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Michael Sam’s Draft Stock May Fall, But Coming Out Is Good for His Career

By Jake Mann – Feb 10, 2014 at 4:53PM

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The All-American defensive lineman from Missouri announced he is gay. With reports that his NFL draft stock may fall, was it the right business move?

Michael Sam is one of the best defensive ends in University of Missouri history. He's a first-team All-American, first-team All-SEC NFL prospect, who was the conference's Defensive Player of the Year last season.

Michael Sam is also gay. If, as expected, he's drafted, he'll become the NFL's first openly gay player, and if early press is any indication, he'll be a talking point in every radio show until kickoff next fall, probably even longer. 

From a moral standpoint, I support Sam's decision 110%. But was it the right business move?

The contract
Except for Peyton Manning and a handful of superstars who have multi-million dollar endorsement deals, most pro players must rely on their on-field contracts for income. For a rookie entering the league, draft position is enormously important.

2013 NFL Draft
Round Avg. annual salary* Avg. signing bonus
First $2.8 million $6.5 million
Second $1.1 million $1.5 million
Third $712,400 $582,000
Fourth $647,400 $426,500
Fifth $586,500 $185,500
Sixth $565,600 $101,900
Seventh $553,400 $52,900

Source: Spotrac. *Every rookie draft contract was four years in length.

In the 2013 NFL Draft, the average first round draft pick made $2.8 million a year with a signing bonus over $6 million. In the second, the sum of these figures fell by 70%, subsequently dropping in each of the final five rounds.

Before Sam's announcement, most scouts pegged him to be a middle-round draft pick because of his small stature (for a defensive end) at 6'2" 255 pounds. Most likely, this would have netted him an average annual salary between $580,000 and $710,000, with a signing bonus of at least $200,000, possibly more.

According to Sports Illustrated, though, at least "eight NFL executives and coaches … project a significant drop in Sam's draft stock" because he is now openly gay. Teams might not want to handle the media attention he brings, and they might be uncomfortable with having a gay teammate, the anonymous league execs say.

Image via Marcus Qwertyus, Wikimedia.

Judging by the data, a lower draft position -- in the seventh round -- could drop his salary to around $550,000 a year, while cutting his signing bonus significantly. 

The endorsements
That doesn't mean he'll make less money. Don't forget the other side of the equation: endorsements. 

Manning and Tom Brady lead the pack with sponsorships that pay $10 million a year or more, and aside from maybe Richard Sherman, most NFL defenders don't make near that much from endorsements.

In Sam's case, his position as the first openly gay active athlete in America's most popular sport makes him very marketable. Last year, gay-marketing consultant Bob Witeck told Bloomberg that anyone in this role could make millions in "endorsements and speaking engagements," as sponsors look to enter an LGBT marketplace responsible for spending nearly $900 billion per year. Gay Ad Network CEO Mark Elderkin told the outlet, "We've passed the tipping point to where national advertisers are no longer afraid of the gay market."

Nike (NKE -0.65%) has expressed interest in endorsing gay athletes before, and it did sign the WNBA's Brittney Griner, who is out, last summer. The NBA's Jason Collins also revealed he is gay in 2013, and afterward became a Nike athlete, spearheading the company's 

Image via Nike.

"Be True" campaign (pictured right).

Nike has also supported Sheryl Swoopes in the past, and smaller companies like MAC Cosmetics, Chili's, and HeadBlade have backed gay athletes.

Macy's (M 0.98%), Amazon.com (AMZN -0.77%) and J.C. Penney (JCPN.Q) also have a history of advertisements geared toward the LGBT market, so actual athletic sponsorships aren't too much of a stretch.

The future
Regardless of which companies decide to sponsor Sam, the value of his endorsements should outweigh his lost salary. Assuming they amount to at least $500,000 -- a modest estimate -- it was a smart business move to come out (though presumably that was low on the list of Sam's considerations).

Speculation that some NFL teams may pass on drafting the defensive end is disappointing, but it's the sad reality that's at play here, considering the amount of media attention Sam is getting. His decision is truly breaking barriers, much in the same way Jackie Robinson did over 60 years ago, and unfortunately, outright acceptance won't come overnight.

Still, as Forbes said yesterday, "athletes are part of a younger much less judgmental generation" than most. On the football field, Sam's teammates will likely support him, much as they did at Missouri.

At the end of the day, he's a football player who belongs in the NFL, and his ability to sack the quarterback will be a valuable asset to whichever team decides to draft him.

Jake Mann owns shares of J.C. Penney Company. The Motley Fool recommends Amazon.com and Nike. The Motley Fool owns shares of Amazon.com and Nike. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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