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Agents, financial advisors lining up lockout money for players

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We’ve pointed out a time or two in the past few days the “lockout fund” created by the NFLPA* for players who won’t be playing — and thus won’t be paid — until the lockout ends.  Players are eligible for up to $60,000 in reimbursed dues payments and unpaid licensing rights from the past two years.  (As Alex Marvez of FOXSports.com reported on Thursday, only 958 of the 2,032 players who were on an active roster in 2010 qualify for the maximum payment.)

The fact that players will be able to begin collecting that money as soon as April 15 has caused some to wonder whether the players will be able to make it through the offseason and into September without getting paid.  As a source with knowledge of the situation explained it to us on Thursday, however, agents and financial advisers currently are scrambling to find ways to get money to the players so that they’ll be able to withstand a full season with no salary.

In some cases, agents will loan significant amounts (from $50,000 to $100,000) to their clients.  Some agents will be hard pressed to come up with that kind of cash, given that their income in 2010 was reduced by the free-agency restrictions and the relative lack of long-term deals — and given that their 2011 income will be zero dollars plus benefits, babe.

In other cases, financial advisers will set up credit lines.  For players without strong credit ratings or significant collateral, we’re told that the interest rate could be as high as 22 percent.  (The irony, of course, is that players with strong credit ratings and/or significant collateral are in that position for a reason, and likely won’t need to borrow money during the lockout.)

The problem, as the source explained it, is that plenty of players making $2 million per year are living like they’re making $4 million per year.  But they won’t go broke during the lockout.  Instead, they’ll borrow what they need to make it through the lockout — and then they’ll pay the piper later via significant interest fees.

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30 Responses to “Agents, financial advisors lining up lockout money for players”
  1. jw731 says: Apr 1, 2011 10:08 AM

    60 grand……Hell….that’s an earring for Dez……

  2. mharenza says: Apr 1, 2011 10:11 AM

    I may be way off here but does it seem like the rank and file NFL player is being manipulated by the likes of Drew Brees, etc. ? The players who are able to withstand not missed paychecks are leading those who aren’t.

  3. duanethomas says: Apr 1, 2011 10:12 AM

    If financial advisors are doing their job, why would they need to set up a lockout fund for their clients? If you have a player/client who makes 2 million but lives like he makes 4 million, what type of advice are you giving him? What kind of client is he? Doesn’t make sense, but if these advisers are like Dez Bryants guy them it make perfect sense.

  4. eagleswin says: Apr 1, 2011 10:16 AM

    3 things are likely if there’s no 2011 football season.

    1. Plenty of these players will indeed go broke. If the players are living beyond their means now that means they have plenty of monthly bills that need to be paid. A $50,000 loan won’t cut it. I’d bet some of those players spend that a month.
    Also, how do they even make the monthly payments with no income?

    2. Other players will find they no longer have a roster spot in 2012 and will declare bankruptcy.

    3. The NFLPA will turn it’s backs on anyone who doesn’t have an active roster spot, instead referring them to the NFL Alumni.

  5. zaggs says: Apr 1, 2011 10:16 AM

    “The problem, as the source explained it, is that plenty of players making $2 million per year are living like they’re making $4 million per year. But they won’t go broke during the lockout. Instead, they’ll borrow what they need to make it through the lockout — and then they’ll pay the piper later via significant interest fees.”

    This seems very familiar, like its been going on for awhile in a grander system. Can’t quite place it.

  6. sabeybaby says: Apr 1, 2011 10:18 AM

    If I was a player I would have my agent set up a max line of credit and borrow all that I can because when you get a loan or buy bling on credit you don’t have to pay it back. Right? I’m sure I’m entitled to that.

  7. chapnastier says: Apr 1, 2011 10:18 AM

    I hope to God the owners either: A. take the players to court over both the lockout fund and this. B. use this to prove the de-certification is a sham and lastly C. The owners pound the crap out of these arrogant players legally.

    What hypocrites.

  8. commoncents says: Apr 1, 2011 10:23 AM

    It’s the rookine that should be taken care of, not the players that can’t figure out how to budget 2 million a year, and survive a lockout.

  9. smarterthantheaveragebearfan says: Apr 1, 2011 10:25 AM

    “Alex Marvez of FOXSports.com reported on Thursday, only 958 of the 2,032 players who were on an active roster in 2010 qualify for the maximum payment.)..”

