Muhammad Ali sells 80 percent of rights to his name, likeness for $50 million

By Tim Povtak
The Orlando Sentinel
(April 12, 2006)  It's common for sports stars to sell products, signing lucrative endorsement deals worth as much or more than they make for their athletic prowess.

It's uncommon to sell themselves outright.

When Muhammad Ali sold 80 percent of the rights to his name and likeness for $50 million this week, it may have marked the beginning of a new era in sports marketing for the most elite athletes.

Instead of working for a sports star in a traditional sense, like IMG does with Tiger Woods and Vince Carter, and taking a percentage of their earnings, burgeoning entertainment company CKX paid Ali cash for the exclusive rights to market him and his image.

Anything with Ali's name or likeness, whether it's sportswear, boxing gloves, movies, books, museums, will be sold under the CKX umbrella.

"They essentially have bought the rights to sell the rights," said Dan Migala, editor and publisher of The Migala Report, a sports marketing trade publication in Chicago. "It's just a new way of looking at things in sports. It has taken an old concept, used in other businesses, and applied it to a new area."

Migala explained it in real estate terms. Instead of an agent getting permission to sell a house and take a small percentage of the sales price, CKX has bought the house outright and now can sell it for whatever price it wants, and pocket most of the profits.

The risk is higher, but so might be the rewards.

It's comparable to Michael Jackson paying an enormous price to buy the licensing rights to all the old Beatles songs. It's also like the NFL selling its television rights for a billion dollars to networks that believe the product is so good they also will profit by passing the cost on to the advertisers, who will gladly pay it.

"There are sports endorsers, then there is the next level, the likeness of the most recognized person on the planet, that's Ali," Migala said. "That's the most important thing to have."

Ali, now 64, is a three-time heavyweight boxing champion who retired in 1981. He is considered the most famous athlete of his generation and the most recognized worldwide sports figure in history.

Yet he also has been considered one of the most commercially underused stars in history. According to some estimates, Ali's name, likeness and image generated just $7 million in annual revenues in the past five years. CKX believes it can double, triple or quadruple that annual figure.

CKX is a publicly traded New York-based company that last year paid $100 million for the rights to market the name and likeness of Elvis Presley, another icon with worldwide appeal. The company generated $51 million in revenue last year with the Presley name. It also owns and profits from the lucrative franchise that created American Idol.

"Muhammad Ali is such a rarity, a guy who comes along only once in two lifetimes," said Nova Lanktree, president of Lanktree Sports, Celebrity Network, and a professor at Columbia College in Chicago. "Michael Jordan might be the only other person in the same league. That's probably why you haven't seen this before."

If Ali's likeness is worth $50 million, some marketing experts wonder what the likeness of Michael Jordan or Tiger Woods, or Shaquille O'Neal would be worth.

"Comparing Ali to Shaq or anyone else, would be like comparing apples to oranges," said David Carter, sports business professor at the University of Southern California. "There's no one else who has that kind of worldwide appeal, and he's at a different stage of his life."

Although CKX now will have creative control of the Ali name, chief executive Robert Sillerman promised the company would be "respectful, methodical and impactful," in the way Ali is used.

"We hope to increase the (Ali) business substantially, but in a less commercial way than the Elvis estate," Sillerman told the New York Times. "This is not a mass retail explosion of Muhammad Ali's name, face, etcetera on a product."

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