Adidas Is All In On James Harden

Photo Credit: Bleacher Report
Photo Credit: Bleacher Report

Nike can’t offer everyone their own signature shoe and a massive pay out, so that leaves the door open for competitors like Adidas and Under Armour to entice athletes to jump ship.  This summer, Adidas  did just that when they lured James Harden from Nike with a massive 13 year deal that officially began on October 1st.  It would be difficult for anyone to say no to $200 million and a shoe/apparel line.


As of now, Harden will average $16.78 million on the final three years of his deal with the Rockets and $15.38 million annually from Adidas. But if Harden hits certain benchmarks, it’s possible he will earn more annually from Adidas than the Rockets.

Harden now has the opportunity to join the ranks of those making more from their shoe deal than their employer.  This comes at a time when Nike is slated to become the official apparel supplier of the NBA beginning the 2016-17 season (previously Adidas) and Under Armour passed Adidas up as the the 2nd largest seller of apparel.  Does James Harden have the star power and enough celebrity appeal to lead Adidas in reclaiming market share and increasing sales?

Adidas seems to think so.  The hefty price they paid to roster the NBA’s MVP runner-up, and the truck full of shoes they delivered to his house, would suggest they are all in.

Under Armour is Making Moves

Back in April, the Portland Business Journal reported Under Armour’s plans to grow its footwear and innovation operations in Portland.  They purchased the 70,000 square foot former YMCA building, just south of the city, off of Barbur Blvd.  Under Armour, who has been quietly operating in Portland in an office at the North Park Blocks since 2013, is expecting the new space to be operational in 2016.  Portland, which is home to Nike, Columbia and Adidas, could give them the access to the talent they need to make a meaningful push into the footwear market.

Speaking of footwear, according to Forbes, 60% of Nike’s sales are from shoes compared to 12.5% for Under Armour.  Nike also holds 60% overall market share for US footwear and 96% in basketball. This means there is huge potential for Under Armour to claim footwear market share, specifically in basketball.  The company’s CEO, Kevin Plank, couldn’t have written a better narrative than the NBA Finals this year.  Under Armour went head-to-head with Nike and won.  That is, Under Armour’s leading man, Stephen Curry of the Golden State Warriors, took down Nike’s golden boy, LeBron James and the Cleveland Cavaliers, to become an NBA Champion.  With the win, sales of the CurryOne increased to a 1% market share of basketball shoes.  UA is hoping to take a bigger piece of the pie with the CurryTwo, which is set to release late October in the US.

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MVP handles 🏀 #StephGonnaSteph

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In an industry where endorsements are everything, having Stephen Curry (NBA MVP and Champ), Tom Brady (Super Bowl Champ), Jordan Spieth (#1 ranked golfer) and Misty Copeland (leading ballet dancer and one of the most influential people in the world) should bode well for UA’s top and bottom lines.  Additionally, Under Armour’s partnership with NBA’s youth program, Jr. NBA, and the NBA Draft Combine starting in 2018 and their “Rule Yourself” campaign should make significant impacts as well.

It looks like the overlooked stars, with chips on their shoulders, could be aligning for Under Armour.  Strike while the iron is hot.