It is no secret that one of Nike‘s main marketing scheme is to spend large sums on endorsements. This is what has set them apart from all the other athletic gear giants in the industry. They always use money to attract the biggest superstars of each sport. Whether it’s Cristiano Ronaldo, Roger Federer, Kobe Bryant, Tiger Woods, or Derek Jeter, Nike always makes those names the face of their respective sports.
However, Nike has always had a love affair with basketball as that sport has become its major target for endorsement deals. In truth, Nike even owns and controls 90% of the basketball industry because of how much the company is willing to spend on the sport. But how exactly did they dominate the basketball market so much?
Well, to start things off, it is safe to say that four of the biggest names in basketball the last 20 years are all signed with Nike. The company has superstars such as Michael Jordan, LeBron James, Kobe Bryant, and Kevin Durant all signed with them. While those players may have or may be competing with one another for the title as the best on the planet, they are all playing under one brand. Their competitiveness and superstar reputation out on the court has made Nike even more profitable. In fact, Jordan, James, and Durant are all responsible for 10% of Nike’s total gross revenue at one point in time.
Considered to be the best player in history, Jordan even has his own brand under Nike because of how successful he was not only as a player but also as an endorser. The Air Jordan brand has produced the Air Jordan I, an iconic red shoe that went against the NBA’s rules on sneaker colour. Every time Jordan wore those shoes, he was fined $5,000. But because of the publicity Nike was getting, they were always more than willing to shoulder the fine. Soon after that, everybody wanted to play like Michael Jordan. Air Jordan became more popular and, every time a new sneaker is released, Nike earns a revenue of about $2.5 billion.
Even Michael Jordan has benefitted from this partnership. In 2014, it was reported that he was able to earn a total of $100 million from his sneakers. That number was more than the $94 million he made as a player. Forbes even values him at $1 billion. Without a doubt, his status as the world’s highest-paid retired athlete is due in large part to Nike.
However, Nike wasn’t always nearly as successful as it was with Jordan. They nearly lost Kevin Durant to a rising competitor back in 2014. However, Nike offered him a 10-year deal worth $285 million to stay with the company.
Just a year after making Kevin Durant the highest paid endorser since Michael Jordan, they would then give LeBron James the company’s first-ever lifetime deal. They had a good reason to do so because, in 2015 alone, LeBron was able to sell $345 million worth of sneakers in revenue for Nike. While that number is yet to catch up to what Jordan has been able to give the company, the sales are still projected to increase over the next few years. This also means that LeBron James might make $500 million in the next 15 years to become a billion-dollar athlete.
However, Nike is not expected to slow down when it comes to offering lucrative endorsement deals. It has since signed players such as Paul George and Kyrie Irving while failing to win over stars like Stephen Curry and James Harden, who both signed with different companies. As competition among the giants of the industry is rising, Nike will perhaps outdo itself in the next few years by signing even more players and by offering more unprecedented deals to some of the biggest names in basketball.
Shop Nike at tReds