With hip-hop mogul Jay-Z seemingly running the endorsement show for his most high-profile client, Kevin Durant, Nike was not ready to be upstaged by a financial coup d’etat from rival sporting giant Under Armour. Durant is a Washington D.C. native and coincidentally, Under Armour’s headquarters are located just 35 miles away in Baltimore, MD. With all the craze and praise that NBA superstar, LeBron James has received recently for returning to his home state to try to win a title, many have speculated that Durant would follow suit in the summer of 2016 when he becomes a free agent.
However, with Durant’s old Nike contract already expired, Nike didn’t have two years to take the wait-and-see approach and they sprang into action at the 11th hour to make sure that they weren’t going to lose one of their biggest cash cows. For the most part, big NBA shoe contracts are a miss because only a handful of players are actually making profit for big shoe companies.
According to a recent Forbe‘s report, the top three NBA shoe deals which are raking in big dollars for shoe companies are attached to the likes of King James who ranked at No. 1 for Nike shoe revenue over the last year with $300 million in sales. Next was Durant who brought in $175 million in sales, and lastly, Kobe Bryant came in at third with $50 million.
It’s not just a Nike thing however, Derrick Rose lead all NBA Adidas clients in shoe sales with $40 million. However, the next two NBA players with Adidas deals, Dwight Howard and John Wall only raked in $5 million dollars each for the company, so it’s clear that Nike is the shoe king of the NBA. For more details on NBA players and their endorsement deals, check out this article.
With Durant as their second-highest grossing NBA shoe client in regards to their most recent annual sales report, paying him the approximated $300 million over the next 10 years is a relatively cheap investment. If Under Armour can afford to fork out the reported, $265-285 million that they offered Durant, then an industrial giant like Nike should be ashamed of themselves for appearing to be stingy, by waiting until the last minute to intervene.
Durant’s popularity as a basketball player and reputation as a humble guy, has made him an endorsement magnet. This was seen best after his MVP speech this summer, when he tearfully thanked his mother, Wanda Pratt, for raising him to be the man that he is now. The MVP award is usually given around the time of Mother’s Day and the NBA used his speech as a commercial, and when it went viral, Mother’s Day companies were blowing up his cell phone in an attempt to get in on the action.
The fact the Durant is only 26 years old (come Sept. 29th), shows that he still has a lot to accomplish in his career as an Oklahoma City Thunder player, and Nike is well aware of this. Winning championships has even helped change the image of the once, universally-hated King James, and he too has experienced an increase in wealth for himself and his endorsers, as a result of his recent accomplishments.
If Durant can sell another $175 million-plus in shoes over the next two years, then Nike will be able to count anything that brings in revenue for the company as heavy profit for the remaining eight years that will be left on his deal. If Nike feels that they are taking a “gamble” on this investment, then where can the rest of us sign up to take a “risk” like this one?