When Big Money Contracts Cause Big Problems...

Last week it was reported that current Columbus Blue Jackets defensemen and former University of Michigan player, Jack Johnson filed for bankruptcy. Believe it or not this is a huge growing problem in professional sports, even with all the high dollar contacts that are being signed in this day and age.

Photo of Jack Johnson courtesy of detroitnews.com 

What’s a bit different in this case is that is wasn’t Johnson, who is currently under a $30.5 million contract, who made poor financial decisions, but his parents. That’s right, his own parents who he had trusted to manage his finances after signing a 7 year deal with the Los Angeles Kings in 2011. It was during this time that Johnson, for whatever reason, signed away his power of attorney to his parents Jack Sr. and Tina Johnson.



Yahoo Sports reported that Johnson, prior to the filing, had claimed assets of under $50,000 with debts as potentially high as $15 million. Bad advice from financial advisor Simon Vo, who convinced the parents that borrowing against future earnings, otherwise known as “monetize,” was a good idea.  Johnson has now cut off ties with parents and has surrounded himself with his own financial advisory staff. This unfortunately, is a move that was made a little too late.

Photo courtesy of yahoo.com

Johnson will learn a lesson from this as he’s added to a long list of professional athletics who have had to file bankruptcy. The most notable on the list is former heavyweight champion Mike Tyson, who aside from his successful boxing career that earned him $400 billion, is infamously known for his bizarre purchase of three white Bengal tigers, who cost him over $500,000 for one year. Besides these types of foolish purchases, bad investments, lavish lifestyles, and not understanding how taxes work were additional reasons for bankruptcy filings as  outlined by the 2012 ESPN 30 for 30 documentary titled “Broke.” This film included a startling fact that “By the time they have been retired for two year, 78% of former NFL players have gone bankrupt or are under financial stress. Within five years of retirement, an estimated 60% of former NBA players are broke.” This is amazing to me.


So how did all happen? Well first and foremost, most high schools aren’t required to provide any type of personal finance education. Most young adults just don’t understand personal finance. Add that to the fact that the minimum NFL salary for example is $420,000 and that’s all you need to know. The NFL is attempting to fix this problem by offering a financial education program by providing p with unbiased financial advice. Still even with this effort, it’s hard to see this problem going away anytime soon.

 

References

https://www.youtube.com/watch?v=TSOAwNSv8EM

http://espn.go.com/30for30/film?page=broke

http://www.accessathletes.com/blog/blogdisplay.cfm?/Education-is-Key-for-Pro-Athletes-596

http://www.sportingcharts.com/articles/off-the-charts/50-biggest-athlete-bankruptcies-in-sports-history.aspx

http://www.therichest.com/sports/boxing-sports/the-most-ridiculous-purchases-mike-tyson-has-ever-made/

http://www.pacificawealth.com/professional-athletes-sudden-wealth-the-nfl-financial-education-program/

http://sports.yahoo.com/blogs/puck-daddy/jack-johnson-files-for-bankruptcy-thanks-to-parents--loans-against-contract-154348457.html;_ylt=A0LEVx.0E3FUdkMA3sRXNyoA;_ylu=X3oDMTEzZWc0cGhpBHNlYwNzcgRwb3MDMwRjb2xvA2JmMQR2dGlkA1ZJUDUyMV8x

http://www.detroitnews.com/story/sports/nhl/2014/11/20/blue-jackets-jack-johnson-files-bankruptcy/70026196/

Stop Worrying...These Are Not The Same Old Lions



Ideally it would have been nice to start out this blog by describing just how easily the Lions handled the Arizona Cardinals yesterday, how their record improved to an impressive 8-2, and how the win kept them one game ahead of Green Bay in the NFC North division. Well… none of that happened. Instead the Lions lost 14-6 showing a lackluster effort on offense against a better Cardinal team.

Lion's offense struggles against Arizona. Photo
 coutesy of detroitnews.com

If you look at the comments section of any Detroit Lions article today, you’ll see a slew of comments about how Lions QB Matthew Stafford stinks, how the coaching staff stinks, and in general how the entire team stinks too. It’s almost as if these folks on the message boards fell asleep for the last month when the Lions went undefeated. However let’s not jump off the bandwagon just quite yet.  This isn’t the same team we’ve been watching over the last 20 some odd years.

SOL…not so fast

Lion's Head Coach Jim Caldwell - photo coutesy
 of Freep.com

Most Lions fans are very fickle. When things are going well there’s talk about how this is the Lion’s year to win the Super Bowl. When problems arise however, you’ll hear those same fans mention "SOL" for same old Lions, or how they are “Lion’s free.” This is almost a defense mechanism based on 50 plus years of being burned over and over again by this franchise. The Lions are only one of four NFL teams that have never played in a Super Bowl, so fans have a right to be gun shy.  After all just last year, the Lion’s started out 6-3 only to lose 6 out of their final 7 games.

So why is this team different? My answer is defense. Defense wins championships and keeps teams competitive in most games. This year it just so happens the Lions are the top defensive team in the NFL. Defensive

 

Tackle Ndamukong Suh is having an All-Pro year, while avoiding the brainless penalties that labeled him one of the dirtiest players in the NFL. Is it a coincidence that Suh is finally putting together a career year just when his contract is about to expire? Probably not. Add to the mix the solid linebacker and secondary play, both question marks in the offseason, and that the Lions appeared to have hired the right coach for this team and there are your reasons to believe why this team won’t go into another tail spin.  

Key’s to finish off the season

Pat Caputo from the Oakland Press discusses the importance of the Lion’s utilizing all of their offensive weapons, unlike what they did against the Cardinals. This to me is a key point for the Lions to move deep into a playoff run, especially with the emergence of the defense. The Lion’s offense has plenty of fire power as long as Stafford can stay focused with his progressions and accurate with his throws.

Up next…the Lions visit New England next week to take on the Patriots.

 

 

Refrences

 

http://www.theoaklandpress.com/sports/20141116/pat-caputo-having-a-lot-of-weapons-means-little-if-detroit-lions-dont-use-them

http://www.nfl.com/videos/nfl-network-total-access/0ap2000000099328/Is-Ndamukong-Suh-a-dirty-player

http://www.detroitnews.com/story/sports/nfl/lions/2014/11/16/lions-vs-cardinals-live-updates/19135837/

http://www.theoaklandpress.com/sports/20141114/paula-pasche-x2014-jim-caldwell-has-turned-detroit-lions-around

https://search.yahoo.com/search;_ylt=Avyh_9_OQeCgw1sGGNTtatObvZx4?fr=yfp-t-901-s&toggle=1&fp=1&cop=mss&ei=UTF-8&p=ndamukong%20suh

http://www.answers.com/Q/Which_NFL_teams_have_never_played_in_a_Super_Bowl

https://news.search.yahoo.com/search;_ylt=A0LEVyuJaWpUR_YA3JpXNyoA?p=Matthew%20Stafford&fr2=cosmos&.sep=&fr=yfp-t-901-s