Football Players Thrive Off Of Endorsement Deals over Contract Bonuses

Signing your first NFL contract is an important moment

The professional sports salary that many people dream of but only a select few actually obtain can be enough to support an individual who handles his finances wisely for a long time. However, many football players have other sources of income besides the teams that signed them.

Football players living off of endorsement money? 

endorsementEndorsements are an important revenue stream for many professional football players. Even party-boy extraordinaire Rob Gronkowski can explain as much. In his five seasons, the New England Patriots tight end has made more than $10 million from the team that drafted him. However, he hasn’t spent a dime of the small fortune he’s amassed from his time catching footballs from Tom Brady. Instead, the player explained in his autobiography that he’s been living off endorsement deals.

“To this day, I still haven’t touched one dime of my signing bonus or NFL contract money,” Gronk wrote in his autobiography, according to the MMQB. “I live off my marketing money and haven’t blown it on any big-money expensive cars, expensive jewelry or tattoos and still wear my favorite pair of jeans from high school.”

The smart spending aside, Gronk’s ability to live solely off of endorsement money is impressive, and something that incoming players should take account of. Understanding endorsements is important because, as Gronk has shown, these deals can ensure players are sitting on massive piles of money come retirement.

There are a variety of athlete contracts, each of which can be broken down into relevant sections. In addition, all of these deals are also restricted in ways by the league. Understanding what, exactly, endorsement deals will look like may help players strike their own deals with the help of their agents.

The different types of endorsement deals available to NFL players 

Endorsement contracts can be for hard goods such as protective gear, clothing and headgear or non-wearable goods, according to Get2TheLeague.com. Headgear and clothing endorsement deals are especially valuable, because athletes wear the products, with logos on display for all to see. However, players with these deals may have to work around restrictions placed on them by the NFL’s deals with brands such as Nike.

Non-wearable goods deals aren’t nearly as restricted by the sorts of logos the NFL will allow players to wear on-field and at league-sponsored events. These sorts of deals allow certain brands to take advantage of the athlete’s image to sell its own product.

There are certain things that NFL players are not allowed to endorse under any circumstances, though. Not all that surprising is the league’s ban on endorsement deals from alcohol and tobacco companies, as well as firms that manufacture or sell products on the league’s list of banned substances, the source explained. Important to note is that players cannot endorse anything from companies that produce any banned substance. For example, if a company produces a nutritional supplement on the banned substances list, as well a perfectly acceptable sports drink, the player cannot endorse either. Even if though sports drinks are OK to endorse, the company in question also produces a banned substances, which makes all of its products off-limits for endorsement.

Clauses to keep in mind when working on an endorsement deal 

Certain endorsement contract clauses are also important. These are built into deals to protect players’ interests. For example, it is good business to pay attention to the mix of guaranteed money and incentives offered in an endorsement deal. Base money will offer a sense of security, while bonuses included in the deal will allow the player to make even more money.

Additionally, an indemnity clause is crucial. This portion of the deal will protect the player in the case that the company is sued and he is named as one of the defendants. Without the clause, he would be at risk of the company became involved in a lawsuit.

Finally, the term of the deal is also extremely important. The earlier a player is in his career, the shorter the term he should typically be looking for, Get2TheLeague.com noted. This will help with renegotiating the contract later on.

Endorsement deals are an important source of income for NFL players, and they should take care to make sure their sponsorship contracts are well-constructed and work in their best interests. Part of this is understanding the framework of endorsement deals. Another part is working with an agent that is well-educated on sports law and endorsements. With knowledge of these deals and the help of an agent, a well-paying and safe endorsement deal can be developed that will offer a valuable source of income for years to come.

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Anthony R. Caruso is a business transactional attorney in New York and New Jersey with experience in structuring, negotiation and completion of legal deals involving business, entrepreneurs, athletes and performers.

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