With another major victory all but inevitable, it would seem that Nike is set to stay true to its namesake.
According to Terry Lefton of Sports Business Daily, the company is on the brink of landing a long-time apparel rights deal with the NBA. While this new agreement wouldn’t come into effect until the 2017-2018 NBA season, and nothing has been signed, the “framework” of the deal has been outlined and an agreement in principle has been reached by the two sides.
Said the report:
Nike’s new on-court rights will not begin for more than another two years. Nike and the NBA still have “a million I’s to dot and T’s to cross,” said a senior industry source, “but it’s at that stage, as opposed to getting to the right number.” The new deal will take effect in time for the ’17-18 NBA season, after the rights held by 11-year incumbent uniform rights-holder adidas expire. After adidas dropped out, the NBA said it hoped to announce a new uniform deal this spring. adidas’ current agreement is valued at $400M over 11 years, and a Nike deal is certainly expected to surpass that in value.
It shouldn’t come as a surprise that these two sides would come together. After all, when adidas decided to end its partnership with the NBA, it was because the deal wasn’t helping the brand achieve more in the basketball world. That sentiment was echoed by Adidas Global Basketball General Manager Chris Grancio when he spoke about the brand’s new business strategy: a heavy investment in player sponsorships.
Nike may already be the dominant force in the basketball landscape, but a deal with the NBA has the potential to be extremely beneficial for both the brand and the league, especially in terms of overseas growth.
NBA jerseys are already pretty cool. But one thing that would take them up a notch would be if they had a brand’s logo on them. Interestingly enough, this is exactly what Nike’s new apparel deal would allow for.
In the Sports Business Daily report, sources said, “for the first time, the deal will include the rights to put a manufacturer’s logo on NBA jerseys. Currently, adidias’ logo only appears on NBA warm-ups. One source said that both Nike’s swoosh and its Jordan Brand Jumpman logo could appear on NBA jerseys.”
The addition of the Nike logo on NBA uniforms would only increase its hold over the basketball marketplace. With both the league and the brand looking to continue expanding overseas, the union between these two giants seems like a slam dunk. Under Armour was also vying for the apparel deal, but Nike’s major hold over individual sponsorships in the basketball community was a critical piece of the puzzle.
The NBA needed a partner with better distribution capabilities and more international reach. Nike certainly fits the bill. Not only does this brand have 75% of the league wearing its shoes, but it reps the majority of the major players in the NBA — specifically, LeBron James, Chris Paul, Kevin Durant, Russell Westbrook, and Carmelo Anthony. Their personal connections with Nike would only help the league benefit abroad. Coincidentally, the sport’s international appeal works in Nike’s favor as well.
It didn’t matter how you slice it — these two mega brands were already essentially connected. By creating an official partnership, the NBA and Nike will each benefit greatly. Between increased distribution and international expansion, the sky’s the limit here. In the end, both sides just had to do it.