Will an athlete who signs with the New York Knicks make more money in endorsements than an athlete who signs with the Oklahoma City Thunder? Does the size of the media market an athlete plays in correlate to the amount of endorsement dollars said athlete brings in? The answer, statistically, is no.
Recently drafted top athletes often express, through the demands of their agent, that they do not want to play in certain small media market cities like Oklahoma City (#36), Memphis (#48), and Portland (#25). Agents get a cut of both the athletes salary and endorsement deals. Since a recently drafted athlete’s salary is slotted or fixed, the only way for an agent to increase income is to maximize endorsements. It seems reasonable to expect more endorsement money while playing for a media market with 30 million televisions, as opposed to a media market with 300,000. As reasonable as this seems, it’s just not accurate.
Let’s dig into the data. I’ve compiled the top 25 money making professional athletes competing in team sports and correlated their endorsement wages against the size of the media market they play in. The results indicate that there is a slight negative correlation between media market size, and the amount of endorsement dollars an athlete collects. The graph below shows a -.27 correlation coefficient. A negative correlation in this data set means that an athlete is more likely to cash in on a small market team. But the size of the coefficient, .2, really just indicates the data is pretty scattered and that there is no real statistical relationship between the two variables.
With all of this stated and explained, the city you play in has nothing to do with the amount of commercials you get booked for. Not sure you believe that, just ask three athletes from small markets, Lebron James (15), Peyton Manning (24), and Kevin Durant (36). All three play in very small market cities, two of which are actually shrinking, and yet, these three athletes pull in a combined yearly total of 63M in endorsements. But what about all of those NYC athletes raking in that Cats Broadway money? Well, Alex Rodriguez and Derek Jeter would kill to make some of that Kevin Durant Oklahoma City money. These two Yankees make a combined 14M in endorsements.
So what factors are operative in determining how much money a player brings in for endorsements? My guess is team winning percentage, titles, and an athletes looks and overall charisma are the main factors. Tim Duncan makes a pittance in endorsements, not because he plays for the small market Spurs, but because he’s the most boring person on earth. Ben Rothlisberger is also a winner from a small media market, but this two time Super Bowl winner only makes 2.5M in endorsements. Is this because Pittsburgh doesn’t have too many people watching TV, or is it because Ben’s looks are becoming a real problem. My guess is the latter.
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Tags: alex rodriguez, ben rothlisberger, correlation coefficient, derek jeter, endorsements, kevin durrant, lebron james, marketing, media markets, memphis grizzles, NBA, New York Knicks, new york yankees, oklahoma city thunder, peyton manning, portland trail blazers, san antonio spurs, Sports Marketing, statistics, tim duncan
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