Grant Hill sticks with Fila for $80 million 7-year shoe deal one of best ever

Footwear

September 24, 1997|By Liz Bowie | Liz Bowie,SUN STAFF Bloomberg News contributed to this story.

If Grant Hill is attempting to become the next Michael Jordan, he showed yesterday he is coming closer -- off the basketball court, anyway.

The Detroit Pistons star signed a seven-year, $80 million contract with Fila Holdings SpA, one of the most lucrative sports endorsement contracts in history, that will boost his annual take from about $6 million to $11 million.

Only Jordan, who recently signed a new contract with Nike Inc., receives more -- roughly $20 million a year. Hill's new deal exceeds the five-year, $50 million contract Allen Iverson of the Philadelphia 76ers signed with Reebok International Ltd.

Fila, which has its U.S. headquarters in Sparks, hopes the contract will lead to an increase in sales of its sneakers and a corresponding jump in its stock price, which has gone from a high of $105 a share on Sept. 16, 1996, to a low of $27.125 on Sept. 15. Yesterday, Fila shares gained $1.438 to $29.813.

Hill renegotiated the last two years of his current contract with Fila and extended it through 2004. The new deal includes a base salary and minimum royalty guarantees on his signature products, plus royalties on the sales of other Fila products, and equity in the form of performance bonuses and stock options. Hill has already done much for the company, helping to boost it from No. 7 in the athletic footwear industry to No. 3, behind Nike with a 45 percent share and Reebok with 25 percent of the market. Fila has an 8 percent share.

"He has clearly taken us to another level," said Howe Burch, Fila's senior vice president for sports marketing. "He has meant an enormous amount to this company. We have sold hundreds of millions of dollars [because of Hill]."

Burch said Hill's appeal is not limited to the United States. Some 300,000 people turned up at one stop during a tour Hill made of Southeast Asia.

But the shoes have not always done as well. The Grant Hill III sneaker was sold at a discounted price and had disappointing sales.

Burch said the company, which has evolved from a focus on fashion to a focus on performance of its products, hopes to make further strides in that direction. "Beside the investment in Grant, we have opened new design offices," he said.

One change in the contract gives Hill greater say in the way his name is used on products.

He will hold a new title: chairman of the sports marketing and athletic committee, which will let him advise Fila on selecting other athletes for endorsement contracts as well as on licensing deals involving Fila.

"I think as Fila goes after other athletes, they will call and ask for my opinion," Hill said. "Thus far, the relationship has been great. I look forward to enhancing the relationship."

Hill's Washington-based agent, Lon Babby, called the agreement "extraordinary."

"It's fair to say it's one of the most successful sports marketing partnerships in history," Babby said. "His potential, both as a basketball player and a businessman, are limitless."

Hill, the son of former Dallas Cowboys star Calvin Hill and Washington-area consultant Janet Hill, has been an all-star in his first three seasons in the National Basketball Association. He played on two national championship teams while at Duke University. He was also a member of the 1996 gold medal-winning U.S. Olympic basketball team and is considered by many to be the heir-apparent to Jordan.

Pub Date: 9/24/97

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.