A-Rod, A Franchise, A Next Career: 1851’s Exclusive Interview with Alex Rodriguez
On November 15, 2007, the New York Yankees agreed to a 10-year, $275 million contract with slugger Alex Rodriguez that would put him in pinstripes until the age of 42. On August 12, 2016, Rodriguez hung up his cleats at the age of 41. With a resume full of Hall of Fame worthy accomplishments—including 696 home runs, 3,115 hits, 2,086 RBI, 14 all-star appearances, three MVPs and a World Series ring—it would have been enough to make nearly anyone call it a day, find a beach and relax.
Instead, Rodriguez decided to start his second act, reforming his notoriety as a business leader instead of a baseball player.
In a sports world where the reality is that half of a player’s income goes to taxes, five percent goes to an agent and 10 percent goes to management, some athletes spend money like they are holding onto 100 percent of their earnings. This quickly depletes their wealth, Rodriguez says. That’s why very early on, Rodriguez understood that he needed to make investments off the field, stating that if he bought one asset every year for five years, by the time he was 35 or 40 he would have five assets that would throw off cash, thus protecting his money. According to Celebrity Net Worth, as of April 2017, Rodriguez was worth $300m, proving that he put his money where his mouth was.
During his 20s, Rodriguez started the process of protection of investment, quietly building an investment portfolio that launched as A-Rod Corp in 2003. With over 70 percent of athletes going bankrupt and the average baseball career lasting just 5.6 years, Rodriguez simply decided not to be a statistic.
“It started out of fear,” he told 1851 in an interview. “I was always planning for life after baseball, even in the middle of my rookie season. I saw so many athletes go from rags to riches back to rags. I would see their lives and careers change because of one injury. I saw a lot of athletes go from the penthouse to the outhouse. I wanted to be ahead of the game. All these things started creating fear—that’s why I started A-Rod Corp.”
Today, the holding company of the famed-athlete identifies, originates and manages investments across a broad array of industries, including real estate, sports and wellness, media and entertainment. For Rodriguez, today, business is greater than baseball.
While Rodriguez admittedly misses the clubhouse, comradery and the game, he is now working on his second act as a business professional. Whether he’s working on his personal brand through an extremely open and active Instagram profile (@arod) or humanizing his personality as a commentator on Fox Sports or as a cast member on Shark Tank, the term “athlete” is quickly diminishing while the suit is taking the forefront.
According to a Fortune.com story from July of 2017, Lennar CEO Stuart Miller, J.P. Morgan Asset Management CEO Mary Erdoes and Chicago White Sox owner Jerry Reinsdorf say Rodriguez has an “incessant curiosity”. This curiosity has led A-Rod, the businessman, to franchising, buying into an emerging concept called TruFusion, a niche fitness concept that blends yoga, Pilates, barre and cycle.
“I found myself going to Vegas a lot and I just wanted to organically find a good place to workout and train,” he said. “I looked around for a workout that would be good for me, since I had knee and hip surgeries, and couldn’t find anything. A friend of mine recommended that I try TruFusion, and the minute I walked in, I fell in love with the concept.”
Rodriguez says it’s the variety of workouts that TruFusion brings to the table that ultimately sold him on the concept as a consumer. He added, “I don’t like one trick pony fitness gyms. If I have to be on a treadmill, it just doesn’t function for me because of my knee injuries and hip surgery. I like the diversity of not having to run every day, seven days a week. I like having options—I call it a hybrid between Bikram yoga and Barry’s Boot Camp.”
After falling in love with the product and understanding the business landscape of other niche fitness brands like Orangetheory, Rodriguez’s curiosity as a businessman continued to peak.
“I fell in love with it—going there seven days in a row, and sometimes going back twice a day,” he said. “My body started feeling so good, [the workouts were] so nurturing and my bones—it just felt really good. For me, the things I value most are flexibility, core and weight training. That trifecta was awesome. Then I started thinking about the places I spend most of my time – New York, Miami and LA. I wanted to know if [TruFusion] was in those markets. I quickly found that they only had three locations open, and I said, ‘Boy, we could help this brand.’ The first thing I thought was that can we build one out in LA, so I spoke with the brand’s management. I found out that there was maybe an opportunity to buy holding company at the top to help them strategize how to promote this. They had already done the hard part in creating a great model and great substance. What they needed were eyeballs to spread the word, and I knew A-Rod Corp could help solve that challenge.”
Every franchise brand has the same challenge of placing eyeballs in front of the franchise opportunity. With Rodriguez’s personal brand and business operations, he had something intangible to give to this emerging brand. Now, he sees global opportunities for TruFusion.
“People may become interested in learning more when they know I am involved, but when you are looking to operate a business, people will still look at the fundamentals and metrics. If those metrics make sense, then people will look at it. If they don’t, then no matter who is connected, people won’t buy,” he said. “We know there is a certain amount of leverage that I will have, but we also don’t want to overuse it. We have a great brand and a great management team that helps manage it for you. We just need to find a good location, leads and local operators. It’s pretty much McDonald’s— [TruFusion] will take care of the rest.”
Rodriguez said that while he truly sees success in TruFusion, the growth of the brand cannot be forced.
“It only works if it’s completely organic. If we are passionate about it, then it will sell itself,” he said.
And the same goes for the next at-bat in his career – his turn at crushing business records.
“I hope that we continue to be in a position to make great investments and to buy great companies with exceptional, experienced management. We like businesses with more than capital,” he said. “Much like Berkshire Hathaway, we are going to continue to be a portfolio of great real estate and great companies. We are going to continue to take that capital and reinvest it and do it with exceptional, talented people that also have great devotion. We are in a fortunate situation where we can hand-select companies we want to work with. Talented, educated individuals with great attitudes are who I want to deal with every day.”
Rodriguez continued, saying, “My life, now, is about living a long, healthy lifestyle and TruFusion fits in to make my life better.”