By Stefanos Gregoriou, The Sports Financial Literacy Academy
Numerous professional athletes are transitioning into entrepreneurship, becoming increasingly aware of their potential as business leaders. Athletes may find it easier to thrive as entrepreneurs due to their popularity and ability to attract public interest when launching new businesses. Widely-recognized athletes can capitalize on their fame and public exposure to succeed in the business world. There are two main paths for athletes to become entrepreneurs: starting their own businesses or forming partnerships to promote other companies’ products and services using their Name, Image, and Likeness (NIL).
Traditional Businesses
Athletes often choose traditional business options like restaurant franchises and real estate development. Others turn their reputation into their business by launching product lines in sports equipment, cosmetics, and fashion. A prime example is former NFL player Vernon Davis, who owns multiple Jamba Juice franchises.
Venture Capital
In recent years, some athletes have ventured into venture capital, forming advisory teams to screen businesses for investment. Alex Rodriguez, a former baseball star, founded his successful investment firm, A-Rod Corp, which supports businesses with both internal and external capital. Another popular option for athletes is acquiring ownership in professional sports teams, as seen with Michael Jordan’s investment in The Charlotte Hornets and Shaquille O’Neal with the Sacramento Kings. Athletes use their brand to promote and grow their business, largely through their networks and social media following, establishing a market for their products.
Building their own Business
Successful athletes can also be seen as a business in themselves. Their brand image—their lifestyle, appearance, and personal story—becomes the product they sell. Social media plays a key role in building an athlete’s personal brand and brand equity. Athletes can use social media to not only promote themselves but also endorse the products and services of sponsors. Strong social media presence leads to lucrative sponsorship deals, often resulting in endorsement incomes that surpass earnings from sports. LeBron James, for example, earned $90 million in endorsements compared to $36 million in sports wages.
However, athletes must approach business-building with caution. Their personality, values, and public perception play significant roles in their success as entrepreneurs. Since their brand is built on public perception, athletes must maintain a positive image to avoid damaging their business. A negative narrative can harm their reputation and impact their business prospects.
Building a strong brand and fan base is crucial for business growth. Social media is a powerful tool for athletes to build their brand and promote their business. However, athletes must remember that social media alone isn’t enough. Hard work, dedication, ongoing research and development, and adapting to trends and customer preferences are essential for long-term success in entrepreneurship.
The Money Smart Athlete® Blog is established and run by the Sports Financial Literacy Academy® (SFLA). Through its education programs, the SFLA has the vision to financially educate and empower athletes of all ages to become better people, not just better athletes. For more information on our courses, our SFLA Approved Trainer Program®, and how they can benefit you and your clients, please get in touch with us at [email protected].