Nadal gains on Federer on, off court
Sponsors favour the young Spaniard for the long haul
May 10, 2009
By Danielle Rossingh and Alex Duff
Consider the saga of Nadal's $50 000 (R419 006) Mercedes SLK 200 Kompressor. In 2005, his breakout year as a pro, Nadal won the Mercedes Cup final in Germany. He climbed into the silver convertible sports car parked on the court - part of his prize for winning the event - and inched it forward a few yards.
Toni Nadal, Rafael's coach and uncle, who was watching from the stands, told his nephew soon after the event to forget about driving the car. Toni arranged for Kia Motors, a Nadal sponsor, to provide him with a $20 000 Sorento, which he drove while the Mercedes gathered dust in the family's garage for two years.
"I said I wouldn't like him to have a luxury car," Toni says. "I never wanted him to be incorrect or have a showoff attitude."
Under Toni's tutelage, Nadal ended Roger Federer's reign as the world's best tennis player last year and is favoured to win his fifth French Open, starting on May 24. In the sporting world's most rivetting rivalry, Nadal still lags Federer in at least one category - earning power.
A global brand
Federer tops the money list in tennis, with an annual income from tournaments and endorsements of $35.1 million, placing him at 11th on Sports Illustrated's 2008 ranking of the top 50 earners in sports. Tiger Woods at $127.9m, is by far the richest athlete, followed by golf rival Phil Mickelson and Los Angeles Galaxy midfielder David Beckham.
Nadal, who did not make the cut, probably earned about $15m to $20m last year, says Simon Chadwick, a professor of sport business strategy and marketing at the UK's Coventry University Business School.
This year, Nadal may be gaining ground on Federer as a money maker too. After winning his first Wimbledon title and the gold medal at the Beijing Olympics last year, Nadal signed deals with three corporate sponsors including Mapfre, Spain's largest insurer, bringing his endorsement total to nine.
While marketers mostly use Nadal for promotions in Spain, Nike is repackaging him for a broader international audience. In January, the world's largest athletic shoe maker outfitted him in more conventional attire, ditching his sleeveless muscle top and three-quarter-length pants for a polo shirt and shorts.
"Nadal is on the way to becoming a global brand," says Steve Simon, tournament director of the BNP Paribas Open in California, an event that the Spaniard won in March. "Beckham has been there for years. Federer has been there for years. Nadal, if he can stay healthy and continue to play like he is today, is going to be there as well."
A safe rebel
The product of a close-knit Spanish family that prizes discipline and modesty over fame, Nadal is taking an almost quaint route to the accumulation of wealth. While sports is full of stars like Russia's Anna Kournikova, who once made more money from sponsors than any other female athlete without ever claiming a singles tennis title, Nadal refuses to let endorsements distract him from improving his game.
At a press conference at Indian Wells, Nadal said that too many endorsements meant too many days of work in an already hectic 11-month season.
In February, after a 24-hour journey from the Australian Open to the island of Majorca, Nadal spent 10 hours filming his seventh ad in a year for Banco Espanol de Credito, a unit of Banco Santander, Spain's biggest lender.
With Nadal, marketers get an unusual mix of humility and virility, or what Tom Cannon, a professor and sports finance expert at the University of Liverpool Management School in England, calls a "safe rebel".
On the court, with bulging biceps and a bandanna over his hair, Nadal is a warrior with a wicked forehand - an image used by Kia in television commercials.
Off the court, Nadal, who still lives with his parents in their apartment in the small town of Manacor on Majorca, is humble and reserved. He shows it every time he calls number two Federer the world's best.
Federer, the sport's leading brand, flaunts his fame, attending New York Fashion Week with Vogue magazine editor Anna Wintour in 2006. Gillette, the leading razor blade maker, used Federer, Woods and French soccer star Thierry Henry in 2007 in its largest sports advertising campaign that year, which reached 150 markets worldwide.
Federer, a native of Switzerland who speaks Swiss German, German, English and French, appeals to sponsors such as Rolex with his sophisticated self-assurance, Chadwick says. "Federer has a set of values that makes him very appealing to sponsors; he is very approachable," he says. "Nadal has a more mysterious quality. He needs to be less mysterious, more outgoing."
Nadal is now making a run at winning all four Grand Slam events in one calendar year - a feat last accomplished in the men's game by Australia's Rod Laver in 1969. Since then, a longer season has added to the physical toll on a player's body, making it tougher to repeat Laver's feat.
With his overpowering topspin shots and boundless energy, Nadal reduced Federer to tears by beating him at the Australian Open final in February, the first Grand Slam event of the year.
After the French Open, Nadal will have to take Wimbledon and the US Open - an event he's never won - to achieve what has eluded almost every top player.
Just like Nadal's tennis, his income - including more than $24m in prize money won since 2001 - is a family affair.
Nadal lets his father, Sebastian, manage his money with the help of a financial adviser. "Rafael doesn't have any experience in business; it's normal that his father takes care of things," says Toni, Sebastian's brother.
