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Takeaway: $UA's endorsement dollars paid off in a venue it is rarely known to frequent -- the US Open (that's right, tennis, not golf).

People often debate the efficacy of athlete endorsements. Generally speaking, we think that those that perform at the highest level in their respective sport BUT can also cross over to mainstream appeal are the only ones worth paying for. For example, just after the Olympics, Nike's Alyson Felix was featured in Sports Illustrated while also being on the cover of Teen Vogue. That's when endorsements turn commercial. Same goes for someone like LeBron James, who dominates sports headlines, but also has dominated the cover of GQ.

There are always exceptions. Sometimes those exceptions are with people, like Tom Brady, who simply can't sell due to his lack of mass appeal to most men (not our opinion -- those are simply the facts -- it's why Nike ditched him). Sometimes the exceptions are with brands, like UnderArmour, which brings us to the image below. 

Enter Sloane Stephens, the youngest tennis player ranked in the top 50. While sh'e not going to win the US Open, she raised eyebrows when the 44th seed upset Francesca Schiavone -- who was ranked as high as #4 last year. 

It takes all of about half a second to look at this picture and realize that something is different. No Swooshes. No Stripes (Adidas). No K Swiss Shield. No Reebok (remember them?). All you see is the edgy UA logo.

If Sloane was wearing a Swoosh, would anyone notice? No way. They'd probably expect it. But when they see the logo of a company Wall Street discounts will ever actually build a footwear business, it matters.

Remember, from a branding perspective, the US athletic market is a 2-horse race. Nike and UnderArmour. This is fairly represented in Apparel market share stats. 

But Nike has about 40% share of the footwear market versus UA at 1%. We understand that this seems like a very unfair comparison. It is. But brands like Adidas, Asics, Reebok, and New Balance have between 5-7%.  Brands like Saucony, Brooks and K-Swiss have another 3-4%. 

Every point of share gain in footwear amounts to about $0.20 per share off of UA's $0.92 EPS base in 2011.

UnderArmour Endorsement Dollars At Work - 9 5 2012 6 29 50 AM