Carmelo Anthony is suing his former business manager, alleging he misappropriated more than $2 million of the Denver Nuggets star's assets.Anthony joins a long list of current and former athletes like Scottie Pippen, Sergei Fedorov, Mike Vick, Raghib "Rocket" Ismail, Drew Bledsoe, and others who have entrusted others to "manage their money", only to be bitten in the a$$. It's little wonder that 60% of NBA players are flat broke within 5 years of retirement. And we have to witness such disturbing displays as this.
The lawsuit, filed in U.S. District Court in Sacramento, Calif., on Monday, alleges that Anthony's former business manager, Larry W. Harmon, and employees of Larry Harmon & Associates P.A., breached their fiduciary duties by transferring $1.75 million of Anthony's money without his knowledge or consent to a company formed by Harmon, most of it in 2008.
Another $265,500 was discovered to have been invested in third parties without Anthony's knowledge or consent between 2005 and 2008, according to the lawsuit, which seeks recovery of the approximately $2 million, plus punitive damages.
Harmon declined to comment Monday on the allegations or on his dealings with Anthony.
Carmelo Anthony is entering his 7th NBA season after being selected 3rd overall in the 2003 draft. He's due to earn $14,400,000 in 2009.
Yeah, that's Scottie Pippen, playing in freakin' Sweden, for what's essentially a junior college-level team. At age 40-something. Because he needed the cash.
Why do these guys go broke? The reasons are many: child support, divorce, and frivolous spending, but poor investments are the biggest reason why many of these guys eventually lose everything they make. Few of us are smart enough to know how to manage millions. That's not a course taught at most colleges, and few of these guys go to class anyway. So, it's not exactly a shocker that they place too much trust in folks who invest their money in pyramid schemes, vanity bidnesses (restaurants, record labels), or just outright steal it. The players are so focused on the tangible returns (ie: car wash, clothing line) that it usually takes them years to look at bank statements and realize they've been "got". Most leagues provide financial counseling that encourages players to simply focus on saving what they have rather than attempting to make more. That's a pretty sound suggestion, but who wants to hear that nonsense? Boring.
On the flipside, maybe we shouldn't come down too hard on these guys for not being smart enough to juggle finance and on-field performance. After all, the profession most likely to get swindled isn't even pro athletes. It's doctors.
Question: Given a $120M contract, do you think you'd do a better job of managing it than Carmelo? What would you personally do to ensure you don't go broke once you retire?
Carmelo sues former business manager [ESPN]
The 6 Main Reasons Why Most Pro Athletes Go Broke [CosmoLoan]