It's been the talk amongst true sneakerheads and KD fans all week. Should Kevin Durant leave Nike for Under Armour? Well, from my perspective, the answer is: Yes and No. I say "yes" for several reasons. When you're talking numbers, it makes sense for anybody who truly understands business. You have a company that is offering $285 Million dollars for an athlete to wear their shoes. Shoes! Remember, the NBA is not paying Durant that much to play basketball.
Nike, who picked up Durant back in 2007, helped to make KD a household name and propelled his status in the sneaker culture. However, Nike's contract with Durant is reportedly only worth $60 Million. Nike pays out about 12.5% on endorsement payouts, and it is being reported by Forbes magazine that they just started seeing a return on the money they advanced Durant.
There is one major fact we have to remember: Nike reserves the right to match the Under Armour deal, which they could with their eyes blindfolded. In 2011, it is estimated Durant only sold about $15 Million in sneakers and apparel, while in 2012 that number jumped to $35 Million in retail. Durant cleared $14 Million this past season in endorsements combined, with $12 Million of that coming from Nike. Sprint, NBA 2K, and other deals amounted the balance.
Another fact to point out is in 2007, Adidas offered Durant $20 Million dollars more than Nike, per year, but Durant understood the importance of branding himself at that time. Here we are, 7 years later, and $285 Million, 10-year contract on the table. I say yes....and no.
I say "No" because Under Armour is not known for basketball sneakers. At least, not in the sneaker culture. Some might argue the point that Nike was in the same position back in 1984 when they signed Michael Jordan. True. Under Armour is slowly coming from the "underground" when it comes to basketball, signing Steph Curry (who also left Nike) to unveil his own shoe, and DeAndre Jordan to sneaker deals. Although that's a great look for these players to have sneaker deals, Under Armour is yet to make an impact on the sneaker community, who buy the sneakers.
Whether Durant could prove to be a giant at Under Armour, and generate sales, is yet to be seen. However, with Durant's credibility, his recent MVP Award and speech, and now the cover of the upcoming NBA 2K game, KD is in high demand. Roc Nation Sports Management is behind him, and Jay-Z alongside partner Juan Perez, are brilliant businessmen. If KD does decide to finalize the deal with Under Armour, we could see a hot signature line come out of it. But will the fans of his Nike signature line jump ship and support him under a new umbrella?
Nike is running the campaign for the new KD VII's as we speak, If Durant walks away, this could mean dismal sales for KD's newest, and possibly the last, signature line for him.
Nike's revenue is $28 Billion this past fiscal year, with Jordan Brand clearing well over $2 Billion by itself. LeBron James is reported to be the top-selling athlete for basketball kicks, with Kobe right behind him. Will Nike match Under Armour's numbers? They can, and if their smart, they will try to at least come close to keep their star on the rise.
If Nike walks away from Kevin Durant, it could signal a shift in power for the 2015 sneaker game. Adidas is mounting a serious comeback, and we could see Durant become the face of a company that needs him to corner a market they only have a 1% stake in. Stay tuned to KickGame DVD, and we'll bring you up to speed in the KD / Under Armour saga. Cali "O" #TeamKickGame
No comments:
Drop A Comment