SBD/June 19, 2017/Marketing and Sponsorship

Nike Signs Projected No. 1 NBA Pick Markelle Fultz To Multiyear Endorsement Deal

Fultz has worn Nike throughout his college, high school and AAU career
Markelle Fultz, the projected No. 1 pick in Thursday's NBA Draft, has "agreed to a multiyear show deal with Nike," according to Nick DePaula of THE VERTICAL. Fultz said, "Growing up, I always wore Nike shoes. I always wanted the newest Jordans and the newest Nikes." DePaula noted there was "aggressive interest from adidas and Under Armour." Sources said that offers from each brand "topped" $1.5M annually with "additional incentives for earning NBA Rookie of the Year honors." Some brands also "offered a $500,000 signing bonus." However, Fultz was "focused on Nike from the start" due to his "familiarity with the brand's sneakers on the court and his love for wearing a variety of Nikes and Jordans casually off the court." His deal with Nike "doesn't include a signature shoe just yet, as the brand will look for Fultz to lead its newest statement-level team sneakers and establish himself in the league" (SPORTS.YAHOO.com, 6/16). In Seattle, Percy Allen noted Nike has deals with the last two No. 1 overall picks -- 76ers F Ben Simmons and T'Wolves C Karl-Anthony Towns (SEATTLE TIMES, 6/17). USA TODAY's A.J. Neuharth-Kensch noted Fultz shortly after announcing his deal with Nike on Twitter "retweeted a tweet that said he should have signed with Big Baller Brand" (USATODAY.com, 6/16).

STILL DEMAND FOR NIKES? CNBC's Scott Wapner noted Nike shares on Friday were downgraded by JPMorgan analyst Matthew Boss, causing the stock to be the “second-worst performer on the Dow” for the day. Boss said, "We’re seeing a move more from performance to lifestyle. ... This North American marketplace is just really in a consolidation mode and from a brick-and-mortar standpoint, we think Nike may be the one that faces the most disruption." Boss: "Nike could out-innovate. Nike could out-muscle its competition. I think that’s going to be harder for them to do in the next couple of years.” CNBC contributor Josh Brown: “I actually wholly disagree with the premise that it's more important to be concerned with the distribution of the products versus the demand. The demand for the products is incredible, that's not changed and ... no one should be surprised they have strong quarters and weak quarters. Bigger picture from Nike's perspective, they've invested a lot in e-commerce, they invested a lot in marketing online. They were doing that before a lot of other brands. They'll figure out how to get the product to customers" ("Fast Money Halftime Report," CNBC, 6/16).
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