There's a sad thing that happens to a lot of professional athletes, whether they're boxers or football players or nearly any other sport. They're able to make a lot of money in a short amount of time, but the drive and determination and carefree abandon that leads to being a champion often means they may not be the best with money, either because they live in the moment or they never had a lot of money until they all of a sudden hit it huge, and that can leave them in a difficult place.
They focus on the discipline of their sport, and that doesn't always leave a lot of financial discipline, so even athletes who earned tens of millions playing their sport will often end up bankrupt within years of retirement. Sometimes, however, they're able to make it out the other side due to smart management of their money, endorsement deals, and having some business sense.
As we talk about Floyd Mayweather and Conor McGregor, and how they stand to make 100 million+ each for their upcoming fight, you can't discuss riches in boxing without mentioning some of the past greats. Mike Tyson was famous for squandering his money. He grew up without much, he would rob and steal at a young age, until he found his mentor Cus D'Amato who helped transform him into a championship boxer. After Cus passed away, Mike went through some dark times, and blew incredible amounts of money. But that's not always the way the story goes…
…When Things Go Right
The best example of an endorsement deal gone right has to be George Foreman. He made his share of money as a boxer, but it's his later business deals that really cemented his financial future.
He didn't invent the famous George Foreman Grill, he simply lent his name to it, but this small appliance became a massive success along with tons of recipes (we've uploaded a file here with some of his recipes). He is said to have earned $137 million in just the first year alone. Did you hear that Conor and Floyd? 137 million in just the first year, and he didn't have to get punched in the face.
It was an attorney named Sam Perlmutter who originally showed Foreman the Grill (which you can learn more about grills here), made by Salton. He told George that he's making all of these other companies and people rich by endorsing their products, but only getting smaller scraps for himself at the end of the day.
After getting one of the BBQ Grills, six months passed and Foreman hadn't even tried it out. He said he “wasn't interested in toys”. But months after receiving it, his wife took it for a spin, and loved it.
Wifey Knows Best
George still wasn't interested, until his wife made him a hamburger on the BBQ Grill and he loved it. In George Foreman's own words: “So I called my partners back and said, ‘I'm going to do that deal.'”
The deal itself was pretty straight forward, Foreman gets 45% of the profits after expenses are covered. That lawyer who helped convince him? He gets 15%, not a bad payday either.
He sold his stake in the grill for a Huge Lump Sum Payment…
Salton saw the potential in this grill, and decided to buy out George Foreman in order to use his name, without having to pay him such a big % of profits. That's how he earned $137.5 million, along with millions more for doing TV appearances, plus the money he earned before being bought out.
Beyond the initial success of the grill, which went on to sell over 100 million units, George's other business ventures haven't struck gold in the same way – but that's okay – like boxing and in business, you only need one perfect move to change your life.