Friday, November 6, 2009

What Would You Do?!? - A Fool And His Money Shall Soon Part Ways.

Another week, another broke athlete story. Ya'll know I hate quoting stories so heavily, but I'll make an exception since this needs to be fully digested.
Several National Basketball Association sources, among them friends and former teammates of former Celtic Antoine Walker, said the 33-year-old player may well have squandered much of his $110 million-plus in career earnings. Without a team or contract as the new NBA season begins Tuesday, they’ve heard that Walker is casting about for cash to pay off his debts and is looking to catch on with a team, perhaps even overseas.

A Boston Globe review found that, during the last seven months, Walker has been pursued by multiple financial institutions for unpaid debts totaling more than $4 million. Court documents filed in Illinois and Florida reveal Walker was named a defendant in three recent debt-related civil cases, in addition to the ongoing check-kiting case. His former agent is also after him, citing a heap of unpaid fees.

Walker declined to comment through his agent. His lawyer did not return calls. Walker faces a court hearing this Thursday in Las Vegas on three felony counts of drawing and passing checks without sufficient funds with intent to defraud. As of Friday, a representative for the Clark County district attorney’s office in Las Vegas said, Walker had made no move to pay up or otherwise settle the case. Each of the charges carries a possible one- to four-year prison term.

Antoine Walker entered the NBA’s maximum-contract financial elite in 1999, the year Boston signed him to a six-year, $71 million deal. He was to be the talent and star-presence the Celtics would rebuild around, a big man with a smaller man’s ball-handling skills. And at 22, he would instantly be very rich, with a champion’s wallet even if not yet a champion’s game.

If Walker’s story raises the question - How could anyone burn through so much money so fast? - it also suggests an answer. He is one of those people who simply can’t say no.

During his heyday with the Celtics, Walker played and lived with brash confidence. On the court, there were the reckless 3-pointers, the improbable game-winning (and sometimes game-losing) shots, the trademark wiggle as he celebrated his biggest baskets. Off the court, there were the cars, the jewelry, the houses, the suits, the gambling. He liked to move in an outsized entourage; his mother estimates that, during his playing days, he was supporting 70 friends and family members in one way or another. And speaking of his mother, he built her a mansion in the Chicago suburbs, complete with an indoor pool, 10 bathrooms, and a full-size basketball court.

After his July arrest, Walker did all he could to keep up appearances.

He posted $135,000 cash bail. The next day, he went ahead with the celebrity event he was in town for, the American Century Golf Championship, where he kept company with actors, all-stars, gold medalists, and Hall of Famers.

Behind the celebrity smiles, the picture was much grimmer. Walker managed to pay down just $178,000 of his bad-check debt before being charged, said Clark County prosecutor Bernie Zadrowski. The total being sought by the DA’s office, including court costs, is now $905,050.

And he faces a host of other claims. This summer J.P. Morgan Chase Bank, Wachovia Bank, and American Express Centurion Bank won decisions against Walker. He was ordered to pay J.P. Morgan Chase $1,571,771.47 and Wachovia $1,540,929.14 - both for failing to pay off sizeable promissory notes. From court documents, the loans appear originally related to Walker’s nonbasketball business endeavors.

A default was entered in the American Express case with $53,321.71 in overdue credit card charges at stake, including some that fit the picture of a free-spending star - an $1,843.45 dinner, with a $350 tip, for instance. Or, two nights at the Mandarin Oriental in Miami for $2,198.04. And Walker, remarkably, appears to have authorized five people to make charges on his card, not a strategy most personal finance professionals would recommend. Many of the charges appear to have been rung up by another individual, but Walker is on the hook.

Additionally, in March, an arbitrator ruled that Walker owed his former agent, Mark Bartelstein, more than $450,000 in unpaid fees. Bartelstein declined to comment about the matter.

Financial advisers often caution professional athletes to look at the big numbers on their contracts and subtract half for taxes. That rough math would have left Walker with approximately $55 million in career earnings to spend. NBA agents and players contacted for this article say an annual “burn rate’’ of $2 million to $4 million isn’t unusual for the living expenses of an elite player. With Walker’s taste for the finer things, former teammates suspect he fell on the higher end of the scale. In the 10 years since his first max-contract, that could account for about $40 million of Walker’s total wealth.

He was always high-end. And eager to show it.

Living at the Bishops Forest condominium complex in Waltham during the Celtics season, Walker turned the pavement surrounding his home into a virtual luxury car lot - two Bentleys, two Mercedes, a Range Rover, a Cadillac Escalade, a bright red Hummer. Often, the vehicles were tricked out with custom paint jobs, rims, and sound systems at considerable added expense. He also collected top-line watches - Rolexes and diamond-encrusted Cartiers.

Then, there were the custom-tailored suits - closets full of them, including the set he ordered for his first playoff run in 2002, enough so he wouldn’t wear a suit more than once during the postseason run. When the Celtics officially hired Jim O’Brien as head coach in 2001, Walker had his tailor make three suits and presented them to O’Brien.

When it came to his Celtics teammates, Walker took good care of them on the road. It wasn’t uncommon for Walker to hire limos to take out groups of teammates. And Walker always paid for the big dinner bills.

Walker’s extravagant ways didn’t stop in his post-Celtic years, when he played in Dallas, Atlanta, Miami, and Minnesota before his final NBA deal was bought out by the Memphis Grizzlies last year.

When he had money to spare, Walker also enjoyed giving it away, particularly to children dealt bad hands in life. Raised by a single mother on Chicago’s South Side, he knew a lot about that. He established a charitable organization, The 8 Foundation, to channel his philanthropy. He arranged for Christmas gifts and courtside seats at Celtics games for underprivileged youngsters, paid for new uniforms and travel to tournaments for youth basketball teams, and conducted free basketball camps.

He also rewarded loyal family members and friends with expensive gifts. Shortly after being drafted, he gave his best friend a new car. A Mercedes sport utility vehicle parked in the driveway of his mother’s home was a gift from Antoine to his younger sister. And early in his NBA career, he paid off the debt his mother accumulated sending him to Catholic schools. He finally received his high school diploma when he took care of his overdue tuition.

“Antoine is a sweet person,’’ said Diane Walker. “Everything we have is pretty much a gift from Antoine.’’

But with the legal system closing in, and slim prospects of extending his NBA career, the stakes are now higher than ever for Antoine Walker. With few moves left, the question now is how, or if, he will ever get his wiggle back.
When will these guys learn? When you clear $50M over a 10 year period, your focus needs to simply be on saving money, not making more. Walker should have been set for life, as should at least 3 future generations of Walkers with that amount of money. Instead, barely a year after "retirement" (it should be noted, Walker was such an a-hole and locker room cancer that no team even invited him to camp this season) Employee #8 finds himself broke, busted, and possibly headed to jail.

Most interestingly, Walker didn't squander his fortune the way most athletes do with multiple baby mamas, a devastating divorce, or turrible business investments. Nope, he did it the old fashioned way, spending (and gambling) recklessly and taking care of as many as 70 people financially at one time. Let that sink in. This guy's mama says he was essentially paying the bills of everyone at his family reunion. I don't know whether to call this incredibly generous or incredibly stoopid.

One thing's for certain: I doubt any of those folks are going to sell the houses, cars, and watches he bought them to help pay his legal fees. And that's just sad.

Question: What Would YOU Do? How would you handle the pressure of family members asking for a handout? Be 100% honest. If you had been poor your entire life, then signed a $110M contract, would you be that much better off than Walker is right now?

For Walker, financial fouls mount [Boston Globe]

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