78% of NFL players face financial trouble within two years of retiring. Why? Despite having wealth, fame, and networks, many athletes fail in business due to poor advice, risky investments, and lack of business knowledge. From Mark Brunell’s $25M debt to Scottie Pippen’s $3.5M real estate loss, the pattern is clear: success on the field doesn’t guarantee success in business.
Key Reasons Athletes Fail in Business:
- Bad Advisors: Unqualified or unethical financial advice.
- Lack of Business Skills: Poor planning and market research.
- Overconfidence in Fame: Assuming celebrity status will drive sales.
- Risky Investments: Backing ideas without proper research.
- Misjudged Time Commitments: Underestimating the effort required.
How Athletes Can Succeed:
- Build a team of trusted advisors.
- Learn business fundamentals.
- Validate ideas with market research.
- Start small to test concepts.
Athletes who plan, seek expert advice, and focus on real market needs can turn their fame into lasting business success.
How and Why Athletes (Still) Go Broke | PTFO
Failed Athlete Businesses: Common Patterns
Major Business Losses by Athletes
Professional athletes across various sports have faced massive financial setbacks when venturing into business. Here are some striking examples:
- Scottie Pippen: The former NBA star lost $3.5 million in a failed South Side real estate deal and later suffered additional losses from a misguided private jet investment.
- Deuce McAllister: The NFL running back saw his Nissan dealership in Jackson, Mississippi, file for Chapter 11 bankruptcy. This left him owing $930,000 to Nissan, along with $5 million in lawsuits.
- Sheryl Swoopes: Despite earning over $50 million during her career, the WNBA legend filed for bankruptcy in 2004 due to unsuccessful business ventures.
These stories point to recurring issues that plague athletes’ business endeavors.
Most Common Mistakes
Athletes often face challenges like falling for scams, making poorly researched investments, and lacking basic business knowledge.
- Fraudulent schemes: Many athletes trust the wrong people. For instance, NFL players Antoine Winfield and Fred Taylor lost millions to so-called advisors who funneled their money into questionable investments, personal expenses, and even Ponzi schemes.
- Ill-advised investments: Without proper research, some athletes back risky ideas. MLB player Torii Hunter, for example, lost $70,000 on an inflatable raft invention meant for flood conditions.
- Lack of business knowledge: Many athletes dive into ventures without understanding how to run them. Former NFL star Raghib "Rocket" Ismail invested $300,000 in a "Rock N’ Roll Café" based solely on advice from others. The project failed due to poor planning.
Unqualified advisors also contribute significantly to these losses. Hall of Famer John Elway lost $15 million in a Ponzi scheme run by hedge fund manager Sean Mueller. Similarly, Art Monk, a former NFL player, lost $50,000 after investing in a shoe company pitched by his teammate Terry Orr, who instead used the funds to pay off personal debts.
These cases show how even wealthy, high-profile athletes can make costly mistakes when they lack proper financial advice and a clear understanding of business operations.
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Main Reasons Athletes Fail in Business
Poor Advice and Echo Chambers
Professional athletes often fall prey to bad financial advice from unqualified or unethical advisors who take advantage of their fame. Rick Flynn, managing partner at FFO Business Management & Family Office, highlights this issue:
"There are quite a few morally challenged financial advisors who seek to prey on the naïveté and gullibility of some professional athletes and their families"
Adding to the problem, athletes frequently surround themselves with people who only agree with them, avoiding tough conversations or constructive criticism. This lack of honest feedback can lead to a series of poor decisions that go unchecked.
Fame Isn’t a Business Strategy
Being famous might help open doors, but it doesn’t guarantee a successful business. Many athletes mistakenly assume their celebrity status will automatically translate into sales. Unfortunately, name recognition alone rarely builds customer loyalty or ensures steady revenue. This is especially evident in industries like retail and hospitality, where countless athlete-backed ventures have failed.
Athletic Skills Don’t Equal Business Expertise
The qualities that make someone a successful athlete – like physical skill, competitiveness, and teamwork – don’t necessarily prepare them for running a business. Market trends, financial planning, and operational know-how require a completely different skill set, which many athletes underestimate.
Too Much Money, Too Fast
Having access to large sums of money early in their careers can lead athletes to make impulsive business decisions. Without financial limitations forcing them to plan carefully, they often skip essential steps like due diligence and market research, which are critical for long-term success.
