By Jonah Engel Bromwich and Kevin Draper
Before last summer, every top N.B.A. draft pick of this decade had
signed a sneaker endorsement contract with Nike or Adidas. DeAndre
Ayton, this year’s No. 1 pick, did not.
“We were dealing with Nike people, Under Armour and all the other shoe companies,” he said soon afterward. “We just thought Puma was the right fit.”
Marvin Bagley III, the second pick, went
with Puma, too. He said in an email that he chose the company because
“they’re willing to do things differently, which is what I like about
them.”
If Puma started
the 2018 insurgency against the traditional shoe powers, New Balance
joined the rebellion last month. Multiple news outlets reported the
company had landed a deal with Kawhi Leonard after he turned down a
multiyear contract worth $22 million from Nike. In October, New Balance
revealed it had signed the much-hyped prospect Darius Bazley
to a million-dollar contract. Bazley, 18, is not yet in the N.B.A. He
is interning with the company and training for the draft instead of
playing a “one and done” year in college.
Not to be outdone, Under Armour added Joel Embiid,
the Philadelphia 76ers’ charismatic young center, to its roster days
before the season began, beating out competition from Puma and New
Balance. He joined Stephen Curry and Dennis Smith Jr. on the Under
Armour payroll.
The rush of upstart brands signing
N.B.A. players is a testament to the league’s ever-expanding popularity;
even being tangentially associated with the league gives the brands
some credibility with young consumers, they insist. Which is a good
thing, given that experts say the shoes themselves may tank.
“The headline for us when it comes down
to why are we getting back into basketball after 20 years is culture
culture culture culture culture,” said Adam Petrick, Puma’s global
director for brand and marketing. “The N.B.A. and all the other
entertainment mechanisms around it, whether it’s ESPN or Complex
magazine, are attuned to creating a 24-hour news cycle around
basketball. In our day of mass news media mass consumption, we have the
option to benefit from that.”
Mark Bartelstein, a top N.B.A. agent
whose client Gordon Hayward recently signed with the Chinese shoe
company Anta, said the companies were battling for a piece of the
basketball business because “the money follows what is hot, and the
N.B.A. is very hot.”
Executives at
Puma and New Balance, eager to justify major investments, were quick to
agree, pointing to the outsize influence of a league with a global
footprint that extends beyond sports. They say that it has never been
more important to be associated with the N.B.A.
As Bagley put it, Puma’s “culture is not
strictly basketball — it’s a full lifestyle brand that not only
supports me as a basketball player, but also as an artist.”
And yet Puma may be making this bet at precisely the wrong time, as the market for basketball shoes is bottoming out.
According
to Matt Powell, a sports industry analyst at NPD Group, basketball
shoes now account for just 4 percent of the shoe market, down from a
high of 13 percent a few years ago. Performance sneakers — shoes worn
for athletic activity — are doing poorly more generally.
Consumers, Powell said, are now more interested in looking like athletes than they are in imitating their abilities.
“This
is the peak of the athleisure trend,” he said. “They just want to look
the part. If you are going after looking the part, you don’t need to
spend $150 on a top-end basketball or running shoe.”
Executives like Petrick say they are not concerned.
“Most
people don’t wear performance sneakers for performance,” he said. “So
when we’re trying to appeal to our core consumer, it’s not going to be
just around the features and benefits of the product, it’s going to be
around the brand perception. Being a part of basketball culture means
that we’re a part of culture, period.”
Puma
announced its re-entry into basketball in March, signifying the rebirth
of a product line that had last been associated with Vince Carter in
the 1990s. New Balance’s history in the N.B.A. dates back even farther.
James Worthy and M.L. Carr were endorsers in the 1980s, but as Nike
became dominant and endorsers started earning millions of dollars, New
Balance largely exited the sport.
In recent years, the most prominent player to wear New Balance was the San Antonio Spurs’ redheaded sharpshooter Matt Bonner.
Though he wasn’t a paid endorser, Bonner’s goofy-dad image was then a
perfect fit for a brand that for years did not even attempt to be cool
and proved very successful at falling well short of vogue.
New
Balance would not confirm that it had signed Leonard, whose strong play
for the Toronto Raptors has helped his team become a favorite to make
the N.B.A. finals. Chris Davis, a vice president for global and sports
marketing at New Balance, would only say that any brand would be lucky
to have Leonard.
Davis said New
Balance had put together a 12-year plan to become the third-largest
athletic brand in the world. It wants to grow from $4.5 billion in
revenue to $7 billion by 2023, meaning third place behind Nike and
Adidas is an extremely lucrative place to be. And any strategy for
global growth now requires investing in basketball.
“It is the second-biggest global sport,” he said, adding that New
Balance’s two biggest markets are the United States and China, where
basketball is huge. And New Balance, like Puma, has also ventured into
street style: A collection of shoes created in tandem with the
streetwear label Kith was released late last month.
For shoe
companies, however, it isn’t enough for N.B.A. players just to wear
their shoes off the court. Though the vast majority of buyers will never
wear their shoes to play basketball, if shoes aren’t worn on the court
by players, they are seen as inauthentic.
New
Balance also buys into the current industrywide belief that both
athletes and consumers are more open to so-called challenger brands —
brands that go after the lords of the realm — than ever before. There
have never been as many shoe companies vying for sneaker free agents as
there are today, a trend that started in earnest five years ago when
Under Armour signed Curry.
Unlike its
competitors, Under Armour is content to stay a performance-first brand,
unless its athletes dictate otherwise. Asked about slacking sales for
performance shoes, Ron Johnson, the general manager for global
basketball at Under Armour, was sanguine.
“I feel like
there’s always going to be headwinds and challenges in various
categories, whether it be seasonality or the cyclical nature of trends,”
he said.
Performance sales could
pick back up. But Powell, the NPD analyst, was not optimistic. He
pointed out that plummeting sales for performance shoes went beyond
basketball. Whether it is running, tennis, training or any other
athletic activity, performance footwear has fallen out of fashion. Last
year’s best-selling shoe was Nike’s Tanjun, which is similar to the Nike Free running shoe but costs half as much.
Puma’s
Petrick acknowledged the challenges for signature basketball shoes, but
he said that creating separate silos for performance footwear and
off-court footwear was not a genuine reflection of how the industry
worked. He doesn’t care all that much whether fewer pairs of the $185
LeBron James signature Nike shoes are flying off the shelves.
“I
can tell you that LeBron is wildly relevant as a cultural icon to our
core consumer,” he said. “So why wouldn’t I want to inhabit this space?”
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