Menu
In-Depth

Athletes tie endorsements to equity stakes in upstart companies

More athletes are seeking a cut of what they’re selling, in some cases signing endorsement deals that may sacrifice in the short term but offer the chance for larger payouts later.

“The one trend that I’ve seen is athletes’ willingness to take on a bit more risk and potentially forgo some of the cash in a deal, depending on if there is stock available or a startup that has private shares,” said Lowell Taub, head of endorsements at CAA Sports. “I would call it the 50 Cent phenomenon.”

The rapper famously negotiated an equity stake in Glaceau’s Vitaminwater brand as part of an endorsement deal and then reaped millions when Coke bought the company for $4 billion in 2007. Author Dan Charnas estimated the rapper’s take to be in the range of $60 million to $100 million. Another investor in Vitaminwater — New York Mets third baseman David Wright — had a much smaller slice of the company but also netted a healthy payout as a result of the Coca-Cola deal.

David Wright is among the athletes who hold an equity share in Mission Athletecare, a maker of skin protection products.
Wright didn’t stop at Vitaminwater. He, Sergio Garcia, Dwyane Wade, Mia Hamm and Serena Williams are among 20 athletes with an equity share in Mission Athletecare. The New York venture works with notable pros to develop and promote a range of products aimed at skin protection, from chapped lips to sun block. After three full years in business, the company has its products in 20,000 stores across the country.

With or without equity, an athlete and a company can tout the authentic nature of product collaborations, and help build lasting legacies for athletes that can pay off well beyond their playing years.

Maria Sharapova, like the Williams sisters before her, delved into fashion with a designing role that has included launching a line of casual shoes with Cole Haan. Earlier this year, David Beckham, in partnership with clothing chain H&M, released nine styles of underwear carried in the retailer’s 1,800 stores.

Tony Hawk and Shaun White, X Games heroes past and present, have taken aggressive approaches, putting their names on clothing, video games and, in White’s case, even chewing gum. Target works with White on boys and young men’s clothing lines.

“The transition between an athlete with an endorsement and an athlete with an apparel line should be natural,” said Dan Griffis, Target director of strategic partnerships, lifestyle marketing and events. “We don’t have a formula.”

Griffis said the company wants to avoid haggling over contracts and to focus more on a constant conversation about working together with White and other athletes.

“The athletes get it,” said Mission founder Josh Shaw. “They understand, ‘I can move the needle for your company.’ And they say, ‘My fans can see through an endorsement when I just take a check.’”

Erik Spanberg writes for the Charlotte Business Journal, an affiliated publication.

SBJ Morning Buzzcast: March 25, 2024

NFL meeting preview; MLB's opening week ad effort and remembering Peter Angelos.

Big Get Jay Wright, March Madness is upon us and ESPN locks up CFP

On this week’s pod, our Big Get is CBS Sports college basketball analyst Jay Wright. The NCAA Championship-winning coach shares his insight with SBJ’s Austin Karp on key hoops issues and why being well dressed is an important part of his success. Also on the show, Poynter Institute senior writer Tom Jones shares who he has up and who is down in sports media. Later, SBJ’s Ben Portnoy talks the latest on ESPN’s CFP extension and who CBS, TNT Sports and ESPN need to make deep runs in the men’s and women's NCAA basketball tournaments.

SBJ I Factor: Nana-Yaw Asamoah

SBJ I Factor features an interview with AMB Sports and Entertainment Chief Commercial Office Nana-Yaw Asamoah. Asamoah, who moved over to AMBSE last year after 14 years at the NFL, talks with SBJ’s Ben Fischer about how his role model parents and older sisters pushed him to shrive, how the power of lifelong learning fuels successful people, and why AMBSE was an opportunity he could not pass up. Asamoah is 2021 SBJ Forty Under 40 honoree. SBJ I Factor is a monthly podcast offering interviews with sports executives who have been recipients of one of the magazine’s awards.

Shareable URL copied to clipboard!

https://www.sportsbusinessjournal.com/Journal/Issues/2012/10/01/In-Depth/Equity-stakes.aspx

Sorry, something went wrong with the copy but here is the link for you.

https://www.sportsbusinessjournal.com/Journal/Issues/2012/10/01/In-Depth/Equity-stakes.aspx

CLOSE