Football For A Buck: Steve Young Has The Happiest Annuity Story Ever
October 8, 2018 by David Rae
Greatest moments and player statistics may be top of mind when you think about the history of sports. However, there are also teachable moments when it comes to finances. A lot can be learned from how leagues, team owners and individual players either responsibly or irresponsibly managed their multi-million contracts. Football for a Buck: The Crazy Rise and Crazier Demise of the USFL by Jeff Pearlman provides an entertaining romp through the history of the United States Football League (USFL), offers tidbits about some National Football League (NFL) hall of famers and shares the history of the USFL league’s demise.
Click HERE to read the original story via Forbes.
Spoiler alert! Pearlman’s book reveals how the involvement of Donald Trump, and a few others, contributed to its expiry. If you are looking to retreat into the good old days of sports, and skip the toxic political climate of today, this may not be the book for you.
Football for a Buck delves into the daytime soap opera drama of the USFL, the last league to truly challenge the NFL. Pearlman, the best-selling author of eight books, distills more than 400 interviews to uncover all the untold stories of ego, excess and bad financial moves that brought down this football league. From cocaine, to hookers, to hall of fame play, this book is “high” entertainment.
While I’m not currently a huge sports fan, I couldn’t put this book down. Partly because it covers many of the earliest sports memories and players I watched as a kid. Additionally, several games I attended are mentioned and my father, Mike Rae, is quoted. A professional player during that time, his football playing highlights included winning the National Championship with the University of Southern California and a Super Bowl with the Raiders. The final three years of his professional career were spent playing in the USFL for the Los Angeles Express, Michigan Panthers and LA Express again, respectively.
During that time, I remember sitting through the longest game in football history. I assumed my father was a player for the LA Express team since the game was played at the Los Angeles Memorial Coliseum. However, it turned out he was playing for the Michigan Panthers that year. The game went on forever. It went into overtime, then another overtime and then a third overtime. As a financial planner (now), I’m all for a good value but that was crazy. As a kid I’m sure I just didn’t care. I asked my mother about it who said, “We went to a museum in the middle and it cost me a lot of money in ice cream.” I asked her about that day, but like me, she didn’t remember which team my father played for nor which team had won. She was entertaining two kids, under the age of five, for what turned out to be a very long day.
Who won? Who cares. ABC switched TV coverage away from the game before it ended. A reported 7,964 fans attended the game (including three from my family). Surely less people were there by the end of the game. By the way, if you haven’t been to a game at the Coliseum, it holds nearly 100,000 people. As it turned out, Steve Young and the LA Express won.
Steve Young and his $40 Million Annuity
This just may be the best story about an annuity. Steve Young was signed out of Brigham Young University (BYU) and into a 40-million-dollar contract with the USFL. That was the headline but the reality was that he was given an annuity that would pay out something like $40 million over the 50 years that followed. Had it been a deal with the San Francisco 49ers (where Young really earned his NFL hall-of-famer cred), I’d say it was a raw deal. However, given the fact that some players weren’t paid for playing in the final season (or other seasons) of the USFL, accepting the annuity appears to have been a genius move on the part of either Young or his agent.
Those annuity payouts have lasted longer than the league and it’s safe to say that he has made more money than probably anyone else involved with the league. To be fair, that couldn’t have happened to a nicer guy. Even with a large signing bonus, and salary, he continued to wear old jeans and drive a 19-year-old Oldsmobile Dynamic (a clunker at that). In addition to outlasting the league, that annuity even outlasted the Oldsmobile car company! Who would have thought that? With a staggering number of pro athletes going broke after they retire, it’s refreshing to read stories about players who made smart financial choices.
Trump as an USFL Owner- At least no one died
It isn’t difficult to find people speaking negatively about Donald Trump. All you have to do is turn on the television or read the book, Fear, by Bob Woodward or Michael Wolf’s Fire and Fury pretty much any episode of the Daily Show with Trevor Noah. However, many may find it surprising to learn that Trump owned a team in the USFL. A whole book could easily be written about the part he played in the fall of this league. According to Pearlman, Trump was a major character who contributed to everything that went wrong with the league, from its founding to its failure. After reading the book, you may infer that Trumps desire to move the league from spring to fall was the proverbial nail in the coffin for the upstart USFL.
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His contributions included ghosting on buying a team for the inaugural season, undercutting the USFL leadership after purchasing the New Jersey Generals for the 1984 season and negotiating record-breaking contracts for the likes of Heisman winner Hershel Walker. One might consider those examples as lessons on how not to negotiate a deal. It was more “shart of the deal” than “art of the deal.”He even spearheaded a disastrous anti-trust lawsuit against the NFL. In Trump’s defense, the USFL won the lawsuit, and in true Trump fashion of turning gold into dust, the league was awarded a whopping $1 verdict.
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Interestingly, Pearlman noted that Trump only became involved with the USFL after being rejected by the NFL. Pete Rozelle, NFL commissioner at the time, told Trump in a private meeting, “As long as I or my heirs are involved in the NFL, you will never be a franchise owner in the league.”
Another USFL team owner, Jerry Argowitz, summed up Trump in a way that seemed pretty familiar to all who watch him today. “Was Donald a good man to work with?”, Argowitz said. “No, terrible. He was all about himself, about his team, about his success. He didn’t care about the USFL, so much as he card about Donald Trump. We had a discussion one day. He said, “How do you think I’ll be remembered in the league?” “Donald, you are going to be remembered as the man who destroyed the USFL.” He said, “But I hired Doug Flutie! I hired Doug Flutie!”
While many would probably agree that Flutie was a good quarterback, they would also probably agree that he was by no means the best in the league. In fact, many would most likely say the contract Trump gave him to play in the USFL was outrageously and overly generous. According to Football for a Buck, Trump sent a letter to all team owners in the league demanding that they contribute to the salary for Flutie. In the end, he didn’t receive one dime from any of the other team owners to help defer the cost of Flutie’s contract.
Some Personal Finance Takeaways from Football for a Buck
Give this book a read. It was interesting to about how many supposedly super rich people were barely staying afloat financially. When dealing with your household finances, substance wins over style every time. Looking wealthy is not the same thing as being wealthy or being on track to become wealthy someday. Don’t try and keep up with the Joneses. All that spending might be fun along the way, but more often than not, it will end in disaster.
According to Pearlman, the teams that actually made money in the USFL were those who followed the league’s original financial plan. They had a spending plan (that they could afford) and stuck with it. Other owners appeared to be just showing off and spent money they didn’t really have. Some ended up broke while others were already broke. The losses from the USFL were just the straw that broke the proverbial camel’s back.
Perhaps I should thank Trump. If his contributions to the league’s demise hadn’t put my father (and hundreds of others) out of work some thirty plus years ago, I wouldn’t have learned all those important financial lessons I learned when I was young. I quickly learned what retirement was and the value of dollar. Then again, I can’t seem to get over the fact that my tax bill will skyrocket in 2018. At least as a certified financial planner, I am planning ahead so I have the money come tax time.
