It’s an age-old story: A sports star who once commanded millions goes broke in retirement. Alex Rodriguez had heard that cautionary tale and, early in his career, he decided he wouldn’t let that be his fate.
Rodriguez, the Major League Baseball all-star better known as A-Rod, knew the statistics: The average professional baseball player’s career is 5.5 years. Roughly 80 to 90 percent of lifetime income is earned before he turns 30. And of the 750 players in the MLB, less than 5 percent have a college degree.
“Just with those three numbers, those metrics, I would short the stock,” said Rodriguez, 43, speaking on “The Corp” podcast. “I wanted to put a system in place that would counter that.”
That set him on a path to an investing career and, ultimately, to his current position as CEO of A-Rod Corp, the business and real estate investment firm he founded.
The company was born when Rodriguez, then in his early 20s, purchased a single duplex in Miami. To finance the down payment, he sold two Rolex watches and raised about $12,000 selling autographs.“Then I was off to the races. I had my first duplex—a couple of years later I sold it for double. I said, man, this is almost as good as baseball,” recalled Rodriguez, who will give the closing keynote address during ACG’s InterGrowth conference in Orlando.
He continued to invest in real estate and built a portfolio of more than 12,000 properties across the Southeast—a successful start that laid the groundwork to expand into other industries.
Off the Field
Rodriguez’s baseball accomplishments are legendary. He hit 696 home runs over his 22-year career and signed a record-breaking $275 million, 10-year deal with the New York Yankees. He is a three-time MVP and a 14-time all-star.
While Rodriguez’s baseball career was soaring, A-Rod Corp was building a business empire off the field. Today, the firm’s investments span a range of industries, including real estate, sports and wellness, media and entertainment.
“When I grew up, sports, entertainment and technology were all three different silos. I think today they’re all one. They all complement each other extremely well,” he said during an interview with Middle Market Growth.
A-Rod Corp’s sports and wellness holdings range from fitness concepts to consumer-focused wellness products. In 2017, the firm bought the rights to develop UFC-branded gyms throughout Miami-Dade County. The fitness centers capitalize on the growing interest in mixed martial arts and the increasing market share of boutique fitness clubs, which accounted for 42 percent of club members in 2016, according to the UFC Gym website.
To provide gym-goers with a way to keep their sports drinks cold, A-Rod Corp invested in Ice Shaker, a brand of insulated, stainless steel bottles founded by former NFL player Chris Gronkowsi and his brothers—including New England Patriots tight end Rob Gronkowski. The brothers pitched the investment to Rodriguez during his debut on ABC’s “Shark Tank.”
The firm has also bet on up-and-coming verticals. In October 2017, A-Rod Corp invested in NRG eSports, a platform featuring competitive esports and live gaming content channels. Esports is expected to become a $1.5 billion industry by 2020, according to Deloitte.
When it comes to more traditional sports investing, Rodriguez says he wouldn’t rule out buying a professional sports franchise.
“You never say never. It’s always been one of my long-time dreams, to own a team,” he said. Although he has evaluated several opportunities, none has been a fit. “It would have to be an extraordinary opportunity for me to be able to own a team and run a team. Because that would be my full-time job, 24/7.”
Unlike many investing companies, A-Rod Corp has leaned heavily into its own brand, and that of its CEO.
The firm is active on social media— its Instagram account has more than 42,000 followers and frequently posts photos of its founder. Rodriguez is also featured prominently on the A-Rod Corp website, where he’s shown boxing at a UFC fitness center and lifting kettlebells at a TruFusion studio, another A-Rod Corp portfolio holding.
“We’re in different world today in 2019 than we were in 2009 or 1999. Institutions really grew up by less is more: Don’t let anybody know your name. Do the deals very quietly,” Rodriguez said. “While a lot of those fundamentals still apply today, I think we live in a world of storytelling and one of our superpowers is our global reach.”
Just five years ago, Rodriguez’s brand power seemed to be waning. His use of banned substances led to a suspension for the 2014 baseball season, and news of the rules violation tarnished his reputation.
Flash forward to today, and Rodriguez’s comeback is undeniable. In addition to leading A-Rod Corp, he provides commentary for Fox Sports and ESPN. He co-hosts Barstool Sports’ podcast “The Corp,” appears on “Shark Tank,” and is frequently photographed at events with fiancé Jennifer Lopez.
His second act comes at a time when the line between sports and business has blurred, the result of big data and the popularity of a “Moneyball” approach to building teams.
“When you think about analytics, they’ve taken over sports,” he said. “We’re taking great talent from people who could be at Blackstone and BlackRock and Apollo—many private equity and Wall Street businesses— and today they’re running Major League Baseball franchises.”
A-Rod Corp itself has built a bench of experienced financial professionals to work as part of the firm’s 10-person team, led by its founder. Rodriguez’s career as a professional athlete armed him with not only financial capital and brand equity, but a unique perspective on trends shaping the industries in which A-Rod Corp invests—particularly the one that made him a star.
“There are opportunities all over the place in sports,” Rodriguez said, “and there will continue to be as television and live events become even more valuable in the future.”
This story originally appeared in the May/June print edition of Middle Market Growth magazine. Read the full issue in the archive.
Kathryn Mulligan is the editor-in-chief of Middle Market Growth.