By: Darren Rovell
(Story orginally ran on CNBC.com)
In the late 90s, a company called Broadband Sports was signing athletes to Web site deals, with the idea being to empower the athlete to take control of their own brands by disseminating their own news and selling their own merchandise.
But, in the end, athletes weren’t really on board with writing about themselves frequently enough for fans to make their sites worthwhile destinations and the retail space never was fully developed.
Fast forward to today where a combination of factors have led to many athletes controlling the flow of their information more than ever before.
Social media sites like Facebook and Twitter have not only made it easier to put information out — full blogs need not apply anymore. But the athletes themselves are more into technology and understand the importance of connecting with their fan base virtually more than the last generation of athletes ever did.
Now that athletes like Shaq, Dwight Howard and Lance Armstrong have the talking directly to their fans part down, one company is now focusing on using social media platforms to help better develop the business side.
The company is called Lineage Interactive and the goal is to turn the athlete’s social media site into a robust, money-making machine.
“Old age endorsement deals are done,” said Anthony Rodriguez, CEO of the company. “Social media done well will make all athlete-company partnerships real joint ventures, where the athlete helps sell the product more than they ever have before.”
Rodriguez, for example, is working with Phoenix Suns star Amar’e Stoudemire. Through a partnership with RazorGator and a technology platform called AtCost.com, Stoudemire is currently selling playoff tickets on his own Facebook page. The more friends a ticket buyer is willing to link to their transaction with Stoudemire’s page, the cheaper the ticket becomes.
Rodriguez eventually sees the most active athletes becoming serious distributors for the companies and brands they associate themselves with.
“If this technology was available in the 1980s, who do you think would sell more Air Jordans?” Rodriguez asked. “Michael Jordan, through his Facebook page, or Nike? I wouldn’t bet against Jordan.”
Rodriguez says that the new way of selling is going to pressure on a lot of big time sports agents for a variety of reasons.
“Let’s say Nike is negotiating with LeBron James and LeBron’s people are arguing that he’s the biggest name out there,” Rodriguez said. “The problem is LeBron is doing nothing in the social media world and Dwight Howard is doing everything. In a way, it could destroy the old “being cool equals brand equity” economy.”
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Rodriguez also says that the big agencies don’t have enough resources devoted to the tech space, which is a problem because a player’s value will be related to his social media interaction.
“Companies aren’t writing the same type of upfront checks that they used to,” Rodriguez said. “Those athletes who are set up to cash in from an entrepreneurial standpoint can be worth more to companies if they can generate sales.”
Rodriguez points to the shoe marketplace as an example. While Nike [NKE 73.90 — UNCH (0) ] sells signature shoes for LeBron James and Kobe Bryant, the majority of their athletes wear intricate custom made shoes that never make it to the shelves. A middle of the road player with a good merchandising platform and a great shoe could be new found business for the player and for Nike, he reasons.
The idea of Broadband Sports was to cut out the middleman and do business by bringing the fan closer to the athlete. The athlete and the world weren’t ready for that. Rodriguez is betting that they are now.