Economy

Why LeBron James Just Dropped McDonald's

National Basketball Association star LeBron James announced last week that he would not renew his contract with fast food giant McDonald's, a paid sponsor since 2010.

Instead, the Cleveland Cavaliers player said that he would be moving into a role as brand ambassador for the startup fast casual pizza chain Blaze, according to ESPN. James started investing in the company in 2012.

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"I believe in the company. I believe in their vision. I believe in what they're all about, the authenticity of how they make pizza, how they run their business, and I wanted to be a part of it," James said of the deal. On Twitter, James said he was excited about the partnership.

But what does James' move mean? According to some experts, it could signal a shift in celebrity endorsement culture and the phasing out of transparently half-hearted endorsement partnerships. "He's just not selling out to get a paycheck," Allen Adamson, North American chairman of the brand firm Landor Associates told the Oregonian. "Consumers are skeptical unless they believe that the celebrity actually uses the product and is invested in the brand."

For James, this sentiment rings particularly true. Speaking to reporters in February of this year, the 30-year-old player off-handedly mentioned McDonald's as an indicator of his former, less professional, less healthy self. "I ate McDonald's my first couple years in the NBA and I didn't stretch, I didn't ice, it didn't matter," James said. "I was 18, I could do whatever I wanted to." Asked when he last ate McDonald's, James collected himself and replied, "uh, every day," with a sideways glance.

Perhaps what the transition also signals is a broader shift away from more established fast food chains, and a slant towards newer fast casual models that champion fresher, healthier ingredients, and generally better work environments for employees. Coming from a power-player like James, whose tweets alone are worth an estimated $139,474 each, as ESPN notes, it's a slightly higher-profile incarnation of a consumer trend that shies away from fast food giants like McDonald's.

McDonald's has faced structural financial shake-ups in recent months, reporting declines in revenue and floundering to keep pace with fast casual competitors such as Chipotle and Shake Shack. In January, this trend was reflected in the numbers, when McDonald's' quarterly profits dipped 21 percent, while Starbucks—which some consider a fast casual establishment serving higher-quality products at prices slightly higher than competitors—reported booming sales.

As for James' new investment, the pizza company has said it plans to out-Chipotle Chipotle, shooting for Starbucks-level prominence. It plans to have 500 stores by 2020, Business Insider reports.

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