Why Adidas Is Still Being Haunted 👻
Plus the highest paid athletes in the world and some surprising findings.
Welcome to Athletic Interest.
There are few certainties in life - death, taxes and Forbes randomly telling you how much money people have.
In keeping with this tradition, Forbes has just released its list of the 10 richest athletes:
1. Cristiano Ronaldo ⚽️ - $136m*
2. Lionel Messi ⚽️ - $130m
3. Kylian Mbappé ⚽️ - $120m
4. Lebron James 🏀 - $119.5m
5. Canelo Álvarez 🥊 - $110m
6. Dustin Johnson ⛳️ - $107m
7. Phil Mickelson ⛳️ - $106m
8. Stephen Curry 🏀 - $100.4m
9. Roger Federer 🎾 - $95.1m
10. Kevin Durant 🏀 - $89.1m
* For anyone wondering why Ronaldo doesn’t have at least $200 million, the Forbes methodology counted from when CR7 was still at United and ran up until only halfway through his Saudi mega deal. This period includes a few months of unemployment.
Just from scanning this list, there are a number of interesting things to point out:
The total earnings of the top 10 have reached $1.1 billion, a new record.
Football is once again dominating, taking the top three spots and earning more than 35% of the total pot.
The future looks bright for Mbappé. He is already making more than $100m per year at the age of 24. Ronaldo did not reach that level until he was 33.
There are also some unexpected results this year, one is nicely summed up by this meme…
The inclusion of two golf stars in the top 10 was a little surprising. Especially when you consider that one of them is 52-year-old Phil Mickelson, someone that has not appeared in the top 10 since 2016. The other, Dustin Johnson, could not even break into the top 50 richest athletes last year.
To make this whole thing even more surprising, the golfing duo were the highest-earning athletes when it comes to on-field earnings. They both recorded more than $100 million in prize money, that’s more than double what Ronaldo earned in that area.
What let them down was off-field earnings, with both golfers losing large sponsorship deals thanks to their recent moves to the much-maligned LIV golf tour. It was this golf league (owned by The Public Investment Fund of The Kingdom of Saudi Arabia) that handed both Mickelson and Johnson their mega-money prize pots.
On the other end of the scale, we have Roger Federer. The freshly retired superstar has barely even picked up a racquet in the last year (as evidenced by his grand total of $0.1m in prize money) and yet is still clinging on to his top 10 status. Unlike the above-mentioned golfers, Federer’s sponsors are still happy and continue to pay big bucks to remain associated. Federer has also seen success through an investment in the fast-growing Swiss shoe company On Running.
One interesting fact, Federer’s $95.1m total earnings would have been enough to earn him the top spot in 2017, when Ronaldo earned $93 million. A clear example of how fast athlete earnings have been rising.
It’s almost as if you could start a whole YouTube channel just talking about the money behind sports…
👟 With all the money that those top-10 athletes earned in the last year, they could almost buy the entire stock of Yeezy products that have been left collecting dust in the Adidas vaults.
They probably wouldn’t want to, but they could!
Ever since the public breakdown of the collaboration between Kanye West and Adidas, the sportswear company has been left with millions of pieces of unsold Yeezy products with an estimated (former) retail value of €1.2 billion.
There has been a lot of speculation over what Adidas will do with the leftover items. Some argued it should be destroyed while others suggested donating the stock to charity.
In some ways, it feels like Adidas could not turn over a new leaf until the stock was gone, and the ghost of that controversial partnership was finally exorcised.
Luckily, Adidas appears to have finally made a decision.
“What we are trying to do over time is to sell parts of these goods and then donate to organizations that help us and that also have been hurt by Kanye’s statements,” explained CEO Bjørn Gulden on a call with investors.
Not all of the money made by selling these items, which still retain strong demand on the resale market, will go to charity. Adidas will look to replace some of its losses, and Ye (formerly Kanye West) will also be entitled to some of the money.
It’s not hard to understand why Adidas is so keen to move on and cut its losses. The impact of the Kanye West saga is still being felt in the company’s financial results. In the most recent quarter, net sales dropped by one percent year-over-year to €5.27 billion. There would have been a nine percent sales growth if you exclude the ‘Yeezy’ line from the equation.
The United States was the market most impacted by the demise of Yeezy, seeing a 20% drop in sales in the quarter.
Despite this, there are some reasons for optimism:
Parts of Asia saw up to 16% sales growth,
The South American market grew by 49% (probably still seeing a boost from Messi/the World Cup.)
The performance market was particularly strong for Adidas, with the Women’s 2023 World Cup jerseys helping secure double-digit growth.
In the end, Adidas actually recorded a small net profit of €60 million, far exceeding expert estimates of €15 million. This news was a boost for investors, with the Adidas stock price rising 8% and hitting its highest level since August 2022.
🏎 Formula 1 is also experiencing some healthy financial results.
F1 just released revealed that revenues increased by $21 million to $381 million for the first three months of this year.
The majority of this revenue increase can be traced back to this song released by Will.i.am:
Just kidding, the actual reasons behind the increase are increased media rights, sponsorship income, and increased race fees.
The last two are pretty simple. F1 has added several new sponsors off the back of its growing audience, with Liqui Moly, Paramount+, and Puma being just some of the high-profile names added during Q1.
That Puma deal is quite interesting. The sportswear brand has been partnered with some of the top teams like Mercedes and Ferrari for several years but has now reached an agreement to be the official supplier of F1.
Under this agreement, Puma will have the right to produce F1-branded apparel, footwear, and accessories. Puma will also equip Formula 1 officials on track. This signals a wider strategy from F1 to create more merchandise and find more ways to directly monetise its growing audience.
Race fees have also gone up as F1 agreed to new contracts with circuits such as Azerbaijan and Austria. There are further agreements expected with new circuits in the U.S. and South Africa over the next months and years.
But the biggest win for F1’s revenue has been F1 TV. Asking fans to sign up for a streaming service that only shows one sport was always a difficult task, but F1 is reporting that sign-ups have risen significantly this quarter.
Continued growth in these areas will help justify the incredibly high value of F1, with recent estimates putting the total asset value at close to $20 billion.
🍔 F1 bosses aren’t the only ones looking to make a few extra bucks from the fans, restaurants at the recent Miami Grand Prix were supposedly serving meals for up to $500.
This left many fans outraged on social media, although that anger was soon re-directed at F1 bosses who decided to bring out the drivers on race day in what can only be described as the most American way possible:
Some drivers were supposedly annoyed with the whole thing, and F1 bosses will talk with them to decide whether to continue with the lavish ceremonies.
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