Why Are The World's Biggest Athletes Choosing New Balance?

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0:28if you were one of the best athletes in the world which brand would you sign with for decades the answer seemed obvious but something has changed some of today's biggest athletes are choosing new balance and not necessarily because new balance offered them the biggest check so what are athletes actually looking for from a brand? And what happens when an endorsement becomes something more? I sat with Clutch Athletics founder and CEO Rich Paul, five-time Olympic medalist Gabby Thomas, and New Balance CMO and brand president Chris Davis to find out why. I'm Linda Boff, and you're listening to A Different Take.

1:24I have to tell you, Rich, I'm so struck by your long-term thinking and view and patience in a world where, you know, we see a lot of news stories that are about the price of an endorsement and the money side of things. How do you bring that to the athletes you work with? I always say to my clients, like, you know, you don't have to know everything, but you need to be in the know of everything. And so most agents are focused on the transaction. They don't understand the shoe business. They don't really know who, and why should they, right? They have a, that wasn't what they were trained to do. What irks me more than anything, I see a guy sign a deal and it's a big number, but I know the partnership isn't going to work.

2:14And I know that for me, if the number might have been smaller, but you picked the right partner, you're going to do that 10x or maybe 15x. Why should you do this? What is the strong suit? it's less about the transaction monetarily and it's more about what's their actual plan. The mass of athletes they just sign they're just signing endorsement deals. Very few athletes actually sign partnership deals right because in a partnership deal you have a strategy within throughout the calendar year right there's a lot of dollars being spent on print there's a lot of dollar spend is spent on commercial, I always ask the business, what's their media buy?

3:01Because if their media buy is X and you're involved in that, then there's a compounding that goes. You can really add that to the bottom line of the transaction. The reason why most families and players and agents don't focus on that is because that dollar amount that the brand is spending doesn't go directly to your contract that they can charge on or that goes in your pocket. But it is an investment backing you if you embrace it the right way, which ultimately does a number of things. It embeds you deeper into the brand and I can always renegotiate and do another deal down the road. You know, we'll get our value.

3:42And then also it gives you a platform that allows other brands to see you in a light in which they may want to now have a partnership as well. So you may have turned one deal into three and those three deals are at the same level as it pertains to just having that quality value from a brand perspective. As an athlete, I definitely do have the experience of having relationships with brands that can either be partnerships or they can be endorsements. And there is a fine line between them. And having an endorsement does feel transactional. You know, you show up, you do the campaign, you do the endorsement, you do a shoot, you hold the product, and then you go about your day.

4:31And of course, there's a benefit to, you know, the financial structure of that. There's something really unique and special about a partnership, about building a brand together. And it's something that I think people can tell the difference. It feels real. You're building a brand together. The brand represents you. And it's something that I can be really excited about on a day-to-day basis. It's so nice to know that I have that support, that I have something that I am proud to be a part of. And of course, there is a financial structure that is really nice too. But I just love being a part of something that is bigger than just what I do on the track.

5:07And New Balance is such a big part of my career and my journey in that regard.

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6:13Darius Baisley took an unconventional road to the NBA. Instead of playing college basketball, he spent part of his gap year as a million-dollar intern at New Balance, learning the sneaker business from the inside while preparing for the draft. And the unusual decision ended up being the beginning of a much bigger partnership and part of New Balance's strategy. Darius, at the time, was trying to figure out what his next steps were going to be. He had the idea of going to college. He can go to the G League. And through my evaluation of him as a person, after talking with his mom and spending some time with him, I just felt he needed to do something a little bit different because the margin of error when you go to college, because you're only going to become an NBA ball player.

7:06And I just felt like he could probably get there and then never get to the NBA based upon things that can transpire. The New Balance idea, I knew that you probably couldn't do that on the basketball floor, but what you could do is that same type of route within the corporation. So my thought process was his colleagues at New Balance would be his teammates. The headquarters would be his gym. That evaluation was what I felt like they needed to understand. And also I felt like it's actually better because this is a, what I would say, an environment that has a direct correlation to where he was going, right?

7:56You know kids sign shoe deals without ever knowing the business within the company that actually makes the product Because most people only focus on the transaction of the deal No one actually wants to get to understand how things actually work and why they choose the athlete and all those things and so Allowing him to gain that education while still working out It worked out for him and it was actually what I believe expedited NIL. You know, we did the million-dollar internship. He still ended up going 23rd in the first round of the draft. I don't think anybody had done something like that before.

8:33No, no. And by the way, they stopped it by allowing NIL to come in, but I was getting ready to do a lot of different things from a creative standpoint because I had found, not a loophole, but I had found another option versus just going to college. And if the player's already good, I can develop them. I don't need them to go to college for the development.

9:01How could we enter a very competitive sports marketing landscape with very strong industry incumbents that have been doing this for decades? We started with the idea that we're not going to sponsor anybody. It's only partnerships. And the idea of that is when you join New Balance, you're joining a family. We're a very boutique sports marketing firm, and it's about being one of few versus one of many. Part of that is the co-authored approach. And how we define co-authored is every athlete that we work with has a seat at the table with our team. They're involved in co-authoring their business strategy, their content strategy, and their product strategy.

