Sports Biz with Darren Rovell

Is New Endorsement Company The Future?

Source: BAT

The New York Times recently had a story on Brand Affinity Technologies (BAT).

It’s a company that seeks to match up corporations and athletes for endorsement deals four days or less.

Right now the business is mostly online, so a company can pick an athlete and, if the deal is accepted, that athlete’s name and likeness can be in the ad almost immediately.

Here’s my take on the idea.

First, let’s talk about what I like.

There are a lot of these small deals that local and regional companies want to do, but they don’t know how to contact the athlete.

This will help.

“The only guys that seem to be getting deals are the top two guys in any market,” said BAT chief executive Ryan Steelberg. “But the reality is that there’s a ton of supply in terms of athletes that don’t have deals and that’s why this makes sense. With the explosion of regional sports television and the Internet, people know who every player on their favorite team is, not just the stars.”

While it’s not the most genuine of endorsements, this is the easiest pitch an athlete will do. All they need to do is grant permission to use their likeness and it’s free money.

“The guys don’t have to spend a half a day making an appearance for the company,” Steelberg said.

What I’m skeptical about is the size of these deals. We saw an offer from a company looking to do an online ad with a pretty good football player in the $3,500 range. The guy makes about $60,000 every quarter of football he plays. Is it worth his trouble to take that deal? Consider the fact that if his name is associated with this company all over the Internet, he will have a hard time endorsing another brand in that category. If you’re an offensive lineman who got the deal, I can see taking the money and running. But if you’re a wide receiver who has more upside, it doesn’t seem like the right quick cash to take.

Steelberg said that his company hasn’t experienced any of this backlash. Since starting up earlier this year, he says he has done roughly three dozen deals and only one athlete turned the offer down. Steelberg says the average deal is slightly larger than the deal I saw. The average deal nets the player between $7,500 and $10,000.

The other catch is that I’m not sure the big time agencies would want to let their athletes know that they are getting deals through this site. Imagine if you are a top agency like CAA and you’ve pitched your clients on your unique ability to get them marketing deals. If your clients find out you are getting them deals through this Web site, it might look worse than getting no deals at all.

Steelberg says that he doesn’t feel like his company is competing with the agencies and cites the fact that 85 of them, including Athletes First, has put their clients on his site.

I think this can work. It breaks down the stigma that athletes have to get big money or nothing. I’m just not sure that the level of money being offered for these deals is going to be enough for multi-millionaires to consider. So far, it seems that from the number of deals these athletes have accepted, I’m apparently wrong about that point, but we'll be watching.

Questions?  Comments?