It is no secret that athletes earn the majority of their wealth through endorsements and brand sponsorships. Think Michael Jordan and Nike, Lionel Messi and Adidas, Usain Bolt and Puma.Watch any match of the English Premier League and you will see a plethora of companies that paid millions just to have their logo seen in the background.As the most viewed form of television programming, sport is a goldmine for advertisers. During a final of a football match, a brand can gain up to 17 hours of bra
nd exposure, according to GumGum, a media technology company that specialises in artificial intelligence and computer recognition.Football superstar Cristiano Ronaldo, basketball icon LeBron James and NBA legend Jordan are the only three athletes to have signed a lifetime contract with Nike, setting them to earn at least a billion dollars from the deal. Each has their own sub-brand under Nike Inc.,and their logo, personal branding, and likeness are now part of the Nike entity forever.In 2018, tennis ace Roger Federer signed a 10-year deal with Uniqlo to replace his former endorsement with Nike. His new deal with the Japanese retailer is worth a reported US$300 million ($414.5 million) which marks one of the biggest endorsement contracts in the history of tennis. With Federer at the age of 40, his contract with Uniqlo will probably extend past his retirement, allowing him to profit from the brand even off the court.And Uniqlo is only one of Federer’s many sponsors. The tennis pro also has multimillion-dollar deals with Wilson, Credit Suisse, Mercedes, Rolex, and more.
A symbiotic relationship Sponsorships can have an impact on an athlete’s career before they even start playing professionally. And elite athletes like Ronaldo and Federer can earn millions before they even touch a ball. Major brands like Nike and Adidas sponsor a multitude of team kits, even at the school and collegiate level for basketball and football.
In July of this year, the National Collegiate Athletic Association, in the US, permitted college-level athletes to monetise their name, image and likeness, either through brand deals or personal merchandising. Among the most prolific signings from the new rule is between Louisiana State University star gymnast, Olivia Dunne and WME sports agency. Dunne, who has more than 5.7 million followers on TikTok and Instagram, is projected to earn up to seven figures just in endorsements.
For burgeoning athletes such as Dunne, these sponsorships could also mean a massive advantage for their future professional careers. With sponsors comes funding which will allow them access to better personal coaches, dietitians, physiotherapists, and more. Eventually, personal sponsorships like these can be used as leverage to sign with a better team or negotiate a higher salary.
In some expensive sports, like motor racing, sponsorships can make or break a career. In Formula One, where the cost of developing a racecar can go up to the hundreds of millions, funding from sponsors can directly impact the performance of the car and drivers who are unable to pull sponsors risk losing their place on the grid.
Formula One is also one of the few sports where a title sponsor can entirely or partially make up the team’s name. This includes the Red Bull Formula One team, which is backed by a Honda engine.
Ronaldo vs Messi Despite the pandemic throwing a spanner into live sport starting last year, the world of football was not short on surprises and drama. After 21 years at FC Barcelona, Lionel Messi shocked fans when he made the move to Paris Saint-Germain. On the day of the signing, his new Messi 30 PSG jersey reportedly sold out within seven minutes, breaking Cristiano Rolando’s record during his transfer to Juventus in 2018.
The Nike and Jordan-backed PSG is rumoured to have sold nearly a million units of Messi’s jersey within 24 hours. Diehard fans who came to the PSG official store on the Champs-Élysées filmed the hours-long queue outside the store, which extended all the way into the Metro station nearby.
Not to be outdone by his rival, Ronaldo’s surprise return to his old team, Manchester United, made shockwaves across the globe. With him reclaiming the number 7 at Old Trafford, the club sold £32.6 million ($60.5 million) of his Adidas-clad jersey in the first 12 hours – by the first four, Ronaldo had already smashed the record of the highest daily sale on a single sports merchandise site outside North America.
The Portuguese player now has the fastest-selling jersey in English Premier League history and Manchester United managed to cover Ronaldo’s £12.9 million transfer fee in just a matter of hours.
This, however, is when things get slightly ironic. Nike lifer Ronaldo achieved the greatest sports apparel feat with a jersey made by Adidas. And Messi, who has sold millions of football cleats for Adidas, now dons PSG’s team kit by Nike-Jordan.
While the executives at Adidas and Nike headquarters are probably not the happiest about this situation, another former athlete is getting the final laugh.
PSG football club has been in a partnership with the Jordan brand for the last four years. Michael Jordan’s unique contract with Nike allows him to earn a 5 per cent royalty of every Jordan brand sale, which stretches across shoes, apparel, and accessories. The ex-NBA All Star has reportedly earned more than £5 million thanks to Messi’s transfer to the Paris football team.
Bad press can be good press As mentioned, most famous elite athletes make the majority of their income outside of competing, so when a sponsor decides to pull out, it can put a major dent in an athlete’s wallet. Never more notoriously than with Lance Armstrong, who lost an estimated US$150 million in endorsement deals because of a doping scandal that resulted in him being banned from cycling for life.
In the past, sponsors would ruthlessly cut ties over the most minute slip-ups, but these days brands are learning compassion may be more effective in pulling customers’ heart strings. Although Nike had initially received backlash for choosing to stick with Tiger Woods through his controversial times, the brand is now lauded for supporting Woods throughout his comeback.
The brand did the same for tennis star Maria Sharapova when she failed a drug test at the 2016 Australian Open, while her other sponsors decided to leave.
In June, the highest-paid female tennis player of the year, Naomi Osaka, was fined US$15,000 after skipping media day at the French Open due to her struggles with mental health, which were related to sports media. Osaka subsequently decided to withdraw from the tournament as criticism against her piled on.
Despite Osaka’s rough season, her biggest sponsors – Mastercard, Levi’s, Nissan, Nissin Foods, and TAG Heuer – are following Nike’s lead in supporting her. “Our thoughts are with Naomi,” Nike said in a statement, while Mastercard tweeted, “Naomi Osaka’s decision reminds us all how important it is to prioritise personal health and wellbeing.”
Mental health has been a serious topic in sports recently. Top athletes Osaka and gymnast Simone Biles withdrew from major events this year, exposing how performing at a high level physically, combined with the added pressures of the media and fans, can take a toll mentally.
As brands drive towards more purpose-driven marketing, sticking with their athletes through the tough times projects a more positive image for consumers. Today’s audience values honesty and, above all, authenticity.
Watching a top athlete win is great but seeing someone like Osaka talking about a topic that is relevant to so many people makes her much more relatable and ultimately is more important than winning or losing a tennis match.