Did Superstar QB Tom Brady lose his mind by taking a paycut? I don’t think so.
Tom Brady, long-time quarterback for the New England Patriots, is considered the best quarterback of his generation and one of the best of all time. Brian Warner of CelebrityNetWorth.com writes that his multiple Super Bowl and Pro Bowl wins have allowed him to reach his career peak: he could easily command $20 million per year based on what other quarterbacks are getting paid. Yet Brady just agreed to a three-year contract with the Patriots that will pay him less than half of that. He is no dummy, and has proven himself a solid businessman with endorsement contracts and real estate investments. So why did he leave over $30 million on the table for what will likely be his last football contract?
Warner writes about the brilliance of Brady’s decision, and I agree. I think Tom Brady has made a bold business move that will likely generate, over the long-term, far more money than the tens of millions he left on the table. By agreeing to take less money, he was able to make himself affordable to his current team, ensuring that he will finish his career with a reputation as a solid team player. The additional funds can be used to recruit better players which will stregthen the overall quality of the team. This will increase the odds that they can achieve another Super Bowl win and greater success. With this reputation intact, Brady will be able to command far more than the current $10 million per year he earns on endorsement deals. That’s where the real money is, even after he can no longer play.
I believe his way of thinking provides great insight for small-business owners. It’s difficult to leave money on the table in anticipation of a greater payback in the future and with less certainty, especially when you have the continuous pressure to make payroll and cover other expenses. But if we don’t think strategically and aren’t willing to take a calculated risk when the opportunity is right,
