IL-based housewares company Salton Inc., which sells
George Foreman Grills, "will buy the right to use the name
`George Foreman' to market its cooking appliances,"
according to CNBC's Maria Bartiromo. Salton will pay
Foreman and his partners $113M in cash over five annual
installments. Bartiromo noted that the George Foreman
Grills "are among Salton's best selling products" (CNBC,
12/9). In N.Y., Patrick McGeehan reports that Salton will
pay Foreman $137.5M in "cash and stock." Foreman and "two
business partners" will receive shares of Salton worth
$23.5M and five annual cash payments of $22.75M. Foreman
will receive "about" 75% of the payout, "which is structured
as a long-term capital gain to reduce the sellers' tax
liability." DLJ analyst Peter Schaeffer "estimated"
Foreman's "total income from his" Salton partnership "will
exceed" $150M. Salton CEO Leon Driemann said Foreman will
"continue to assist us in our marketing effort" (N.Y. TIMES,
12/10). In N.Y, Sam Walker reports that the new pact
"replaces" Foreman's "royalty arrangement" -- in which
Foreman received 45% of the profit and his partners got 15%
-- and "should save" Salton money in the "coming years"
(WALL STREET JOURNAL, 12/10). Shares of Salton were up 1
1/4 yesterday to close at 31 3/4 (THE DAILY).
A NEW MODEL FOR ATHLETES? Analysts say that Foreman's
deal with Salton "appears to be the largest one-time
endorsement contract ever" for a sports figure and that
"over its lifetime" the "relationship could even rival"
Michael Jordan's pact with Nike. Lanktree Sports President
Nova Lanktree: "I've never seen anything like it." Walker
calls the deal "remarkable, not only for its size but also
because demand" for sports figures as endorsers "has been
declining" (WALL STREET JOURNAL, 12/10). In N.Y., Nancy
Dillon reports that Salton "gets global, unrestricted use of
Foreman's name forever" (N.Y. DAILY NEWS, 12/10).
