Roger Federer is one of, if not the, greatest tennis player of all time. He might have had a fairly average 2021 and many reckon he’s in the death throes of his playing career, but his achievements – as well as his unsurpassed popularity – remains as impressive as ever.
Naturally, any player at the very top of one of the world’s most popular sports is likely worth a bit of dosh. Not only has Federer won a sizeable amount of prize money over the years, but he’s also been able to court (pun intended) some pretty high-profile endorsement deals: Mercedes-Benz, Moët & Chandon, Rolex…
But it’s what Federer has done with his apparel deals in recent years that’s the subject of this article. For years, Federer was tied to Nike, the world’s biggest sportswear brand and arguably the #1 brand any athlete wants to have a deal with – so it was pretty shocking when the Swiss champ walked away from Nike in 2018 and instead shacked up with Japanese fast fashion brand Uniqlo, and then penned a deal with Swiss sneaker brand On.
It seemed like an enormous gamble – but as sports investing expert Joe Pompliano has recently explained on Twitter, it might have been one of the most savvy money moves any athlete has ever made:
“Federer is one of only six athletes to cross $1 billion in career earnings while still active. The part you didn’t know? He left behind a $10 million annual sponsorship deal with Nike and turned it into a $600 million-plus payday.”
Pompliano sets the scene: “Federer had been with Nike for more than 20+ years, becoming one of the most decorated athletes in sports history with 20 Grand Slam titles. But when it came time to renew his $10 million annual sponsorship deal with Nike, things got interesting.”
“Nike had a loaded roster of tennis players [including] Serena Williams, Rafael Nadal, Maria Sharapova [and] Nick Kyrgios… there is an unwritten rule in the world of sponsorships [that] you don’t spend over 10% of overall revenue on athlete sponsorship deals…”
“Nike ultimately decided to protect their margins, letting the 36-year-old legend walk. The result: Federer shocked the world, signing a massive 10-year, $300M deal with Uniqlo – or 3x more than the $10M Nike was paying him annually.”
But here’s the really clever part of Federer’s deal with Uniqlo, according to Pompliano: “the agreement didn’t have a retirement clause, meaning Federer would earn $30 million at age 46 even if he retired 5 years prior. Even better? The deal only covered apparel, not shoes,” Pompliano reveals.
“Federer continued to wear Nikes without being paid for it. But after discovering footwear brand On Running while training, Federer made an even bigger bet. He signed an equity deal and became a global ambassador for the Swiss brand.”
“Including his initial investment & marketing fees, Roger Federer reportedly owns about 3% of the brand. The craziest part? Just two years later, On Running has gone public & the business is valued at $10 billion. That means Federer’s stake is now worth about $300 million.”
Federer’s deal with Uniqlo was clever, but it’s his move with On that’s really canny. Since its founding in 2010, On has grown to capture 40% of the Swiss performance sneaker market, 10% of the German market and even 6.6% of the US market. It’s clearly a successful brand – and now, it’s enjoying a fruitful symbiosis with investor/signed athlete Federer, the champ’s star power further elevating the business (and lining Federer’s pocket in the process).
Pompliano concludes thusly: “Roger Federer has built one of the most impressive brands in sports history. He only played in one event last year but still brought home $90 million, making him the 7th highest-paid athlete globally. Yet only $300k of the $90M came from tennis events. Now that’s wild.”
By backing himself with the Uniqlo deal and getting hands-on with the On deal, Federer has absolutely minted himself – even as question marks surround his future on the court. Few athletes would have the cojones, foresight or ability to pull off such a win… But there’s a reason he’s the GOAT.