Under Armour Is Banking On Kevin Durant’s Global Reach

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August 21, 2014
Greg Price
Displayed with permission from International Business Times

Under Amour has dared to challenge Nike for a share of the $4.5 billion basketball shoe business.

The Maryland-based company reportedly offered Oklahoma City Thunder forward and reigning NBA MVP Kevin Durant a new endorsement contract worth as much as $265 million or $285 million, ESPN’s Darren Rovell reported Thursday.

The deal includes stock and a community center to be built in Durant’s mother’s name.

Nike does have the right to match, and if it does, Durant legally can’t switch to the rising Under Armour. Rovell called the potential deal “the most intriguing” one he’s ever seen, with Under Armour looking to gain its first significant foothold in a market Nike has long dominated.

Forbes reports, Nike and its Jordan Brand subsidiary held a 92 percent market share last year, compared to 0.7 percent for Under Armour.

Durant, represented by rapper Jay Z’s Roc Nation Sports, has been a client of Nike’s since he entered the league in 2007. Yet, since he hired Roc Nation last year, he’s already spurned beverage titans Gatorade for Talking Rain.

Under Amour hopes bucking the norm turns into a pattern for Durant and that it can continue to grow in a global sports apparel market expected to reach $178 billion in revenue by 2019, Forbes reported in March.

Under Armour has essentially gone all in on Durant, much the same way Adidas did when it signed Chicago Bulls guard Derrick Rose to a 13-year, $185 million deal in 2012. The gamble thus far hasn’t helped Adidas’s market share. Last year it had 5.5 percent, up only half a percent from 2012.

Rose has played a total of 10 NBA games the last two years due to serious injuries in both of his knees, and sales of his shoes were flat last year, at $40 million, when compared to 2012 figures.

Barring a similar string of crippling injuries, Durant is on pace for a Hall of Fame career and could be the NBA’s top endorser in the future. The Thunder are perennial contenders in the Western Conference, and last year Nike totaled $175 million off products tied to Durant and his signature trademark “KD.”

Durant could earn as much as $28.5 million per year from Under Armour, but he would still be second to Cleveland Cavaliers star LeBron James, who’s expected to rake in roughly $30 million from Nike this year.

Though the NBA’s two top players can’t come close to legend Michael Jordan and the $100 million in royalties he earned from Nike in 2013.

Founded in 1996, Under Armour has gradually built up its brand and market share by designing and selling sports apparel, and then shifting to running and football shoe wear. Basketball would seem like the next logical step, but Nike’s stranglehold on the sport and its superstars has limited new challengers.

Under Armour started to lure top NBA players last year when it signed Golden State guard Stephen Curry, but the possible addition of Durant could be a tipping point.

“A bold move like KD, and overpaying him, I think is a nice strategic play for them,” said Matt Dzamba, director of Sports Marketing for Zambezi. “From a global perspective, any article you ever read about Under Armour it talks about their global growth. When you look at the global landscape there’s a saying that ‘if you want to go global, you go to China.’ The NBA guys there are superstars to the nth degree.”

And though losing a player of Durant’s caliber would hurt most companies, Nike has much more staying power and depth in its current roster of clients.

“This deal is far more important to Under Armour than Nike,” said Marc Edelman, sports law professor at the Zicklin School of Business at Baruch College. “Nike already has a huge portfolio of elite athlete athletic endorsers, across all sports; Durant would be just one more.

“By contrast, for Under Armour this poses a unique opportunity to secure a premier athlete sponsorship. With the stock option component of this sponsorship, the deal can be compared with some of the deals Oiselle has made with elite women’s runners, albeit likely on a far larger monetary scale

Durant has worked hard the last seven years, molding Oklahoma City into one of the top teams in the West. He’s notched four scoring titles, been named to the All-Star team five straight times and took the franchise to its first NBA Finals since relocating from Seattle. But he will be an unrestricted free agent following the 2015-16 season, a small window of two years that Under Armour likely hasn’t overlooked.

