Nike Wins $1 Billion Contract To Be Official Partner With The NBA

Photo: AKM-GSI

The NBA is on the eve of continuing changes to its brand, as the sport is signing Nike to a 8-year deal.

Commissioner Adam Silver, who is experiencing high TV ratings with the NBA Finals, announced Wednesday that the Swoosh will be the only apparel company allowed to put its logo on NBA uniforms. The Beaverton, Oregon-based company is paying about $1 billion for the contract, according to a person familiar with the deal who spoke on condition of anonymity. Adidas, the brand that was the NBA’s apparel partner for 11 years, decided to back away from the sport in change of direction by the German company.

Focusing more on the international sport of soccer, Adidas is placing more emphasis on developing new products and sponsoring individual players. The choice to not renew its partnership with the NBA doesn’t stop the multinational conglomerate from signing deals with future NBA players. Adidas currently has four of the top six NBA draft picks signed to exclusive deals, as well as signing last season’s number one draft pick Andrew Wiggins.

“Nike will be instrumental in our collective efforts to grow the game globally while applying the latest in technology to the design of our uniforms and on-court products,” NBA Commissioner Adam Silver said in a statement. As the exclusive on-court apparel provider, Nike’s deal is another in a set of fantastic advances within the sport. Last year, the NBA announced a nine-year, $24 billion media-rights deal with ESPN and Turner Sports, which changed the marketplace within the league.

The effects of that deal, alone, has far-reaching effects on everything within the NBA. From how much a certain team can cost (the Los Angeles Clippers became a billion-dollar company this year) to how much the player’s can command in salary, the NBA alongside Nike will be able to reap billions more in revenue. In addition to warm-up outfits and shooting shirts, Nike will be able to design and make jerseys. The brand’s signature swoosh will begin to appear on all uniforms in the 2017-2018 season.

For Phil Knight head of the billion-dollar company, Nike finds itself the exclusive apparel company for both the NBA and NFL, as a deal with the latter went into effect in 2012 and extends through 2019. As the world’s largest apparel and shoe company, Nike already controls more than 90 percent of the U.S. basketball shoe market, thanks, in part, to players like LeBron James, Kobe Bryant, Kevin Durant and, of course, Michael Jordan being on its roster. Shares of Nike rose as much as 1.7 percent to $105.12 in New York in 1-day, and was up 7.5 percent this year through Wednesday’s close.

“Having the Nike logo on the jerseys can help grow the business,” said Brian Yarbrough, an analyst for Edward Jones & Co. “The bigger aspect is it keeps the competitors’ logos off the jerseys.”

[via NBA]

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