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.