Kansas City Chiefs quarterback Patrick Mahomes II has not only dominated on the football field throughout his meteoric rise, but he’s also done very well in the business world, with various endorsement deals and investments.
One recent business venture has not worked out, however, as Canadian sports drink company BioSteel filed for bankruptcy according to KCTV and an SEC filing submitted by Ontario-based investor Canopy Growth, which owned 90% of the equity in BioSteel.
BioSteel first sought creditor protection in the U.S. and Canada on September 14, according to CBC News, as they looked for a new buyer. But as the SEC filing states, Canopy Growth plans to lay off 181 employees because the company has gone belly up.
“Canopy Growth has marked yet another major milestone in our transformation plan, as while BioSteel’s business has shown significant year-over-year revenue growth, and we believe the brand remains an attractive asset, it does not align with Canopy Growth’s cannabis focused asset-light strategy,” Chief Executive Officer David Klein said in a statement. “We have repeatedly demonstrated that we will take decisive action to enhance our profitability and ensure we are focused and positioned to be a leader in the North American cannabis sector.”
KCTV’s Heidi Schmidt noted that Canopy Growth “expects to save more than CDN $100 million, or about $74 million USD, a year with the move.”
Sports Business Analyst Says BioSteel Was ‘Burning $11 Million a Month’ & Resulted in Total Loss of Equity for Patrick Mahomes
Mahomes’ new contract came at a good time, as BioSteel resulted in a total loss of equity, according to sports business analyst Joe Pompliano.
“Sports drink company BioSteel has filed for bankruptcy,” Pompliano posted on September 22. “The company has signed a ton of endorsement deals over the last several years (NHL, Patrick Mahomes, Luka Doncic, LA Lakers, etc.). But they were burning $11 million a month, and their bankruptcy filing lists $45 million in unsecured debts.”
He listed those unsecured debts: “NHL: $8.7 million. LA Lakers: $2.5 million. Miami Heat: $953,000. USA Soccer: $675,000. Andrew Wiggins: $658,000. Philadelphia 76ers: $296,000.”
In a video, Pompliano broke down the entire situation surrounding BioSteel’s bankruptcy, relaying that Mahomes’ equity “is down to zero essentially at this moment.”
Having said that, the respected analyst did also note that the Chiefs QB most likely “wasn’t putting cash into the business” himself. So, while this news is surely disappointing for Mahomes, it’s not necessarily devastating financially.
“It’s probably not a highly touted investment for him,” Pompliano said. BioSteel was muscled out of the sports drink industry by competitors like Gatorade, BodyArmor, Powerade, Prime and others, according to The Sports Daily.
When signing on as an equity partner in 2020, Mahomes stated: “I have been using BioSteel’s products for years, and I love that its products are all-natural and sugar-free. I’ve been fortunate enough to be educated on sports nutrition by the best, and I want to pass along this knowledge to today’s youth.”
Patrick Mahomes Thanks Chiefs for New Contract: ‘I’m in a Great Spot’
Despite this slight hiccup, Mahomes is doing just fine financially, signing a new contract with KC.
“I’m in a great spot,” Mahomes told reporters on September 20. “I’ve got a lot of great people around me.”
Continuing later: “It’s a special place and a special relationship that I have with the team to be able to trust them to be able to – even when I signed the last contract know that this was going to happen and then probably going to happen again at some point.”
In terms of his responsibility to the QB market, Mahomes said the following.
“I think it’s just kind of a know that you’ve got to keep the bar going, you’ve got to keep it moving,” he replied. “I don’t want people to be negotiated against me and so that’s a reason that you do something like I did this last week, just trying to keep the market moving in the right direction, trending in the right direction so not only me but other quarterbacks and other positions can get paid the money that they deserve.”