by Larry EderUsain Bolt is a phenomenon. That, is a fact. He fills up stadiums, and he has captured the interest of general sports fans everywhere. PUMA’s CEO Jochin Zeitz noted in a press conference that Bolt’s marketing value was estimated to be at US $358 million, after Berlin. According to business reports, Mr. Bolt is making between two and three million dollars US, per year, for his services. PUMA has worked with him since he was a junior. PUMA made an investment in Mr. Bolt when he was quite young, and Mr. Bolt has been happy with PUMA. Mr. Bolt also has contracts with Gatorade, and several other companies. This writer wonders out loud why McDonald’s has not picked him up, considering his love of chicken nuggets.
Usain Bolt, September 13, 2009, photo by PhotoRun.net.
In the past year, Chinese companies have started to come into the sports marketing world. Late in 2008, Li Ning, a Chinese footwear manufacterer, signed Yelena Isinbayeva, the current World record holder (27 times now) in the women’s pole vault, for a deal worth $7.5 million US over the next five years. Recently Li Ning made an offer for a Chinese women marathoner, reportedly worth $250k per year.
Recently, in the Jamaica Gleaner newspaper website, a Mr. Anjani Williams, CEO of Anza Marketing Group, Inc., claims to have the marketing rights to Mr. Bolt in China.The problem is, there seems to be some disagreement over the term representation. Sources close to Mr. Bolt claim that Mr. Bolt ended any representation with Anza over six months ago. Is this, as some claim, merely a way for Anza to pique the interest of a former client?
So, Anza claims that they have an offer on the table for $115 million, over five years, with a potential to make $300 million. This is from a Chinese marketing firm that will not reveal itself until Mr. Bolt signs the dotted line. In speaking to several global sports marketers over the past twenty-four hours, and gauging their reaction to the validity of this offer, most of the marketing sources question if a global marketer in general, and a new Chinese marketer in particular, would want to float an offer such as this, before the deal was done. The embarrassment, culturally, in China, for such an offer to be turned down, would be worse than if the offer had never been made.
Is something rotten in Denmark, as Hamlet might say, or for this blog, rotten in Jamaica? It seems that this may be the case. However, the decision is yours. Please read the piece below. Twitter me at www.twitter.com/runblogrun or email me at runblogrun@gmail.com and tell RBR if you believe that there is even a valid offer here?
It is a well done promotion for the sports marketing firm mentioned, but does not fit the modus operandiof any current global marketers. In the real world, Mr. Bolt’s contract with PUMA stipulates no discussion by Bolt management with competitors of PUMA until after 2010, and even then, PUMA has first right of refusal.
In my mind, Usain Bolt’s worth is incalculable. He has excited fans inside and outside a sport that has needed to shake the cobwebs out for some time. Part of the fascination with him has to do with how his events, his visits, his public relations has been managed. This summer, with the excitement of an Usain Bolt vs Tyson Gay vs Asafa Powell line up, the world was transfixed!
Could offers like this be in Usain’s or other athletic stars futures? Of course, but this one, well, we shall see how it pans out….stay tuned!
Article from the Gleaner:
http://www.jamaica-gleaner.com/gleaner/20090922/business/business1.html
A five-year, multimillion-US-dollar deal reportedly offered to sprint sensation Usain Bolt by a Chinese company could also allow the athletics superstar to eventually spin off his own division of the firm.
The company in China is also reportedly willing to buy out any entity with which Usain might have agreements, and would supersede them in base salary while offering a licensing deal that Bolt currently does not have. If Bolt agrees to the deal, it could be signed in a matter of weeks.
Bolt is currently signed to sporting goods maker Puma AG, which reportedly pays the world record holder in the 100- and 200-metre sprints and triple World Championships gold-medallist about US$1.5 million a year. Puma CEO Jochen Zeitz recently disclosed that, after his success in Beijing in 2008, analysts estimated Bolt’s media market value to be about US$358 million. The media market value is equivalent to what the company would have to spend to get similar exposure from regular advertising.
A big change
The Chinese deal, which offers Bolt licensing rights inside China and exclusive distribution rights in markets outside that country, is being negotiated by Anza Marketing Group Inc, the exclusive marketing agent in China for the triple Olympic champion. Ajani Williams is the CEO of Anza.
“Anza, through its work over the past eight months, has received several offers, and most notably, two major offers, one of which would eventually change the landscape for Usain Bolt in terms of his sponsorship and endorsement market rate. It would change the landscape of track and field, it would change the outcome of his life, and probably even the direction of the country,” Williams said of the proposal on the table, adding that Anza had a counteroffer that could double the sum mentioned.
Shortly after Anza became Bolt’s agent in China, just under a year ago, it began talking to partners in the Chinese company about possible deals. This monster deal, however, came together about eight weeks ago, Williams revealed, adding that the negotiations were difficult given the worldwide economic downturn.
Tipping point
Bolt’s performance in Berlin, where he broke two world records and won three gold medals, was the tipping point, he said.
Williams was unable to disclose the name and nature of the company, citing the risk of compromising the integrity of the deal, but gave the assurance that if Bolt signed, then those details would be made known. He did reveal that conservative valuations show that Bolt could earn around US$115 million from the deal over five years, but there was the potential to exceed US$300 million, based on sales in China and the world market.
“China is the world’s largest market and these kinds of deals were not available to people like Michael Jordan 20 years ago,” Williams explained. “Usain now has the chance to be empowered and empower a new generation of track and field athletes and all athletes and become the CEO of his own empire.”
He said an athlete of Bolt’s calibre has to capitalize as much as possible on licensing deals, along with guaranteed base-salary endorsement deals. It also gives the triple Olympic gold medalist the opportunity to use this new deal to leverage similar deals, which would force companies to adjust their current market rates.
In recent times, Chinese sporting-goods companies have signed several major sporting stars, including basketball stars Shaquille O’Neal and Baron Davis. Just this year, Russian pole-vaulter Yelena Isinbayeva was signed by Chinese sporting goods company Li Ning to a deal worth about US$1.5 million a year.
Bolt is also being offered a deal worth between US$200,000 and US$400,000 a year from another company, sina.com, which Williams describes as the Chinese version of Yahoo. The site hosts one of the biggest sports blogs in China. Basketball stars like Kobe Bryant reportedly earn as much as US$400,000 a year just for posting blogs there, Williams said. He added that blogging on the site would help Bolt keep his brand relevant in the Chinese market, establish his value, and set him up for many more deals.
“Anza has received several offers and most notably, two major offers, one of which would eventually change the landscape for Usain Bolt in terms of his sponsorship and endorsement market rate. It would change the landscape of track and field, it would change the outcome of his life, and probably even the direction of the country.”
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