The Staggering Value of Player Endorsements in Tennis

Roger Federer & Rafael Nadal's rivalry in 2017

Roger Federer made headlines this week when he appeared on centre court at Wimbledon in a new line of kit, manufactured by Japanese clothing brand Uniqlo.

Whilst player wears new kit might not seem much of a headline, what startled the world was the price the Japanese company have paid to prise Federer away from his long-standing association with Nike, whose clothes he has worn for 23 years.

Worth a cool £23 million a year, the contract that Federer has signed is the most valuable sports sponsorship deal in the world. This is no short-term arrangement either, as it is scheduled to last for 10 years which, unless the 36-year old Swiss manages to defy old age into his 40s, will mean that it will still be in place long after he retires.

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So why have Uniqlo paid so much money for a player who, with all respect, is in the twilight of his career at the top level?

The answer quite simply is that Federer, who is currently gunning for his ninth Wimbledon title, has widespread marketing appeal that goes beyond tennis.  They are hoping that by wearing and endorsing their clothes, Federer will appeal to his large demographic of middle-aged fans who will want to emulate their hero and buy the same clothes as he does.

Uniqlo are by no means Federer’s only sponsors, who include NetJets, a private jet firm, Mercedes Benz, Barilla Pasta, Sunrise telecoms, Jura coffee and Moet & Chandon.

The value of all these endorsements, including the just expired deal with Nike, added-up to a staggering £602 million, which dwarfs his total career prize money of £88 million. To put that in context, that makes him richer than Sir Elton John, Kim Kardashian and even the Queen of England.

Federer is not alone.

French Open champion Rafael Nadal earns well over £21 million a year from endorsements as well. This includes acting as global ambassador for South Korea’s Kia motors, as well as promoting brands such as Nike, Telefonica, Babolat rackets, Richard Mille watches, and the clothing brand Tommy Hilfiger.

And it is not confined to the men’s game either. Former world number one Serena Williams, earns around £12 million annually from various product endorsements, including Nike, Delta Air Lines, Aston Martin, Gatorade and Pepsi, to name but a few, as well as promoting her own designer apparel line.

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It is clear then that for major brands, the world’s top tennis players are, in effect, walking billboards for their products, and an endorsement from a Federer, Nadal, or Williams, or an advertisement featuring them, can produce a substantial boost for their business.

And, whilst it may seem like a lot of money for Uniqlo to pay Federer, it may yet prove to be a very sound investment, if an example can be borrowed from another sport.

In 1985 Michael Jordan agreed a deal with Nike for US $500,000 plus stock options.

Under the terms of their five year deal, the basketball player was required to have sold US $4 million worth of shoes branded under his name by the third year of the deal. In fact, Nike sold $70 million worth of Air Jordan 1s in their first two months on sale in 1985!.

That was more than 30 years ago. As of May 2016, the Jordan brand was generating more than $2.5 billion in annual sales for Nike. Nike said in October 2015 that it expected the Jordan brand to be worth $4.5 billion in annual sales by 2020.

If Uniqlo can generate even a fraction of those returns from their endorsement of Federer, it will prove to be a gamble well worth taking.

About Andy Dalziel 1562 Articles
Andy is English but a long time resident of Cyprus. When not writing about tennis and other sports, he is also a Chartered Accountant. In his spare moments, he spends more time than is healthy worrying about his beloved Arsenal.

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