Foreman's Grill Deal: Best In Sports Marketing History?
CNBC Sports Business Reporter
If not for Nike's signing of Michael Jordan in 1984, George Foreman's deal with Salton to put his name on what would become its Lean, Mean, Fat-Reducing Grilling Machines would undoubtedly be considered the best endorsement deal in sports marketing history.
If it doesn't beat out the Jordan deal, it's a close second.
In the mid-90's, Salton's electric grill wasn't expected to be big. And it might not have ever made it had it not been for an attorney named Sam Perlmutter who showed it Foreman.
"He said, 'Uh, George, you're making all these other companies wealthy," Foreman said. "Why don't you get your own product?"
But Foreman's initial reaction, even without trying the grill, wasn't positive.
"I looked at it and said, 'I'm not interested in toys," Foreman said.
Six months later, Foreman had not tried the grill. His wife Mary finally did.
"I told him I tried that grill," she said. "I really love that grill and it was easy for me because having a bunch of kids you just put the stuff on there — and especially children love grilled cheese sandwiches."
Foreman wasn't sold yet. Until his wife made him a burger on it.
"The grease, everything went away and the meat was delicious," Foreman said. "So I called my partners back and said, 'I'm going to do that deal.'"
The deal wasn't that compelling from a monetary standpoint. It provided that there would be no up front guarantees but, after expenses, Foreman would get 45 percent of profits, while Perlmutter and another partner would get 15 percent.
The rest is history.
Foreman's endorsement led to millions and millions of grills sold.
At the age of 48, Foreman fought Shannon Briggs in 1997. Many believed Foreman had won the fight, but he returned to the locker room a loser. That was until his attorney came to him with a blown up copy of his royalty check from the grill. It was for $1 million.
"That was one of the happiest days of my business life," Foreman said. "I lost my last professional boxing match, I'd received a check for $1 million for the grill."
After seeing the check, Foreman realized that he had to devote his time to business over boxing. It was his final fight.
"It was sort of getting in the way of my business life then," Foreman said.
It was just the beginning. By 1998, Salton had sold $200 million worth of grills.
The grills were selling so well that a year later, Salton felt they would make money if they just bought out Foreman.
The price? $137.5 million in cash and stock for use of his name in perpetuity. Add that to what he made before, and what he made after — Salton subsequently paid him at least $11 million more to make TV appearances — and Foreman might have pulled in close to $200 million from a deal he wasn't that interested in to begin with. In the end, over 100 million grills were sold.
Since then, most of Foreman's other products haven't made a mark, including a shake line, a shoe line and a line of frozen meats. George Foreman Enterprises, which licenses Foreman's name to companies, trades on the pink sheets and has been fairly inactive in recent years.
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