Rich Froning at the 2012 Reebok CrossFit Games.
Derrick K. Irions
After a modest beginning, CrossFit has brought its brand of
fitness to thousands of locations across the world. There are now
more than 7,000 affiliate gyms in existence, up from
just 18 in 2005. And the swelling number of participants isn't
just good for CrossFit's brand, it's good for its best athletes
Enter Rich Froning
Rich Froning, the sport's equivalent of Michael Jordan, recently
won a record fourth-straight CrossFit Games title. The victory
came days after he signed a long-term endorsement contract
While the financial details weren't disclosed, Reebok
reports Froning is now one of its highest-paid athletes, and
it says the deal will last for the remainder of his career.
The potential size of the contract is so large, in fact, it
prompted ESPN reporter Darren Rovell to liken Froning's
arrangement to "Peyton Manning [money]."
Why is Reebok so high on CrossFit?
Reebok famously sponsored both Manning brothers for almost a
decade, paying them millions in the process. But CrossFit is not
the NFL. And as it happens, it's not even close to reaching the
popularity of a major North American sport. So why is Reebok
funneling money into it?
That's a question with multiple answers, though growth may be
the most important factor. As mentioned above, CrossFit has
expanded in a
-esque fashion over the past half-decade.
Most important, start-up costs are low. All the average
location must do is pay for an annual $3,000 affiliate fee,
a $1,000 trainer certificate, a few thousand dollars worth of
insurance, a real estate permit, and property and equipment
Because of this, U.S. CrossFit gyms now outnumber
traditional competitors like Gold's Gym and 24 Hour
Fitness. "It was important to us that there wasn't a huge barrier
to entry ... we made it easy just for normal people to open a
business," Lauren Jenai, the ex-wife of CrossFit
founder Greg Glassman, recently told ESPN.
The money is rolling in
Exact financial statistics are hard to come by, but
reports CrossFit HQ likely made close to $100 million
in revenue last year.
Some of that money comes from Reebok, the outlet says,
which has sponsored the CrossFit Games since 2011. Another
chunk of revenue is made from ESPN, which has televised the
games in four consecutive summers. Affiliate fees account for
most of the remaining revenue.
, Glassman approximates the affiliates made an
additional $1.5 billion-$2 billion in 2013, combined.
A shift in strategy
Additionally, Reebok's linkage with CrossFit -- and Froning
-- illustrates a newfound focus on participatory sports.
The apparel maker also has a relationship with Spartan
Race, a leading name
in the mud run industry
. Like the CrossFit Games, Reebok is a Spartan Race
title sponsor, and it receives significant TV exposure from the
This shift in strategy was apparent earlier this year
when Reebok unveiled a new delta-shaped logo, one that
says focuses "on fitness rather than elite athletes." Reebok
shared more insight in a press release:
Through the millennia the delta has been a symbol of change
and transformation. The Reebok Delta has three distinct parts
each representing the changes ... that occur when people push
themselves beyond their perceived limits and embrace an active
and challenging life.
Self-actualization by way of fitness? That message is a far
cry from Reebok's past marketing tactics, which centered
on superstar athletes and big-budget apparel deals with
major sports leagues.
This change is likely a response to plodding financials. Poor
toning shoe sales and the loss of its exclusive NFL deal
forced Reebok to cut jobs and lower forecasts two years ago.
After previously expecting 2015 revenue to hit almost $4 billion,
that projection is now less than $3 billion.
It is too early to tell how Reebok's new strategy will work out
over the long run. But the more CrossFit continues to grow,
the smarter it looks. Its latest sponsorship deal with Rich
Froning is just the latest indication the brand will continue to
bet on the budding sport.
once said CrossFit's success is the result of its ability to
"blur the line between spectator and athlete," and the outlet is
exactly right. Unlike some fitness programs, CrossFit has
the allure and exposure of a traditional sport. And unlike most
sports, it allows the average fan to participate. Because of
this, Reebok has to be very optimistic about the future.
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Why Is Reebok Crazy About CrossFit?
originally appeared on Fool.com.
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