With the National Football League (NFL) owners current locking out the players, many players have little or no source of income or any type of benefits. More than a year ago, I discussed how the NFL Player’s Association (NFLPA) was warning players on how to prepare for the lockout. This including things such as: not purchasing houses, not buying boats or expensive cars, and trying to save money and leave within one’s means.
Pro Football Talk reported last month that many players were seeking high interest loans to help them through the lockout period. Now ProFootball Talk and Yahoo Sports are both reporting that a number of players from at least 16 teams have had to set up these high risk loans. It is noted that these loans have interest rates in the range of 18 to 24 percent, with a 36 percent rate in the case of default for some of the loans.
NFLPA representative and Arizona Cardinal kicker Jay Feely noted:
“I think it’s predatory and unjust. I don’t think they should be charging those interest rates and I would encourage every player [considering high-risk loans] to look elsewhere. I think if you went to your bank, or outside lending agencies, you’re not going to pay that kind of interest. That’s absurd.”
However, as noted in the Pro Football Talk article, many players do not have the credit history or collateral needed to back the large loans that many of them are needing to get through the lockout period.
Yesterday, I noted that the NFL owners had made a new offer to the players. Considering the fact that players are already going out to get risky loans, I’d think that the owners may be in a good negotiating position now. They have made concessions which will give more money to players who are more likely to be NFLPA representatives, and with the number of players potentially needing a paycheck growing everyday, it may be that some players will start putting pressure for the rest of the players to negotiate a new collective bargaining agreement sooner rather than later.
On a final note, I imagine these lenders who are making these loans must be smiling in joy at the lockout, and probably hope it extends longer so that they can hook more players with these high interest rates.
H/T to Shawn for sending me these articles.