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April 5, 2023

Reminder: 

Andy Marston

 has taken the reigns to JohnWallStreet on Wednesday mornings. You will find his 

Sports Pundit

 column below.

I will continue writing for Monday, Tuesday and Thursday mornings. 

Adam Grossman is driving on Fridays.

PRIME Example: Rightsholders Could Benefit From Dodging Industry Incumbents

Athletes and influencers have traditionally relied on partnerships with established brands to monetize their influence.

However, in recent years, an increasing number of athletes/influencers have instead chosen to launch their own brands.

KSI and Logan Paul, for example, created a sports drink called PRIME.

The popular duo launched the brand at the beginning of last year with ambitions to “rival some of the biggest companies on Earth,” including Pepsi, Coke, Gatorade, and Powerade.

It opened to strong demand.

PRIME sold over 10 million bottles within the first two months and has since gained distribution in over 2,000 Target stores nationwide.

Similarly, when PRIME expanded into the UK in May, it sold 50,000 bottles within the first five minutes of becoming available.

Demand has remained high since. Media reports have consistently highlighted stories of the drinks being resold online for upwards of $100 per bottle.

PRIME's success is no accident.

KSI and Paul created a product for their large online followings.

“Logan and KSI really know their audience and built PRIME around it,” former EPL club executive and sports marketing consultant Rich Johnson said. “The brand really matches with their fans. The typeface, the colors, the big and bold personality.”

The influencer duo have also been active in creating content designed to keep their followings engaged with the emerging brand.

But KSI and Paul are leaning on sports partnerships to communicate the product's authenticity and quality. Language in the corresponding press releases has highlighted the drink’s coconut water base and the inclusion of BCAA, a nutrient said to aid muscle recovery.

“It [shows] sports marketing has an ability to legitimize. You see it on the digital boards at Arsenal and the canvas at the UFC and suddenly, [these partnerships] fast track PRIME from ‘YouTubers that have a drink’ into a global drinks brand.”

PRIME was recently named the official sports drink of the Los Angeles Dodgers.

Whilst PRIME benefits from credibility gained, Johnson suggests the value for rightsholders –beyond the obvious financial upside– is the ability to get their brand in front of the next generation of sports fans.

“We are seeing a bit of a trend with rightsholders now thinking more favorably about partnerships that have this hidden upside around additional reach,” Johnson said.

Paul and KSI have a combined 47 million followers on YouTube, an audience largely comprised of Gen-Zs.

By comparison, the Dodgers have just 213,000 followers on the platform.

“We sort of saw this when there was the dispute between New Balance and Nike for Liverpool’s kit deal," Johnson said. "Liverpool favored Nike because of the baked in value of their global superstar athletes.” 

And there’s value in having access to and being associated with Logan Paul and KSI, just like there is with LeBron James or Serena Williams.

Last weekend, PRIME flexed its brand power at WWE’s WrestleMania. Paul, who was participating in the event as a wrestler, slammed KSI, who made a surprise appearance dressed as a bottle of PRIME, through a table. 

A post on PRIME’s Instagram account showing KSI lying on a stretcher backstage following the viral moment has generated over 1.4 million likes to date.

While partnering with creators can lead to viral content moments and increased visibility, Johnson warns there are risks too.

Look no further than KSI, who was recently forced to come out and apologize for the use of a racial slur in a video. The English YouTuber/rapper/boxer has since temporarily suspended himself from social media.

For this reason, as well as the fact that there are only a select number of highly successful creator brands capable of sponsoring top rightsholders, some sports properties may be tempted to introduce their own product lines.

Back in 2018, Chelsea FC decided to create its own sports-hydration product, Blue Fuel, as opposed to doing a deal with a well-known brand like Lucozade or Gatorade.

It was one of several offerings launched by Chelsea Digital Ventures, a digital-first, consumer-product business spun out of the club.

Though admirable, the recent successes experienced by creators such as PRIME and MrBeast Burger suggest there is room for improvement among rightsholders looking to launch new product lines in 2023.

“Blue Fuel missed a little bit [in my opinion] because it went so far down the performance route. It really set itself out to be a high-end performance alternative, which I think was a misread on who the Chelsea FC consumer is,” Johnson said.

“Logan Paul and KSI, on the other hand, understand their audience and have really tapped into that…I would love to see a rightsholder develop a product offering that has that [kind of] same alignment to its fans and their behaviors,” he added. 

It's just a matter of time until one does.

Building an independent media brand is a heavy lift. We use this space to shine a spotlight on some of our favorite sports, media and finance content creators. We hope you will check them out. 

The Albachiara Chronicle by Roger Mitchell

Roger Mitchell and his podcast AYNE look at the uncertain waters of sport and finance, to try and better understand the risks facing the business of sport. Recent Story: Who is going to be Sport’s LVMH?

Excerpt: It is time for the sports conglomerate; a Berkshire Hathaway of Sport, an LVMH of Sport.Employing all these above techniques, with fully empowered strategic CFOs. Taking advantages of the imminent haircut valuations. Rolling up the best assets. Capturing synergies and economies of scale, improving them with the best central services, especially in rich data, vertical integration, brand, etc etc.Interestingly, all this, in theory, is the PE playbook. They would say they are the modern conglomerates. The best ones maybe are, when they actually get their hands dirty in the businesses they buy.

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