Brand building and NIL monetization

Key topic

This lesson treats you as a professional athlete who needs to know and understand the importance of building a personal brand for yourself and nurturing it to the point that it has commercial value and can actually bring you revenues. Once that is accomplished, we explain how to treat the rights to your name, image and likeness (NIL) in order to protect it and become financially successful. We will also look at successful cases of NIL monetization such as David Beckham and Shaquille O’Neal.

Learning objectives

• Understand the importance of building your NIL
• Develop a good understanding of the process of building your NIL
• Discover ways to utilize your NIL commercially
• Understand how to protect your NIL

Building the athlete’s brand (NIL)

While some athletes are simply popular because of their work on the field, there are some who have gone the extra mile to create a personal brand off the field that can always be utilized for profit and influence.

The term brand has been used through the years with different meanings attached to it; from initially being used by cattle ranchers to describe the process of using branding irons to mark their animals with their “brand”, to using “brand” as the name given to a product or service from a specific source. Today, we also use the term “personal brand” as we consider every person to have their own set of unique characteristics. Everything you say and do reflects your own independent brand.  Athletes have a personal brand, which is more recognizable than that of an average person because of the fame and attention that usually comes from competing in professional sports.

Your sports brand can be built in such a way that it may transform you into a local, national, or global signature brand, which can be leveraged to sell, endorsed and make a profit.

Athletes can build and capitalize on their brand by creating proper marketing strategies, with well-defined branding activities which are in line with their life plan. Strategic building of the athlete’s personal brand is important because it must be clear on the values they bring to the marketplace in order to stand out from the rest of the crowd.

There are three components in an athlete’s brand:  Athletic performance, Attractive appearance and Marketable lifestyle, which potentially influence consumer brand equity formation. Each of these components consists of several sub-components and must be thoroughly analyzed before proceeding to create your personal brand strategy.

An athlete’s brand strategy is how, what, where, when and to who they plan on communicating and delivering their brand message. How the athlete communicates visually and verbally is part of their brand strategy. A successful branding strategy encompasses all of the following elements:

• Identify your Audience/Followers – You need to have an idea of who your fans are. Identify what your audience wants from you as an athlete, as an individual and as a brand.
• Create a Niche – Athletes can do that by defining who they are and what their mission is in addition to sports or through sports both, on and off the field. They should choose their target market, audience and fans, identify what their audience wants/needs from them and how they can fulfill their audience’s needs.
• Create a story behind the Brand – What is the athletes’ style and what is their behavior on and off court? How do athletes participate in the community and what communication style and methods do they choose to use? Where do they come from, what were their struggles so far and how did they overcome these struggles? These are all elements of the athletes’ story.
• Create a clear Communication Strategy:
  • Online strategy:  Athletes should design, build, promote, monitor and optimize their Online Marketing Platform which consists of:

• • • A Website
    • Social Media Platforms (Facebook, Twitter, LinkedIn, Instagram, Tik Tok, etc.)
    • Web Broadcasting
    • Organizing and commercially engaging their fan base, especially their social media fans
    • Inviting their fan base into their lives with the use of social media

• • Offline strategy: Athletes should promote themselves Offline through appearing in charity or other events, using philanthropy or common good causes. In person interaction will create a much stronger, personal connection with fans

Example of Brand Building – Shaquille O’Neal

A perfect example of an athlete who realized his brand potential from a very young age is Shaquille O’ Neal. Shaquille O’Neal was one of the most dominant Centers to play in the NBA until his retirement in 2011. He has managed to become one of the most financially successful NBA players post his basketball career, despite the numerous financial mistakes that he made prior to retiring. Shaq now makes more money off the court than when he was actually competing, and that’s what financial success during retirement looks like.
He understood the importance of developing his brand from a young age and he developed his logo, “the Dunkman” in a branding class he had taken at LSU.

He has managed to keep himself in the front pages and kept developing his brand throughout his basketball career by starring in three movies and working on it after his retirement by joining Inside the NBA on TNT and reaching out to his 12.7 million fans on twitter.

