Chapter 254 252: Commercial Value
Football is the undisputed number one sport in the United States. Its commercial value and market share are far and away the leaders. Forget the Super Bowl, with its viewership of over a hundred million; the live broadcast of the first day of the annual draft alone draws higher ratings than the NBA Finals and the MLB World Series.
Its dominance is unchallenged!
And yet, compared to football's popularity and influence, the players' incomes are frankly a bit pitiful—embarrassingly so. A top superstar in the NFL might only earn an annual salary of twenty million US dollars. In the NBA, however, salaries like that are commonplace, considered merely average.
Currently, the highest-value endorsement contract Nike offers an NFL player is just two and a half million US dollars per year. Several players, including Peyton Manning, have contracts at this level. This is the top tier. Placed next to LeBron James's one-billion-dollar contract, it's like comparing a kindergartener to a towering giant.
Why is that?
Why is there such a massive income disparity for players when football is the number one sport in North America? From a theoretical standpoint, it's completely illogical, even counterintuitive. This difference is a frequent topic of discussion among NBA and NFL players themselves. From a market perspective, however, it couldn't be more normal.
The reason isn't complicated: too many players. This is the primary factor behind the gap.
On a basketball court, there are only five players, and a team's total roster is capped at fifteen. But on a football team, each squad has fifty-three players. The starting lineup alone consists of at least twenty-five people, and the number of rotational players who are guaranteed to see action in every game reaches at least forty.
In 2010, a player of Chinese descent, Wang Kai, was drafted by the Buffalo Bills, becoming the first player of Chinese descent in the league's history. And yet, Wang Kai's presence never managed to make waves. Why? For one, Wang Kai was an offensive lineman, a position that generally doesn't get much attention. For another, he wasn't a starter, merely a rotational player.
In a single game, forty or more rotational players might see action. A player might only be in for one or two downs on offense, or perhaps make an occasional appearance as a special teams player. Before the commentators can even get familiar with his jersey number, he's already back on the sideline. How could someone like that possibly make waves?
In his rookie season, Wang Kai appeared in only six games as a rotational player. Lu Ke's preseason was much the same; as a rotational player, he participated in a dozen or so offensive downs and failed to cause much of a stir.
The reason Lu Ke was able to stir up so much controversy during the regular season was partly because he's a quarterback, and partly because he's a starter. The number of rotational players is simply too large, and being a starter is a completely different story. But even so, the number of starters on a football team far exceeds the entire roster of an NBA team.
It is for this very reason that in football, fifty-three players are all vying for a piece of the commercial pie, which naturally can't compare to fifteen players in basketball.
When a brand tries to use athlete endorsements to connect with consumers, the supply of baseball and football players is simply too vast, which drives down the price of their contracts. Basketball players and individual-sport athletes, especially in tennis and golf, can always command higher prices. Even soccer player contracts have more potential to be explored.
Furthermore, the price gap for endorsement deals between the NFL and NBA is frankly appalling. A basketball player's deal can easily reach the hundreds of millions, while a football player might not even be able to land a ten-million-dollar contract. Another reason for this is the nature of the athletic shoe consumer market.
Football cleats, like soccer cleats, are highly specialized shoes with a single purpose. This means the average consumer can't wear them in daily life. In contrast, basketball shoes are much more versatile; people can freely choose to wear them as everyday footwear. This dictates a fundamental difference in the size of the market base.
Not only that, but football's global participation rate is lower than soccer's. Many amateur football players even opt to use soccer cleats, which is acceptable—especially for rugby, where using soccer cleats poses no problem. American football cleats, however, have longer, deeper studs, and their placement is different.
Simply put, the more specialized the product, the narrower the audience. Ninety out of a hundred people might be willing to buy basketball shoes, but if even one out of a hundred buys football cleats, that's already considered a rare feat.
Thus, the monetary value of endorsement contracts ends up being worlds apart.
In fact, Under Armour faces the same problem. When it comes to making football cleats, they are experts, perhaps even more so than Nike. A considerable number of players in the NFL are willing to choose Under Armour. But when it comes to making other types of athletic shoes, like basketball shoes or running shoes, Under Armour is far from an expert, and the task of carving out market share is incredibly arduous.
In reality, it's not just endorsement deals; NFL players' salaries also pale in comparison to the NBA's. Besides the massive player base, there's also the issue of the salary cap. However, that's another story for another time. As a rookie, Lu Ke doesn't need to worry about his salary just yet. The earliest that would become a concern is two years from now.
