Nike is reportedly primed to land the next NBA jersey deal after Adidas announced it would not submit a bid, leaving Under Armour as Nike’s only competitor. Securing this deal would set the Oregonian company apart from its competitors when added to an impressive portfolio of deals that already includes the NFL and major NCAA programs.
Unless Under Armour proposes a sweetheart deal to the league, there is very little chance the NBA will discontinue its long-standing relationship with Nike. Even then, the jersey partnership deal doesn’t move the financial needle enough to warrant a change in partners solely based on price. Instead, the NBA could be looking at intangible benefits such as brand recognition, global reach and partnership alignment more than the number of zeroes on the term sheet.
Nike’s power can be seen in the NBA’s biggest global stars, most of whom — including LeBron, Kobe and Durant — are Nike athletes. Nike also boast strong international in-roads, and can help the NBA expand into Asian and South American markets. The fit just seems better with an established brand as opposed to the hard-charging, up-and-coming Under Armour.
If Nike does land this deal, it will have a stranglehold on the jersey deals for the most watched sports in the U.S. Under Armour has made a conscious push to build a basketball brand, but it may be relegated to second place with the looming jersey deal and endorsements from the biggest stars. This deal is a zero-sum game for Nike: not only does it get the deal, but it prevents a competitor from encroaching on Nike’s territory.
To recap, Nike would have deals with the two biggest professional leagues in America, some of the biggest, most recognizable colleges, golf’s two biggest profile players (Tiger and Rory) and an abundance of talent in other sports such as tennis, and track and field and other Olympic sports . That doesn’t leave much for other competitors.
Michael Colangelo is Assistant Director at the USC Sports Business Institute and Senior Editor of The Fields of Green.