Except from his own branded products such as Shaq sneakers, he has partnerships with Macy’s, Zales, Arizona ice tea, and Monster energy drink, that pay him royalties based on the actual sales of the products.

In 2015 he signed a licensing deal with ABG to manage his NIL globally. ABG bought 51% of Shaq Inc: A deal that increased O’Neal’s net worth by $50 Million and through which Shaq has earned $22 Million in 2015 and around $29 Million in 2016.

Now let’s watch a 4-minute video which goes over the power digital marketing for athletes.

Digital Marketing Strategies

Brand equity and its components

As previously mentioned, there are three components in an athlete’s brand which potentially influence consumer brand equity formation towards the athlete’s brand, and each component consists of several sub-components. You need to identify your main ‘’selling points’’ and promote the most popular aspects of your brand.

The first component is Athletic performance which reflects an athlete’s sport performance characteristics and has the following sub-components:

• Athletic Expertise – An athlete’s individual athletic capability and achievement.
• Competition Style – The athlete’s sports playing style.
• Sportsmanship – How the athlete approaches the game, ie, with respect, abides by fair play rules, etc.
• Rivalry – The athlete’s competitive relationship with other athletes.

The second component is Attractive appearance, which refers to the athlete’s external appearance. Its sub-components are:

• Physical attractiveness – The physical qualities and characteristics of the athlete that fans and spectators find attractive.
• Being a Symbol – An athlete’s appealing and engaging personal style which transforms them into a symbol.
• Body fitness – An athlete’s physical condition and body fitness.

The third component is all about the athlete’s Marketable Lifestyle and their off-field marketable characteristics such as:

• Their Life story – An appealing, interesting off-field life story that includes a message and reflects the athlete’s personal values.
• Whether they are a Role model and have an ethical behavior.
• Their Engagement/Relationship effort – The athlete’s positive attitude when interacting and engaging with fans, sponsors and media.

David Beckham – Example on utilizing the Marketable Lifestyle Dimension
The best example of an athlete who has fully capitalized on and utilized the marketable lifestyle dimension is David Beckham.

David Beckham’s rise to fame began when he started playing for Manchester United. His relationship with Spice Girl Victoria Adams, the way he spoke during interviews and his lifestyle off the pitch attracted a lot of attention. He is considered a pioneer in exploiting his NIL. He established an image rights promotion company very early in his career, called Footwork. In all his deals with Clubs, he has always managed not to fully assign the exploitation of his NIL rights to the clubs and retain 50 percent or more of such rights to personally exploit them. This allowed him to have a lot more earnings from sponsorship and endorsement deals than from his playing contracts.

Even after his retirement, the value of the Beckham Brand keeps growing because both himself and his wife have done a great job in promoting their lifestyle and family life globally. In December 2014 Beckham signed a lucrative 50-50 joint venture with Hong Kong listed Global Brands Group to expand his brand into new product categories and geographies.

Adapting the branding strategy according to the different life/work phases

The brand value of an athlete can be built to last a lifetime. When forming an athlete’s branding strategy, the different life/work phases of the athlete should be taken into account. If the branding plan is adjusted to and caters for the athlete’s evolving life/work phases it makes it easier to commercialize the athlete’s brand and add new revenue streams.

Like every other person who enjoys fame, each phase of an athlete’s life and career has different characteristics that appeal to different types of audiences with varying purchasing habits.

• Young athletes up to 22 – 23 appeal to younger people, and they are seen as free, young, single, fearless, with a drive to succeed, hungry for life, wanting to make their dream happen.
• Athletes in their middle 20s to early 30s are perceived as young, successful,  dynamic, benevolent, wanting to make a difference in the world. They could possibly already be married and have kids.
• Then we have athletes in their middle to late 30s. They are seen as more settled and mature, successful professionally and they may have started a family. They are role models, their benevolence starts turning into action by supporting foundations, causes, etc. They become mentors for younger athletes and usually they are getting ready to retire from field play.
• During their 40s athletes have normally transitioned from field play to other businesses. They are considered versatile, adaptable, having a growing family, they could possibly be new entrepreneurs. Giving back to society becomes a priority for them.
• In their 50s the retired athletes have already built the business, they are business networkers, responsible family persons, care about youngsters in sport, pursue philanthropy and they are health and fitness conscious.
• And finally in their 60s + they are considered to be acknowledged for their achievements in life and business, mature family persons, more laid back, they enjoy the pleasures of life and they have more time to pursue hobbies. They are established philanthropists, respected and admired by most.

