In sports, sponsorship deals are a part of daily commerce and have long been associated with cash payments. However, as the landscape of athlete endorsements evolves, a new wave of innovative sponsorship agreements has emerged. These unique deals offer athletes more than just financial compensation, providing them with opportunities to diversify their income streams and expand their brand influence.
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Athletes are presented with many options that allow for a very diverse portfolio, including increasingly popular non-monetary sponsorship deals.
Equity-based sponsorship deals have become increasingly popular in recent years. Instead of receiving cash payments upfront, athletes may be offered ownership stakes in a company or brand. This partnership allows athletes to become stakeholders, benefiting from the brand's success and growth over time. Equity deals offer the potential for long-term financial gains and foster a deeper sense of partnership between athletes and sponsors.
If you're offered an equity deal, make sure to have an experienced professional (preferably a lawyer) take a look at it. It's important that you understand the value, risks, vesting schedules, and termination.
Fast money is attractive, but oftentimes the best and most coveted opportunities by the most influential athletes include equity.
In the digital age, an athlete's social media presence is a valuable asset. Athletes with large and engaged audiences are attractive to sponsors seeking to tap into their fan base for increased visibility. Simply put, sometimes a brand's audience may also be a source of value for the athlete. Audience sizes are directly correlated to sponsorship opportunities.
A brand may be interested in gaining credibility, and in this scenario if they have a substantially larger audience, this is a value exchange to keep in mind. But you must ask yourself if this brand is one whose audience aligns with your own, and whether this brand identity is one that you want associated with your likeness.
Royalty-based sponsorship agreements involve athletes receiving a percentage of sales or revenue generated from products associated with their brand. This type of deal is particularly prevalent among athletes who have their signature lines of apparel, footwear, or accessories. By earning a share of each sale, athletes are incentivized to actively promote and contribute to the success of the product line.
Oftentimes royalties are presented as referral codes, but in reality royalties should be negotiated and included in anything that will include your likeness, especially long term. Don't sign away lifetime use for one time compensation.
Some of the most valuable non-monetary sponsorship deals come in the form of unique opportunities. Athletes may be offered experiences in industries outside of sports, such as entertainment, fashion, or technology. These opportunities allow athletes to diversify their skillsets, broaden their horizons, and build valuable connections beyond the field of play. Such deals can lead to endorsements in non-sports related sectors and open up new career pathways.
As the world of athlete endorsements continues to evolve, athletes can seize the potential of these non-monetary deals to unlock their full earning potential and create lasting partnerships with sponsors. What's after sports is important, and the realization that most athletes aren't going to generate life changing money from endorsements, but should capitalize on the opportunities being created and doors opening.
In Kind/Goods Exchange
In-kind sponsorships also extend to health and wellness services, such as physical therapy, nutrition consultations, or access to top-notch training facilities. Such deals not only benefit athletes physically but also contribute to their overall well-being and performance, making them a win-win for both athletes and sponsors alike.
This type of partnership is usually a gateway into a more lucrative opportunity. Businesses want to make money, and also don't have time to give everyone a contract and a try-out. In kind exchanges (especially for companies and products you're passionate about, or use often) are the greatest way to get an immediate exchange of value and begin testing the waters for a long term opportunity.
Always think long term, and strongly consider equity opportunities, because if everything goes right you'll be receiving dividends long after you're done playing.