During the continuing economic crisis, we are all enduring, many hardworking people have lost much. The number of nationwide individual foreclosure and bankruptcy filings has been staggering. I believe I”m safe in stating that the majority of the bankruptcies and foreclosures have been experienced by couples and single householders who were never considered to be super-wealthy. But, I have found it interesting that there have been quite a few stories making the news lately concerning bankruptcy filings by celebrities and athletes who, at least during part of their career, had some, if not many, multi-million dollar earnings years.
From my cursory look into this situation, I have been able to segment these bankrupt stars into two major categories. Obviously, the economic downturn has impacted everyone, but there are those who are addicted to spending money and living a lavish lifestyle that depletes their wealth quite rapidly and there are those who have lived more modestly but were really hurt by the recession.
Michael Jackson had not declared bankruptcy and, if he had lived, he might have been able to avoid it by selling off more of his assets. Also, the income he was going to earn in the near future from the London concerts that were already sold out at the time of his death would have helped. It was clear that Michael Jackson lived a lifestyle many believe was fitting for a king. He often went on multi-million dollar shopping sprees. It was reported that he had debts of more than $400 million dollars when he died.
Of course, Michael Jackson was basically one of a kind. On a more down-to-earth level, on July 7, former Major League Baseball All-Star player Lenny “Nails” Dykstra filed for bankruptcy in Los Angeles. Dykstra listed assets of less than $50,000 and liabilities of $10 to $50 million. Lifestyle issues appeared to be Nails” problem. He had a mansion, a jet and a Rolls-Royce. He probably lived a few notches above his status. He had a 12-year Major League career and is not likely to be voted into the Hall of Fame.
In the other grouping, we have former NFL quarterback Bernie Kosar who filed for bankruptcy protection in June. Kosar”s legal paperwork indicated assets of $1 to $10 million and liabilities of $10 to $50 million. He owed the Cleveland Browns $1.5 million, his ex-wife $3 million and one bank more than $9 million for poorly timed real estate investments. Last year his steakhouse business closed. Poor Bernie, a guy with a double-major in finance and economics from the University of Miami, got clobbered by the bad economy. His divorce didn”t help, either.
One former athlete hardship case I recently read about was the one that bothered me the most. It involved Hall of Fame football star from the Green Bay Packers, Willie Davis. Davis was a fearsome defensive end for the Packers teams coached by Vince Lombardi. When his career was winding down he went back to school and got an MBA from the University of Chicago and became quite a successful businessman. The key to the Davis story is that he played football when salaries were not astronomical numbers like they are today. He never earned more than $50,000 per year as a top-name football player.
The recent poor economy robbed him of $9 million of the wealth he had struggled to accumulate. He was the second-largest stockholder in the Culver City, California bank that failed.
I can”t bring myself to feel too sorry for those who made lots of money and squandered it on the high life. I do feel badly for those who lived within their means and still lost everything.
It is important for folks to realize that bankruptcy isn”t the end of the world, though. It might surprise you to know that two former presidents, Thomas Jefferson and Abraham Lincoln, both filed for bankruptcy before becoming the president of this country. There is always hope.
Gary Dickson is the editor and publisher of the record-Bee. He can be reached at gdickson@record-bee.com or 263-5636 ext. 24.
