Recently, Dwyane Wade of the Miami Heat left Jordan Brand (Nike), to become the flagship athlete of Li-Ning. The difference between the brands couldn’t be a larger gap. Nike has been the icon in the NBA for years with Jordan Brand being their premier offering. Li-Ning is an up and coming sneaker company, based out of China, which has been trying to get a piece of the professional basketball market by aggressively pursuing NBA players with little success over the past couple season. Maybe this will be their break out with Dwyane Wade.
Why would a superstar D-Wade make such a jump? How could a small company benefit a superstar? It seems like the company will benefit much more than Wade, but the sponsorship has more to do with equity than just dollars. Wade’s deal will include equity in Li-Ning which could make him millions for the rest of his life, rather than just getting paid during his playing days.
Tom Brady did the same with Under Armour a few years ago, taking a deal which includes equity rather than just cash. Under Armour founder, Kevin Plank, was interviewed for Harvard Business Review and it was interesting to read that Tom Brady is really a team player – for the business.
When our stock price went down, I received a text from Tom that said, “don’t worry I’m buying more stock tonight”
Plank was always utilizing contra-sponsorship deals as a way to keep costs down for his start-up apparel company. Only recently does Under Armour have athlete’s like Brady, and Brandon Jennings (NBA) as paid celebrity endorsements.
With more celebrities and pro-athletes being in an economic crisis of their own (example: Bow Wow’s Lambo), and more of their financial problems coming to the surface, these athlete’s choosing to solidify their future by having equity in growing companies helps their retirements.