The NBA’s most valuable player, Kevin Durant, has recently signed one of the biggest sponsorship contracts ever in NBA history.
Oklahoma City Thunder power forward Durant signed a lucrative shoe contract with Nike at the end of August. The deal is said to be worth up to $350 million over the next 20 years, with Durant earning $300 million in the next 10 years alone.
The 25-year-old has just enjoyed one of his most successful individual NBA seasons, in which he averaged 32 points, 7.4 rebounds and 5.5 assists per game. Durant earned himself the accolade of Most Valuable Player after beating Michael Jordan’s record for the most consecutive games scoring at least 25 points – earning the average score in 41 games.
Doubtless his 2013/14 success was one of the reasons that Nike fought so hard to keep Durant on their books. He was pursued aggressively by sports clothing competitor Under Armour, who allegedly offered him between $265 million and $285 million to sign a 10-year sponsorship agreement.
Nike had the rights however to match any deal offered by a competitor, and did so without hesitation. Omar Saad, analyst for research firm ISI, said: “For Nike, this was nothing to them. They could easily build Durant’s business enough, assuming normal margins, where they could generate a cash flow of $60 million a year. And Nike is really good at monetising its marketing assets, way better than anyone else.”
The basketball shoe market is currently worth $4.5 billion, of which Nike has a majority share, while Under Armour still has some way to go. It was an ambitious move for Under Armour given Durant’s previous history with Nike – since 2007, the star has amassed a $60 million fortune, starring alongside fellow NBA star LeBron James.
He’s also proved himself to be a worthy investment as far as Nike is concerned. Last year, sales of Durant’s Nike KD shoes totalled $175 million, equating to approximately four per cent of the overall basketball shoe market.
Durant’s sterling career was inevitably the icing on the cake for Nike. The star is an Olympic gold medalist and has achieved the titles of NBA All-Star, USA Basketball Male Athlete of the Year and NBA Scoring Champion to name but a few. Durant has yet to win an NBA final with Oklahoma City Thunder, but with a new sponsorship deal behind him, sports books out there certainly agree that this could be his year.