Federer and the golden nugget: the value of athletic sponsorship

Source: Rolex / John Buckle (2018)

Is there such thing as the perfect athlete sponsorship contract for a brand? No, but a couple of great deals have been made in the last 50 years, with huge impact for both brand and athlete: Jack Nicklaus, Michael Jordan, Michael Phelps, Kobe Bryant and David Beckham are just a few that come to mind.

There is one athlete in particular who is taking the lead by far in my opinion. He has ruled tennis the world over for the last two decades. He is none other than Roger Federer. I will not dare to present the prestigious list of trophies that "King Roger" has won, although I would wager that he goes down as one of the greatest sportsmen in history. Over his 20-year career, Roger Federer has been a brand ambassador for some of the world’s most famous names: Rolex, Credit Suisse, Nike. His recent move from Nike to Uniqlo – a reported deal of U$S 300M over ten years – has shaken the world of athletic sponsorship.

Source: Forbes (2018)

If instead of focusing on sponsorship, we narrowed in on earnings alone, Forbes’ top ten list of highest paid athletes would show us Floyd Mayweather at the top, with an insane amount of U$S 275M in prize winnings and earnings, but only U$S10M on endorsement. Unsurprisingly, the two other hot shots completing the podium comprise a football rivalry that has dominated the sport for more than a decade: Cristiano Ronaldo (U$S 108M in total earnings), whose recent move to Juventus has already massively boosted the merchandising and social media accounts of the Italian club, and Leo Messi, another excellent example of brand sponsorship and loyalty (U$S 111M in total earnings).  

This list would be completely reversed if based solely on sponsorship. If we made a ranking based on endorsement alone, Federer would be on top, with a colossal amount of U$S 64M. So the question is: why are these brands ready to spend all this money to get to King Roger? 

  A question of fit 

Source: AELTC / Ben Solomon (2018)

Let’s analyse the brands that have endorsed Federer in the last years: Uniqlo (Nike before that), Wilson, Credit Suisse, Mercedes, Rolex, Lindt, Jura, Moet & Chandon, Sunrise and NetJets. Let’s take out Uniqlo and Wilson, as they are equipment endorsements – also important, but irrelevant to our point.   

We will start with Rolex, a Swiss brand, with great tradition and strong values. The spirit of Rolex is one of the best examples of a perfect marriage between athlete and brand. As we focus in on the luxury watchmaker’s core values, we realize they are an essential deciding factor when making an endorsement deal: precision, perfection, hard work, attention to detail, achievements. Now, having heard those words, who am I talking about? The brand or the ambassador? Difficult to say, as you can project those values on both.   

"Now, having heard those words, who am I talking about? The brand or the ambassador?"

If this example seems straightforward, then let’s break it down within another industry. In 2014, Sunrise, the private, Swiss, telecommunications operator closed a deal with the tennis legend. With this endorsement, the shared values are not the same as those Federer shares with Rolex. We are touching a larger population here. In this precise case we identify class, humour, kindness, and all the qualities that would make Federer the perfect son-in-law. They show him in everyday life situations – with great results. So why hire Federer for this specific job? Because people can relate to him, as he doesn’t have (or show at least) a superstar type of life (hear me, Floyd?).  

The golden nugget (and its counterpart)  

Roger Federer seems to fit in every situation, or at least in most of them, which is why we could refer to him as a golden nugget when it comes to endorsement deals. The former ATP leader embodies so many different values that a lot of brands can relate.   

Let’s take another example that goes the other way. In 2012, the then 21-year-old Brazilian superstar Neymar Jr., a.k.a. O’Ney, was pushed into stardom after accepting Barcelona’s gigantic offer. Hard-hitting, tenacious, a cunning smile on his face, Neymar lends toward a certain type of sponsorship. Perfect examples would be Beats by Dre: young, stylish and provocative, or an endorsement for Apple, as part of the Made Defiant or Above the Noise campaigns, which embody the various characteristics cited previously. The Neymar example doesn’t mean that being as versatile as Federer is a bad thing.  It mainly depends on the target you have as a brand. 

Source: Beats By Dre (2017)

And it also depends on the media consumption of the target. If your target buyer is a 13 to 17-year-old, an endorsement like the Brazilian footballer is right on the mark, especially with the incredible social media push that he attracts: an analysis made by Blinkfire showed that O’Ney’s posts in January 2018 alone were worth U$S 40M. The calculation that follows is quite simple: this amount is the investment a brand should make to obtain the same level of exposure.  

We can say that there are as many brand ambassadors as brands in the world, not every one of them is adapted to a specific target. One thing is certain, for the partnership to succeed, the core values of the company have to match with what the athlete projects to the public. 

A The Consultancy Group article, written by Alessandro Di Benedetto 

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