It was only recently that adidas announced it would not be renewing its partnership with the NBA as the league’s official uniform and apparel supplier. Historically, various sportswear brands have held this title, including Champion, Starter, PUMA and Nike during the ’90s. In 2001, Reebok signed the first major multi-year contract worth an estimated $175 million USD over 10 years. Once adidas acquired Reebok in 2006, the contract was restructured to an 11-year, $400 million USD deal, which will soon conclude following the 2016-2017 NBA season. During its years at the helm, adidas took in a disappointing amount of revenue from jersey sales, the lowest monetary drop coming in 2011 when sales plummeted to a measly $1 million USD, compared to $3 million USD the year prior — a 38% decline. All the while, adidas continues to lose valuable market share to Nike’s powerhouse basketball division.
adidas joins the likes of past companies who have struggled to carry the seemingly appealing burden of sole sponsorship rights to the leagues’ gear. In 1999, Starter was forced to go bankrupt before being bought out by PUMA, primarily due to its deep investment in the NBA. Potential brands who are entertaining the prospect of bidding for licensing rights will have to seriously weigh the potential of taking a hit in yearly revenue earnings with the glorified prestige of holding the NBA’s apparel licensing title.
As adidas prepares to hand over the reins to the next sportswear conglomerate, it is essential to note its revolutionary impact on the league from a visual perspective in order to anticipate what the future holds for the next generation of jersey designs. In 2013, adidas introduced the league-approved sleeved uniforms – a new silhouette that was met with lukewarm reception, and underwhelming sale numbers. However, the German sports brand can take credit for the press buzzing success of the most recent Christmas Day and All-Star game jerseys, coupled with the Spanish-themed uniforms, and commemorative Chinese New Year sleeved jerseys that debuted this spring. Furthermore, in the years following Stern’s mandatory, strictly business dress code policy, adidas found a way to add unprecedented flavor to the game by designing unique, game-worn jerseys, which embrace hints of pop culture. On and off the court, you can find official NBA uniforms donning nicknames such as “King James,” and “Truth” amongst others. One can only expect that the next licensee holder will have to continue to develop the new precedent adidas has set for suitable flashiness as an avenue for driving jersey sales.
Although adidas will not be relinquishing its hold for another year and a half, it’s not too early to begin analyzing the feasibility of an NBA apparel deal amongst the most viable contenders: Nike, Under Armour and perhaps as a dark horse, a well-appropriated fast fashion brand looking to make a splash in the sports realm. On paper, Nike is undoubtedly the strongest party who can take on this venture, having achieved 11% growth, which translates to a grand total of $7.4 billion USD in revenue during its 2014 fiscal year. However, one must keep in in mind the fact that Nike is continuing to push in many other sporting domains. An increased presence in the soccer world, evidenced by its decision to sponsor more teams in last year’s World Cup than its rival adidas, and the fact that Nike is in the middle of its 2012 contract with the NFL to be the league’s sole jersey provider are all notable things on their plate. This is also coupled with the increasingly competitive nature behind sponsoring successful college football programs. Nike may in fact be too focused to improve on the various foundations established across various sports to pick up an NBA contract.
Under Armour has positioned itself as the next brand to carry the NBA apparel licensing mantle. The native Baltimore corporation is building to be the next big multinational sports company, boasting its best monetary year to date. In 2014, Under Armour experienced a staggering 30% growth in sales, and accumulated over $3 billion USD in yearly revenue, effectively surpassing adidas for the second spot behind Nike as the largest sportswear company. Today’s Under Armour truly embodies the combination of infusing industry-leading technology, suitable for indoor play (ColdBack shirts, HeatGear garments) with consumer-pleasing designs (Alter Ego line, themed football jerseys). Having already signed Steph Curry, the face of tomorrow’s NBA, to an exclusive sneaker deal, the next power move would presumably be further establishing visibility in the league by stitching its crossed insignia on official game-worn jerseys. If the Tottenham, or University of Maryland uniforms are any indication, fresh batches of enhanced, styled jerseys are on the way if Under Armour can reach an agreement with the NBA.
This sounds quite farfetched, but could an established fast fashion brand seize the opportunity, and effectively add an unparalleled aspect to its label identity? This case is not likely, but is still worth evaluating. Consider Uniqlo for example: the brand has made strides reassuringly cultivating its image as a manufacturer that constructs pieces using quality linen, and the latest in sportswear technology (HEATTECH), while sponsoring the likes of tennis star Novak Djokovic. Although the merger would certainly be unique, and aesthetically pleasing, a fashion-oriented brand would need to ramp up its experience in order to create a high-performance product that is worthy of the world’s best basketball players. However, it could be argued that unlike the other players on the table, Uniqlo, and similar labels could deliver a more distinct fashion element through designs, or celebrity collaborations for added exposure.
The NBA is in the midst of a transitory period spurned by recently elected league commissioner Adam Silver, who seeks to revolutionize the game’s product value in order to match the growing popularity of the sport on the global front. The imminent change of the NBA’s apparel license will surely be a key talking point in Silver’s plan to further enhance the game’s appeal while the brand that comes on board enters the limelight for an ever-growing global sport. The brand that convincingly proves it can set aside a deep and encompassing budget, execute exemplary marketing initiatives, and formulate a diverse creative staff who can brainstorm ways to capitalize on the recent resurgence of jersey designs will undoubtedly be offered the chance of creating the future of NBA apparel.
Vote for who you believe will be manufacturing the NBA’s merchandise in the poll below, and if you choose ‘other,’ let us know who and why.
Who will become the NBA's next jersey purveyor?
- Under Armour