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Archive for the ‘Endorsement Deals’ Category

John Wall signs $25 million deal with Reebok

Posted by ZA on June 10, 2010

John Wall, the University of Kentucky standout, who is likely to be the #1 pick in the upcoming NBA Draft has signed an endorsement deal with Reebok.  The endorsement deal is reported to be a 5-year deal worth approximately $25 million dollars ($5 mil per year).  The deal reported includes two signature shoes that will be designed by Reebok for the young basketball star.

This deal by Reebok is a huge step up from what recent draft picks have received from shoe endorsement deals.  It signals that Reebok plans to make John Wall the centerpiece of their basketball marketing efforts.  In 2009, the top NBA Draft pick, Blake Griffin signed a reported $400,000 per year annual deal with Nike.  In 2008, Chicago Bulls top pick Derrick Rose signed with Adidas (who owns Reebok) for an undisclosed sum that was likely in the $1+ million per season range.  Which means the last deal for a top pick that was on par with Wall’s deal was the $8+ million per year deal that 2008 #2 pick Kevin Durant signed with Nike.

The deal that Durant signed with Nike in ’08 was much larger than the deal that #1 pick Greg Oden received from Nike.  Nike has made Durant one of their top endorsement stars over the past few years, which is a pattern that Reebok is sure to repeat with John Wall.  Reebok’s other top NBA endorsement stars include Allen Iverson, Yao Ming & others.

[Assist: Sports Business Daily]

Posted in Apparel & Shoes, College Basketball, Endorsement Deals, NBA, Sports Marketing | Tagged: , , , , , , , | 6 Comments »

Under Armour signs Michael Phelps

Posted by ZA on February 19, 2010

Michael Phelps will need to be strong to haul around all of the checks from sponsors

Under Armour has signed swimmer Michael Phelps to an multiyear endorsement deal.  The deal will have Phelps endorse Under Armour products that he wears to train “outside-the-pool”.  It was structured that way because Phelps already has a lucrative endorsement deal with Speedo, whose swimsuits he wears during competitions.

This is a bold move for Phelps and Under Armour and appears to be a win-win.  Under Armour picks up one of the most marketable, young athletes in the World for a pretty fair price (note: figures on the deal were not disclosed, but one expert estimated the deal at $5 million).  Phelps insures that Under Armour will get plenty of coverage at the Summer Olympics, an event that has traditionally been dominated by Nike, Adidas and even Puma.  This deal is also a great move for Phelps who already has the richest swimwear contract that Speedo has ever signed.  It is like Phelps gets to double dip, by having two sponsors in the same genre.

[Assist: Sports Business Daily]

Posted in Endorsement Deals, Olympics, Under Armour | Tagged: , , , , | Leave a Comment »

General Motors throws Tiger Woods under the bus

Posted by ZA on February 15, 2010

Bob Lutz, the 78 year old Vice Chairman of General Motors, might know something about designing cars but he’s certainly no expert on marketing.  That is because Lutz recently dropped a verbal jabs on Tiger Woods, the former General Motors pitchman.  Lutz said that GM was not “…too lucky with Tiger…” and that their $50 plus million dollar endorsement deal with Woods did not boost sales for Buick.

My question is if Lutz is going to lay the verbal smack down on someone, shouldn’t it be his own team?  Lutz has been a top executive at GM for the majority of their time with Tiger, so I assume he was aware of the approximately $8 million dollars per year endorsement deal his company had with the golf star.  So why wait until after the deal is done to complain about the effectiveness of it?  Why didn’t Lutz demand that his marketing personnel make changes to improve the effectiveness of the endorsement deal?  Why didn’t Lutz change the way they were using Tiger or change the message Woods was pushing for GM?  Lutz did concede that GM, “…didn’t have him say the right things at the time.” and admits it is “partially” GM’s fault.

Maybe Lutz was the reason that General Motors bailed on their deal with Tiger a year early.  But at that time GM marketing execs were supporting the deal with Tiger by saying “We attribute awareness of our product to Tiger.”  GM claimed the move to end their relationship a year early was “hard to walk away from” but that it was a financial decision to “free up a lot of money for us (GM)”.  So if Tiger was so ineffective for GM and Buick, then why didn’t they cite that as a reason for ending their relationship with the World’s #1 golfer?

