No way, Under Armour! Nike swooshes in with $300 m

[morran8463]

Under Armour had its guy. It was going to sign basketball superstar Kevin Durant to a 10-year, $285-million endorsement deal.
At the last minute, Nike swooshed in Sunday with a reported $300 million deal, and Durant stayed put.
The primary reason for the buzzer-beater: Nike's heavy pockets. Nike has about $4.7 billion in endorsement deals, so Durant barely moves the needle.
"They won't earn money on it, at the very least at first," said Matt Powell, analyst with SportsOneSource. "That said, they are able to absorb an overpriced deal much more than other people easily."
For Under Armour, the Durant offer is a complete 12% of its marketing budget.
Powell estimates that Nike sold $175 million value of its current Kevin Durant-branded sneakers in 2013, and 2014 product sales are anticipated to be up another 50%.
But he says that,Billiga Nike Shox, given the advertising costs, Nike would need to sell about $420 million in Durant sneakers to justify the endorsement deal.
However, Powell stated overpaying Durant is practical because it blocks Under Armour from establishing itself within the basketball shoe market. The upstart only has about 1% of the market today.
A Durant deal would have given Under Armour a good start in overseas product sales also, that is important since 94% of its current sales come from North America. The NBA is the most popular U.S. sports league in overseas markets. Nike gets the majority of its sales beyond your United States already.
Durant's deal most likely tops that of LeBron James, who have reportedly gets $20 million a year from Nike, while some estimates value that deal at as much as $30 million annually. LeBron is No. 1 among active players in sneaker sales, with an estimated $300 million in 2013. "But Durant will be closing that gap," Powell said.
Both trail the all-time king, JORDAN, who's still producing sales of $2.5 billion a year for Nike.
Durant became a a lot hotter home for sponsors this summer after winning the league's most effective player award and getting an emotional acceptance speech honoring his mom.
Nike could find a big boost inside its Durant sneaker sales if his team wins a championship or two, or if he or she moves to a more substantial market when he becomes a free agent in 2016. He currently has for the Oklahoma City Thunder in undoubtedly the smallest market in the group.
It could boost sales by developing a lower-priced also, mass-market edition of his footwear. The current sneaker expenses about between $130 to $200.
Without Durant, Under Armour was remaining to hype a cope with supermodel Gisele Bundchen,nike air force one, wife of New England Patriots quarterback Tom Brady,Tips For Make Basketball Snea, who includes a cope with Under Armour himself already. On Thursday a video the company posted suggested it would announce the offer with Bundchen. Terms of the deals with both wife and spouse weren't included in reports of these signings.

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