Originally Posted by MAXXply
Can the savvy business-school types explain this set-up to me: so you're saying the Djokovic family acquired the distribution rights to Tacchini products for the Serbian market. (I heard they negotiated a similar deal with HEAD too?)
So is it merely a simple case of Dkokovic Corp. buying, for example, Tacchini apparel and HEAD rackets at wholesale from the respective companies, and selling them on at MSRP to whatever Serbian retailers who want to sell that stuff? Is the Djokovic business reasoning as straightforward as that? Or more complex?
Nobody here can disclose the entire deal(s) they made because the contracts are not public info, only bits and pieces of it.
Basically you got the idea right. His family's co. would be the sole importer and distributor (official anyway) of ST in Serbia. They sell to retailers or they can also sell direct to consumers there. This kind of deal usually means ST is not (or cannot) paying the huge upfront fee Djoker's agent is asking. To sweeten the deal they ask for the distribution rights on the side. That is one way of generating future cash when the sales occur, but ST does not need to come up with the cash up front.
I can see Djoker totally agrees because he is very tight with his family. The agent / manager may get some side bonuses from this deal, but again it should not be public info anyway. And only smaller co. like ST can provide something like this. Imagine Adidas would already have a huge distribution channel by themselves or via some big players. They cannot just give out the rights like that.