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.
Maurice Taylor, a star basketball player at Michigan from 1994 to ’97 who was later disassociated by the school after a string of NCAA violations, steered Johnson and his family toward Simon Vo, who was to serve as Johnson’s business manager after Johnson fired Brisson, the agent.
Johnson had been paid relatively modest salaries early in his career, earning a high of $1.6 million in his fourth season in the league.
In the months leading up to his $30.5 million deal with the Kings, however, Vo and Steve Miller, who owned a mortgage company in Los Angeles, began discussing with Johnson’s parents the idea of “monetizing” Johnson’s contract, sources said.
“Monetizing” — that is, borrowing against guaranteed future salaries — has led to the financial woes of many professional athletes.
One prominent NHL agent, asked whether he would ever advise his clients to monetize a contract, responded: “Never, never, never.”
"Miller was the first lender, extending a $1.56 million loan on March 9, 2011, that Johnson’s parents used to buy the home in Manhattan Beach, a third of a mile from their son’s residence, while he played for the Kings.It is the same old mentality - people think a million dollars is "a lot of money" and that their ship has come in - so it doesn't matter if they spend 12% in interest on a funny-money loan. They deserve a new house, right? But as it turns out, a million bucks ain't a lot, particularly when you have to pay taxes, and you only get that money in little paychecks every month.
Johnson, a source said, believed that his parents took out a mortgage using money left to them in the will of a relative who had recently died.
The loan — which carried a 12 percent interest rate, almost three times the market rate — quickly went into default because it called for an initial payment of more than $1 million. (The contract extension Johnson signed with the Kings didn’t kick in until the following season, and he didn’t have that much in the bank.)"
"One day after the home loan was signed, on March 10, 2011, the Johnsons borrowed $2 million at an interest rate of 12 percent from a software developer in Iowa named Rodney L. Blum, who this month won a seat in the U.S. House.Rodney L. Blum - another "free market" Republican at work!
Blum’s office did not respond to interview requests left with Blum’s spokesman by The Dispatch. It’s unclear how Johnson’s family came to know him or why he was making a personal loan at a high interest rate."
"Barely a month later, on April 14, 2011, the Johnsons borrowed $3 million — at 24 percent — from Pro Player Funding in upstate New York, a company that “monetized” several NFL players’ contracts during a work stoppage. Former NFL stars Vince Young, who went bankrupt, and Bryant McKinnie, who was sued for default, were among the company’s clients.
Johnson was sued by both Blum and Pro Player Funding within a month of the loans being signed. He signed settlements, according to court documents, without appearing in court to contest the lawsuits.
To settle Blum’s suit, Johnson had $41,800 — or 25 percent — garnisheed from his bimonthly Blue Jackets paychecks over much of the past two seasons.
The next two years brought additional loans and additional defaults, sources said, but the next loan that ended up in the court system was extended on Sept. 13, 2013: a $400,000 loan at 18 percent from EOT Advisors in Tarrant County, Texas."
The classic pattern - get into money trouble, and you dig yourself deeper trying to get out. I almost forgot about the "who cares about hockey?" strike when the NHL went on strike and no one gave a shit. These guys really think they are worth millions - but when given millions, they spend it like water.
It is hard to feel sorry for Mr. Johnson. He has $5 million left on his current contract. At that point, he will be 32 years old and it is possible his career will be all but over by then. Five million dollars, of course, is a lot of money - more than enough for most of us to live quite comfortably for the rest of our lives.