The National Football League and Major League Baseball’s players associations have entered into a deal with RedBird Capital Partners to maximize profits from player likenesses, the Wall Street Journal reports. This agreement is a major milestone in cross-sport partnerships, as it “marks the first time players unions have joined forces across sports in this way.” With the amount of money that the players and RedBird are putting together, the possibilities are likely endless. I would recommend players focus on replicating the success of athletes like JuJu Smith-Schuster in reaching new fanbases across different platforms to truly see the biggest gains from this new arrangement.
The RedBird deal creates a new company called OneTeam Partners LLC—the company will look to facilitate revenue generation from player portrayals. Bloomberg notes that “[t]he sports unions will have 60% of [OneTeam’s] equity, with RedBird taking the rest.” These intellectual property rights are no joke; from video games to trading cards: usage of player names, images, and likenesses is the cornerstone of various sports products that third-party companies offer (Bloomberg cites Electronic Arts and Nike; while WSJ mentions Sony and Panini America). As the frequent JSEL reader knows, the NCAA has recently taken note of how important these name, image, and likeness rights can be for players.
That the NFL and MLB players are coming together demonstrates a shared understanding among players that pooling resources can have a profoundly positive impact on the overall bottom line. NBA players just “reclaimed their group licensing rights in the last round of labor talks with the league,” and could therefore be next in line to join. One could also imagine a scenario in which other players (such as those in the Women’s National Basketball Association, Major League Soccer and on the U.S. women’s national soccer team) join OneTeam, and the WSJ article states that some are already slated to be OneTeam investors.
RedBird will pool an initial investment of $125 million with annual revenue from the two players associations to get the company going. The players associations make roughly $120 million per year from standard licensing agreements—the players “will still receive their standard annual payouts from the deals, but RedBird will use the funds to invest in other opportunities.” The well-financed company will begin to pursue various opportunities, and in so doing, I would encourage the dealmakers to “Be like JuJu.”
Building a fanbase is key to financial success in the age of athlete celebrities on social media. One great example of this phenomenon is JuJu Smith-Schuster, a young wide receiver for the Pittsburgh Steelers who has already established himself as the third-most popular NFL player on social media. Smith-Schuster’s superstardom is actually no surprise when you consider how he has creatively expanded his potential fanbase past just Steelers or NFL enthusiasts. Smith-Schuster is a well-known Fortnite player and was part of a record-breaking 2018 Fortnite stream (with hip hop artists Drake and Travis Scott, along with streamer “Ninja”) that garnered over 600,000 viewers. As a result, he is reaching consumers that many other NFL players never would.
Smith-Schuster’s example is one to follow. NFL players should look into their contracts with Electronic Arts and see whether Madden NFL has the exclusive right to their portrayal in video games. If so, OneTeam could perhaps figure out a way to structure a limited use arrangement in which the players can become bonus characters in games like Fortnite or other popular titles. For example, maybe Call of Duty could add—as an in-game purchase—an unlockable Lamar Jackson character with turbo speed and extra distance/accuracy on grenade throws (thereby exposing Jackson to CoD players who might otherwise not ever hear of him or interact with him or his likeness in any meaningful, goodwill-inducing way). CoD has already included NFL players Le’Veon Bell and Alejandro Villanueva in a prior game, but it doesn’t appear they are playable characters. Another possible crossover would be encouraging more players to start streaming certain non-sports video games on Twitch, with a special card reward in Madden Ultimate Team (MUT) for those who subscribe to the player’s stream. Related to this, perhaps OneTeam cuts a deal with Panini and Electronic Arts to start putting special cards in actual trading card packs, redeemable for virtual cards on MUT (thus encouraging trading card buyers to buy and play Madden with this new found favorite player, and vice versa).
RedBird may have struck gold with this investment, if player rights stay as lucrative as they have been. With the right awareness of how to build fanbases up over time, OneTeam should be a highly profitable endeavor.
Eli Nachmany is a Sports Highlight Contributor for the Harvard Journal of Sports and Entertainment Law and a current first year student at Harvard Law School (Class of 2022).