Nike's Manziel Signing Is Another Dent in Under Armour

NEW YORK (TheStreet) -- Relative upstart Under Armour (UA) continues to sign lucrative athlete endorsement deals to keep pace with rivals Nike (NKE), Adidas and Puma. Under Armour sought to make a big splash in the 2014 NFL Draft by signing Johnny Manziel, the most high-profile college player in this year's draft, but lost out to Nike.

Nike announced it has signed Manziel, the 2012 Heisman Trophy winner from Texas A&M, to a multiyear deal. Nike will now provide shoes and Manziel's jersey, as the official NFL jersey provider. The company will also be able to use Manziel and possibly his "Johnny Football" moniker in advertisements.

Under Armour was at one point believed to be the front runner for Manziel. The company even had billboards near its Baltimore headquarters welcoming Manziel to the family. A banner read "Welcome to our house, Johnny."

Manziel is the possible number-one overall pick in the 2014 NFL Draft. Another possible first pick, Jadeveon Clowney, is close to inking a deal with Puma. Two of the top prospects are now out of Under Armour's reach.

Under Armour still boasts Tom Brady and Cam Newton, two prominent NFL quarterbacks, under endorsement deals. However, other players signed to Under Armour are starting to lose their luster. Ray Lewis is retired, Arian Foster is declining due to injuries and Devin Hester recently parted ways with the Chicago Bears. Expect Under Armour to target other first-rounders once the draft is over to gain some more future stars in its marketing efforts.

Nike, on the other hand, has a roster of star quarterbacks signed to deals. This list includes Russell Wilson, Colin Kaepernick, Drew Brees and Aaron Rodgers. Nike is the clear leader in endorsements and its control of the NFL jerseys makes it hard for others to make a splash in the football market.

Under Armour is increasing its presence in the college athletics market, including a huge deal with highly followed Notre Dame. This could be the first of many big name colleges making the switch to Under Armour.

Adidas, Under Armour and New Balance all bid on Manziel and lost out to Nike. Manziel wore Adidas uniforms during his two seasons with Texas A&M, and Adidas, the previous sponsor of Notre Dame jerseys, continues to lose out to its rivals in new endorsement deals.

When it comes to endorsements, customers and shareholders don't appear to mind. Shares of Under Armour are in the triple digits and now have increased 33% in the short 2014 year to date. The company sports a market capitalization of over $12 billion, despite moving less than $3 billion in sales annually, and is projected to see sales increase 20% in each of the following two seasons. However, just like Johnny Manziel did, investors might want to start choosing something other than Under Armour.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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