Stephen Curry bolted for Under Armour last September. Damian Lillard chose Adidas in a $100 million-plus bidding war that concluded in April.
Historically, Nike has allowed some of the NBA’s rising stars to trickle down to other apparel companies.
But the league’s transcendent figures? Some of the world’s most marketable athletes? Those don’t typically escape Nike’s grasp. And that’s why Kevin Durant will remain an endorser of the company that controls more than 90 percent of the basketball apparel market.
Under Armour made a strong push, offering up a deal reportedly in the $265 million to $285 million range, plus incentives, over 10 years. But on Sunday morning, ESPN reported that Nike decided to match it. Durant is now under control through the start of the 2024 season.
“Excited and humbled to sign back with the Swoosh,” Durant tweeted late Sunday night.
The base salary is more than Nike planned to pay for Durant. ESPN reported its original offer was in the $20 million per year range.
But Durant’s rising popularity and extreme marketability – his MVP season was only topped by his legendary acceptance speech, cementing his reputation as a wholesome and humble family oriented star – made him worth the spiked price tag.
“I think at the end of the day for Nike, Kevin is not just a substitute type of guy,” ESPN business insider Darren Rovell said. “He’s different from LeBron and he’s different from Kobe. And that way he can really provide incremental revenue to them.”
Durant made around $175 million in shoe sales for Nike last year. His other apparel brings in an extra wad of cash. And, as Rovell sees it, Durant’s brand and Nike’s utilization of it can only grow.
“They could open up the channels so much more in the Foot Lockers of the world, give them more shoes, make the shoe go from $125 to $160,” Rovell said, noting its growing popularity. “I can’t believe how many KD’s I see. There are already KD’s all over New York City and every major city.”
So despite the hard-line negotiation by Jay-Z and Roc Nation Sports, a tactic that reportedly didn’t sit well with Nike, keeping Durant was a must. And Under Armour’s involvement only provided some extra motivation for Nike.
Over the past decade-plus, the Maryland-based company has exploded onto the apparel scene. Under Armour’s clothing is gaining popularity and its label continues to seep its way into the major college football scene. But the company has struggled to make a dent in the shoe industry.
“Although they’ve been an against-all-odds story,” Rovell said, “they’ve been in the shoe business eight years and it’s been a tough go for them.”
Durant was supposed to go a long way toward changing that. Originally thought to be nothing more than some added leverage for Durant, Under Armour reportedly made a huge impression on the Thunder superstar during a sit-down meeting last month. And people within the industry started to think Under Armour had a legit chance.
“There are some people on Wall Street and some people in the retail space that were praying for him to go to Under Armour just to inject some life into the business and take away some of the control to Nike,” Rovell said.
But as the deadline grew closer and the realistic threat sunk in, Nike found it too risky to let Durant walk.
“Even though they are nine times the size, I do think Nike has paid a little bit more attention to Under Armour in recent years, even though they are the David to Nike’s Goliath,” Rovell said. “So I think there was a, ‘Hey, we are such a monopolistic power in the shoe game that what’s another couple million to make sure they don’t get any market share.’”
Over the next two seasons, the Thunder owes Durant $41 million. His new Nike deal will pay him far above that. The base salary of his apparel deal – likely somewhere in the $24 million to $28 million per year range – will be the highest of any NBA player. When adding royalties – Nike endorsers get 5 percent of the gross retail sales – LeBron will likely pull in a bit more.
But Durant’s value has skyrocketed. His marketability is at an all-time high. His brand has never been more popular. And Nike clearly recognized that.