L.A. Gear’s $20-Million Poster Boy
One morning, Michael Jackson awoke and decided he was tired of wearing his black loafers.
That’s the real story behind the eccentric pop superstar’s $20 million contract with L.A. Gear, which is being billed as the largest corporate endorsement deal in show biz history.
So far, media coverage has focused on Jackson’s bizarre behavior at last week’s press conference (“Protect me,” he whispered to a top L.A. Gear exec. “Don’t let them ask me any questions.”), the fog ‘n flood-light filled conference’s price tag ($50,000) and Jackson’s creative input into his new shoe (he’ll help design the “Unstoppable” line of footwear).
But Jackson’s L.A. Gear signing isn’t a typical bottom-line corporate endorsement, said Randy Phillips, a prominent rock manager who served as one of the deal’s key middlemen. The ball started rolling when RockBill’s Jay Coleman got a phone call from Jackson’s attorney, John Branca. Since RockBill is the industry’s top corporate-sponsorship brokerage firm, this was no ordinary phone call.
“John said that Michael was thinking of wearing sneakers instead of his black loafers when he made his new videos for his upcoming greatest-hits album,” said Phillips, who co-manages Rod Stewart and the Bangles. “It was obvious that the switch to sneakers was a pretty radical image change for Michael. So I told Jay not to go anywhere till I had a chance to talk to (L.A. Gear chairman) Robert Greenberg, who’s a good friend.”
Though L.A. Gear is one of America’s fast-growing companies (its sales are expected to top $1 billion this year) it had been eager to establish a corporate link with a brand-name pop superstar as a weapon in its high-stakes battle with athletic-shoe rivals Nike and Reebok. With Jackson suddenly available, L.A. Gear sprang into action, sending Phillips and L.A. Gear exec Sandy Saemann to meet with Jackson while he was recording one of the three new songs that will appear on his hits collection.
“The L.A. Gear guys were desperate to get involved, no matter what the cost, with someone of Michael’s stature,” said Phillips, who said he received a “healthy” pre-negotiated fee for his role in the deal. “We spent two hours with him in the studio, showing him L.A. Gear ads and telling him about the shoe business. He was the opposite of what I expected–he was very warm and conversational, and asked very sharp questions about marketing and promotion.”
After financial agreements were made, Jackson was also granted unprecedented involvement in the design of his L.A. Gear products. “He’s really into it–he’s going to be at the factory, with his sleeves rolled up, working on everything,” says Phillips.
So why is the Gloved One, who after all, is being hired as a corporate spokesman, so shy about meeting the press that he fled the mike after mumbling for 10 seconds? “Michael may have only said two sentences, but he spoke more at our press conference than he did at Pepsi’s press conference–or when he visited the White House, for that matter,” said Phillips. “What’s important is that he’s enthusiastic about the product. He came to the press conference wearing L.A. Gear’s hottest shoes. You didn’t see him ever drinking a Pepsi at their press conference.”
Still, Jackson has complete freedom from any corporate interference in his work. When Pepsi came under fire from religious groups over Madonna’s controversial video this spring, it backed out of its endorsement deal with the pop starlet. That won’t happen with Jackson. “L.A. Gear has nothing to say about the songs or videos he makes,” Phillips says. “We’re prepared to live with anything he does.”
Unlike Pepsi, which debuted its Madonna ad before her new single came out, L.A. Gear has no plans to release any Jackson commercials before his hits collection, which isn’t due till spring of next year–at the earliest. “We’re not going to scoop his album,” Phillips says. “The spots we use, which will probably feature segments of his new songs and clips from his videos, will not air till after the album is released.”
The bottom line remains: is an oddball pop star who has sworn off concert touring and who’s creative peak may be at least five years behind him really worth the $20 million?
“Absolutely,” insists Phillips. “L.A. Gear’s stock has gone up almost 10 points since the day before the press conference. (On Wednesday, the firm’s stock was at 73, up from 64 the day before the Jackson announcement) And you have to give Michael Jackson credit for a huge part of that swing. We think he’s going to make a big difference.”