Kevin Durant’s decision to join the Golden State Warriors will have impacts on the court, but the business impacts have already been set in motion.
Golden state warriors ownership
Joe Lacob and Peter Guber paid $450 million for the Golden State Warriors in 2010. The team had some history, but wasn’t a national name or branding power by any measurement when Lacob and Guber purchased the team. They also had an old — and one of loudest — arenas in the NBA. Things have changed.
It obviously started with Stephen Curry, Klay Thompson, Draymond Green and an NBA title, but now the value of the team will increase even more if it can become a modern-day dynasty. It also helps the Warriors will be opening a new arena on the other side of the bay in San Francisco in 2019. Some estimates have the Warriors valued at the $2 billion mark. That’s not a bad return for Lacob and Guber.
The only threat to Nike’s basketball branding dominance was Steph Curry and Under Armour. It helped UA that Curry was winning MVP awards and games at an astounding rate. That could all be changing.
The Warriors are still going to win games, but now its not just because of Curry. Durant, a Nike endorser, will also be a huge personality. Any time a young fan watches the Warriors crush another opponent it won’t be with just an Under Armour persona leading the way. Nike and Durant will be there too. It will also be more difficult for Curry to win a third consecutive MVP with Durant carrying some of the scoring load and leadership responsibilities. This could cut into Under Armour’s momentum.
NBA Television partners
Well, Durant to the Warriors is a built in storyline full of drama and intrigue. The Warriors will be on every nationally televised game possible next year — there is a limit to how many games TV partners can show Golden State. The games will probably bring solid ratings — solid is an understatement. It’s also a lot easier to plan media and advertisements when there is a pretty good chance the companies know the Warriors, Cavs, and Spurs will again be the NBA powerhouses and most likely NBA Finals participants.
Oklahoma City and small market teams
Even though Adam Silver admitted parity isn’t that important, super teams aren’t great either. There is little doubt that Oklahoma City wouldn’t have its national following if they never had Durant. Small market teams may become frustrated leading toward some problems coming up in the future — see the next loser.
The Thunder won’t lose as much franchise value as the Cavaliers when they lost LeBron, but that isn’t any solace for ownership. Sponsorship deals and partnerships will be more difficult, especially if the Thunder have to trade their other star — Russell Westbrook — because of fear he will leave for nothing like Durant. That means less money coming in and signals a warning for other small market ownership groups
Collective bargaining agreement believers
The owners and players can opt out of the current CBA after this upcoming season. Small market owners are going to see what happened to Thunder ownership and will want changes. The past few CBAs have had different types of negotiating interest groups. It’s not just players v. owners. It’s star players v. role players, and big market owners v. small market owners.
The onerous luxury tax designed to stop super teams doesn’t seem so onerous anymore with the new TV money coming into the system. The NBPA decided that smoothing — raising the cap at a sustained rate instead of this huge bump — wasn’t in its members interest and now there’s a perception of chaos. Note: it is just a perception, players are getting contracts commensurate with their ability (mostly) and owners are still cashing ESPN and Turner checks. Still, if small market owners take umbrage with the new normal, a lockout could be on deck.
Nike and Under Armour
How can Nike be a winner and a loser? There is another side to the coin of Durant and Curry teaming up. It is just bad optics. Durant and Curry aren’t going to be able to stick to their fun personalities anymore. They are the NWO — of WCW fame — of the NBA. They are the new evil empire. There will be backlash for Durant and the Warriors. They all went from NBA darlings to the enemy real fast.
Nike and Under Armour now don’t have players where they are the focal point of their teams. LeBron is the star on Cleveland. Nike doesn’t have Adidas competing with him for shots on the same team. Adidas has Damian Lillard and James Harden as leaders of the Blazers and Rockets. Nike stars aren’t sharing attention. Durant and Curry’s play on the court could be amazing but their marketing power could be better off separated.