Secret NBA Shoes Contract: Lost All Star Loss $300 Thousand?

When a NBA manager and a player broker negotiate a labor agreement, they are restricted by the salary cap, and they must act according to the rules of the alliance. However, there are no similar restrictions on negotiation between sports brand and player broker, which makes communication between both sides more creative.

This creativity is most evident in the incentive clause of the endorsement contract for shoes. When a basketball endorsement contract is reported, what we often hear is that players can earn up to XX, because most contracts contain a lot of incentive bonus based on the performance of the stadium, but it is hard to predict how much money the players can earn from a endorsement.

The incentive bonus in the endorsement contract is based on two categories: personal performance and team performance. The index of personal performance bonus includes the level of field data to a certain level; the number of appearances reaches a certain number; winning awards such as MVP at the end of the season; the All-Star lineup, the league's best line-up or the best rookie lineup of the league. The indicators of team performance include winning a certain number of games, qualifying for the playoffs, achieving certain results in the playoffs, entering the NBA finals, winning the championship, and playing the players themselves.

Nick DePaula, a ESPN sneaker expert, revealed that players can earn 300 thousand dollars in the All-Star lineup, earn 250 thousand dollars in the dunk contest, and earn 25 thousand -5 million dollars in the All-Star Saturday game. Nick Paula, So when players lose all stars or lose some honors in the all star game, they often feel depressed because they have missed a handsome bonus.

There will also be money deductions in some endorsement contracts. For example, there is usually a limit to the number of matches in a contract. If players fail to play a certain number of games in a single season, they will lose some income. Generally speaking, this number will be set to 60 matches. In addition, Paula said that some contracts will also be limited. If a player reaches or exceeds 26 of the score and rebounding data per game, he will get a $250 thousand bonus. If the figure is less than 16, it will reduce 250 thousand dollars.

Interestingly, some sports brands will also set up small market deductions clause in the contract. This means that if a player plays in a big market city like Losangeles or New York, the brand will provide rewards, but if players go to play in some small market cities, the fees they will get will be greatly reduced. Whether players choose a small market city voluntarily or players are passively traded to small market cities, they will be deducted from money.

Sports shoes brands also love big market teams.

"I see sales of some brands in some small markets by 20%." Paula said, "I know a brand that lists Sacramento and Orlando in the small market."

A sports brand executive who did not want to be named confirmed: "this is definitely a clause in the endorsement contract. There are incentives and deductions based on the players' market. If players go to important markets such as New York, Losangeles, Chicago or Miami, brands will get more exposure. They will take part in more American broadcast competitions and get more media coverage.

However, all this is the result of negotiations between the two sides. If players and brokers do not want small market deductions to appear in the contract, they can choose to refuse.

"This is a process of compromise." A NBA broker said, "if you want to allow the deduction of money terms, you have to consider what rewards you will get, so that it is worth being included in the contract. The money deductions you see in shoes endorsement contracts and all endorsement contracts are mainly related to injuries. If a player is unable to play, the brand can also stop in time. In addition, there are moral provisions. If a player does something morally bad, his contract will also be affected.

Sports brands are usually more willing to give players an incentive clause than a guaranteed high salary contract. "Now many brands do not want to pay the high cost of basic endorsement." Dexter Gordon, director of sports marketing at AND1, said, "if you sign a contract with a player, he can only pay the high basic fee as usual if he doesn't perform well during the season, which will make you complain:" if this is a contract full of incentive clauses, it will be more secure. If the players perform well, they will make more money and everyone in the brand is happy. " Even if the player signs a contract full of incentive clauses, they still have a certain base salary, which is also necessary for negotiation.

NBA salaries can be disclosed differently. When it comes to endorsement contracts, it is difficult for us to find details of the contract. So how can brokers put forward a price and ensure that their clients get their own treatment in endorsement cooperation?

"You have to try to find out what the market is, it is not as clear as you are in negotiating NBA contracts, but you will hear rumors that you need to dig up information so as to understand the other players' endorsement fees." A top NBA broker shared, "you have to communicate with every company." By talking with every company, not one or two companies, you will get a valuation to understand the market's expectations for specific customers. "

Former NBA agent Matt Babcock said: "big brokerage firms have obvious advantages in judging players' market value. They can better grasp the market because they want to negotiate with every sports brand on behalf of a large number of customers.

At some point, brokers have to jump out of their natural thinking when they are looking for brands for their players. "If your player is not a star, your job is to find his advantages and focus on it, so as to attract the interest of the brand." A NBA agent said, "maybe your players are in the market where Nike wants to enter, because there are no Nike players in their team. There are also some players who are somewhat like street clothes and street culture ambassadors. They show this on the pitch, like PJ, Tucker and Nick Jan are all such players. Under such circumstances, your negotiation is not. In the same way, you need to find an angle or favorable condition to help your players find the endorsement brand.

In addition to bonus incentive clauses and basic endorsement fees, brokers will talk about players' support for products from the brand premises, including whether they have signature shoes, if there are any royalties related to them, and whether there is charity support, because some players will seek support for their AAU teams or training camps. There are other details to be solved. For example, will players play any commercials, will they appear in some activation activities? Will the players publicize the brand during the off-season, and if so, do they want to go abroad to promote the brand?

Almost all brokers also mentioned that the position and play of players in the arena greatly affected the negotiation process of endorsement contracts and the acceptance of sports brands to players. As we can see, many of the big players in NBA only get branded product support, which confirms that the big players do not sell shoes.

"I think a lot of companies think so." Gordon, director of sports marketing at AND1, said, "when you try to sell products to consumers, especially children, they are more likely to identify defender's products. Not many children will grow up to be O'neal, but if you have a player like curi, the children may say, "if I train hard, I can be that kind of person." Our consumers are more willing to follow defenders.

Sports brands are more willing to sign fullback players. This is a trend for many years, but in recent years, with the emergence of stars such as alphabet and Durant, the major brands now turn to outside players. But there is a reverse case. Nebid, the former 76 star of the signing of Andrew Ma, will get his first pair of signature shoes later this year. Zion Zion has signed the most expensive rookie endorsement contract with James (7 years 75 million dollars) after the Jordan brand. They may re prove that the big players can also sell shoes.

"Bide's signature shoes will be a very interesting research case, because at present, no center has its own signature shoes in NBA, so we expect him to do it. Nebid has a very strong influence in social media. "Big man doesn't sell shoes" has some reasons, but we also want to see if Nebid can break the rules. Historically speaking, this is a challenge for them. Paula said.