Hoping To Be An MLB Draftee? Look To The Likes Of A-Rod And Realize That Baseball Is 'Not The Entire Journey'

Unlike in other sports, a popular requisite for major league baseball players is minor league or college experience. Notwithstanding, among those players that have made it to the collegiate level, the odds of playing professionally are narrow.

In fact, the figure is below 20% with first-round draft picks often faced with near-60% odds of making it to the majors.

“If there’s a 40% chance you’re not going to make the majors, or you’ve never had a college education, and you’re just out of high school, these odds are a scary thing to rely on.”

That’s according to Michael Gruen, an entrepreneur and angel investor who has brokered deals, as well as consulted on brand and entrepreneurship opportunities for athletes.

“What is worse? Very few people who make the majors spend a significant time in the league. Many of them last a few years before flaming out. Consistency is difficult.”

With the 2022 Major League Baseball (MLB) draft beginning on Sunday, July 17, and ending Tuesday, July 19, here are some unlikely considerations prospective draftees should make.

State Of Play: Presently, minor league earnings pale in comparison to that of the MLB, where some players are paid hundreds of millions of dollars.

The minimum weekly salary at the rookie and short-season levels range from $400 to $700, depending on the class. A minimum salary has been proposed, so that all players are able to earn a wage they can live on, based on the hours they work, according to The Athletic.

“You won’t be paid well in the minor leagues,” Gruen said, adding that top players will, on the other hand, be eligible for signing bonuses that are worth millions.

“Then, they go through the system for four years until they make the majors.”

A Pigeonhole: The caveat is that many players won’t make the majors.

“On top of the slim chance you may make the majors, you have to know what you will do with all the money and, at the same time, not pigeonhole yourself as an athlete,” Gruen explained.

The case Gruen is making is as follows: it’s fallacious to think you must identify yourself only as an athlete. Though the platform players have is small, there’s a small window wherein they can get creative and “view themselves as brands and entrepreneurs.”

Who To Model: Alex Rodriguez, Steve Young, and Derek Jeter are prime examples of those who were successfully able to leverage their brand and pivot, “building empires” beyond sport.

Rodriguez is one of the best examples, Gruen explained, noting that “he did not need to pivot as he had hundreds of millions from baseball. The chances of making it to that level are not good.”

While still playing, Rodriguez founded A-Rod Corporation, a holding company he used to make investments in things like technology and real estate. Later, he also founded Monument Capital Management through which he owns properties across multiple states, all the while asset price inflation has homes in some areas favorably marking nearly 40% higher than a year or so ago.

Likewise, Young, who was a National Football League (NFL) quarterback, has pivoted to private equity, his second act.

How To Do It: Though it may seem daunting, the best thing that a player can do now, is to recognize the monetizable opportunities beyond baseball.

“These top prospects coming out of high school are making up to $3.5 million, and they have no idea what to do with it,” Gruen remarked. “This is where my focus has been. It’s been educating my friends that play in the minor leagues, helping them learn where they can allocate capital.”

In short, a savings account or mutual fund tracking the S&P 500 isn’t enough with inflation rates in the high single digits. Having portfolios with equity stakes exposed to burgeoning industries, via venture investments, is one of the many alternatives.

The moral, however, is that “baseball is only one part of your journey. It is not the entire journey, and that’s what people need to realize.”