Professional athletes often assume that stellar contracts with high annual salary earnings automatically translate into mainstream popularity and equally high endorsement earnings. The 2010 edition of Sports Illustrated’s Fortunate 50 athlete salary review once again shatters this assumption, showing little to no correlation between healthy contract salaries and endorsement (marketing) earnings.
Many of the athletes appearing on this list have become annual regulars. Tiger Woods, Phil Mickelson, Floyd Mayweather, Jr., LeBron James, and Alex Rodriquez claim the first five slots. Also, it is no shock that certain athletes with strong brands have scored high endorsement revenue. I’m looking at you, Peyton Manning.
However, like 2009 list, the 2010 edition illustrates a great divide between the contract earnings of athletes and their endorsement earnings. While Phil Mickelson tops the list of endorsement income as a percentage of total earnings (at 84.3%), over half the Fortunate 50 bring home less than 10% of their total earnings from endorsements. That’s quite a gap.
Some other interesting “finds” on the SI list?
- Golf and motorsports dominate the top 5 slots of endorsement-to-total earnings;
- Seven NFL players, all with contract earnings of over $18 million per year, earned about $75,000 in endorsements; and
- Floyd Mayweather, Jr. ranked third in total earnings, but ranked near the bottom of endorsement-to-total earnings with 0.4% of his earnings derived from corporate sponsorships.
Why the great divide?
In our athlete-marketing guide, “Ahead of the Game,” we noted the essential differences between the underpinnings of these two athlete revenue streams. It’s the difference between salary power and brand power. Salary power derives from the athlete’s on-field ability; his/her ability to be a difference maker in a game’s outcome. The bigger the difference, the more the salary.
Brand power, on the other hand, is different. Very different.
Endorsements: Not Run on Auto-Pilot
A brand’s power, or value, comes from its ability to attract an audience. Usually a large audience.
We call the disparity between high contract earnings and low endorsement earnings the “brand power gap.” Athletes suffering from the brand power gap have great earning power, based on their status as a difference maker. However, they have little value as a brand off the field. After the final whistle blows, fans simply don’t care about “who they are” and “what they stand for.”
There are some persons who deny the existence of a brand power gap. They point to instances where the notoriety of the athlete from on-field performance translates into brand strength. I won’t deny that some athletes become brands by sheer muscle power. That great Super Bowl play or the final three seconds of Game 7 of the NBA Finals. However, fame on the field is fleeting and easily replaced by the next day’s top story on ESPN’s SportsCenter. Real brand strength, cultivated during an entire sports career, has more power and longevity than on-field play.
We all know marquis athletes (with 7 or 8-figure annual salaries) upset, or even bitter, that their brands do not attract meaningful (i.e., 7 or 8 figure) investment from endorsement partners. However, they generally have no idea they suffer from the brand power gap. Their non-existent off-field brand doesn’t have the strength to compete with other athletes whose brands have value. Athletes with valuable brands attract the notice of large audiences. The larger the audience, the more valuable the brand, the more money earned through endorsements.
The good news for athletes with an earnings gap? The brand power gap can be closed.
It is closed through affirmative effort by the pro athlete and his/her business team. Real brand strength is derived from defining and positioning an authentic brand, with messages that attract a mass audience: projecting a brand through a regular social media strategy; participation in brand-relevant promotional events; and cross-marketing outside of a sport to attract a larger audience. These are but a few examples.
Our message to clients is simple. The brand power gap can greatly limit your ability to maximize lifetime earnings. You can choose to close the gap. Or, you can leave millions of dollars on the table.
Your choice.
Posted by Ken Ungar
