July 28, 2016
Can Curry “Just Do It” For Under Armour?
Golden State Warriors point guard Steph Curry, who led his team to a contentious 7-game NBA Finals series against the Cleveland Cavaliers, is one of basketball’s most influential players. Curry’s family-oriented approach to life has captured the love and affection of fans nationwide. The two-time MVP is also solidifying his reputation as one of the best basketball players in history, having broken his own record at 402 made three-point shots in one season. Taking the stage as one of the all-time greats, it is only fitting that Curry would pursue the most strategic consumer alignment deals.
Nike pioneered the idea of brand dominance based on athlete endorsement and exclusivity deals in 1983 when the shoe company endorsed Michael Jordan. Fast forward to 2014, when Nike accounted for 95.5% of the basketball sneaker market, according to Forbes. Now, Under Armour is attempting to chip away at Nike’s long-held dominance and become competitive in the sports merchandise arena by capitalizing on Curry’s fame and his fans’ loyal following.
When Nike was founded in 1964, the company originally made only running shoes. They established their classic swoosh – one of the most recognizable brand symbols in the world – and the unforgettable tagline: “Just Do It.” In 1983, however, the company began to see a quarterly loss. Nike knew it needed something big to remain relevant within its industry. And as we all know, this meant signing Michael Jordan. They drafted up a contract and was able to capture the biggest name is basketball. This game changing endorsement launched Nike into the basketball sponsorship sector. As Jordan’s fame and success grew, Nike captured his influence and turned it into major monetary benefits.
Nike has been around for 60+ years and has honed its brand in order to retain its number one spot in the basketball market, in addition to other sports apparel and clothing items. Under Armour is copying this exact formula with the hopes of changing the industry and growing their business.
When Curry began his basketball career, he signed an endorsement deal with Nike – a deal which could have brought Nike the same success as they saw through Jordan’s career. But at the end of the 2013 season, with Curry’s Nike contract up for renewal, Nike blew the pitch and lost one of the biggest stars in the world to a major competitor. With such a strong association, Under Armour now has the resources to form a brand presence in the NBA that could eventually rival Nike, and the potential impact of a contract with a player like Steph Curry on the revenue of a multi-million dollar brand is astronomical.
After decades of Nike’s brand dominance, Under Armour now has an opportunity to change the merchandise game entirely, just like Nike did in the 1980’s. Curry is poised to go down as one of the best players in basketball history, and Under Armour stands to profit big time.
Even more significantly, Curry’s choice to sign with Under Armour has also re-established the idea of ‘competition’ within the basketball clothing market. Inc.com reported that, Morgan Stanley analyst Jay Sole, assessing Under Armour’s future prospects, concluded: “UA’s total basketball business is probably double (in terms of retail sales), and even its non-Curry styles have grown at a super-high rate. The growth could be…a tipping point signaling the end of Nike’s basketball dominance….This will be especially true if the Curry effect is so strong, he puts a halo over the entire brand, which benefits its apparel and running footwear businesses.”
While Under Armour gets a lot of attention for fast growth within the basketball merchandise market, it is important to remember that Nike remains far ahead of its Baltimore-based rival and remains the market leader for basketball footwear and apparel on a global level. Curry’s deal with Under Armour gives the brand the opportunity to use his fame to catapult their brand recognition among new audiences.
Only time will tell if Under Armour can topple the long-reigning kingpin of the sports merchandise industry and pick off other star athletes to represent the brand. But if they find success with a few more key athletes and capitalize on their individual fan bases, we are likely to see Under Amour top its sales of $200 million worth of Curry gear during the 2015-2016 season sooner rather than later.
LEVICK Fellow Eleanor Brow contributed to this post.