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Tom Brady Switches to Under Armour

November 8, 2010

Tom Brady’s contract with Nike recently expired, and he has switched to Under Armour. This is pretty big news as Under Armour continues to grow in the sports apparel business. This gives them huge recognition because of Brady’s star quality. They have players like Anquan Boldin, Miles Austin, Brandon Jennings, and Matt Wieters endorsing their product, but none of these are future Hall of Fame quarterbacks who can be pitted against Reebok’s Peyton Manning and Nike’s LeBron James as big time faces.

What’s very interesting in this piece is part of Brady’s compensation. Under Armour is a growing company that is very popular. They’ve seen great earnings and a rise in their stock, but they still have to compete with the big dogs for talent – in particular, Nike. So, how does a growing, exciting company do this? It finds a different way to compensate the talent. Brady received equity in Under Armour in exchange for the switch from Nike. This has to be attractive to him. As much as he talks about fitting with the company in the article, the truth of the matter is that this is a business decision. Brady will now have ownership in a growing company that most think will continue to get bigger.

Under Armour has created a blueprint for companies entering markets with dominant players.

1) Create a useful product that you believe in.

2) Create an identity that resonates with your target market

3) Stick to the identity which you have created in everything you do

4) Sign recognizable, up-and-coming, young talent to endorse your products

5) Find an innovative, lucrative, and attractive way to compensate the “big fish” which will take your company to the next level

6) Keep churning

Easier said then done.

– Jason

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