Lonzo Ball Shoe Contract Study — Big Baller Brand’s annual pay vs. shoe deals of MJ, LeBron, and other NBA superstars
We began by analyzing the sales estimates for Lonzo Ball’s ZO2 shoes. According to the estimate of the leading sneaker sales analyst, Matt Powell of the NPD Group, Lonzo’s ZO2 shoes would sell 10,000 pairs within the first year. We then used the price point of the ZO2 shoes to calculate how much money Big Baller Brand could profit from shoes based off of the profit margin per sneaker. Using the profit margin per sneaker research conducted by the University of Oregon, for every pair of ZO2 shoes sold, Big Baller Brand could expect to net 9% of the sales price of $495 as profit. Since Big Baller Brand is a family business run by Lonzo’s father, we treated the total profit of the ZO2 shoe sales, $445,500, as the value of Lonzo’s endorsement deal per year. This calculation of Lonzo’s endorsement deal also was checked against a similar calculation of LeBron’s shoes sales, shoe price, and Nike’s profit margin per LeBron shoe. The resulting figure from this calculation was $32,400,000, which is almost exactly the annual value of LeBron’s endorsement. This confirmed the validity of our estimate that the profit from Lonzo’s shoe sales could be counted as his annual endorsement value.
We then deduced how many days would it take the top NBA players and Lonzo’s fellow rookies with well-known shoe deals to be paid the annual value of Lonzo’s shoe deal. To begin, we analyzed the financial terms of players’ shoe endorsement contracts. Dividing the total value of the contracts by the amount of years set out by the contract, we arrived at the annual value of each NBA player’s shoe deal. Then, we divided that annual value by 365 to calculate the “pay per day” by their shoe contracts. We then divided 445,500 — Lonzo’s shoe contract — by the pay per day of the other players shoe contracts to get the number of days it would take each NBA player to earn the value of Lonzo’s shoe deal.