For athletic brands with mega-athletes on their rosters, the pressure is on.
As the ink dries on LeBron James’ headline-making lifetime contract with Nike Inc., attention has turned to the NBA’s other superstar athletes.
Will James’ king-sized deal — though the numbers have not been disclosed, it’s a safe bet that the Cleveland Cavaliers forward won’t be taking home chump change — be the new standard by which all future athlete-endorsement packages are measured?
“Every time one of these deals comes along, it sets the bar that much higher. When one player gets a big number, it resets the bar for everybody,” said Matt Powell, a sports-industry analyst at The NPD Group. “That doesn’t mean the next deal will exceed LeBron’s, but it certainly increases the value of [sponsorship] deals from what people thought [companies] should pay.”
As the popularity of the NBA’s newest powerhouse and Under Armour-sponsored Stephen Curry continues to rise, insiders say locking him down for a lifetime could be a viable consideration for Under Armour.
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“If you have a property you really believe in, an asset like Stephen Curry, you’re going to want him to be around for a long time,” Powell said.
The Golden State Warriors guard led his team to an NBA championship last season as well as a 22-0 undefeated streak in the current season.
In 2013, Under Armour outbid Nike to sign Curry, for just under $4 million. In September, Curry and Under Armour extended their partnership through 2024.
While securing the loyalty of a superstar athlete into the foreseeable future could benefit athletic brands, Powell said it may be wiser for players to shop themselves around.
“It’s always a crapshoot for players. It’s like: ‘If I get X amount of money here, will someone pay me that much more to go elsewhere?’” explained Powell. “In some ways, the players are better off saying: ‘Let me get out in the open market and have people bid on me.’”
Either way, Powell said, Nike has protected itself from the melee that often accompanies the end of an endorsement contract between a superstar player and a brand.
“Nike is making sure there is not going to be any drama at the end of its contract with LeBron by locking him down solidly for the rest of his life — as opposed to what they went through with the [Kevin Durant] deal,” Powell said.
Nike and Under Armour engaged in a high-profile bidding war over Durant last year, which ended with the Oklahoma City Thunder forward accepting a $300 million dollar offer from Nike.
“In the long run, [Nike’s deal with James] is probably a good thing, but it’s [supposedly] a lot of money, and I often question the value of all of these deals,” Powell said.