Athlete Endorsement Deals
Athletes all over the world make millions of dollars every year playing for their respected teams in their respected sport. This is not even taking into account the endorsement deals that they have, which sometimes makes them more money opposed to their team contract. In this blog we will be looking into successful endorsement campaigns and those campaigns that failed between the company and the athlete.
Before a company endorses an athlete to represent their company the athlete needs to meet their criteria. Just like when hiring a new employee companies look at character and see why hiring this person to represent their company is a match made in heaven. Besides being successful on the field or on the court, athletes need to have good character and overall have a positive image to the public for a company to consider signing them to be a part of the company. According to sportsnetworker.com the five on field attributes brands should look for in athletes are performance quality, winning record, skill, style, and potential. The five off field attributes that brands look for are personality, physical attractiveness, unique background, role model to the community, and has a strong relationship with the fans (http://www.sportsnetworker.com/2011/02/15/athlete-brand-endorsements/).
In my previous blog, I mentioned about Peyton Manning’s endorsement deal with Papa Johns. Peyton Manning is a great example of why a national company would like to endorse him because not only is he successful on the football field but he is funny, charismatic, and has a great reputation to not only the public but to his peers as well.
The time is now for athletes to cash in on endorsement deals because if they play their cards right with the right company they can bring home more money then their current contract that comes from their team. One of the biggest brands to endorse players is Nike, having eight out of the top ten endorsement deals in athlete endorsement history. The number one deal should be no surprise which is Michael Jordan, the marriage with Jordan and Nike went hand in hand. Nike let Jordan start his own shoe line that currently makes him $60 million a year. Second place on the all time list is Lebron James and he made a unique arrangement with Nike. In December 2015, Lebron signed the life time contract, which means that he will make $30 million a year plus the shares from his shoe sales for the rest of his life. Basketball players are not the only ones making a good living from endorsements, Cristiano Ronaldo signed a $105 million dollar deal with Nike for over five years (http://www.totalsportek.com/money/biggest-endorsement-deals-sports-history/).
Another brand that is starting to make a name for themselves when it comes to endorsing athletes is Under Armour. Tom Brady, Jordan Spieth, Michael Phelps along with others are starting to sign with Under Armour but arguably the most well known player that joined the UA team is Stephen Curry. Curry was originally signed with Nike until his deal was up and Nike made mistakes in their campaign to recruit Curry by misspelling his name in the sales pitch. As a result Curry signed a deal with Under Armour and is now projected to make the company $14 billion dollars (http://finance.yahoo.com/news/under-armour-insane-endorsement-deal-hot-streak-steph-curry-spieth-tom-brady-200347654.html).
There are many successes when it comes to endorsement deals with athletes but sometimes there are failures and the two parties need to part ways. Companies choose to part ways with an athlete when they do not have a positive reputation to the general public. Athletes most notable for losing their endorsement deals are Michael Vick, when it went public about his dog fighting activities. Both Nike and Rawlings dropped Vick. Mike Tyson lost millions of dollars from Pepsi when his divorce went public and details of him abusing his wife came out. The most famous scandal of an athlete losing his endorsements was in 2009 when Tiger Woods lost $22 million dollars in endorsement deals because of details of him cheating on his wife with multiple mistresses. Sponsors included Gatorade, AT&T, Accenture, and Nike contemplated dropping him but ultimately stuck with Tiger (http://www.businessinsider.com/12-athlete-endorsements-that-were-lost-to-scandal-2011-8?op=1).
Brands need to make sure that athletes meet their criteria and can represent the company in a positive outlook to the public. Public scandals are a guaranteed way for people to lose endorsements but can gain those back as popularity from the public increase.
On my next blog we will be discussing how different sport venues utilize sponsorship and how they get a companies message out to the fans.