Earlier this month, NFL superstar quarterback Tom Brady learned a whole new way to score.
So did 10-time world champion surfer Kelly Slater.
The two top-shelf jocks signed mega-rich endorsement deals but instead of simply pocketing the cash, shooting a few commercials and going their merry way, the two opted to take their fees in stock of the companies whose products they will be hawking.
Brady and Slater join a small but growing group of athletes hoping to get a piece of the action and help grow the company — and their shares — to much greater wealth, experts said.
“The chances of a windfall later on from a stock gain can outweigh a cash payment,” said David Carter of Sports Business Group. “Sometimes athletes just waste the money as soon as they get it, with nothing to show for it.”
Indeed, when the New England Patriots’ signal-caller renewed his endorsement deal in recent weeks with sports apparel firm Under Armour, Brady chose to take a chunk of its stock as part payment of a new multi-year package.
The firm disclosed in filings this week that it increased its endorsement deal outlays by $7.8 million in the past three months compared to last year — on both college and pro athletes. Brady’s stake wasn’t disclosed, but in just four days of trading earlier this week, the value of shares outstanding climbed $38.5 million. Its shares boast a one-year return of 85 percent.
Golden-boy surfer Slater turned down his pending $10 million bonus reward this week for winning his 10th world title, and instead took a 3 percent stake in the company that he endorses worldwide: apparel and surfer-gear maker Quiksilver Inc. His stake currently is worth about $20 million.
Quiksilver CEO Bob McKnight said he asked Slater whether he wanted the bonus in cash “or would you rather have ownership in the company what will make you 10 times more in the years to come?”
“He said, ‘Definitely stock.’ ” Its shares are up 106 percent this year, closing yesterday at $4.17, off 22 cents.
Experts cautioned that jocks, like any investor, could fumble their picks.
“This is an entirely new landscape for athletes, and they’ve got to be cautious about doing their due diligence on endorsements,” said Carter.
In his new sports business book, “Money Games,” being released Monday, Carter devoted a chapter entirely to the growing phenomenon of “endorsement equity.”
Other experts say the equity system is gaining fans among jocks and corporations alike. There’s no tax taken out of a player’s package, and sponsors don’t have to worry about morality lapses ruining their entire investment in a star.
“When athletes have skin in the game — and know they’ll make more money by helping a company’s business — they’ll work a lot harder for a corporate goal,” said Kevin Adler, president of Engage Marketing.