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Did Andrew Luck Make a Smart Financial Decision?

Any of you sports fans out there know about Andrew Luck’s decision to stay at Stanford for his senior year in so he could play one more season of college football before going pro.

There’s been some discussion about how someone can risk tens of millions of dollars just to play one more year and finish a degree he’ll likely never need (or at least one that he can always get later).

Frugal Dad mentioned it in his roundup and Squirrelers took a close look at his decision and just how much he left on the table.

However, they forgot to mention a few things:

1. High quality NCAA student-athletes can take out insurance policies to protect them should they get injured prior to entering the NFL.

Coastal Advisors is one company that provides this type of insurance, and according to Sports Illustrated’s Jim Trotter, a $10 million tax free policy for Andrew Luck would cost around $100,000.

2. Andrew Luck comes from a family that is well off.

His father is the athletic director at West Virginia and supposedly makes $300,000 himself, so if Andrew Luck never played in the NFL, he would still receive plenty of money and that should not be a major concern. When you’re set, you’re free to be happy and do the things you love. Clearly playing his senior year at Stanford is pretty important to him.

3. There is the possibility of a lockout next season, in which case Andrew Luck would sit around doing nothing.

Like all NFL players, he would sit on his couch instead of being with his friends playing football. In addition, a new collective bargaining agreement could mean that he won’t get $50 million guaranteed that Sam Bradford, last year’s top draft pick, got.

From a mathematic perspective, which would you rather have: Being able to play one more year in college, with a 1% chance of getting seriously injured, and if you do, you receive $10 million tax free, or a guaranteed $30 million dollars, on which you’d have to pay taxes and sit on the couch for a year (he could, of course, finish that degree, he just wouldn’t be eligible to play football at Stanford). The decision is starting to get a little hazy, right?

Taking all of these factors into consideration, clearly Andrew Luck wasn’t simply deciding between playing college football and going to the NFL. He wasn’t turning down a crazy amount of money just because he wanted to get his degree. He had an important decision to make and there were many factors that contributed to his choice.

Readers, given all this information, what do you think of Andrew Luck’s decision to stay in college to play his Senior season, earn his degree, and proceed to the NFL afterward? Is he crazy for leaving money on the table? Or will he be secure enough that his decision is warranted.



  1. I think you made some really good points. But, first of all, his father makes $300k a year? That’s NOT enough for Andrew to be set for life. And, what is the probability of an injury? Having said that, I agree that he should stay. The only negative is not related to finances – his coach left so he’ll have to adapt to a new coach next year and the team likely won’t be as good.

    • @Ira, I did some more research, and it looks like his father is a former NFL quarterback and was the head of several prominent positions within the NFL as well as in the private sector.

      Being set for life isn’t ever a sure thing and depends on not letting spending get out of control is just as important as the income, but I think based on this information, Andrew Luck wasn’t making a choice of supporting his family and playing at Stanford.

  2. I think Andrew made a good decision; he’s going to have a degree, which will be his backup plan in case he doesn’t make the NFL

    • @20 and Engaged,

      Great he has a degree that’ll make him a 200K a year, that is much better than possibly earning a GUARANTEED $50mil (ignoring the whole lock out issue). You know how years he’ll have to work at 200K to make $50mil? TWO HUNDRED AND FIFTY YEARS! lol

      Bottom line STUPID MOVE.

      • @Evan, what about the insurance, isn’t that enough of a backup plan? $10 million, tax free? Also, his backup plan to the NFL (should it lockout), could always be getting his degree right then because he’ll have a year off with nothing to do!

        • @Daniel,

          The insurance is nice, but the difference in money is staggering. Also, he could have a terrible year or have an injury which lets him play (no insurance) but drops him significantly.

  3. Daniel, you are neglecting the possibility of a bad senior season that reduces his draft stock. He was absolutely going to be the number one pick if he declared this year.

    He could go back to Stanford next year, play poorly, and end up getting drafted much later, which will cost him millions (and that’s not even including the possibility of a Rookie Salary Cap in the new CBA).

    For example, Matt Leinart would have been drafted first overall if he declared after his junior season. Instead, he returned and was drafted 10th the following year. He lost millions by taking the chance that he’d be the top QB prospect next year, even though he didn’t get hurt.

    • @Kevin McKee, True, that could definitely have a further, substantial impact on the finances. There are no givens, and I guess he took the experience over the up-front money, but I hope this decision pays off for him.

      I guess there’s no doubt he’s giving up money, but either way, it’s very likely he’ll make tens of millions of dollars over the length of his career.

  4. so, evan….more money=happiness? how sad that you think
    so. all i can say is that i suspect andrew and his family will be
    just fine with or without the immediate contract.

  5. Thanks for referencing my post in yours above. It’s an interesting debate, and it’s fun seeing people go back and forth on it.

    You bring up a good point on the insurance aspect. That might save him to some degree in the event of a catastrophic injury. And there could be a labor situation in the NFL next year too.

    And Stanford is one of the truly great universities in the U.S., on the short list of being among the elite of the elite. He’ll hold a very prestigious degree and would have good career prospects upon leaving Stanford just as an ordinary student.

    All that said….he’s leaving $50 million guaranteed, most likely, on the table and risking losing it by going back to school. Sure, there’s the insurance aspect, but with those numbers you’re looking at $40 million out the door in that case.

    Plus, his stock really can’t get higher. He would have been the #1 overall pick. You can’t go higher than that. If his play falters, or has a few bad games, opinion of him might change a bit. Some other players might emerge as top pick options regardless. Plus, he’s losing his head coach, Jim Harbaugh, to the NFL. Harbaugh was about the hottest coaching candidate in the NFL or college recently, so Luck might be impacted by having a new coach at Stanford.

    Too much to risk with little upside to staying. And I say that with much respect for a Stanford degree.

    Let’s just say Luck has some nice options in his life right now:)

    • @Squirrelers, It’s a good problem to have, right??

      It’s true, he can only go downhill, but maybe the prospect of doing nothing for a year and not getting paid or playing football rubbed him the wrong way.

      From what I read, money was not the top factor in his decision.

  6. I normally like what you write however today I think your
    post was way off the mark. Life is not all about money! More power
    to him for realizing this!!

    • @Kim Hill, thanks for the feedback, but I’m not knocking his decision, simply suggesting that while people make a big deal about how much money he left on the table, Andrew is still set up for financial success.

  7. As an architect, I have jaw-dropping respect for anyone who can make it through the program AND be an outstanding football player. Clearly, this alien being can choose to do whatever he likes. ;)

  8. I didn’t really think of the insurance aspect. However, I still think that going to the NFL wouldn’t be a bad decision. I said over at Squirreler’s, you can always finish your degree at any time. However, if his passion is playing in college and he wants to do it, then more power to him.

  9. I think that he thought it through and made the best decision for him. The best financial decision isn’t always about the numbers, but it’s about long term goals and getting there. He might be thinking long term as in past his football career, and in that case, having his degree will help him more.

  10. First off, I like Luck’s decision to stick around, even if it may hurt his NFL stock for 2011. I would be interested to know whether he knew Harbaugh was leaving before making his decision. I don’t think Stanford is going to be nearly what it was with Harbaugh and it’ll be interesting to see how Luck plays under a new coach and system.

  11. Daniel, Interesting post. One thing is for sure, you can go
    back to college, but you can’t go back to college with the clout he
    has there now. Spending senior year as a star athlete is a once in
    a lifetime chance for which most people sitting on mountains of
    money would pay immeasurable sums. And who knows, he may just love
    his academic path as well??? Keep up the good work, Jane

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