Search

Ben_Slingerland

The Business of Sports

Best Opening Weekend of College Football Ever?

While many Americans prepare for their fantasy football drafts this weekend before the NFL season kicks off on Thursday, September 8th, Christmas has come a week early for football fans with what ESPN is calling the “greatest opening weekend in college football history.”

 

When you look at these opening weekend match-ups, you’ll understand the hype. #1 Alabama vs #20 USC (Arlington, TX), #18 Georgia vs #22 North Carolina (Atlanta), #2 Clemson at Auburn, #5 LSU at Wisconsin (Green Bay, WI), #10 Notre Dame at Texas, #3 Oklahoma vs #15 Houston, #11 Mississippi vs #4 Florida State (Orlando, FL), #16 UCLA at Texas A&M, and Kansas State at #8 Stanford. Just a half decade ago, this would have seemed like an impossible dream as virtually no coach in the top 25 (or near the top 25) would gamble so early in the season. Traditionally, the opening weeks of the college football season have been riddled with blowout after blowout as coaches of top teams would schedule “cupcake games” to prepare their teams for their tougher conference schedule.

LSU
Leonard Fournette is one of the preseason favorites to win the Heisman Trophy. Fournette and the LSU Tigers rumble with the Wisconsin Badgers at Lambeau Field this weekend.

Not anymore. The college football playoff selection committee has made it very clear that the strength of schedule will play a major role in the selection process for the four-team playoff. Scheduling philosophies changed seemingly overnight as athletic directors and coaches shifted focus.

 

In the old Bowl Championship Series that relied purely on mathematical formulas that favored undefeated records, teams had little incentive to schedule tough non-conference games. The key was getting to 12-0 or 13-0 with little consideration for fans, players or entertainment value. The tables have turned for the better.

 

To get a better picture of how incredible this opening weekend is; consider that this weekend has four non-conference games between preseason ranked teams; now consider that in 2009 there were four of those … the entire season. In the 2010 season there were only 5.

 

Another unique factor of the first weekend of college football is the simple economics of big neutral site games with USC and Alabama playing at AT&T Stadium in Arlington, TX; Georgia and UNC playing in the Georgia Dome in Atlanta, GA; LSU and Wisconsin playing at Lambeu Field in Green Bay, WI; and Ole Miss taking on Florida State in the Orlando Citrus Bowl. The big, professional venues provide huge opportunities for both teams and conferences to cash in on these Labor Day Weekend matchups.

Alabama
The defending National Champions, the Alabama Sooners (led by Offensive Coordinator Lane Kiffin, left, and Nick Saban, right, Head Coach) will take on the USC Trojans at AT&T Stadium in Arlington, TX on Saturday night on ABC.

The most watched game of the weekend should be the USC-Alabama matchup Saturday night at 8pm on ABC, which should challenge the Notre Dame-Georgia Tech season opener a decade ago as the most watched Saturday Night college football opener ever. While the best matchup of the weekend on paper will come on Monday night with #4 FSU and #11 Ole Miss.

 

Undoubtedly, the best opening weekend in college football in quite some time … if not, all time.

 

 

Historic Month of April Basketball

On Wednesday, the nation witnessed the most historic last day of the NBA regular season in its 70th year of existence. Not only did Steph Curry and the Golden State Warriors break an NBA best regular season record with its 73rd win to top the 95-96 Chicago Bulls 72 win season, but Kobe Bryant dropped 60 points in his last ever basketball game. Oh and if that wasn’t enough action, the Boston Celtics overcame a 26-point deficit in a playoff-impacting game against the Miami Heat.

 

Not many people believed that the Golden State Warriors were going to top the season they had last year … well that’s exactly what they did. They added the exclamation mark on Wednesday by surpassing Michael Jordan and the Chicago Bulls with the best ever regular season record of 73-9. Steph Curry hit yet another milestone, hitting 10 three-pointers to cross the 400 mark … the first player to ever do that. While Curry is the engine that makes the Warriors go, the other half of the “Splash Brothers” duo, Klay Thompson, finished the year with 276 of his own threes, giving them the best two shooters in the league.

 

There is a saying that goes “records are meant to be broken.” Well, many experts thought that 72-10 record held by the ’95-’96 Bulls was one of those records that never was going to be broken. The fact that the Warriors did it in their last game, at home, made it all that much more special. Any sport fan, basketball fan or not, should appreciate the level of which Steph Curry and the Warriors are performing … it has never been done before and may very well, never happen again.