    —-

    ONLY? ONLY?

    Thats about 50%. If 10% or 15% qualified then I think the use of “only” would have been justified. But not in this case.

  10. lololnpnp says: Apr 1, 2011 10:25 AM

    “The problem, as the source explained it, is that plenty of players making $2 million per year are living like they’re making $4 million per year.”

    And you needed your “source” to explain this to you?

  11. grogansheroes says: Apr 1, 2011 10:29 AM

    “In some cases, agents will loan significant amounts (from $50,000 to $100,000) to their clients. Some agents will be hard pressed to come up with that kind of cash, given that their income in 2010 was reduced by the free-agency restrictions and the relative lack of long-term deals — and given that their 2011 income will be zero dollars plus benefits, babe.”

    I think it will be so funny that Agents, maybe the biggest slimeballs, other than NCAA Bball coaches, will not get paid!!!! HAAAAAAA, I love it, lets hope all these guys, players, agents, and owners go broke. Only problem is they will look for a handout from Obummer!!

  12. wutdafuhk says: Apr 1, 2011 10:31 AM

    Articles like this prove that these rascals make too much money. If any player has to struggle to live during this lockout, then they obviously are a financial moron and don’t deserve to play in the NFL.

  13. thingamajig says: Apr 1, 2011 10:32 AM

    “Instead, they’ll borrow what they need to make it through the lockout — and then they’ll pay the piper later via significant interest fees.”

    Because its the American way.

  14. bdickey33 says: Apr 1, 2011 10:35 AM

    MLB has started, why does anyone care about this anymore. Players and owners keep driving your sport closer and closer to the inferior spectator sports. Watching self destructive Millionaires and Billionaires is not as entertaining as games that are actually going on right now. Switch on over people!

  15. crubenst says: Apr 1, 2011 10:36 AM

    The players need to understand one thing: EVERYONE is in it for themselves. I think they’re getting terrible advice from their lawyers and agents who benefit the most from this. Think about it, the next contract will affect the agents for the next 30-50 years and it will only affect players for 3-5 years. Its much less of hit to miss a year for the agents. Now these snakes are going to take advantage of the players and loan shark them money! Most of these guys will wind up playing the next 3-4 years JUST TO PAY BACK THESE LOANS. Its like taking out a couple hundred thousand for school loans to get a job that will last 5 years. Terrible personal economic decision!!! But hey, at least guys like Drew Brees can go to bed at night knowing they didn’t “sell out” past and future players.

  16. jeff061 says: Apr 1, 2011 10:43 AM

    Most fascinating part here is players are already broke – 6 months before their regular paychecks are normally set to resume!

  17. shrimpdd says: Apr 1, 2011 10:45 AM

    The owners have to know they’ve won this thing already. If the players can’t even survive March without needing loans and payouts for their bling, Hummers, bullets and weed, well… it’s all over. Yeah, Brees, Manning and Brady may have all the coin they need, but that obviously isn’t true of the masses.

    No matter how you cut it, De Smith sold these guys down the river when he decertified.

    But, hey, he got on TV while sporting his fedora so he got what he wanted!

  18. godofwine330 says: Apr 1, 2011 10:46 AM

    Damned shame. They KNEW this was coming and they STILL didn’t prepare? I’d have stopped going to the club. Stopped making it rain (that is pretty stupid to do regardless), paid my mortgage for the next year. Paid my car off (though I don’t understand why playerseven HAVE mortgages and car notes because they should just pay them off with their signing bonus and be debt free).

    Now, on a government employee paycheck I squirrel away $100 per check into my 401k, which comes out to $2600/yr.. If NFL players weren’t doing something similar for the last two years they are much more foolish than I thought.

    A fool and his money…you know the rest.

  19. easyeddie says: Apr 1, 2011 10:53 AM

    I’m sure D- Smith or even the Brees’, Mannings’ and Brady’s of the union never honestly explained to the rank and file the financial consequences of their actions all this time.
    Also, if some of these players can’t handle their finances when the money was coming in how likely is it they’ll ever recover with 22% interest rates staring them in the face?