I think this is poor form by General Motors and Lutz to criticize Tiger now, more than a year after they dropped him.  With all of the controversy that Woods has been involved in lately, this amounts to Lutz kicking a man while he’s down.  Should you feel sorry for Tiger?  Heck no, because he was paid handsomely by GM.  Plus Tiger is responsible for all of the personal problems that have gotten him into trouble lately.  But I think GM and Lutz need to take a lesson from this situation; that you should speak honestly in parting, not comeback later to blame the other guy when your deal did not work.

Lutz should have kept his mouth shut publicly, something apparently he’s had trouble doing in the past, and shared his feelings on the deal with his own staff.  That might help his company to avoid signing ineffective marketing partnerships in the future, while not offending the top sports endorsement star on the planet.  Oh I know Tiger has fallen way off his perch, but don’t think that Woods will never regain his place at the top of the sports world.  And when he does I’m sure there will be people there to remind Tiger what the top brass at GM said about him.  If I was a competitor of GM, I might enjoy the opportunity to unleash Tiger on his former sponsor someday – because Tiger is a fierce man when he puts his mind to something.  Lutz may learn to regret throwing Tiger under the bus in such a public fashion.

Posted in Endorsement Deals, Golf, Sports Marketing | Leave a Comment »

Endorsement Profile: Maria Sharapova

Posted by ZA on December 11, 2009

Athlete: Maria Sharapova
Sport: Tennis
League: WTA
Agent: IMG (Max Eisenbud)
Age: 22   (April 19, 1987)
Rank in SI’s richest athletes: 13 (International list)

Maria Sharapova endorsement deals (thru Dec. 2009):
* Canon
* Cole Haan
* Land Rover
* Nike (athletic shoes & apparel)
* Parlux Fragrances (perfume)
* Prince (tennis racquets)
* Sony Ericsson
* Tag Heuer
* Tiffany & Co

Former Sharapova endorsement deals:
Colgate-Palmolive, Gatorade, Motorola & Tropicana


Maria Sharapova endorsement potential:
Maria Sharapova is the top female endorsement star in the sports world.  Sharapova has competition from Venus & Serena Williams, Danica Patrick, Michelle Wie and Lorena Ochoa; but Maria is still the top endorser among female athletes.  Sharapova’s endorsement success has been helped by her good looks; she was named in 2005 as one of People magazine’s 50 most beautiful celebrities in the world.  But Sharapova is not just another pretty face (i.e.- Anna Kournikova), she is one of the top players in tennis who has won 3 of the 4 tennis major tournaments.

Only in her early 20’s Sharapova is already a global brand, which her sponsors take advantage of by featuring her in advertisements in the United States, Europe and Asia.  She is from Russia, but does not endorse any Russian companies.  But her lineup of endorsement deals is the envy of any athlete in the world.  She has some of the biggest companies on the planet tailoring their marketing campaigns around her name.  Canon has featured Sharapova in new product launches which were so successful that they even made Maria’s dog a star.

What’s next for the tennis superstar slash celebrity slash endorsement queen?  Maybe retirement.  Maria has made comments that she doesn’t plan to play tennis for her another decade.  She’s said she would like to follow the lead of Justine Henin and retire young so she can pursue other life goals.  That means that sponsors who wish to align their brand with the top earning female athlete on the planet better hurry up.  Maria Sharapova is in her prime as an endorsement star, but there may not be that many years left for advertisers to sign her if she decides to follow her dreams to raise a family.

Maria Sharapova commercial for Canon:

Posted in Apparel & Shoes, Athletes, Endorsement Deals, Endorsement Profile | Tagged: , , , , , , , | Leave a Comment »

Endorsement Profile: Tiger Woods

Posted by ZA on December 3, 2009

Athlete: Tiger Woods
Sport: Golf
League: PGA
Agent: Mark Steinberg (IMG)
Age: 33 (December 30, 1975)
Rank in SI’s 50 richest athletes:  1st
Endorsement value:  $105,000,000.00

Tiger Woods endorsement deals (thru Nov. 2009):
* AT&T
* Gatorade (Pepsico)
* Gillette (Procter & Gamble)
* EA Sports (Electronic Arts)
* NetJets
* Nike Golf
* Tag Heuer
* TLC Vision Corporation
* Upper Deck

Tiger Woods endorsement potential:
Tiger Woods is the top athlete endorser in the world today.  He is the Cadillac of athlete endorsements (even if he occasionally drives erratically in his own Escalade).  Every major corporation wants him, but few can afford him.  Woods has even surged past sports brand icon Michael Jordan in-terms of earnings; Tiger is first athlete in sports to earn more than $1 billion dollars in their career.  Much of that money comes from the rich endorsement deals that Tiger has had for over a decade.

