#GRONKonomics101

When most people think of New England Patriots’ tight end Rob Gronkowski, they think of a fun-loving, goofy party boy, who likes to cause a little mischief from time to time…not many people think “financially savvy.”

robside

In June 2012, the New England Patriots and Rob Gronkowski (hereinafter, “Gronk”) agreed to a six-year, $54 million contract, including an $8 million signing bonus, $13 million guaranteed, and an average annual salary of $9 million. Now, we all know that Gronk loves a good party, and those parties cost money – wild celebrations, legendary spring breaks, his very own party bus (Gronk Bus LLC), his upcoming party cruise ship that leads to a party on “Gronk Island,” and the list goes on!

Good thing he has this epic contract money to support his party habits, right???

Well, actually, that assumption would be #wrong…

This past summer, Gronk revealed his new book, “It’s Good to Be Gronk,” where he revealed his biggest secret of all: he is three years into his six-year contract with the New England Patriots and has yet to spend a dime of that $54 million. An excerpt from his book reads:

“To this day, I still haven’t touched one dime of my signing bonus or NFL contract money. I live off my marketing money and haven’t blown it on any big-money expensive cars, expensive jewelry or tattoos and still wear my favorite pair of jeans from high school… I don’t hurt anyone.”

So aside from being super fun to party with, we all know that Gronk is amazing at playing football (definitely wish I had him on my fantasy team this year). But even I did not think it was possible that 26-year-old, fun-loving Gronk is even better at playing the endorsement game. I am sure most of you have seen how Gronk successfully brands himself by maintaining a strong presence on social media platforms, such as Facebook and Twitter.

Gronk has also teamed up with brands such as Dunkin’ Donuts, BodyArmor sports drinks, Zubaz sweat pants, Nike (if you have not yet seen the “Snow Day” commercial, click here – I highly recommend it), and more.

While Gronk has been smart to “live off [his] marketing money” and to save his football contract money, other NFL players have not been as insightful with their financial decisions. There has been no shortage of NFL players spending all of their cash almost as soon as they get it – nearly 16% of NFL players (roughly 1 out of 6 players) drafted between 1996 and 2003 declared bankruptcy within 12 years of retirement. Moreover, poor money management is a problem that plagues athletes in all sports across the globe and can be attributed to many factors, such as lavish spending, divorce or unexpected injuries. When all is said and done, though, a lack of financial planning is the ultimate downfall for athletes.

Gronk, on the other hand, has had the foresight and good sense to work with a financial advisor to assist with his wealth management. Below is an example of an investment portfolio that can preserve capital for individuals (i.e. professional athletes) with “Blue Chip” earnings power, ranging from $50 to $100 million:

blue-chip-cap

Recently, Capital One has taken advantage of Gronk’s saving tactics by having Gronk offer financial advice to consumers about things like sub-savings accounts and emergency savings funds, which leads me to….

gronk_financial

Key Takeaways from #GRONKonomics101:

  1. There is more to Gronk than just a great football player with a mischievous smile that loves to have fun and party.
  2. NFL Players, and athletes in general, can learn a lot from Gronk and his money saving tactics, such as:
    • If an athlete is given the opportunity to make money through an endorsement deal, they should do so wisely and use such remuneration for spending money as Gronk has done (while wisely saving contract-related income).
    • If they haven’t done so already, athletes should really seek out a financial advisor to help with investing and saving endeavors as well as to prevent the earnings depletion that has plagued so many athletes before them.
  3. Marketers who partner with celebrity endorsers should take a lesson from Capital One’s venture with Gronk by creating campaigns with a unique and honest angle that stay true to the brand’s identity.
  4. If you are not already a fan of Gronk, you should be now…just saying.

And now concludes my #IS6621 lesson on #GRONKonomics101. I hope you have all learned something new and have smiled or laughed at least once after reading my blog post (hopefully more than once, but I know I am not that funny).

I hope all of you and your families have a wonderful Thanksgiving – eat a lot of turkey etc., drink your libation of choice, be merry with friends and family, & party like Gronk!

11 comments

  1. Great post, Jaimie – I think you should tweet this at him in the hopes that he’ll join us as a guest speaker in #IS6621! (One can dream, right?) I think a lot of celebrities use their popularity on social media for financial gain, but somehow when Gronk does it, I don’t view him as opportunistic, (The Kardashians, on the other hand, drive me crazy). I respect that he’s stayed true to himself, managed his money responsibly, and looked just plain adorable at every step of the way. Way to go, Gronk!

  2. Great post Jaimie! I completely endorse @erincollinsmba idea to tweet this post to Gronk and get him to come to our final class. That would be a victory of social media if there ever was one. To be honest, I never imagined that Gronk would be the poster boy for smart decisions and financial acumen. Its a great lesson for all athletes and pop figures, movie stars and anyone who knows that the money can go as fast as it comes. I’m surprised and yet very impressed with the way Gronk has managed to stay humble with him money and not spending it on lavish lifestyles and using it to be happy and spread his Gronk parties everywhere. Hope we get invited to one someday!

