"Why do pro athletes get paid so much? What leads to such astronomical values? And, from a business point of view, is there a way to measure the return on investment of these transfers? The answer lies in the power of a brand.”
In May 2013, Neymar da Silva Jr. signed with Barcelona for five seasons. The Spanish team paid a princely sum for the young Brazilian football star, who’s better known as Neymar: €57 million (USD $78.4 million). While that may sound like a lot, it’s practically a bargain if we consider the whopping €100 million (USD $137.5 million) that rival Real Madrid spent this past September to recruit Gareth Bale for six seasons, amounting to the most valuable transaction ever made in football. Real Madrid also renewed its contract with Portuguese footballer, Cristiano Ronaldo, who will earn an impressive €17 million (USD $23.4 million) per season.
As so many around the world have asked themselves: Why do pro athletes get paid so much? What leads to such astronomical values? And, from a business point of view, is there a way to measure the return on investment of these transfers? The answer lies in the power of a brand.
As defined by Interbrand, a brand is “a living asset brought to life in different touchpoints to generate identification, differentiation and value.” By that definition, star players are indeed “living assets,” and their value is greater than their football skills alone. Star athletes entertain on the field, but they’re also celebrities with monetary value beyond the field. They are cultural icons and idols. They are trendsetters and product endorsers. They are brands—and very valuable brands, at that.
Neymar, Ronaldo, and Bale generate value for themselves, for their teams, and for the brands with which they are associated. The gigantic wheel of investments never stops turning. Value builds—or diminishes—with every match, interview, or commercial. Thus, when we examine the value of pro athletes, we must evaluate them by the same ten Brand Strength pillars we would use to assess any other brand.
With athletes, clarity comes first. Does the player have a well-defined viewpoint and personality? Is the brand strategy for the player clear and well understood by everyone who comes into contact with him or her?
Brand commitment is crucial. Is the player being properly “handled” and cared for? Is creative and strategic thinking being applied to the player’s career? Ideally, both the player and his or her brand management team should be engaged in the process. At the core of brand commitment is the ability to define, disseminate, and even legally protect the brand.
In a social and connected world, responsiveness also comes into play. Is the brand ready for new challenges? Is the player aware of how he or she is perceived? Are there strategies in place to help the player respond appropriately to fans, the press, or social media interactions? If so, are these responses happening at the right time and through the right channel?
Another very important attribute is authenticity. If a player is worth millions in salary, then he or she must be both relevant and unique. A valuable brand should be different from its competitors. Football stars and other athletes must stand out in positive ways both on and off the field.
Last but not least, the player’s brand must be present—that is, frequently seen and remembered. Moreover, it must strive to remain consistent. Ideally, fans, companies, and teams should establish a strong and well-understood perception of the player and his or her proposition as a brand.
When it comes to managing a football superstar, the challenge becomes even more complex. After all, we are dealing with a human being, not a company that consistently follows rational decision-making processes and employs collective reasoning. As such, if we consider our aforementioned brand factors, consistency is likely the hardest attribute to establish for a human brand.
World-class athletes live under the prying gaze of the paparazzi, feisty reporters and ardent fans. They are frequently in the public eye, oftentimes via their own social media channels. Tempers can get hot and issues can get personal, but, as we have often seen, inconsistent behavior, especially any actions that may be perceived as negative, can have a devastating impact.
This is why talented football players are being groomed to become stars (and brands) earlier than ever. Neymar, for instance, has been in media training since he joined the Santos academy at the age of 14. As a result, he and his family have learned what is expected from a global celebrity.
Protection is another vital piece of personal brand management, as football stars’ brands can be applied to a wide range of products. Before transferring from Tottenham to Real Madrid this year, Gareth Bale registered his signature “Eleven of Hearts” heart-shaped hand gesture with the UK’s Intellectual Property Office. Neymar and Messi have also developed personal logos, which are applied to official garments and other merchandise.
By aspiring to the global brand recognition of David Beckham, for example, these three footballers are still the exception to the rule. Most of their peers still have not invested in brand identity and management, so there is a tremendous opportunity for many footballers (and those who invest in them) to enhance their careers by recognizing the advantage branding can offer.
Admittedly, the idea of branding football stars and celebrities is rather new to Brazil. Even though the country is a great exporter of football talent, Brazilian clubs and brands haven’t discovered how to truly capitalize on sponsored players and rising stars. What are they missing?
Brazil’s typical football star brands lack relevance and differentiation. Neymar signed 12 different sponsorships while playing for Santos: Nike, Panasonic, Claro, Tenys Pé, Lupo, Guaraná Antartica, Mentos, Unilever, Volkswagen, Santander, Heliar, and Red Bull. While his personal brand maintains presence and mass appeal, his sponsorship deals do not appear strategic, or make emotional connections with audiences. To ensure that these sponsorships are purposeful and mutually beneficial, brands working with Neymar should consider what personal brand equity he can share with them and vice versa.
The successful Messi and adidas brand partnership serves as a good example. Thanks to exposing his image in every corner of the world via adidas campaigns, the deal generates value for Messi. Transferring equities like commitment, confidence, and world-class talent, the Argentinian footballer adds value to the adidas brand. The aspirational image of Messi increases the role the brand plays in selling professional and non-professional products, from performance apparel and gear to streetwear, making this a win-win relationship, one that both sides strategically manage.
But what about the football clubs’ brands? Real Madrid and Barcelona are two of the most prominent clubs in the world and also brands with high financial value, according to Interbrand’s latest Best Spanish Brands report. The value of their players is not only related to match results and tournament victories, however. The use of an athlete's image is also linked to lucrative media relationships, product sales and endorsement deals. To return to the question of seemingly excessive athlete compensation, these factors impact the extraordinary salaries players such as Cristiano Ronaldo receive.
Despite having millions of fans, traditional Latin American clubs like Boca Juniors, Corinthians, and Flamengo struggle to convert brand strength into financial results. Corinthians, for example, has a “potential market” of more than 30 million fans in Brazil. Its revenues are growing year by year and have achieved R$358 million (around €134 million or USD $183.2 million) in 2012. Yet, these numbers are modest compared to the revenue most European teams generate.
In fact, Brazilian football teams are only now learning management strategies to transform passion into profit. The next three years will be key for Brazilian clubs, players and companies as the 2014 FIFA World Cup and the 2016 Summer Olympics present unmatched opportunities for taking Brazilian football and other sports to the next level—and to the global stage.
Increasingly, companies are looking at sports teams and individual athletes as unique assets who can share their positive attributes with sponsors and investors. Neymar expresses himself with flair, creativity, and exuberance, while Messi comes across as straightforward, reliable, and committed. These qualities can do much to enrich and add value to a corporate or product brand—and, of course, the right sponsorship opportunity can give an athlete’s career an enormous boost. Compatibility is essential, however, and too often overlooked by sponsors who may believe any celebrity will do.
Finding the right celebrity-sponsor relationship requires full understanding of both the values of the sponsor’s brand platform and the player’s ideals and personality. By thinking long-term, learning from international clubs that employ smart brand management strategies, and following Interbrand’s ten Brand Strength factors, corporate brands, pro teams, and athletes can make the most of the financial opportunities that sports offers in a world that richly rewards the talent and charisma of star players.