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From Catwalk to Tunnel Walk: Exploring the Intersection of Luxury Brands and Sports

Loeb & Loeb is proud to sponsor the 2024 Luxury Law Summit: London.

From the runways of high fashion to the stadiums where champions are made, the fusion of luxury brands and athleticism is reshaping both industries. In this discussion, Melanie Howard, chair of Loeb’s Luxury Brands practice, Amber Knight, senior legal counsel at Stella McCartney Limited, and Amaryllis Seabrooks, SVP and associate general counsel at WME Sports, provide insights into the motivations, benefits and legal considerations associated with partnerships between luxury brands and the world of sports.

In this Q&A discussion, the speakers are noted by their initials.

Given the spotlight on women’s sports, what trends are you witnessing in terms of sponsorship opportunities? 

AK: Sadly, but unsurprisingly, sponsorship of female athletes has historically revolved around their appearance rather than their ability. However, a positive trend has emerged with media and fans focusing on female athletes’ performance in recent years. Brands are following suit and sponsoring athletes based on strength, talent and inspiration rather than appearance alone. This alignment offers sponsors untapped value, enhancing brand perception and reaching a more diverse audience. Hopefully, this will be a permanent shift.

AS: We are seeing that for the top female athletes, sponsor fees are becoming more comparable to those in men’s sports and the compensation gap is less stark. I feel that luxury brands are one of the categories most balanced in terms of male and female sponsorships. Over the last few years, companies have started to emphasize diversity, which has led to an increase in the promotion of female athletes. We have had brands approach us specifically for suggestions of female athletes to work with, whereas they had only sponsored men in the past.

MH: In addition to the shift in focus from the appearance to the performance of women athletes, brands are recognizing that the audience for women’s sports (particularly women’s team sports) is inherently different from the audience for men’s team sports. Sponsorship of women’s sports and women athletes align with many brands’ desires to foster diversity and inclusion initiatives. 

As luxury brands increasingly seek out sports-related collaborations, what are the benefits, risks and considerations for both brands and athletes in such partnerships?

AK: There is always a level of risk for brands in a new investment. More so than with actors, singers or artists, luxury brands have to consider the “asset’s lifespan” when collaborating with athletes. Athletes are often more vulnerable to having their sponsorship devalued due to factors beyond their control, such as sudden injuries or changes in coaching staff or management. Brands may want to consider implementing step-back provisions from the outset and ensuring flexibility within the sponsorship package. On the other hand, while brands look to remain agile, athletes should capitalize on collaborations in a way that adds longevity to their sponsorship “lifespan,” by exploring opportunities that will outlive the end of their sporting career.

AS: Partnering with athletes offers brands a powerful avenue to influence buyers, especially when aligned with elite athletes embodying corporate values. However, risks such as athlete misconduct, performance issues and injuries are inherent in such partnerships. While these can be mitigated contractually, there will always be a “roll the dice” factor to any individual sponsorship. Athletes have a variety of factors to consider, such as whether the brand aligns with their values and if they can genuinely endorse its products, the potential limitations of exclusivity agreements, and the need to balance brand responsibilities to prevent overextension that could affect athletic performance.

How can collaborations between luxury brands and athletes drive industry growth, and what key strategies ensure mutually beneficial partnerships?

AK: Increased participation and enhanced talent translate to larger audiences, a broader demographic and amplified opportunities for athletes and sponsors alike. For instance, in women’s golf, decorated players like Se Ri Pak have inspired successive generations, leading to a significant presence of Asian female golfers in the Rolex Women’s World Golf Rankings, with 27 of the top 50 hailing from Asia as of May 2024. This presents a substantial opportunity for luxury brands seeking to enter or strengthen their position in the Asian market. Alignment of values and fan perception is essential for a mutually beneficial partnership, facilitating smoother collaboration and preventing alienation of existing fanbases. 

AS: Collaborations can foster overall growth and development when they’re genuinely authentic. In today’s climate, insincere endorsements are easily discerned by consumers. Alignment between the athlete and sponsor on their core values is crucial, followed by a joint agreement on how to convey that narrative. It boils down to what the company and the athlete represent together—like Nike and Tiger Woods embodying dominance, for instance.

