Nike announces sponsorship deal with the NBA
Nike, Inc. (NKE) recently announced it will be the official on-court apparel sponsor for the NBA (National Basketball Association). The merchandising and marketing partnership deal, which applies worldwide, will last eight years, beginning with the 2017–2018 season.
What’s in it for Nike?
Nike has been associated with the NBA as a global marketing partner since 1992. This new deal will expand Nike’s sponsorship rights in the following ways:
- The Nike logo will be featured on NBA uniforms. Nike will be the first apparel company to do so.
- Nike will have worldwide design and manufacturing rights for authentic and Swingman jerseys, on-court warmups, and shooting shirts.
- Nike will also have these rights during the NBA All-Star Games, the NBA Global Games, the NBA Draft presented by State Farm, the Samsung NBA Summer League, and the NBA3X.
Nike has been a marketing partner for the WNBA (Women’s National Basketball Association) since 1997. According to a Nike press release, the new agreement gives Nike “an expanded presence” at the WNBA All-Stars and other events in the season. Nike will also be a marketing partner for the NBA-Development League (NBA-D League) for the first time.
The cost of sponsorship
Nike and the NBA haven’t disclosed the financial terms of the partnership yet. But according to a Bloomberg report, which cited unnamed sources, the eight-year deal is worth an estimated $1 billion.
NKE is among the top ten holdings of the Consumer Discretionary Select Sector SPDR Fund (XLY) with 3.0% weight.
Adidas bows out
Adidas (ADDYY) currently has apparel rights for the NBA. Its contract started in 2006 when it took over rights from then-NBA-apparel-sponsor Reebok. Adidas’s contract expires in 2017.
In March, Adidas announced it wouldn’t be bidding for renewal of the contract. Instead, Adidas will look to sponsor more players and try to regain the market share it has lost to Nike (NKE), Skechers (SKX), and Under Armour (UA).
In the next part of this series, we’ll look at Nike’s dominance in basketball.