Nike has made a splash to replace Adidas as the apparel partner of the National Basketball Association (NBA), as part of a much broader eight-year global merchandising and marketing partnership starting from the 2017-2018 season.
While the rights acquired by Adidas were reportedly worth about $400 million for eleven years (and royalties on sales), the Nike agreement was said to reach about $125 million per year or $1 billion for eight years – but with the crucial added value that the Nike brand will be allowed to appear on jerseys worn during NBA games.
The deal formally makes Nike the exclusive on-court uniform and apparel provider for the NBA as well as the WNBA, the women's league and the NBA Development League, the D-League. Nike will have the global rights to design and manufacture authentic and Swingman jerseys as well as on-court warm-ups and shooting shirts.
The Adidas Group announced in March it would not be seeking a renewal of its eleven-year licensing deal with the NBA, explaining that it was not yielding sufficient returns. Adidas obtained the rights after it acquired Reebok, the NBA's former partner. This agreement has done little to expand the German brand's business in U.S. basketball footwear, in which the Nike group has an estimated share of 96 percent.
Nike had been widely predicted to bag the deal because it's among the few companies that have the required financial resources and infrastructure. Apart from extra exposure in the U.S. market, the deal should be most useful to support the brand's basketball business in China. Some analysts said it may undermine the global value of the agreements signed by other companies with big-name basketball players, as they will be seen scoring in NBA Games in jerseys carrying Nike logos.
