How sneaker free agency works: The biggest misconceptions

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How sneaker free agency works: The biggest misconceptions

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How sneaker free agency works: The biggest misconceptions

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This is part four of a four-part series that gives readers a behind-the-scenes look at shoe deals and the sneaker free agency process, with insight from various NBA agents, sneaker executives and industry experts. Check out part one, part two and part three.

In recent years, fans have become much more knowledgeable about shoe deals and the sneaker-free-agency process. Top media outlets like ESPN and Yahoo! Sports have ramped up their coverage of the sneaker world as whole, hiring industry experts like Nick DePaula to break news and provide terrific analysis. 

Also, social media allows sneakerheads to be more informed than ever. Not only can fans follow their favorite brands and players, top NBA reporters treat sneaker-deal terms as breaking news and it’s in their feed alongside other scoops (like trades and free-agent signings). Most people initially learned of Zion Williamson’s record-breaking rookie deal with Jordan Brand when Adrian Wojnarowski tweeted it to his four million followers.

However, there are still quite a few misconceptions about sneaker deals and the industry as a whole, according to various NBA agents and shoe-company executives who spoke to HoopsHype. 

“Fans think that every player is making millions of dollars and that every superstar player is making crazy money from their sneaker deal and that’s not the case,” one NBA agent said. “A lot of guys are in six-figure-and-below deals and when you’re looking at what a typical NBA player makes, that’s not anything to them. The guys who are in the millions are in a very rare class. There are the guys who have signature shoes, but the number of guys who make royalties or have minimum-guaranteed royalties from their signature shoe is even smaller. 

“There aren’t many guys who make $10 million per year or more from their sneaker deal and that’s around the average NBA salary now, so the impact that the sneaker deals have on these guys and how they operate isn’t as significant as people think. It’s good money, but it’s not crazy (in most cases).”

Zion Williamson’s Jordan Brand shoes (Photo by Jonathan Bachman/Getty Images)

Fans often overestimate how much players are making if they’re with a company like Nike or Jordan Brand. The public was surprised to learn that Kawhi Leonard was making less than $500,000 from Jordan Brand (before leaving for New Balance). Jimmy Butler was getting a similarly small paycheck from Jordan Brand before becoming a sneaker free agent.

But it’s not just the fans who do this. Sometimes, players believe they’re going to get a ton of money from their sneaker contract only to be disappointed when that’s not the case.

“I think there’s this expectation that everybody gets a big shoe deal, but not everybody can get that kind of contract,” NBA agent Roger Montgomery said. “I think that misconception hurts agents sometimes because every player thinks they can get a huge sneaker deal because they’ve heard about some of these big deals that other players got. They may just get a merch deal that only gives them free product. It’s still a shoe deal, but it’s not the piece of the pie that they expected.”

Sometimes, rival agents prey on a player’s unrealistic expectations. Rival agents constantly try to poach successful players away from their peers. They usually try to persuade the player and his inner circle that the current agent did a poor job negotiating their contracts and that they’d be able to get the player significantly more money from their shoe company or NBA team.

Even certain All-Stars have trouble getting a lucrative shoe deal because the brands are looking for certain positions and styles of play (as we covered in part two of this series). For big men, especially those in small markets, it can be very difficult to get a big payday from a sneaker company.

“A player may be an All-Star, but that doesn’t necessarily mean that he can sell sneakers,” one sneaker-company executive said. “Sometimes, an agent will say, ‘My player was an All-Star, so he deserves to be paid like these other All-Stars!’ Well, a sneaker company is mainly focused on whether he can sell sneakers and being an All-Star doesn’t guarantee anything. Also, something I see a lot is when a player signs a big contract, their agent will try to come to the sneaker company and say, ‘Look at the deal he signed with his team! He deserves a bigger shoe deal!’ He may be a great player and have a big NBA contract, but, again, it doesn’t mean he can sell sneakers. These things come across my desk and I’ll see how much some of these guys want and I’m just like, ‘What?!’ He may be a dynamite player, but I don’t care; I need guys who can move sneakers.”

In 2018, an Eastern Conference general manager told HoopsHype that some NBA players are more loyal to their sneaker brand than to their NBA team. After all, it’s not uncommon for a player to be with the same shoe company for their whole career, but bounce around from NBA team to NBA team. 

“A player may make more money from their shoe deals than from their NBA deals over the course of their lifetime,” the GM said. “You wonder, ‘Who is the player loyal to?’ Suddenly, the shoe company may become a factor when decisions are made. Because there’s no salary cap in those negotiations, a company like Nike can give a player as much money as they want and as long of a contract as they want [whereas] NBA teams obviously can’t do that. The relationship between the player and his shoe company is probably more stable and long-lasting than the player’s relationship with their franchise too. There are plenty of examples of players who have lifetime shoe deals, so it can be a relationship that continues long after the player has retired. It’s more common to see a player change teams than change shoe brands.”

When asked about this idea, there was some agreement and some push-back.

“It sounds weird to say, but there are some guys who really do have a family-style relationship with the people from their sneaker brand,” DePaula said.

Photo by Astrid Stawiarz/Getty Images for Frito-Lay

“I think people who jump to the conclusion that players are more loyal to their sneaker brand than their NBA team must be on the outside looking in at the sneaker business,” one NBA agent said. “A lot of guys are upset with their sneaker company – they sometimes don’t have the best relationship with their sneaker company despite getting paid a lot of money from them and being with them for a long time. I don’t want to name names, but there are players who would surprise you that are upset and who don’t necessarily have a great relationship with their sneaker brand. It’s almost the same way they look at their team like, ‘They were the ones who could pay me the most money and since it was the best offer business-wise, that’s why I signed it.’ Some players are very loyal to one brand and some have a great relationship with their sneaker company, but you can’t always make that assumption.”

“I think it is hard to compare the two relationships,” former NBA agent Matt Babcock added. “A commitment to a team means that the player is required to team up with specific players and coaches, so there’s a direct correlation with that player’s career success. It also determines where that player and his family live. It is a very involved commitment. On the other hand, a commitment to a shoe company is significantly simpler. A player can wear the shoes wherever he wants and they just need to change the color of the shoes if he switches teams.”

One final misconception is that the United States’ basketball-sneaker market is booming right now. In reality, sales have been down recently. 

“Trends are very cyclical,” one NBA agent said. “After Michael Jordan, shoe companies were chasing the success of his sneakers and giving out a lot of signature deals in the ‘90s. But when LeBron James first entered the NBA in 2003, the basketball-shoe market was down. Then, it exploded around the time of the 2008 Olympics. The market was exploding until we got to this recent trend of athleisure/minimalist type of stuff that everyone is wearing. Now, there’s a big focus on running shoes, NMD-type shoes and minimalist shoes, so basketball shoes aren’t really in style right now. That’s kind of been the issue.”

“You have to understand the marketplace over the last three years and see why companies made the decisions that they made,” Montgomery added. “We have to figure out what these companies are trying to accomplish. It’s the same thing we have to do with NBA teams. A team may have cap space, but they may want to hold onto that space for the future. These shoe companies have a budget and, each year, that budget changes. It’s just like the salary cap. If a company is coming off of a not-so-great year, they may be thinking, ‘This year, we’re going to pull back a bit and not spend as much.’ If a company is coming off of a great year, they may be thinking, ‘What we’re doing is working, so we’re going to keep the same strategy and spend again.’ What we have to do as agents is understand each company’s strategy.”

Be sure to check out part one (breaking down the types of shoe deals), part two (detailing shoe-deal negotiations) and part three (taking a look at the sneaker-free-agency process) of this series.

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