Roger Federer's Business Portfolio (And What's Next)
Roger Federer's Business Portfolio (And What's Next)
With the legend retiring, let's take a look at his impressive career off the court.
In a 2-week span, two of the greatest players of all time have hung up their jerseys.
Serena Williams and Roger Federer.
While it’s sad to see them go — both of them are sure to stay relevant in the coming years off the court.
However, they’re both building wealth in different ways. Let’s get to it.
Roger’s Tennis Background
Roger Federer grew up in northern Switzerland to a Swiss father and South African mother.
After avoiding mandatory military service in 1998, Federer turned pro and never looked back:
— 103 career ATP titles
— 237 straight weeks ranked No. 1
— Final tour record of 1251 - 275 (85%)
— 18/19 Grand Slam finals between 2005-2010
He dominated off the court as well...
Federer is one of six athletes who have earned more than $1 billion while still playing.
Much of this can be credited to the ~$90M in endorsements he earned annually.
They included:
Lindt
Rolex
Wilson
Uniqlo
Gillette
Credit Suisse
Mercedes Benz
Federer the Investor
There is enormous pressure on athletes to leverage their cash and social influence early in their career, however, Federer waited until he saw the light at the end of the tunnel to enter this new domain.
It’s important to note that social media was in its early days as Federer was on the come-up.
Athletes today face a much different scenario (and pressure).
One of Federer’s earliest investments was in the private jet company NetJets — which Warren Buffett purchased in 1998.
The company did over $2B in revenue last year, earning Federer some nice dividends.
Federer’s $300M Move
Up until 2018, Federer had a $10M annual sponsorship deal with Nike.
But they parted ways after 20+ years.
Why?
Nike didn’t think he was needed anymore.
There's an unwritten rule in the sponsorship world that only 10% of revenue should be spent on athlete endorsements.
Nike already had deals with other younger tennis stars, like:
Nick Kygrios
Naomi Osaka
Francis Tiafoe
Nike decided to let Federer go.
How did he respond?
A few months later, Federer signed a 10-year, $300M deal with Japanese LifeWear brand Uniqlo.
The deal had some friendly provisions as well:
guaranteed payment (even if Federer decides to retire early 😎)
the ability to sign with another shoe company (as Uniqlo doesn't have any)
Needing a tennis shoe, Federer joined the Swiss sneaker brand, OnRunning.
They brought him on as a shareholder (owned equity), ambassador (received marketing fees), and produced his own shoe line (% of sales).
The company took off...
Last year, OnRunning went public at a whopping $10 billion valuation.
Even better...
After dilution, Federer owned ~3% of OnRunning. This equated to about $300M in stock.
In summary...
Federer lost a $10M deal with Nike
Signed a $300M contract with Uniqlo
Joined OnRunning helping them to a $10B valuation and $300M in stock — that's one heck of a trade-off.
Taking it a Step Further
Early in his career, Federer was focused on one thing.
Perfecting his craft.
That’s what 99% of athletes should be wrapped up in.
That’s what 99% of business professionals should be wrapped up in.
That’s what you and I should be wrapped up in.
Perfect your craft — the accolades, money, and goals will follow.
Serena Vs Federer
What I respect most about Serena and Roger is that they’ve stayed true to who they are throughout their careers.
The success didn’t change them…
As a wise sage once said: “If you want to know the true character of a person, give them these three things: money, fame, and influence”.
But one thing has changed…
Their business moves off the court.
Early in their careers, both focused on winning, which led to prize money and juicy endorsement deals.
As the cash piled up, and retirement inched closer, the pair explored different business avenues.
Serena has gone for the investor route, starting her own $111M venture fund, Serena Ventures.
Roger has gone for the entrepreneurship route, joining a company like OnRunning and helping them grow.
Both options work great, showing the immense value athletes add to companies, countries, cap tables, and really anything they associate with.
One last thing…
Federer is an all-around good dude.
While I get players like Nick Kygrios are more exciting, young kids should look up to role models like Federer.
There’s a lot we can learn (and apply to our own lives) from people like Roger Federer.
Thanks for reading today!
Have a great weekend.
We’ll talk again on Sunday during the weekly roundup (I have some cool stories I look forward to discussing).
Peace,
AP
Extra Credit
Roger Federer is ready for retirement.
A few years ago, he purchased an autobus from the 1960s and plans on driving it around Europe so he can visit the cities he competed in but was never able to fully explore.
Sounds like a great idea — but might be hard to avoid the public’s eye in this thing.