I have just read on Brand Republic that the UK Gym chain LA Fitness have signed a four-year profit-sharing deal with the celebrity Alesha Dixon. Her fee will be based on the success of LA Fitness over the four year contract period. It is rumoured that the highest amount (rumoured to be £3m) she could earn is three times bigger than the lowest fee (assume that this is a £1m).
I really like this reward and risk payment and I suppose in one way, that is why the old commission system work. If a piece of advertising works, then it runs and runs, and all the agencies involved in creating that advertising, benefit in the long term.
The key phrase there being long term. Perhaps it is a good time to start thinking about the current commercial models that are in place and see if there are ones that can financially reward all parties involved. What do you think?
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