Colts QB Andrew Luck Dumps Gatorade for a Stake in Upstart Bodyarmor

Indianapolis Colts quarterback Andrew Luck is following the example set by rapper Curtis Jackson, better known as 50 Cent, by grabbing an equity deal with his new sponsor, Bodyarmor. Other notable Bodyarmor endorser-investors include fellow NFL players Rob Gronkowski, Ray Rice, Jason Pierre-Paul, and LeSean McCoy, as well as Major League Baseball’s Mike Trout and Buster Posey.

While there appears to be a growing number of professional athletes inking equity deals with their sponsors, 50 Cent is largely credited as being the one who set the trend. 50 Cent reportedly made around $60 million from his 2004 investment deal with Glaceau Vitaminwater when Coca-Cola (KO) bought the brand for $4.1 billion in 2007.

However, not all equity deals end with double or triple digit returns. In particular, Businessweek notes that:

For every Vitaminwater story, however, there are dozens and dozens of busts. “Ninety percent of the stories turn out to be huge losses,” says Steve Piascik, founder of the accounting firm Piascik, which specializes in advising athletes. Still, when the equity is in lieu of payment, athletes are essentially playing with house money.

As for Andrew Luck, the quarterback says his risk from the Bodyarmor deal is minimal. “There’s always a risk in any equity,” he says. “That comes with any partnership.”

Source: Businessweek