When it comes to sports, fans can often identify as much with a single athlete as they may with their hometown team. One need look no further than Miami’s own LeBron James, who was the subject of a previous post on this blog detailing his extensive earnings off the court.
Of course, it is the great worth of athlete endorsements that has sporting goods manufacturers fighting to sign professional athletes to significant deals. Take, for example, footwear company New Balance. Long a known player in the running world, in 2010 the company found itself looking for ways to expand its overall business. Key players in the organization, including one manager who had moved from a major competitor, identified huge potential in their line of baseball clients – and made the decision to buck their history of shying away from athlete endorsements by jumping in full throttle.
Now, after only three years, the company boasts 300 current players wearing their brand under an official agreement, which amounts to about 40 percent of all players in Major League Baseball. Some of the most recognizable players include Dustin Pedroia, Miguel Cabrera and Curtis Granderson.
Of course, in the world of sports merchandising and licensing, competing companies need to find a way to differentiate themselves – a signal of competition that has sports agents and athletes excited at the possibilities. To compete with other giants of the industry, New Balance has chosen to directly include contributions to charitable efforts in their contracts – something that one sports marketing firm executive thinks is a great way to stand out. With their aggressive approach, the company hopes to become the top brand in the sport in the near future.
For athletes, a company highlighting the value of its’ endorsers is welcome news, and the fact that competition exists for a player’s signature means that athletes can seek out deals that best meet their goals. Of course, while the end value may be great, negotiating such contracts can be challenging and players will want to ensure they understand what the agreement requires of them. After all, a company like New Balance stands to benefit greatly from the use of an athlete’s likeness, so the value given in return should be maximized to ensure a long, productive and worthwhile relationship.
Source: Boston Globe, “New Balance buffs out endorsement roster,” Gail Waterhouse, July 5, 2013