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When Under Armour went all in to sign Kevin Durant during the summer of 2014, the appeal was clear from the start.
Durant was the reigning league MVP, an Olympian and perennial All-Star starter. He headlined one of the Western Conference's elite teams. He was a pure scorer with a jump shot every young kid looked to emulate. He was even from Maryland, where Under Armour's founder, Kevin Plank, has called home his entire life.
From a marketing standpoint, his on-court dominance, coupled with a clean and wholesome public image, made him a favorite of parents as well. All of those factors contributed to his successful KD sneaker and clothing line with Nike, which had just sold $85 million in shoes that season. During that same 2013-2014 season, the entire Under Armour basketball category sold $30 million in sneakers.
Durant had it all, and Under Armour acted accordingly, offering the Thunder star 10 years and $285 million, multiple brand sources told The Vertical. It was an unprecedented offer in the sports marketing world.
There were plans to build a $10 million community center in Washington, D.C., in Durant’s mother’s name. Additional company stock was even incorporated into the offer, the value of which we'll never know. Durant could've single-handedly shifted the trajectory and long-term valuation of the entire company.
The brand committed to work hand-in-hand with Durant to build a signature collection of footwear and apparel. There was even talk of launching a KD-only signature retail store along the East Coast.
When Durant ultimately passed on the Under Armour offer – his bond with Nike being too strong – he announced the news with a simple tweet.
Under Armour was devastated.
As it turns out, it was the best thing that could've happened to them.
Durant's injury issues
While players in today's social-media era can connect with fans across different platforms and make lasting imprints with real-time direct marketing, the greatest impact on an athlete's business will always come from the court.
Had Under Armour signed Durant, it would have had to endure the partnership’s difficult start. The reigning league MVP played 27 regular-season games in 2014-15 because of a foot fracture, and several marketing executives in the industry told The Vertical that Under Armour would've taken the blame for the misfortune. Durant eventually underwent three surgeries in a six-month span to correct a Jones’ fracture in his right foot.
“It would have had a huge impact,” a footwear industry consumer insights director told The Vertical. “It would have made what they did with Steph [Curry] look like a fluke.”
This was a post-Derrick Rose world, where the consensus among hardcore sneakerheads and casual basketball players was that the athletes’ shoes were to blame for injuries, no matter how unproven the claims were.
If Durant were suffering recurring foot issues in his very first year with Under Armour, few think the brand – which launched basketball shoes at retail in the fall of 2010 – could have recovered.
“I think it would have been as devastating as Derrick Rose's ACL injury [in 2012] was to adidas,” one industry marketing source told The Vertical. “Nike has the brand equity to survive injuries to their signature athletes. When injuries happen to star players at competing brands, consumers often assume it's the fault of the sneaker brand the athlete is wearing. Yet, with Nike, consumers never blame the product.”
That lack of blame across the industry is a credit to the equity Nike has long established in basketball, where it has enjoyed more than 90 percent market share for nearly a decade. Gaining that consumer trust is a quest adidas and Under Armour are still after.
Not only would the Durant injury have been a lot to overcome, but Under Armour would've also had to allocate extraordinary resources to helping Durant overcome his injury issues, as well as marketing expectations and activations. That likely would've taken away from Stephen Curry's rise during the 2014-15 season.
Curry has diplomatically said he would've welcomed Durant to Under Armour, but as a proud competitor, he was also looking to establish himself as the face of the brand.
“Obviously, it didn't happen, but any time that you can lift the brand to new places, however you get it done, I want to be a part of that,” Curry said after Under Armour missed out on Durant. “I don't think anyone would come try to trump my position. Obviously you've got bigger names and what have you, but I'm trying to elevate my game to that level.”
The rise of Curry
Curry debuted his first signature shoe with Under Armour during the 2014-15 season, and became everything that was expected of Durant: MVP. Team leader. All-Star starter. Fan favorite. NBA champion.
“A lot of people questioned [my] decision [to sign,] and Under Armour was up and coming and hadn't hit that threshold yet,” Curry said at the launch of his first signature shoe. “That was something that I saw the potential in for the partnership to grow.”
All on his own, Curry has changed the direction of Under Armour. In the summer of 2014, the brand was earning roughly $3 billion in revenue, with just 1 percent of that coming from the basketball category. Under Armour had just .35 percent market share in the overall basketball footwear space.
The following year, the brand's revenue leaped 28 percent to $3.96 billion. Just two years later, the company has reported a 2016 net revenue outlook of $4.95 billion. Plank credited Curry's footwear sales and the growth of basketball with helping to create a halo effect across the entire company.
“Stephen’s impact on our brand was immediate,” says Kris Stone, Under Armour's director of pro basketball sports marketing. “What's great about Stephen is that he loves the game and he enjoys competition. He plays with a smile on his face and is always having fun on the court. Not a lot of people can be fiercely competitive and also play with an almost childlike joy.”
It's that childlike joy and penchant for the unthinkable that has since allowed Curry to become such a marketable star, but his journey through the league was hardly off to an assuring start. After beginning his career with a string of ankle injuries that forced him to miss large chunks of his third season, Curry has been remarkably healthy over the course of his time with Under Armour, playing 78, 80 and 79 games over his three seasons with the brand.
The good fortune that Curry and Under Armour have experienced together has gone a long way toward affirming the partnership, with Curry now facing Durant and the Thunder with a trip to the NBA Finals on the line.
Just after Curry and the Golden State Warriors won the franchise's first championship in 40 years last summer, Curry and Under Armour agreed to an eight-year extension that expires in 2024 and pays Curry eight figures annually.
The deal also includes expanded plans for Curry's signature sneaker line, with additional team and lifestyle models, as well as more basketball camps, promotional tours throughout Asia and marketing resources for new ad campaigns.
“It's very small and family style, where everybody is involved,” Curry said of his relationship with the brand. “That's a big reason why I joined the team, and I could tell from Day One that they really cared about me, about the product and cared about the athletes that they signed.”
That approach has been working as the two are riding the wave of Curry's back-to-back MVP seasons. In the fourth quarter of 2015, the brand's footwear sales jumped 95 percent from the year before, thanks in part to the launch of the Curry Two sneaker. To celebrate the first unanimous MVP in league history, the brand unveiled a special “Back2Back” two-shoe pack on the morning of the MVP announcement.
The success of Curry and Under Armour is creating an awareness and audience with the next generation of players. That’s not a knock on Durant, as he and Nike are continuing to enjoy their partnership and will be releasing the ninth KD signature shoe later this summer. The rise of Under Armour without Durant has simply been a credit to Curry's unprecedented play on the court.
“The process is getting easier and easier with young players that understand who we are as a brand,” Stone said. “Steph just takes it all over the top, and he’s showing kids that you can play at the highest level in our footwear and be successful.”
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