After a much publicized flirtation with Under Armour, Oklahoma City Thunder star Kevin Durant resisted the advances of the Baltimore-based brand and decided to re-up his contract with Nike. The Swoosh reportedly offered Durant $350 million over the next 20 years, giving him $300 million of that in the next 10, according to the Wall Street Journal. Durant’s initial contract with Nike was for $60 million. Guess that’s what happens when you’re the reigning MVP.
Durant’s signature kicks accounted for $175 million in sales for Nike last year, coming in second to Nike’s prized possessions—LeBron James’s signature shoes, which hit $300 million, according to Matt Powell. With Durant’s popularity and on-court success rapidly rising, those numbers will likely only go up. Under Armour, which made waves by signing Stephen Curry away from Nike last year, will have to look elsewhere for another marquee player for their basketball brand.
So what does this all mean?
For starters, it allows Nike to hang on to a crucial member of its Big Three. With Kobe Bryant nearing retirement, losing Durant to another brand would have been a blow to Nike’s basketball roster. It also allows them to capitalize on the massive success of the KD VI, one of the most popular basketball shoes last season. The KD VII hasn’t elicited quite as much hype, but once the season begins in October, sales of the shoe should pick up steam. Locking Durant up for the new two decades also allows Nike to take chances with the KD signature line down the road. The KD VII feels like a safe shoe, whereas its predecessor was a riskier design that ended up paying off.
The deal allows Durant to stay with the same brand for his entire career and create a memorable line, like LeBron and Michael Jordan before him. Leaving a basketball behemoth like Nike for a brand that has yet to establish itself in the basketball space would have been a major risk. Durant would have been the face of the brand and would have raised Under Armour’s basketball profile, but he would have had to start from scratch on his signature line. Why fix something that isn’t broken?
In conclusion, Nike is still the leading player in the basketball market. Though they certainly had to overspend to keep Durant, it was clearly worth it to them to maintain their partnership with one of the best basketball players on the planet. Durant’s signature line will continue deep into the future.