Under Armour 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.
Under Armour is reportedly offering Durant — who has long been loyal to Nike — a package worth as much as $US285 million over 10 years.
It would be Under Armour’s biggest endorsement deal, representing about 10% 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%. By comparison, Nike is estimated to control 96% 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 Baltimore Sun. “Having him on board would give them additional credibility in their basketball category.”
Wall Street is betting on Under Armour’s ability to chip away at Nike’s empire. The stock is up more than 1,000% over the past five years.
But it’s still considered a clear underdog. Under Armour has a market cap of just $US15 billion compared to more than $US68 billion for Nike.
The company has experienced massive growth over the last two decades, but it’s sales are still only a tiny fraction of Nike’s.
When Under Armour was founded in 1996, it had $US17,000 in revenue. This year, it’s expected to bring in $US3 billion. By comparison, Nike is expected to bring in $US28 billion this year.
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