Athletes and Ownership: The New Standard
Longstanding superstar athletes are rewriting the playbook of sports ownership.
Last week, on Feb. 13th, Tiger Woods announced a new lifestyle brand called Sun Day Red in partnership with TaylorMade. Woods spent 27 years with Nike and earned $660 million, per Fortune.
TaylorMade gave Woods something Nike did not: ownership.
TaylorMade filed for an LLC rather than a corporation, leading legal experts to believe Tiger and TaylorMade are sharing ownership and profits in the new business endeavor.
Woods is one of many star athletes rewriting the playbook of sports ownership:
- Lionel Messi’s Inter Miami deal, which pays him $20.4 million annually, includes a future equity stake in the team and a revenue share on new MLS Season Pass subscribers from the $2.5 billion, 10-year Apple-MLS deal.
- Jon Rahm, the world's #3 golf player and reigning Masters champ, signed a long-term extension with Topgolf Callaway Brands and received an equity stake as part of the deal.
- Tom Brady owned 1.1 million common shares for serving as a brand ambassador for FTX. Brady’s stake in FTX was worth as much as $45 million at the company’s peak.
Is this a trend or a fad?
Some leagues, like the NFL, don’t want player ownership. But, without the players, there is no league. Could you imagine if Lebron James opted out of the NBA during his prime?
Athletes want a share of the upside, and in some cases, like Lionel Messi’s deal, they are turning down large sums of guaranteed money in favor of it. Expect this athlete-ownership trend to last as financial literacy increases and former and current players become more embedded in the business world.
