For Adidas, the massive long-term deal demonstrates a commitment to continuing to infiltrate a basketball sneaker industry dominated by Nike (which estimates ownership of roughly 95% of the U.S. basketball sneakers market), with Under Armour quickly expanding its own line of products. Harden joins Damian Lillard of the Portland Trailblazers, John Wall of the Washington Wizards, Derrick Rose of the Chicago Bulls and Andrew Wiggins of the Minnesota Timberwolves as marquee NBA players under contract with Adidas.
Signing Harden was an important move for Adidas if, as now demonstrated, it sought to maintain a real position in the world of basketball. Earlier this year, Adidas chose not to renew a deal with the NBA that had established it as the official outfitter of the league. In came Nike, which signed an eight-year partnership with the NBA worth roughly $1 billion that is set to begin with the 2017-18 season. More recently, Under Armour announced its own global marketing partnership with the NBA, which positions the brand as a title partner and outfitter of the NBA Draft Combine, presenting partner of the Junior NBA program in the U.S. and allows Under Armour to work with the league to launch an NBA FIT mobile application.
Adidas needed to make a major announcement, and quickly, in order to remain relevant in the basketball industry.
Adidas hopes that it can not only exploit Harden's prowess on the basketball court as well as with those following in the United States, but also overseas, with particular emphasis on China. The Rockets have largely remained a fan favorite in the Far East since the days that Yao Ming occupied the area surrounding the basket. The partnership includes Harden traveling on what Adidas calls "extensive brand tours" in Europe and Asia.
Adidas must also be banking that Harden's ability to move merchandise sales is boosted by the deal. Based on overall sales from Adidas and NBAStore.com from October 2014 through December 2014, Harden's was only the fourteenth most popular NBA jersey, behind Lillard, Dirk Nowitzski and Chris Paul. At the top were James and Curry, respectively.
For Harden, $200 million in guaranteed dollars should provide more than enough money to create financial security for the remainder of his life. Harden is currently performing on a 5 year, $78.78 million contract extension signed in October 2012. Add the new money by way of Adidas' deal, along with other endorsement contracts with companies like KT Tape, BODYARMOR and BBVA Commpass, and Harden has little to worry about off the court.
Harden will earn more money from the Adidas deal than what seven-time NBA All Star Tracy McGrady and eleven-time NBA All Star Allen Iverson made throughout their respective careers from on-court earnings.
The deal officially begins on October 1, 2015.
Darren Heitner is a lawyer and the Founder of South Florida-based HEITNER LEGAL, P.L.L.C., which has a focus on Sports Law and Entertainment Law.