It is very important for athletes to know at which phase they are positioned at all times, so that they are aware of the type of audience they appeal to so that they can align themselves with their audience’s expectations and interests. Obviously, athletes have a different appeal and a different audience at each stage of their life and a carefully crafted branding strategy can actually keep athletes in the spotlight during all of their life/work phases.

The commercial use and monetization of NIL

The NIL of sports celebrities has become a tradable commodity nowadays. You can utilize your NIL strategically while still in the limelight and turn it into a long-term brand that withstands the test of time. We list a few ways through which sports celebrities can capitalize on their image:

Endorsements by sports stars are considered quite valuable for brands and they are sought at various stages during the life cycle of a product. The promotion of the endorsement through the social media accounts of the endorsing athlete provides a direct way for celebrities to publicly endorse products and share their enthusiasm with their fans, and it is considered a core part of an endorsement strategy nowadays.

Endorsement contracts usually have a definite time frame, anywhere from one to five years with an option for renewal, within the time frame that the sports celebrity is active in their sport, and they may include one particular product or a range of products. The compensation can take many forms, from a fixed fee to a percentage of the sales of the endorsed products. Third party endorsers may provide bonuses for athletic achievement within the endorsement period.

Sponsorships are offered by sponsoring brands who support a sports celebrity and hope that their appeal to the public will have a positive effect on sales. Sponsorships create a more involved contractual commitment for the celebrity athlete because of their long-term nature and because the sponsor requires certain actions from the athlete in return for the sponsorship fee paid to them. Sponsorships can create a good-size income stream for the athlete as a lot of companies from various industries are moving towards this direction to raise brand awareness and recognition. Celebrity athletes are usually sponsored from various companies in different industries, simultaneously.

While endorsement is about the product, with the athlete used as a marketing tool, merchandising is more about the athlete behind the image and the sale of a range of products under that athlete’s name and image. Merchandising often involves various parties while the celebrity is at the core of the product’s marketing campaign; they are not usually responsible for the design or production of the goods. The celebrity may or may not have overall strategic control depending on the agreement they have entered into. In a lot of cases, a company with experience in the field of, for example perfumes, can seek permission to use the celebrity’s name for a particular perfume thus making this a licensing deal.

Other uses
The NIL of an athlete may be exploited by their team in a variety of ways, through appearances, use of his NIL on merchandise, etc. In these cases, the team enters into a separate contract with the player for the use and common exploitation of their image. This is something that David Beckham had created and perfected in the soccer industry, by always asking for a separate compensation amount from soccer clubs for the use of his image.  Also, an app or a computer game may seek to feature a celebrity athlete’s likeness and the athlete can be compensated either through a flat fee or a licensing agreement based on the sales of the computer game. Athletes can also receive royalties for films, documentaries, books, etc.

The development of the digital space now offers expanded opportunities for the monetization of NIL. Blockchain technology, along with fractionalized NFT contracts, make it possible for athletes to obtain more than one brand or sponsor for the use of different aspects of their image. Athletes can license different aspects of their name, image and likeness, as tokenized assets for reproduction by fans, sponsors and brands. The opportunities for commercializing the athletes’ brand through fractionalized NFTs are vast and can mint hundreds of different types of NFTs, each carrying different types of economic rights or uses. Through fractionalized NFTs, athletes can break down their economic rights to small, and, at the same time, affordable, particles which can be licensed to different people for profit.

In addition, with the use of NFTs and smart contracts, professional athletes can lend their name, image and likeness for profit in the digital space, in addition to the physical world.  For example, the digital space gives athletes the opportunity to mint different types of NFTs holding digital collectibles, digital trading cards and any other athlete-related digital tokenized assets. Due to the fact that digital assets are purely imaginative and are based on creative imagination, the commercialization possibilities can be endless, and a multitude of new revenue streams can be created. Moreover, royalty rights for an athlete’s image, name and likeness can now be cryptographically protected too. Through NFTs, athletes can automatically receive royalty payments on branded merchandise or memorabilia each time an asset is sold.