MH: Authenticity in athlete endorsements is key from a legal and business perspective. Athlete endorsements must reflect the honest opinions, findings, beliefs or experience of the athlete, and any such views expressed must remain true throughout the marketing relationship. Monumental collaborations like Nike x Michael Jordan achieve this by bringing the athlete into the business—often with an equity stake—and creating a new product line and brand around the athlete (e.g., Air Jordan). These types of partnerships also have great potential for longevity of the collaboration beyond the athlete’s retirement from professional sports (even if due to injury), and many athletes have far outpaced their lifetime sports career earnings through their entrepreneurial endeavors. However, the athlete must maintain personal integrity in public opinion, as reputational missteps can be more detrimental to the brand and partnership than physical injuries.

Fan loyalty and consumer engagement are pivotal in both the sports and luxury industries. How can luxury brands leverage the global media reach of sports to enhance visibility, attract new audiences and reinforce brand positioning?

AK: It’s all about exposure. These collaborations broaden both the athlete’s and the brand’s reach, appealing to audiences beyond their typical sphere. The global media coverage of sports presents luxury brands with numerous opportunities, from in-program advertising to total event exclusivity, kit design and national team sponsorship. However, brands must avoid pigeonholing themselves by exclusively associating with one sport, team or individual. While focusing solely on specific areas may strengthen a loyal fanbase, it risks overlooking broader sports fan demographics.

AS: Another strategy to enhance visibility is to integrate luxury branding onto the playing field, styling athletes as they arrive at sports venues and incorporating luxury items as they step onto the court or field. Immersive experiences for fans at sports venues can also elevate the brand experience, catering to the attendees who seek a premium experience at big events. An example of accessing a new fan base is Louis Vuitton’s sponsorship of esports, challenging the notion that ultra-luxury companies can only sponsor heritage sports. While social media activations featuring star athletes promoting luxury brands are common, fresh content ideas could have a greater impact on brand visibility.

MH: Recent marketing surveys reveal that consumers expect brands to be actively engaged in boosting visibility, engagement and media coverage for women’s sports. Before entering into an athlete or team sponsorship, brands should reach internal alignment on the level of engagement they are prepared to have (e.g., grassroots initiatives to grow youth sports participation). Many athletes have founded or are actively involved with nonprofit foundations, with which they have partnered or whose causes they have championed. Athletes may be more likely to partner with brands that are willing to expand the scope of the endorsement to donate to these organizations or engage in cause marketing in support of these charitable initiatives. In the U.S., there are specific legal considerations that need to be addressed before the commencement of such marketing initiatives, including state registrations and additional contractual documentation between the parties.

Looking ahead, what emerging trends may influence luxury and sports collaborations, and how can brands and athletes adapt to capitalize on them?

AK: When it comes to women’s sports, I think we are going to see a lot more firsts in the next year and many exclusive tie-ups between women’s sports teams and luxury brands, both on and off the pitch. Prada’s dressing of Caitlin Clark for the WNBA draft is the perfect example. To my knowledge, this was Prada’s first foray into the world of basketball, as it had never formally dressed an NBA or WNBA athlete. 

AS: A big focus will be on how sports governing bodies adjust rules to allow more integration of luxury brands and products, and also how the major sportswear brands such as Nike, Adidas and Puma accommodate the ability for athletes to partner with luxury brands in their contracts.

MH: For decades, most major sports have witnessed steady increases in the length of their seasons, including post-season playoffs. Professional athletes have little time off and cannot commit to as rigorous a schedule of personal appearance obligations as other celebrity endorsers and brand ambassadors. For this reason, brands are incentivized to find multiple avenues to capitalize on brand exposure while the athlete is on the field/court/pitch/etc. While individual sports, such as tennis and golf, allow athletes to place brand partners on the sports broadcast, sponsored athletes in team sports are constrained by brand partnerships negotiated by the team and league. Enter the “tunnel walk,” which was alluded to earlier with athletes setting fashion trends. Fans want to see athletes’ everyday style, which expands the scope of potential branded products well beyond sports attire and footwear, presenting natural entrée for luxury brands, including those that are in niche product categories such as jewelry, accessories or luggage.

Melanie Howard, Amber Knight and Amaryllis Seabrooks will be speaking on the panel “From Catwalk to Tunnel Walk: The Winning Combination of Luxury & Sports” during the Luxury Law Summit in London on June 11. 

Learn more about the event on the Luxury Law Summit London website.