 

On the very same night, Kobe Bryant, the Black Mamba, ended his career in historic fashion, dropping 60 points on the Utah Jazz. Easily considered one of the best ever to play the game, Kobe played 20 great seasons, all with the Los Angeles Lakers. Announcing his retirement prior to the season, every game was a farewell to Kobe when he travelled to opposing arenas. Wednesday was the epic finale to the season-long Kobe farewell in true LA / Hollywood fashion. Twitter blew up with Kobe appreciation tweets, SnapChat had a geo-filter announcing it Black Mamba day … StubHub was selling tickets at $27,500 (and $900 to just get into the stadium).

 

Kobe’s career was eventful to say the least. From being one of the first players to be drafted right out of high school, to being accused of sexual assault, to winning 3 consecutive NBA championships, to being named an 18-time NBA All-Star … Kobe Bryant made a name for himself. He certainly had his critics who spoke out against his sexual assault allegations, to the way he conducted his retirement announcement, and even saying his 22-50 shooting performance in his last game was average. No matter what your view of Kobe Bryant is, what cannot be disputed is his impact on this generation of basketball fans, as he will forever be remembered as one of the best to ever play the game.

Kobe Bryant said good bye to the Los Angeles faithful, after completing his 20th and final NBA season on Wednesday night. He went on to score 60 points on 22-50 shooting.
Kobe Bryant said good-bye to the Los Angeles faithful, after completing his 20th and final NBA season on Wednesday night. He went on to score 60 points on 22-50 shooting.

Needless to say it’s been a very exciting month for basketball fans everywhere, as the college basketball season ended in dramatic fashion on April 4th, when Villanova upset UNC on a buzzer beater 77-74 in what was considered one of the best NCAA Championship finals ever. And today, the highly anticipated NBA playoffs begin.

 

While it is hard to imagine the NFL being replaced as the most popular league in this country, the NBA is certainly on its heels.

Why America Loves Steph Curry

I remember it like it was yesterday. I was sitting in my college dorm room at Georgetown, watching this slender, baby-faced sophomore put a cinderella #10 seeded Davidson team on his back and upset my #2 seeded Georgetown Hoyas in the 2nd round of the NCAA tournament in 2008. Stephen Curry scored 25 of his 30 points in the second half and rallied little Davidson from 17 points behind, past the Hoyas. While this upset would start a trend of early NCAA tournament heartbreak exits for the Hoyas, never would it be done in single-handed fashion as Curry managed to do it against JT III’s group in 2008.

 

A star was born.

Davidson's Curry celebrates after a three-pointer against Wisconsin during their NCAA basketball game in Detroit
Overlooked by each ACC school, Curry was given a shot by Davidson and he went on to break virtually every single NCAA 3-point record while leading Davidson to the Elite 8 in 2008.

Stephen Curry was overlooked by just about every power conference school in the country. Many ACC schools would not even invite him to walk on to their rosters, and Virginia Tech (where both of Steph’s parents excelled as student-athletes) didn’t even take a look at him. The beanpole guard out of Charlotte Christian School (NC) went on to Davidson, who took a chance on him. He proceeded to become the all-time leading scorer in Davidson basketball history (in just 3 years), was the 2009 NCAA Division 1 scoring leader, and the year before, broke the NCAA record for most 3-point field goals in a single season with 162.

 

People finally knew who Stephen Curry was.

StephCurry1
Steph Curry ended a 40 year NBA championship drought for Golden State after having an MVP season for the Warriors in 2014-15. 

Taken 7th by the Golden State Warriors in the 2009 NBA Draft, Curry has electrified the NBA. Obviously his MVP and title-winning season last year followed up with unworldly 24-0 winning streak to begin this 2015-16 NBA season has highlighted his unprecedented NBA career. Yesterday, Steph Curry was named the 2015 Associated Press Male Athlete of the Year, beating double major winner Jordan Spieth and Triple Crown Winner American Pharoah.

PicPlayPostPhoto
American Pharoah (top) and Jordan Spieth (bottom), were the runner-ups in the 2015 AP Male Athlete of the Year voting after their own respective record breaking years.

