It is important to say that endorsement deals are not sponsorship deals. Many make the mistaken assumption that the two terms are the same.
The sponsoring deals are better known. In these deals, athletes or clubs represent a certain brand and in return receive money or "only" the payment in kind. The best known are the equipment contracts of, for example, Nike or Adidas in sport.
But why, for example, the deal between Cristiano Ronaldo and Nike is an endorsement deal, I'll explain now.
When football fans think of Nike, they usually think directly of Cristiano Ronaldo and - more importantly - the other way around, the association is even stronger.
Some of the fans of Ronaldo only buy Nike products because Ronaldo wears them. It creates trust in the brand and of course it also generates huge sales. People buy things because he uses them.
Another example is the deal between Subway and Michael Phelps. Before the 2012 Olympics, Subway's sales increased as many Phelps fans went to Subway, who, like their role model, wanted to eat there. In the end, it turned out that Phelps never ate a sub. You could have come up with that yourself, but the general public is not interested in something like that. She buys "blindly" what the role models advertise.