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Branding the World of Sports

Posts Tagged ‘Nike’

John Wall signs $25 million deal with Reebok

Posted by ZA on June 10, 2010

John Wall, the University of Kentucky standout, who is likely to be the #1 pick in the upcoming NBA Draft has signed an endorsement deal with Reebok.  The endorsement deal is reported to be a 5-year deal worth approximately $25 million dollars ($5 mil per year).  The deal reported includes two signature shoes that will be designed by Reebok for the young basketball star.

This deal by Reebok is a huge step up from what recent draft picks have received from shoe endorsement deals.  It signals that Reebok plans to make John Wall the centerpiece of their basketball marketing efforts.  In 2009, the top NBA Draft pick, Blake Griffin signed a reported $400,000 per year annual deal with Nike.  In 2008, Chicago Bulls top pick Derrick Rose signed with Adidas (who owns Reebok) for an undisclosed sum that was likely in the $1+ million per season range.  Which means the last deal for a top pick that was on par with Wall’s deal was the $8+ million per year deal that 2008 #2 pick Kevin Durant signed with Nike.

The deal that Durant signed with Nike in ’08 was much larger than the deal that #1 pick Greg Oden received from Nike.  Nike has made Durant one of their top endorsement stars over the past few years, which is a pattern that Reebok is sure to repeat with John Wall.  Reebok’s other top NBA endorsement stars include Allen Iverson, Yao Ming & others.

[Assist: Sports Business Daily]

Posted in Apparel & Shoes, College Basketball, Endorsement Deals, NBA, Sports Marketing | Tagged: , , , , , , , | 6 Comments »

Nike won’t compromise brand for Women’s footwear

Posted by ZA on June 7, 2010

AdAge article about  the strong growth that Skechers and Reebok are seeing from their marketing of toning shoes to women.  Both Reebok and Skechers grew their market share of women’s shoes close to 200% in the past 12 months.  During that same period Nike and Adidas market share in that category declined (Note: Reebok is subsidiary of Adidas).

The article attributes much of Reebok and Skechers growth to the successful launch of shoes that focus on toning. Skechers shoes have an uneven sole that is supposed to tone legs and butt while you walk in them.  Reebok has recently started pushing similar toning shoes with an aggressive marketing campaign that focuses solely on women’s butts and legs.

While those two brands are enjoying the new toning category, Nike is sitting it out.  Nike says it will “compromise…performance” in their shoes and has not indicated they will release any shoes in these category to compete with Skechers or Reebok.  Instead Nike pointed to a new line of women’s training shoes they will release this Fall.

While I appreciate Nike’s unwillingness to chase a fad, I think they are missing an opportunity here.  I’ve seen lots of women I know wearing the Skechers toning shoes.  Why couldn’t Nike developing something in the space and market it as a lifestyle shoe, thus not “compromising” their standards on performance or training footwear.  Nike needs to be careful here because they might wind up giving up more than just this one (toning) category of shoes, they may wind up conceding a large piece of market share in women’s footwear and apparel.

Can Reebok overtake Nike?

Posted in Adidas, Apparel & Shoes, Nike, Sports Brands, Sports Marketing | Tagged: , , | 2 Comments »

Nike looking to gobble up competition

Posted by ZA on May 6, 2010

Nike announced that they have targeted annual revenue of $27 billion by 2015.  Nike plans to achieve that growth through expansion into developing markets (China & Eastern Europe), by expanding their existing line of products and by pursuing “acquisitions and partnerships”.  That target is a big increase (near 50%) from Nike’s 2010 revenue projection of $19 billion, so to achieve their goal the Swoosh is going to have to be very aggressive.

This announcement only solidifies my opinion that Nike will try to acquire rival Under Armour.  Under Armour reported 2009 revenue of just under $900 million dollars, which should put UA in the $1 billion annual revenue range in 2010.  So Nike not only gobbles up a strong competitor and gains ground in the performance sportswear category, they would also be adding $1 billion plus dollars in revenue towards their bottom line.  That billion plus in extra revenue is more than Nike is receiving from their current subsidiaries; Cole Haan, Converse, Hurley and Umbro.  So Under Armour has to look attractive and I think Nike buys them this year.

Posted in Nike | Tagged: , | 2 Comments »

Did Nike commercial end Tiger Woods’ marriage?

Posted by ZA on April 16, 2010

In a word, no.  But AdAge takes an interesting look at that topic here because apparently some of the mainstream media is using that story line to drum up business.  Even if Elin Nordegren didn’t like the Nike ad, a television commercial was not the breaking point in their marriage.  So to even suggest that the ad played a role (and not Tiger’s 18+ affairs) is insulting to Elin.

