CELEBS STOCK UP BY
TOUTING .COMS
By BETH PISKORA
It's the latest must-have among the celebrity
set: the exclusive sponsorship deal with an emerging Internet
company.
What's more, the celebs are increasingly
demanding -- and getting -- equity stakes instead of flat cash
payouts for their time.
Flooz.com's got Whoopi Goldberg, who got
more than 100,000 shares of the not-yet-public stock for her
participation.
"Because of her ownership stake, Whoopi
has gone out of her way to help this company's development,
doing things that are not specified in her promotional
contract with us," said Jack Feuer, vice president of
marketing at www.Flooz.com
Inc.
Meanwhile, the online brokerage firms are
duking it out with their celebrity representatives. Tennis
star Anna Kournikova promotes Charles Schwab & Co., while
actress Geena Davis appears in ads for TD Waterhouse, which
has also signed Jackie Chan and Phil Jackson as celebrity
spokesmen. Online trading powerhouse E*Trade is making a name
for itself with its hilarious ads starring blond bombshell
Anna Nicole Smith. Former "Six Million Dollar Man"
Lee Majors is busy promoting www.Kozmo.com
Even www.HealthExtras.com, the online disability
insurance company that is expected to go public this week,
inked a contract with paralyzed actor Christopher Reeve, in
what is viewed as one of the best strategic fits between
product and spokesman.
"The celebrity endorsement adds
credibility in the eye of the consumer," said Steven Voci,
chief marketing officer of Zentropy Partners, the Internet
services division of ad giant Interpublic Cos.
"A website is just another medium for
reaching the consumer, so it's another area where celebrities
can lend their equity," added Voci.
The celebrities may well think of it as
getting equity, not lending it. Most of the celebrities that
have signed sponsorship deals with Internet start-ups are
seeing to it that at least part -- if not all -- of their
compensation package comes in the form of stock.
Reeve, for example, has a very close
relationship with HealthExtras, in which he not only promotes
its disability insurance products but also helps the company
develop ideas for new products and services. In exchange for
that increased level of service, HealthExtras offered Reeve a
small equity stake, which is bound to gain in value after the
IPO.
"Some of our key products were his
brainchild," said Mark Bennett, a spokesman for
HealthExtras. "He's much more than a paid promoter; he's
got an equity interest in the company."
Because Reeve holds fewer than 100,000
shares of the company, which is expected to go public with 5.5
million shares outstanding, the actor is not required to make
public the value of his stake. He has made clear that all of
it is directed to his charity, The Christopher Reeve
Foundation to Cure Paralysis, as are any and all payments
received from HealthExtras for appearing in television ads, an
amount that could top $1 million, according to the terms of
the contract.
Other celebrities are declining any cash
payment at all in favor of bigger equity stakes.
Former
Paychecks like that are generating some
criticism that the celebrities are getting the better end of
the deal.
