Brand wars have been a part of society for centuries. One of the biggest rivalries around exists between Nike and Adidas. Constant commercials, endorsement deals, and plenty more advertising flood the media daily from these outlets trying to reach consumers and sway their minds.
Just recently, sportswear king Nike began its deal as the official uniform and merchandise provider of the NBA, a title previously held by rival Adidas for 11 years. The partnership, which was made official in 2015, runs for 8 years and will cost the company somewhere in the range of $1 billion. Kicking Adidas out of such a powerful platform should in theory drive sales up tremendously for Nike, while simultaneously push the “Three Stripes” a little further down in the competition. It’s no surprise that jersey sales are already huge in the NBA, where its stars are the most recognizable among any of the main 4 sports. Fans can constantly see LeBron James and Steph Curry flooding their TV’s on commercials promoting Nike and Under Armour, respectively, among other brands.
It should be interesting to see where Nike’s stock goes as well as Adidas’. Currently trading at about $53, one can only assume that Nike will benefit from this recent move and go up a couple dollars over the next year. Considering that they were trading at about $55 a year ago, this move couldn’t come at a better time. Looking bigger picture, over the past 5 years the highest Nike has traded at was a tick over $67 late in 2015; it would be quite the story if they can reach those levels again. It should be noted that the last time Nike struck up a deal with a major league, the NFL in 2012, they saw their stock rise over $1.50 in that year alone.
Adidas on the other hand hasn’t completely suffered losses, as it was recently announced that they surpassed Jordan Brand (part of Nike) as the 2nd highest selling shoe on the sportswear market, still trailing Nike in that category. As we make our way towards the holidays, the money will start flowing and I expect Nike to surge.