Every year we hear about former professional athletes who have fallen on hard financial times. Despite millions of dollars in salary, per diems and sponsorship dollars, the world surrounding a players' finances can be toxic with fees, hangers-on, and poor decisions. That's why the parents of Sixers rookie Michael Carter-Williams are taking precautions to set him up using his rookie salary.
Nowadays, Carter-Zegarowski and her best friend, Tracie Tracy, are running his management team. They are taking a proactive approach to make sure he doesn't spend all his money in a couple of years.
His rookie contract guarantees him $4.5 million over his first two seasons. He could make a total of $10 million if the Sixers pick up the final two seasons of his contract.
But his salary is deposited into a trust he can't touch for three years. Carter-Williams is living off endorsement deals with Nike and Panini trading cards.
This is genius. Every rookie should do this. Even if it means short-term pain, it's such a better approach. Sure, there are extenuating circumstances, but looking at the problems with players and their long-term finances, this sets them up. $10 million dollars after you're done playing can set you up for over a decade of living unbelievably comfortably and that's before investment of that money or any further income generated.
The players' union should really get out in front and support this system, developing ways for the players to manage their rookie salaries. Even if the players are out of the league after their first contract, it puts them in a better position to transition to the "real world."
Good on MCW's folks for getting out in front for their son.
HT: Bleacher Report