Derrick Rose’s Adidas contract shows why long-term endorsements might not be worth it

Derrick Rose is Adidas’ second-highest paid basketball athlete after James Harden, and he hasn’t been an All-Star since 2012. The narrative was there: He was the league’s youngest MVP, a feel good story about a solid guy who played basketball for his hometown Chicago Bulls.

He was a sneaker company’s dream — extremely marketable while also being extremely skilled. That all went away when Rose tore his ACL in April 2012, and he hadn’t been the same since. But months before that, Rose signed a 14-year, $185 million extension with Adidas that the brand is still paying him from today.

Rose is being paid by Adidas along with his brother Reggie Rose, as well as his childhood best friend, according to a report from Sports Illustrated.

The deal called for annual retainers of $12 million per season from 2012–13 until ’16–17. (This season, he is entitled to $11 million.) It also included annual royalties of up to $6.25 million per year, as much as $4.8 million in annual appearance fees and use of a private plane.

Reggie Rose, Derrick’s older brother, is paid between $250,000 and $300,000 annually as a consultant. Randall Hampton, Rose’s best friend since sixth grade and his assistant, is paid between $50,000 and $75,000 annually for “consulting” services. Adidas also pledged to contribute $150,000 annually to the AAU team of Rose’s choice.

Adidas was a brand still trying to find its way in basketball at that point, and they took a solid chance on Rose.

The Cavs’ point guard just had the D Rose 8 release in October, and the brand is set to drop the D Rose 9 in July, according to reports.

Rose is still owed about $80 million by Adidas

Rose considered retiring early this season but if he does, he would be walking away from about $80 million over the next seven years, according to ESPN’s Nick DePaula. If Rose walked away from the game officially, the rest of his contract wouldn’t be paid out.

The former All-Star said money isn’t something he’d be concerned with if he chose retirement. “Man, I don’t care about [that],” Rose said. “Not to be rude, [but] I don’t care about no f‑‑‑‑‑‑ money.” But that would make a big difference for Adidas, which would be able to move from the contract.

Adidas may have been able to get from under Rose’s deal

Rose was accused of rape in a civil lawsuit in 2016, but he was found not liable. Still, most brands include moral clauses that can be used to terminate contracts. Adidas never did that with Rose’s deal.

We’ve seen this happen before, though it doesn’t happen often. Latrell Sprewell’s contract with Converse was terminated shortly after he choked out then-Warriors head coach P.J. Carlesimo in 1997. Lance Armstrong’s deal with Nike was terminated in 2012 for doping. Adidas terminated Terry Rozier’s sneaker contract because he made a public appearance in Nike, according to Sports Illustrated’s report.

On the other hand, we’ve seen brands stick with players through legal troubles and accusations. Nike never terminated Kobe Bryant’s contract when similar charges were levied against him. It also stuck with Tiger Woods through his sex scandal in 2009. Adidas seems to have done the same thing with Rose here.

This is why some believe athlete endorsements may not be worth the trouble

Athletic endorsements have become somewhat of a Rorschach test. Some see the opportunity to have world-famous brand ambassadors marketing their product to fans, while others see hefty contracts that brands hand out too often just for the rare chance to make a return on their investment.

“They’re paying far too much to get a return on those investments,” Matt Powell, a market analyst for the NPD Group, told SB Nation. “We look at what a Harden or Curry or LeBron or Durant are getting, and I don’t see how a brand earns that out.”

For the best athletes, contracts usually range between 10 to 15 years, unless you’re LeBron James or Cristiano Ronaldo — then it lasts a lifetime. Rose fits in that same boat, too. He had a 14-year deal, and that’s a huge commitment. While those other athletes have performed well, Rose has been hurt and Adidas is paying for it.

At the same time, it’s hardly fair to blame Adidas. He was a league MVP at 22 years old, had a great narrative, and seemed to be heading to the top of the league fairly quickly. Tradition shows that Rose should get a 14-year deal like he did.

But now tradition is done. Jordan Brand waited until his second deal to give Russell Westbrook a huge shoe contract. John Wall waited on Adidas to do the same for him and lost money because of it. We’re already seeing the changes.

Now with Rose as the leading example for what could go wrong, we won’t see things shift back the other way for a while.