With a long list of celebrities signing deals with sneaker companies and creating their own line of sneakers, it seems like endorsement deals only work with this product. Two of the most prominent deals are those between Rihanna and Puma, and Kanye West and Adidas:
- In 2014, Puma signed Rihanna as creative director in a USD 1m, multi-year contract. However, Puma most likely did not expect it to become the success it did: Rihanna’s collaboration with Puma helped the brand earn USD 975m in the last quarter of 2015, which is a 17.1% increase in average sales! Source
- In 2013, Kanye West revealed that he was leaving Nike as endorser, after Nike refused to pay him royalties on his sneaker sales. Instead, he signed a deal with Adidas worth an estimated USD 10m, and the Yeezy Boost collection from Adidas by Kanye West has become a massive success. In this era of social media, proof of success can be measured by other means than earnings and sales: In the number of Instagram likes! Today, the success of celebrity endorsement deals lie in the celebrities success on social media. In 2015, Adidas received a total number of likes of almost 80m, number 2 on the sneaker brand list was Vans with a bit more than 40m likes, whereas Kanye West’s enemy, Nike, received less than 30m likes. Source
FINDING THE RIGHT MATCH
However, it is not only in relation to sneaker companies that celebrity endorsers can be a huge success! It is only a matter of time before we see this trend explode to other lines of products, and it has already begun.
The former boxing champ, George Foreman, has earned more than USD 200m for endorsing the Lean Mean Fat-Reducing Grilling Machine! Charlize Theron has earned an estimated USD 55m for being the face of Dior’s J’adore perfume. In 2012, Beyonce Knowles signed a 10-year USD 50m spokesperson contract with Pepsi. Since 2005, George Clooney has earned USD 5m per year for his affiliation with Nespresso. And the list goes on and on and….
NOT YOUR CLASSIC ENDORSEMENT DEAL
But imagine what these endorsement deals would have given these celebrities if part of the deals had been stock warrants! At OMNIA Entertainment LLC, we offer a different take on endorsement deals, as we seek influencers and endorsers to brands and companies that we are taking public through OMNIA Private Equity AG. As the endorser, a celebrity will receive stocks in the company that they endorse, meaning that they will be paid in stocks before the actual IPO. We all remember how 50 Cent made USD 150m with his endorsement deal with Vitamin Water. Our goal is to make all our endorsers part of an upside at this level.
SMALLER BRANDS – HIGHER VALUE
We believe that such an upside is possible by using the right endorser to a smaller but growing brand. It is easier to create a 100% growth in company value and sales with a smaller company than doubling the sales and company value of Nike!
With the power of social media, any small brand can become highly valuable quicker than ever before. Together with taking a company public, the power of social media can highly increase the value of these deals, and the companies become highly valuable as well as liquid.
We are living in exciting times, and at OMNIA, we love building companies and brands for the world to enjoy.