Firms aren’t sure Lin’s a slam-dunk
Jeremy Lin’s buzzer-beating three-pointers and underdog past have basketball fans and neophytes alike hooked on one of the most captivating — and pun-happy — Linderella tales in a while.
Now, if only businesses could figure out what to do with him.
Retailers caught unprepared for his sudden ascent have hustled to get Lin-branded merchandise on their shelves. But the big money for Lin isn’t in shirts and caps; it’s in his image and his staying power — and what he and major sponsors can do with that.
Corporate marketers are intrigued by the Lin phenomenon, but many are hesitant to offer major deals, such as a line of athletic shoes, in case the New York Knicks point guard flames out early. After all, Nike Inc. and its ilk aren’t accustomed to looking for their next big star in the esteemed halls of Harvard or among NBA bench warmers.
The second-year player himself, undrafted and cut from two teams in December, is keeping mum about his potential marketability.
“Lin was just hoping to play another day. He certainly wasn’t looking to cash in on this,” said Robert Boland, a New York University associate professor of sports business and law.
An injury to Knicks’ superstar Carmelo Anthony gave Lin the opportunity to catapult himself into the sports stratosphere. Before Thursday night’s game against Miami, he averaged 22.1 points a game this month and helped the team win nine of its last 11 games.
That set the stage for Jeremy Lin-style economics: a new sports management world that businesses on both sides of the Pacific, as well as Lin himself, are learning to navigate.
“No one knows how long his moment is going to be and whether he’s going to be worth a long-term investment,” said Kenneth L. Shropshire, a sports business and law expert and professor at University of Pennsylvania’s Wharton School.
“Do you develop a shoe with his name now or settle for a more fleeting endorsement? This is all new, and companies need to see more to protect themselves from unpredictability,” Shropshire said.
So far, Lin’s star-is-born narrative has pushed the prices for Knicks tickets on the resale market to an average of $528 from $229 before Anthony was injured, according to ticket search site TiqIQ.com.
In financial circles, “a Jeremy Lin” is the term now being used to describe overlooked and underused investment opportunities. Knicks owner Madison Square Garden Co. may be one: Its shares gained more than 12% to $32.84 on Thursday from $29.32 on Feb. 3.
Taiwanese tour groups are organizing trips to New York to see Lin play, including one package from Phoenix Tours that includes two Knicks games at the Garden in March.
His jersey and shorts from his first Knicks game sold for $40,000 on Internet auction site EBay. The limited-time Jeremy Lin-Mint chocolate mint cookie drink at burger chain Shake Shack sold for considerably less: $5.75.
This month, six applications to the U.S. Patent and Trademark Office tried to lay claim to the “Linsanity” catchphrase.
Two other applicants filed for “Lin-sanity” and “Linning.” Lin countered Feb. 13, applying for the rights to use “Linsanity” on products such as duffel bags, mugs, hoodies, action figures and even sports drinks.
Dick’s Sporting Goods Inc. stores didn’t have any Lin products until last week, when the chain got Lin-branded T-shirts, framed photos of Lin on the court, banners, towels and collector’s coins in his name — and more flows in each day.
“I can’t remember the last time something caught fire this way,” said Jerry Copsinis, who manages community marketing efforts for Dick’s.
With his Ivy League degree, Lin may have the smarts to make money in innovative ways instead of jumping on the first limited-time, all-cash endorsement deal he’s offered, analysts said.
Some expected Lin to go the route of wealth-building agreements involving company stock — a method used by New England Patriots quarterback Tom Brady in his deal with clothing company Under Armour Inc.
Others said that with more than 530,000 followers on Twitter, Lin could become a social media cash cow like Shaquille O’Neal, who has been said to make millions of dollars off a single sponsored tweet.
Consumers consider Lin to be about as aspirational as George Clooney, as influential as Steven Spielberg and as trend-setting as Rihanna, according a recent index of consumer perceptions from brand promotion firm the Marketing Arm.
Still, most companies probably will approach Lin cautiously instead of making any sudden overtures, Wharton’s Shropshire said.
This season, Lin will earn more than $600,000 on his NBA contract, but basketball stars can earn tens of millions through endorsement deals each year, sports branding experts said.
Miami Heat superstar LeBron James makes $10 million a year from a partnership with Nike and millions more on other endorsement deals.
Some companies may try to nab Lin for smaller partnerships now to win his loyalty if he turns into a durable star, marketing experts said. Others may offer him a contract with an escalator clause, which would limit their risk by tying Lin’s benefits to his performance.
But sponsors such as sportswear giant Nike won’t be producing a Lin sneaker quite yet. The company instead recently launched a T-shirt featuring the “Linsanity” catchphrase in Foot Locker stores, spokeswoman Jacie Prieto said.
“We’re continuing to look for ways to celebrate him,” she said.
But Lin has several advantages that could make him more bankable than other hyped players. He has a strong work ethic, a humble demeanor, hometown values and a passionate fan base made up mostly of viewers who aren’t interested in the sport.
“He’s somebody who sports fans want to root for and who people who aren’t even sports fans want to become sports fans for,” said Marc Edelman, a law professor at Barry University and a sports business expert.
Lin’s Harvard degree could make him more attractive to a higher-brow fan base that’s more likely to be interested in the rare so-called “thoughtful athlete,” such as Rhodes scholar and former basketball star Bill Bradley.
And as the first Taiwanese American in the league, Lin could leverage even a short star turn into more lasting popularity in the U.S. and in basketball-crazed China.
“If he proves himself to be a bona-fide player with sustainable power, the sky’s the limit for him,” said David Carter, executive director of the USC Sports Business Institute. “He could go from being an underdog to the mighty dog.”