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Your First Footwear and Apparel Endorsement Deal

You were a star college football player at a big time Division I-A school.  Upon the conclusion of your senior season, you tested extremely well at the Combine and at your school’s pro day.  You were fortunate enough to have been selected in the NFL Draft.  Now, the hard part begins – Nike, Adidas or Reebok -- which company’s shoes and apparel should you wear?  And more importantly, just what should you expect to give and receive in return?

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Your First Footwear and Apparel Endorsement Deal

Nov 12th, 2015

Your First Footwear and Apparel Endorsement Deal

You were a star college football player at a big time Division I-A school.  Upon the conclusion of your senior season, you tested extremely well at the Combine and at your school’s pro day.  You were fortunate enough to have been selected in the NFL Draft.  Now, the hard part begins – Nike, Adidas or Reebok -- which company’s shoes and apparel should you wear?  And more importantly, just what should you expect to give and receive in return?

Whether you want to be like Kobe, D-Rose, or Steph is pretty much a question of personal preference.  Some players like certain shoe brands better than others in terms of style and even comfort.  The truth of the matter is, if Nike is pursuing you to wear their products, you can rest assured that Adidas and Reebok will not be far behind. 

Whether you decide to wear Nike, Adidas or Reebok products, the standard terms and conditions of the typical endorsement contract remain remarkably consistent across the entire industry.  At the core of the typical endorsement contract is the shoe company’s obligation to provide you with free merchandise (shoes, gloves, compression shorts, etc.) related to “professional use,” or use in practices and games.  For your personal and family use, the shoe company will typically grant you a merchandise credit for all footwear, apparel and accessories found in its current product catalog.  You can either schedule visits at the shoe company’s flagship stores (located in large cities across the U.S. such as New York and Chicago), or you can shop online using your own personal account.  The amount of the merchandise credit will often vary from player to player depending upon the visibility of your position (skill position players usually carry a higher profile than offensive linemen) and the round in which you were selected (a higher round draft pick will most likely receive a larger merchandise credit than a lower round draft pick).  Nevertheless, for a three-year endorsement contract, merchandise credit amounts will typically average in the range of $2000 - $3000 for the first year, $3000 - $4000 for the second year and $4000 - $5000 for the third and final year.  The contract may also contain performance bonuses for which additional merchandise credit will be issued.  Performance bonuses are typically given for playoff appearances, (merchandise credits will increase as you advance through each round of the playoffs from the wild card game to the Super Bowl), being named to the initial Pro Bowl ballot and leading the league in a statistical category.

In exchange for the free gear, you will be required to fulfill certain obligations under your contract.  First, you will be required to grant the shoe company the right to use your likeness, image, autograph and/or name in any advertisements and marketing campaigns that the shoe company may choose to run and any products (including shoes, t-shirts and sweatshirts) that it may choose to produce during the term of your agreement.  However, keep in mind, that if the shoe company decides to sell products (such as posters, t-shirts and shoes) with your name or image on them, you will be entitled to royalties, or a small percentage of the wholesale revenues received by the shoe company from their sale. 

Second, you will be required to wear the shoes, apparel and accessories of the shoe company and only that shoe company, during any and all public appearances you make as a member of your NFL team.  “Public appearances” are usually defined to include NFL training sessions, practices, games, skills competitions, camps, clinics, post-practice interviews and autograph sessions.  Your failure to fulfill this obligation will result in offsets against your merchandise credit for the year in which the offense occurred.  Typically, the shoe company will reduce your merchandise credit by 10% for the first offense, 15% for the second offense and 25% for the third offense with all reductions being cumulative.  Continued failure to comply with the terms of this provision could constitute grounds for termination of your contract. 

Finally, you will be prohibited from “spatting” your shoes so as to cover or obscure any portion of the shoe company’s logo or trademark, unless you give your shoe company rep prior notice (before that weekend’s game) that you are required to “spat” your shoes at the recommendation of your team’s trainer due to a legitimate injury.  Your failure to comply with this provision will also result in merchandise credit offsets (as set forth above) and continued failure to comply could also constitute grounds for termination of your contract.

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