Tiger’s endorsement history is legendary, starting with a $40 million contract from Nike when he turned pro in 1996.  Tiger basically made Nike Golf what it is today and Phil Knight rewarded him handsomely with a $100 million extension in 2006.  Tiger has become the driving force behind Nike Golf, even as they have added other big name golfers to their endorsement stable (i.e.- Stewart Cink, Anthony Kim, Justin Leonard).  Woods is a poster boy for their product line, having dropped his lucrative Titleist sponsorship when he switched to play a Nike golf ball.

Much of Woods appeal as an endorsement star has to do with his phenomenal ability on the golf course.  Tiger grabbed the sport of golf by the throat and has not yet let go; in a sport with some of the biggest endorsement stars on the planet (Phil Mickelson, Arnold Palmer) Tiger is the king.  It only helps that golf’s demographic is one that appeals to the bluest of blue chip companies; businesses that want their product featured (by Tiger Woods) to that affluent golf crowd.  Tiger’s so marketable that even his caddy, Steve Williams, has grabbed endorsement deals with Nike and Valvoline.  Let that sink in for a second…even Tiger Woods’ caddy has major corporations paying him money to endorse their product.

Perhaps the truest test of Tiger Woods endorsement appeal is understood by looking at the list of corporations that he used to endorse.  Tiger’s former deals with Accenture, American Express, Buick, General Mills, Titleist and Rolex would be the envy of most athletes, yet Woods has just moved on to bigger, more lucrative deals.

Tiger Woods has truly changed the game in-terms of endorsement deals.  Like Jordan did before him, Woods seeks out “business partnerships” rather than just contractual endorsement deals.  He is setting the standard today on how athletes and sponsors partner up.  His deals are making sports stars, like Tiger, more money from corporate sponsors than they have ever earned before.

Tiger Woods commercial for Nike Golf:
[Youtube=http://www.youtube.com/watch?v=6oTMosZ76b8]

[Edit: Accenture dropped their endorsement deal with Tiger Woods in December 2009 - a few days after this post]

Posted in Endorsement Deals, Endorsement Profile, Gatorade, Golf, Nike, Sports Brands | Tagged: , , , , , , , , , | 9 Comments »

Endorsement merry-go-round: Puma to Nike to Adidas

Posted by ZA on October 20, 2009

What happens when athletes switch their allegiance from one sports brand to another?  They usually pick up a bigger paycheck.  These days the goal of the big brands is to lock up their talent for the long haul.  The term “lifetime deals” have come into play with athletes like Allen Iverson (Reebok) and Tiger Woods (Nike).  Those type of deals originated with Michael Jordan who has been Nike’s shining star for a quarter of a decade.

But there are some athletes who switch brands. Here are 8 NBA stars who changed their sneaker deals:
Kobe Bryant: Adidas to Nike
Vince Carter: Puma to Nike
Baron Davis: Reebok to Li-Ning
Tim Duncan: Nike to Adidas
Kevin Garnett: Nike to And 1 to Adidas
Jason Kidd: Nike to Peak
Stephon Marbury: And 1 to Starbury
Chris Webber: Nike to Dada
Source: Complex.com

Li-Ning and Peak are both Chinese brands.  Starbury was a line of discount shoes started by Steve & Barry’s; the chain liquidated their stores in 2008 but the shoes/apparel continue to be promoted by Marbury. Dada may or may not still be in business – most of the stuff about them I could find is dated, so I can’t tell.  I guess that’s what happens when you select Chris Webber and Latrell Sprewell to endorse your product.

Posted in Adidas, Apparel & Shoes, Endorsement Deals, NBA, Nike, Sports Brands | Tagged: , , , , , | Leave a Comment »

“The kid from North Carolina” aka: Michael Jordan

Posted by ZA on September 9, 2009

A great article from Yahoo Sports on Nike’s decision to sign Michael Jordan.  The original deal signed back in 1984 was for $500k and a piece of the profits from Nike sales of Jordan products.  The deal eventually catapulted Nike from a top sporting goods company to a global brand.