James dominated the headlines last month after he announced his return to his home state of Ohio, and Durant could follow suit. He grew up in Seat Pleasant, Maryland, and the nearby Washington Wizards have been tabbed as early front-runners should Durant decide to bolt Oklahoma City. TV By The Numbers ranks Oklahoma City as the 45th largest television market in the country, drastically lower than No. 9 Washington. Durant could earn far more in local endorsements, on top of his salary and shoe deals, while playing in front of his hometown

“If the Wizards are a young, growing team, which they are, and they make sense from a basketball perspective, I think it can’t hurt him considering going home,” Dzamba said. “The irony of the situation is the two most likely suitors for him in two years will probably be a New York team, either Brooklyn or the Knicks, or the Lakers. Then you get into the argument it is a nice story, and it’s nice to have our big basketball guy playing in Under Armour’s market. But from a business perspective I would almost rather he play on the Lakers, which has great global visibility, a blue- chip brand, tradition and the built-in Chinese audience to kind of make him more of a global play.”

BroadbandTV and the NBA Continue Content Claiming Relationship on YouTube

Vancouver, BC (August 19th, 2014): Leading media and technology company BroadbandTV (BBTV) has renewed and expanded its relationship with the National Basketball Association (NBA) internationally. BBTV and the NBA first teamed up in April 2009 for the management of its fan-uploaded content.

As part of the relationship, BBTV and the NBA will continue to work together to enhance the NBA Channel on YouTube. The NBA Channel on YouTube has received more than 2.2 billion page views, and more than 5.6 million subscribers, making it the most popular professional sports channel on YouTube.

“Our commitment to deliver the most advanced solutions possible has allowed us to build upon our relationship with one of the world’s largest and most prestigious content owners,” said Shahrzad Rafati, Founder & CEO, BroadbandTV. “We’re thrilled to extend the relationship and help the NBA to become even more successful on YouTube.”

BroadbandTV has developed some of the most advanced and innovative technologies in the online video space: VISO NOVI, for detecting and managing fan-uploaded content and VISO Catalyst for enhancing viewership and engagement for premium videos. Both platforms empower content owners and creators to become more successful online. BroadbandTV also operates the third largest multi-channel network in the world.

For more information on BBTV please visit: www.bbtv.com

Basketball Drills At Nike’s Americas Team Camp

Here’s video of Jay Triano (Portland TrailBlazers), Eric Hughes (Milwaukee Bucks), Jama Mahlalela (Toronto Raptors) and Bruno Caboclo (Toronto Raptors) working with campers at Nike’s Americas Team Camp.

Make sure you adjust the video settings so that it shows in 780p HD.

Jay Triano Nike Team Americas Camp

Photos From Nike’s Americas Team Camp

Here are photos of Jay Triano (Portland TrailBlazers), Eric Hughes (Milwaukee Bucks), Jama Mahlalela (Toronto Raptors) and Bruno Caboclo (Toronto Raptors) working with campers at Nike’s Americas Team Camp.

Click on any of the pictures to see a larger, high res version.

Bruno Cabolco dunk Nike Team Americas Camp
Bruno Cabolco dunking at Nike Team Americas Camp

Eric Hughes Nike Team Americas Camp a
Eric Hughes working with campers at Nike’s Team Americas Camp.

Jama Mahlalela Nike Team Americas Camp a
Jama Mahlalela observing a defensive drill at Nike Team Americas Camp.

Jay Triano Nike Team Americas Camp b
Jay Triano at Nike’s Team Americas Camp.

Nike Team Americas Camp Augst 17, 2014
Nike Team Americas Camp August 17, 2014.

Bruno Cabolco defensive stance Nike Team Americas Camp
Bruno Cabolco observing a defense drill.

Jama Mahlalela Nike Team Americas Camp
Jama Mahlalela in a huddle at Nike’s Team Americas Camp.

Jay Triano Nike Team Americas Camp
Jay Triano

Bruno Cabolco Nike Team Americas Camp
Bruno Cabolco