A simple mistake that cost Nike billions (Second of Three Parts)
By Eddie Alinea
PhilBoxing.com
Mon, 29 Oct 2018
Ever wonder how the most electric player in a generation slipped through the grasp of the most powerful sports apparel company in the world ? and how Under Armour managed to pull off the marketing heist of the century?
Thus was how ESPN The Magazine, in its special edition pay tribute to the Golden State Warriors? romping off with the NBA championship 2015, wrote the story by way describing how Nike lost Stephen Curry as endorser of its products.
During negotiations for the renewal of Curry?s contract that lapsed in 2013, it became clear to the Golden State Warriors ace and his father, Dell Curry, that Nike didn?t value Curry as much as others. They, for instance awarded youth development camps to Kyrie Irving and Anthony Davis instead of Steph despite the duo having been drafted in 2011 and 2012, respectively, or two and three years after Curry.
The ability to help young players meant a lot to Curry, who could see himself in some of the players that attended those camps. He attended Chris Paul?s camp when he was younger and wanted to give back to kids who were in his position. But that wasn?t going to happen with Nike?
It?s possible that Nike simply did not have enough room for Curry, given that Irving plays the same position and had a certain swagger and cool image that the soon-to-be back-to-back MVP might have lacked at the time.
Whatever the reason was, nothing should?ve excused Nike for the next mistake they made during their re-signing presentation to Curry. It could possibly be considered as the biggest blunder in sports marketing history just by the sheer lack of disrespect it took to make the mistake.
During the presentation, one of the Power point slides had Kevin Durant?s name on it. Meaning slide was practically the same as the one used for a presentation to Durant and they forgot to change the name to Stephen Curry.
That show of disrespect did it. Curry and his father stopped paying attention after that. Nike, even after the horrendous mistake, still had the audacity to offer Curry a $2.5 million contract to stay with them and that?s when Curry decided that he was worth so much more, which, and it turns out later, he, indeed, was worth over $14 billion more.
With Nike?s presentation over, it was clear that Stephen wouldn?t be one of their top tiered athletes and Dell talked to his son to try something out of the box.
Steph was no stranger to being overlooked. During his entire career, he was never recruited, never much respected, but he has always proven everyone wrong. He decided to bet on himself in what would turn out to be one of the best decisions of his life. It would cause Nike lose billions of dollars.
This opened the door to Under Armour the perfect time to make a pitch that would make the heart and soul of the Warriors? offensive weapon one of the most recognizable athletes in the world. The firm offered him $4 million to join their team although Nike still had the rights to match their offer.
Steph, at that time, had failed to reach the playoffs with the Warriors for three straight years and had only played 26 games the year before so that Under Armour was taking a huge risk in betting $4 million on Curry. He was always looked at as injury-prone. A huge gamble really.
After Curry refused Nike?s original $2.5 million offer, the company decided to decline the option to match Under Armour?s $4 million offer.
This would turn out to be one of the biggest marketing mistakes ever made in sports history. Curry would go on to win the NBA championship and become the most popular player in the NBA. Everyone wanted to ?be like Steph?. You won?t believe how much Curry single-handedly increased Under Armour?s worth.
After the signing of Curry, Under Armour?s stock price skyrocketed from $47 a share to $120 a share. He single-handedly doubled Under Armour?s worth from $14 billion to $28 billion in just a couple of years.
Under Armour knew how much he was worth to them and understood that $4 million a year wasn?t going to cut it anymore. They knew that in order to keep him signed with them, they?d have to come up with an offer he couldn?t refuse..
Curry not only propelled Under Armour to the second biggest player in the athletic sportswear marketplace, he, likewise, served as a catalyst to help Under Armour sign other high profile athletes in other sports, including Bryce Harper of MLB?s Washington Nationals and Jordan Spieth of the PGA Tour.
In December of 2016, Under Armour just signed a 10 year deal that will begin in 2020 to become the sole supplier of the on-field uniforms worn in every MLB game by every team.
Under Armour knew they couldn?t make the same mistake Nike did and prepared to offer Curry a deal of a lifetime.
After only two years with Under Armour, the firm put all their attention to re-signing Curry. They were able to agree on a deal that will keep him until 2024.
The deal included part ownership in the company, which neither Nike or Adidas have ever offered to any of their athletes. With the new, exclusive contract with the MLB signed just recently, that new deal could jump to over a billion dollars for Curry if all goes well. (To be continued)
Click here to view a list of other articles written by Eddie Alinea.
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