Jack Johnson's bankruptcy a sad but common story for athletes
Each September during the past few years, the NHL Players' Association has flown a group of top prospects to Toronto and put them up in a swanky downtown hotel for a private preseason event. There's some fun involved in the annual gathering—an all-star game of shinny, a field trip to a Blue Jays game—but it's primarily a business trip. The kids spend a couple of days signing autographs for card companies, posing for photos and attending a series of seminars designed to ease their transition to the NHL. The topics range from how to deal with the media to taking charge of their soon-to-be robust finances.
Jack Johnson's shocking bankruptcy story; Maple Leafs point fingers
The gist of the latter, according to the players with whom I spoke when I attended the event a couple of years ago, seemed to be pretty much common sense. Protect your PIN. Don't become a bank for your buddies. Don't overspend on extravagances. Learn to steer clear when an "investment opportunity" sounds too good to be true. And, most important, find a competent and experienced professional who can set up a long term plan that will secure your financial future.
It's a great program. But it came a little too late for Jack Johnson.
The Columbus Blue Jackets defenseman, who is now playing in his eighth full NHL season, is at the center of a shocking bankruptcy filing that claims he has less than $50,000 in assets against more than $10 million in debt. And it's not only his career earnings of $19 million that have disappeared. His current wages—$5 million per year—are being garnished and his future earnings are at risk.
All because he trusted his financial security to what Johnson himself admits were "the wrong people."
His own parents.
According to the stunning story by Columbus Dispatch hockey writer Aaron Portzline, Tina and Jack Johnson Sr. made a series of ill-advised decisions, ranging from lavish spending—buying themselves cars, traveling and making more than $800,000 worth of renovations on property they own—to taking out loans from non-traditional sources for at least $15 million at predatory interest rates. They got in over their heads, and dragged their son down with them.
“I’ve seen lots of instances of parents riding their kid’s coattails around,” said an NHL executive familiar with the case. “I’ve never seen a case as ugly as this one, where the parents took such advantage of their kid.”
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Johnson is certainly not the first high-earning hockey star to lose it all. Players such as Bryan Trottier, Bryan Berard, Mike Modano and Darren McCarty ran into varying degrees of financial trouble, and those are just some of the higher profile names.
That it would happen to so many athletes in this sport isn't surprising. Most are young men with limited educations who have no idea how to deal with sudden extreme wealth. They get caught up in the lifestyle and end up spending beyond their means. Or their financial naiveté leads to bad investments that quickly drain their accounts.
But few are victimized the same way as Johnson. He's not in this position because he was wildly irresponsible. He was victimized by his family. And whether the Johnsons got caught up in some bad decisions or felt entitled to some of the spoils of their son's success as a reward for their own sacrifices doesn't really matter. Jack Johnson has lost more than a fortune. He lost his parents. His relationship with them has been destroyed along with his finances. And that's why this story hurts like a punch to the gut.
You really have to feel for Johnson. It's hard to imagine how deeply this has affected him off the ice, but you can clearly see how it's weighed him down on it. He's been a shadow of the player he was last season. Now that he's taken charge of this situation by surrounding himself with competent counsel and seeking remedies through the system, you hope he can find a little peace in both his worlds.
And you can bet that Johnson's cautionary tale will hit home in a way that no hotel meeting room seminar ever could.