A traditional, but exceptionally valuable, external income stream for pro athletes has been the endorsement or sponsorship deal. You always see and hear about the mega-deals some athletes get. But generally, these deals are carefully crafted, and there are tons of factors that need to be considered before jumping into deals with companies whose intentions may not be readily apparent.
It’s important to make sure that the brand you’re endorsing or sponsoring aligns with your personal values and reputation. This means considering whether the company’s mission, values and business practices align with your own, and also whether your association with the brand would reflect positively on your image. If a brand or company is known for engaging in unethical or controversial practices, it’s important to know about it, and it’s obviously not a good idea for you to be associated with it.
You should also carefully evaluate the financial compensation they will receive for the endorsement or sponsorship deal, and ensure that it’s fair and commensurate with your level of fame and experience. Consider, also, whether the deal offers long-term financial stability, and whether the compensation is guaranteed or subject to performance-based conditions.
You should also consider the time commitment required by the endorsement or sponsorship deal and how it aligns with your current schedule, as well as your training schedule. You should be sure to fully understand what is expected of you, such as how many events you will be required to attend, how much time you will need to devote to creating content, or what types of promotional activities are expected of you.
Another tripping point is failing to review the terms of the agreement to understand how the agreement may be terminated or non-renewed. This is important, as in the unfortunate case the relationship does not work out as expected, you should be aware of what the steps are, and how it will affect the compensation or other terms of the agreement. Additionally, the terms of renewal and how the agreement will be extended or if it will be renewed at all, should be considered.
A lot of times, once you see dollar signs, it’s easy to lose track of any legal or tax implications of the endorsement or sponsorship deal. This may include restrictions on their ability to earn additional income, such as competing with the company’s products or services. You should also be aware of any potential tax implications of the compensation you will receive, and whether it will be subject to taxes or not.
Lastly, remember that you don’t have to negotiate these deals alone. Endorsements and sponsorship deals can be complex, so you may want to seek out the advice of a manager or agent to help you navigate the process and negotiate the best deal possible. They can help you to identify potential opportunities, evaluate the terms of the deals and negotiate the best possible terms and compensation.