Why Nike Owns U.S. Olympic Basketball

Why Nike Owns U.S. Olympic Basketball

7/20/2012
Twenty years ago, Michael Jordan found himself in the middle of the basketball shoe war between Nike and Reebok at the 1992 Summer Olympics in Barcelona. Jordan was the face of Nike, but Reebok was the Olympic medal stand uniform outfitter. The Dream Team, led by Jordan, rolled through the Games and won the gold medal. Come podium time, Jordan draped an American flag over his right shoulder, covering the Reebok logo, as did fellow Nike endorsers Charles Barkley and Magic Johnson.

There was potential for more conflicts this year as Adidas is the official sponsor of the London Games, but Nike is the official sponsor of the U.S. basketball team and will provide the uniforms and medal stand apparel (click here for a preview).
Team USA is the overwhelming favorite to win basketball gold, but there will will not be a repeat of 1992 on the medal stand as there are no Adidas or Reebok athletes on the U.S. Olympic team. Nike signed No. 1 overall draft pick and newly appointed Team USA member, Anthony Davis, this week to
a multi-year contract. Davis represents the 11th member of the U.S. team that is part of the Nike family. The one player not on the Nike payroll, Kevin Love, has a deal with Chinese shoe company 361 Degrees, but Love wears Nikes on the court. Even the coach of the U.S. team, Mike Krzyzewski, has a long-term endorsement deal with Nike. The battle for basketball shoe supremacy is long over with Nike winning by knockout.

Adidas put its basketball marketing resources behind Dwight Howard and Derrick Rose, but both players will miss the Olympics because of injuries resulting in a clean sweep for Nike on the court. Adidas locked up Rose for 13 years in 2012 in a deal worth $185 million that could exceed $200 million, including royalties. The deal kicks off with the 2012-13 season.

Rose and Adidas are fighting an uphill battle against the Swoosh. Nike commands 92% of the U.S. basketball shoe market year-to-date, including the 58% share of Nike subsidiary Jordan, according to research firm SportsOneSource. Adidas is left with 5% of the pie, while Reebok, owned by Adidas, has a 2% share. And1, Under Armour and Fila control less than 1% of the market combined.

Wholesale sales of Rose’s shoe were $25 million in 2011 in the U.S. compared to $40 million for Kobe Bryant’s shoe and $90 million for LeBron James’ signature Nikes says analyst Matt Powell at SportsOneSource. The Jordan Brand remains the top seller with sales of $1 billion last year in the U.S. The Adidas Crazy Light 2 basketball shoe ranked No. 52 and No. 90 among top selling basketball sneakers during a recent July week. Every other style in the top 100 best sellers was a Jordan or Nike model.

Nike uses its top endorsers, James, Bryant and Kevin Durant, to spread the Nike basketball gospel globally, while Carmelo Anthony and Chris Paul have signature shoes with the Jordan brand. Bryant sells twice as many shoes in China as he does in the U.S. Bryant was the biggest and most popular star of the 2008 Beijing Olympics. Nike regularly sends its top basketball stars to Europe and and Asia to promote Nike. The Olympics are another opportunity to push the Nike brand to the world.

The world will be watching the U.S. basketball team, which is expected to be one of the biggest draws of the London Olympics. They will see one Swoosh after another. Just the way Nike likes it.