9:46They know us, we know them, all of them on a personal basis. Every athlete that we sign, we meet with face to face. Every athlete that we work with has a component within their contract where they have to give back to charity. And that's unique to our industry. So we go through this really long process of identifying who's fiercely independent, who wants to challenge the status quo and step aside from the sea of sameness that the industry had become, Who wants to be one of few versus one of many? Who wants to buy into that challenger brand mindset? Do they want to put in the work to develop their strategy from a business product and story selling standpoint?

10:27And I'm happy to say that at the end of these processes, we never lose. Because if an athlete decides to go with another brand, they weren't right for us. But if they do decide to go with us, then they are all in. They're all in on visiting headquarters. They are all in on working with product managers. They're all in on being part of the family. And whether that's Josh Allen, Coco Gauff, Gabby Thomas, Bukayo Saka, Kawhi Leonard, Tyrese Maxey, Cooper Flagg, Shohei Otani, Francisco Lindor, the list goes on. All of these individuals were early pioneers in buying into the strategy that we've been talking about.

11:06And they wanted to be part of it. They wanted to help grow it. but they intrinsically understood the values, the personality, and the authenticity that we were bringing, while simultaneously understanding that the products that we made were going to enable them to perform better. I think what sets New Balance apart truly is how they do select their athletes based off of that. You know, it's not a numbers game for them. It's really about quality over quantity. And there's a reason why we have the certain partners that we have. And truthfully, the New Balance roster does feel like someone would have family because we all know that we do share that value system.

11:43For me personally, New Balance was excited to support me in school. When I signed with New Balance, I was still a junior in college, and I had never felt a pressure to stop prioritizing academics first. They also are very supportive of my philanthropic endeavors as well. I volunteer at a clinic here in Austin that it serves underinsured patients, so those who don't have health insurance or don't have access to health care without the clinic. And I remember the first time I asked New Balance to kind of partner with me on this project I was working on there, and they did not hesitate to help out and just send so many sneakers to give out for free to all of these patients.

12:25And they showed up in such a big way in that. And they allow me to have a platform to even speak about those health care issues that I'm so passionate about in my day to day life. What Gabby describes as a relationship, New Balance has turned into a strategy. Interestingly, the company doesn't want the biggest possible athlete roster. It wants the right roster. Athletes who share the brand's values. Athletes who are willing to have a voice. and athletes who want to participate in building something rather than simply appearing in it.

13:01It's partnerships over sponsorship. It's our partners, our reflection of our values. And the enduring approach, the trust, the ability to have difficult conversations, to understanding the vision of where we are going, to understand that not everything that we do is going to be a success, that there are going to be mistakes along the way, but how do we reorient, re-strategize, and reconvene to be part of that future? Consistency equals confidence, and patience is a virtue. Like, those are two cliches, but they're true. Sounds like you live by them. They're true. And, you know, with Rich, there have been many instances where we have promised that we would over-deliver on a specific athlete, and when we say that, he believes it because the proof is in the pudding.

13:52There have also been instances where we've been looking at certain athletes and have proactively reached out to him where he has indicated that these individuals were not right for New Balance, meaning they wanted a sponsorship, not a partnership. And after years of going through these types of conversations and millions of dollars spent or earned, trust becomes very apparent very quickly. things become more expensive and you realize integrity, values, and trust rapidly when you're working on large business deals. And I would say success breeds success. One athlete turns into three, three athletes turns into ten, ten athletes turn into a sub-brand, sub-brand turns into partnerships, and then all of a sudden you know you have a business partner, you have a friend, and you have an ally who understands a common vision and you're both trying to do the same things in ancillary industries and it's very hard to find partners who are like-minded but also put their money where their mouth is and have the patience to realize those strategies over a decade there's another important distinction here new balance isn't asking athletes to tell the company's story It's asking them to help write it.

15:15What can that mean? Product, content, business strategy, even philanthropy. And if the strategy works, the athlete doesn't feel like an advertisement for New Balance. The athlete becomes part of what New Balance means. I think when an athlete signs with New Balance, they feel appreciated. And I think it's important to separate ego and appreciation. I think everyone needs to have ego in competition. but then there is an appreciation, you know. Is that rare to be appreciated? Over time it is, you know, because when a brand is not new, but fairly new in the space of, especially in basketball, right?

15:57You start, so you basically, a lot of it is making sure that everyone feels welcome and, you know, even going out to the families. It is actually surreal to even think about the fact that it's been almost eight years to the day since I have started my partnership with New Balance. And I just recall being on the beginning of my track and field journey at that time. I had never made a U.S. team yet. I was so young and so new to the sport and I have come such a long way since then. And I think what really strikes me the most is that New Balance has been on that journey with me every step of the way.

16:42They are my longest partner. New Balance has believed in me before I ever had any type of accomplishment at the professional level and I think that is just such a beautiful thing. New Balance didn't compete by signing the most athletes. It competed by building the kinds of long-term relationships athletes want to keep and nurture. And there's a bigger philosophy underneath all of this, because the same patience and independence that shape the athlete strategy shows up in New Balance's products, its collabs, and the way it thinks about the business itself. And it raises a very different question.

17:23What happens when a company doesn't have to answer to Wall Street? I'm Linda Boff, and you're listening to a different take.

17:59Season for seasonal drinks at McDonald's.