in liabilities. However, nearly all of the assets were part of a judgment his food company had won in 2004 but had never collected." Among his debts: $4 million owed to the Associated Bank of Chicago, $9 million owed to Greenline Capital Partners and $23,000 in credit card debt with Bank of America.

Many speculated that Duerson, who held an MBA from Harvard and had served on the NFL Players Association's Executive Committee, suffered lingering effects from head trauma that came from years in the NFL. That has not been confirmed, however, according to the Chicago Sun-Times, "Duerson had enough foresight to insist to relatives via text messages that they donate his brain, and his family obliged by contacting the Center for the Study of Traumatic Encephalopathy at the Boston University School of Medicine, which received a $1 million gift from the NFL because of its efforts to research head trauma in sports, including football players."

How to deal with the long-term impact of concussions is reportedly one of the sticking points in the current NFL labor negotiations, with the players' union pushing for more extensive coverage for retired players.

'Live like a prince forever'
Most of us can only dream of the types of salaries that are commonplace in professional sports. However, many of the problems that have tripped up pro athletes are the same that doom the average credit card holder: spending carelessly, not living within a budget and so on.

Perhaps the best advice comes from an unlikely source -- New York Jets linebacker Bart Scott. In the aforementioned MSNBC article, Scott said this: "I learned something a long time ago from Steve Bisciotti, the owner of the Baltimore Ravens. He said, 'You can live like a king for a while, or you can live like a prince forever.' I'm satisfied with living like a prince forever."

While Scott is talking about saving millions of dollars, his advice can apply to anyone who comes into any amount of money. Maybe you inherited a few thousand dollars or got a new job and a big raise. Perhaps you won a few hundred bucks with a lottery ticket. You could even have won $75 in a fantasy football league with your buddies. Whatever the case, the principles are the same: Spending now feels great now, but taking the time to be smart with your money and set yourself up for the future can make you feel really good for a really long time.