Some more interesting tidbits from the article:
* Nike’s total revenue in 1984 (year MJ signed) was $900 million, in 2008 Nike had $18.6 billion in revenue.

* No one at Nike had ever met Michael Jordan when they agreed to sign him to an endorsement deal.

* Nike produced so much black & red apparel with Jordan that “at one point there was a run on the world’s supply of red-colored thread”.

It’s a good article by Dan Wetzel, it’s worth a read.

Posted in Apparel & Shoes, Athletes, Endorsement Deals, NBA, Nike, Sports Brands | Tagged: , , , | Leave a Comment »

Does Scott Boras hurt his clients endorsements?

Posted by ZA on August 24, 2009

A thought occurred to me as I watched the recent Stephen Strasburg contract negotiations with the Washington Nationals; does Scott Boras’ hard negotiating style hurt his players endorsement opportunities?  Boras is known as a super tough negotiator who has even been called the “most evil man in baseball”.  This is not a reputation unfairly bestowed upon Boras, he has known throughout baseball circles for his abrasive negotiating style.  Teams like the Nationals clearly do not relish dealing with Boras because he always demands huge contracts for his clients.  With Strasburg, the #1 pick in the 2009 amateur baseball draft, Boras was initially seeking an “absurd” contract that would rewrite the MLB draft record books.  The Nationals and Boras finally hammered out a not quite absurd, but still record deal at the 11th hour.  That deal happened after months of tense negotiations that clearly did not endear the Nationals executives to Boras.

Which makes me wonder; is Boras an equally tough negotiator when it comes to endorsement deals?  Do corporations like Nike and Pepsico try to avoid dealing with Boras clients because for fear they will be raked over the coals during the negotiations?  Strasburg has been called a once in a generation prospect, but has yet to sign any endorsement contracts.  Other Boras clients are some of the biggest names in Major League Baseball (Alex Rodriguez, Manny Ramierez, Prince Fielder) but seem to lack the mainstream endorsement deals of their peers in the game (e.g.- Ryan Howard for Subway, Derek Jeter for Gatorade).  Is this just a coincidence or do Boras clients not have the same endorsement prospects as non-Boras clients?  Difficult to say, but you have to believe corporations prefer to work with clients who have agents less aggressive than Boras.  If that is the case, then Boras’ style might actually be costing his clients endorsement money.

Scott Boras’ top clients and their top endorsement deal:
Johnny Damon – Puma
Manny Ramirez – EA Sports
Alex Rodriguez – Nike & Pepsico
Barry Zito – True Religion jeans

Posted in Endorsement Deals, MLB | Tagged: , , , | Leave a Comment »

Who are the most popular athletes in America?

Posted by ZA on July 30, 2009

Americans love sports, so naturally we love the athletes who play the games.  But which athletes are our favorites?  Who are the top 10 most popular athletes in sports today? The Harris Poll recently released the results of their 2009 survey that asked 2,177 U.S. adults to tell who were their favorite sports stars.

America’s Favorite Male Athletes (2009):
1. Tiger Woods (Golfer)
2. Michael Jordan (Retired, NBA star)
3. LeBron James (Forward, Cleveland Cavaliers)
4. Kobe Bryant (Guard, Los Angeles Lakers)
5. Derek Jeter (Shortstop, New York Yankees)
6. Jeff Gordon (Driver, Nascar)
7. Peyton Manning (Quarterback, Indianapolis Colts)
8. Dale Earnhardt Jr. (Driver, Nascar)
9. Brett Favre (Retired, NFL star)
10. Albert Pujols (Baseball player, St. Louis Cardinals)

America’s Favorite Female Athletes (2009):

1. Serena Williams (Tennis player)
2. Venus Williams (Tennis player)
3. Danica Patrick (Driver, Indy Racing)
4. Candace Parker (Forward, WNBA)
5. Mia Hamm (Soccer star)
6. Maria Sharapova (Tennis player)
7. Annika Sorenstam (Golfer)
8. Chris Everett Lloyd (Retired, Tennis star)
9. Anna Kournikova (Retired, Tennis player & model)
10. Michelle Kwan (Figure skater)

What stands out to me about the lists, particularly among the guys, is the influence that Nike has among the list.  7 of the 10 guys on the list endorse Nike, you could count Brett Favre as an 8th since he endorsed Nike brand, Starter.  The only 2 guys who do not have endorsement deals with Nike are the two Nascar drivers, who wouldn’t be a target for a shoe/apparel endorsement deal.  So you could say that Nike has a clean sweep of the eligible males.  Among female favorite athletes Nike’s percentage drops down a bit, but they still have four of the top 10 and the #1 overall.  Serena Williams, Mia Hamm, Maria Sharapova and Chris Everett Lloyd all cash endorsement checks signed by Phil Knight.

