Secrets that have turned athletes into billionaires

Matthew Pavlich is a Nine sports presenter and co-founder of Pickstar

Talent endorsing brands is nothing new.

Since the 1920s and Babe Ruth’s underwear line, athletes have been leasing their own personal brand to be associated with the latest and greatest brands and products available.

Back in the day, athlete endorsements seemed to largely be a side gig. A bit of money on the side to complement their sporting earnings and achievements. This was certainly the case when I first started my AFL career back in 2000.

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Nowadays, for the top stars, it isn’t the case. It is very much apart from everything they do.

American football icon, Tom Brady, will move into the television commentary booth when he finally calls time on his NFL career after recently agreeing to a deal with Fox Sports worth a record-shattering $375 million ($540m) over 10 years. Brady is playing for at least one more season, reversing a retirement decision.

Either way he is safe in retirement! If only I had won seven Super Bowls, I might be in a position to ask my media partners for a pay rise.

Michael Jordan, the most iconic sports marketing tool we’ve seen, first penned a five-year $7 million deal with Nike in 1984. He didn’t know it at the time, but he set a precedent for athletes that they could aspire to in the business sphere.

In the following 30-odd years, almost every year, we have witnessed massive endorsements, including Steph Curry’s recent $42 million endorsement deal with Under Armor which was one of the richest athlete deals of all time.

But when it comes to selling a brand or service, it may not be one of these massive global stars that are best suited to a brief and budget. A lesser profiled talent may be the better fit!

There are more layers to this than might first appear.

Understanding the seller’s needs, the location of an event, availability of the talent and their passion points are all just as important.

When you’re maximizing the value of someone with a profile, another fundamental aspect is understanding when is best to capitalize on the peak moment of marketability and if there is proper alignment of values ​​and beliefs between the star and the brand.

Is it authentic? If not, customers will likely see straight through it.

Most professional athletes earn more from competing than they do from their endorsement work – with a couple of broad exceptions.

Stars who might earn more as brand ambassadors are in sports that have a fast-growing audience, but don’t yet have the structures in place to pay top dollar to top performers.

Women’s football is a great example of this: superstars like Megan Rapinoe, Alex Morgan, Daisy Pearce and Sam Kerr have fans around the world but their clubs don’t yet turn over enough to compete with blue-chip brands in terms of financial rewards.

AFLW too sees the likes of Daisy Pearce, Abbey Holmes and Erin Phillips in demand by media and brands more than they get paid, to play the game they love.

A lot of leading athletes in female team sports will push hard to build followings on social media – and engage with fans as authentically as they can – so they can offer partners as much value as possible.

Importantly, as we saw with the recent AFLW wage rise, these playing wages should continue to go up, allowing women to concentrate, first and foremost, on the day job they strived so hard to get.

The other group who makes almost as much, if not more, from their commercial activities as from their chosen sport are among the very richest athletes in the world. In the last few weeks, trade media company Sportico released its rankings of the highest-earning stars in sport.

At the top of the list is LeBron James, who was paid $36.9 million last year in salary and bonuses by the LA Lakers but made $90 million from endorsements. Kevin Durant and Giannis Antetokounmpo, fellow NBA megastars, also made more off the court than on it.

Stars of individual sports often have even greater opportunity to cash in on their personal popularity. According to Sportico, Tiger Woods made $8.5 million playing golf last year and $65 million as an ambassador.

Naomi Osaka earned $1.2 million in prize money from tennis and an estimated $52 million from her various commercial activities. The great Roger Federer, whose time with racquet in hand has been limited by recent injuries, took $724,000 on the circuit and $80 million promoting the likes of Wilson, Mercedes-Benz and Rolex.

Federer’s success – he is understood to have amassed $1 billion while still being an active player – has come in part from bold decisions like partnering with high-street clothing brand Uniqlo and footwear startup On after a blockbuster deal with Nike ended.

Athletes often have cause to think tactically and strategically about their endorsement portfolio. Argentinian soccer icon Lionel Messi – second in Sportico’s list with total earnings of $122 million, with $50 million from endorsements – has been prolific in this space in the past couple of months.

In March, he signed up to become a global ambassador for crypto-backed, blockchain-based fan token provider Socios for a reported $20 million windfall. In May, he was unveiled as a tourism ambassador for Saudi Arabia during a trip to Jeddah on the Red Sea.

But remember, a brand doesn’t have to partner with a big star to get a great outcome. In fact, there are many factors when trying to get the best bang for your buck.

Paralympians, netballers and hockey players all have inspiring stories that might resonate more with your customers, as compared to a big named player.

Athletes’ careers are infamously short and even those who have spent years in the public eye can have fleeting windows in which to capitalise. If you miss out on those, it can be harder to reach your earning potential. But getting it right can lead to relationships that live well into retirement.

This is all worth brands considering, too. There will be times where a deal is impossible and an athlete is out of reach, and others where everyone is ready to talk. There will be periods in an athlete’s career where they are in exactly the right place to front certain campaigns, either because of their popularity or maturity. It is up to both sides to make the most of that.

Star athletes have unique qualities that make them perfect for brands. They are youthful, recognizable across generations, in great health and make an emotional connection with audiences.

Getting full benefit from that takes calculation and conversation.

And despite the massive figures quoted above for the world’s biggest stars, you don’t have to part with as much as you’d think to get a meaningful outcome with talent.

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