The Value Of Marketing And Endorsements

Marketing and endorsements are huge components of many sports agencies. For one, agents often take a much larger cut on marketing and endorsement deals (normally 15-25%) than on contractual deals with professional teams (normally 3-4% depending on sport). Also, for many professional athletes, an agent is not needed to negotiate with teams because…there are no teams (golf, tennis, etc.).

Thus, the marketing and endorsement side of the business is a priority for many agents. Another person who takes interest in the subject is Harvard Business School professor Anita Elberse, who recently dissected this section of sports business in an article that has a sub-focus revolving around Maria Sharipova, in particular [Marketing Maria: Managing the Athlete Endorsement].

Some important extracts:

• PricewaterhouseCoopers estimated that the sports industry accounted for around $50 billion in revenues in the United States in 2007, up from just under $35 billion in 2001. On a global scale, total revenues are expected to be nearly $100 billion this year, compared with $70 billion in 2001.
• If a company is looking for an endorser with global star appeal, it has a reasonably large group of male athletes to choose from, but only a select few female athletes. This likely has contributed to Sharapova’s phenomenal marketing success.
• Companies try to find athletes with brand attributes that match those of the products the athlete is asked to endorse, or at least that match the attributes the company hopes to associate with those products. Other aspects play a role too, such as good looks, public-speaking skills, and overall image.

Maybe Barbara Bonic will be the next Sharapova? That would be nice!

-Darren Heitner