NHL Superstar Files for Bankruptcy

Evander Kane has not watched any of my videos on how athletes can avoid going broke unfortunately. He recently signed a $49 million contract over 7 years. But he found himself in the news last night.

Kane, Sharks Sued by Centennial Bank. I was confused. Why would the San Jose Sharks be getting sued as well as the player?

Centennial Bank sued Evander Kane and the San Jose Sharks on Thursday in Florida federal court, claiming Kane owes them more than $8.3 million in principal and interest.

Using spotrac, we can see that Evander has earned $55 million in his 12 season career from salary alone.

---------- CONNECT WITH ME ----------
★ Instagram ★
↪ https://www.instagram.com/spencercornelia1/

★ Facebook ★
↪ https://www.facebook.com/spencer.cornelia/

★ LinkedIn ★
↪ https://www.linkedin.com/in/spencercornelia/

---------- YOUTUBE FINANCIAL ADVISOR PLAYLIST ----------
https://www.youtube.com/playlist?list=PLJ6shAyi_8epqc98p-vS_GmcvGK1HTxbE

According to Centennial, Kane received an initial $3.9 million loan from the Arkansas-based bank for business and investment opportunities in September 2018. The loan was secured by his Sharks contract, a seven-year, $49 million dollar pact inked that May. Additional loans were secured against Kane’s contract over time.

This is fascinating. I’ve never heard of this being done before. When he signed the 7 year, $49 million deal with the Sharks in 2018, Evander had already earned over $32 million from his previous seasons in the NHL. I feel like the bank during the underwriting process should have maybe dug a little deeper into his finances. Major red flag if someone who just earned $32 million is needing to use future paychecks to pay off a new loan of only $3 million.

Maybe I’m clueless to this world of million dollar investment loans, but shouldn’t the bank be worried if Evander has to bring the Sharks representatives into the meeting rooms to close on a loan? I would have loved to be in that meeting room. I’m curious who represents the Sharks in this process. And also why would anyone from the Sharks agree to this setup? I have so many questions. They are now liable for the debt that Evander is taking on.

Why does a professional hockey team jump into a loan with one of its players? I don’t see any benefit to the Sharks signing documents to assume the debt for a current player. Because they are assuming the debt. I understand that a contract can serve as collateral to take on debt, but this means Evander had to have been taking on unsecured debt and lots of it. And the only collateral he had was future earnings. Which then makes me think he doesn’t own any current assets that the bank sees as valuable. I have so many questions.

Per the complaint, the San Jose Sharks were contractually obligated to pay the bank back directly from Kane’s wages.

This makes no sense to me. The Sharks are investing in Evander Kane by offering him a 7 year, $49 million contract right? They offered the contract in 2018. And in 2020, only three years later, Evander needs them to direct his paychecks to the bank to pay down a loan.

Remember that professional sports are no different than what most people have as jobs. The players are employees and the team is the employer. If you went to upper management at your job tomorrow and asked them to no longer send your paychecks to your bank account, but to send it to a specific bank directly to pay down a loan, do you think management would be like oh that’s fine, can you send over the routing information?

Of course not. They’d be confused. And then they would be worried that you’re in financial trouble. This is no different. But Evander is a $49 million investment. Did they not pull him to the side and ask if he needed some guidance?

He listed liabilities at $26.8 million and assets at $10.2 million, the article reported. The assets include three homes for Kane.

He received $3.9 million for business and investment opportunities in September 2018. But now he owes $8.3 million. My concern is that Evander got in deep into some bad deals, took out more loans, leveraged his future earnings even more, and then got hit with some losses. And then when his paychecks stopped coming in, he went oh shoot I can’t pay this debt.

Themes:
Evander Kane
evander kane bankrupt
why do professional athletes go broke
why do athletes go broke
personal finance
how do athletes go broke
why most athletes have no money
why 80% of athletes go bankrupt
how to invest
personal finance 101