While his stats, records and awards document his greatness, his immense popularity is far less tangible. Unlike most NBA greats (Michael Jordan, Kobe Bryant, Lebron James) who commonly rely on their height and athletic ability, Curry’s game relies on skills that he has developed: shooting, dribbling, and passing. His underdog story of not receiving any major scholarship offers coming out high school, being the third point guard taken in the 2009 draft, and a below-market contract extension three years ago, speaks to his perseverance and grit.

 

America likes rooting for the underdog.

 

His jersey is now the bestseller in the league. His team’s games get record television ratings at home and in opposing markets. He has built Under Armour into a $3 billion sportswear company. His 3-year-old daughter, Riley, has become a star in news conferences. As ESPN analyst Jalen Rose puts it, “Steph allows us into his living room. [America] is watching him on a national stage be a son, a dad, a husband, a father, a brother. And he does all of it while continuing to improve.”

StephCurryAndRiley
Steph Curry and his 3-year old daughter, Riley, at a playoff postgame press conference. 

Steph Curry is human and that is why America loves him.

Signs Support Super Bowl Showdown in Santa Clara

I really do not like to hype up major sporting events, but when I do, there is usually a good reason. I understand it’s only the day after Christmas, but it’s not too early to start looking at Super Bowl 50 at Levi’s Stadium in Santa Clara, CA. And if everything goes as planned in the AFC and NFC playoffs in January and the best teams in the NFL “hold serve”, the biggest sporting event in America will pit the undefeated Carolina Panthers against the defending champions, New England Patriots.

Super Bowl 50 will be the first Super Bowl logo not to have roman numerals in it. It will also be played in the league's newest, most technologically advanced venue, Levi's Stadium in Santa Clara, CA.
Super Bowl 50 will be the first Super Bowl logo not to have roman numerals in it. It will also be played in the league’s newest, most technologically advanced venue, Levi’s Stadium in Santa Clara, CA.

The storylines would be innumerable. On what will be the 50th anniversary of the Super Bowl, you would have the NFL’s biggest surprise (and quite likely undefeated) in the Carolina Panthers against the team who has owned the NFL for the last 15 years in the New England Patriots. You would have the League’s two best quarterbacks and front-runners to win the MVP in Cam Newton and Tom Brady. The cocky “Dabbin’ Superman” versus the humble “Golden Boy.” You would have a rematch of Super Bowl 38, in which the Patriots narrowly won 32-29. You would have the northeast part of the country rooting for the Patriots to win their 5th super bowl in 15 years, while just about everyone else (including Roger Goodell and the NFL)  rooting for the Panthers, who have not won a Super Bowl in their twenty seasons as an NFL franchise.

Cam Newton, and his infamous "Dab", has taken the NFL by storm this season by leading the Panthers to an undefeated record.
Cam Newton, and his infamous “Dab”, has taken the NFL by storm this season by leading the Panthers to an undefeated record.

Of course, many people will say “it’s way to early to predict a Panthers and Patriots Super Bowl.” First, you have the Pittsburgh Steelers who are coming off impressive wins over both the Bengals and the Broncos. The red hot Steelers will likely get their chance at a rematch of their season opener against the Patriots in the AFC Divisional Round. In the NFC, the Seahawks currently look better than when they won the NFC the last two years. If the Panthers manage to get past them in the NFC Divisional Round, they’ll likely have a very good Arizona Cardinals team in the NFC Conference Championship. Moreover the Panthers have been miraculously holding on in games against the Packers, Saints and most recently the Giants, which suggest an eventual fourth quarter collapse is inevitable. The Patriots, meanwhile, have been devastated by injuries to Danny Amendola, Patrick Chung, Dion Lewis, Rob Gronkowski and Dont’a Hightower, not to mention Julian Edelman. A major question mark remains whether or not this team will be healthy in the playoffs.

Tom Brady and the New England Patriots have won 4 Super Bowls in the last 14 years ... they will be going for number 5 in the next 6 weeks.
Tom Brady and the New England Patriots have won 4 Super Bowls in the last 14 years … they will be going for number 5 in the next 6 weeks.

Having said all that, Vegas still favors the Patriots and the Panthers to win Super Bowl 50, with the Patriots at +333 odds of winning it all and the Panthers at +400. The next most likely team to win the whole thing is the Arizona Cardinals with odds of +650. At least at the moment, all signs point to a showdown in Santa Clara, CA (where Tom Brady grew up) between the perfect Panthers and the despised Pats.

