We have all heard of the athletes who made millions and blew it all, but we rarely hear about the athletes and celebrities who made wise business decisions. There have been many notable partnerships between athletes and companies in which the companies were able to leverage the athlete’s popularity to bring awareness to their brand; oh, and they would reward the athlete handsomely.
If you were to scan the list of athletes who made the most money last year, you would see a list of athletes who grinded through a season despite a pandemic, such as Tom Brady and Cristiano Ronaldo, but you will also see Conor McGregor. Despite only fighting once all year, McGregor is at the top of the list thanks to a unique source: his majority stake in the whiskey brand, Proper Twelve. McGregor’s whiskey deal is merely the latest iteration of a celebrity-brand partnership where celebrities have walked away with a massive payout after successfully using their following to increase popularity in the brand.
Many lesser-known or start-up companies would love to have a celebrity or athlete endorsing their product, but they do not have large enough budgets to attract the talent, so they often end up offering a deal in the form of equity. Although it’s riskier because a public figure does not receive any money up front, the icons that are confident enough to bet that their own spotlight on a product to help it succeed (and Conor McGregor certainly isn’t lacking in that department) can reap huge benefits. McGregor was able to use his following to make Proper Twelve into one of the top five best-selling whiskey brands, translating to approximately $170 million. He also has the potential to earn another $350 million now that Proper Twelve has been sold to a large player in the liquor space, Proximo Spirits, for around $600 million.
Taking equity rather than cash may seem like a no-brainer in hindsight, but we have the benefit of hindsight in all these cases. Being pitched ideas left and right and having to discern which will be successes is not an easy task — it can be easier and potentially more fruitful to receive money rather than equity. 50 Cent typically stuck to the policy of only taking guaranteed money, however, the one time he deviated from this policy, it turned out to be quite the success. In exchange for promoting and building up Vitamin Water, 50 Cent received up to $50 to $100 million. Much to the chagrin of his bandmates, 50 Cent told his group mates not to sell their stake in the deal because there was no guaranteed money while he decided to make an exception (50 Cent Vitamin Water Commercial).
50 Cent and Conor McGregor are just the tip of the iceberg when it comes to deals that have worked out well for both the upstart brand and the promoter. 50 Cent Vitamin Water Commercial include Sean “Diddy” Combs promoting the alcohol brand Ciroc. In parallel, Casamigos, one of the biggest tequila brands in the world today, was actually founded by actor George Clooney, who has had insane success.. The lesson we can take away here is it’s always smart to diversify and spread your wealth around — you never know what will be a success.
Photo Credit: Images courtesy of Proper No. Twelve, Google Creative Common Licenses
