Nike Wins NBA 8-Year Contract for Oh, You Know, 1 Billion
Nothing tastes sweeter than victory, especially when that victory is one big delicious pile of one billion dollars, which is exactly what Nike paid to the National Basketball Association this past week.
Once again, being the power-house that it is, Nike blew Adidas out of the water (and off the court) and picked up an eight-year apparel contract with the NBA replacing Adidas beginning 2017.
The word is that Adidas decided against contract negotiations with the NBA to renew their exclusive apparel contract in order to shift its focus to individual players instead, which led to a huge win for Nike. After the announcement of the deal, Nike’s stock rose 1.1% to $104.50 per share, with a total annual increase of 7.5%. Even though this deal is roughly a 245% increase from the previous Adidas deal, having Nike’s logo be the single and only logo seen on the NBA courts EVER is going to be huge for business and well worth that $1 billion price tag- a small investment for such an extravagant long-term gain.
This also begs the question: Will Nike remain the exclusive uniform provider for the NFL upon contract expiration in 2017? Holding contracts with the two most popular athletic organizations in the country would draw in an inordinate amount of revenue for this premier athletic company, but Nike might be planning to direct full attention and funding to the NBA. Although Nike already has killer endorsement deals with all-star players such as Kobe Bryant, LeBron James and Michael Jordan, their relationships with major corporations are their most invaluable source of advertising and marketing and what makes them absolutely dominate the sports industry.
All in all, with Nike’s innovative and technological apparel production, you can expect to see some impressive uniforms on the court for the 2017-2018 NBA season. As for Adidas, Under Armour, and every other athletic gear company, you could always try Sears?