The NFL season started with Brady and Goodell butting heads in “Deflategate” and it could very well end with Goodell handing Brady and the Patriots the Vince Lombardi Trophy in Brady’s hometown. Needless to say, the very confident Cam Newton will undoubtedly have something to say about that. It is only December, but all signs point to Super Bowl 50 being one of the best ever.

Social Media & Sports

Professional athletes in today’s world are in the public eye more than ever given the incredible impact of social media. This week Johnny Manziel was demoted from the Cleveland Brown’s starting quarterback position to a third string option when a video surfaced of him partying in Austin, TX during the Browns bye week. On Wednesday night, a video surfaced of the Philadelphia 76ers star rookie, Jahlil Okafor, getting into a street fight in Boston and knocking a person to the ground.

 

By this point, understanding the impact social media can play should not be considered earth shattering news to anyone. As pictures that surface on Twitter, Snapchat, Facebook, and Instagram can have harmful effects for any professional whether it be in finance, law, medicine, education … you name the career field. In this day in age, people can very quickly snap a picture or video and send it out to the world that could have ramifying effects.

 

After the 76ers lost their 16th straight game, you can understand why the likely Rookie-of-the-Year winner, Jahlil Okafor, was frustrated. A source close to Okafor said someone on the street mentioned, “the 76ers suck and you guys are all losers. You’ll never win a game …” This evoked the following reaction from Okafor:

Obviously, an incredibly immature and irresponsible reaction on Okafor’s part that probably should have resulted in an arrest for assault. Time will tell what sort of punishment he will face from the 76ers but hopefully this will serve as a wakeup call for the young 19 year-old as to do’s and dont’s as a professional.

 

Johnny Manziel or “Johnny Football”, on the other hand, has been involved in numerous off-the field incidents involving partying that stems back to his time at Texas A&M. Coming from a family of substantial wealth, Manziel has done what he has wanted since the beginning and is now quickly learning how its effecting his professional career.

One week after being named the team’s starter, Manziel was demoted to third string for Monday night’s game against the Baltimore Ravens after this video surfaced showing Manziel holding a bottle a champagne in a club during the team’s bye week.

 

Professional athletes are celebrities who are constantly in the limelight. Just as they’re expected to keep their composure on the field or court, they are expected to do the same off it as well. They are commodities that are paid millions of dollars a year to represent their organization. Today, there is a growing trend of more and more GM’s putting considerably more stock into researching players’ off the field habits and lifestyle, before investing that amount of money into them. It stems down to the collegiate level as well, where you see more and more college coaches checking their high school recruits’ social media profiles before offering them a scholarship.

 

The days of simply being “good enough” or “not having the rules apply” are over. Athletes, at all levels, are in the public eye to a certain degree, so making smart decisions off the field has become more important than ever with the increasing accessibility of social media.

Jurgen Klinsmann & US Soccer in the Perpetual Hot Seat

There are several high-pressured positions in the vast world of sports; however, few are surrounded by more scrutiny than that of the Head Coach of the US Men’s National Soccer Team. Jurgen Klinsmann was the highly sought after man from Germany that the U.S. had to wait for but eventually got, back in 2011.

Coach Jurgen Klinsmann was the coveted man for the US Men's National Team head coaching job.
Coach Jurgen Klinsmann was the coveted man for the US Men’s National Team head coaching job.

This past summer Jurgen and the Yanks saw the highest of highs (beating the #1 and #3 teams in the world in Germany and the Netherlands) simultaneously with the lowest of lows (a penalty-kick defeat to Panama in the CONCACAF Gold Cup 3rd place game). Things only got worse a few weeks ago when the US suffered an agonizing 3-2 overtime defeat to their arch-rival Mexico eliminating any hope of them qualifying for the Confederations Cup in 2017.

The US U17 MNT failed to record a win in the qualifying round of the 2015 U17 World Cup in Chile.
The US U17 MNT failed to record a win in the qualifying round of the 2015 U17 World Cup in Chile.

Moreover the youth National teams have not faired much better recently. The U17 Men’s National Team did not record a single win in their three games in the U17 World Cup this October in Chile (2-0 loss to Nigeria, 4-1 loss to Chile and a 2-2 draw to Croatia). The U20 Team is winless in their last three contests, including an 8-1 drubbing in Germany.

 

And yet many think Klinsmann’s job is safe. Sunil Gulati, the President of the US Soccer Federation, hired him and extended his contract through 2018 after his performance in the 2014 World Cup. He is the highest paid coach in U.S. soccer coaching history by a wide margin. His salary is rumored to have surpassed the $3 million mark after getting a hefty raise following the 2014 World Cup.

