by FOX Business’ Connell McShane reports on a firm aiming to change the way pro athletes invest and how it could transform the NFL’s ownership landscape.
Professional athletes have long made more money than the average American, but their salaries have skyrocketed in recent years.
Green Bay Packers’ Aaron Rodgers, for example, is the NFL’s highest-paid player, set to make nearly $60 million next season. Joe Burrow, the young quarterback for the Cincinnati Bengals, has signed a four-year, $36 million deal. NBA’s Blake Griffin and tennis star Sloane Stephens rake in millions each season – and have one unique thing in common.
They are clients of Patricof Co, the investment firm run by Mark Patricof that aims to help these ultra-rich athletes change their capital game by picking smart bets.
Patricof recently made some investments in farmland in Iowa. Stocks and bonds are also among the athletes’ portfolios, according to the founder, who also cited stocks from hot sauce brand Cholula to SpaceX.
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“What can we do to give these athletes the best opportunity to create long-term, sustainable value from their investment portfolio?” Patricof told Connell McShane of FOX Business last month. “We want our athletes to be deeply connected to the investments they make, so we don’t take anyone’s money on a deal unless they understand the investment, unless they respond to it.”
With clients like Blake Griffen, Sloane Stephens and Aaron Rodgers, Patricof Co founder Mark Patricof hopes to leverage their capital and achieve greater financial success. (Getty Images)
Griffin, a Boston Celtics power forward and center, explained how he selects investments and was interested in learning more about allocating capital.
“Do you like this product? Do you really believe in the product? It’s hard to get excited and stand behind something and add value to something that you don’t really care about,” Griffin told McShane. “You hear the horror stories of guys who spend all their money – there was a documentary about all the guys who went broke three years after they stopped gambling and that was terrifying to me.”
He claimed his mother was always fiscally responsible and even participated in Griffin’s early financial meetings and negotiations as an NBA player.
“I ended up thinking, ‘Okay mom, I got it from here,’ but I appreciate that about my mom because she took care of me,” he said.
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Tennis pro Stephens’ husband – American soccer player Jozy Altidore – gave her a bunch of shares for her recent birthday, she also told McShane, encouraging a deeper interest in investing in companies with which she is allied.
“They were all my favorite companies, just a random number of companies. My favorite place to eat is Potbelly, which is a sandwich shop, so it was Potbelly and Starbucks and McDonald’s,” Stephens said, which eventually inspired her to invest in the Kodiak brand of food.
“Why not invest in something I believe in?” said the former Wimbledon and US Open champion. “And I think after meeting everyone at Kodiak and being on the advisory board there, just being able to have input and seeing where they’re going with the brand takes it a level further.”
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Patricof predicted that one of his most famous clients, Joe Burrow, NFL Draft No. 1 first round pick 2020 who will one day become a billionaire. The best strategy for a young player with big deals like Burrow is to “take it slow,” the founder advised.
“Blake was far from knowing what he liked and didn’t like, so in some ways it’s very different,” noted Patricof. “But if you think of Joe Burrow today versus Dan Marino 30 years ago, Joe will be able to do anything he wants to do in the world and he has the intelligence to do it, so there you go Now it’s just a matter of creating the right opportunities.”
That right opportunity, the Patricof co-founder pointed out, could one day be team ownership for his clients.
Former New York Yankee CC Sabathia is a customer of Patricof Co. | Getty Images
“I think if you love sport and understand the underlying value of sport, ownership is a natural place to develop. You’ve seen how the NBA has completely changed the way it’s owned over the past 20 years. Now they come from finance and technology,” he explains. “The NFL is still a bit of an old world and I think that’s going to change again in the next 10 years and we’re going to see a whole new diversity of owners and they’re going to come from different backgrounds, including sports.”
When former New York Giants quarterback Eli Manning retired from the game, he was making more money than any other NFL player in history. While not a Patricof customer, he recently clarified that he would one day investigate team ownership.
“I would really only be interested in the New York Giants,” Manning told McShane at a recent event in New York, “and I don’t think they’re going to be for sale anytime soon, and I don’t think quite the 6 billion have dollars it would cost to buy them.”
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Patricof remains convinced that after they eventually retire to the sidelines, other athletes like Griffin, or even a group of his clients, will be interested in becoming a professional sports team.
“I think it’s wise. It’s what we know, it’s what we’ve been doing all our lives. So it goes back to value creation,” Griffin said. “If you can invest in something like this and be part of an ownership group, I think you bring an insight that not many ownership groups have. And I think people are more willing to involve you in these deals.”
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