By Sara Germano
Nike Inc. will take over the rights to outfit the National
Basketball Association in 2017, further cementing the company's
hold on the sport.
The eight-year contract with the U.S. sportswear maker is worth
more than $1 billion, a person familiar with the matter said. It
will give Nike, which already controls more than 90% of the
basketball footwear market, the rights to supply the jerseys,
shorts and warmup gear used by NBA teams when the league's current
deal with Adidas AG expires.
Nike's contract will begin with the 2017-2018 season.
One win for Nike: The company will be able to display its logo
on NBA uniforms. That is a first for the league, which has been out
of step with common practice in other sports organizations like the
National Football League.
The next big question is whether the new Nike jerseys might
eventually sport sponsors' names. Many in the industry have been
wondering if pro basketball might one day go the way of global
soccer, a possibility that has come up in contract
negotiations.
In an interview with The Wall Street Journal earlier this year,
Adidas North America President Mark King said ads on jerseys would
lessen the value of an outfitting contract for companies like his,
which would then be competing for attention.
Asked in January if sponsors might one day appear on jerseys,
NBA commissioner Adam Silver said, "I think yes, we will see it in
the NBA."
Nike's hold on basketball is pervasive, running from
sponsorships of youth athletic leagues through college teams to
marquee players like LeBron James. The deal comes in the middle of
a hard fought, heavily watched NBA final series pitting the Golden
State Warriors against Mr. James's Cleveland Cavaliers. The
Cavaliers lead the best-of-seven series 2-1 heading into Game 4 on
Thursday.
Germany-based Adidas has been the NBA's outfitter since 2006 but
said earlier this year it wouldn't renew the contract. The 11-year
contract was estimated to be valued at $400 million, and executives
said it hadn't paid off as expected.
The NBA had also soured on its relationship with Adidas,
particularly because the company has been losing clout among U.S.
consumers, according to a person familiar with the matter. Last
year, Adidas slipped to third from second place in total retail
sales of sports apparel and footwear, behind Nike and Under Armour
Inc.
League sponsorship deals are highly coveted by major sportswear
makers, which use the contracts to gain influence in professional
sports. Nike currently holds the outfitting rights for NFL jerseys.
Rights for Major League Baseball are held by Majestic Athletic, and
the National Hockey League is held by Reebok, an Adidas
subsidiary.
Write to Sara Germano at sara.germano@wsj.com
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