Pablo Torre Finds Out – Episode Summary

Podcast: Pablo Torre Finds Out
Episode: How and Why Athletes (Still) Go Broke
Date: July 23, 2024
Host: Pablo Torre
Featured Guests: Todd Burach (Athlete Wealth Manager), Antoine Walker (Former NBA All-Star), Justin Pugh (Veteran NFL Lineman)
Duration: ~50 minutes

Overview

This episode marks the 15th anniversary of Pablo Torre’s landmark Sports Illustrated article, “How and Why Athletes Go Broke.” Pablo reunites with Todd Burach, whose career in wealth management for pro athletes was inspired by that original story, to revisit the persistent issue of athletes losing fortunes—despite increased awareness and resources. The episode pairs firsthand athlete testimony (NBA’s Antoine Walker, NFL’s Justin Pugh) with behind-the-scenes analysis of why, after all these years, the cycle persists: cultural pressures, lack of financial literacy, fleeting earning windows, misplaced trust—and evolving contexts like NIL and a shrinking “middle class” in pro sports.

Key Discussion Points & Insights

1. The Legacy and Impact of the Original Reporting

• Pablo reflects on the viral reach and enduring interest in his 2009 article, once Sports Illustrated’s most-read digital feature.
• Todd Burach recounts how the story shaped his career (03:20):

  “I read that article and remember being like, I’m gonna fix that problem…That was the moment in my career when I just focused everything on helping athletes make better financial decisions.”

• The narrative's resonance comes from the mix of “tabloid goldmine” stories of extravagance and bankruptcy, with a deeper look at systemic causes (03:00).

2. The Athlete’s Unique Experience With Wealth

• Most athletes earn the vast majority of their lifetime money in a short window (07:09). A typical career span leaves little time to recover from mistakes.
• The “Lure of the Tangible”: The urge to showcase success with material things (04:39, 05:41).
  • Justin Pugh (04:39): "I went from asking my mom for $100 to get Chipotle and Subway for the week to...signing with the New York Giants, being a first round pick...getting a $4 million signing bonus."
  • Antoine Walker (05:05): "My first paycheck was 1.6 million...Bought my mom a house for a half a million, couple cars. I'm in debt, technically."
• Social pressure and identity: Money and status are closely tied to remaining “relevant” after sports (05:41).

3. Financial Illiteracy and Compressed Earning Windows

• Athletes, often young and from modest backgrounds, rarely get proper financial education in school (07:00).
  • Todd Burach (07:02): "It's insane that we...don't teach them about anything related to taxes or budgeting...This is a broader problem."

4. Problematic Mindsets: The “I’m Different” Fallacy

• "Athlete mentality" is about believing oneself to be exceptional—a survival trait in sports, but dangerous in investing (12:47).
  • Todd Burach (12:48): "Your entire life you basically said to everybody around you, I know what you're saying, I'm the exception."
• This leads to risky, ill-advised investments, as confessed by multiple guests:
  • Antoine Walker (13:22): "I had a car fetish...I like to fix them up, put rims on them."
  • Justin Pugh (15:05): "I made some bad investments...a startup in China called dd. Who knows where that money will go?...You put $250,000 in and now you're looking at it, it’s 50k."
  • Rocket Ismail anecdote (16:00): Lost money on a string of doomed ventures.
• Comparison to moguls like Magic Johnson: Most overlook the failures that preceded their success and ignore their unique rebound capacity (16:18).

5. The Role of Trust—and Misplaced Loyalty

• Many athletes rely on family or childhood friends for business advice, with disastrous results (19:30).
  • Magic Johnson (18:36, paraphrased): “If anyone calls me with a pitch involving their friends or family, it won’t even be a conversation. They fail.”
• The lottery analogy: Sudden wealth with no training in managing it (20:34).

6. Predatory Practices and Systemic Risks

• Athletes are prime targets for scams (“sharks”) due to public salary info and naiveté (24:57).
  • Justin Pugh (24:57): Stories of teammates resorting to loan sharks between paychecks; pay structure leads to psychological traps and risky bridge loans.
  • Anecdote: Financial advisor cited the Patriot Act as the reason for hiding his $146,000 fee; a "Count" who defrauded high-profile players (26:30).

7. Family, Divorce, and Estate Planning

• Family obligations and high divorce rates accelerate financial peril (27:54).
  • Antoine Walker (21:35): "I come from very humble beginnings...I bought my brothers and sisters cars. Really nice cars...Probably not the right way."
  • The tragic story of Derek Thomas illustrates the costly consequences of not signing a will or planning an estate (29:00).
  • The “it won’t happen to me” mindset persists—often with devastating results.

