Michael Vick has gone from earning 12 cents an hour washing pots and pans in prison to once again earning multi-millions playing quarterback in the NFL.
As odds-defying as Vick’s on-field comeback has been with the Philadelphia Eagles, his financial revival might be more improbable.
Vick, who will face his former team in the Georgia Dome on Sunday night, lost well over $100 million in football and endorsement income when he pleaded guilty to a charge related to dogfighting and went to federal prison in 2007.
The final seven seasons of his contract with the Falcons were wiped out. All of his endorsement deals were lost. He filed for bankruptcy protection while incarcerated in Leavenworth, Kan.
Flash-forward to 2011, and Vick, 31, has a contract with the Eagles even more lucrative than his long-lost deal with the Falcons. And his endorsement earnings — although far short of their previous peak — also are on the rebound, powered by sports-apparel-and-equipment giant Nike’s decision to re-sign him four years after dumping him.
“We probably all can learn from what has happened,” said Bob Hope, a long-time sports-marketing executive in Atlanta. “It’s very easy to say, ‘Nobody could ever come back from this.’ Or, ‘Nobody could ever come back from that.’ But when folks get into very difficult situations, if they behave and are contrite, humanity can be very forgiving.”
Vick’s mega-contract with the Falcons, signed in December 2004, was to pay him an average of $13 million per season for a decade. His new six-year deal with the Eagles, signed last month, averages $16.67 million per season.
As with Vick’s Falcons contract and almost all other NFL contracts, the fine print in the new deal reduces the headline numbers. About $36 million of the contract is guaranteed, most of which will be paid out in the first two years, and the sixth year of the deal, at a non-guaranteed $20 million, appears to be contract padding because it reportedly will be voided if Vick takes 35 percent of the snaps in any of the first five years.
Still, by any measure, the quarterback who lost it all is once again one of the more highly paid players in the NFL.
That is good news for Vick, who joined the Eagles shortly after being released from prison in 2009, but also for the creditors in his Chapter 11 bankruptcy case.
Vick’s unsecured creditors were owed about $20 million when his bankruptcy plan was approved and will be repaid from his earnings. Court records outline a plan under which the percentage of Vick’s income handed over to creditors escalates as his pre-tax earnings increase, starting at 10 percent of annual income below $750,000 and topping out at 40 percent of income above $10 million.
About $2.1 million had been repaid through June, according to court records, and about $5.3 million of Vick’s average annual income from the new contract will go to creditors until they are paid off. At that rate, the debt will be cleared in about three years — less if his endorsement income continues to grow.
The Falcons were one of Vick’s larger creditors, owed $6.5 million under a negotiated settlement of the team’s breach-of-contract claim for repayment of bonuses that Vick received in the 2004 contract. However, court records show that the Falcons sold the debt in March for an undisclosed amount to Fulcrum Credit Partners, described on its website as a “top tier player in the ... secondary market for distressed claims and other illiquid debt.”
Before being indicted, Vick was one of sports’ highest paid endorsers of products; in 2006, Sports Illustrated estimated his endorsement income at $7 million. He might not reach that level again, but his on-field comeback — he was the NFL’s Comeback Player of the Year last season — jump-started a commercial recovery as well.
“It follows a very similar path that we’ve seen from other tarnished stars with the most important step being performance as an athlete,” Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon, said by e-mail. “His athletic ability is now much more the key to his marketing success than it was before.”
The first step in Vick’s marketing comeback came late last year, when he signed a small local deal with a New Jersey auto dealer, Woodbury Nissan. Deals followed with Unequal Technologies, a provider of shock-blocking sports products such as the chest protector that Vick wore late last season; MusclePharm, a nutritional-supplement company; and Core Synergy, a titanium-infused wristband brand.
A high-profile deal came in July, when Nike, four years after dumping Vick, brought him back into the fold.
Nike’s reversal was not a surprise to David Carter, executive director of USC’s Sports Business Institute, who nevertheless cautioned that Vick will be hard-pressed to extend his endorsement comeback from the sports niche to “mainstream consumer products” such as soft drinks and cereal.
“He will never get back to where he was because there is a segment of the population that won’t want to associate with a product he’s endorsing,” Carter said. “He is not going to be featured in a Coca-Cola Super Bowl commercial.”
Added Swangard: “The strongest interest will come from brands that are endemic to the sport — i.e., Nike. They can sell Vick with a performance story. The non-endemic brands that would be more interested in the selling of his celebrity likely will stay on the sidelines for the foreseeable future.”
On a 1-to-10 scale of marketing appeal, Carter said Vick might have ranked seven with mainstream corporate America and nine with sports-specific brands before the dogfighting scandal. Now, Vick might rate three with the mainstream companies and six or seven with the sports companies, Carter said. “It’s still a pretty precipitous fall,” he said.
Financial terms of endorsement deals generally aren’t disclosed, and it’s unclear how much Vick is bringing in from his new deals. The only company to reveal the terms was MusclePharm, which put its deal with Vick at $1.55 million over three years.
Mixed signals about Vick’s marketability are reflected in measures by The Nielsen Company and E-Poll Market Research.
Vick has generated more “online buzz” than any other NFL quarterback in the past year — 16.3 percent of all NFL QB buzz, according to Nielsen/E-Poll. But his N-Score — the companies’ measurement system that rates the brand effectiveness of athletes — is a relatively low 13, pulled down by a higher than average number of people with a negative reaction to him.
By comparison, Indianapolis Colts quarterback Peyton Manning’s N-Score is an off-the charts 262, and Falcons quarterback Matt Ryan’s is 24.
Still, there are undeniable signs of a commercial comeback for Vick: Last season his No. 7 Eagles jersey was the NFL’s sixth best seller, and this summer he finished second in fan voting for the cover of EA Sports’ Madden12 video game.
And that massive new contract with the Eagles monetizes his on-field comeback.
“Kids have an opportunity to see that you should never count yourself out,” Vick said at the news conference announcing the contract, “but at the same time don’t put yourself in a position where you got to make your miraculous comeback.”
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