By: Alexander Wildes  | 

NBA Players and Endorsements

The pairing of athletes with consumer products that are outside the sports industry has a long history in the field of advertising. In 1979, star defensive tackle “Mean” Joe Greene was featured in an iconic and widely successful Coke commercial, and since then, using athletes as endorsers has become more and more popular. 

Among all major sports, this trend has become most popular in the NBA. Not only do professional basketball players make a lot more money from endorsements than athletes in any other sports, but just about every player in the NBA has some sort of endorsement, whether it be an athletics company, like Nike, or those with no relation to sports, such as McDonald’s. Some of the current famous product endorsers are LeBron James (Sprite, Nike and Beats: $53 million), Stephen Curry (Under Armour, Chase: $42 million), and Chris Paul (State Farm, Nike: estimated $8 million per year). 

While we know that NBA players would love to grab these endorsement opportunities and earn extra money, endorsers aren’t going to pay just any NBA player to endorse their product. So, what can NBA players do to increase the amount of endorsement dollars they bring in?

Simply put, they can become better basketball players. Top players in today’s NBA, such as LeBron James, Stephen Curry, and Kevin Durant, may get paid even more from endorsements and advertisements than they do from their actual NBA salary. Therefore, becoming a top player is a lot more than just securing a bigger NBA contract; it opens the door to many more lucrative endorsement opportunities, which in turn can help secure financial riches far beyond what players may make just from their NBA contracts.

Another thing players can do is play in a bigger market, namely New York, Miami or Los Angeles. While players who do not play in these cities can still make significant sums in endorsement money, playing in bigger cities means brighter lights and much more exposure to fans, as the media capitals of the U.S. are in the bigger cities. When living in these bigger cities, players may also become more popular and can, therefore, capitalize on their fame with more endorsements.

A further thing players can do to maximize their endorsement money is to build up their social media following. As we have seen in the past few years, athletes, celebrities and especially influencers have begun to promote items on social media, sometimes making even more money from just one post than the median income of the U.S. Top NBA players with millions of social media followers like Kevin Durant, Stephen Curry, and Giannis Antetokounmpo can bring in the $100’s of thousands per post, while the league’s most recognizable star, LeBron James, may earn as much as $1 million for a single promotional post on Instagram.

Clearly, NBA players can earn a lot of money from advertising, endorsing and promoting products. But what do the companies on the other end of these deals get out of these partnerships?

The first thing companies may get is product quality assurance. For example, if LeBron James is willing to wear a clothing brand or to consume food from a specific restaurant, millions assume that the clothing or food must be very good. Given James chooses to wear or eat whatever he wants, and if he is willing to partner and endorse something, that product must be worth it. Furthermore, if James chooses to endorse a certain product, I, as a big basketball fan, may subconsciously make a connection between the product and James’ skill, making it more likely for me to purchase the product.

Another boost companies get from having NBA players on board is more brand awareness. When a player with millions of followers posts a picture on social media or is featured in an advertisement of any company, the amount of viewers and purchasers can jump exponentially. Moreover, if a player consistently wears a certain company’s clothes, or consumes a certain product often, fans of that specific player will recognize the brand, putting the brand at an advantage to be bought over others.

Naturally, the most important part that companies can get from their athlete endorsers is more sales. While this may sound obvious, it is important to remember that there may not be any tangible number for this, as brand awareness and product quality assurance cannot be quantified, nor can the exact amount of sales that a certain player is responsible for. However, we can tell exactly how many items with a player’s name (such as LeBron James’ sneakers) were sold, and if a player posts a link with a code for a discount on social media, we can see how many times that code was used. For example, in 2012, Nike sold $100 million worth of LeBron James sneakers, and James was getting paid only $15 million from Nike, so we can see the partnership from Nike’s point of view was a fantastic idea. However, based on other metrics, such as overall company performance and social media following, the overarching effects of NBA endorsers can be seen.

Clearly, these NBA player and company partnerships work out exceptionally well for both sides when the player is well-liked and respected. However, what happens if a player’s public image takes a turn for the worse? 

In 2004, NBA superstar Kobe Bryant was charged with sexual assault, and was subsequently dropped by McDonald’s and Nutella and was suspended by other brands such as Nike. However, it is likely that all these companies were still contractually required to pay Bryant the remainder of his contract, regardless of whether or not he was used in advertisements, as there was no opt-out opportunity for the company in case of a negative shift in public perception, which could potentially hurt their brand image.

Now, standard contracts have a solution to this issue: the morals clause, which protects companies from having to shell out big money to the NBA endorsers in the event that the player does something to negatively affect the perception of either the brand or the player himself. For years, many contracts had a morals-type clause that protected the company from the endorser doing something to hurt the brand, such as saying that the product is terrible quality. However, with the number of incidents inside and outside of the sports world of endorsers hurting their own public image (which may hurt the brand as well, as those people are linked to the brand), companies have gotten smarter and have increased the range that their morals clause can cover. Therefore, if a player is to get charged with drug possession, say something derogatory or do anything the company deems hurtful, companies can easily drop the players without the worry of having to pay their contract.

As technology and social media continues to develop, and athletes’ influence continues to spread around the globe, it seems as though this partnership between NBA players and companies will have an even brighter future.

Photo Caption: A relationship that benefits both parties
Photo Credit: Pixabay