While terms of former Santos FC forward, Neymar's, new five-year deal with FC Barcelona have not been revealed; considering his lavish tendencies; this raise in income could not have came at a better time for the Brazilian superstar.
According to Forbes Magazine, during a two year stretch (2012-2010), the 21-year-old phenom has reportedly spent on $750,000 triplex and a $2 million mansion in a gated community (both located in the Northern Coast of the state of Sao Paulo), a $150,000 flat in Sao Paulo, a Porsche Panamera Turbo (price ranging from $400,000 to $550,000 by Brazilian market prices), and an $8 million, 78-foot yacht that features a Jacuzzi and a dance floor.
That does not include the monthly $15,000 in child support or the $1 million mansion he bought for the mother of his child.
"No doubt he's probably overspending," said Forbes sports business writer, Christina Settimi, who in 2012 the business magazine estimated Neymar's annual earnings to be around $8 million - $4 million from his Brazilian club contract and $4 million through sponsorship deals with Nike, Red Bull, volkswagen, and other Brazilian companies.
"Most athletes don't understand how to be financially stable," says Daniel Sillman, co-founder of the Compass Management Group, whose company provides athletes with advice on a wide-range of business matters - from financial management, to legal services, to marketing. "They've made a quick ascent to wealth. It becomes very difficult to say 'no'. And sometimes you're not as wealthy as you think you are."
The economic downfall of pro athletes was the subject of Billy Corben's "Broke" documentary, which aired October of last year as part of ESPN's critically-acclaimed "30 For 30" series. Corben's film examined the financial pitfalls that come with signing a lucrative sports contract, interviewing active and retired athletes across many sports - both success stories as well as many who lost it all.
In his documentary, Corben points out that 60 percent of former National Basketball Association (NBA) players are broke within five years of retirement, while 78 percent of former National Football League (NFL) players have gone through some financial stress, including bankruptcy.
"It's a 'keeping up with the Jones'' effect," says Corben, who describes his documentary as a step-by-step guide in how to lose millions of dollars without breaking a sweat. "It's the competitive nature of athletes. They see what other guys in the locker room are buying as symbols success and, as competitive people, they strive for that success. It's that same competitive drive that makes them successful in their careers."
The list is endless of athletes who have lost a vast portion of their wealth upon retiring. Former heavyweight boxing champion Mike Tyson's paycheck, for his successful one-man show, "Mike Tyson: Undisputed Truth," goes straight to the Internal Revenue Service. The one-time "baddest man on the planet" owes the I.R.S. $18 million, having squandered away $300 million of his earnings.
Former Major League pitcher Curt Schilling auctioned off his famous bloody sock from Game 2 of the 2004 American League Championship Series to help pay off personal debt. Schilling lost $50 million on a failed video game company.
Argentina soccer legend, Diego Armando Maradona, had two Rolex watches confiscated, during a trip to a health clinic, as well as earrings he had on his possession, on another occasion while playing in a charity game, after a judicial order from an Italian court to seize anything "within plain sight".
Maradona owes the Italian government $50 million in unpaid taxes from the seven years he spent winning Series A titles for Napoli.
In Maradona's case, international sports stars must not only deal with trying to assimilate to a new language and culture but to different sets of laws, as well.
Imagine what it's like for a young Dominican pitching prospect, new to the this country, having to learn a new language, culture, and the United States tax code?
"The U.S. tax laws is foreign to just about everybody, it may as well be a foreign language," says Corben. "In some cases, with international athletes, you are not just going from 'rags to riches,' you are coming from a poverty nation."
Corben thinks that athletes need to change how they approach their business practices, viewing themselves more as CEOs of their own corporation, with their skill-sets and name brand being their multi-million dollar asset.
"As CEOs, you are suppose to navigate through all these complex tax laws, staying on top of paying your bills, paying your lawyers and financial advisors, supporting your pregnant girlfriend," says Corben. "And with international athletes, we are now talking about an international company. As the CEO of an international company, you need to have people around you that you trust to help you with the laws in other countries."
Sillman believes that this process should start as early as possible in an athlete's career.
"It's getting the athlete to realize where they are financially and compound their wealth," says Sillman. "You have to educate yourself at a young age. The reality is that you have to develop good habits, say 'no' to people, be honest with yourself. The earlier you start and make the athlete understand this, the easier it becomes for them."
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