NBA, The Business of Basketball

Be Like Mike: Nike, Michael Jordan and the most influential NBA player sponsorships and brand partnerships

Off the court, sponsorships are the primary channel that professional basketball players generate additional income. There are other methods to pad their already fat bank accounts, but a sponsorship is the often the most lucrative.

Some of the biggest brands in the world are willing to pay them huge amounts just for starring their ad campaigns. Basketball players, on their part, are ready to help companies sell a variety of products ranging from apparel to cars, as their sponsorship money is usually over seven figures.

Be Like Mike: A Win Win

When companies and brands partner with the right NBA player, it’s money in the bank. Working with and signing NBA superstars to wear their gear is a proven way to boost sales. No doubt that fans emulate their favorite NBA players on the court and off;  purchasing and using the same products that their favorite players endorse.

In many cases, basketball players can make more money by endorsing products and services than they do by playing.

According to the IEG Sponsorship Report, some of the top sponsors of NBA teams and player are Anheuser-Busch, State Farm, MillerCoors, Gatorade, Adidas, Spaulding, Coca-Cola, Kia Motors, Pepsi-Cola, McDonald’s, and Geico, to mention just a few. Most of the NBA sponsors are insurance companies and car manufacturing companies, following by telecommunication, banking, and beer industries. The NBA signs sponsorship deals with local as well as international companies.

Here is a list of the seven biggest ever basketball sponsorships.

Michael Jordan – Nike

Jordan may have stopped playing professional basketball, but Jordan still rules the world of basketball shoes . Although the Air Jordan XXXI is not selling as its predecessors, Nike continues to earn revenue through its sponsorship deal with Jordan (and Jordan raking in the cash).

At the end of the financial year 2016, Nike’s revenues through its Jordan sponsorship increased by 18% to $2.8 million. And Jordan continues to earn an estimated $110 million through his association with Nike. Without the iconic Air Jordan shoes, Nike would be a completely different company today. On the other side,Michael would still be the GOAT, but he wouldn’t be nearly as rich as he is.

James Harden – Adidas

Adidas is Nike’s biggest competitor in the market so in order to compete effectively against Nike, which
enjoys 90% share in the basketball market, Adidas had to overpay top basketball players and teams. Adidas signed a $200 million deal with Harden in August 2015 and launched its signature Harden shoes in October 2015. They turned out to be the fifth largest selling shoes among NBA players, netting a cool $14 million for James Harden .

Stephen Curry – Under Armour

Stephen Curry has made $12 million through his sponsorship deal with Under Armour, signed in 2013. The back-to-back MVP awards that Curry won and the resulting popularity of the Warriors turned out to be extremely beneficial partnership for the company.

As a result, Under Armour got overexcited with the success of Curry 2 and overproduced Curry 3, which led to fall in sales. Curry extended his deal with Under Armour in September 2015 and got a pay hike plus equity in Under Armour.

Dwyane Wade – Li-Ning

Wade parted ways with Nike and joined Li-Ning, a Chinese sneaker company in 2012. According to the terms of the $8 million deal, he got equity in Li-Ning. At the beginning of that season, he launched his fifth signature Li-Ning sneakers. A limited number of these sneakers are available in the US.

Rakuten Partner with Warriors

The Warriors got into a jersey sponsorship agreement with Rakuten, a Japanese eCommerce company. The three-year deal is worth $60 million, which makes their partnership the biggest team sponsorship among the 14 NBA franchises that have jersey sponsors. In addition to displaying the company’s logo on their jerseys, the Warriors renamed their practice facility as Rakuten Performance Center. Rakuten became the team’s affiliate marketing partner, video-on-demand partner, and eCommerce partner.

NBA Jersey Sponsorships

In 2018, for the first time ever, the NBA’s sponsorship revenue became more than $1 billion. In 2017, the NBA’s sponsorship revenue was $861 million. This indicates 4.5% increase in sponsorship revenue in 2018.

The increase in revenue is because of the ads that were displayed on NBA team jerseys in 2018. During the previous season, NBA teams were permitted to display advertisements of their sponsors on their jerseys and 20 NBA teams grabbed this opportunity to boost their revenue.

It led to the league getting lucrative sponsorship deals from Nike, Adidas, and Verizon. These deals also contributed to a great deal in the boost in revenue. The NBA jersey sponsorship deals started with $5 million, but there are sponsors who have paid in the range of $20 million to $60 million per sponsorship.

Nike Signs 8-Year Partnership with NBA

The NBA signed an eight-year apparel deal with Nike at the beginning of the 2017 – 18 season. Reliable sources quote that the deal was worth close to $1 billion, which is 245% more than the previous deal.

Adidas announced that it would not extend the sponsorship deal it had signed with the NBA back in 2006. However, unlike the NBA Adidas deal, the Nike logo will be allowed to be displayed on team jerseys for the first time in league history. Nike wasted no time in taking advantage of their sponsorship opportunity with the NBA; creating their popular City Edition jerseys, Christmas jerseys, NBA All-Star jerseys and alternate road jerseys.

Nike and the brands affiliated with it control over 90% of America’s retail basketball shoe market. Nike has signed endorsement deals with some of the biggest players in the NBA, including Kobe Bryant, Kevin Durant, Russell Westbrook, Kyrie Irving, and LeBron James.

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