With the coronavirus pandemic keeping the sports industry on pause, players from across the National Basketball Association are urging their colleagues to use the downtime to examine finances and prepare for a possible change in the league's revenue landscape.
"Don't look at this at this as a timeout," Oklahoma City point guard Chris Paul told CNBC in an interview. "Look at this as an opportunity to get stronger in however way you see fit. If financial literacy is one of them, which I think that is for a lot of us, then dive in."
Paul, who also serves as the National Basketball Players Association president, acknowledged players are "aware" of the negotiations with league owners to determine issues surrounding compensation to players. According to a report from ESPN, the NBA will pay players on April 15, the second of two installments due this month.
People familiar with the situation confirmed to CNBC the league would issue payments and added nothing has been determined for payments in May. Also, players may need to agree to some portion of refunds to owners if games are canceled. The people said the NBA is still working to save its season, evaluating various models, including a tournament in Las Vegas.
While the league is figuring out its business affairs, Paul and others, including Portland Trail Blazers guard CJ McCollum and Chicago Bulls forward Thad Young, say athletes from all leagues should do the same.
But despite the advice and warnings of financial turbulence, athletes losing career earnings is still too common. Sports Illustrated estimated 60% of former NBA players are broke after five years of retirement, while 78% of National Football League retired players suffer financial hardship after two years.
From NFL stars like Adrian Peterson to former NBA players like Antoine Walker, who lost over $100 million, and icons Tim Duncan and Kevin Garnett, athletes from all over are victims of fraud, being taken advantage of, and corrupt business dealings.
But it's also lack of financial awareness that is the culprit, says Drew Hawkins, the CEO of Edyoucore, a financial consulting firm.
Hawkins said athletes currently bring in a "third-party analysis" to comb through everything from investments, bank accounts, and credit card statements.
"Big companies get self-audits done all the time but yet, these individuals that are entities who just assume, 'I've got my people around me, they're doing what they need to do, I'm good, and I don't need to get that level of checks and balances,'" Hawkins said.
Before winning a $6 million lawsuit against his former advisor Charles A. Banks IV, Duncan – the longtime San Antonio Spurs forward – admitted he failed to oversee Banks as he considered him a trusted friend. That allowed Duncan to "feel comfortable moving forward without replacing the check and balances.
Hawkins said he recommends clients in the sports and entertainment industries hire third-party officials to examine finances and investments regularly to avoid the mistake Duncan made.
"Tim Duncan and Kevin Garnett didn't lose millions overnight because the stock market went bad all of a sudden," Hawkins said. "It was things that happened, and people they were working with consistently over time."
Thad Young, who signed a three-year deal worth $43 million ($32 million guaranteed) with the Bulls last summer, said players should ask challenging questions to advisors and all business partners.
"Get answers on every single detail of your empire," Young said. "If they can't answer, then maybe you should think about going to find somebody else."
Young, 31, said the time off from basketball allows him to learn more details about his business investments. He created the investment firm Reform Ventures, which has holdings in tech companies such as CyberReef Solutions, a cyber security company, and Carbon 3D.
The 3D printing company recently announced it would create items like face shields and swabs in the fight against coronavirus.
"They are moving fast and growing every day," Young said of the printing firm.
Asking tough questions over the years also allowed Young to make better judgments around the risk mitigation. Young said his investment strategy involves identifying tech companies in the later stages of soliciting investors.
"Buy some shares at discounted rates and when those companies go public or they stale and get bought out or something, cash in from that and move those gains to the next stage of investments which could be in real estate or another tech venture," he said.
Spotrac.com estimates Paul made over $250 million in his 15-year NBA career. He's who also an investor with PlayersTV channel, which recently launched on Samsung TV Plus.
Paul agreed he has more time to be involved with "phone calls that are usually about my business, but a lot of times, I'm in practice. So, it's been great for me to be on these phone calls and to talk about what is going on."
With leagues losing money to the coronavirus work stoppage, players will undoubtedly be affected, and Hawkins said its "super critical" that athletes prepare now.
Ex-NBA guard turned TV analyst Jay Williams told CNBC younger athletes should also utilize veteran players and former players when it comes to business advice.
In NBA circles, Williams said players like Miami Heat forward Andre Iguodala, Golden State Warriors star Steph Curry and ex-players Junior Bridgeman and David Robinson are all respected in business. He suggested younger players who need additional advice reach out.
Williams had his career cut short after a motorcycle accident in 2003, one year after he was drafted by the Bulls following a promising career at Duke University.
Williams said athletes' financial troubles stem from bad "habits" formulated before they earn millions; hence, he advised younger players to get educated as early as possible.
"Ten years ago, that wasn't the cool thing to do," Williams said. "Now, it's cool to talk about financial responsibility. It's cool to understand where your money goes; are you getting paid through an LLC or an S corporation and [learning] what are the tax benefits from that.
"I think guys will have a better understanding of how they look at the financial matters overall, and the more guys spend time with these individuals, it just makes you think about the utilization of your money."