  3. Wow Jaimie. Thanks for Sharing. Im definitely a Gronks fan now more then ever before. Its really fascinating to see how Gronks lives off from his marketing money. And the fact that most NFL players spend their money as soon as they get it , is even more fascinating. 1 out of every 16 players get bankrupt after retirement, wow! You think these people have more then enough money for the net few centuries, but I guess the way they live their lives makes that happen. Whats more interesting then that is how Capital One used Gronks in its financial ad. I loved your takeaways and the pictures you posted. The topic was interesting, new to me and light. Thanks for sharing and happy thanksgiving to you and to your family too.

  4. @jaimiebcmba laughed and smiled as soon as I started to read this post. I think even I wasn’t a crazy Patriots fan I could still find a way to appreciate Gronk both as a Football player (let’s be honest he’s the greatest TE ever) and a role model for other athletes. I was actually surprised to see that only 1 out of 6 football players during that 8 year period declared bankruptcy. I expected the number to be much higher.

    I wonder how social media has helped Gronk be the marketing machine for brands that he is now. Athletes have huge followings and I think other athletes can learn from Gronk on how he manages to stay true to himself (the party side) but demonstrate that he can use his following and celebrity to earn money. I see a film career in his future. Definitely post retirement many years from now. Thanks, Gronk!

  5. Growing up in the Boston area I’m a fan of all Boston-based sports teams, so clearly I’m a huge fan of Gronk. I’d also heard, probably on SportsCenter, that Gronk hadn’t touched a dime of his football money, which is really impressive given how frivolous professional athletes often are with their money. However, when I think of Gronk I don’t think of his financial acumen … I think of his larger than life personality, hardcore partying, and that he’s a total meathead (I say that with love). For me there’s a total disconnect between Gronk and Capital One and I’d be shocked if Gronk convinced a single person (that wasn’t a Patriots season ticket holder!) to invest with Capital One. In this case Gronk’s persona far overreaches what he’s done from a financial standpoint and I think Capital One would have been better served using another spokesperson.

  6. Great post! There is a 30 for 30 called Broke that talks about the ways professional athletes have lost their money. It is pretty amazing that athletes making this much money can lose it all in a matter of years. Gronk is a great example of a fun and energetic guy that knows how to manage his money for his future life outside of the NFL. In a sport that often leaves players with lasting injuries, it is important for NFL players to plan for expenses outside of the few years they are in the NFL. Because of his personality, Gronk is a marketers dream, so it is not surprising that he is raking in the money from endorsements. I think it is interesting how Capital One is using someone who is financially savvy themselves to promote better savings and financial responsibility. I am interested to see what Gronk chooses to do after his NFL careers ends, because someone with his personality could make be anything from an announcer to a financial advisor. Overall, this was a fantastic post about a great player.

  7. Great (and funny!) post Jamie! Before reading your blog I would have made all the wrong assumptions about Gronk and his money spending habits. I can imagine it would be very difficult to resist the temptation to buy all of the luxurious goods his teammates enjoy with their contract income, so I think Gronk deserves an immense amount of credit for keeping his finances in order even when there is millions of dollars sitting in his bank account. Like you said he is incredibly smart to limit himself to marketing income and to listen to his financial advisor about saving, investing, and spending, etc.. Hopefully other pro-athletes will follow in his foot steps and save their contract money for their retirement days. After all we can all take a page from Gronk’s book by realizing it doesn’t millions of dollars to have fun and stay true to yourself. Thanks for sharing the new and fun insight into a fan favorite Patriots player!

  8. Awesome post! It is always cool to see how athletes utilize their massive paychecks. Gronk is one-of-a-kind both on and off the field and his book has recently made my “To Read” list. I used to not like him but I have come to realize that most of my disdain was from pure jealousy. As you mentioned, there are countless athletes who do a great job at being (and remaining) financially competent throughout their years. Gronk is put in a special situation because of his personality and outstanding talent – thus putting him in the position to land big time endorsement deals and not have to spend a dime of his NFL contract. However, I do think professional athletes, especially with their lofty league minimums, should consult financial advisors so that they ensure some stability.

  9. Awesome post! I’m an huge follower of sports in general and one things that comes up every now and then is former players running into financial trouble because of poor money management. It’s great to see players who are taking care of themselves and looking out for their future. With research showing the amount of players running into financial trouble, more and more players are starting to be better about financial management. There is an example of a player drafted this year who has budgeted to live on $60K a year with his wife to ensure financial stability.
    Gronk is a huge personality, and companies are leveraging it. You can see Gronk all over social media and advertisements; its great to see him managing his success!

  10. Nice post. Always nice to find a celebrity who actually has some common sense.

  11. Cool post, Jaimie. I knew that Gronk had a very strong SM game, but I did not realize it was generating the kind of income his lifestyle indicates. Very cool look at the marketing investments made in SM.

%d bloggers like this: