May 22, 2003

Tonight we'll find out who wins the NBA Lottery picks and, fundamentally, who gets to draft LeBron. How do you celebrate if you're the most hyped player to come out of high school in years? Sign a $90-million endorsement deal with Nike. To put that in a bit of perspective, Michael Jordan's first deal with Nike was for five years and $2.5 million. In a more modern time, Tiger Woods' first deal was 5 years $40 million. At more than twice Tiger's initial contract, LeBron is getting a whole lot of money.

posted by Ufez Jones to basketball at 01:14 PM - 22 comments

so Nike thinks that over the course of this contract, they will make over 90 million dollars more in sales than they would have if Lebron was not signed? That's ridiculous. I don't understand these endorsement deals... never have. Nike is so well known right now that they could stop 100% of their marketing for a full year and still dominate the market... what's the point of spending another 90 million on it?

posted by Bernreuther at 01:35 PM on May 22, 2003

The deal's huge, but keep these numbers in mind: Nike has a $15 to $20 million yearly ad budget and a single Super Bowl commercial sells for around $1.5 million. Today's publicity alone is probably worth a few million to Nike, which is all about putting itself where the hype is. The thing that kills me about James is that nothing he does in the league can possibly live up to the legend. He could be the real "next Jordan" and it would only be meeting expectations.

posted by rcade at 01:40 PM on May 22, 2003

I hope he tanks. I hope he ends up in a city where his hype will still not be enough to draw fans to see the terrible team (ie, Denver), and every dollar spent on him, by teams, shoe people, other endorsements, networks, etc, will be a total waste. I hope those taken after him (Carmelo, Darko, etc) outperform him in every possible way. And it's not that I dislike Lebron. In fact, I think he's probably humbler and classier than most of the NBA, and handled this better than most teenagers would. But I do hate that he's been blown up so much by the damn media, and I'd love to see it blow up in their face. And if he fails, he's still rich, so who cares. (someone didn't sleep enough last night and is one of those moods)

posted by Bernreuther at 01:56 PM on May 22, 2003

Word has it Nike also picked up Carmello as well.

posted by jasonspaceman at 01:57 PM on May 22, 2003

yeah. noone will say how much they paid him.

posted by Bernreuther at 02:42 PM on May 22, 2003

And it's not that I dislike Lebron. In fact, I think he's probably humbler and classier than most of the NBA, and handled this better than most teenagers would. Let's hope it stays that way. Any time I see a situation like this, I get that little echo in the back of my head that murmers Len Bias. Regardless of all the hype and millions of dollars, I'd hate to see something like that happen again.

posted by Ufez Jones at 02:47 PM on May 22, 2003

The NBA and NFL Draft and time leading up to them are probably my favorite non-playing sporting events of the year. Hooray for drafts!

posted by corpse at 02:49 PM on May 22, 2003

On why Nike would pay so much - I heard an apocryphal story that Coca-Cola continued to advertise (and spent quite a bit on it) to make the market more difficult for rival soft drink companies. By driving up the costs of advertising, they were putting the squeeze on Pepsi. I heard something similar from someone who worked at Anheuser-Busch. One year Augustus, or Adolphus, decided not to advertise, because it seemed like a tremendous waste of resources with all of the Busch brands in the lead. So they didn't advertise and sold just as much beer as the year before. But all of their competitors improved their sales. So they returned to advertising. Nike won't get $90 million in return on LeBron. But they really don't want Reebok or Adidas to have him.

posted by BobbyLove at 04:09 PM on May 22, 2003

Oh, and I'm always amazed at the "talent" rule - that in all walks of life evaluators always pick the person with the most talent as the person most likely to succeed. In hindsight, though, in most endeavours, success is the result of talent, work, luck, perseverance, etc., etc.

posted by BobbyLove at 04:11 PM on May 22, 2003

Nice point BobbyLove. I think it comes down to shutting Reebok and Adidas out. Nike is aware that their name recognition rode on the back of MJ. Bernreuther suggests that Nike could stop advertising and would still be fine at this point, but you only need to recall when Converse ruled the basketball universe. All it takes is a few years out of the public consciousness, and you're suddenly that shoe company that dropped the ball, hanging out with Mr. IBM and Mrs. Atari.

posted by jacknose at 04:19 PM on May 22, 2003

Nike won't get $90 million in return on LeBron. But they really don't want Reebok or Adidas to have him. This is an excellent point. It also sounds very steinbrenner-esque. But while George is competing to win, Nike really has less to gain. I wouldn't lower my bottom line just to keep another company from spending their money (and thus lowering theirs). It's bad business. The segment I just saw mentioned a pretty good list of things they plan to do with Lebron, so maybe the loss won't be as big as I expect, but I still can't think of any way that they'll make more than that money back... and if in the end, the bottom line gets lowered, who really cares what shoe he's wearing? I'm not as anti-endorsement as I sound, but there just comes a point where, as Reebok put it (truthfully or not, since some say they offered more), it's just plain a bad investment.

posted by Bernreuther at 05:26 PM on May 22, 2003

Cavs won. I wonder who they will take. Bigger story is that the Pistons got number dos, they certainly need the scoring.

posted by corpse at 08:04 PM on May 22, 2003

please please please please let carmelo go to Detroit and not Darko... That'd be an awesome stroke of luck for him to go to a contender, and not be banished to Denver and wasted...