Posted in Golf, Nike | Tagged: , , , | Leave a Comment »

New Tiger Woods commercial for Nike

Posted by ZA on April 7, 2010

Nike Golf launched their first Tiger Woods commercial since his scandal broke.  The commercial features the voice of Tiger’s deceased father, Earl Woods.  Tiger doesn’t speak in the commercial, he just stares into the camera with a concerned look on his face.  Tiger’s wearing a Nike swoosh on his hat & sweater vest, which is the only brand or messaging in the commercial aside from a plain Nike swoosh that briefly appears on the screen at the close.

I don’t personally care for this commercial.  I know Nike feels like they had to address the elephant in the room with Tiger, but using his late father’s voice seems to be a cheap tactic.  Nike will surely get lots of exposure for this commercial because it is a major source of controversy.  But I’m not sure mentions on NBC Nightly News and across the blogosphere is going to translate into business for Nike.  I think Nike Golf should have kept the focus on Tiger’s play on the course and not try to touch his off-course issues.


Tiger Woods commercial for Nike Golf

Posted in Golf, Nike | Tagged: , , | 1 Comment »

Nestle turns to YouTube to promote Olympic athletes

Posted by ZA on January 5, 2010

Nestle is promoting its new product by releasing videos featuring Olympic athletes, Shawn Johnson and Apolo Anton Ohno on YouTube.  Johnson and Ohno are shown performing stunts in the videos to earn points for their Nestle team (Team Crispies or Team Chocolate).  The videos have drawn over 1 million views on YouTube.

The Shawn Johnson video shows her doing a backflip over a bobsled as it races down the track.  The video is similar to the Nike video that shows Kobe Bryant jumping over a speeding car.

Shawn Johnson doing backflip over a bobsled

Kobe Bryant leaps over a speeding car

[Assist: Brandweek]

Posted in Olympics, Sports Brands, Sports Marketing | Tagged: , | Leave a Comment »

Evaluating my 2009 Sports Marketing predictions

Posted by ZA on January 3, 2010

Time to take a look back and evaluate how I did on my 2009 predictions for the world of Sports Marketing. I posted my “bold predictions” on January 2, 2009 as a wide ranging look at some of the big moves I thought would happen in the industry.  I made seven predictions and wind up getting almost half of them correct.

Prediction: Tiger Woods will sign with Mercedes or BMW.

Result: This one did not happen, but who could have predicted the implosion that would happen to Tiger Woods the endorsement star in 2009.  Tiger is currently losing endorsements by the week, but I still think this prediction will eventually come true.  Companies will stay away from Woods for awhile, but when they do come back I expect Tiger to pickup a luxury car endorsement deal.

Prediction: Wrigley Field gets a new name.

Result: This one didn’t happen, although the Cubs were finally sold at the end of the year so it could be on-tap for 2010.

Prediction: AIG will end uniform sponsorship with Manchester United.
Result: I got this one right.  Shortly after writing these predictions word came out that AIG would discontinue their deal with Man U.  AIG actually just chose not to renew their deal, but close enough I got this one right.

Prediction: NASCAR will cut races.

Result: It was a tough year for Nascar with a tough economy and huge losses in the auto industry both hurting the sport.  The end result was that some races were not return to the schedule (e.g.- Milwaukee Mile in 2010).

Prediction: Reebok will be folded by Adidas.

Result: This did not happen, and with parent company, Adidas’ stock up 20% in 2009, the Reebok brand might be safe for awhile.  That said, I still think we’re still headed towards an Adidas versus Nike world, so at some point Adidas is going to put Reebok down.

Prediction: Under Armour will be acquired by Nike.

Result: This did not happen, but I still feel it’s one that could happen soon.  Under Armour’s stock is only up slightly since beginning of ’09 and UA stock took a pounding in October when they missed the mark with their expansion into running shoes.  Nike is still flying high and has a $30 billion market cap, so I think they eventually make this acquisition to eliminate a big competitor.

Prediction: David Beckham goes back to Europe.
Result: Nailed this prediction.  Becks came, he played a little bit and created a sensation.  Then David high tailed it back to the Spanish Premiere League.  I think Beckham likes the idea of playing in America, but isn’t really interested in doing it just yet.

Posted in Adidas, Apparel & Shoes, Golf, Nascar, Nike, Sports Brands, Sports Marketing, Under Armour, Venue Naming Rights | Tagged: , , , , , , , | 1 Comment »

Will Tiger return any money to Nike?

Posted by ZA on December 17, 2009

As the scandal around golfer Tiger Woods rages on, sales of Nike Golf apparel are dropping.  Retailers are no longer pushing the Tiger Woods branded Nike Golf line and his absence from the PGA Tour is only going to continue to hurt sales.  Bloomberg estimates that Nike stands to lose approximately $30 million in sales from the current Tiger scandal.  A former CBS Sports executive says “The aura (around Tiger) is gone”.

