Roc Nation Sports announced that Under Armour made a $285 million dollar offer to the league MVP with strong incentives. The move put Nike, who currently endorses Durant, on notice. Hit the jump for details.
Via ESPN:
Kevin Durant’s representation, Roc Nation Sports, informed Nike on Wednesday that he has a deal on the table with Under Armour worth between $265 million and $285 million over 10 years, sources told ESPN.com.
The deal includes Under Armour stock and other incentives, such a community center built in his mother’s name, whose exact worth will not be known for some time.
Nike, which saw its signature business related to the Oklahoma City Thunder forward grow to roughly $175 million at retail this past season, will now have the right to match, which is a condition of Durant’s current contract with the brand. Durant can still choose Nike if they don’t match, but can’t legally choose Under Armour if they do.
Nike’s last offer, sources said, would have given Durant a base and a minimum royalty guarantee that would equal no less than $20 million a year.
If Under Armour wins the services of Durant, it would be the largest sponsorship deal the company ever has committed to. The average of $26.5 million to $28.5 million means that Under Armour would be devoting nearly 10 percent of its current annual marketing budget on him. Although Under Armour has given investors guidance that it might hit $3 billion in revenues this year, only about one percent of that is from basketball shoes.
Because Under Armour has such a small basketball business, the company has to guarantee Durant his money up front, instead of the typical shoe deals that offers a minimum guarantee plus up to five percent royalty on the wholesale revenues. Michael Jordan, for example, made more than $100 million last year from Nike largely from royalties on sales of his Jordan brand.
We wonder if Nike plans on matching the deal, Durant is one of the most popular players that is in the prime of his career.
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