Each year, the major professional sports leagues hold their annual talent drafts and add new players to their franchises. In professional sports, a drafted rookie often goes from having almost no money to being a millionaire overnight. There is a great deal of responsibility that goes with that kind of money, but young professional athletes are often ill-prepared to handle the situation. That is why professional sports leagues are starting to offer resources to rookies that had not been available in the past.
When a teenager is suddenly handed millions of dollars after only knowing a life of financial struggles, the problems can start to mount quickly. The solution has been for many professional sports leagues to offer wealth management for professional athletes to help rookies to avoid squandering all of their money. The advice includes classes on investing and precautionary tales about athletes who had millions and lost it all quickly.
In years past, a rookie athlete finding a good mentor to teach the rookie how to adjust to the sudden change in lifestyle was hit or miss. Sometimes a rookie was able to find a mentor, but most rookies were left to fend for themselves. These days, leagues have created structured mentor programs and often assign retired veteran players to help guide rookies through the difficult life changes they will experience.
Rookie Contract Restrictions
The competition to sign talented rookies has always been heated, and some teams in the various professional sports leagues would sign their rookies to huge contracts to entice other rookies to want to be part of the team. But the end result of paying rookies all of that money was often disaster. Today, many professional sports leagues limit how long a rookie contract can be and the maximum amount a rookie can get paid. This helps to ease the rookie into the lifestyle of a famous and rich professional athlete.
Professional athletes work their entire lives to get the chance to sign the big money contracts. But sometimes giving all of that money to a rookie is not the very best idea in many different ways.