Is The Lockout A Good Financial Lesson For Rookies?

Reggie Jackson via APTurning pro can be a tumultuous time for a rookie.  Yes, it’s the realization of a life-long dream, but its also fraught with the dangers of new-found wealth.  For many of these kids, it’s their first taste of real money.  And this isn’t about playing up a cliche.  Even a middle-class kid has zero concept of what making a couple of million dollars to play basketball is all about.  It can be overwhelming.  

The NBA, and all pro sports leagues, provide financial planning at part of their rookie orientation.  There are too many “Antoine Walker” stories out there that make everyone look bad.  So leagues will take steps to at least educate players.   But the lockout has postponed that, so these rookies are on their own. 

And that might not be a bad thing.  Take Oklahoma City Thunder rookie Reggie Jackson, who talked about the struggle in a story published this morning.

The Oklahoma City Thunder rookie is doing his best to navigate the NBA lockout. Not quite the start to the dream career that the 24th overall pick always envisioned.

“Everybody’s just trying to live at the lowest expense as they can and find ways to manage until the lockout is lifted,” Jackson said.

I’m a firm believer in looking for a silver lining.  I always say that sometimes the worst thing that happens is the best thing that could happen.  Take, for example, Bob Gray’s story of Hollywood fame after losing his job because LeBron James left Cleveland.  Losing a job is as bad as it gets for some people.  But it turned out to be the break he needed.  And maybe, for the rookies, the lockout is a needed early lesson in financial planning.

With no money coming in, it’s hard to start spending like a new millionaire.  In fact, Jackson had to take out a loan.

He says it’s a small amount that only keeps him afloat.

“I’m trying to pay back as little as I can and just get through the times right now,” Jackson said.

“I’ve grown up not being super wealthy. I went to college being broke and found a way to manage through that. So I’m just getting by. Basketball’s never been about money and never will be. I’m living comfortably enough to where I’m satisfied. But I’m also not out there buying a big house and a big car. I’m not trying to do that. I’m OK with settling for less fancy things.”

This means Jackson’s going to have to work.  He’s going to work camps and make public appearances.  Maybe he’ll have to find a foreign team to take him for a few months.  But what he won’t be doing is living the life of a new millionaire whose ego will tell him, wrongly, that the good times will never end.  

Every rookie thinks he’ll be a superstar.  Every rookie thinks he’ll have a 13 year career and that another paycheck will always be there when this one is spent.  But what this labor situation is teaching this new crop is that the business will always be unpredictable.  And what you think will happen isn’t necessarily what actually WILL happen.  

This lockout is bad in almost every way.  But it comes with valuable lessons.  Some of those will be learned by owners.  Some will be learned by veteran players.  Some may even be learned by David Stern and Billy Hunter.  But the first lessons are being taught to the most impressionable players in the lockout:  the rookies.  If they can learn those lessons well, it may set them up for more sound financial futures once their NBA careers come to an end.

Photo: AP