Athletes, Widely Followed On Social Media, Are Upending The Sponsorship Business

Meet the new sports media companies.

At 1:29 p.m. on Oct. 19, skateboarder Ryan Sheckler uploaded a video to his Facebook page shot entirely on an LG phone. The video, paid for by LG, showed Sheckler and his buddies skating around his hometown of San Clemente, California, providing fans with the type of behind-the-scenes access that’s helped him attract over 3.3 million subscribers to his Facebook page. Sure enough, within 36 hours, the video hit 1.8 million views; today it’s sitting well above 7 million.

By any measure, the campaign was a wild success for LG -- particularly since it never aired on TV, eschewing what was once advertising’s most important channel in favor of social media.

For years, athletes like Sheckler built social followings as a way to connect with their fans. But now, some players’ audiences are so large they’re sometimes surpassing those of the broadcast networks that carry the games they play in (CSN Bay Area, for instance, set a record this week with a peak of 216,663 households watching a Warriors game. The Warriors' Stephen Curry is followed by over 3 million people on Twitter alone). This new dynamic is creating an environment where athletes can rival traditional media entities for attention and ad dollars. And it’s upending the traditional player sponsorship business, converting today’s athlete from commodity, someone who faces the camera to pitch a product, to a driver of the sponsorship process -- a director whose final cut must feel like natural, non-sponsored social media content and a distributor whose reach, at times, rivals that of billion-dollar media companies. And it’s making these athletes a bunch more money in the process.

“The following that I have on the internet allows me to do so many incredible things,” Sheckler told BuzzFeed News. “You’re in control of your own destiny with the content you create.”

We’re already seeing serious business activity gear up to take advantage of athletes' shift from pitchmen-for-hire to content creators and distribution channels. In April, for instance, Wasserman Media Group, an athlete representation and sports marketing company, acquired the New York–based social media agency Laundry Service, an outfit that helps the athletes it represents build their online presences and sell sponsored content through their accounts.

Wasserman isn’t wasting any time setting the plan into action. This week, Laundry Service is spinning off its social media talent representation arm, Cycle, into a new company and adding 1,600 athletes for whom it will negotiate sponsorship deals and produce both sponsored and non-sponsored content. Cycle is essentially a new version of a media network.

“People are now media entities,” Jason Stein, CEO of Laundry Service and Cycle, told BuzzFeed News. “The influencers we’ve worked with, and now athletes, have as much reach, if not more, than any of the biggest media entities. When you combine the fact that they are going to star in original content and deliver that to their large audiences, it’s the future of advertising.”

When LG did the video with Sheckler, for instance, Cycle was working behind the scenes, helping with negotiations, production, managing approvals, and guiding the creative process to fit LG’s needs and Sheckler’s social media voice. Laundry Service then helped distribute the ad further by promoting it with ads on Facebook, Twitter, and Instagram. The agency’s plan is to connect its advertising clients with the athletes it represents to produce more such campaigns. And Wasserman’s representation arm will bring to it some of the most recognizable athletes in the world -- including A-listers Andrew Luck, Russell Westbrook, and Anthony Davis.

Though social media sponsorship is hardly unique to sports, there’s no more fitting lens through which to view the massive impact social platforms are having on traditional media. Sports broadcasts are widely considered one of the sole remaining revenue streams holding the traditional television model together. People tune in to sports broadcasts live and will sit through commercials during time-outs, making them attractive venues for advertisers who subsidize the costs. But if advertisers can find the same attentive audiences elsewhere -- as they are starting to do -- it could mean trouble.

"These are the most popular people on the most popular apps ... they are the media companies of the future."

“The new talent is becoming empowered and threatening the existing ecosystem,” said Rich Greenfield, managing director at the financial services firm BTIG, of social media influencers. “These online influencers hold more sway with millennials than a lot of traditional talent.”

And for serious athletes, the economics can be very compelling. Said Casey Wasserman, CEO of Wasserman Media Group, “The opportunities are much more meaningful and more frequent than they otherwise would have been for a much greater diversity of athletes."

The definition of television may also soon change, with apps, not traditionally programmed channels, dominating the viewing experience, as they do on the latest Apple TV. “If apps are the future of TV as so many have said, and these are the most popular people on the most popular apps, it would only make sense that they are the media companies of the future,” Stein said.

That may be the future, but the present isn’t so bad for athletes either. Currently they’re living through changes that are inserting them squarely in the driver’s seat, with more economic and creative leverage than they've ever had off the court. “It’s gotten significantly better,” said Sheckler of his earnings. “It’s a blessing.”