Other brands are well represented; Gatorade has deals more than half of the two lists.  That number is even greater if you factor in all of the Pepsico clients, Gatorade’s parent company, on the two lists.  Nike’s chief competitor, Adidas, also has a couple of current (Parker) or former endorsers (Kournikova) on the list.

But no brand is as well represented on the two lists as Nike.  The question it brings up is whether Nike’s marketing is helping to make these stars more popular or whether Nike has just picked the most popular athletes?  My thought is that it’s a bit of both.  Nike has always been one of the innovative marketers in sports.  They’ve revolutionized the game of sports marketing with campaigns they built around athletes, starting with Michael Jordan and continuing today through Tiger Woods.

Consider that Nike did not even make golf shoes or clubs prior to signing Tiger in 1996.  Nike’s original endorsement contract with Tiger Woods was $40 million dollars over five-years, which was then followed by a five year, $100 million dollar extension.  But their spending did not stop there, Nike has spent tens of millions more to promote their association with Tiger Woods.  And for their efforts, it’s estimated that Nike Golf pulled in $725 million in sales in 2008.  Through their endorsement deal and promotion, Nike essentially created a new billion dollar revenue stream for the company.  That type of innovative marketing will generate the cash to pay for a lot of endorsement deals.

And Nike has never been shy about spending for top talent.  They signed quasi lifetime endorsement deals with a few of the top names (Jordan, Woods & Serena Williams) to make sure they locked up their stars.  Other deals might as well be lifetime contracts because you won’t see Jeter or Sharapova pitching anyone else’s shoe brand anytime soon.  And Nike jumps at the chance whenever their has been an opportunity to add a big, new star to their roster.  Just recently they solidified long-term agreements with two members of the top 10 list above who happen to be the most popular players in the NBA; LeBron James and Kobe Bryant.

All of the athletes above are some of the biggest stars in sports; a feat they achieved because of their superior talent and lots of hard work.  But to ascend to the top of the list of America’s favorite athletes also requires a little help from sponsors.  And from their dominance on the two lists, it appears that Nike is a really good sponsor to have.

Posted in Athletes, Endorsement Deals, Gatorade, Golf, MLB, Nascar, NBA, NFL, Nike, Sports Brands, Sports Marketing | Tagged: , , , , , | 5 Comments »

Only a select few to endorse Wheaties

Posted by ZA on July 28, 2009

In the 80+ years that General Mills has marketed Wheaties there have been thousands of great athletes featured on their boxes of cereal.  Everyone from Andre Agassi to Kristi Yamaguchi have been featured on the front of the famous orange box.  Being selected to appear on the cover of a box of Wheaties is quite an accomplishment; one that only the best athletes and teams will ever experience.

But as prestigious as it is to appear on a Wheaties box, it is even more so to be named a spokesperson for the iconic brand.  Wheaties has only had 7 athletes who were selected to serve as spokesperson for their product.  They are all athletes who transcended their sport and were famous around the globe.  The seven Wheaties spokespersons are athletes who excelled both on and off the field.

Athletes who served as Spokesperson for Wheaties:
* Bob Richards (Pole Vaulter)
* Bruce Jenner (Track & Field)
* Mary Lou Retton (Gymnast)
* Walter Payton (Football player)
* Chris Evert (Tennis)
* Michael Jordan (Basketball)
* Tiger Woods (Golf)

There are not published details on how much these athletes were paid by Wheaties to endorse their product.  But the distinction of being a spokesperson for a brand so closely linked to sports greatness is surely a thrill for each of these star athletes.

Full list of athletes who have appeared on a Wheaties box.

Posted in Athletes, Endorsement Deals, Sports Brands | Tagged: , , , , , , | Leave a Comment »

 
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