So You Are a Professional Athlete–Now What?

Over the last few NFL seasons, I have been fortunate to address players at three NFL club’s Directors of Player Engagement (DPE’s) Rookie Success programs. My emphasis was on assisting the rookies, their significant others and/or parents, on how to better understand financial literacy. That’s right—there’s more to know as an NFL draftee then just football X‘s and O’s.

As NFL training camps are opening up, it is imperative for players and their loved ones to understand how to navigate business opportunities, multi-state taxes, residence choice, how to account for in-season and off-season expenses, budget earnings and make sure there is enough cash flow to last the entire off-season.  The plan is to give each player a better understanding of what to discern as the season approaches and enable him to become more successful both on and off the field.

At the start of our financial literacy program, some rookies look like a deer in headlights.  Who educated these players during their collegiate years on how to navigate the complexity of the business world?  Who understands tax compliance and budgeting? NO ONE! So let’s look at some strategies a player must know when he prepares to play for pay:


  • A player’s net paycheck will be lighter or heavier depending on where his team plays.  Back in the early 90’s, the “jock tax” rule required that nonresident athletes apportion part of their salary to the state and city where they played their road games.  This could be an advantage if games are played in Florida, Texas, Washington, and Tennessee among others.  It could be a disadvantage if games are played in California or Minnesota where tax rates are high. Come tax time, the athlete must file a tax return in most states where games were played, which becomes an expensive and burdensome responsibility.  Imagine having to deal with filing ten state tax returns?
  • One of the most important matters for rookies is state of residence. Should their domicile change to the state where they practice and play their home games or should they maintain a residence where they played college ball, or to where their parents live?  The answer is easy:  it depends!   Our initial meetings with the parents and players, reviews how to complete a W-4 form so the correct federal withholding is taken from the paycheck. We then individually determine which state to declare as a home state.  Once the state of residence is determined it is imperative to update driver’s licenses, register for elections, and register a car to prove the player is indeed a resident of that state.


  • NFL Teams typically pay players stipends and offer modest pay for mini camps, training camp and preseason.  Once the regular season starts, however, players will typically receive 16 paychecks.  Some teams pay every two games so players may only receive eight paychecks in a season.  Pay is allocated over duty days, which were approximately 135 days in 2017.  The issue then becomes: what should a player do to cover living expenses, training regimen, vacations etc., when there aren’t game checks coming in during the off-season?  Again, the answer is simple: BUDGET!
  • At our initial meetings with players, we review “cash” required to pay all necessary living expenses.  Once a financial game plan is put into place, it’s important that the player agree to adhere to the budget each month.  Part of this budget will include a player salary.  In other words, deposit the whole game check into the bank and only take a modest amount as salary for those “special” purchases that absolutely need to be purchased along with cash.  Most young guys today don’t even use cash.  All expenses are paid for with their debit card or with the Venmo app.  They should avoid purchasing a mansion, expensive car, or watch unless it is considered affordable and in the budget.

Tax Considerations:

  • On December 20, 2017, Congress passed the Tax Cuts and Jobs Act and for 2018 accounting for in-season and off-season expenses has become much more difficult.  Certain expenses such as message therapy, travel, union dues, agent fees, purchases of phones or computers, certain meals, training clothing, cleats, and equipment to augment recovery, tax prep fees, and certain lodging as well as most of a players state income tax payments are no longer deductible as an itemized deduction.  Now a player needs to confer with his tax advisor to strategize and game plan how to take advantage of the new law.
  • I can assure you, while a player is focused on training camp, he is not thinking about the impact of the tax law changes.  However, that thought process can impact him financially and is critical in putting as much money in his pocket.
  • If the player considers himself the CEO of his own company, it can make a difference when computing his tax liability.  Cash is king so the player must confer with his tax advisor to game plan an appropriate strategy.  The end result is to mitigate his tax liability and put more cash in his pocket.

The lesson here is that becoming a professional is a huge undertaking with much responsibility.  There are so many things affecting a player’s life.  By game planning ahead of time, the player will become more successful off the field, which should enable him to become more successful on the field.

Categories: Advisory