Therefore, a sponsorship contract of two hundred fifty thousand US dollars a year was not an astronomical sum. In the NBA, it would be a mere drop in the bucket, practically insignificant. But for Lu Ke, it was more than enough to be content.
Incidentally, as football agents, they also suffer from "unfair" treatment.
In Major League Baseball, agents can take a five percent commission. In the hockey and basketball leagues, it's four percent. But in football, it's only three percent—the lowest amount.
But don't forget, the NFL has the most players.
The entire NBA has only about five hundred players, whereas the NFL has over two thousand. In other words, football agents can easily make up for the lower commission rate with a higher volume of clients. A top agent representing ten or twenty players could see their income completely blow that of an NBA agent out of the water.
This is precisely what makes Lech Steineberg an outlier.
For a long time, Lech only represented a single player, and his commission was still the standard three percent; he never secretly raised his rates just because he had fewer clients. But as the most authoritative top agent in the business, Lech owns his own agency, and the agents under him also adhere to a "quality over quantity" approach. As a result, he remains one of the wealthiest agents in the industry.
Looking at Lu Ke, who was in high spirits, Lech couldn't help but tease, "Remember what I said when I first signed you? Well? Believe me now?"
Lu Ke chuckled and played along. "All this for a two-hundred-and-fifty-thousand-dollar contract?" he joked back, feigning disappointment that his commercial value was so low.
Lech's smile faded as he deliberately put on a serious expression. "Don't underestimate this start. As the only player of Chinese descent in the entire league, or even of Asian descent... Ah, no, that's not right. The only *starting* player of Asian descent—"
As a veteran agent, Lech naturally knew about Wang Kai. However, this season, Wang Kai was on the injured reserve list and not part of the Buffalo Bills' fifty-three-man roster, so his influence had naturally diminished even further.
"Your commercial value can't be measured by conventional standards." During the meeting earlier, Sean was actually probing Lu Ke's connections to Asia and brainstorming future marketing strategies; none of that was just idle chatter. More importantly, Lech had complete confidence in his own abilities and network. "In the future, let's just wait and see."
Perhaps Lu Ke could become the first person to break the NFL's salary constraints, precisely because of his Chinese heritage. Everything is a double-edged sword. Someone who doesn't understand might squander a priceless opportunity, but an expert could create a miracle. It was like being the first person to eat crab—it could turn out to be a bad thing, or it could be a good thing.
However, this was just a concept for now. The prerequisite for everything was victory—one win after another!
"Leave the contract matters to me. After the lawyers have a look, we'll sort out the key details, then sit down to discuss them. We'll sign only after we've confirmed everything is in order." Lech got back to business. "The main thing is choosing the right gear for different occasions—for example, the gear on the practice field, the attire at press conferences, and so on. Sponsors are always particularly concerned about these details."
"Isn't that also because the league has its own regulations?" Lu Ke asked, confused.
Lech smiled and nodded. "See? You're already starting to get the hang of it." To sponsors, every little detail represents profit, and no one is willing to compromise easily. This has become one of the rules every player must adapt to. "Yes, the league has regulations too, but since Under Armour, like Nike, is an official league sponsor, things are relatively less complicated."
"Don't worry, just leave these things to me." Lech took responsibility for the matter. "Also, I'm sure you know what you're doing, but as your agent, it's my duty to remind you. You need to manage your bank account properly, keep yourself out of trouble as much as possible, and, with your training, be sure to keep it up."
Seeing Lech's sincere expression, the corners of Lu Ke's mouth curled up into a slight smile. This made Lech pause for a moment. "What is it? Is something wrong?"
Lu Ke chuckled out loud. "No, it's nothing. I was just thinking... so this is what it feels like to have an agent."
'All this time, Lu Zhengze and Jiang Youning had given him their full support in chasing his dream, but when it came to the field and training, they couldn't help. Lu Ke could only rely on himself. Especially after entering college, he had depended entirely on his own awareness and self-discipline, planning every little detail of his life and getting to where he was today, one step at a time. Now, all the miscellaneous affairs, both on and off the field, were handled by his agent, while training was handled by the team's coaches. Everything was falling into place.'
"That's my job," Lech said with a slight, steady shrug. "By the way, I noticed you're still living with your family. That's a bit of a distance from the team's training facility. Do you need to move?"
"Yes, I haven't had the time to look for an apartment yet. Can you help with that?"
"Of course. That's my job."