Boston, MA 09/04/2014 (wallstreetpr) – Under Armour Inc (NYSE:AU) lost the battle to Nike Inc. over the endorsement of the NBA star Kevin Durant. The Company initiated the offer of $200 million to Durant with the advent of the expiry of the previous contract with Nike.
Mega deals failure
However, Nike countered the bid with $350 million for 20 years including $300 million as endorsement for ten years and retirement and other benefits. It became the second lost in major endorsement deal for Under Armour after the bid of $1.3 billion by Adidas AG for Manchester United.
Under Armour Inc (NYSE:UA)’s CEO, Kevin Plank, did not discourage with the failure of major deals rather the Company expressed its interest over all kinds of deal. In an interview with Bloomberg, Mr. Plank said the Company wanted to inform the president of every team club, every director of athletic and every commissioner of a league that we will address the endorsement requirement if you have any such deals.
Shifting focus
Despite the Company have the potential; Under Armour Inc (NYSE:UA) is now shifting its focus on targeting mega endorsement deals.
Mr. Plank also stated that the Company has positive growth, though ten times less than Nike, and can spend on marketing while endorsing any athlete, league or team.
Therefore, UA did not challenge Nike in the deal and believed that the additional $150 million will create new opportunities for the Company. The Company already expanded its operation from football jerseys to shoes, bags and yoga wear.
Under Armour Inc (NYSE:UA) avoid the battle with two sporting legend Nike and Adidas in endorsement deals rather prefer lesser-known players like the Premier League’s Tottenham Hotspur and the NBA’s Brandon Jennings.
Now, the Company is focusing on promoting sports apparel for women and recently, UA signed the supermodel Gisele Bundchen to promote the products for women.
