How to lose a fortune without breaking a sweat

NHL hockey player Jack Johnson, a product of  Faribault’s Shattuck-St. Mary’s School,  is tapped out, and mom and dad are to blame, the Columbus Dispatch newspaper says today.

Johnson, who has earned more than $18 million in his National Hockey League career, could owe as much as $15 million. He has filed for bankruptcy.

“I’d say I picked the wrong people who led me down the wrong path,” Johnson tells The Dispatch.

You expect the leeches who follow big-money athletes to try to grab cash. But you don’t expect it from your parents.

But the Dispatch says his parents are involved.

Tina Johnson borrowed at least $15 million in her son’s name against his future earnings, sources told The Dispatch, taking out a series of high-interest loans — perhaps as many as 18 — from nonconventional lenders that resulted in a series of defaults.

The tangled web is one that The Dispatch has been investigating since the spring, and — according to court documents, NHL sources and sources with knowledge of the situation — involves a U.S. congressman from Iowa, the son of an oil baron in Texas and a former University of Michigan basketball star.

Because Johnson’s name is on the loans, he has been sued at least three times for more than $6 million for defaulting, as in the case of the mortgage on a house in Manhattan Beach, Calif. In court documents, Johnson says his parents bought the house with his money but without his knowledge.

Johnson’s parents allegedly each bought a car, spent more than $800,000 on upgrades to the Manhattan Beach property and traveled, often to see him play NHL games for the Kings and Blue Jackets.

“Jack would ask (his parents) questions: ‘What’s this? What are these guys calling about?’  ” a source said. “And they would tell him not to worry about it, just worry about playing hockey.

“These were his parents, right? He trusted them. It wasn’t until last spring or early summer that he understood there was a significant problem.”

“It’s essentially a step-by-step guide, ‘How to Lose Millions of Dollars Without Breaking a Sweat,’” writes columnist Michael Arace.

It is about 20-year-olds who suddenly are rich and who have no concept of personal finance. They are caught up, and competing, in the lifestyle. They are stalked by people looking to get their money. Sometimes, it does not take long to vaporize.

According to SI, 60 percent of NBA players are broke within five years of retirement, and 78 percent of NFL players are experiencing some level of financial stress within two years of retirement.

Stay around long enough in my business and you know some of these guys. I covered University of Connecticut basketball in the late 1990s, at a time when Richard Hamilton was the easygoing superstar and a kid by the name of Josh Nochimson was the student manager.
Hamilton took Nochimson along to the NBA as his business manager. In 2008, Hamilton sued Nochimson, alleging that Nochimson had stolen $500,000 to $1 million from him.

“We don’t like to look over stuff, but you can’t trust anybody,” Hamilton said at the time. “I don’t give a damn who it is, you can’t trust nobody.”

Arace says Johnson has “divorced his parents.”

  • Kassie

    Since about 95% of the kids who go to Shattuck-St. Mary’s School will be very rich someday, if not already, they should all be given finance classes from the time they enter the school. Not the type that should be in all public schools, but the type about hiring accountants and people who are trustworthy to manage their stuff and how to do audits and ask the right questions.

  • CHS

    Who should be more trustworthy than your own parents?

  • Jack

    Personal finance should be a required class in high school, you don’t get to graduate until you have successfully passed it.
    Today’s graduates are incredibly financially naïve for the most part. That doesn’t help them in life at all.