The Power of Endorsement Deals: Is Equity the New Compensation?

Posted by

Professional athletes are becoming brands; walking, talking brands. Their success on the playing field adds value to their brand. Ultimately, companies want to use the athlete’s brand to sell their product; this gives birth to an endorsement contract. Companies pay huge sums of money for athletes to promote their products. The more powerful an athlete’s brand is, the more money a company is willing to pay to get their products in that athlete’s hands. Athletes earning potential in the endorsement arena is limitless; simply the marketplace controls it. As a result, endorsement deals often dwarf the salary a player makes which is often limited by the various leagues’ salary caps. And to be clear, these salaries are extremely lucrative on their own. This discrepancy just demonstrates how powerful these endorsement deals are.

In 1984, Nike made an unprecedented deal with Michael Jordan for $500,000 per year for five years. Fast forward to the present. Nike has become a global power in business and their Air Jordan brand has a cult-like following. Michael Jordan still has a deal with Nike and, per Darren Rovell, his Air Jordan brand netted him an estimated $100 million in the last year. In Jordan’s entire playing career he earned about $93 million. Other current players have followed Jordan’s blueprint. LeBron James’ Nike deal is worth an estimated $300 million over ten years. Kevin Durant’s Nike deal is worth $285 million over ten years. The list goes on and on.

The structure of the deals has not changed much since Jordan’s deal. Nike and Adidas have dominated the shoe endorsement market. They give a contract for a fixed amount of money over a fixed amount of years. However, that formula may be changing. Up and comer Under Armour recently signed a deal with Stephen Curry. The terms of the deal were not disclosed, but the company did say that the deal includes an equity stake in the company. By taking equity, in effect, Curry has gambled on himself. The more shoes he helps sell the more the equity will be worth. The more the equity is worth the more money Curry will make.

We will stay tuned to see how his deal plays out. Perhaps we have witnessed the future of endorsement deals.

66 comments

  1. I’m the owner of JustCBD Store brand (justcbdstore.com) and I am currently planning to expand my wholesale side of business. I am hoping someone at targetdomain give me some advice 🙂 I considered that the most suitable way to accomplish this would be to connect to vape stores and cbd retailers. I was hoping if anybody could suggest a reputable web site where I can buy Vape Shop B2B Leads I am already reviewing creativebeartech.com, theeliquidboutique.co.uk and wowitloveithaveit.com. Not exactly sure which one would be the very best solution and would appreciate any advice on this. Or would it be easier for me to scrape my own leads? Ideas?

  2. You’ve made some decent points there. I checked on the internet to find out more about the issue and found most individuals will go along with your views on this web site.

  3. Everything is very open with a very clear clarification of the issues. It was definitely informative. Your site is extremely helpful. Many thanks for sharing!

  4. I absolutely love your website.. Excellent colors & theme. Did you make this web site yourself? Please reply back as I’m wanting to create my own website and would love to know where you got this from or just what the theme is named. Kudos!

  5. After I originally commented I appear to have clicked on the -Notify me when new comments are added- checkbox and from now on each time a comment is added I receive four emails with the exact same comment. There has to be a way you are able to remove me from that service? Cheers!

  6. An interesting discussion is worth comment. I believe that you need to write more on this subject, it might not be a taboo matter but usually people do not discuss these topics. To the next! Cheers!!

  7. Having read this I believed it was rather informative. I appreciate you taking the time and energy to put this article together. I once again find myself spending a lot of time both reading and commenting. But so what, it was still worth it!

  8. Hello! I could have sworn I’ve been to this blog before but after browsing through some of the posts I realized it’s new to me. Regardless, I’m certainly delighted I discovered it and I’ll be book-marking it and checking back regularly!

  9. I blog frequently and I truly thank you for your information. Your article has really peaked my interest. I’m going to bookmark your blog and keep checking for new information about once a week. I subscribed to your RSS feed too.

  10. Hi there, I think your blog could possibly be having web browser compatibility problems. Whenever I take a look at your website in Safari, it looks fine but when opening in I.E., it’s got some overlapping issues. I simply wanted to give you a quick heads up! Aside from that, excellent blog!

  11. May I simply just say what a comfort to find someone who really knows what they are talking about on the web. You certainly realize how to bring a problem to light and make it important. More and more people must read this and understand this side of your story. I can’t believe you aren’t more popular because you certainly possess the gift.

  12. Oh my goodness! Impressive article dude! Thank you, However I am experiencing problems with your RSS. I don’t understand why I can’t subscribe to it. Is there anybody getting similar RSS problems? Anybody who knows the answer can you kindly respond? Thanks!!

  13. Can I just say what a relief to uncover somebody who really knows what they’re talking about on the web. You definitely understand how to bring a problem to light and make it important. A lot more people should check this out and understand this side of your story. It’s surprising you aren’t more popular because you definitely have the gift.

  14. Howdy! This blog post could not be written much better! Going through this article reminds me of my previous roommate! He continually kept preaching about this. I will forward this post to him. Fairly certain he will have a good read. Thanks for sharing!

  15. I simply want to tell you that I’m newbie to blogging and site-building and truly loved your website. Probably I’m want to bookmark your site . You certainly have fantastic article content. Thank you for sharing with us your web page.

  16. I was very pleased to discover this web site. I want to to thank you for your time for this fantastic read!! I definitely savored every little bit of it and i also have you saved as a favorite to see new things on your web site.

  17. Everything is very open with a really clear explanation of the challenges. It was really informative. Your website is very helpful. Many thanks for sharing!

  18. Having read this I believed it was really enlightening. I appreciate you finding the time and energy to put this short article together. I once again find myself spending a lot of time both reading and commenting. But so what, it was still worthwhile!

  19. You have made some really good points there. I looked on the web for more information about the issue and found most individuals will go along with your views on this website.

  20. That is a great tip particularly to those fresh to the blogosphere. Short but very accurate info… Appreciate your sharing this one. A must read post!

Leave a Reply

Your email address will not be published.