Most people know that being a professional athlete playing one of the four major sports often comes with a million-dollar payday.
But many professional athletes have found themselves struggling to sustain themselves after their careers — including some who have gone broke despite making hundreds of millions as pro players.
Former NFL MVP Cam Newton explained the intricacies of why that could be the case during an episode of his podcast "4th & 1" published on Saturday, May 11.
Newton cited the example of Detroit Lions wide received Amon-Ra St. Brown, who in April, agreed to an contract extension worth $120 million over four years.
Soon after, sports business expert Andrew Petcash broke down St. Brown's contract, citing how due to different taxes and fees, his net take home of the estimated $30 million annual salary was closer to just 50% of the contract's amount.
Amon-Ra St. Brown just became the highest-paid WR (4 years, $120M).
— Andrew Petcash (@AndrewPetcash) April 24, 2024
Here's how much he will actually earn: 😲
$30M: Salary
-
$11.1M: Federal Tax
$900k: Agent Fee
$894k: Jock Tax
$703k: FICA/Medicare
$637k: Michigan Tax
=
$15.7M: Net Income pic.twitter.com/zSYUEQDNbR
St. Brown's success will likely have him playing for a decade or so in the league, but that's not the case for everyone. The average NFL player only plays 3.3 years in the league, according to Statista.
Newton said that NFL players need to remember they are like entities or brands, and he said it only dawned on him last year that he had to protect his own brand for his own financial future. He said that the lifestyle of being a player and consistently seeing the money was difficult to ignore.
"You always think that the money will keep coming in," Newton said. "[The lifestyle] is like a drug ... The more money that you have, the more 'No' is not a part of your vernacular.'"
Newton's reality check is just another example of the complexity of the lives and financial situations of professional athletes, especially as many of them are thrown million-dollar salaries in their late teens or early 20s.
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The former Carolina Panthers quarterback then explains that on top of that, the money an NFL player makes is what will sustain them not only for the rest of their playing years, but for the rest of their lives.
"And you have to understand this Amon-Ra, or whoever makes a lot of money: This money has to last you for the rest of your life," Newton said.
Newton, who made over $133.5 million over his 11-year career per Spotrac, first explained the salary comes very quickly to the players because it comes every week. In St. Brown's case, Newton showed that St. Brown would take home $923,529.41 for each of the 17 weeks of games during the NFL season. (Newton was not clear if he meant 17 games or weeks, as the NFL expanded to an 18-week season in 2021.)
"So you're taking home $15 million, but this is the sweet spot: You're making that in 17 weeks," Newton said.
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He said that massive lump sum is why it's hard for some players to notice when their bank accounts are dwindling — even calling out those who questioned Shohei Ohtani for not noticing the millions that were being drained of his account due to the mismanagement of his ex-interpreter.
He said that massive lump sum is why it's hard for some players to notice when their bank accounts are dwindling — even calling out those who questioned Shohei Ohtani for not noticing the millions that were being drained of his account due to the mismanagement of his ex-interpreter.
"If a person is raking in $932,000 plus dollars on a given week, you wouldn't know if $60,000 is missing especially when your focus isn't that," Newton said.
NFL players contracts are unique in professional sports as they they are not fully guaranteed. St. Brown's contract is fully guaranteed only up until $77 million over the next four years, but he can earn closer to the reported $120 through playing incentives and other bonuses.
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