A month into the lockout that has frozen the NFL, cash-strapped football players appear to be attracting a swarm of vulture lenders. The online sports magazine ThePostGame.com reports that with no paycheques rolling in, players are now turning to short-term loans with “obscene terms” to pay bills and existing debts.
Interest rates on these loans range from 18 to 24 per cent, and rise as high as 36 per cent upon default, one source alleged. The lockout, which started on March 11, is the product of disputes between NFL owners and players over a range of issues, including how to divide over $9 billion in annual revenues. Predicting that the disagreements could lead to a months-long standoff, the NFL Players Association advised players to set aside three game cheques from the 2010 season as a lifeline. (The median salary for NFL football players is $770,000.)
That piece of financial good sense, though, was apparently lost on many. Ten per cent of players have already secured predatory loans, and close to half could be signing themselves into the hands of loan shark lenders before Labour Day, around the time the regular season normally begins, the anonymous source said, adding: “They’re going to lose their homes. Their credit is going to be shot.”