The power of Jeremy Lin seems to know no boundaries. He is boosting ticket prices across the NBA. He might be the impetus for a deal between Time Warner and MSG. And maybe most impressively, he triggered a sell-out at the Air Canada Center for the New York Knicks game against the Toronto Raptors Wednesday night when the Linsanity show hit the road. Yes, a sell-out for the 9-21 Raptors who got a first-hand look at the movement sweeping the globe when Lin buried a three-pointer with 0.5 seconds left to win the game.
But when does Jeremy Lin get paid for giving the Knicks and NBA a shot in the arm? His contract this season became fully guaranteed this week and is worth $762,000. He'll earn 80% of that as the NBA lockout trimmed the 2011-12 season to 66 games from 82. Lin's only endorsement deal is with Nike which pays him little. Most NBA shoe contracts are for very small amounts of cash or just merchandise for all but the game's stars.
Last month we looked at the NBA's top-earning players in terms of salary and endorsements led by Kobe Bryant at $53 million. The cut-off for the top 10 was $22 million. All of these players are veterans and earn playing salaries of at least $15 million.
Lin likely has a couple of years before he'll join this elite list. He will be a restricted free agent after the season and the Knicks can match any contract offer he gets. Yet the intricacies of the NBA's collective bargaining agreement and salary cap will likely limit Lin to a contract next year that starts around $5 million whether with the Knicks or someone else.
Off-the-court is where Lin has room to cash-in. There are only 10 NBA players that earn more than $5 million annually from endorsements by our count. That group is separated into Bryant and LeBron James who make $25 to $30 million a year and then everybody else who is much further down the pay scale.
The driving force in every NBA star's endorsement portfolio is his shoe deal. Nike and Adidas are willing to pay up because these players directly drive sales of basketball shoes and apparel. But in recent years, shoe companies have stopped shelling out for unproven talent. The only significant shoe deal the past three years for a young player was the five-year, $25 million contract John Wall inked with Reebok.
Nike has a stranglehold on the $2.8 billion U.S. basketball shoe market. Nike subsidiary Jordan owns 63% of the market while Nike commands 26% according to research firm SportsOneSource. Adidas makes due with 5%, while Reebok commands just 3%. Nike still has Lin locked in for another season at a nominal fee, but will renegotiate if it wants to expand the role Lin plays in marketing for the Swoosh.
Seven-figure non-shoe deals are even rarer in the NBA with very few outside of Kobe and LeBron. Those two are the gold standard having transcended their sport and reached global icon status. Can Lin do the same? He's trending that way, but he's only 10 days in while Kobe and LeBron have been both been in the public eye for 10+ years.
Basketball players have an advantage over baseball and football players when it comes to endorsements because of the global appeal of the game. It allows them to ink lucrative deals in Asia as Bryant has done. Bryant has scored deals with his website, Smart Car and others in China in recent years.
The holy grail for any athlete who wants to cross over and appeal to all demographics and regions around the world is Tiger Woods. At his peak, Woods signed global deals that earned him $105 million annually. Maybe we are getting ahead of ourselves. Let's see how Lin co-exists with Carmelo Anthony on the court first.