Under Armour wants Kevin Durant's help to fight Nike

The athletic-wear underdog could be offering a huge contract to the basketball star.

By MSN Money Partner Aug 22, 2014 2:01PM
Credit: © Sue Ograki/AP Photo
Caption: Oklahoma City Thunder forward Kevin Durant (35) shoots a technical foul shot in the second quarter of Game 4 of the Western Conference finals NBA basketball playoff series against the San Antonio Spurs in Oklahoma CityBy Hayley Peterson, Business Insider

Under Armour (UA) is beefing up its endorsement deals in a crusade to topple Nike's athletic-wear empire.

The Baltimore-based company has been scoring a number of key endorsements lately, including golfer Jordan Spieth.


Now, it's going after one of the biggest stars in basketball -- Oklahoma City Thunder forward Kevin Durant (pictured).


Under Armour is reportedly offering Durant -- who has long been loyal to Nike (NKE) -- a package worth as much as $285 million over 10 years.


It would be Under Armour's biggest endorsement deal, representing about 10 percent of its annual marketing budget, according to ESPN.


The record-setting deal is intended to widen Under Armour's share of the basketball market, which now stands at less than 1 percent. By comparison, Nike is estimated to control 96 percent of the market. 


"[Durant's] one of the premier basketball players in the country," Matt Powell, a retail analyst and owner of Princeton Retail Analysis, told the The Baltimore Sun. "Having him on board would give them additional credibility in their basketball category."


The move by Under Armour comes shortly after it launched its largest-ever global women's marketing campaign. And earlier this year, the company scored the biggest equipment deal in college sports. 

Wall Street is betting on Under Armour's ability to chip away at Nike's empire. The stock is up more than 1,000 percent over the past five years. 


But it is still considered a clear underdog. Under Armour has a market cap of just $15 billion compared to more than $68 billion for Nike.


The company has experienced massive growth over the past two decades, but its sales are still only a tiny fraction of Nike's.


When Under Armour was founded in 1996, it had $17,000 in revenue. This year, it is expected to bring in $3 billion. By comparison, Nike is expected to bring in about $28 billion this year.

--Chart credit: BusinessInsider.com


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3Comments
Aug 22, 2014 2:19PM
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$285 million endorsement deal for KD?  I can't wait to start spreading that wealth around.

Sincerely,
Barack Obama
Aug 22, 2014 4:28PM
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Our whole nation has gone insane listening to this nonsense, here.  The "younger" generations will be led to slaughter and have not one idea of anything going on in the world ... forget the "markets" as they mean nothing and never will.  It is done and over and that should be quite obvious for anyone with a brain. Have a nice weekend, all.
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