How Nike lost Steph Curry to Under Armor

(ESPN) In the 2013 offseason — coming off a year in which Curry had started 78 games and the Warriors had made the Western Conference semis — Nike owned the first opportunity to keep Curry. It was its privilege as the incumbent with an advantage that extended beyond vast resources. “I was with them for years,” Curry says. “It’s kind of a weird process being pitched by the company you’re already with. There was some familiar faces in there.”

The August meeting took place on the second floor of the Oakland Marriott, three levels below Golden State’s practice facility. Famed Nike power broker and LeBron James adviser Lynn Merritt was not present, a possible indication of the priority — or lack thereof — that Nike was placing on the meeting. Instead, Nico Harrison, a sports marketing director at the time, ran the meeting (Harrison, who has since been named Nike’s vice president of North America basketball operations, did not respond to multiple interview requests).

The pitch meeting, according to Steph’s father Dell, who was present, kicked off with one Nike official accidentally addressing Stephen as “Steph-on,” the moniker, of course, of Steve Urkel’s alter ego in Family Matters. “I heard some people pronounce his name wrong before,” says Dell Curry. “I wasn’t surprised. I was surprised that I didn’t get a correction.”

It got worse from there. A PowerPoint slide featured Kevin Durant’s name, presumably left on by accident, presumably residue from repurposed materials. “I stopped paying attention after that,” Dell says. Though Dell resolved to “keep a poker face,” throughout the entirety of the pitch, the decision to leave Nike was in the works.

Dell’s message for his son was succinct: “Don’t be afraid to try something new.” Steph Curry had thrived on proving people wrong for the entirety of his career. He had delighted in it, even. And Nike was giving him fuel.

If that’s so, that psychological damage was self inflicted. For all Under Armour did and for all Nike didn’t do, Nike still had an opportunity to salvage the situation when Curry indicated he wanted to sign elsewhere.

In 2013, Nike retained Curry’s matching rights, analogous to how NBA restricted free agency works. They still could have signed Curry, regardless of his preferences. According to a Sept. 16, 2015, report from ESPN’s Darren Rovell, “Nike failed to match a deal worth less than $4 million a year.”

 

In this way, Nike’s strength is indivisible from its weakness. As the top brand, it claims the most stars, by far. That’s a massive advantage, but basketball marketing is an act of minimalism. Promote too many athletes and the message becomes garbled.

It wasn’t a thankless effort for Bazemore, either. Now, three years later, he makes six figures annually with Under Armour

That has something to do with why Bazemore’s alma mater, Old Dominion, is now an Under Armour school. “We just signed Old Dominion, so that was kind of a giveback to Kent, so he’s happy about that,” Stone says. Under Armour paid nearly seven times what Nike was paying the school annually before

This was the condensed version of Ethan Strauss’ article so if you enjoy behind the scenes looks at the NBA and how shoe companies operate within the NBA I really encourage you to read the entire piece. So Nike being the juggernaut they are (accounted for 95% of sales in the basketball marker in 2014) thought they could half ass their presentation to Steph by first by sending in Nico Harrison instead of power broker Lynn Merrit who is involved in all major deals then reusing an old PowerPoint with Kevin Durant’s name still on it. Finally they certainly sealed their fate mispronouncing his name and never correcting it throughout the presentation. Well hot damn, I haven’t seen a pitch go that well since Tommy Callahan started slinging break pads in the midwest. It seems that Nike got complacent in thinking they are the end all be all in the shoe game , and that players would beg for there chance to be signed with Nike. Or that they decided to that they were going to push Anthony Davis and Kyrie Irving as their feature younger guys.  That seems more plausible to me looking from the outside in.

But despite that bang up presentation from Nike they would need not worry because when Curry’s deal expired in 2013 because a caveat in his contract that gave them the ability to match any offer Curry would receive and keep him.   Over the course of his final year with Nike coincided with Kent Bazemore joining the team. This turned out to be a key moment for Under Armor and Curry because over that next year Under Armor would flood Bazemore’s locker with so much gear he couldn’t keep it all. Soon enough the asst coaches , team personnel and players were wearing it. During that season Curry became more aware of what Under Armour could do for him and what he could for Under Armor.

Fast forward to signing day when Curry signs with Under Armour and Nike decides not to match their roughly 4 million a year offer for him. That amount doesn’t even make the top 10 highest shoe endorsement list.

#10 – Blake Griffin, $6 million/year, Jordan Brand

#9 – Damian Lillard, $10 million/year, adidas

#8 – Dwyane Wade: $12 million/year, Li Ning

#7 – Derrick Rose: $14.2 million/year, adidas

#6 – Kobe Bryant: $15 million/year, Nike

#5 – James Harden: $15.4 million/year, adidas

#4 – LeBron James: $20 million/year, Nike

#3 – Kevin Durant: $30 million/year, Nike

#2 – Stephen Curry: Terms undisclosed, Under Armour

#1 – Michael Jordan: $90-100 million/year, Jordan Brand

At the end of 2013, Under Armour had a 0.35 percent market share of basketball shoe sales and now in 2015  they have almost 3% of the market. That can be directly related to Curry One and his Championship MVP season.

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Which has pushed Under Armour into 2nd place behind Nike but ahead of Adidas which wasn’t the case prior to 2015.  Here is growth graph to see just how much of an impact Curry had

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So far a little less than 4 million dollars a year Nike passed up hundreds of millions in sales  and the influence of the game’s superstars to hitch their wagons to Anthony Davis and Kyrie Irving instead. But its not just him they are losing but future players and thats where it could really hurt Nike in the long run and really give them a challenger. Remember this past summer Nike almost lost Durant to Under Armor. So far a little less than 4 million dollars a year Nike passed up hundreds of millions in sales  and the influence of the few  superstars in the game. This is shaping up to be a colossal miss from Nike , the company which has had very few ever. So very similar to how Steph is transcending the game maybe he can do the same to the shoe market too.

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