So the question is will Tiger give any of that money back to Nike?  Woods is almost solely responsible for building Nike Golf division into a half a billion dollar cash cow.  For that Tiger has been paid over $100 million dollars by Nike in his career.  So will Tiger consider giving some of that money back to Nike now – when it’s clear that Tiger’s personal actions are hurting the corporate giant.  I doubt that Tiger would ever hand over a check to Phil Knight, but I do think this will prompt Tiger to give Nike a sweetheart deal whenever his current contract expires.  Sure Tiger has made more money for Phil Knight than Knight has paid to Woods, but Knight & Nike have also stood by Tiger during this scandal.  Knight is the only sponsor who has vocally supported Woods saying that Tiger’s transgressions are just a “minor blip” on his great career.   I’m betting that Phil Knight gets a nice holiday card from Tiger this year.

Posted in Athletes, Golf, Nike | Tagged: , , , | Leave a Comment »

Endorsement Profile: Maria Sharapova

Posted by ZA on December 11, 2009

Athlete: Maria Sharapova
Sport: Tennis
League: WTA
Agent: IMG (Max Eisenbud)
Age: 22   (April 19, 1987)
Rank in SI’s richest athletes: 13 (International list)

Maria Sharapova endorsement deals (thru Dec. 2009):
* Canon
* Cole Haan
* Land Rover
* Nike (athletic shoes & apparel)
* Parlux Fragrances (perfume)
* Prince (tennis racquets)
* Sony Ericsson
* Tag Heuer
* Tiffany & Co

Former Sharapova endorsement deals:
Colgate-Palmolive, Gatorade, Motorola & Tropicana


Maria Sharapova endorsement potential:
Maria Sharapova is the top female endorsement star in the sports world.  Sharapova has competition from Venus & Serena Williams, Danica Patrick, Michelle Wie and Lorena Ochoa; but Maria is still the top endorser among female athletes.  Sharapova’s endorsement success has been helped by her good looks; she was named in 2005 as one of People magazine’s 50 most beautiful celebrities in the world.  But Sharapova is not just another pretty face (i.e.- Anna Kournikova), she is one of the top players in tennis who has won 3 of the 4 tennis major tournaments.

Only in her early 20’s Sharapova is already a global brand, which her sponsors take advantage of by featuring her in advertisements in the United States, Europe and Asia.  She is from Russia, but does not endorse any Russian companies.  But her lineup of endorsement deals is the envy of any athlete in the world.  She has some of the biggest companies on the planet tailoring their marketing campaigns around her name.  Canon has featured Sharapova in new product launches which were so successful that they even made Maria’s dog a star.

What’s next for the tennis superstar slash celebrity slash endorsement queen?  Maybe retirement.  Maria has made comments that she doesn’t plan to play tennis for her another decade.  She’s said she would like to follow the lead of Justine Henin and retire young so she can pursue other life goals.  That means that sponsors who wish to align their brand with the top earning female athlete on the planet better hurry up.  Maria Sharapova is in her prime as an endorsement star, but there may not be that many years left for advertisers to sign her if she decides to follow her dreams to raise a family.

Maria Sharapova commercial for Canon:

Posted in Apparel & Shoes, Athletes, Endorsement Deals, Endorsement Profile | Tagged: , , , , , , , | Leave a Comment »

What does Nike spend on marketing?

Posted by ZA on November 12, 2009

Nike is one of the top brands in sports and the #1 shoemaker in the world.  The athletic apparel and footwear giant was founded in 1964 by Phil Knight and Bill Bowerman.  Formerly known as Blue Ribbon Sports, the company now has recognizable brands across many sectors: Nike, Jordan Brand, Nike Golf, Converse, Hurley, Nike Soccer, Umbro and Cole Haan.

Nike has more than 30% global market share in the athletic footwear category and almost 10% share of the athletic apparel market.  Nike’s market share in the United States is higher, they have almost 40% of the U.S. market.  Nike had almost $19 billion in global revenue in 2008 (source).

Nike reinvests approximately 12% of their revenue into marketing, which includes advertising, endorsements and sponsorship deals.  In 2008, Nike spent almost $3 billion dollars on marketingNike’s U.S. budget is close to $800 million. Nike is seeing strong results from their spending because their 3 top brands (Nike, Jordan, Converse) grew 11% in September, while competitors Adidas, Reebok and New Balance fell by an equal amount (source: AdAge).

Top Marketing Execs at Nike:
Phil Knight – Chairman/Founder
Mark Parker – President & CEO
Charlie Denson – President, Nike Brand
Ken Dice – VP, Marketing – North America
Trevor Edwards – VP, Global Brand
Joaquin Hidalgo – VP, Brand Marketing
Keith Houlemard – President, Jordan Brand
Jared Morris – US Marketing
John Slusher – VP, Global Sports Marketing
Howard White – VP, Sports Marketing – Jordan Brand

nike_swoosh

Posted in Nike | Tagged: | Leave a Comment »