adidas has "dropped its bid to extend its apparel contract" with the NBA and instead will "focus on developing new products, endorsing more amateur teams and doubling its roster" of NBA players, according to Matthew Kish of the PORTLAND BUSINESS JOURNAL. The brand has been the league's apparel partner since it "signed an 11-year deal" in '06 for a reported $400M. The company had "been in talks with the NBA about an extension since 2012 but this month decided to walk away." However, a source said that adidas last week was informed the NBA "planned to open the competition to other bids as a result of Adidas falling behind its competitors." Kish reports the move by the NBA "likely meant Adidas would have been a longshot to renew." adidas Global Basketball GM Chris Grancio said that the deal "hasn't been as lucrative as hoped." Grancio: "We haven't been able to elevate our brand for the basketball consumer that we're targeting." Kish notes with adidas "out of the picture, Nike or Under Armour will likely be the league's apparel partner" starting in '17. Both are "expected to bid" on the NBA contract. Despite the move, adidas "isn't de-emphasizing basketball." Grancio said that the sport "remains a core part of the company's business" with annual sales around $1B, "including basketball-related sales in other adidas divisions." Grancio: "We're going to invest more money in basketball over the next five years than we ever have." Grancio added that adidas hopes to "double its roster of NBA players from 70 to 140" by '20. He added that the company will "invest more in high schools and college teams," as well as "improve the look of basketball products with the help of a group of four new basketball designers" (BIZJOURNALS.com, 3/16). adidas has "fallen further behind" Nike in the U.S., and CEO Herbert Hainer "has said North America will be a priority for the German group in 2015" (REUTERS, 3/16). ESPN's Darren Rovell notes adidas' announcement "is a proactive move," as it would be "hard for NBA to keep them when they've slipped to #3 behind Nike & UA" (TWITTER.com, 3/16).
