Former NFL running back Darren McFadden made nearly $50 million in nine NFL seasons split between the now Las Vegas Raiders and the Dallas Cowboys. He just might be on Twitter right now extolling the virtues of Bitcoin if he had the $237 million in digital assets that he should be sitting on. He doesn’t have it. Why?
That’s because former business manager Michael Vick (no relation to the football player) used $3 million of McFadden’s money to invest in his own business ventures while at the same time telling the running back he intended to buy Bitcoin for what amounts to $800 apiece at the time. This all happened back in 2017. In December of that year, the price spiked to $20,000 per coin. That would have made McFadden’s investment worth an estimated $237 million.
McFadden Fired His Business Manager
As anybody would do after losing out on a $237-million opportunity, McFadden fired Vick in 2018. What ired McFadden the most is the fact that Vick was a family friend who had been in the running back’s life before the fame and money came into play.
The lawsuit filed in court at the time alleged that Vick not only squandered the $3 million that was supposed to be invested in Bitcoin, he also allegedly mishandled $12 million and other moneys investing in his own private business ideas without telling McFadden anything.
Financial Mismanagement and Athletes
Unfortunately, no matter how much technology and the world of finance advances in the number of tools and opportunities for financial literacy, the sports world hears all too often the stories of prominent athletes going broke. The most recent includes running back Adrian Peterson, who will one day be inducted into the Pro Football Hall of Fame thanks to his unique blend of athleticism and running ability.
Peterson’s career has seen him make over $100 million as one of the most legendary Minnesota Vikings to ever put on the purple and gold jersey. Still, Peterson filed court documents last year stating that he is broke and on the hook for millions of dollars in loans that have yet to be repaid in multiple states.
Even athletes who have earned much more than Peterson and McFadden, and also invested in Bitcoin early, have gone broke before. Former heavyweight boxing champion Mike Tyson, for instance, has earned an estimated $400 million-plus throughout his boxing career yet managed to squander most of that money.
Fortunately for Tyson, he’s managed to reignite his financial status by leveraging the star power of his name, lending it to a documentary movie about his life, a Broadway play, and a host of Bitcoin ATM machines located throughout Las Vegas. He saw the potential of cryptocurrency before most athletes were even thinking about it.
How Blockchains and Smart Contracts Can Save Athletes Millions
It’s kind of ironic that McFadden lost out on an opportunity to earn so much money investing in Bitcoin. That’s because two of the major benefits of digital currencies revolve around blockchains and smart contracts.
Blockchains are decentralized public ledgers secured by networks of computers. They don’t have a centralized authority or owner, meaning an ill-willed agent or business manager can’t steal from his client.
Smart contracts are self-executing contracts that exist on blockchains like Ethereum and other digital currency networks not named Bitcoin. They allow parties to enter into an agreement without a lawyer or third party overseeing a transaction.
No need to use an escrow service either. All of the value transferred within a smart contract agreement is handled by the terms of the contract itself and the programming behind it. Both of these technologies could have saved McFadden and made him filthy rich in Bitcoin.
For now, he’ll have to take his experience in 2017 as a $237-million lesson learned.