Just two weeks ago the San Francisco 49ers’ new quarterback Jimmy Garoppolo earned a nice, fat bonus check for post-season play. Never mind that the 49ers sputtered through most of the season before Garoppolo arrived, ending up in last place in the NFC West. And never mind that Garoppolo took over a team effectively eliminated from postseason contention by mid October. But the fact that Garoppolo had spent the majority of the season in a New England Patriots uniform assured that the former Tom Brady backup that he would receive his share of the spoils as his former team made the playoffs.
The defending NFL champion Patriots booked their eighth title appearance in the Bill Belichick-Brady era, on January 21 with a 24-20 win over Jacksonville in the AFC championship game. In doing so, each player on the team scored (so far) $79,000 of bonus earnings.
But the money hasn’t stop rolling in yet, either for Garoppolo or for the players who are suiting up this Sunday for Super Bowl LII. As football fans are expected to wager $4.76 billion on this weekend’s contest between favored New England and the Philadelphia Eagles, players on both teams are set to get additional bonus pay as a result of their postseason success.
In addition to the taking home the Vince Lombardi Trophy, bragging rights, and potential endorsement deals, media appearances and fanfare galore, the winners of Super Bowl LII will receive $112,000 each for winning the big game. Players on the losing team will get $56,000.
Here’s the breakdown: Players on NFL teams that made the 2017-2018 season playoffs in either division got a $28,000 starter bonus if they won their divisional playoff game, plus an additional $51,000 just for playing in their respective conference championship, for a grand pre-Super Bowl total of $79,000. Should the Patriots win their sixth Super Bowl this weekend, the total take for New England players for postseason play would be $191,000 (the Super Bowl winner’s $112,000 bonus in addition to the $79,000 already pocketed). Thanks to his service time with the Pats this season, Garoppolo is also entitled to that Super Bowl bonus, without even being present at the Big Game.
Likewise, if Philadelphia upsets New England to win their first-ever Super Bowl trophy, their players would take home the $191,000 postseason bounty, while Pats players would earn $135,000 (the sum of their $79,000 already won from the AFC Championship game plus $56,000 per player awarded to Super Bowl runners-up).
What to do with all that money
For legendary top players like Brady, trips to the Super Bowl and the perks that go with them may seem commonplace. Brady’s current two-year, $41 million contract with the Patriots made him the 15th highest-paid quarterback in the NFL at the start of the season. Over eight Super Bowl appearances since the 2001 season, Brady and the Patriots have won five Super Bowls so far, and bonuses collected from his Super Bowl trips, not counting this postseason have reportedly totaled $403,000 of additional compensation.
Not every Super Bowl participant makes Tom Brady money. Other top quarterbacks such as Cam Newton, Drew Brees, and Matt Ryan have been to a Super Bowl only once. Many NFL players, as was highlighted in the 2012 ESPN film “Broke,” show that success on the field doesn’t always equal long-term financial well-being.
Joe Geier, president of Winpoint Financial, a Marriottsville, Md.-based wealth management firm, has worked with professional athletes for more than 25 years. He says that performance bonuses for individual players often create a need for additional planning as well as strategies to handle extra tax burdens.
Says Geier: “When an existing client receives extra comp or a bonus that was not in our original budget or financial plan for the year, how we treat it depends on where a player is in relation to meeting his long-term financial goals.”
“First thing we do is remind them that although they may think they receive $112,000 for winning the Super Bowl, their net after-tax income will be closer to $61,600. They need to understand that 45%-50% is going to Uncle Sam first.”
Geier adds that he encourages young players to regard bonuses not as extra spending money, but as a welcome bonus for their investment portfolio, or a means to “pay down any debt they may have accumulated in the early part of their career.”
Paul and Wes Karger of Boston-based money management firm TwinFocus Capital, say that even with ultra-high net worth clients, receiving a large sum of money from a performance bonus or the sale of an asset can create a “windfall mentality.”
“Generally, when we have a client that receives a large windfall we tell them not to make big decisions on purchases — on cars, boats, planes, homes, etc.— until they have had time to think diligently through all of the consequences,” Wes Karger says.
“We also tell them that there is no urgency to invest or spend funds immediately,” he adds. “The cost of making an ill-informed decision is usually much greater than the potential lost benefit of not investing or making a purchase immediately.”
Paul Karger, meanwhile, observes that different personalities display different mindsets when it comes to money. “Some clients don’t want to listen at all,” he says, “at which point we try to convince them to carve off a portion for ‘play money’ and preserve the balance by prudently investing. Others are not at all enamored by having (extra) liquidity in their own hands. We always try and protect clients from making rash decisions.”
Geier says that his main approach is to work with athletes that are more dedicated to planning and growing wealth over the long haul. He said that likes to start with athletes early in their careers to get off on the right track. That said, there are occasions in which a professional athlete will weigh the prospect of using extra compensation for a special purchase, like a sports car. When the big bonus checks come, Geier says, the outcome often has a lot to do with “education and the relationship you have with your client.”
Says Geier: “Although they may not like to hear it, if a client wants to spend their bonus on, say, a new Ferrari, I point out that they will also be spending part of next year’s salary and more to pay for it in insurance cost and maintenance, and also that they’re buying a depreciating asset. Our job is to educate them on the harsh realities of the financial world.”
Andy Frye writes about sports for Rolling Stone. Follow him on Twitter at@MySportsComplex.