Floyd Mayweather has an estimated net worth of $280 million, but is it possible that he could blow it all? Pundit Arena investigates.
The thought in itself is ridiculous. I mean, look at the guy. Is it likely that the man who’s about to take part in the richest fight in history (breaking his own record), could conceivably lose his fortune? One who owns private jets and puts down seven figure bets?
Some may cite ex-footballers who went broke such as:
- David James (earned over £20m during his career)
- George Best (£60 million, the most infamous example from this side of the pond)
- Also ex-basketball player Kenny Anderson (who earned around £40 million)
Others may justifiably refer to fellow boxing legends Evander Holyfield (declared bankrupt in 2008, with a bank foreclosing on Evander’s $10 million mansion), and Mike Tyson (bankrupt in 2003, blowing well over £200m).
The rest may throw this gif in our faces (yes please!).
However one views it, ‘Money’ Mayweather should take heed of the following.
According to Forbes, Floyd Mayweather was the highest-paid athlete in the year of 2014, earning $105 million. Since splitting from promoter Bob Arum in 2006, Floyd took control of his fight promotion. Floyd dropped his ‘Pretty Boy’ moniker, anointed himself as ‘Money’, and started ‘Team Money’ (which suitably includes Warren Buffett).
He topped the Forbes and Sports Illustrated lists of the 50 highest-paid athletes of 2012 and 2013 in the process. Considering that he has at least two fights left, his net worth could approach half a billion dollars sometime soon.
The thing is, Floyd is spending like this is a lifetime job. And as we’ve seen from the examples above, there has been a dangerous precedent set in terms of sports stars losing nine-figure fortunes in startlingly quick fashion.
This blog post – How to go from earning $100 million a year to bankrupt – was written by a former private banker in August of last year. In it, it is claimed that Floyd Mayweather will go bankrupt within five years of retiring.
“Nothing drains an account like bad investments and poor money management, which is exactly where Mayweather has some previous form.” – Banker’s Umbrella
Business incompetence is highlighted as the main issue. Floyd purchased a Mercedes Maybach 57S in February of 2007. He borrowed more than $415,000 at 16% annual interest to buy the $528,000 car.
But why would a boxer that has just earned $8 million need a loan to pay for a car? And why would the bank force him to pay 16% interest? Were the bank aware of Floyd’s money mishaps? It appears so.
Well, guess what? Floyd reneged on his payments and was subsequently sued.
Floyd’s decisions to return from retirements could well be attributed to the need for financial gain. Why else would he return to the ring, having beaten every opponent he’s faced?
This is due in part to one of Floyd’s toughest bouts to date – with the taxman.
We are already aware of Floyd’s constant trouble with the IRS, coming on no less than six occasions. Someone else who had issues over tax demands was Mike Tyson – to the tune of $13 million. Tyson, for his part, has rather unhelpfully told Mayweather to “enjoy splashing his cash”.
“I got a good relationship with the IRS, they ain’t took nothing away from me” – Floyd Mayweather
The crux of the argument is this – Floyd is spending like it’s going out of fashion, and when his career ends, where does his next revenue stream come from?
He does have his own promotion company – Mayweather Promotions – who currently have twelve fighters on their books., but is this a sustainable income?
Merchandise and ‘investments’ are also avenues that Floyd is availing of. But he sure as hell won’t be making anywhere near what he is now (he reportedly earned $80m for fighting Canelo Alvarez) once he leaves the ring for good. This is a temporary gig and we’re not quite sure that Mayweather or his much vaunted team realise it.
As always, Leonard Ellerbe, the CEO of Mayweather Promotions, defended Floyd to the hilt during an interview with Yahoo! Sports:
“Floyd has a tremendous advantage, because he’s seen the pitfalls and the things that have happened to other fighters, going back a long, long time before him. He’s educated himself and surrounded himself with top-flight financial advisors. Floyd has a number of billionaire friends who have helped him and given him sound advice.”
First of all, surrounding himself with financial advisors is no guarantee of financial security (reference: most recent financial meltdowns in both personal and business capacities).
Also, hiring a second jet for his entourage, not paying his taxes, carrying a million at a time on his person in a hockey bag, buying dozens of supercars, paying out on lawsuits and a fleet of mansions does not suggest financial prudence.
Five years of retirement is indeed a long time. Floyd Mayweather would be well advised to draw up a budget and curb most of his unnecessary spending, or face having to fight multiple times more in the years to come to bankroll his lavish lifestyle.
Disclaimer: This is not a job application for the position of financial advisor to Floyd Mayweather Jr. (although if Team Money are reading this, I’m your man!).