What are the key elements of a successful athlete endorsement contract?

Before you start looking for an athlete to endorse, determine what you want to accomplish with that endorsement. Do you want to increase awareness of your brand? Target a new market? Associate your product with specific values like perseverance or success? Having clear goals will help you choose the right athlete and structure the deal to achieve those goals. Nike signed an endorsement deal with Michael Jordan in the 1980s, with the clear goal of dominating the basketball market. Nike's association with Jordan not only increased brand awareness, but also created a cultural legacy with the overpriced Air Jordan line.

A player contract is a specific type of employment contract between a sports team and a professional athlete. Player contracts are fundamentally limited duration employment contracts where the sports team agrees to pay the player to train for and play a certain number of games in a season in exchange for the player’s unique skillset. These contracts may also require players to make appearances at publicity campaigns, nonprofit events, and press conferences. Professional athletes often enter a player contract with a professional team for a specified number of seasons. A player contract will include any signing bonuses, no trade clauses, injury liability, and restricted free agency provisions.

Elements to consider: 1. Alignment of Values: Align an athlete's personal brand with your company's values e.g. Nike x Serena Williams showcased her athletic prowess and demonstrated Nike's commitment to empowerment and excellence. 2. Audience Fit: Select athletes with a strong appeal to your audience. Nielsen Sports says this increases purchase intent by 53%. 3. Performance-Based Incentives: Incorporate to ensure mutual success 4. Exclusive Rights: Prevent competing brands from capitalising on the athlete's image. Be mindful of being over-restrictive and limiting an athlete's earning potential or hindering future collaborations. 5. Renewal Terms: Make clear to streamline future negotiations and maintain a positive relationship.

I agree with the article, although you need to define your goals both for that particular deal and your long term strategy. Whether representing the athlete or the endorsed company, what are the long term goals? How many other deals do you want to pursue? Is this particular deal in line with your overall business and brand strategy? What is the plan after this contract expires? Are you planning to renew with bigger and better deals with the same parties? If so, what parameters can be negotiated into this deal to allow that to happen, perhaps automatically by meeting certain metrics? Remember that goals are both specific and more general, immediate and long term and every deal should push the plan forward.

It's all about striking a balance. First, know what you're aiming for—be clear about what you want to achieve and make sure it aligns with the brand's vibe. Understand your worth, but keep it real: research the market, know your standing. Terms should be fair, protect your rights, and toss in some give-and-take. Lawyers are your friends here, don't skimp on the advice. And remember, it's more than just signatures and dollars. It's about building trust, delivering on promises, and keeping in touch. This ain’t just business; it’s a partnership that can boost both your athlete's brand and the company’s if done right.

The contract should specify the amount of money the athlete will receive for endorsing the product or service. This may include a signing bonus, guaranteed money, or performance-based incentives. It should outline the specific services the athlete will provide, such as appearing in advertisements, making public appearances, or promoting the product or service on social media. The contract should specify the length of the endorsement, including any renewal or extension options. Lastly, it should outline the conditions under which either party can terminate the contract, including breach of contract, bankruptcy, or changes in the athlete's reputation or performance.

In my experience, the contract should clearly outline the rights and obligations of the athlete and the company. This may include exclusivity clauses, non-compete clauses, and restrictions on the athlete's behavior or actions. Additionally, the contract should address ownership and use of any intellectual property associated with the endorsement, including the athlete's name, image, and likeness. Furthermore, the contract should include representations and warranties from the athlete and the company, including guarantees of the athlete's performance, the quality of the product or service, and compliance with applicable laws and regulations. Finally, the contract should specify the procedure for resolving disputes.

And no matter what side you are on, remember that things can go wrong with even the best of intentions. Are there provisions requiring appropriate insurance and are the necessary parties added as additional insureds? What kind of indemnities are there and are they mutual? Are any triggering events for termination, extension, bonuses or reductions described objectively, or can they be used down the line as a way to get out of the deal if one party has changed their mind? Who has the right to approve advertising and all uses of name, image, likeness, etc. to ensure that all promotional materials coincide with brand image? Money is tempting, especially in the new world of NIL deals, but does the risk outweigh the reward?

Beyond contracts; endorsement is also about building a relationship. This may include support in competitions, collaboration on charitable initiatives, or simply maintaining open and regular communication. A good relationship increases athlete commitment and makes the partnership a success. Red Bull excels at building relationships with its athletes. Whether it's propelling Max Verstappen's career, making the historic jump from the stratosphere with Felix Baumgartner, or winning the Dakar Rally at 61 with Carlos Sainz sr. Red Bull demonstrates a unique ability to build deep and meaningful relationships with its athletes, thus reinforcing its brand image focused on adventure, adrenaline & sporting excellence.

Yes, both sides should think long term and ideally find a way to grow and nurture the relationship into something bigger and more beneficial for both parties down the road.