Durant Deal Ensures Nike Dominance

September 9, 2014

Key to the success of many sports conglomerates is the athletes they align with and the way they then use them.

Puma has Usain Bolt, Cesc Fabregas and Nico Rosberg, adidas boasts Lionel Messi, Kevin Pietersen and Andy Murray (although this is alleged to be under review) and now Nike has cemented the strength of its roster by re-signing basketball star, Kevin Durant.

The basketball PR value of the Oklahoma City power forward is underlined by the bidding war that erupted between Nike and Under Armour, a late-entry rival for Durant’s services. 

The Baltimore-based manufacturer reportedly offered Durant a $285 million deal however Nike, which had reportedly been considering letting the player go, more than matched the proposition.

The most likely explanation as to why Nike matched such a staggering offer, a vast improvement on the $60 million deal Durant signed in 2007, is that it would have been dangerous to lose him to a burgeoning competitor.

Durant’s currency is high, not just for the following he commands but also because his signature KD shoe line generated Nike $175 million dollars over the last 12 months.

By contrast, Under Armour only achieved $30 million in the basketball shoe market over the same period.

Nike and Brand Jordan, which Nike owns, make up 93% of that shoe sector, compared to 0.35% for Under Armour. Nike is also endorsed by 322 NBA players, beating Under Armour’s 13.

Regardless of the size difference Durant is one of the best players in the league and losing him to a growing competitor, whilst also a sports PR own goal, would see Nike’s market share reduced.

Under Armour saw sales rise by 25% in 2013, with growth continuing this year.

Having Durant on its books would have been an incentive for other NBA stars to join him, including the league’s young players with whom Under Armour is popular.

So determined were Under Armour to sign Durant, it reportedly offered him additional incentives including, stock, naming a community centre after his mother and an assurance to commit 8% of its total marketing budget to him.

Alas Under Armour missed out and now Durant won’t be back on the market until 2024.

Lining up with fellow ambassadors, LeBron James and Kobe Bryant, sports agencies believe royalties will push the deal closer to the $300 million mark, earning Durant more in base and bonuses a season than he receives in salary from his team.

For now, Nike’s basketball dominance is intact.

Rebecca Hopkins is Managing Director of ENS Ltd, a London-based sports agency tasked with promoting and protecting brands in sport. They specialise in sports PR, crisis management and online public relations.

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