In March 2009, Sports Illustrated published a classic article on why so many athletes go broke. Excessive spending, ill-advised financial guidance and hubris are often the main culprits. Since then, many more articles have been published on the topic. In a recent deal with Roc Nation Sports, professional boxer Miguel Cotto took yet another step toward an altogether different future than the ones highlighted in such stories.
As we’ve seen and continue to see, being a great athlete is far from enough for financial success. A few years into retirement, those with the most storied sports careers still fall prey to debt, even bankruptcy. Entrepreneurs, even after an initial windfall, may face the same fate if they invest too much of their resources in an opportunity that they believe will grow their wealth exponentially but can cost them everything.
This is the story of how one boxer is doing things differently.
A fighter inside the ring, a modest mogul outside.
What some fans may not know is that pro boxing champion Miguel Cotto quietly runs a homegrown business empire, owning 13 gas stations and a dozen real estate properties. Using his earnings from the ring, Cotto invests in opportunities that will outlive his fighting career.
He does not own a stable of luxury cars. His home is not a glamorous mansion. Cotto lives well, but not in excess. Over the years, Cotto has diversified his assets, building businesses he understands and knows well. His conglomerate also manages a boxing promotions company and local businesses in his home of Puerto Rico.
In Cotto’s two most recent bouts, audiences have seen a fighter at the top of his game, but one could argue that an even better version of Miguel Cotto is outside the ring, growing his brand and ensuring the future financial stability of his family and legacy. The latest development in the Cotto empire story, signing on with elite up-and-coming agency Roc Nation Sports, is simply another example of a prudent and vision-driven businessman at work.
The news broke during a closed press conference March 5 at 21 Club in New York City. I first met Cotto years ago when I led Ecko Unltd's Sports Marketing initiatives. Back then, Ecko Unltd had sponsored Cotto when he first fought Alfonso Gomez on April 12, 2008. As a longtime fan and sponsor of boxing, and a close, personal friend to Miguel Cotto, from Cotto, I have learned a lot about what it means to build a successful enterprise.
Thinking long-term and traveling with a professional entourage.
When he manages his money, Miguel Cotto regularly exercises prudence. Instead of unnecessarily shouldering the financial burden of distant relatives, hometown acquaintances and every other individual who asks for help paying the bills, Cotto makes sure his hard-earned dollars go to people who earn their keep and that any money he spends personally is being used wisely.
With every business deal, Cotto brings along a cohort of trusted advisors. Among those are his business manager, Bryan Perez, his attorney, Gaby Penagaricano, and a financial counselor, Hector Soto. Decisions are seldom made by instinct. Instead, the professional arrangements he makes are smart and calculated.
“Though Miguel is generous with the people he loves, he avoids flaunting his wealth and spoiling others to feel entitled to money. He creates jobs and opportunity so when he retires from the ring, he can guarantee that his family and friends will be taken care of, as long as they work for it,” said Bryan Perez.
The trend of superstar athletes misusing their fortunes will likely never end. That is because a sudden windfall can trick even the smartest of people into believing their funds may outlast their lifetime. Often, the money well runs dry sooner than expected.
Single revenue streams create tremendous risk for even the most conservative entrepreneurs; a stable financial situation is the result of business diversification. Cotto knew over-reliance on boxing earnings might lead him down the irreversible path former professional athletes followed. He made sure his business interests were varied and numerous. While Cotto celebrates his recent partnership with Roc Nation, he is also thinking about new companies to open next.