Celebrity Athletic Endorsement

History of Celebrity Athletic Endorsement

The concept of celebrity endorsements for products has centuries-old beginning, perhaps as long as advertising itself. By some accounts, around 1760, Wedgewood pottery used “royal attributes” to give value beyond the product’s sole attributes. Trade cards, between 1875-1900, subsequently were simply celebrities’ pictures each given (with product description) with products – actresses and baseball players (such as Cy Young and Ty Cobb), along with authors (Mark Twain on cigars and flour) noted.

The baseball cards became more mainstream with Kodas Cigarettes, with many reportedly buying cigarettes just to get the cards (with no permission apparently, as one of the players had to stop his name’s use, making the card even rarer and hence more sought after). Thereafter, Wheaties as a cereal had Babe Ruth, Joe Dimaggio, Jackie Robinson, Chris Every, Michael Johnson, Michael Jordan, and Tiger Woods endorsing it, along with Mary Lou Retton post-Olympics. Interestingly, 46/51 players in the 1939 Major League All-Star game endorsed Wheaties at the time. A deliberate permission given was noted for the case of a preacher, Rev. Henry Ward Beecher.

This practice gained momentum, with celebrities including athletes noted in one of every eight TV commercials – for cigarettes, beauty products, beverages, and audio equipment, mostly. “Reggie” was a candy bar named after baseball player Reggie Jackson, and 48 of 59 celebrities for Coke were athletes. In the 1970s, the ability to be “free agents” allowed athletes to represent themselves, an increase in endorsements grew – with sport-related salary typically correlated to endorsement value.

Nike led the charge signing Michael Jordan in 1984, and then in 1990s holding press conferences to announce celebrity deals – in 2004, committing nearly $339mm. The payoff has been notable – for example, Nike saw a revenue growth from $200mm to $250mm after Tiger Woods endorsed golf balls.

The Present-day World of Celebrity Athletic Endorsements

Today’s world involves not just getting celebrity athletes after they have proven themselves, but when they have potential, even prior to entering the professional arena – for example, Lebron James had a $90mm seven-year deal pre-NBA entry; a 13-year old player (Freddy Adu) was paid $1mm, and Reebok’s signed a 3-year old (?prodigal) basketball player contract (!) While risky, such ventures have paid off in cases of LeBron James and Michael Jordan for Nike. Nonetheless, “matching and not mismatching” the athlete to the product has remained a key point.

Nike’s recent ad with Jordan stating “I missed more than 9,000 shots in my career. I’ve lost almost 300 games… 26 times I’ve been trusted to take the game winning shot and missed… and that is why I succeed” connected with audiences by showing the human side.

Given the significant “structure introduced into the art of celebrity endorsement,” there has been understandably interest on the part of collegiate athletes receiving endorsement. However, the NCAA has (as it posts on its website ncaa.org under FAQs) that “amateurism certification” is important as students are first students and next athletes. When asked whether college-bound student-athletes can be paid, the NCAA notes that in such circumstances “his or her eligibility could be affected.” In addition, limits (e.g. 10K in prize money per year maximum) prevent any additional funding to be given to athletes (except to cover meals and lodging). This is claimed by the NCAA “to ensure integrity and fair play among NCAA schools and a level playing field for participating student-athletes.”

An Endorsed Future?

The ongoing controversy about NCAA athletes not being able to be paid has gained notoriety with some players suing the NCAA after even retiring from professional sports, and winning decisions in their favor. While rare, this has prompted many journalists to request or opinionate consideration for NCAA athlete payment. At the heart of this controversy have been difficult living conditions by impoverished athletes, while schools benefit substantially to the tune of millions of dollars because of star power of athletes. The argument of a “level playing field” may be difficult to understand for some, in the era of heavy recruitment and targeting, where essentially a college may be competing for a player with an endorsement company (e.g. Nike or IMG – see img.com). Players such as LeBron James, having a direct offer for millions of dollars in endorsements (which would preclude a college education automatically, should they accept the endorsement) have an extreme disincentive to go to college. If colleges were the businesses they are in this transaction as well, would they compete with endorsement companies successfully, or would the very best college-age players play for the NBA (with a “level playing field” more so achieved, but not necessarily the “best level playing field” or a field not so level after all in terms of as strong talent). While the argument remains a difficult one to fully understand, proponents of the free enterprise system consider athletes of any age (as evidenced by the extreme of Reebok allegedly endorsing a 3-year old) able to be approached – should the athlete then be “precluded from participation in gaining college-level knowledge” or join the NCAA where other athletes are deprived of the free enterprise in favor of a college education? This remains controversial, with both sides having strong points.

(Portions of this text are from sources of the internet, which may include huffingtonpost.com, ncaa.org, complex.com/sports, nike.com, img.com)

Ravish Patwardhan, MD