Why Tom Brady is worth every penny of his new $375 million broadcast deal
It was the news that rocked the sports world on Tuesday, as Fox Sports announced that following his playing career, Tom Brady had agreed to become a broadcaster for the network's biggest NFL games.
What was truly shocking though was the price tag: According to the New York Post's Andrew Marchand, Fox will pay Brady's contract would pay him $375 million over 10 years. For comparison's sake, Brady has made "only" $300 million from his actual playing career. While $300 million is nothing to scoff at, it also means that Brady's first10 years of broadcasting will be more lucrative his 20+ years as an NFL player were.
Naturally when that number came out - $375 million! - the internet reacted with the same thought: How could any broadcaster be worth that much? There is no way that anyone should make $37 million a year to be a broadcaster of NFL football games.
Still, as crazy as the number sounds, Aaron doesn't believe the number is crazy at all - and discussed it on today's Aaron Torres Pod.
He claimed there were five reasons why the contract actually made sense from Fox's perspective, and let's get into them below:
(As always, a quick disclaimer is worth mentioning here, as Aaron does work as a Fox Sports Radio host - although as you can guess, he was just as surprised by the news as anyone)
Here is his reasoning:
1. Who are we to say how anyone should spend their money?
Put simply, it's a cliche as old as time, but it really is true: Someone is worth what someone else is willing to pay for their services. And clearly, Brady has value to the company as the face of its NFL coverage, as Aaron said.
"I'm not in the business of telling people how to spend their money," Torres said. "Everybody spends money on different things, everyone spends things on whatever, and I'm not in the business of telling people how to spend their money."
To explain, Aaron used a pretty contemporary example: That of John Ruiz, the wild Miami booster, who is throwing money at slightly-above average college basketball players, like a sailor who just came to port.
While we all wish that Ruiz hadn't completely reset the market for good college basketball players (and maybe gotten himself in trouble in the process), who are we tell a billionaire what to spend his money on?
"I think there's a different conversation between 'Will John Ruiz make his money back?' and 'Is he worth it to Miami basketball and John Ruiz?'" Torres said. "Now, is he really worth it? Are they really going to make $800,000 off Nijel Pack, a very nice college basketball player but not a great one? Probably not. And what I can certainly say is that Life Wallet, John Ruiz's company, I don't think they're going to make $400,000 just to get back the money back they paid Nijel Pack, let alone make enough money to make profit from Nijel Pack promoting their products. But at the end of the day, who am I to tell John Ruiz how to spend his money?
By the way, it's the same with coaches. There are boosters writing huge checks to coaches that I don't think are worth it. Heck, there are coaches who are writing huge checks to get rid of coaches. There is some booster, somewhere in Baton Rouge right now, writing a check to Ed Orgeron for $7 or $8 million to not coach football this year."
It's the same with Fox.
2. Anyone with options isn't going to come cheap
Beyond what's mentioned above, also remember that, again, Brady has made over $300 million in his career. If Fox wanted him to be the face of their NFL coverage for a decade after he retires, you really think he's coming on the cheap?
It doesn't seem likely, considering that Brady has his TB12 business, a production company and could do pretty much anything he wanted to in retirement, which is why Fox had no choice but to pony up what they did.
"Tom Brady has options," Torres said. "If he wants to do TV, he can do TV. If he wants to do a weird 'Manning Cast' like Peyton Manning, he can do a weird 'Manning Cast' like Peyton Manning is. If he wants to go lay on a beach for 10 years he can. If he wants, he can get into ownership. If he wants, he can get into management. If he wants, he can get into coaching. Tom Brady can do whatever he wants. So to get Tom Brady to commit for 10 years, 18 weeks in the fall, and sometimes more because FOX has Super Bowls, you are going to have to overpay Tom Brady, don't you think?"
Again, Tom Brady has made $300 million in his career. You really think he was going to broadcast games for $1 million a year? Yeah right.
3. You don't want him hitting the open market
Something else that seemingly no one considered: What would've happened if Tom Brady hit the open market?
No one on the Aaron Torres Media staff is a trained economist, but this seems like simple supply and demand issue: There's only one "Greatest Quarterback of All-Time." And there's no telling what he would've gotten paid had other networks found out he might be interested in broadcasting.
That's why Fox overpaid - so Brady never hit the open market. Heck, it didn't even seem as though anyone knew that Brady had a real interest in broadcasting to begin with.
"The reason you wanted to get this done, in the manner with which it was done, was the fact that it gets out that Tom Brady might be interested in getting into broadcasting, then all of a sudden, you get into a bidding war," Torres said.
"Then all of a sudden, Amazon gets involved. Remember, Amazon has those Thursday night games. Yeah they signed Kirk Herbstreit to call those games, but guess what? They could fire Kirk Herbstreit in a second. They're worth, what $50 billion dollars. They could write Kirk Herbstreit's check in a minute and bring in Tom Brady. NBC, you don't think they'd push Drew Brees aside to get Tom Brady? You don't think CBS would have to have some tough conversations about Tony Romo if they knew Tom Brady was available?"
Besides the fact that Amazon is actually worth closer to a trillion dollars than $50 billion, there's probably some merit to this point.
Again, no one ever claimed Torres was an economist.
4. When you factor in who Fox lost, they didn't really pay Tom Brady as much as you think.
Keep in mind, these decisions aren't simply a zero sum game, and it's not just about paying Tom Brady $37.5 million. They were only able to pay Brady that much, because both Joe Buck and Troy Aikman left for ESPN.
To retain them, Fox would've basically had to pay what they paid for Brady anyway.
So when you factor in Brady's salary, with his partner Kevin Burkhardt's, they're essentially even.
"Remember, the reason the void is there, is because Troy Aikman just left FOX and their Sunday booth to go call Monday Night Football for ESPN. Troy Aikman just left FOX to go to ESPN, and it cost ESPN $18 million a year to get him. Then ESPN said 'You know what? If we're going to have a good broadcaster like Troy Aikman, we need a good play-by-play man alongside him' so they went out and got Joe Buck his long-time partner for $15.5 million a year.
ESPN just spent $33.5 million to get Troy Aikman and Joe Buck away - you don't think it's worth paying $37.5 million to get Tom Brady? Because you have $34 million spent on the other two."
Essentially, Fox paid like $5 more million to get a really good No. 1 broadcaster and the GOAT, Tom Brady, than they would've paid Buck and Aikman. Seems pretty reasonable to me.
5. Finally, remember where this announcement was made
Lastly, don't forget: This announcement wasn't made by press release or report from the Athletic or ESPN. It was made on a Fox earnings call.
It was meant as a way to excite shareholders, and Brady's role as an "ambassador for the company" can't be undersold here either.
"And I think this is an important part of this as well. According to the reports from Andrew Marchand, he's not only going to be the face of Fox Sports for 10 years in that booth. He's also going to be an ambassador for the company. When they have a big golf outing, or an event with the big shareholders who are spending 10's of millions of dollars on this company. You know who's going to be there shaking hands and kissing babies? It's Tom Brady!"
Again, this decision was about much more than just the 18 weeks a year Brady will be calling games. It isn't just about getting Joe from Toledo, Ohio to the couch, and keeping him there.
It's about being the face of a company. And at $37.5 million a year, seems like a reasonable deal for that company.
To listen to the entire Tom Brady segment, download today's Aaron Torres Podcast, or listen below.
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