The news: Struggling sportswear brands like Nike and Under Armour face another challenge as upstarts target their marquee athletes with deals that offer them a bigger role in shaping the brand and entering new categories.

Real Madrid striker Kylian Mbappé ended his relationship with Nike to sign with On, where he’ll collaborate with the company to develop and test football shoes and apparel while also serving as a global brand ambassador, per Bloomberg. While financial terms weren’t disclosed, The Athletic reported that Mbappé received equity in the company.

That mirrors the playbook On used to enter tennis, when it signed Roger Federer in 2019 and gave him an equity stake.

Mbappé’s deal comes just a few months after NBA superstar Stephen Curry signed a 10-year endorsement deal with Chinese sportswear giant Li Ning that will initially focus on basketball and golf before expanding into broader lifestyle categories. Last week, Curry announced the signature shoe he’s designing in partnership with the brand will debut early next year.

Why it matters: Challenger brands are zigging while established brands zag.

Challenger brands like On don't need to match Nike’s vast endorsement budget; they just need to identify the right athlete to reshape how consumers see them. Nike’s constellation of stars gives it enormous scale and reach, but it also means an athlete like Mbappé is one superstar among many. At On, he can become synonymous with the brand’s push into soccer. Similarly, Li Ning can build its expansion around Curry.

The model is compelling for athletes because it gives them the opportunity to act more like business partners than paid spokespeople, with greater influence over products and potentially a financial stake in the upside.

For challengers, a marquee athlete can provide credibility in a category where the brand has little history. Mbappé can help establish On in soccer, just as Federer helped it break into tennis and attract other athletes like US Open finalist Ben Shelton. That matters when reputation influences purchase decisions: 34% of retailers believe a brand’s reputation will influence consumers’ online purchases this holiday season, per a recent Narvar Insights and eTail Insights survey.

Implications for brands: A superstar can give a challenger instant credibility, but the brand ultimately has to transfer that credibility from the athlete to the category itself.

That means following the headline signing with strong products, distribution, marketing, and eventually a broader roster of athletes. Otherwise, the brand risks becoming overly dependent on a single star and vulnerable to an injury, controversy, departure, or simply the inability to turn attention into sustained demand.

Nike’s vast roster gives it more insulation from any individual athlete’s setback. Challengers can get more mileage from one superstar, but they also have much more riding on the relationship.