On episode 006, Nick and Billy tried to work out how anyone goes broke after earning hundreds of millions. It started with the Floyd Mayweather and Conor McGregor fight. Here are the numbers, and where we were off.
The fight. Mayweather beat McGregor by 10th-round TKO on August 26, 2017, at T-Mobile Arena in Las Vegas. The guaranteed purses were $100 million for Mayweather and $30 million for McGregor. Estimates of total earnings vary: Forbes (as reported by Sportskeeda) put it at about $275 million for Mayweather and about $85 million for McGregor, while Wikipedia lists about $280 million and about $130 million, and McGregor himself said around $100 million. Showtime announced 4.3 million pay-per-view buys in the U.S.
The math we did on air. Billy's point was simple: put $280 million in a bank at 1 percent and it pays about $2.8 million a year without touching the principal. That is a fair back-of-the-envelope number. (Real-world savings rates change, taxes and fees take a chunk, and nobody who earns that much puts it all in one savings account, but the point stands: you do not need to be clever to live well on that.)
Living off a million. Nick's point was the other side: if all you had was one million dollars, you could buy a cheap house and do something sensible with the rest. That is also a reasonable rule of thumb, though it depends heavily on where you live.
NFL careers are short. NFL careers are short; a 2003 Black Enterprise report cited by Wikipedia puts the average at about 3.2 years, which is why money earned early has to last. We also named Marshawn Lynch and Shaquille O'Neal as athletes who handled money well. In 2016 NFL Network's Ian Rapoport said on radio that Lynch had not spent "a dime" of his NFL playing money, living on endorsements instead; that was a report from a radio segment, not an audited fact. Shaq said on the Earn Your Leisure podcast in 2021 that he tells his six kids, "We ain't rich. I'm rich," meaning they have to earn their own way.
What the sources say
Billy said McGregor made $280 million for the Mayweather fight. That figure fits Mayweather, not McGregor; McGregor's reported total is somewhere between about $85 million and $130 million depending on the source.
We said Mayweather "has to come back to boxing because he's broke." We have no source for that, so treat it as a rumor we repeated.
We said "90 percent of NFL athletes blow their money." A much-repeated figure says 78 percent of NFL players go broke within a few years of retiring, but a 2015 National Bureau of Economic Research study (reported by Fortune) found 1.9 percent of players had gone bankrupt after two years and about 15.7 percent after 12 years. "Broke" and "bankrupt" are not the same thing, but the data does not support 90 percent.
We said careers last "three to four years." That is close: the figure we found is about 3.2 years, from an older report.
We said Shaq's rule was "this is my money." His reported line is "We ain't rich. I'm rich."
The takeaway we agree on. Earning a lot and keeping a lot are different skills. Think about the average person: if you do not track spending, hand money to people who say they will "handle it", or buy things that cost money every month, it does not matter whether the paycheck is $50,000 or $50 million.
Sources:
- Wikipedia: Personal finances of professional American athletes (NFL career length and the bankruptcy study)
- Fox Business: Shaq's message to his kids about money (Oct 30, 2021)
- The Root: Marshawn Lynch hasn't spent a penny of his NFL money (Feb 8, 2016)
- Wikipedia: Floyd Mayweather Jr. vs. Conor McGregor
- CBS Sports, 2017: the money each fighter will bring home
- theScore, 2017: Mayweather to net $100M, McGregor $30M guaranteed
- Sportskeeda: How much money did Conor McGregor make fighting Floyd Mayweather Note: CBS gave only the guarantees; the totals are reported estimates and differ by source.
