The Decline of the NBA Sneaker Deal
J Thoendell stashed this in Sports
Jordan, it turned out, was one of a kind. His brand rode with him to the heights of fame and then transcended its association with the living, breathing man now running the Charlotte Hornets (and watching old Clint Eastwood Westerns) and became an enduring symbol of prestige and nostalgia. It is now a subdivision of Nike that brings in $2.5 billion in annual sales. When I spoke with Jordan’s longtime agent David Falk a couple years ago, he put it this way: “Just having a brand is one thing, but making the brand work is quite another. … There’s no brand that’s been remotely as successful as Jordan. I’m not even sure you’d even call those other guys brands.”
Shoe companies have slowly been coming to the same conclusion. According to some back-of-the-envelope math from shoe market analyst Matt Powell, Nike lost money for years on its endorsement with James. And Adidas’s $185 million man, Derrick Rose, has suffered repeated injuries. John Wall and Reebok (RBK)didn’t make it to the end of a reported 5-year, $25 million deal he signed as s rookie in 2010. After such hard lessons, guaranteed money—especially for rookies—appears to be coming down.
It's hard to believe that Nike lost money for years on its endorsement with LeBron James.
No wonder Nike seems to be spending so much more money on golf and tennis endorsements these days!