On and Mbappé: The 18.7x Deal and the Question Nobody Dares Answer

Kylian Mbappé has just signed a new agreement, and this time it has nothing to do with a transfer. The French striker has become the face of On, the Swiss sportswear brand that, if you asked ten football fans in Saigon, nine would assume is a food delivery app. Neither side would disclose the value of the deal. No figure, no term, no specific clause. Just one dry confirmation: cash plus equity. That is the entirety of the public information. And for someone who has spent more time reading the balance sheets of sportswear companies than reading league tables, the most interesting part lies precisely in that void. I once got one thing right and everything else wrong — this article is about the part I got right, and the part I am still unsure of. On is not a stranger to investors. It is a listed company, trading at a price-to-earnings ratio of 18.7 times — slightly above its industry peers. Over the three months to August, according to M Science data, On gained market share while Nike kept losing it. That is the first paradox I want you to remember: a brand winning on the retail floor is being treated by investors like a company in trouble. On the day the deal was announced, On's shares fell 0.3% in a choppy session. The media read that figure as a signal of skepticism. I see ten analysts offering eleven different explanations for a 0.3% move — most of which fall within the ordinary noise band of any stock. But before dissecting this deal, we need to place it in the right context. On started with running shoes. That is home turf, where the brand built its technical reputation over years. The big turning point came in 2026, when Roger Federer left Nike to join On, and according to Forbes, received roughly 2.5% equity in the company. That was not an ordinary endorsement contract. It was a structure that allowed a sports legend to become a shareholder, tying his personal financial fate to the brand's share price. Tennis was the first leap out of the comfort zone. Football is the second, and the hardest. On's strategy is a step-by-step expansion into adjacent categories: running, then tennis, then football. Each leap raises the marketing-cost bar. And each leap bets that credibility in the old category can convert into credibility in the new one. Running to tennis was a reasonable jump. Tennis to football is a far bolder one. Why is it hard? Because football is a completely different shoe market. Nike and Adidas have dominated this segment for decades, with player and club sponsorship contracts signed while talents were still in academies. Their credibility does not come from advertising, but from millions of boots worn on professional pitches, through rain, through mud, through curling shots that distort the very structure of the sole. That is credibility you cannot buy with a marketing campaign. And this is where the story gets interesting. Randy Konik, an analyst at Jefferies, said something I consider the centerpiece of the whole deal: performance credibility cannot simply be bought. He is right. But that statement also raises the reverse question — if it cannot be bought, how do you get it? The traditional answer is: put the product on elite players' feet, let them prove it on the pitch, and let the image spread. Mbappé is the spearhead of that strategy. But what nobody knows is whether his contract obliges him to wear On boots in official matches. If it does, the deal means something entirely different. If it doesn't, it is just an expensive advertising campaign. On has one advantage I need to mention: the LightSpray robotic manufacturing technology, currently used in running shoes. The idea is that this manufacturing technique could transfer to football boots. It sounds reasonable. But a football boot must withstand entirely different loads — the impact force of a shot, hard braking on wet grass, turning at high speed. A technique for making a running-shoe upper does not guarantee it works in that environment. This is an unproven hypothesis, and I will not pretend it has been proven. There is one organizational detail many articles overlook: Thierry Henry was appointed director of the soccer business. That, I rate higher than the Mbappé deal itself. Hiring a star for advertising is something anyone can do. But building a genuine football operation — from product development to player and academy relationships — is a multi-year story. Henry brings a network in football that a marketing department cannot buy with ad money. Now to the part I want you to think about most. This entire story, at its deepest layer, is a wager whose risk structure is widely misunderstood. Investors worry about cost. But the true cost of an endorsement deal paid in equity is not cash. It is future dilution. By paying in stock rather than cash, the brand preserves short-term cash flow — which sounds smart. But it also ties Mbappé's payout to the share price, creating a new layer of pressure nobody sees in this quarter's report. This is a double-edged structure analysts will have to confront in the coming years. And here is the second paradox, the more important one. More than half of On's revenue comes from the Americas. That very region is described as weakening. Which means the Mbappé deal, to truly succeed, must lift the weakest market — one where football is not the most popular sport. This is the contradiction I have not seen anyone fully analyze. You spend on a global football star, signed to a brand whose half of revenue depends on a market where football is a second-tier sport. This formula can work in Europe, in Asia, but in the US, where American football and basketball dominate, Mbappé's spillover effect has clear limits. At 18.7 times earnings, the market has already priced in sustained high growth. That means if the football segment fails to deliver, the pressure point will not be the brand, but the valuation. This is a risk few football fans notice, yet one every investor sees. And as marketing costs rise to sustain the growth narrative, margins could be eroded even as brand awareness climbs. I could be wrong here. In fact, I hope I am. Because if On does what I just called difficult, that is a lesson in how a small brand beats a giant — and I am the first who wants to see it happen. People call me a provocateur. I consider that a job description. There is a precedent anyone analyzing this deal must mention: Under Armour and Stephen Curry. It is the story of a brand that signed a top superstar, built a product line named after him, and still could not break Nike's dominance in the basketball segment. Curry is the biggest star of a generation, and that still was not enough. The lesson is clear: one superstar does not guarantee success for an entire category. If that holds true in American basketball — where Under Armour has home turf — it holds even more true in European football, where On is the newcomer. That is why I say: right outcome, wrong player name, still beats right name, wrong outcome. The real story here is not Mbappé. The real story is whether On can convert an enormous marketing cost into actual football boot revenue. What strikes me most about how the media has handled this story is the polarization. On one side are commercial voices, seeing brand credibility elevated. On the other are voices from the investment-fund side, skeptical on economics. Both are right. And it is precisely that polarization — not any single number — that is worth watching. Because when two intelligent camps look at one event and reach two opposite conclusions, the truth usually lies where neither has been willing to look. So what do I predict? I predict On's football-segment revenue will be the number everyone awaits in next quarter's report. I predict analysts will demand that number at any price. And I predict the most important thing will not be Mbappé, but whether LightSpray is validated on a professional pitch. Because a football boot is a performance product, not a fashion product. You can sell running shoes with a story. You cannot sell football boots to a professional player with a story. Morocco did not have a miracle. They had homework, and they did it thoroughly. I thought about that while reading about this deal. On is doing homework, but that homework is far harder than signing a name. I am 58. I have seen brands burn money on stars and then vanish from the pitch. I have also seen brands that looked tiny suddenly capture a segment. What I learned after forty-two years is this: time is the final referee, and it never reads press releases. This deal is not over. It has only just started the clock. And the question I put to you — not to On, not to Mbappé — is: are you looking at the share price, or at the boots on the players' feet? Because only one of those two will tell you the truth.