 

In looking at the US Men’s National Team’s body of work over the last 6 years it’s hard to argue with their consistent presence. Only 9 countries have been to 4 out of the last 6 World Cup knockout rounds, and only 8 have been to 3 out of the last 4 knockout rounds… the US are in both of these groups. The US can also boast being one of only 7 countries to qualify for each of the last 7 World Cups. A third place 1999 Confederations Cup finish, a 2nd place 2009 Confederations Cup placing and several Gold Cups, it is actually relatively easy to argue that the US is in that upper tier of countries.

 

But it is difficult to say much more than that … as the US still has yet to cross that threshold into the elite that Americans have come to expect from their national teams. You still cannot mention US soccer in the same breath as Brazil, Argentina, Germany and Spain. And until that day comes, the position Jurgen Klinsmann holds as Head Coach of the US Men’s National Soccer Team will continue to be a tumultuous one.

The US loss to Jamaica in the Semi-Finals of the Gold Cup was the beginning of a very disappointing stretch of results for the US Men's National Team.
The US loss to Jamaica in the Semi-Finals of the Gold Cup was the beginning of a very disappointing stretch of results for the US Men’s National Team.

Combine the summer’s Gold Cup debacle with their most recent 3-2 loss to Mexico, and a second straight failure in CONCACAF Olympic Qualifying, and it’s clear that Klinsmann is in the most tumultuous part of his four-year era.

 

How the NFL is Doing One Quarter into the 2015 Season

So what have we learned after the first quarter of the NFL season? Well first and foremost, the NFL continues its dominance amongst American professional sports as the premier league, not only in this country but also the world.

 

In 2014, the average NFL game drew 68,776 fans, more than 25,000 fans per game than the next-highest league (the German Bundesliga with 43,500). The English Premier League was third at 36,695 and Major League Baseball was fifth at 30,346. So far this year the NFL is right on par as last year at 68,000 fans a game in attendance per game.

 

In terms of television, the league continues to do extremely well. The opening game between the Patriots and the Steelers was the highest ever TV rating for an NFL opening game. The game tied the Vikings and Saints from 2010 with a 17.7 rating, which was up five percent from last season’s opening tilt between the Packers and the Seahawks. Given all the media coverage surrounding Tom Brady and Commissioner Rodger Goodell’s prior to the game, the record high TV ratings prove that scandal didn’t drive fans from the NFL, rather, it brought them in.

Tom Brady and the New England Patriots unveiled their 2014 Super Bowl banner prior to the 2015 NFL season opener against the Pittsburg Steelers.
Tom Brady and the New England Patriots unveiled their 2014 Super Bowl banner prior to the 2015 NFL season opener against the Pittsburg Steelers.

The NFL continued their tradition of playing games across the pond in London this past week when the Miami Dolphins and New York Jets played in the famous Wembley Stadium. This season’s international NFL matchup was the second-fastest selling game in the eight year history of the professional football league’s International Series. In fact, only the inaugural 2007 matchup that pitted the Dolphins against the New York Giants sold out quicker than this year’s game. The tickets to the game ranged from $26.53 to $241.08 according to the NFL UK website as 90% of the ticket holders were reported to be from the UK. These have been extremely lucrative to the league, as last year’s three matchups generated an estimated $30 million in revenue. This game was the first of three games to be held at Wembley Stadium this year, with the Bills playing the Jaguars on October 25th, and the Lions playing the Chiefs on November 1st . Both of these games are expected to sell out.

The Miami Dolphins played the New York Jets in front of a sold out Wembley Stadium in London, England in Week 4.
The Miami Dolphins played the New York Jets in front of a sold out Wembley Stadium in London, England in Week 4.

On the field there are still several, six to be exact, undefeated teams including the Bengals, Packers, Falcons, Panthers, Broncos and of course the Patariots. The New England Patriots Power Rating Index actually ranks this year’s team even higher than the 2007 undefeated team. Perhaps the two biggest surprises of those 6 undefeated teams come from the same division, the NFL South with the Atlanta Falcons and the Carolina Panthers both remaining perfect through four games.