Passion Over Market Demand
Another common misstep is prioritizing personal interests over actual market needs. A perfect example is Torii Hunter’s experience with an inflatable raft invention:
"The pitch was that when high-rainfall areas were flooded, consumers could pump up the device, allowing a sofa to float and remain dry."
Despite investing $70,000, the product didn’t address a real market demand and ultimately failed.
Misjudging Time Commitments
Athletes often underestimate how much time and effort it takes to run a business effectively. This can lead to neglect and poor management. Rick Flynn underscores the importance of understanding financial longevity:
"When working with professional athletes, we make sure they clearly understand where all their money is and why plus the fact that often these funds are going to have to last for a long time"
The transition from a structured sports career to the unpredictable world of business requires a major shift in time management and focus – something many athletes struggle to adapt to.
How Athletes Can Succeed in Business
Choosing the Right Business Partners
Building a strong team of advisors and partners is a key step toward success. Many athletes have faced financial losses because of relying on unqualified or conflicted advisors.
Here are some strategies for forming solid partnerships:
- Check credentials: Conduct background checks and review track records.
- Separate roles: Avoid mixing personal relationships with professional investment decisions.
- Diversify expertise: Bring together a team with skills in various areas.
- Stay involved: Actively participate in business decisions.
With a reliable team in place, athletes can focus on using their public image to their advantage.
Using Celebrity Status Wisely
Once partnerships are established, athletes can strategically use their fame to build businesses that resonate with their audience. For example, LeBron James created Uninterrupted to address real market needs while staying true to his personal mission.
Similarly, Serena Williams’ fashion line, S by Serena, thrives by meeting market demands, connecting with customers, and emphasizing long-term growth.
Learning Business Fundamentals
Many athletes’ past failures reveal the importance of understanding essential business principles. Kobe Bryant’s success with Bryant Stibel was rooted in a deliberate approach – he studied business basics and partnered with experienced professionals. Without careful planning, impulsive choices can lead to financial setbacks.
Key areas to focus on include:
- Financial planning and analysis
- Conducting market research
- Managing daily operations
- Assessing risks
- Making strategic decisions
Finding Real Market Opportunities
After building a strong foundation with partnerships, branding, and business knowledge, athletes need to identify real market needs to achieve lasting success. Naomi Osaka’s investment in Sweetgreen is a great example – she aligned her commitment to health and wellness with a proven business model in a growing industry.
Athlete entrepreneurs who carefully validate their ideas and remain adaptable are better equipped to succeed. They focus on creating value for their customers rather than relying solely on their fame.
Conclusion: Learning from Past Mistakes
Quick Reference Guide
The high failure rates of athlete-led businesses highlight the importance of proper planning. To steer clear of common mistakes, athletes should focus on a few key areas:
- Start Small and Build
Begin with a side project to test your business idea with minimal risk. - Financial Management
Keep a close eye on cash flow and avoid expanding too quickly. Matthew Tomkin suggests starting small to test concepts first. - Professional Support
Build a strong advisory team early on to help navigate the challenges of starting a business.
By addressing issues like poor advice, mismanaged funds, and unrealistic time commitments, athlete entrepreneurs can set themselves up for long-term success. These steps highlight the importance of seeking expert guidance early to create a solid business foundation.
Getting Help Early
Transitioning from sports to business requires careful planning and the right support. Many successful athlete ventures show that early strategic planning is essential for bridging the gap between athletic skills and business expertise.
"I’ve missed over 9,000 shots in my career. I’ve lost almost 300 games. Twenty-six times I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed." – Michael Jordan
Athletes can take the following steps to improve their chances of success:
- Professional Assessment
Before launching, evaluate critical factors like:- The viability of your business idea
- Market demand for your product or service
- The time and effort required
- Financial resources needed
- Strategic Planning
Develop a comprehensive business plan that addresses:- Succession planning
- Leadership roles and responsibilities
- Long-term goals
- Strategies for managing risks
"Looking back I would worry much less about what people think about you and just make sure you do it your way. I listened to a few too many people at the start who were suggesting things we shouldn’t have done."
With the right mindset, thorough preparation, and expert support, athletes can significantly improve their chances of building successful businesses.
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