Canadian athletes join trend of sports stars becoming equity investors

Amar Gupta, left, Denis Shapovalov and Josh Barr.Handout

Last month, when Denis Shapovalov lost his temper during a match at the Italian Open and began swearing at the crowd, two Toronto entrepreneurs were watching more closely than just casual fans in his hometown . That’s because, shortly before the tournament, Amar Gupta and Josh Barr had signed a deal to bring the Canadian men’s tennis star as an equity investor in brüst, their four-year-old business, which sells a cafe innovative cold brew with enough protein for a complete meal.

Yet in a recent interview, they insisted that Shapovalov’s competitiveness was part of the reason they did business with him. “We like his intensity, we like his aggressiveness,” Gupta said. “He has an advantage over him that we’re aligned with, as a disruptive brand.”

By taking a stake in brüst and becoming a face of the company – or, in the new industry parlance, a “brand ambassador” – Shapovalov joins a rush of Canadian athletes who are asserting their power growing market, as investors in products and services they believe in, rather than just paid spokespersons in advertising campaigns.

Not so long ago, athletes waited until they had hung up their skates (or cleats, or running shoes, etc.) before going into business, accepting a sinecure at a bank that appreciated to have a former star on staff, or perhaps to buy a car dealership. . (One of the exceptions to the rule, of course, spawned an iconic Canadian company, after NHL defenseman Tim Horton opened a coffee and donut shop in Hamilton in 1964 while playing still for the Toronto Maple Leafs.) But for the most part, their business activities were limited to endorsement contracts.

Not anymore. For several years, a growing number of athletes based in the United States and Europe have caught the entrepreneurial bug. Canadian athletes based in their home country, constrained by the small size of Canadian companies, were excluded. (On Thursday, Forbes reported that, by its calculations, LeBron James’ earnings exceeded US$1 billion, including about US$900 million in endorsements and investments.) But now they’re joining a group of Canadian startups to strike long-term deals that give them real power to affect a company’s fortunes.

“Influencers, whether athletes, celebrities, musicians, have become much more educated over the years, and much more aware of their appeal and ability to influence brands and consumers,” said Tom Chapman, the tennis business manager at WME/IMG, who oversees the off-court business dealings of Shapovalov and fellow Canadian Bianca Andreescu, as well as Serena Williams, Maria Sharapova and others.

If Shapovalov, “is going to spend time generating buzz and awareness for a brand, and that business is going to grow, he wants to participate in the long-term benefit of that, instead of earning a few hundred thousand dollars. dollars a year into some kind of sponsorship format,” said Chapman, who noted that the development reflects athletes “betting on themselves.”

Canadian Olympic gold medalist sprinter Andre De Grasse recently became an equity investor in Plantiga, a Vancouver-based company that makes smart insoles that track the amount of force an athlete uses in motion, whether while walking, running, jumping or landing. after a jump shot.

Plantiga CEO Quin Sandler said he had seven athletes among his investors who had each invested between $25,000 and $75,000 in the company. But just as important as the money, he said, is that those athletes leveraged their elite networks to help grow the business, introducing Sandler to their former NCAA programs and teams. professionals in which they play. Sandler also said that current Toronto Raptor (and MBA holder) Thaddeus Young, who owns stock in companies including Coinbase, Airbnb, Space X and Toronto startup Trufan, connected him with a shoe company in which he invested.

And Sandler said he expects some of his athlete-investors to make social media posts about how Plantiga’s technology and data collection helps them avoid injury. “It’s actually a core part of our go-to-market strategy,” Sandler said. “Because that’s what I think is a big gap in society in general. People just don’t know how they move. Last year, De Grasse shot a video encouraging people to sign up for Plantiga’s beta testing program.

Young was introduced to Plantiga by Randy Osei, a former business manager of professional basketball players (including Anthony Bennett) who now runs the Athlete Tech Group (ATG), a Brampton-based events company that brings together investors technologies and athletes. Osei said investors in ATG include Lethbridge-born hockey player Kris Versteeg and Mississauga, Ont.-born former NBAer Andrew Nicholson.

Osei said the athlete investing revolution is a long time coming, given that the global sports industry is estimated to be around US$600 billion, after years of double-digit growth. “The greatest value creator, the athlete, always sees the smallest percentage of that growth.”

Some sports investors are more involved than others. The founders of brüst say that as a heavy coffee drinker who is often pressed for time to get enough protein into his diet, Shapovalov will be a passionate and genuine ambassador for the product. They plan to include him in meetings with major accounts such as Loblaws, as well as retailers south of the border, when the company begins to enter the US market, possibly later this year.

“We think it will be exciting for potential customer managers to see that Denis is truly a fan of the product, using it in his daily life,” Gupta said. The company will also run “tennis with Denis” promotions, in which clients and customers can win the opportunity to play against Shapovalov.

Chapman warns that not all professional athletes are cut out to be active investors. “This model is not for everyone. It is very important that you don’t forget the day job. The daily job is to train, to surround yourself with the best coaches in the world, to perform at a high level, to go out on the court, to win tennis matches and to succeed. It’s bread and butter, it’s the day job, and nothing should detract from it.

But Brian Levine, president of Toronto-based Envision Sports and Entertainment, which represents De Grasse and also worked on brüst’s behalf to sign Shapovalov, said the investments are a natural expression of the sporting mindset. . “Some athletes are focused on their sport and their family and nothing else,” he told the Globe. “However, others find great personal fulfillment in being actively involved in other activities, including investing. It also helps keep them balanced. Maybe they are having a bad game or they get injured, but they can always aim for success in another arena.Athletes are very competitive individuals, and many see corporate work as another area to compete in.

Naomi C. Amerson