Rafael comes from a family of small-business owners.
Sebastian and Toni started a window-making company, Vidres Mallorca, with five employees in Manacor in the mid-1980s. With their third brother, Miguel Angel a former soccer pro, they bought the Sa Punta restaurant in the Son Servera area of Majorca.
The trio also opened a cafe, an English-language school and the Grup d'Assegurances insurance company on Manacor's town square. The three brothers all own homes on the same ocean front street in the resort of Porto Cristo.
Rafael owns four companies that aim to invest in real estate, hotels, bars and restaurants and other businesses. He has a stake in a hotel in Mexico, a warehouse in Majorca and real estate in Spain. One company, Debamina, had equity of e3.1m (R34.7m) and a loss of e6 780 as of the end of 2007, according to its public filings. Rafael also put a little bit of money in the stock market.
The financial adviser, whom Sebastian declined to name, has also set up a pension for Nadal, who plays a sport in which players typically retire before the age of 35.
In 2006, Nadal placed e6.1m with Goramendi Siglo XXI, another company he owns. He will get the exact sum back in annual payments of e180 000 every year from the ages of 30 to 63, a company filing shows.
For top tennis pros, prize money from tournaments amounts to a small fraction of their take from sponsors. Nike signed Nadal in 1999, when he was only 13. Federer and two other top 10 pros wear the Nike swoosh as well.
The right time
"Rafa connects with today's youth," Nike spokeswoman Marloes Jonker says. "We consider Rafa to be a key driver of our brand."
As Nadal earned more victories - completing a record-winning streak of 81 consecutive matches on clay in 2007 - he lured bigger sponsors. In October, he cut a shampoo endorsement deal with L'Oreal, which uses him in ads in Spain.
Rafael's agent Carlos Costa, a former tennis pro who stays in the Nadal family home when visiting, offered Banesto a sponsorship on a Wednesday. Chairwoman Ana Patricia Botin, the daughter of Emilio Botin, the patriarch of the family that has helped run Santander for 114 years, agreed to the four-year deal the following Monday, says Rami Aboukhair, marketing director of the bank.
Banesto, whose net income fell 3.1 percent in the first quarter amid a recession in Spain, is using Nadal to boost deposits.
The bank offers people e500 for directly depositing their paychecks of at least e1 000 into a Banesto account for 40 months. Last year, 300 000 customers signed up through a similar promotion fronted by Nadal.
"It was far more successful than we had expected," Aboukhair says. "Nadal is popular with everyone."
After Nadal took over the top spot in tennis last year, more sponsors signed up. Inter Parfums made Nadal the worldwide ambassador for its men's fragrance, Lanvin L'Homme Sport.
In 2002, at age 15, Nadal won his first professional tour match at the Majorcan Open. Two months later in June, he turned 16 and quit school to become a full-time tennis pro.
"Nadal's family is investing in the person as much as the sportsman," says Santiago Alvarez de Mon, a professor at IESE Business School in Barcelona who has written about Nadal. "That explains his mental fortitude. He's still with the same girlfriend he's had for ages and the same friends."
Today, Nadal still trains at the Manacor club, where paint peels from the pink facade and weeds grow in the crumbling tarmac courts. Toni leads Rafael's practices, which sometimes run to four hours of high-intensity hitting.
Toni is not paid for this coaching; he supports his family with a share of the profits from the window company, which had a net income of e2.5m in 2007.
"The US Open is a big goal right now," Nadal said at Indian Wells.
For the Spaniard, winning the event is the key to gaining bigger endorsements in the US and possibly even surpassing Federer's earnings, the University of Liverpool's Cannon says.
"Nadal could outearn Federer," he says. "The big question is whether the market would allow for those kinds of earnings. The market for big, international sponsorships is flat right now."
Sponsors are betting on Nadal for the long haul, with Babolat signing a 10-year deal with him in 2007. Nike is also banking on many more years with Nadal. He debuted his new attire, which might widen his appeal to an older audience, at an exhibition match in Abu Dhabi this year.
What has not changed is Nadal's passion to win, and that means beating Federer.
One Grand Slam shy of Pete Sampras's record 14 titles, the Swiss is not about to willingly pass the torch to Nadal, who turns 23 in June. At Indian Wells, Federer told reporters that he likes Nadal's chances of winning the four majors this year.
"He definitely has a shot to do it," Federer said. "I know there's many guys out there that won't let that happen, and I am one of them."
Nadal, ever modest, said it's unlikely that he'll also triumph in the remaining three Grand Slam events this year.
"My chances are really small," Nadal said at Indian Wells, holding up two fingers just barely apart to show exactly how small.
With a potent mix of a dedicated family, unsurpassed athleticism and youth, Nadal will shatter many more records. He may even become tennis's top money maker too - only on Toni's terms, when the time is right. - Bloomberg
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