Richard Sherman's Rant: Millions in Endorsements, and Eyeing a Record Contract
The entirety of Richard Sherman's rant after last week's Seahawks and 49ers game lasted no more than 25 seconds, and that's a generous count of the time that includes a confused Erin Andrews' questions.
We've all seen the rant, seen the talking heads of the sports world either laud Richard Sherman or denounce him. I'm not adding to that chatter.
What I do find fascinating is the ramifications of the interview from a cold dollars-and-cents calculation. After Sunday's game, we've seen the following happen to Richard Sherman:
His Twitter follower count quickly more than doubled, and now sit at more than 700,000. He now has 82% more followers than Darelle Revis, the highest-paid cornerback in football.
Jersey sales exploded. Sherman's jersey is now the tenth most popular NFL jersey since April 1 of last year. He's the only defensive player in the top 10.
Advertising started flowing in. According to Sherman's agent, upward of $5 million in endorsements are on the table after last week's game. He currently makes slightly more than his $550,000 per year rookie contract in endorsements.
Clearly, while Sherman has his detractors, his adrenaline-fueled rant is leading to a big pay day.
Salary vs. sponsorships
The past week surrounding Richard Sherman -- and his potential payday from it -- highlights the role of endorsements across sports figures and celebrities.
According to a 2011 Harvard study, between 14% and 19% of all commercials featured a celebrity that endorsed a product. For the best athletes, endorsements are extremely lucrative. For example, according to Forbes, Tiger Woods and Roger Federer tied for the highest endorsement income in 2013 at about $65 million each. Their income from winning competitions was pegged at "just" $13.1 million and $6.5 million, respectively.
The total business of endorsements is huge, and saw tremendous growth last decade. Nike discloses future endorsement obligations in its financials. In 2002, the company reported just over $1 billion in endorsement obligations, but by 2009 that figure had risen to over $4 billion! While the company has cut back on endorsement deals in recent years, they're still a lucrative source of additional income for many athletes.
Since football is America's most popular sport, you might expect several football players to be among the highest-paid endorsement deals. After all, a Harris poll published today showed 35% of Americans list football as their favorite sport. Baseball sits far behind in second place at 16%.
Football -- not the endorsement gold mine you'd expect
Yet, there are a couple very key areas that prevent football players from cashing in on huge endorsement deals. While the sport is a top advertising draw in America, commanding Super Bowl ad rates of about $4 million for every 30 seconds, players are more anonymous. Football is a team sport where 22 players are battling on each play. Not only that, they're anonymous warriors hidden behind helmets -- there's even a penalty for players who remove their helmets while on the field. Also, football is a niche sport away from America. Contrast that to golf or tennis -- both those sports are global, and their fans are known for high disposable income.
The global popularity of sports is a key concept. The titans of endorsement deals, such as Nike and Adidas have long been focused on international sales growth. The world's biggest cricket star, Mahendra Singh Dhoni, makes 133% more in endorsements than the NFL's highest-paid endorser, Peyton Manning. The Indian market has 1.2 billion potential consumers that multi-national brands want to reach. Also checking in before Manning are four different golfers and Chinese tennis player Li Na. Global reach, demographics, and international markets matter. A lot.
Not surprisingly, the biggest football endorsers are quarterbacks. They're the face of teams, the center of each offensive play. By Forbes' estimates, Manning makes $12 million annually. Following him is Drew Brees ($11 million), Tom Brady ($7 million), Aaron Rodgers ($6 million), and Tony Romo ($3 million).
Sherman, the anti-quarterback
Endorsement deals beyond well-known quarterbacks tend to be regional in the NFL. Seattle's Marshawn Lynch, known for his hard-nosed play and "beast mode" nickname, is most-known in the Seattle area for his poorly acted commercials with a local plumbing company (worth a watch).
Pierre Garcon, a wide receiver who led the Redskins with 113 catches last year, fills up local advertising as the face of a local pizza chain.
These are deals that generously could top out in the low six-figures. They also show the disparity between two very well-known positions (running back and wide receiver) and the kinds of national endorsements quarterbacks can command.
For defensive players, who anonymously form a unit and rarely make Sportscenter Top 10 highlights, getting endorsements can be even more challenging. As was noted, Richard Sherman is the only defensive player in the top 10 of jersey sales. Ask an average fan to name a cornerback from 20 years ago, and you'll likely get only one answer: Deion Sanders.
Like Richard Sherman, Deion Sanders wasn't known for his subdued nature. His brashness, style, and self-confidence allowed him to overcome the inherent anonymity of his position.
If Sherman's agent is correct, and he does have $5 million worth of potential endorsements on the table, his end-of-game rant will have pushed him into a unique space: among quarterbacks as the highest-paid endorsers in the NFL.
Yet, there is also another benefit to the recent attention heaped upon him. Richard Sherman will be on the last year of his rookie contract next year and will be expecting a big pay day. Analysis from Spotrac shows Sherman should expect a 6-year contract worth about $92 million, with $48.9 million of that contract guaranteed.
NFL GMs are smart enough to know Sherman is a top-flight player without all the media attention from the past week. However, the endless loops of his amazing final play and the potential for him to be a huge factor in the Super Bowl as the foil to Peyton Manning could be worth some extra oomph to that long-term contract.
Sherman is a surprisingly calculating player. While the spotlight is shining on the endorsement outcomes from his rant, the bigger picture might be what few are paying attention to: Sherman says he's the best cornerback in the game. His next goal is to get paid like the best.
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The article Richard Sherman's Rant: Millions in Endorsements, and Eyeing a Record Contract originally appeared on Fool.com.
Eric Bleeker, CFA has no position in any stocks mentioned. The Motley Fool recommends Nike. The Motley Fool owns shares of Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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