I figured I would make my first post something that can spark some debate in both sports fans and non-sports fans. Yesterday I was in my Marketing Communications course here at school and we were discussing the amount of money spent on athletes through product endorsements. It truly is amazing to think about the money that people like Lebron James, Alex Rodriguez, Tom Brady, and yes, Tiger Woods, make purely off of endorsement deals. Sports entertainment is growing at such rapid speeds that marketers can't help but continue to pour truck loads of money into top athletes' drive ways.
When you look at the 2011 endorsement numbers from the top 50 American athletes, the numbers are simply staggering. Through everything that Tiger Woods has gone through in the last couple years you think his $100 million in endorsements from 2007 would be long gone, think again. Tiger Woods made $60 million in 2011 from endorsements alone, thirty times the amount of his earnings on the golf course. Obviously this number is much lower than that previous $100 million, but the ratio of earnings from endorsements to winnings is not. Athletes are used every day to sell all kinds of products; from apparel, to video games, to cologne, to restaurants, and last but not least, beer. Professional athletes now have no maximum on the amount they can make, even after they are done playing.
Look at Michael Jordan, the greatest basketball player to ever play the game. How much do you think he earned in 2010? How does $60 million sound? That's right, MJ earned close to $60 million in 2010 without dunking from the free throw line, hitting a last second three, or even lacing up his sneakers. Jordan's highest earnings while he was playing; $33.1 million. Granted you have to take into account inflation and cost of living.... heck who am I kidding, the guy is making bank, all through endorsement deals.
As a marketing student you have no option but to embrace the popularity of sports in America and it seems to only be growing. The world of sports combines what is great about America, the freedom to succeed, the competition, the constant battle to be the best, that's America. I can't help but think that their are thousands and thousands of people out there that will disagree with what I'm about to say, but here it goes:
THEY DESERVE IT
These guys bring in millions and millions of dollars for every single one of the companies that endorses them, otherwise, why would they do it? Marketing executives across the globe understand the power of sport and that is why we continue to see the numbers in endorsements continue to grow. Last year alone, the Jordan Brand made Nike $1 billion in revenue. These guys may be making a ton of money, way more than what I could ever dream to make, but who's to stop them? I love seeing commercials with athletes in them (except Brian Orakpo), they are about the only commercials I watch. Believe what you want, do the research, and realize that these athletes are only making a margin of what that bring in through revenue streams. Forget performing on the field, find yourself a good endorsement.
Sources
http://sportsillustrated.cnn.com/specials/fortunate50-2011/index.2.html
http://probasketballtalk.nbcsports.com/2011/09/23/michael-jordan-makes-more-money-now-then-when-he-played/
This is not really related to what you wrote, but what do you think about the state of baseball as a business, where the best players are paid exorbitant amounts by the big cities (i.e. NYC and Boston), leaving small market teams desperate to keep their good players? I'm a die-hard Cleveland fan, but I see my beloved team as nothing more than an MLB farm-team for the BoSox and the Yankees. Recently, two of the best players Cleveland producted (Martinez and Sabathia) had to be traded because we simply couldn't afford them. I'm not arguing they shouldn't be paid big bucks considering the revenue they generate for the franchises, but the system seems rigged to me. Thoughts?
ReplyDeleteI would highly recommend reading my blog tomorrow as it entails the concerns that you bring up in your comment. I too believe the system is "unfair", but that it is simply part of the business of baseball. I broke down both of your trades in my blog and hope that you are pleased with what I have come up with. If I haven't answered your questions or you would like to discuss more, feel free to comment on that blog and I will definitely comment back. Thanks for reading!
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