Sunday, 21 July 2013

McIlroy Set for Cash Swoosh

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LeBron James signed a seven-year, $93 million contract with Nike in May 2003 and then signed a new shoe contract with Nike in 2010 that pays the Miami Heat basketball player more than $10 million per year. In all James earns about $28 million a year from a range of endorsements. 



In 2006 Tiger Woods signed his third multi-year agreement with Nike for an undisclosed fee, as is company policy, the terms of the contract were not released. Although Woods' original contract with Nike was for a reported five years, and valued at $40 million. In 2001, he signed another five-year deal, for a reported $100 million. 

In the past week Nike has ended the agreement with the one time Tour de France winner Lance Armstrong following the decisions by the Union Cycliste International to endorse the findings of the US Anti doping Agency and banned the Texan athletes from cycling. With that decision came the loss of seven Tour titles and a lengthy of list of sponsors now clambering to distance themselves from the drug taking athlete. The estimated financial loss for Armstrong already reaching $50 million. 

Lance has repeatedly denied doping, saying he has never failed a drug test. Last week he stood down as chairman of Livestrong, the charity he started in 1996, in order to “spare the foundation any negative effects as a result of controversy surrounding my cycling career.” 

Armstrong and Nike signed a five-year contract in 2010 to pay the Lance Armstrong Foundation at least $7.5 million annually from profits generated by Livestrong merchandise, according to Outside magazine. Nike said last week after release of the USADA report that it “plans to continue to support Lance.” 

Highlighting his commercial value it should be noted that Armstrong earned $21 million in 2010, which made him the 50th highest-paid athlete in the world, according to an annual list released by Forbes magazine. 

It is into this mega world of sponsorship that two time major golf major winner Rory McIlroy is rumoured to be entering with suggested deals ranging up to $250 million over ten years – and in a similar league to LeBron james. 

To put matters into further perspective Michael Jordan signed his first five year deal with Nike in 1984 for $2.5 million contract with Nike in 1984. The brand Jordan is now a $1 billion business for Nike with MJ getting a piece of the profits. 

Nike has been seeking new face to sponsor in the world of golf having previously sunk  alot of hipes in Anthony Kim , who has proved a huge disappointment on the PGA Tour.

As McIlroy’s current deal with Titleist/FootJoy is set to expire at the end of this season, leaving the world number one a free agent. It is expected that a deal of the size suggested - $250million - would result in McIlroy going with Nike products from head to toe and from driver to wedge. 

McIlroy's other existing contracts inlcude the Dubai-based hotel group Jumeirah, the sunglasses manufacturer Oakley, Santander bank, and the watchmaker Audemars Piguet.

In the case of Tiger Woods it took some time to make the switch to Nike golf balls and clubs and was not part of his second deal. But by 2010 he had made the change and in a one swoosh also ended a marketing conflict between Nike and Titleist - that began when Nike entered the golf ball market. 

Tiger Woods then began using Nike new irons at the American Express Championship in Ireland in 2004, another step in his move away from the Titleist brand. 

``We won't be satisfied until we can convince him that we've made a better product for every club in his bag,'' Nike Golf General Manager Chris Zimmerman said in an interview at the time 

These days the former World Number 1 uses a signature model Nike golf ball with his own line of shoes, gloves, hats and shirts emblazoned with the company's trademark ``swoosh'' and Wood's personal ``TW'' logo. 

But no equipment changes comes without risk or can be done without raising superstition as  Tiger recognised at the time, and having only switched from Mizuno when he turned professional in 1997. 

Just ask Graeme McDowell who after winning the US Open in 20010 signed a very lucrative deal with Srixon, and leaving Callaway after many years. Not to mention much success .

In return for a multi-year contract McDowell agreed to use Srixon irons, Cleveland wedges and the latest Srixon golf balls. He also now wears a Srixon hat, uses the glove and carries a Srixon bag. All reward for becoming the first European to win the US Open for 40 years - since equalled by McIlroy - and holing the winning putt at the Ryder Cup in 2010. Not to mention defeating Tiger Woods over 36 holes and a play off at the Chevron World Challenge the same year.

Since making the switch though McDowell has yet to win a tournament, all adding to the understandable reluctance of golfers to change their equipment. Unless of course the deal is too hard to refuse. Particulalry as these sponsorshop deals exceed the athletes annual salaries by a multiple of the possible prize money earned in a season in golf. Or the annual salaries that are possible in the NBA, NFL or indeed football world.

There is a vital difference between career earnings and endorsements.

Floyd Mayweather
Total Earnings between June 2011 to June 2012: $85 million
Salary/winnings: $85 million
Endorsements: $0
Sport: Boxing , Age: 35

Manny Pacquaio
Total Earnings between June 2011 to June 2012: $62 million
Salary/winnings: $56 million
Endorsements: $6 million (Monster Energy, Hennessy, Nike, Hewlett-Packard)
Sport: Boxing , Age: 33

Tiger Woods
Total Earnings between June 2011 to June 2012: $59.4 million
Salary/winnings: $4.4 million
Endorsements: $55 million (Nike)
Sport: Golf, Age: 36
Net Worth: $500 million – As of September 2010, according to Forbes

LeBron James
Total Earnings between June 2011 to June 2012: $53 million
Salary/winnings: $13 million
Endorsements: $40 million ( Nike, McDonald’s, Coca-Cola, State Farm and others)
Sport: Basketball, Age: 27

Roger Federer
Total Earnings between June 2011 to June 2012: $52.7 million
Salary/winnings: $7.7 million
Endorsements: $45 million (Nike, Rolex, Wilson, Credit Suisse)
Sport: Tennis, Age: 30

Kobe Bryant
Total Earnings between June 2011 to June 2012: $52.3 million
Salary/winnings: $20.3 million
Endorsements: $32 million
Sport: Basketball, Age: 33

Phil Mickelson
Total Earnings between June 2011 to June 2012: $47.8 million
Salary/winnings: $4.8 million
Endorsements: $43 million (Callaway, Barclay’s, KPMG, Exxon, Rolex, Amgen/Pfizer)
Sport: Golf, Age: 41

David Beckham
Total Earnings between June 2011 to June 2012: $46 million
Salary/winnings: $9 million
Endorsements: $37 million (Burger King, Sainsbury’s, Samsung)
Net Worth: £160 million ($260m) – As of April 2012, according to the Sunday Times Rich List
Sport: Football, Age:37

9 Cristiano Ronaldo
Total Earnings between June 2011 to June 2012: $42.5 million
Salary/winnings: $20.5 million
Endorsements: $22 million (Nike, Castrol, Konami and others)
Sport: Football, Age: 27

10 Peyton Manning
Total Earnings between June 2011 to June 2012: $42.4 million
Salary/winnings: $32.4 million
Endorsements: $10 million (Reebok, Sony, Wheaties, DirecTV, Gatorade, Papa John’s)
Sport: Football (NFL) , Age: 36




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