NFL Lockout Fallout: Players Taking High-Risk Loans
The biggest fallout from the NFL Lockout thus far is not the opening of some sports agent Wild Wild West, where agents are prying clients from one another’s grasp at any chance they get. If anything, that sort of atmosphere already existed and did not change much with the decertification of the NFL Players Association as a union for the players. Instead, the biggest concern to date is the worrisome lending practices of NFL players in need, or with a strong desire, to take out loans. These loans typically have terrible interest rates attached to them, which players will be complaining about for years to come.
A few weeks ago, Jason Schwartz of The Daily (News Corp’s new iPad magazine) contacted me because he was working on a story about how NFL players are weathering the Lockout financially and wanted to hear about my thoughts with regards to the loans being taken out by these players. He ended up getting quite a group of industry leaders to contribute to his piece (IN THE POCKET: Some NFL players turn to high-risk loans to make ends meet)
Here is my contribution:
Another reason players are borrowing now — before even missing a major payday — is that they may be afraid credit will dry up if the lockout continues into the NFL season, said Darren Heitner, an agent and the author of sportsagentblog.com. After all, if interest rates are this high now, what will they be like when players start to miss game checks and lenders know they are even less likely to be repaid?
Other quotes in the article come from Deion Sanders, Rick Smith of Priority Sports, Leon McKenzie of Sure Sports Lending, Jason Yorker of AGR Sports Funding, three-time Pro Bowl tight end Chad Lewis, and Ted Reid of Morgan Stanley.
I’m not going to judge as to whether guys like Yorker are in the right or wrong with regards to offering loans fully equipped with 30% interest rates. What I will say is that it is sad that it has gotten to the point where such loans are necessary. Are athletes looking for lower interest rate loans and just not finding them? NFL owners will recognize that players are above their heads in debt and will use it to their advantage to break the ranks within the NFLPA the longer that this Lockout persists.