Kevin Durant Deciding on Huge Endorsement Deal
- Updated: August 21, 2014
Roc Nation Sports who represent Kevin Durant on Wednesday informed Nike that Under Armour has put together a deal that was worth between $265 million and $285 million over a period of 10 years, sources who requested anonymity have said.
The deal would include stock at Under Armour and other forms of incentives, such as the building of a community center in the name of his mother.
Nike, whose signature business that is related to the forward for the Oklahoma City Thunder is close to $175 million at retail during last season, can match the deal if they choose, which is one of the conditions of the current contract Durant has with the brand.
Durant can also choose Nike even if it does not match but legally is not able to take Under Armour if Nike matches.
The last offer by Nike, said sources, would give Durant a base as well as a minimum guarantee on royalties equal to a minimum of $20 million annually.
If Under Armour were to win Durant’s services, it would be the company’s largest deal for sponsorship ever committed to.
The $26.5 million to $28.5 million average annually means Under Armour would devote close to 10% of its current annual budget for marketing on just Durant.
Although the company has given guidance to investors that if could reach revenues in 2014 of $3 billion, only 1% of that comes from the sale of basketball shoes.
Because the company does very little in the way of basketball business, the company must guarantee the money for Durant up front, unlike the typical shoe deals that give a guaranteed minimum plus as much as 5% royalty in the revenues that are wholesale.
Michael Jordan made over $100 million for example just last year off Nike from the royalties of his Jordan brand.