8. “Keeping Up with the Joneses” Culture

• Locker room comparisons stoke overspending (31:47).
  • Justin Pugh (31:47): "Keeping up with the Joneses is real...If she got that ring, my wife better get a bigger ring. If I bought this kind of French bulldog, I'm getting the better French bulldog."
  • Bankruptcy is especially shameful for public figures—everything is exposed (32:13).
  • Antoine Walker (33:45): On bankruptcy court: "You have to go prove where this money went… I had to put my championship ring in my bankruptcy portfolio."

9. Identity Loss After Retirement—and Financial Aftershocks

• The psychological blow of no longer being “the athlete” compounds money challenges (35:06).
  • Todd Burach (35:08): “So if you haven't had those reps of connecting with people outside the game, when you're forced to do it, it's really hard. Oh, this isn't a money thing. This is an identity thing.”
• League and union support is limited—and sometimes problematic. Certification of financial advisors can create a false sense of security; true due diligence remains essential (37:00–38:16).
  • Justin Pugh (38:39): "The league can't hold everyone's hand...Imagine if your boss forced you to make this type of investment..."

10. What’s Actually Changed in 15 Years?

• Some progress: More teams offer financial literacy programs, background checks for advisors, and more stories are shared as cautionary tales (41:04).
  • But impact varies: Programs are only useful if individuals engage and organizations foster a “culture” of learning (41:20).
  • Focus needs to be on practical “street smarts,” not abstract finance (42:19).
• The “middle class” of athletes has diminished—mega contracts for a few, many scraping by (44:07).
  • Todd Burach (44:07): "If you look at the middle class, it’s gone. All that money is being accrued at the top...It’s a winner-take-all system."
• More attention is needed for journeymen, fringe players, or those with brief careers—the reality for most (46:12).
  • “You play in the NFL so you must be loaded. In all likelihood, that’s probably not the case.”

Notable Quotes & Memorable Moments

• "Your entire life you basically said to everybody around you, I know what you're saying, I'm the exception."
  — Todd Burach (12:48)

• "Keeping up with the Joneses is real...If she got that ring, my wife better get a bigger ring."
  — Justin Pugh (31:47)

• “If anyone ever calls up Magic Johnson with a pitch that involves their own friends or family. Magic Johnson is automatically not interested...They hire these people not because of expertise, but because they're friends. Well, they'll fail.”
  — Pablo Torre recounting Magic’s rule (18:36–19:00)

• "It's insane that we...don't teach them about anything related to taxes or budgeting...This is a broader problem."
  — Todd Burach (07:02)

• "You see a guy in a locker room with a certain car, you want to have a better car than him."
  — Justin Pugh (31:47)

• "It's really tough to change behavior when you're fighting against that [exceptionalism]. When you have proof that you are, in fact, exceptional in verifiable ways... No, this is going in. I'm good."
  — Pablo Torre & Todd Burach (30:00, 30:13)

• "I had to put my championship ring in my bankruptcy portfolio because that's something that I won, that was of value.”
  — Antoine Walker (33:45)

Timestamps for Important Segments

• 00:43–03:20 – Todd’s introduction and connection to original article
• 04:39–06:11 – The “lure of the tangible” and instant lifestyle upgrades
• 07:00–08:04 – Failure of K-12 financial education and compressed earning windows
• 08:54–09:53 – Dissecting the oft-quoted “78% go broke” NFL and NBA stats, and their limitations
• 12:47–14:21 – The persistence of the “I’m different” athlete mentality and self-inflicted mistakes
• 19:30–21:06 – Trust issues and the dangers of relying on friends, family, and unvetted advisors
• 24:57–26:30 – Predatory lending and public salary info
• 27:54–29:41 – Divorce, family, estate planning, and the story of Derek Thomas
• 31:47–33:45 – Locker room pressure, material one-upmanship
• 35:06–36:30 – Retirement, loss of identity, and holistic support from teams/leagues/unions
• 41:04–42:19 – Effectiveness of team financial literacy programs
• 44:07–46:32 – Disappearance of the athlete “middle class” and shifting economics
• 47:25–49:48 – Pablo's closing reflections: The problem persists, the middle class shrinks, but stories and transparency may offer hope for the future

Final Reflections & Takeaways

• Despite massive influxes of money and more resources, the root causes for athletes’ financial distress remain stunningly unchanged. Athletes are still uniquely vulnerable due to cultural, educational, and structural factors.
• The collapse of the “middle class” in sports means more players aren’t landing the generational wealth fans imagine; many see brief, modest earnings–yet face the same pressures.
• The fundamental challenge is both practical and psychological: learning financial “street smarts” is as crucial as managing ego, trust, and identity after a short, intense athletic peak.
• Awareness is higher than ever, but the hardest step—just like in ordinary life—is admitting vulnerability, asking for help, and changing behavior.

For those who haven’t listened: This episode offers a mix of hard truths, darkly funny anecdotes, practical advice, and empathy—a “talkumentary” by turns revealing, cautionary, and surprisingly universal in its portrait of our relationship with success, money, and self-worth.