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

 

MSU Football: “Little Brother” All Grown Up

Over the years when you thought about college football in the state of Michigan, you probably always thought first about the University of Michigan. When you think about former Michigan State University sports greats, you think basketball. Names such as Ervin “Magic” Johnson, Greg Kelser, Scott Skiles, and Mateem Cleaves may come to mind.

When I was growing up, the big college football game in town was always Michigan and Ohio State and it seemed year after year it was these two schools that would always fight for an invitation to the Rose Bowl. It was always the Bo Schembechler and Woody Hayes going at it with each other in front of a sold out crowds. Michigan’s dominance continued well though the early 2000s until Head Coach Lloyd Carr retired in 2007.

These days however, college football fans are hearing more noise from the team wearing the green and white instead of maize and blue.  Yes, it appears the college football pendulum has swung to East Lansing, meaning the Wolverines can no longer refer to the Spartans as “little brother.”

Coach Mark Dantonio, who in his 8^th season, has turned around the Michigan State football program into one of respectably and success. His team defeated Stanford in the Rose Bowl last year 24-20, which was their first appearance in The Granddaddy of Them All since 1988. This season, the #8^th ranked Spartans have not slowed and will be taking their 7-1 record (4-0 in the Big Ten) into tonight’s game against the #13^th ranked Buckeyes who will also come in with a 7-1 record and 4 Big Ten wins. Mike Griffith of M Live Sports breaks down the game, giving the Spartan’s the edge in most of the categories. If the Spartan’s can win, Connor Cook would be the first quarterback to beat Ohio State twice (he beat them last year in the Big Ten Championship game) in 13 years.

This game should be bring plenty of excitement as both teams look to gain an advantage in the Big Ten East Division standings. Another good contest could signify a new rivalry that could last years down the road, especially with Wolverines now on the decline.

My prediction: Michigan State 28 - Ohio State 23. 

References

http://en.wikipedia.org/wiki/Rose_Bowl_Game

http://bentley.umich.edu/athdept/football/umosu/woodyvbo.htm

http://www.cleveland.com/osu/index.ssf/2014/11/michigan_states_connor_cook_co.html

http://www.mlive.com/spartans/index.ssf/2014/11/position_breakdown_michigan_st_6.html

http://en.wikipedia.org/wiki/Mark_Dantonio

http://en.wikipedia.org/wiki/Lloyd_Carr

http://en.wikipedia.org/wiki/Connor_Cook

https://www.youtube.com/watch?v=6455_8FsJOM

MLB Free Agency: Don't Show them the Money

Last Wednesday, the San Francisco Giants clinched their third World Series title in the last five years. The series featured a dramatic Game 7 that included a scoreless relief appearance from Giant’s pitcher Madison Bumgarner, who had already earned wins in Game 1 and Game 5 starts. Bumgarner, the series MVP, was also awarded a 2015 Chevrolet Colorado from the now famous “Chevy Guy” Rikk Wilde.

 

Photo courtesy usatoday.com

With such an entertaining season now in the books, most fans now turn their eyes to the “Hot Stove League” to dream about the possible moves their favorite teams should make this offseason that will earn them that coveted championship trophy. In fact, starting tomorrow free agents have the ability to sign with any major league club.  The free agent market this offseason features Starting Pitchers Max Scherzer and Jon Lester, 3^rd Baseman Pablo Sandoval, and Shortstop Hanley Ramirez.

 

As like any fan, I too was taken back with excitement when the Tigers signed free agent 1^st Baseman Price Fielder (9 years/$214 million) in 2012, and resigned Justin Verlander (7years/$180 million) last year and Miguel Cabrera (10 years/$292 million) this past spring. Owner Mike Ilitch has made a point to express his “win now” at all costs attitude. However the performances of these deals so far has been alarming. Fielder only lasted two years before fans grew tired of his carefree attitude and was dealt to the Rangers, Velander has been inconsistent at best after resigning; and Cabrera has struggled with injuries almost, as it seems, before the ink ever dried on his new contract.
 

Now enter Scherzer, who declined the Tiger’s offer of 6 years and $144 million this spring. He’s now reportedly seeking a 7 year contract anywhere from $175 to $200 million. So one might ask why would any GM pay this much for a 29 year old pitcher, who during his seventh season in the big leagues this year finally pitched his first major league complete game? Surely given his awkward delivery, which sure looks like it places strain on his arm, will one day lead him to permanent spot on the disabled list. The answer… there will always be those teams who think an all-star pitcher will put them over the top as the final missing piece.  
 

Image courtesy of flckr.com

Baseball, unlike the other major sports, has no salary cap. It does however have a luxury tax, which can penalizes a team 17.5% if it exceeds the set $189 million threshold. So any team making an offer to a top tied free agent better do their homework first. Think I’m kidding? Just ask any Yankee fan how much they still love the declining skilled Alex Rodriguez, who at 39, is still owed a whopping $64 million over the next three years.

I now cringe when hearing about any multi-million dollar contract that goes beyond four years. After all, it’s us fans who will end up paying for it in the end. One box seat for $96 anyone?

 

References
 

http://www.autonews.com/article/20141030/BLOG06/141039990/how-the-chevy-guy-became-you-know-a-hit-and-stuff

http://yanksgoyard.com/2014/10/30/alex-rodriguez-officially-back-yankees/

http://mlb.mlb.com/home

http://www.detroitnews.com/story/opinion/columnists/lynn-henning/2014/10/02/henning-max-scherzers-big-gamble-pay/16589591/

http://www.huffingtonpost.com/2014/10/29/giants-world-series-2014-game-7_n_6072354.html

http://en.wikipedia.org/wiki/Hot_stove_league

http://www.sportingcharts.com/articles/mlb/explaining-the-luxury-tax-in-major-league-baseball.aspx