The Business of Track & Field Athlete Contracts
I have started this journal entry a dozen times with the themes of "Doors Open and Close", "The Roads Are Open", "A Different Path" and "A New Journey". Not one of those themes seemed to convey the thoughts and feelings I had regarding what transpired this past week. I want to note up front that this posting is not to bash on ANY of my previous sponsors. It is meant as a real world learning experience for future professional track & field athletes. It will give them a look at what to expect in this business. I also hope to give sponsors something to think about with future contracts.
To start with the positive, I have moved up to doing two workouts a week. The nerve damage in my ankle is completely healed and my Achilles is reacting well to the increased work load. This is the best my legs have felt all year. Next week, I will increase the work load even more since I passed the test this week. That news and the amazing weather in Oregon is cause enough for a happy dance. It also eases the blow of the events of this past week.
On to the recent life altering happenings, I was let go from Nike or in legal terms my contract was terminated. I have experience with this process because it is the third shoe company to let me go in 12 years. I understand the business and know that my lack of racing for a year is the reason behind the contract termination of the last two shoe companies. However, this termination was harder than the others.
With the current contract termination, I was not given any advance notice. Instead of a paycheck I received a termination letter. I also instantly lost access to the gym, pool, and track. The access to workout facilities can be replaced quickly. However, instant loss or reduction of expected income can’t be replaced. My contract was paid out in quarterly payments. (I will explain the issues with that later.) The contract does give the sponsor the right to terminate my contract after a period of inactivity. However, a clearer channel of communication would not make the termination as life changing.
Broken Contract Image via Shutterstock
To help you understand this process let me explain the business of sponsoring “professional” track & field athletes. This might be similar to other sports’ sponsorships but I don’t have knowledge of how they work. Below is a typical conversation with an inquisitive stranger (S).
S: “What do you do?”
A: “I am a professional distance runner. I run for Company X.”
S: “How does that work? Like Tiger Woods or Lebron James?”
A: “Yes, but the sponsorships are on a much smaller scale. Company X pays me to wear their gear, run races, and represent the company during all events related to running. I am the equivalent to a walking/running billboard for Company X. Unlike NBA players, we don’t get a salary from a team. The Company X sponsorship is usually the bulk of our annual income. Also, unlike cyclists or NASCAR drivers, track & field athletes are limited to the number and type of sponsors allowed. This limitation is due to both the sponsorship contracts and the IAAF which is the international governing body of track & field.”
S: “So you work for Company X?”
The answer gets complicated and long. If I don’t want to go into the details I say yes and they ask how many free shoes I get or if I can get them a pair. However, if they really want to know I explain that track & field athletes are contracted workers. The definition of a contracted worker according to eHow.com is:
“A contract worker is not an employee of a company. He is a self-employed person who operates his own business, usually as a sole proprietor. He is hired for a specific task or project, sets his own rates and pays his own income taxes.”
eHow.com goes on to explain the benefits of companies hiring contracted workers.
“By hiring a contract worker, a corporation will be able to save money because the worker, not the corporation, is responsible for his own payroll taxes, training, transportation, health insurance, and other benefits and costs. A company does not pay a contractor for holidays, sick time or other employee benefits.”
Track & field athletes are not employees of the shoe or apparel company. They are contracted walking, running, jumping, and throwing billboards for shoe companies; hired to perform better than anyone else. Better performances lead to more views of the products or mentions in the news. After a period of inactivity the billboard is viewed infrequently and not worth as much. Business wise, it does make sense to replace the billboard with a more visible one.
A typical question that inquisitive stranger might ask, “How do you get sponsored?”
I respond that there are two ways to go about it. Athletes can hire an agent to facilitate the deal and bargain with the shoe companies. Agents know the company’s contacts, market values of track performances, and the extra perks to ask for. This is the easiest route and probably the smartest choice. However, the athlete can contact the shoe companies by sending their resume and asking for sponsorship without an agent’s help.
Depending on the talent, age, and curb appeal of the athlete the sponsorship deals can vary greatly. The following is a very generic outline of sponsorship levels.
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