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Today At A Glance:

Roger Federer has built one of the most impressive brands in sports history and is the only tennis player ever to reach billionaire status. So today’s newsletter looks at his success, including why he struggled early in his career, the moves that turned everything around, and a historic deal that earned him $600 million.

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Friends,

Roger Federer is one of the greatest tennis players of all time. He turned professional at just 17 years old and won 20 Grand Slam titles over his 24-year career.

Most Men’s Grand Slam Titles

1. Rafael Nadal: 22

1. Novak Djokovic: 22

3. Roger Federer: 20

And off the court, he’s even better. For example, Roger Federer only played in one tournament last year but still made more than $90 million.

That dollar figure put him as the seventh highest-earning athlete in the world, meaning he made more money last year than other superstar athletes like Tom Brady, Kylian Mbappe, Canelo Alvarez, and Giannis Antetokounmpo.

But I don’t think people truly understand how much of an outlier Federer really is.

There are more than 3,000 professional tennis players today, and there have been tens of thousands of others in the past — but Federer is the only tennis player in history to cross $1 billion in career earnings.

In fact, he is one of only seven athletes in history — regardless of sport — to cross the billion-dollar mark while still active, joining names like Tiger Woods, Floyd Mayweather, LeBron James, Phil Mickelson, Cristiano Ronaldo, and Lionel Messi.

But it wasn’t always this way. Roger Federer struggled as a businessman during the early parts of his career. He went through multiple agents and made significantly less money than his rivals on the court.

But a shift came in the early 2000s. Federer hired a new agent and started signing multi-million-dollar sponsorship deals. He built a global brand with Nike and even started his own sports agency.

But Roger Federer’s biggest win came just a few years ago when he left behind a $10 million annual sponsorship deal with Nike and turned it into a $600 million payday.

This is how Roger Federer became the only billionaire in tennis history.

Roger Federer’s Path To Greatness

Roger Federer grew up in Switzerland and started playing tennis at just 8 years old.

He was one of Switzerland’s top 3 junior tennis players by the age of 11, and he quit playing other sports — like badminton and basketball — to focus solely on tennis by the age of 12.

Federer then became one of the best junior tennis players of all time.

He won Switzerland’s junior national championship at 14 years old. He then won both the singles and doubles junior Wimbledon titles at 16 years old, and he turned professional at just 17 years old.

But while many people were impressed with Federer’s accomplishments as a junior player, no one could have envisioned the player he would ultimately become.

Federer’s professional tennis career lasted nearly 25 years — from age 17 to 41.

He won 20 Grand Slam men’s singles championships, including one French Open, five US Opens, six Australian Opens, and a record eight Wimbledon titles.

Federer was the world’s #1 ranked player for 237 straight weeks and 300 weeks overall, and he won 1,251 of the 1,526 matches he played in his career — a ridiculous 82%.

This on-court success helped Roger Federer earn $130 million in prize money throughout his career. But still, that success doesn’t explain how Federer became the first billionaire in tennis history.

For example, Federer’s fellow “Big Three” rivals Rafael Nadal and Novak Djokovic have earned more prize money throughout their career. And Federer’s $130 million in on-court earnings represent just 12% of his career earnings overall.

ATP Career Earnings

1. Novak Djokovic: $166 million

2. Rafael Nadal: $134 million

3. Roger Federer: $130 million

4. Andy Murray: $63 million

5. Pete Sampras: $43 million

So the bottom line is clear: No tennis player in history has built a bigger brand and earned more money off the court than Roger Federer.

But as I said before, it wasn’t always that way.

Roger Federer’s Business Starts To Evolve

Roger Federer signed his first sponsorship deal with Wilson at age 16.

But despite his early success on the court, he quickly found himself being outearned by rivals. This was due to several factors, but most importantly, it had to do with his representation.

Federer began his professional career as a client at IMG. But in 2002, his former agent Bill Ryan left the company under contentious but undisclosed reasons.

And Ryan’s exit came at a terrible time. Federer was in the middle of negotiating a new deal with Nike, and he was looking to significantly increase his current deal, which was for five years and $500,000.

But rather than just signing with a different agent at IMG, Federer decided to leave the agency altogether and be represented by his family — primarily his father.

Federer then signed a new deal with Nike that was worth about $2 million annually.

And while this might seem like a home run for a 21-year-old kid, the dollar amount was far below market value — and the deal shocked many people throughout the industry.

For example, Andy Roddick was ranked #3 at the time behind Federer and had a contract with Lacoste worth $5 million per year.

And American tennis agent Ken Meyerson publicly said that he thought the Nike deal should have been $10 million given Federer’s status — and he said Federer was losing millions of dollars being represented by his father.

This left Federer in a strange position.

In 2005, even though he had just won 3 of 4 Grand Slam titles the year prior, Roger Federer only made $14 million in off-court earnings, which was considerably lower compared to players like Andre Agassi and Maria Sharapova.

But this is when everything changed for Roger Federer. He noticed the discrepancy in earnings between himself and other tennis stars and decided it was time to start looking for another agent.

