Is Equity The New Norm For Athlete Endorsement Deals?
ellness technology company, Therabody, has continued to grow its investor and athlete ambassador list with the recent additions of international football stars, Cristiano Ronaldo and Romelu Lukaku.
The moves are the latest for the company, who became the official recovery partner of both the AFL and NRL in Australia this year.
The Therabody athlete ambassador and investor list now includes several high-profile athletes across international sport including Ronaldo, Lukaku, NBA-star Paul George, Mo Farah, DeAndre Hopkins, Aaron Rodgers, Kevin Durant, James Harden, and Marcus Rashford, among others.
The investments from high-profile athletes have signalled an ongoing trend for athlete commercial partnerships, where athletes are taking on equity in companies that they sign endorsement deals with.
This trend has also been highlighted with a number of athletes opting to sign equity deals opposed to traditional endorsement deals with start-up companies such as Hyperice, Rhone, BodyArmor, and many others.
By acquiring an equity stake in the company they are partnering with, athletes are choosing not to receive immediate cash for their endorsement work, however, will be able to be involved with the daily operations of companies, understanding everything from manufacturing to distribution to profit margins.
This trend is seeing more power be handed to athletes in the commercial world as athletes are taking extra care to research different companies, industries, and financial factors before deciding who they are best aligned to partner with.
This has seen a number of high-profile athletes diversify their financial assets far beyond their on-field or on-court product and also invest their own capital into brands they partner with.
Speaking about the trend, BodyArmor founder and chairman, Mike Repole, in a press release in August 2020 after signing an equity deal with seven elite athletes, said athletes are taking more care in their decision making.
“Athletes are making choices that work for them,” Repole said.
“They care about what they put in their body and they’re reading labels like they’ve never read before.
“Being an athlete now is not just seasonal.
“Whether it’s food or beverage, athletes are taking nutrition a lot more serious than ever before and BodyArmor really checks all the boxes for them,” he said.
Speaking to Sportico, Repole spoke about how he first used equity deals for athletes 20 years ago with Vitaminwater and Smartwater.
“Back then, we didn’t have the cash to offer partners, so we offered equity instead,” Repole said.
“[Today’s athletes are] most interested in the equity and owning a piece of the company,” he said.