Under Armour enjoys making Nike pay through the nose for Kevin Durant

Nike and Kevin Durant built playgrounds last month in areas of Oklahoma devastated by tornados in the spring of 2013. (Brett Deering / AP Images for Nike)

When it decided to pursue Kevin Durant and offer him a gigantic, multi-year endorsement deal, Under Armour knew full well that its sales spiel might not work. Nike had the contractual right to match the offer and, to no one’s surprise, it did so over the weekend, locking up Durant’s services.

The company was delivering more of a purpose pitch, Kevin Plank told Bloomberg TV.

“We wanted to send a message to every athletic director, to every president of every team club, to every league commissioner,” Under Armour’s chief executive officer told Stephanie Ruhle. “If you have a deal, there’s no deal too big for us.”

Nike’s contract with Durant was expiring, so Under Armour made a strategic move to top the $200 the Oregon company was offering. According to Plank, Under Armour offered a $350 million deal with the idea of, if nothing else, making Nike pay more. It did, signing the Oklahoma City Thunder star to a contract Bloomberg says is worth $300 million over 10 years. Including other things, the contract, negotiated with Jay Z’s Roc Nation, could balloon to $350 over 20 years.

“Do I take pleasure in that they paid $150 million more than they planned on paying?” Plank said. “Absolutely.”

Afer all, there’s only so much money, even for a behemoth like Nike. Nike may have about 10 times the sales of Under Armour, but Bloomberg notes that UA’s revenue has grown at three times’ the Swoosh’s rate.

“There will be opportunities created from that $150 million,” Plank said. “We all have a finite amount of money.”

Under Armour added one expensive name this week, signing supermodel Gisele Bundchen to sell its new line of women’s apparel.

After spending most of her career in traditional print sports journalism, Cindy began blogging and tweeting, first as NFL/Redskins editor, and, since August 2010, at The Early Lead. She also is the social media editor for Sports.



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Cindy Boren · September 4, 2014