Former Baltimore Ravens running back Jamal Lewis filed for bankruptcy protection in April but failed to provide required financial documents or appear for a mandatory interview with court officials. (AP Photo/John Amis, File)
Former National Football League star running back Jamal Lewis, 32, has filed for bankruptcy protection in Georgia, saying that he can?t pay $10.6 million in debts.
Lewis broke into the league with a splash in 2003, running for 295 yards in the Baltimore Ravens? home opener in the stadium that had just been rechristened M&T Bank Stadium for the company that had bought the naming rights. Today, though, M&T Bank is one of the creditors listed in Lewis? court documents for a $350,000 judgment on a defaulted loan.
M&T Bank is among the companies saying that Lewis didn?t repay loans that he took out to finance several real estate ventures and a trucking company, as well as for houses and cars.
After filing for bankruptcy, however, Lewis failed to submit required financial records to the federal bankruptcy court in Atlanta and also didn?t appear for a scheduled interview with court officials. The bankruptcy trustee then asked the court to either dismiss Lewis? case or convert it from Chapter 11, which allows the creation of a repayment plan, to Chapter 7, which would allow the sale of his $14.4 million in assets to pay off the creditors.
A hearing has been scheduled for July 10.
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Financial Woes All Too Common for Pro Athletes
If Lewis? financial woes have a familiar ring, it?s because stories of millionaire athletes having difficulty handling their money have become commonplace. In 2009, Sports Illustrated reported that nearly 80 percent of NFL players are in financial trouble within two years after retirement.
Attorney Timothy Liam Epstein, who chairs the Sports Law Practice Group at SmithAmundsen in Chicago, considers the Sports Illustrated finding ?not at all surprising.?
Timothy Liam Epstein
Epstein says there are a variety of reasons why so many professional athletes encounter financial problems.
First, he says, while their annual salaries are huge, their careers typically last only a few years and they often haven?t learned how to budget their money for their post-career lives.
?Exacerbating the problem, athletes often hire family or friends to manage their money and put too much trust in them,? Epstein says. ?This often leads to disastrous consequences, and the story is all too common. The person entrusted with managing the athlete?s finances is either not looking out for the athlete?s best interest or [is] equally na?ve when it comes to management of a professional athlete?s lifestyle.?
?Another reason, he says, is that young athletes are too often easy prey for companies that are seeking financial backing because they are ?rich, young, and often less educated.?
In addition, Epstein points out, young professional athletes face peer pressure to adopt a free-spending lifestyle that?s seen as emblematic of being a successful player.
?The trouble is that they are living this lifestyle without much knowledge or regard for the long-term financial consequences and often with no financial planning whatsoever. With proper financial counsel, athletes should have a general idea of what they are worth and how much they are spending, but the reality is that many are unadvised or misadvised, which is often worse.?
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Epstein: NCAA should do more
?Which raises the question: Should agents, leagues, teams, or the NCAA take greater responsibility in providing some degree of financial guidance to pro or pro-bound athletes?
According to Epstein, in recent years the NFL and NCAA have recognized the problem?at least to a certain extent?by partnering to host a ?Life Skills Education and Professional Development Summit? for the purpose of assisting student athletes? off-field personal and professional development. And he said this year?s summit produced a plan to develop a program called ?Banking on a Bright Future,? which would focus on financial literacy topics, ranging from budgeting to investment to retirement planning.
But he believes the NCAA and member schools could do more.
?There is no reason why the NCAA could not mandate financial courses similar to the program proposed at the NFL-NCAA summit,? he says. ?Educating future professional athletes at a younger age will instill a sense of responsibility and impute greater knowledge of financial prudence that will provide a much stronger foundation for future financial stability.?
The reality, Epstein says, is that once athletes have signed a contract and the big money is rolling in, it?s frequently too late.
?The fact is, once athletes start receiving big checks, it is all too easy for them to tune out their teams or agents,? he says. ?Educational programs and courses should be offered at the college level to properly prepare student athletes for their future.?
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