Ted Forstmann’s private equity firm had just acquired his old agency IMG, and Ted asked former world No. 1 women’s tennis player Monica Seles to set up a meeting with Federer.

The two men met and ended up bonding over a shared interest of charity work in South Africa. But what ultimately made Federer reunite with IMG was the resounding endorsement tennis legend Monica Seles gave for her agent at IMG: Tony Godsick.

And Godsick immediately went to work. From 2005 to 2010, Federer’s annual earnings increased 207% — from $14 million to $43 million through deals with Mercedes-Benz, Rolex, and Lindt.

Federer then signed a 10-year deal with Nike in 2008 worth over $10 million per year, which was a record at the time And by 2013, Federer’s annual earnings had risen to $71.5 million.

That was a 66% increase from 2010, and it placed Federer second on Forbes’ 2013 list of the world’s highest-paid athletes — behind Tiger Woods and ahead of Kobe Bryant.

Federer was now in the company of sports megabrands. And to take his brand to the next level, he decided to leave IMG again and go out on his own. But this time, he took his longstanding agent and business partner, Tony Godsick, with him.

The two left IMG to create a boutique sports agency called TEAM8. The business has a small client roster today, including 18-year-old American tennis star Coco Gauff, US Open Champion Juan Martin del Potro, and retired NHL goalie Henrik Lundqvist.

But more importantly, it allowed Federer to build a business around himself. The tennis legend now works with more than ten brands, most of which have sponsored him for over a decade, including Wilson, NetJets, Rolex, Mercedes-Benz, and others.

He also boosted his earnings by playing in exhibitions and promotional tennis events. 

Federer commands between $2 million and $3 million per special appearance. And in 2019, he made a whopping $15 million for just five exhibition matches in South America. 

But prize money, sponsorships, and appearance fees alone aren’t what made Roger Federer a billionaire.

To do something that no tennis player in history had done, Federer had to take risks — and one of those risks turned into one of the greatest sports business deals of all time.

Roger Federer Cuts Ties With Nike

The story starts in 2018. Roger Federer had been with Nike for more than 20 years and was already one of the most decorated athletes in sports history, with 20 Grand Slam titles.

But when it came time to renew his $10 million annual sponsorship deal with Nike, things got interesting.

Nike’s tennis roster in 2018 was loaded and included players like Serena Williams, Rafael Nadal, Maria Sharapova, and Nick Kyrgios.

And there is an unwritten rule in the sports world that you don’t want to spend more than 10% of overall revenue on athlete sponsorship deals.

So Nike had a tough decision to make: Do they let a 36-year-old aging superstar walk to protect the margins on their $350 million tennis business? Or do they succumb to his demands and finish out one of the most legendary athlete-brand relationships in sports history?

Well, in the end, Nike ended up letting him walk. And Federer shocked the sports world by signing a massive 10-year, $300 million deal with Uniqlo.

The Japanese brand had never sponsored a tennis player before, and they were now going to pay Roger Federer three times more than Nike did in his prime, so everyone was confused — but this was a genius move by Federer for two reasons.

First, the Uniqlo agreement didn’t include a retirement clause, meaning Federer could stop playing tennis the next day and still earn $30 million annually in retirement.

But secondly, the Uniqlo deal only covered apparel, not shoes. So Federer continued to wear Nike’s while playing without being paid for it.

But after discovering the footwear brand On Running while training, Federer eventually ditched Nike again and signed an equity deal to become a global ambassador for the Swiss brand.

He helped them design and market shoes, and the company grew aggressively.

But here’s the craziest part: Just two years after signing the deal with On Running, the company went public at a $10 billion valuation — and Roger Federer’s 3% stake in the business was now worth $300 million.

So while many people were surprised to see Federer leave behind a $10 million annual sponsorship deal with an iconic brand like Nike, they were even more surprised when he turned it into $600 million.

And the good news is that Roger Federer will do a lot of good with this money.

He opened the Roger Federer Foundation in 2003, which provides grants for education, sports, and other projects to countries with 15% or higher child mortality rates.

Federer has already raised more than $50 million for the foundation and personally donated $15 million to open more than 80 schools in Africa. And Federer also spent more than $1 million to provide 64,000 African children meals while schools were closed during the pandemic.

But none of this should come as a surprise — Roger Federer has always been a sports marketer’s dream: He’s not only a great athlete, but he’s an even better person. 

Mike Fahey, who heads a Boston-based marketing firm, told the New York Times:

“Roger is forever a gentleman. He doesn’t throw tantrums. Doesn’t hit ball people. Doesn’t abuse umpires. He’s the ultimate class act.” 

So in a world where 99% of professional tennis players struggle to make a living, Roger Federer became an outlier.

He worked incredibly hard at his craft and finished his career as one of the best players in history. But he also built a personal brand and a financial empire unlike anything we have ever seen in sports.

And ultimately, that might be his most impressive accomplishment.

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Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. Subscribers include investors, professional athletes, team owners, and casual fans. So if you are not already a subscriber, sign up and join 84,000+ others who receive it directly in their inbox each week — it’s free.