Adidas takes new shot at US market with NBA Harden deal
NBA star James Harden will soon be dribbling the ball with Adidas sneakers on his feet as the German sportswear maker hopes to retake U.S. market share from basketball giant Nike and number two Under Armour.
Signing up the Houston Rockets guard in a reported 13-year, US$200 million deal aims to make Adidas trendy in a market where it has been caught flat-footed before.
Charismatic Harden, 25, known as “The Beard” to his fans and voted the NBA’s second best player last season, will switch from Nike to wear Adidas shoes on the court, and its gear in social settings, from October.
Adidas has stayed quiet about the sum reported by ESPN, but confirms it is taking a big bet on basketball.
“His connection with the fans is unique and unprecedented,” an Adidas spokesman told AFP, noting that the salary will be linked to athletic performance. “He can take the game and our brand to new heights.”
In a market where teenagers love custom sneakers, Adidas is taking on number one Nike, which already sponsors superstars LeBron James, Kevin Durant and Kobe Bryant.
“Adidas is changing its marketing strategy,” said Cedric Rossi, an analyst at investment bank Bryan Garnier.
“It no longer sponsors the NBA league, but it is backing a few key players ... Consumers associate and identify with these stars much more easily.”
Nike will, meanwhile, take over from Adidas as NBA’s official apparel supplier from the 2016-17 season.
From then, Adidas will reallocate the US$10 million a year it paid to the league to individual players, said Rossi, explaining the value of Harden’s contract.
“We must not forget that it is for about 13 years. In the end, he makes US$15 million a year.”
Autonomy in the US
Adidas pulled out its checkbook because the stakes are high for CEO Herbert Hainer, who is under pressure from shareholders.
The sportswear maker was relegated last year to number three rank in the U.S. market, behind newcomer Under Armour.
Adidas, a giant in soccer-obsessed Germany, presented a new strategy in March for the market across the Atlantic.
“The United States has always been a problem,” even in the time of Robert Louis-Dreyfus, its former chief, recalls an ex-company executive.
“The view of Adidas has always been a European vision on the U.S. market ... We never allowed the U.S. to work as entrepreneurs.”
He said this could have included adapting its marketing strategy and, for example, investing in university sports.