 

A big talking point among the sports gambling world is the amount of buzz around Draft Kings and Fan Duel. These two startup gambling sites have made a killing from fan to fan wagering surrounding NFL games. DraftKings, a $1.2 billion, Boston-based startup, has raised $375 million in venture capital funding from investors like MLB’s venture arm, Melo7 Tech partners, the NHL, and Redpoint Ventures.

The two multi-billion dollar online sports gambling companies, Draft Kings and Fan Duel, have stolen the show with the amount of marketing dollars they've poured into the first quarter of the NFL season.
The two multi-billion dollar online sports gambling companies, Draft Kings and Fan Duel, have stolen the show with the amount of marketing dollars they’ve poured into the first quarter of the NFL season.

Since August 1, Draft Kings has spent $81 million on 22,000 ad spots, while Fan-Duel (another billion dollar fantasy sports startup), has spent $20 million on 7,500 advertisement airings according to the Wall Street Journal. The front-end heavy marketing strategy has paid off for DraftKings as they have grown their users from 3 million to 4.5 million over the course of the last month.

 

All the media coverage on the recent surge of both of these sports wagering startups has triggered lots of discussion of legislation changes and other policies being put in place. Both companies have temporarily banned employees from wagering on sports. Meanwhile, much state legislation has been discussed with politicians engaging in conversation about policies of banning online gambling.

 

Regardless, the NFL continues to soar as the world’s most successful sports league across the vast majority of key performance indicators.

Under Armour No Longer the Underdog

19 years ago, a 23-year-old former special teams captain from the University of Maryland football team began a business from his grandmother’s basement in Washington, D.C. Kevin Plank was tired of having to change out of the sweat-soaked T-shirts worn under his jersey. Yet he noticed that his compression shorts always stayed dry during practice. This observation inspired Plank to develop his first prototype of a moisture-wicking synthetic fabric t-shirt. He gave the shirt to his Maryland teammates and past teammates who had gone on to the NFL. The recent college grad perfected the design that effectively wicked moisture and kept athletes cool, dry, and light … and the company that we now know as Under Armour was launched.

Kevin Plank, the Founder and CEO of Under Armour, started the business 19 years ago in his grandmother's basement in Washington D.C.
Kevin Plank, the Founder and CEO of Under Armour, started the business 19 years ago in his grandmother’s basement in Washington D.C.

The first major team sale came with Georgia Tech football requesting 10 shirts from Plank. This led to contracts with other Division 1 football teams totaling $17,000 in revenue in year one. In 1999, Warner Brothers used Under Armour in two major films, Any Given Sunday and The Replacements, which coupled with an ad in the ESPN The Magazine, generated about $750,000 in sales. In 2003, the company launched its first television commercial centering on the motto “Protect this house” which played into the company’s notion of being the underdog. Four years later, in 2007, Under Armour opened its first full line full-price retail location in Annapolis, Maryland. On January 21, 2014, Under Armour announced their official apparel and equipment partnership with Notre Dame, making it the largest of its kind in the history of college athletics. The company has maintained an operating profit of more than 30% since its inception and soared to over $3 billion in revenue this past year and over 8,000 employees. And this past year, Under Armour passed Adidas as the second-largest sportswear company in the US.

Under Armour has marketed its underdog story through the slogan "Protect This House."
Under Armour has marketed its underdog story through the slogan “Protect This House.”

Last month, Under Armour reported a 29% growth in revenues over the same period last year, leading to a 7.3% jump in the company’s stock price. And so this begs the question, how does the company continue to grow at such a rapid place?

 

The biggest growth  categories for Under Armour recently have been golf-related items, women’s products, and basketball shoes and apparel. Not coincidently, Plank attributes much of the company’s recent success to that of Jordan Spieth, Misty Copeland, and Stephen Curry.

 

In today’s market, athletes are one of the most sought after groups of professionals for endorsements of products across a wide range of industries and categories. Being able to leverage an athlete’s appeal, recognition, and following within the general public in order to create a strong, positive association between a fan favorite and a brand, is a company’s dream. When you are dealing with a brand that happens to be a sports apparel brand, the value of endorsement is that much more amplified. This is not by any means a “new” marketing technique in the industry, however Under Armour has proven to be consistently good at identifying target areas of growth and then moreover, getting the right athletes in those areas.

Stephen Curry was one of Under Armour's most lucrative endorsement deals after bowing out of the negotiation for Kevin Durant.
Stephen Curry was one of Under Armour’s most lucrative endorsement deals after bowing out of the negotiation for Kevin Durant.

