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Managing the Athlete Endorsement

November 2, 2007

A few days ago I read an interesting interview of Sarah Jane Gilbert, a product manager for Harvard Business School’s Knowledge and Library Services. Sarah talking to Harvard Business School professor Anita Elberse about her research study on tennis star Maria Sharapova who is client of the leading sports agency IMG, which is widely seen as the catalyst behind what has become the sport marketing industry.
The key concepts of this study include:

* On a global scale, total sports industry revenues are expected to be nearly $100 billion in 2007.
* The highest-paid athletes often make more money from endorsements and other commercial activities than from salary and winnings.
* Marketing executives value entertainment-related endorsements because of the difficulty of reaching a wide group of consumers using traditional advertising.
* Companies look to hire athletes whose image mirrors their own corporate brand.
* Sports agents and agencies must strategically manage these assets because their clients’ professional careers are often short lived

Keeping in mind that Mr. Entertainment himself, Gilbert Arenas, is bringing out 20 different versions of his new adidas basketball shoe, which are featured by many of his sponsors, just shows again that Gilbert’s agent(s) are doing a great job.

I learned from the interview that 50% of the global revenues in the sports marketing industry are made in the United States, which equals about $50 billion, mainly with football, basketball, baseball and NASCAR racing.

As a result, many of the highest-paid athletes now make more money from endorsements and other commercial activities than from salary and winnings. The majority of top-paid athletes is American or, like Maria Sharapova, based in America. The list includes golfer Tiger Woods, basketball players Shaquille O’Neal and LeBron James, baseball players Derek Jeter and Alex Rodriguez, football quarterback Peyton Manning, and soccer player David Beckham. However, the sports marketing industry is a global business, with international stars such as soccer players Ronaldinho and Thierry Henry as well as tennis star Roger Federer being particularly sought-after endorsers.

The case of Atlanta Falcons quarterback Michael Vick is known all over the world now. Since image is one of the most important factors in endorsement deals, it wasn’t too hard to predict, that Nike and other sponsors will pull back their products, dedicated to Vick. It is interesting though that Anita Elberse also names Kobe Bryant.

Finally, scandals or legal troubles such as those for Michael Vick and Kobe Bryant can seriously limit an athlete’s ability to attract and retain endorsements, so most companies look for endorsers with a clean image.

Nov 2, 2007ballineurope
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This post was published on November 2, 2007
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Comments: 1
  1. PCA
    17 years ago

    The incredible thing is that Gilbert Arenas fired his agent in 2006 and has done some brilliant self-promotion.

    “In September, he fired his agent, Dan Fagan, after two of Fagan’s employees he was close to left the firm.”

    http://www.washingtonpost.com/wp-dyn/content/article/2006/10/29/AR2006102900910.html

    And then from his own blog:

    “I don’t have an agent. My counsel is myself. I just go through all the rules and read up on stuff. I just sit there and read stuff that happened in the past and why things didn’t work out and why things are the way they are.”

    http://www.nba.com/blog/gilbert_arenas.html#070614_01

    ReplyCancel

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17 years ago 1 Comment Features, More, NBA/NCAA
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