Nike Rounds Out 2019 Endorsement Roster With Luka Doncic

The Jordan Brand brings 20-year-old NBA Rookie of the Year Luka Doncic into 'the family,' rounding out a year of ups - and downs - for sports sponsorships.
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In the world of sports and business, it’s par for the course for athletes not only to get free stuff, but millions upon millions of dollars to be the face – or head, torso, arms, legs or feet – of a particular brand.

So lucrative is the desire for consumers to scoop up their favorite sports player-labeled shoes that Nike (NKE) - Get Report has created an entire separate “Jordan Brand” business, selling millions upon millions of insert-sports-star-here labeled and designed sneakers and other paraphernalia.

The latest Jordan Brand endorsement: Luka Doncic, the 2018-2019 National Basketball Association’s 20-year-old rookie of the year, who on Thursday officially became a part of the Jordan Brand's basketball roster and a bona fide member of the Nike sponsorship team.

While details of the contract are still being finalized, a multi-year agreement is in the works for the Dallas Mavericks’ Doncic, who will receive millions to wear not just Nike- and Jordan-branded shoes, but likely his own shoe style (a low- or mid-cut) and colorway.

Signing Doncic caps a high-profile year in which Nike made waves – and lots of money – supporting high-profile athletes, some more contentious than others.

The Beaverton, Ore. company’s biggest and most controversial endorsement by far was Colin Kaepernick, the former San Francisco 49ers quarterback-turned-household-name for bending the knee during the playing of the national anthem – a move that cost him his job but bought in millions of endorsement dollars for him – and for Nike.

Brought-to-you-by as a concept is as old as televised sports, where companies realized that they didn’t just have to advertise their wares on airwaves to make money, but could also advertise on sports players’ heads, arms, torsos, legs and feet.

According to figures compiled by market and consumer data aggregator and analyzer Statista, global sponsorship spending rang in at $65.8 billion in 2018, the 10th straight year of increases and almost double the $37.9 billion recorded back in 2007.

And how much was Nike’s cut? While almost impossible to quantify, the company’s financial numbers in some ways speak for themselves. Nike generated a record $36.4 billion in sales in 2018, or just under $16 billion in gross profit.

The company earlier this month reported stronger-than-expected profit and revenue, though gross margins that were a bit narrower than analysts had been expecting.

Which means that even if Nike, the biggest shoe and apparel maker globally and the leader in the select sports-endorsement club whose members also include Adidas  (ADDYY) , Puma, Under Armour (UAA) - Get Report and others, doesn't always pick winners, it is clearly still a winning strategy to brand-partner with high-profile athletes – and market and sell a piece of their individual magic.

Tiger Woods being case in point. 

With the likes of women's professional soccer superstar and Sports Illustrated Sportsperson of the Year Megan Rapinoe on tap to be  proverbial brand-advertising agents (Budweiser (BUD) - Get Report already sponsors the entire National Women's Soccer League), 2019 likely marked a turning point in the multi-billion-dollar endorsement world.

But like any sport, there is always a bit of tail risk lurking for any high-profile thumbs-up of any talented individual – whether that individual plays sports, music or a role in movies or on television.

Just ask someone on Nike's board of directors or in its marketing department about New England Patriots wide receiver Antonio Brown, who lost his lucrative Nike endorsement deal following accusations this year that he raped his former personal trainer.

Even so, the numbers clearly favor the odds. Just ask the king of sponsorships himself, Michael Jordan.

Said the basketball legend on Doncic joining the Jordan Brand: “We are excited to welcome him to the Jordan Brand family. He rounds out a roster of incredible new talent united to represent Jordan Brand for the next generation.”