Let’s start with Stephen Curry. One of Under Armour’s recent initiatives has been in basketball apparel and more specifically shoes. Under Armour’s global basketball e-commerce traffic has been up more than 300% year-over-year. The basketball-shoe business is dominated by Nike, with brands affiliated with Michael Jordan and Lebron James drawing massive revenues. However, in signing Stephen Curry, Under Armour has put a huge dent into Nike’s basketball market dominance. After Curry’s MVP season and winning the NBA Finals (over Lebron), the Curry One shoe has been a huge success especially with Under Armour’s e-commerce site. The revenue for the footwear business increased 40% compared to the same quarter last year, to $154 million.

Ballerina, Misty Copeland, has proven to be a huge marketing success for Under Armour as they've seen a huge spike in their women apparel.
Ballerina, Misty Copeland, has proven to be a huge marketing success for Under Armour as they’ve seen a huge spike in their women apparel.

Misty Copeland recently became the first black woman to be named principal ballerina at the prestigious American Ballet Theater. Her face and image has significantly contributed to the growth of capris, shorts, sports bras, and running footwear.

Jordan Speith, however, may be the single largest contributor to the company’s ongoing rapid growth. Plank said this about the company’s golf platform:

In just the sport of golf in the last two years our revenues have more than doubled. We’re seeing key category growth throughout the rest of the year — things like on our website — our playoff polos are a number one item at our Brand House and our e-commerce site. The business is basically up everywhere. Having the right asset in Jordan … has been a home run for us.

Jordan Spieth was the youngest golfer to win the Masters since 1923 and did so with a record tying score this April ... Under Armour's stock prices increased 2% the following morning.
Jordan Spieth was the youngest golfer to win the Masters since 1923 and did so with a record tying score this April … Under Armour’s stock prices increased 2% the following morning.

Back in April, the 21 year old Spieth, epitomizing the company’s underdog story, won his first Master’s championship, while Rory McIlroy (Nike’s golden boy) finished fourth and Tiger Woods, a longtime Nike athlete, tied for 17th. Since then, he won the U.S. Open championship, becoming the youngest golfer since Bobby Jones to win the tournament in 1923. Soon thereafter, Spieth nearly won the British Open as well. Spieth’s Masters win caused Under Armour shares to spike 2 percent in trading the following morning.

 

You see, Under Armour invests in athletes the way value investors pick stocks. The company does not fear spending vast amounts of money, and yet Under Armour will typically bid up a top prospect before walking away from the negotiating table. This marketing strategy often causes the Swoosh to pay more than what they wanted for the top prospect, while Under Armour positions itself for a cheaper talent.

 

This gamesmanship played out in their approach of forcing Nike to resign Kevin Durant for about $275 million, while being able to capitalize on getting Stephen Curry in 2013 for a much lower price. In golf, Under Armour took a run at McIlroy, who at the time was the youngest player to amass $10 million in PGA Tour winnings. When Nike signed McIlroy in 2013, Under Armour turned around and signed the 19-year-old Spieth who had just turned pro.

 

Everyone likes a good underdog story. Under Armour’s origins and history is exactly that, an underdog story. Their unprecedented rate of growth have garnered the question from industry experts as to where the finish line might be for the company. And while they certainly are the underdog once again, that 4-lettered company on the other coast is starting to look in its rearview mirror.

 

 

 

Adidas Loves the Beard – Rockets’ Harden Inks $200 Million Endorsement Deal

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.

Adidas' new superstar James Harden faces off against the face Under Armour's brand, Steph Curry.
Adidas’ new superstar James Harden faces off against the face Under Armour’s brand, Stephen Curry in last year’s NBA Playoffs.

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.

Nike and the NBA agreed on a league wide partnership worth about $1 billion last month that will make Nike the official jersey provider.
Nike and the NBA agreed on a league wide partnership worth about $1 billion last month that will make Nike the official jersey provider.

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.

James Harden and TV personality, Khloe Kardashian, have started dating.
James Harden and TV personality, Khloe Kardashian, have started dating.

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.

James Harden will earn more money in his new deal with Adidas than either Tracy McGrady or Allen Iverson earned for their on-court performance in their entire careers.
Harden will earn more money in his new deal with Adidas than either Tracy McGrady or Allen Iverson earned for their on-court performance in their entire careers.

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.

Blog at WordPress.com.

Up ↑