Now, let’s watch a 4-minute video with details on the 31 sponsorship deals that made Cristiano Ronaldo the world’s highest paid athlete.

Cristiano Ronaldo and the 31 sponsorships deals

Managing your brand: Reputation and commercial management

For athletes to stay in the spotlight and continue to grow their brand, a proper brand management strategy has to be in place. The brand management strategy controls two different aspects of an athlete’s brand: the personal or reputation aspect and the commercial or business aspect. The personal aspect deals with the issue of reputational risk and how athletes should be careful of their actions to preserve their good reputation. The business/commercial aspect deals with the commercial exploitation of the brand and its monetization.

Reputational Risk
The sports celebrity image, like all brands, is vulnerable in being dependent on such intangibles as people’s perception of them. Closely linked to the commercial value of the celebrity image is the opinion of the community. A celebrity’s good name or reputation is the regard which they enjoy within the community. The opinion of a celebrity held by society has a definite effect on their commercial value. If the community does not approve the actions of a celebrity, their reputation would be in a bad state. If the celebrity’s image fits in well with communal convictions, then, their reputation would be positive, and this would have a direct, positive effect on their commercial value. A number of athletes have been known not to live up to the public’s expectations thus tarnishing their brand, sometimes overnight, and jeopardizing their earning capacity.

According to Warren Buffet “It takes 20 years to build a reputation and 5 minutes to ruin it”. While building your personal brand is essential, managing your personal reputation is  equally important. You have to be mindful of what your social media activity says about your personal brand as a whole. Your behavior online reflects who you are and what you stand for, so use your social media with care because productive activity can turn into destructive behavior. Celebrity response to their audience is also important. Creating a two-way street,  is key to nurturing a community of fans. It is not about your audience listening to you, it is about having a two-way conversation, a communication.

Business/Commercial management risk
The commercial aspect of managing NIL, deals with the continuous commercial exploitation of the athlete’s brand through procurement of sponsorships, endorsements, ambassadorships, paid or pro-bono participation in various events etc. When planning the business component of the athlete’s branding strategy, special emphasis should be given to the athlete’s communication with the public which assures their spotlight positioning. The fickleness of the public is a major factor which should be taken into account since someone who is “in” today, may be “out” next week and it takes a lot of constant hard work to be and stay “in”.

Athletes should be careful not to spread themselves thin by taking on too many endorsement deals. When an athlete is overexposed by working with a large number of product/company endorsements, their credibility may suffer. People may feel that the celebrity will endorse anything to make more money. Of course, it goes without saying that the athlete should be particularly picky in choosing out their endorsement products and services and they should stay away from any products prohibited by their contract or controversial products such as drugs, alcohol, tobacco and many more.

The successful commercialization of an athlete’s brand is heavily dependent on the athlete’s team of brand strategy advisors. The brand strategy team supporting the athlete, plays an important role in developing and growing the athletes’ exposure, expanding their marketability, and directing them towards the most appropriate commercial opportunities.

Action steps – Exercise 1 (8 minutes)
Let’s assume you just signed your first professional contract and you start thinking about your brand. What are some of your strengths, traits, beliefs, tangible and intangible characteristics that you would use for building your brand.

Lesson wrap-up

Today we discussed the importance of the sport’s celebrity brand. We explained that having a successful personal brand can lead to various and considerable financial gains. We also explored the tools and tactics that one can utilize to get there and what usually comprises a personal brand (such as athletic expertise, competition style etc.). Finally, we listed the various ways in which someone can use their brand to make a profit, but also what it takes to protect your NIL from internal and external threats.

At this point we will wrap up today’s lesson. First, we will go over the learning objectives of this lesson and we want your feedback as to whether they have been achieved and then we will address any questions you may have. Please feel free to ask anything you’d like in relation to today’s lesson and we would love to hear how the concepts we discussed today relate to you and your life!