Adidas has lured Houston Rockets guard James Harden away from the Swoosh with a 13-year, $200 million offer that was announced yesterday.
Right now, Harden will average $16.78 million on the final three years of his deal with the Rockets and $15.38 million annually. However, if Harden reaches certain benchmarks, it’s entirely possible that he will earn from Adidas than he will from the Rockets.
Adidas was in significant need of signing a marquee player. Under Armour has Stephen Curry, Nike has LeBron James and now Adidas has James Harden … all 2014-15 All-NBA first team selections. Nike claims approximately 95% of the U.S. basketball sneakers, while Under Armour is very quickly expanding its own line of products and passed Adidas last year as the second-largest seller behind Nike. In the first six months of this year, Adidas sold fewer shows in the U.S. than Skechers and New Balance. Part of Adidas’ underwhelming basketball brand performance can be attributed to big injuries to two of their main stars, John Wall and Derrick Rose.
Earlier this year, Adidas chose not to renew a deal with the NBA that had established it as the official outfitter of the league and in came Nike with an 8-year partnership that is worth roughly $1 billion. Moreover, Under Armour announced its own global marketing partnership with the NBA, which positions the brand as a title partner and outfitter of the NBA Draft Combine, presenting partner of the Junior NBA program in the U.S. and allows Under Armour to work with the league to launch an NBA FIT mobile app.
Adidas foresees Harden making a big splash in China, as the Rockets have remained a fan favorite in the Far East since the days of Yao Ming. The deal will feature a signature Harden shoe, his own apparel line, as well as Harden traveling on extensive brand tours in Europe and Asia. Additionally, Harden has started dating Khloe Khardashian who is a marketing machine herself and will undoubtedly raise his visibility into other demographics. Nonetheless, Harden’s jersey sales were only 14th in the league last year behind players like Damian Lillard, Dirk Nowitzski and Chris Paul. Adidas is expecting the deal to help move his merchandise sales upwards.
Harden’s endorsement deal with Adidas, which will officially begin on October 1st of this year, speaks to the increased value placed in brand marketing. Harden, who was not that long ago a sixth man for the Oklahoma City Thunder, will now be making more money from this deal than what seven-time NBA All Star Tracy McGrady and eleven-time NBA All Star Allen Iverson made throughout their respective careers from on-court earnings. In basketball and major U.S. sports in general, a highly marketable player and personality like a James Harden can earn more money by pushing a brand than his performance on the court. While on court performance and off-court marketability are highly correlative, Harden’s Adidas deal speaks to how marketability is valued more so now than ever.
One thing remains the same, Nike is still firmly established as the dominant shoe and apparel company in basketball, as they hold long-running endorsement deals with the three most globally popular (active or former) players in the world in LeBron James, Kobe Bryant, and Michael Jordan. And so they have the luxury of being able to allow MVP runner-up and All-NBA mainstay James Harden bolt to their three-stripe rival without much fuss. Nike had the option to match Adidas’ offer but chose not to, perhaps because of their recent large investment in getting the NBA league wide deal.