posted by Bernreuther at 08:40 PM on May 22, 2003

Well, as a Pistons fan, and one who is starting to worry about a sweep, I am speculating on their draft choice, too. The problem is, Joe D(umars) is pretty hard to read on draft choices (or free agency, for that matter). Last year, if you had told me, or most any NBA pundit "They're getting rid of Stackhouse and bringing in Richard Hamilton, Chauncey Billups and drafting Tayshuan Prince" I would have cried. When they drafted Prince, I was disappointed. I saw him a lot in college (being a Louisville fan) and was unimpressed. But he's certainly turned out to be an excellent pick. Will probably be an excellent team player (I say a 13 - 6 guy) for a long time. Chauncey and Rip didn't look great to me in free agency. I still saw Chaunce as the Boston guy, and he's a lot better, and Hamilton is becoming one of my favorite players. I saw in some report in the Free Press that Jordan thought he 'stole' Stack from Dumars for Rip. Yeah, okay, MJ... Why don't you steal Don Reid from us for Jared Jeffries (egads! the Wiz roster is horrible!). My guess would be Darko, as most mock drafts seem to be leaning towards. I have not seen a lot of Anthony, but I've seen no D from him, and that would be a requirement. I think they almost more need a stopper who can truly handle a Tracy McGrady of Jason Kidd, than they need a scorer. They need a Bruce Bowen or Doug Christie. But a post scorer would be excellent, as those are always hard to come by, and Darko could dominate the East. Let Memo be the best backup center in the league. I'm almost more interested with who Detroit can dig up with the 25th pick. Has anyone looked at ESPN's mock draft? It takes a lot of the fun out when you don't recognize half of the players...

posted by BobbyLove at 09:30 PM on May 22, 2003

That mock draft link is interesting, bobby. Looks like another big year for the furriners. I like that they're looking abroad more now (says the guy who's team has a German, a Canadian, two Frenchmen, and a Mexican). But yeah, with all of the foreign borne talent and the high schoolers coming out, it's getting harder and harder to know who the hell these people are. Oh, and what if this actually happens?

posted by Ufez Jones at 10:57 PM on May 22, 2003

Damn, we'll be having some interesting discussions in the run up to the draft just figuring out who of these guys will be doing anything in the league next year or five. I was particularly surprised to see that mock draft show the Warriors taking a shooting guard, even if Arenas does leave for the Lakers or Grizzlies, when the biggest whole they have and have had is for an own the paint center.

posted by billsaysthis at 11:31 PM on May 22, 2003

Everybody but LA and SA needs an own-the-paint center. I'd rather have a Vlade myself. Somebody who can outlet the ball and who can play all the phases of the game, but who doesn't need to have the ball on every possession. I seem to remember reading that Alonzo Mourning has been cleared to play, but I would be worried (if I were a GM) that he would be a Dikembe - slow up and down the floor, and complaining if he didn't get enough touches. Oooohh... maybe Detroit can get Darko and Vlade! That would rock! I don't know what Vlade's free agency status is, or anything... but that would be a nice pair. Vlade could bring Darko along (maybe play them both at once). One free agent center to consider, too, is Olowokandi.

posted by BobbyLove at 07:03 AM on May 23, 2003

I don't think LeBron will refuse to play in Cleveland, he'll probably be involved in selecting the coach personally, behind the curtain of course.

posted by corpse at 07:25 AM on May 23, 2003

Apparently he won't refuse playing in Cleveland. In fact, he seems to have changed his tone quite a bit: The Akron high school superstar says he's going to make Cleveland the way it was before Michael Jordan regularly ruined Cavaliers' seasons when he was playing with the Chicago Bulls. He says he's watched the Cavaliers since he was a little boy, is excited about wearing the team's wine-and-gold uniform and hopes to put a lot of smiles back on people's faces in Cleveland. And for those curious, the above-linked article says that the $90 million contract is for seven years.

posted by Ufez Jones at 08:55 AM on May 23, 2003

BLove, i only meant that the gsw's (the other meaning of that TLA just hit me and I'm pausing to laugh as it's so on target) need a real center, because Dampier sure isn't an answer, and they've had decent luck with guards already.

posted by billsaysthis at 11:02 AM on May 23, 2003

But hey you've got Adonal Foyle! He writes poetry! It might make an interesting column to discuss how the NBA has left behind traditional centers... Now you need TMac or Kenyon Martin or Dirk Nowitzki... The prototype player is now 6'9" and can shoot the three.

posted by BobbyLove at 12:04 PM on May 23, 2003

Oh, and on the earlier point - I think the Converse example is good... While you could maybe say if Lebron were the last player to ever sign a shoe deal, that it would be better for Reebok or Adidas to lose money on him (as far as Nike's concerned). But what happened to Converse, who had Bird and Magic, was that Nike got Jordan. And even if they had overpaid for Jordan, that move allowed them to sew up the league. Think of all the players who had Nike shoes in the Jordan prime - Barkley, David Robinson, Jordan, Gary Payton, Shawn Kemp, Scottie Pippen, etc. Plus every schmoe wore Nikes. Remember part of the start of the playoffs used to be the Bulls coming out with black Nike shoes. SHOES would signal the beginning of the playoffs. Only with Jordan leaving the league (the first two times) have other companies been able to get in the door. That's what Nike is thinking with Lebron. They think he'll be the marketing superstar with which to snare a bunch of other current and future players. Kobe and Shaq are not 'real' enough, TMac doesn't have enough charisma ('Big Sleep' anyone), Garnett is in Minnesota. So Reebok has the only decent pitchman (for shoes anyway) in Allen Iverson. Nike doesn't want them to combine Illy and Lebron.

posted by BobbyLove at 12:15 PM on May 23, 2003

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