Under Armour Gambling With $285 Million Offer to Kevin Durant, Says Analyst
Kevin Durant reportedly received a 10-year deal worth between $265 million and $285 million from Under Armour, an offer that could convince the Oklahoma City Thunder superstar to leave Nike.
While acquiring Durant could work wonders from Under Armour, SportsOneSource analyst Matt Powell told USA Today that the apparel company is making a big gamble in offering a lucrative deal to the reigning NBA Most Valuable Player.
Durant, whose KD 7 signature shoe line with Nike has been making waves over the past several months, will greatly benefit from the deal, but the huge contract could back fire for Under Armour, considering the fact that they have less than 1 percent market share in the basketball shoe competition.
"It's good news for Durant, and we'll see how it works out for Under Armour," Powell said on Sunday. "We'll know when we get to the end of it. If they sell a lot of shoes and establish themselves as a significant player in basketball, we'll know. But again, it's really outsized."
Powell also pointed out that Under Armour is set to spend around 10 percent of their yearly marketing budget on Durant alone, and he added that an apparel company has not invested such amount to a single athlete in recent years.
Under Armour's offer is reportedly three times of what the 25-year-old forward is currently getting from Nike, and it will also be significantly more expensive than LeBron James' and Kobe Bryant's deal with Nike and Derrick Rose's contract with Adidas.
"We haven't seen an athlete get that kind of money in a long time for a shoe contract," Powell said. "It's a significant amount of an investment for Under Armour. I estimate it to be about 10% of their annual marketing budget. It's substantial in terms of that as well."
Durant's move to Under Armour is not yet set in stone as Nike holds right to match the offer. Powell said, though, that Nike will likely let go of Durant similar to what they did in October when they let Golden State Warriors superstar Stephen Curry leave in favor of Under Armour.
"The non-Nike brands seem to be willing to pony up some big money whereas Nike has let some athletes walk because Nike wasn't willing to pay big money," Powell said. "Nike's sending a clear signal that they're not seeing the return on investment on big-shoe contracts."
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