  20. smarterthantheaveragebearfan says: Apr 1, 2011 10:54 AM

    “The problem, as the source explained it, is that plenty of players making $2 million per year are living like they’re making $4 million per year. But they won’t go broke during the lockout. Instead, they’ll borrow what they need to make it through the lockout — and then they’ll pay the piper later via significant interest fees…”

    ——————

    It’s nice to know that it’s only football players who are living beyond their means. I shudder to think what would happen if every American did that……

  21. eagleswin says: Apr 1, 2011 11:06 AM

    bdickey33 says:
    Apr 1, 2011 10:35 AM
    MLB has started, why does anyone care about this anymore. Players and owners keep driving your sport closer and closer to the inferior spectator sports. Watching self destructive Millionaires and Billionaires is not as entertaining as games that are actually going on right now. Switch on over people!
    ———————–
    MLB’s CBA expires in september, I don’t think that’s a slam dunk either.

    NBA CBA negotiations have gone nearly as bad as the NFLs with the owners threatening lockout there as well. A salient point there is that the owners opened there books and the players screwed the owners over by nickle and diming everything everything publicly. They can’t even agree on what should be revenue and expenses despite the books being open.

    It’s a cautionary tale for NFL owners.

  22. eagleswin says: Apr 1, 2011 11:07 AM

    Meant that MLB’s CBA expires in DECEMBER not SEPTEMBER. Typo.

  23. angrycorgi says: Apr 1, 2011 11:12 AM

    “60 grand……Hell….that’s an earring for Dez……”

    Sounds more like what he’s spending on shoe laces.

  24. easyeddie says: Apr 1, 2011 11:27 AM

    It’s nice to know that it’s only football players who are living beyond their means. I shudder to think what would happen if every American did that……

    Or our government ;-)

  25. sagnam says: Apr 1, 2011 11:36 AM

    Am I the only one who is savoring the irony that the players don’t trust the owners who have helped make them filthy rich but they have no problems trusting the so called financial advisors who are doing everything possible to drain that wealth.

  26. dcbronco says: Apr 1, 2011 12:05 PM

    Sagman the owners have also manipulated things to keep the players from making as much as they could. The players that are eligible for that 60,000 like Brees and Manning that don’t actually need it should forgo the money to allow more for guys making less or guys that weren’t eligible in the first place.

    Plus, the NFLPA* might be giving them that money now knowing that the TV money held back is a slam dunk and they will have access to several billion sometime in May. Plus this whole thing will be settled quickly before or within a few weeks of May 12th. Once Doty decides the penalty on the league for the withheld TV money, many of the owners will have no choice but to make a deal. A lot of the owners can’t afford the billions the league will owe from that case.

  27. eagleswin says: Apr 1, 2011 12:36 PM

    dcbronco says:
    Apr 1, 2011 12:05 PM

    Plus, the NFLPA* might be giving them that money now knowing that the TV money held back is a slam dunk and they will have access to several billion sometime in May. Plus this whole thing will be settled quickly before or within a few weeks of May 12th. Once Doty decides the penalty on the league for the withheld TV money, many of the owners will have no choice but to make a deal. A lot of the owners can’t afford the billions the league will owe from that case.
    ——————–
    Please tell me you aren’t serious. No judge, not even Doty is going to award BILLIONS to the players. The players still have a long ways to go to prove that are owed even one penny of that $420 million. Heck, I’m still amused that the players are trying to get Doty to end the lockout even though another judge has that case. He’s their sugar daddy.

    “Daddy, Mommy’s being mean and won’t lift the lockout. Would you talk to her?” .

    Second of all, whoever wins, the NFL or NFLPA*, the other side will appeal. The appeal takes time so it’ll be july or august at least before we see anything that sticks let alone the transfer of any money.

  28. palinforpresidentofnorthkorea says: Apr 1, 2011 1:09 PM

    eagleswin is correct. No money for players until Summer or Fall unless there is an agreement.

  29. touchdownroddywhite says: Apr 1, 2011 1:55 PM

    “If you have a player/client who makes 2 million but lives like he makes 4 million, what type of advice are you giving him? What kind of client is he?”

    Ever seen Entourage? There’s an awesome clip in the second season when the star is out of work and almost broke and he buys a 3 million dollar house. His old, angry financial advisor then reminds him he said they could spend a million at most.

    The stars reply, “It’s ok. I’m not even spending a million. The bank’s loaning me most of it”.

    Some clients just aren’t good clients.

  30. 2009kenny says: Apr 1, 2011 2:46 PM

    Money being available doesn’t mean it will be drawn. It’s hard to feel for players when the minimum wage for all NFL players was 325k. Over 90% of Americans will take that.

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