Puma back in Serena endorsement derby
Puma back in Serena endorsement derby
By Darren Rovell
As the race to land Serena Williams to a new shoe and apparel deal draws to a close, it appears that a contract with Nike is no longer a foregone conclusion.
Nike, the world's largest athletic shoe company, was the favorite to ink the world's No. 1 women's tennis player when her deal with Puma expired in the spring, but Puma remains very much in the race, which could be wrapped up before the U.S. Open, which starts Aug. 25.
Serena and Venus Williams have been dominating both on and off the tennis court.
"I'm closing up things with Puma," Williams told ESPN.com. "They'll make it easier to make my own clothing line."
Like her sister Venus, the fourth-ranked player on the WTA Tour, Serena wants to have input into the design of her clothes. Serena, who wore dresses she designed to the Laureus World Sports Awards in Monte Carlo and last week at the ESPY Awards, has taken fashion design classes with her sister at the Art Institute in Fort Lauderdale, Fla.
Keven Davis, a New York attorney who negotiates the shoe and apparel deals for the Williams sisters, said he would not comment on Serena's new deal until negotiations are complete. One source familiar with the negotiations said Nike has not been informed that it has lost the race since it submitted its latest offer. A Puma official acknowledged talks between Williams and the company, but said a deal is not finalized.
"Currently we have no comment regarding Serena's contract, as we are in negotiations at this time," Puma spokesperson Lisa Beachy said.
A deal with either Nike or Puma is expected to make Serena the highest paid women's tennis player off the court and vault her annual business earnings to more than any other female athlete. Although she has earned $12.3 million on the court throughout her career, she currently earns a reported $8 million annually on her numerous endorsement deals. Venus Williams earns a combined $13 million per year, and fellow tennis player Anna Kournikova makes about $13 million in endorsements and on photo shoots despite never winning a WTA singles title.
Because Serena signed with Puma in January 1998, when she was ranked 99th in the world, the company got her at a bargain of approximately $2 million a year once she reached the top 10. In December 2000, Reebok signed Venus Williams to a five-year deal worth a reported $8 million a year, which remains the largest single endorsement deal for a woman athlete.
A future investment in Serena could be warranted. After all, she has won five of the past six Grand Slam events, more than any other woman's single player currently on tour. She also pitches Wrigley's Doublemint gum, McDonald's fast food, Avon cosmetics and Close-Up toothpaste.
"When corporate America is looking for a female to endorse their product, they have to start at Serena Williams," said Gil Pagovich, a partner in Maxximum Marketing, a sports marketing firm. "Executives can talk all they want about aligning with a women's soccer player or an Olympian or a WNBA player, but no female stays on the top of the news, both on and off the court, like Serena Williams has over the past couple years."
Puma does not own much market share in the tennis shoe category. In fact, it's not even among the top four brands, according to the National Sporting Goods Association.
Sharing the market
Company Market share
Nike 17.8 percent
Reebok 12.3 percent
New Balance 7.9 percent
Adidas 7.7 percent
Source: National Sporting Goods Association
Nike, which has the greatest share of the tennis shoe market, has made significant commitments to high-profile basketball players over the past couple months. Endorsements deals for LeBron James, Kobe Bryant and Carmelo Anthony have tied up about $150 million over the next five to seven years.
"Nike would probably like to do a deal with Serena. Puma needs to do this deal with Serena if they want to stay in tennis," said Craig Tartasky, president of marketing and consulting firm Vertical Sports & Entertainment. "But in order for either of these companies to make things work, it has to be a global buy. They have to be able to sell Serena shoes and apparel in Europe, Asia and Latin America since tennis just doesn't seem to resonate enough in the United States."
Trends in the tennis shoe market aren't particularly promising.
The National Sporting Goods Association reports that tennis shoe sales are down, from $748 million (24.8 million pairs sold) in 1992 to $503 million (14.9 pairs sold) in 2002. But data from the NPD Group, which tracks market trends, suggests that 2003 will be better. Over a 12-month period ending May 2003, tennis shoe sales were up 7 percent over numbers from the previous reporting period.
One of the reasons for the recent bump in revenue is the retro fashion trend and companies like Puma, K-Swiss and Fila have started to cash in. Last year, Puma's U.S. sales were $179 million, up from $111 million the previous year, according to Sporting Goods Intelligence, an industry trade publication.
In last year's U.S. Open, Serena was the focus of attention while wearing her one-piece black "catsuit" with Puma's logo on it. Later in the tournament, she switched to a pink version. Both then hit retail for about $40 each.
Serena is recognized by 72 percent of the general population as compared to the 73 percent that recognize Venus, according to Marketing Evaluations, an independent research firm. Thirty percent of the general population names Serena as one of their favorite athletes, while 29 percent mention Venus in the same light, the company reports. Their "likeability" ratings are double what the typical athlete receives, according to Henry Schafer, vice president of Marketing Evaluations.
There is certainly no lack of coverage surrounding Serena, 21, who has been on tour since September 1995. She has appeared in Sports Illustrated numerous times, recently in its swimsuit issue and as the third-most influential minority in sports (behind Charlotte Bobcats owner Robert Johnson and Tiger Woods).
She also has modeled for Vogue and People Magazine and has had cameos in the movie "Black Knight," ABC's sitcom "My Wife and Kids," on Fox's "The Simpsons" and is scheduled to make an appearance on Showtime's "Street Time" in October.
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